2022 Letter from the CEO

Team, ?

Security and stability have been the foundation of progress throughout history. In the eight decades following WWII, our families have enjoyed a period marked by relative peace and stability where peoples around the world competed and collaborated to create and trade goods, services, and ideas – to produce radical advancements in human achievement, human rights, and the human condition. The leader of this progress has been the United States of America, with its dynamic economy, powerful military, commitment to human rights, and free and innovative people. ?

Yet today, stability is eroding, and conflict is escalating. In 2022, 100M+ people were displaced by violence and persecution, up from 39M in 2011. Russia is at war with Ukraine, and the specter of a Great War hangs over the Pacific. Against this backdrop, America's military and economic advantages are declining and, along with them, the buttress of the international order. ?

The Shield AI Way?

While no person, company, or country can address the fullness of these challenges, Shield AI will play a critical role in restoring the United States and Allied capacity to keep peace and protect people. Artificially intelligent pilots are the single most consequential technology for the future of national security and global stability. We?are the best team to deliver on the promise of this technology. ?

?We show up to work each day invigorated by our mission to protect service members and civilians with intelligent systems.

We know that to accomplish this mission at scale and live up to our potential, we must build the defining technology company of this generation. We know the way to forge this company is from the foundation of our values of honor, service, and excellence.

Despite our company's great promise, good ideas, and best intentions, this year –?like every year –?reminded us that we have no preordained right to succeed or even exist. Competitors drove forward. Bureaucracies moved slowly. We self-inflicted deep wounds. The unforeseen dealt vicious hands. Yet, as we faced countless challenges, we always remembered to create opportunity and seize it. ?

Our approach to every challenge and opportunity was – as it is always –?grit, creativity, and teamwork. Results followed. Nova 2 passed its operational test and evaluation with flying colors readying it for combat operations. V-BAT reliability improved by a factor of ten, preparing the product and our team to scale aircraft deliveries and commercialize swarming next year. Hivemind completed historic?flights on other aircraft with incredible success. We exceeded revenue targets and nearly doubled the company's equity value to $2.3B.

We grew the team to more than 500 extraordinary people, delighted our customers, deployed products across 14 time zones, and made the world safer. ??

Looking Ahead?

Now, I shall make my favorite proclamation to open every year: 2023 is going to be great; our best year ever. We will advance our strategy, improve operations, and strengthen our culture as we make a greater mission impact than ever. We will meet challenges, we will create opportunities, and we will win. These are not flippant statements, but claims informed by our technological advantages, business capabilities, market position and trends, and anchored in my belief in our team –?one that truly embodies the virtues of honor, service, and excellence. ?

I want to thank all my teammates, Shield AI’s investors, and the DoD leaders who continue to champion Shield AI every day. You are all moving the needle for national security and global stability, where and when it is most needed. I hope all are having a wonderful holiday season and wishing everyone a Happy New Year – see you in 2023!

Sincerely, ?

Ryan Tseng?