1. Executive Summary

Dear Valued Stockholders,

We are pleased to report a strong performance in the third quarter of 2025 for AirGen 3001. Not only has the product launched smoothly, but key market indicators—sales volume, customer satisfaction, and brand momentum—are all trending well above our initial forecasts. We remain confident that AirGen 3001 positions Aeronaut Inc. at the leading edge of engineered‑atmosphere technology.

2. Product Launch Highlights

• Launch of the AirGen 3001 occurred in September 2025, on schedule and within budget.
• Initial units sold exceeded 150% of our projected first‑month capacity.
• Pre‑order backlog extended three months beyond target, demonstrating strong consumer interest.
• Positive press coverage and influencer testimonials have boosted public awareness and demand.

3. Financial Performance Metrics

• Revenue from AirGen 3001 in Q3: approximately $12.4 million (versus internal forecast of $8.3 million).
• Gross margin for the product line: 46%, ahead of projected 40%.
• Return‑on‑investment (ROI) on the product’s R&D and launch marketing has already crossed break‑even.
• Net gain in new user subscriptions for our AtmosphereCare service: +28% year‑over‑year.

4. Customer & Market Feedback

• Customer satisfaction (measured via the Aero‑Perceptual Index) averaged 8.9/10 for AirGen 3001, compared to 7.6/10 for the previous model.
• Survey respondents reported that the breath experience felt “fresher,” “lighter,” and “more invigorating.”
• Retail and online feedback indicate strong conversion rates in urban apartment segments and wellness‑oriented households.

5. Strategic Implications

• The strong start of AirGen 3001 reinforces our strategy of “air as experience” rather than just commodity.
• We are accelerating development of the next generation (AirGen 4000 series) and companion ecosystem (AtmosphereCare Pro, SmartVent integration).
• The positive reception enhances our brand equity and gives us a stronger foundation for expanding into verticals such as premium hospitality, corporate wellness spaces, and closed‑environment modules.

6. Risks and Mitigation

Though performance is strong, we remain mindful of key risk areas:

• Supply‑chain constraints: rare‑earth components used in our modulation modules. Mitigation: increasing supplier diversification and securing multi‑year contracts.
• Regulatory oversight: our engineered‑atmosphere approach may attract additional review. Mitigation: ongoing collaboration with regulatory agencies and proactive compliance audits.
• Market saturation: some regions may approach maximum adoption. Mitigation: expand global reach, focus on emerging markets and niche verticals.

7. Outlook & Forward Guidance

Based on current momentum, we are revising our full‑year 2025 guidance for AirGen 3001 upward:

• Forecast units sold: 45 000 (previously 30 000)
• Forecast revenue: $55 million (previously $37 million)
• Anticipated gross margin: ~44% (previously 40%)

We also expect the integrated subscription service (AtmosphereCare) to reach 120 000 active subscriptions by the end of Q4.

8. Appreciation & Closing

We thank you for your continued trust and support as Aeronaut Inc. ventures into this exciting new frontier of the “breathable economy.” The AirGen 3001 has proven that engineered air is more than a niche—it’s a growing reality with tangible value. Together, we’re redefining what it means to breathe.

Here’s to the future — clear, crisp, and full of air.

Sincerely,
The Board of Directors & Executive Leadership Team
Aeronaut Inc.