1 Amaresh Kollipara, Managing Partner, Earth2Orbit LLC Michael Leventhal, Attorney/Consultant, mc² The Law Firm State of the Commercial Space Industry

2 Proprietary – Do not reuse without permission. Themes Space is not a destination Space is an enabler for a variety of business verticals Space accelerates and expands business verticals by providing new, disruptive ways of doing business Faster Cheaper Better Governments can catalyze and accelerate space related businesses Infrastructure is a precursor to space-related applications

3 Proprietary – Do not reuse without permission. -Commercial Space Market Segments- Space is an enabler: it enhances existing market verticals. In-Space & Surface Platforms Launch Satellites Infrastructure Applications HealthcareEarth ObservationScience Research Energy and MiningDefense Media and Entertainment Navigation and Communications Governance Transport Operations

4 Proprietary – Do not reuse without permission. -Porters Five Forces- Framework for Discussing State of the Commercial Space Industry Framework developed by Michael Porter in the late 1970s which assesses competitive environment, market trends, and other factors to determine the profit potential of an industry.

5 Proprietary – Do not reuse without permission. Two Example Industry Segments Sub-Orbital Space TourismOrbital Launch Vehicle Segment Not an exhaustive list of companies – examples only.

6 Proprietary – Do not reuse without permission. Threat of New Entrants Bargaining Power of Customers Bargaining Power of Suppliers Low concentration of companies Low volume of buyers at current prices Cost of switching is high Once companies are established switching costs may be lower Low customer price sensitivity in the early stages High at first, but, as the companies become established, more suppliers, less leverage Companies can take manufacturing in-house Because of the lack of bargaining power of customers, not as important Technological barriers to entry Financial barriers to entry Loyalty if early entrants have solid safety record So, Long Lead Times, Surprise Unlikely Five Forces Analysis Sub-orbital Space Tourism Segment Analysis

Proprietary – Do not reuse without permission. Competitive Rivalry Threat of Substitute Products/Services Thus far, little competition; just branding Later, most companies will support each other to establish the industry Finally, there will be competition, but, as prices drop, demand will outstrip supply for the foreseeable future Extreme vacations are available now -Titanic, -Mt. Everest -HALO -Zero G, -Antarctica -Virtual reality space trips BUT... If you want the real thing, you have to buy a ticket Five Forces Analysis Sub-orbital Space Tourism Segment Analysis

8 Proprietary – Do not reuse without permission. Threat of New Entrants Bargaining Power of Customers Bargaining Power of Suppliers Low concentration of companies Low volume of buyers due to launch costs Cost of customer switching is extremely high Moderate price sensitivity Low bargaining power in current market High due to specialized parts and inputs Suppliers are highly specialized Low presence of substitute inputs High launch costs are attributable to high input costs (in part) Sizable technological barriers to entry Massive financial barriers to entry (~$200M+) However, low customer loyalty – theyll go with whomever Policy, regulatory, and legal obstacles also prevent easy entry Five Forces Analysis Orbital Launch Vehicle Segment Analysis

Proprietary – Do not reuse without permission. Competitive Rivalry Threat of Substitute Products/Services Minimal competitive rivalry existed for decades New entrants are redefining the landscape Few companies in this industry segment, results in low competitive market behavior Substitute products/services do not exist Not many alternatives to ELVs Disruption via substitute products requires paradigm shift in product/service offerings. Five Forces Analysis Orbital Launch Vehicle Segment Analysis

10 Proprietary – Do not reuse without permission. Conclusions Commercial/New Space Industry is slowly maturing We can use traditional methods to analyze this industry Fundamentals look strong Comparing and contrasting with established industries produces insights for investors and others As launch costs go down demand for industry will increase and diversify