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What changed in Sidus Space Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Sidus Space Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+355 added−212 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in Sidus Space Inc.'s 2023 10-K

355 paragraphs added · 212 removed · 150 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

56 edited+54 added−38 removed78 unchanged
Biggest changeIn addition, Euroconsult expects that over the next decade, the total manufacturing and launch market value for small satellites is expected to reach $54.2 billion, more than three times the market value over 2011-2020.
Biggest changeAccording to Citi Report 2022: Space – Dawn of a New Age: published in 2022 , forecasts a $1 trillion annual revenue for the space economy by 2040, an increase from $370 billion in 2020 with forecasts of strong growth in satellites, government space budgets, as well as new applications and industries in the field of space exploration. 1 In addition, Prospects for the Small Satellite Market – A Euroconsult Report 8 th Edition July 2022 , expects that over the next decade, the total manufacturing and launch market value for small satellites is expected to reach $84 billion, more than 3.5 times the market value over 2012-2021.
These satellites are designed to for multiple missions and customers and form the foundation of our satellite platform. Weighing approximately 100 kilograms each, these hybrid 3D printed, modular satellites are more functional than cubesats and nanosatellites and less expensive to manufacture than the larger satellites in the 200-600kg range.
These satellites are designed for multiple missions and customers and form the foundation of our satellite platform. Weighing approximately 100 kilograms each, these hybrid 3D printed, modular satellites are more functional than cubesats and nanosatellites and less expensive to manufacture than the larger satellites in the 200-600kg range.
Our EFTP is characterized by: ● Highly reconfigurable platform ● Available space: 1100 in 3 (payloads are NOT required to conform to CubeSat form factors) ● Power: 28V connectors (up to 2 available) ● Flight computer available to support a wide array of sensor data ● Additive and traditional manufacturing available to support payload development ● Two left-hand circular polarized (LHCP) spiral antennae available with a frequency band of 2 to 18 GHz (nadir and zenith facing) ● GPS patch antenna option 12 LizzieSat TM (LS) LizzieSat (LS) is currently in development as a hybrid 3D manufactured Low Earth Orbit (LEO) microsatellite that focuses on rapid, cost-effective development and testing of innovative spacecraft technologies for multiple customers.
Our EFTP is characterized by: ● Highly reconfigurable platform ● Available space: 1100 in 3 (payloads are NOT required to conform to CubeSat form factors) ● Power: 28V connectors (up to 2 available) ● Flight computer available to support a wide array of sensor data ● Additive and traditional manufacturing available to support payload development 12 ● Two left-hand circular polarized (LHCP) spiral antennae available with a frequency band of 2 to 18 GHz (nadir and zenith facing) ● GPS patch antenna option LizzieSat TM (LS) LizzieSat (LS) is currently in development as a hybrid 3D manufactured Low Earth Orbit (LEO) microsatellite that focuses on rapid, cost-effective development and testing of innovative spacecraft technologies for multiple customers.
Our design engineering capabilities include: ● Requirements Definition – Product development and process optimization ● Verification/Validation (multiple checks and balance) – Meets specification and intended purpose ● Model Based Systems Engineering – Use of visual modeling vs document-based information exchange ● 3D CAD & 2D Engineering Release – Managing, planning, scheduling, and controlling ● Test Procedures and Performance – Meets customer driven requirements ● Operations/Maintenance Manuals – Fully integrated and procedurally driven ● System Integration – Horizontal sub-system integration approach to projects and programs ● Design for Life Cycle Cost & Manufacturing – Incorporation of innovative design manufacturing ● Model Based Data Control – Complex design verification/validation ● Finite Element and Failure Mode & Effects Analysis ● Design for Manufacturability Program Management We provide Program and Project Management to help improve project performance and provide oversight of complex projects and contracts through day-to-day support and expert knowledge.
Our design engineering capabilities include: ● Requirements Definition – Product development and process optimization ● Verification/Validation (multiple checks and balance) – Meets specification and intended purpose 14 ● Model Based Systems Engineering – Use of visual modeling vs document-based information exchange ● 3D CAD & 2D Engineering Release – Managing, planning, scheduling, and controlling ● Test Procedures and Performance – Meets customer driven requirements ● Operations/Maintenance Manuals – Fully integrated and procedurally driven ● System Integration – Horizontal sub-system integration approach to projects and programs ● Design for Life Cycle Cost & Manufacturing – Incorporation of innovative design manufacturing ● Model Based Data Control – Complex design verification/validation ● Finite Element and Failure Mode & Effects Analysis ● Design for Manufacturability Program Management We provide Program and Project Management to help improve project performance and provide oversight of complex projects and contracts through day-to-day support and expert knowledge.
