Shareholder Briefing 7.00 PM Tomorrow, page-14

I have similar thoughts to both of you but I would like to make an observation. The SPP is underwritten so its a form of success ether way.

I think a lot of us that have concerns need to go back to the start and remind ourselves about were SAS is in a typical start-up life cycle. Bear with me...

The general trend for start-ups is that they go through 5 stages of funding.

Stage 1: Seed capital - the leaders of a startup may not have any commercially available product yet and are instead most likely focused on convincing investors why their ideas are worthy of support. This is the initial R&D stage. - "the leading team (e.g. Meir, Meidad, Maya and Yonatan) have been working together on this project 'below the radar' for the past few years. After 12 months of initial study and design we came up with a business and technical plan to support this, and since then we've been talking with key design, engineering, software and hardware sub-contractors to assemble the best team. We decided not to incorporate a company until we had reached an advanced point in negotiations with our key financing partners, and, depending upon their location achieve the correct tax and corporate structuring following legal and tax advice. And I am happy we have reached that point now"
https://www.investi.com.au/api/announcements/sas/01705573.pdf

Stage 2: Startup capital - This stage is similar to the seed stage. With initial market analysis conducted and business plans in place, companies look to begin marketing and advertising the product and acquiring customers. Tasks are simalar to stage 1, and in SAS's case they are developing 3 POC satellites. SAS IPO now secure funding. "Proof of Capability COMPLETED: Nano Sat designed, built and launched (Duchifat-1) on behalf of the Herzliya Science Center, still operational 18 months post launch"
"Launch and In-Orbit demo with 2-3 Nano-Satellites – Q3 2017:"
https://www.investi.com.au/api/announcements/sas/01703104.pdf

Stage 3: Early stage/first stage/second stage capital - only comes after the seed and startup ones in most cases. Funding received at this stage will often go toward manufacturing and production facilities, sales and more marketing.The amount invested here may be significantly higher than during prior stages. We are now at this stage. The 3-Diamonds are a success according to SAS, there are signs of revenue. - "Proceeds from this capital raising will be used primarily for the completion of design, construction and launch costs of the first batch of approximately 20 Pearl nano-satellites as part of Sky and Space Global’s Equatorial Constellation, which is scheduled for Q1 2019, and to provide working capital to the Company."
https://www.investi.com.au/api/announcements/sas/8ba0a498-5a4.pdf

Stage 4: Expansion stage/second stage/third stage capital - Growth is often exponential by this stage. funding serves as more fuel for the fire, enabling expansion to additional markets (e.g., other cities or countries) and diversification and differentiation of product lines. With a commercially available product, a startup at this stage should be taking in ample revenue, if not profit. Many companies that get expansion funding have been in business for two to three years.

Stage 5: Mezzanine/bridge/pre-public stage - After reaching this juncture, the company may be looking to go public, given that its products and services have found suitable traction. Funds received here can be used for activities such as:

• Mergers and acquisitions
• Price reductions/other measures to drive out competitors
• Financing the steps toward an initial public offering

Only after these stages do companies go on to IPO (The major distribution event). It is also this approach that creates the so called Unicorns.....lots of money thrown in up until the company is profitable.

Now considering SAS listed at stage 2 we have to recognize three things.

1) We are the Venture Capitalists - Usually a Venture Capitalist has a fair amount of experience and understanding, they take on the risk with properly understanding the business, it adds a "bit" of certainty to a start-up and later investors when they see a recognized VC listed as a share holder. That "certainty" is missing on SAS because of an early listing, so we take on more risk for a longer term by playing VC.

2) There will be multiple funding rounds - we are on round 3, there will be another round. All I can hope for is that stage 5 does not happen because we have already Listed.

3)Related to point 1, we are missing true "Corner Stone" investor. We need some form of recognition from someone in the industry that agrees with SAS's vision. It adds that word "certainty" once again. ---Maybe credibility is a better word.

I for one have recognized that dilution will occur. I would like to see a statement regarding partnership, whether it is an avenue they are willing to go down, if so what they intend the nature of that relationship to be.