Phoenix Launch Systems, Inc.

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Phoenix Launch Systems, Inc.

Business Plan

Revision 2020.08.09

Prepared by:

Matthew Travis Phoenix Launch Systems, Inc.

Phoenix Launch Systems, Inc.

105 Bowler Springs St, Las Vegas, NV 89148

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Phoenix Launch Systems, Inc.

Company at-a-glance

Phoenix is a Florida corporation with offices in Florida and Nevada. Our main office is currently in Las Vegas, with a planned relocation to Florida once this funding request is closed. We have a diverse and experienced team with backgrounds in NASA, New Space companies, and the Asian aerospace industry. Incorporated in March 2019, Phoenix Launch Systems, Inc. is an evolution from a predecessor company, Aphelion Orbitals, Inc., which was founded in 2016 and received a $500K Seed Series equity investment in 2017. During the following 14 months, the company conducted fundamental R&D on launch technologies. Work included proving the viability of a new propulsion system with flight-scale engine testing as well as design and analysis work on the launch vehicle. In early 2019, the company was restructured and branded under the Phoenix Launch Systems name. Since then, we have commenced detailed design work on the hardware and software for a new nanosatellite launch vehicle, support systems and creation of new IP in order to protect our innovations and grow the value of the company.

Phoenix aims to mass produce space vehicles through miniaturizing and vertically integrating dedicated, single-nanosatellite launch services. Our goals are to:

- Produce and fly a fleet of low cost, scalable nanosatellite launch vehicles; - Provide a regular, scheduled launch service, following a model similar to other terrestrial

transportation systems such as the airline industry; - Create a complete, customizable, turnkey, nanosatellite solution with spacecraft

components, software, and launch; - Be the leading transportation and infrastructure provider for the New Space economy.

Traction and Progress

? Currently have LOI's with three nanosatellite launch customers ? Hold agreements with industry partners to build out infrastructure and support operations ? $0.5M seed round closed Sept. 2017 under predecessor company Aphelion Orbitals, Inc. ? Successful development of a 9.5kN rocket engine and associated propulsion systems ? Conferences, media coverage, presentations gathered interested from a several potential

customers ? One spacecraft built for an academic customer

Phoenix Launch Systems, Inc.

105 Bowler Springs St, Las Vegas, NV 89148

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? Rapidly grew into an 8-employee company with R&D facilities, rocket engine test infrastructure, propellant production equipment, composite manufacturing technology, and in-house spacecraft integration/test facility

We are seeking up to $10M in Pre-A level funding to help us achieve the following.

? Construct the ground infrastructure for the Trailblazer suborbital launch service ? Launch a complete, end-to-end, spacecraft ecosystem ? Complete critical development of the Phoenix Launch Vehicle, including its first stage

aerospike engine ? Enable us to be competitive in NASA/DoD contracts (3 proposals currently in progress) ? Position us for Series A funding. We plan to seek $20M (minimum) additional within 24

months of a total $10 million funding commitment.

Action Plan

An initial phase is projected with an 18-month plan as the first stage of a 60-month schedule specified in this business plan. During this phase we will be able to:

- Hire employees at all levels: executive, engineering and administrative - Invest in a full in-house machine shop capable of supporting long-term operations - Expand our cutting-edge manufacturing capabilities to allow vertically integrated vehicle

development and production - Complete bringing our nanosatellite spacecraft hardware and software product line to

market. Initial product offerings will be available for sale in the first quarter of 2020 - Start sales and production of the Trailblazer suborbital service - Fully develop the Phoenix first stage propulsion system

Achieving the final task will enable us to start marketing the launch service and solidify our manifest. Once we have completed propulsion system qualification, we will be able to take launch contracts and reservations and generate revenue from pre-launch deposit payments.

During the next three years, we plan to create cash flow from sales of our cubesat components and software licensing. This represents our early Minimum Viable Product and will enable sustainment of the company during the remainder of R&D of the Phoenix launch vehicle through 2023. Additionally, we plan to offer suborbital flight services utilizing our suborbital R&D vehicles which will generate revenue as commercial microgravity platforms.

Phoenix Launch Systems, Inc.