We have also established a Joint Cooperation and Marketing Agreement with Dhruva, India’s first private space company, to co-market, and sell our services in other countries. Global Space Economy Overview In recent years, the importance of the space economy has been growing as technological advances in both satellites and supporting terrestrial technologies have enabled new commercial use cases.
We have also established a Joint Cooperation and Marketing Agreement with Dhruva, India’s first private space company, to co-market, and sell our services in other countries. Global Space Industry Overview In recent years, the importance of the space economy has been growing as technological advances in both satellites and supporting terrestrial technologies have enabled new commercial use cases.
Our IPC-J-STD-001 accredited technicians adhere to NASA work standards KSC-E-165, KSC-GP-864, KSC-STD-132, all required for NASA 8739.4 credentials with other industry-standard certifications. 14 Design Engineering We provide quality in-house design engineering services from up-front analysis to integration, assembly, and test.
Our IPC-J-STD-001 accredited technicians adhere to NASA work standards KSC-E-165, KSC-GP-864, KSC-STD-132, all required for NASA 8739.4 credentials with other industry-standard certifications. Design Engineering We provide quality in-house design engineering services from up-front analysis to integration, assembly, and test.
Nonetheless, there can be no assurance that the necessary licenses would be available on acceptable terms, if at all. The industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent claims and related litigation regarding patent and other intellectual property rights.
Nonetheless, there can be no assurance that the necessary licenses would be available on acceptable terms, if at all. 16 The industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent claims and related litigation regarding patent and other intellectual property rights.
There are also several competitors working to develop innovative solutions to compete in this industry. Our Competitive Differentiation We believe that we are well-positioned to compete with legacy space-based data providers and other emergent providers due to our vertical integration strategy that combines rapid production with flexible technology insertion points.
There are also several competitors working to develop innovative solutions to compete in this industry. 15 Our Competitive Differentiation We believe that we are well-positioned to compete with legacy space-based data providers and other emergent providers due to our vertical integration strategy that combines rapid production with flexible technology insertion points.
We signed a multi-launch agreement with SpaceX for five LizzieSat rideshare missions beginning in 2023. These five satellite missions support previously announced customers as well as potential future customers as we continue to layer new missions into our pipeline. 15 Sales and Marketing We market our services to both government and commercial customers.
We signed a multi-launch agreement with SpaceX for five LizzieSat rideshare missions beginning in 2023. These five satellite missions support previously announced customers as well as potential future customers as we continue to layer new missions into our pipeline. Sales and Marketing We market our services to both government and commercial customers.
The regulations exist to advance the national security and foreign policy interests of the U.S. The U.S. government agencies responsible for administering the ITAR and the EAR have significant discretion in the interpretation and enforcement of these regulations. The agencies also have significant discretion in approving, denying, or conditioning authorizations to engage in controlled activities.
The regulations exist to advance the national security and foreign policy interests of the U.S. 17 The U.S. government agencies responsible for administering the ITAR and the EAR have significant discretion in the interpretation and enforcement of these regulations. The agencies also have significant discretion in approving, denying, or conditioning authorizations to engage in controlled activities.
Looking toward the future, the potential for exciting developments in the field of sustainability are of upmost importance. These developments include the planned use of more biodegradable and/or recycled materials that can be used to manufacture parts and further benefit the environment.
Looking toward the future, the potential for exciting developments in the field of sustainability are of upmost importance. These developments include the use of more biodegradable and/or recycled materials that can be used to manufacture parts and further benefit the environment.
Our vertical integration enables us to control our satellites through the entire design, manufacturing, and operation process. Our years of experience manufacturing space hardware means that we are able to leverage our manufacturing expertise and commercial best practices for satellite production.
Our vertical integration enables us to control our satellites through the entire design, manufacturing, and operation process. Our years of experience manufacturing space hardware means we are able to leverage our manufacturing expertise and commercial best practices for satellite production.
Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov . The information contained in the SEC’s website is not intended to be a part of this filing. 18
Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov . The information contained in the SEC’s website is not intended to be a part of this filing.
However, we believe our addressable market can also continue to expand in similar and adjacent industries such as government and defense manufacturing. We have generated space-related manufacturing revenue since 2012, and we have been generating revenue from our commercial constellation space offering since the first quarter of 2022 as we continue to finalize customers for LizzieSat-1 (LS-1) and subsequent missions.
However, we believe our addressable market can also continue to expand in similar and adjacent industries such as government and defense manufacturing. We have generated space-related manufacturing revenue since 2012, and we have been generating revenue from our commercial constellation space offering since the first quarter of 2022 as we continue to secure customers for missions subsequent to LizzieSat-1 (LS-1).
