AND HERE 'TIS10 February 2023Satellite Assets and Data Delivery...

AND HERE 'TIS

10 February 2023
Satellite Assets and Data Delivery Update

The Company notes that it has made significant technological advancements across its
proprietary signal processing technology which enables geolocation from data collection with as
few as two satellites in a cluster. This technological innovation is not only a valuable asset but
also significantly reduces the revenue risk associated with all the challenges of operating
satellites.
The Company also notes that it has previously disclosed anomalies of two individual satellites,
KSF1-C in the Vigilance Mission and KSF2-B in the Patrol Mission. The Company continues to
work with the manufacturer ISISPACE to resolve these anomalies however the Company has
determined conservatively to impair both satellites as further detailed below. The Company
notes that this decision was made today.
The Company reiterates that last week it achieved the milestone of daily product data delivery
to its early adopters and that this data delivery is unaffected.
The data delivery milestone includes delivery of the Kleos Guardian LOCATE data product that is
generated by processing raw data collected by satellite missions using Kleos’ proprietary
intelligence platform to deliver frequency, time, latitude and longitude of radio frequency
activity to a high accuracy, and is sold on an Area-of-Interest basis.
As previously disclosed, in October 2022 the Company identified an anomaly of a single satellite
(KSF1-C) in the Vigilance Mission that was preventing the satellite from supporting the mission.
Due to the technical complexity of satellite launch and early operations it is common for
technical issues to result in extended periods of time whilst solutions are sought and
implemented. In most instances such technical issues are not deemed material, as they are
subsequently resolved, and the satellite restarts operations. In this case, the satellite
manufacturer believes the anomaly can be resolved, but Management has taken a conservative
position by recommending that the satellite is impaired. Despite the impairment, the remaining
Vigilance Mission satellites will still be contributing the anticipated revenues over its remaining
18-month mission life. Furthermore, once the manufacturer has resolved the anomaly, a
reversal of the impairment will be pursued.
Following the recent disclosure that one of the Patrol Mission satellites(KSF2-B) had an anomaly,
Management has recommended also to impair this satellite. As with KSF1-C, the manufacturer
believes the satellite’s anomaly can be resolved, but due to the technical risk and timescale
Management is taking this more conservative position. Due to the inherent redundancy of the
Kleos Space S.A. 7 Rue de l’Innovation, L-1896 Kockelscheuer, Luxembourg - ARBN 625 668 733 / RCS B215591
Kleos satellite cluster architecture, the remaining Patrol Mission satellites are capable of
maintaining both the anticipated future revenues and earnings, despite the individual asset
impairments.
Kleos’ radio frequency geolocation data enhances the intelligence, surveillance, and
reconnaissance (ISR) capabilities of governments and commercial entities. It complements
existing datasets to improve the detection of illegal and hidden activity such as piracy, drug and
people smuggling, illegal fishing and border challenges.
The Company emphasises that the remaining satellites in the Vigilance Mission (KSF1) and the
Patrol Mission (KSF2) will be able to remain in commercially viable operation, notwithstanding
the two satellite impairments. Furthermore, Kleos does not believe these two satellite
impairments will impact future cash flows or revenue generation from the Kleos constellation.
The Company will impair the carrying value of both satellites as of 31 December 2022, resulting
in an expected EUR 1.4 million impairment expense.
- ENDS -
This announcement has been authorised by the Company’s Board of Directors.
For further information, please contact:
Kleos Space S.A. Alan Khalili LUX P: +352 2088 2290 UK P: +44(0)330 0571886
US P: +1 202-866-8794
E: [email protected]

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