105 Bowler Springs St, Las Vegas, NV 89148

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Our complete timeline is a 5-year plan to bring our launch system to full-scale service and company profitability. We recognize that low-cost space access requires a relatively small, highly-skilled, and integrated team when compared to traditional aerospace companies, and a rapid development schedule to minimize CAPEX. Staffing levels will be maintained around 30 employees during development and will grow to 60 as production scales up.

We plan to hire a specialized PR/marketing firm to expand sales and help us navigate the B2B/B2G launch industry. In addition, we have access to a vast talent pool through industry connection. A number of industry veterans and highly influential academicians in the space sector are currently in contact for our advisory committee.

Our timeline is as follows: - Invest in full in-house production capabilities to enable rapid prototyping and vertical integration (from month 1) - Begin revenue-generating commercial operations of the Trailblazer suborbital launch service while rapidly expanding the labor team (Y1 Q4) - Fully develop and qualify the Phoenix first stage propulsion system (Y1 Q1), while solidifying our manifest and securing launch contracts - Initial commercial capability of the Phoenix orbital launch service (Y3 Q3) - Company profitability achieved at the end of Y5

We are targeting four main markets: - Responsive government launch (NASA, DoD) - Commercial/constellation maintenance (Planet, Spire, Planetary Resources) - Academic (astrobiology, research, polar orbits) - Aggregated launch providers (Precious Payload, Spaceflight Industries)

As we are still in the development phase, we expect a significant although smaller amount of revenue in the first two years. Cubesat component sales and software licensing will provide the majority of our early revenue and keep the company viable. We believe an approximate but realistic annual projection in the second year after closing this round is as follows (approximately).

- $180K/year from the Trailblazer suborbital service - $151K/year from nanosatellite solutions - $300K/year from NASA/DoD contracts

Under this Pre-A level funding and projected sales revenue, we have projected that we will bring Phoenix to market within 3 years and be profitable at the end of Year 5.

It is key to note that one of the highest priorities during the development phase is the minimization of technical and financial risks and the mitigation of such risks that remain. To this

Phoenix Launch Systems, Inc.

105 Bowler Springs St, Las Vegas, NV 89148

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end, our core competency does not rely on inventing "unobtainium" or making risky ventures into technologies that are unproven and highly theoretical. Our innovations focus on utilizing proven concepts in new ways and at small scale in order to greatly reduce the cost of access to space while achieving the highest levels of reliability and safety possible. We take the "best of breed" concepts from over 65 years of the satellite launch industry and have integrated them with our own innovations to create a state-of-the-art low-cost launch system.

Executive Summary

Opportunity

The exponential growth in the utilization of nanosatellite technology is a result of its applications in commercial data collection, the requirement for space access from academia, and progress in electronics miniaturization which allow advanced features that used to require large, multi-ton spacecraft to be packaged into sub 50 kg class satellites. The increasing saturation of available ride-share capacity and difficulty manifesting secondary payloads inhibits the utilization of small satellites commercially, and has given rise to the need for dedicated nanosatellite launch services.

Our business model focuses on addressing this opportunity by developing a dedicated nanosatellite launch system capable of deploying large quantities of these satellites at a very low cost and with tailored mission profiles. Among our nanosatellite launch competitors, we stand out through new developmental approaches and engineering practices, enabling cost reductions through decreased complexity, higher launch rate, reusability, mass production and vertically integrated processes. The bottom line is that our approach to space access will allow us to reduce development costs and operate the first regularly scheduled launch service dedicated to the nanosatellite market.

Our strategy relies on three core components which allow us to provide a true turnkey, end-toend space utilization solution as well as conduct procedural technical development and generate a revenue stream during the relatively long development process of an orbital vehicle.

1) Phoenix Launch Vehicle (LV): mass produced, partially reusable dedicated nanosatellite launcher;

2) Trailblazer: commercial, mobile suborbital/supersonic vehicle using a subset of the Phoenix systems;

3) Cassiopeia: modular nanosatellite components and open software platform.

Mission

Phoenix Launch Systems, Inc.

105 Bowler Springs St, Las Vegas, NV 89148

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