Airship AI Holdings, Inc.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. Except as set forth below, there have been no material changes to the risk factors disclosed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and our other filings with the SEC.

Airship AI sells its product to various divisions of a large commercial customer. We also sell to government customers under agreements in the United States. Accounts receivable are recorded at invoiced amounts and are non-interest bearing. All invoices are normally paid within 30 days of contract completion.

For the nine months ended September 30, 2026, we had revenue from one hundred and three customers and four customers represented 80.7% of total revenue. For the nine months ended September 30, 2025, we had revenue from eighty nine customers and two customers represented 68% of total revenue.

As of September 30, 2026, three customers represented approximately 84.8% of outstanding accounts receivable. As of September 30, 2025, one customer represented approximately 73% of outstanding accounts receivable.

We expect to continue to derive a significant portion of our revenue from a limited number of customers in the future and, in some cases, the portion of our revenue attributable to individual customers may increase. The loss of one or more significant divisions of a commercial customer or a government customer or a reduction in the amount of revenue we derive from any such customer could significantly and adversely affect our business, financial condition and results of operations. Customers may choose not to renew their contracts or may otherwise reduce the breadth of the offerings which they purchase for any number of reasons. We are also subject to the risk that any such customer will experience financial difficulties that prevent them from making payments to us on a timely basis or at all.