Our planned satellites are being designed to integrate Customer Off the Shelf (COTS) subsystems that are space-proven, can be rapidly integrated into the satellite and replaced rapidly when customer needs changed or evolve. Our vertically integrated manufacturing processes give us the flexibility to make changes during the production cycle without impacting launch or costs.
Our planned satellites are being designed to integrate Customer Off the Shelf (COTS) subsystems that are space-proven, can be rapidly integrated into the satellite and replaced rapidly when customer needs change or evolve. Our vertically integrated manufacturing processes give us the flexibility to make changes during the production cycle without impacting launch or costs.
Specifically, our Space-as-a-Service offerings encompass all aspects of hosted satellite and constellation services, including hosting customer payloads onto our satellites, and delivering services to customers from our space platform.
Specifically, our Space and Defense-as-a-Service offerings encompass all aspects of hosted satellite and constellation services, including hosting customer payloads onto our satellites, and delivering data and constellation services to customers from our space platform.
Additional benefits include the removal of waste and unnecessary energy associated with conventional machining, often resulting in the production of more scrapped material per part than the material that part is composed of. While these are among the biggest impacts, the effects to can be seen in smaller scales.
Additional benefits include the removal of waste and unnecessary energy associated with conventional machining, often resulting in the production of more scrapped material per part than the material that part is composed of. While these are the biggest impacts, the effects too can be seen in smaller scales.
Any delays in commencing our commercial launch operations, including due to delays or cost overruns in obtaining NOAA licenses or other regulatory approvals for future operations or frequency requirements, could adversely impact our results and growth plans. Our Vertically Integrated Space Platform We are designing, developing, manufacturing, and plan to operate a constellation of proprietary smallsats.
Any delays in commencing our commercial launch operations, including due to delays or cost overruns in obtaining NOAA licenses or other regulatory approvals for future operations or frequency requirements, could adversely impact our results and growth plans. 7 Our Vertically Integrated Space Infrastructure We are designing, developing, manufacturing, and planning to operate a constellation of proprietary smallsats.
Our management team is comprised of our CEO and six (6) of her direct reports who, collectively, have management responsibility for our business. Our management team places significant focus and attention on matters concerning our human capital assets, particularly our diversity, capability development, and succession planning.
Our management team is comprised of our CEO and five (5) of her direct reports who, collectively, have management responsibility for our business. Our management team places significant focus and attention on matters concerning our human capital assets, particularly our diversity, capability development, and succession planning.
We can integrate technologies and deliver data on demand at lower costs than legacy providers due to our vertical integration, use of COTS proven systems, cost-efficiencies, capital efficient constellation design, and adaptable pricing models. We are manufacturing our satellites at our Cape Canaveral facility. Our current configuration and facility is designed to manufacture 5-10 satellites a month.
We can integrate technologies and deliver data on demand at lower costs than legacy providers due to our vertical integration, use of Customer Off the Shelf (COTS) proven systems, cost-efficiencies, capital efficient constellation design, and adaptable pricing models. We manufacture our satellites at our Cape Canaveral facility. Our current configuration and facility is designed to manufacture 5-10 satellites a month.
Under the ITAR, we must receive permission from the Directorate of Defense Trade Controls to release controlled technology to foreign person employees and other foreign persons. Employees/Human Capital As of December 31, 2022, we had 64 full-time employees and 7 part-time employees. We are not party to any collective bargaining agreements.
Under the ITAR, we must receive permission from the Directorate of Defense Trade Controls to release controlled technology to foreign person employees and other foreign persons. Employees/Human Capital As of December 31, 2023, we had 72 full-time employees and 10 part-time employees. We are not party to any collective bargaining agreements.
Planned services that benefit not only current customers but additional such as Mission Helios include providing the ability for customers to demonstrate that a technology (hardware or software) performs successfully in the harsh environment of space and delivering space-based data that can provide critical insight for agriculture, commodities tracking, disaster assessment, illegal trafficking monitoring, energy, mining, oil and gas, fire monitoring, classification of vegetation, soil moisture, carbon mass, Maritime AIS, Aviation ADS, weather monitoring, and space services.
Planned services that benefit current and future customers include delivering space-based data that can provide critical insight for agriculture, commodities tracking, disaster assessment, illegal trafficking monitoring, energy, mining, oil and gas, fire monitoring, classification of vegetation, soil moisture, carbon mass, Maritime AIS, Aviation ADS, and weather monitoring; providing the ability for customers to demonstrate that a technology (hardware or software) performs successfully in the harsh environment of space and delivering space services.
Although this indicates significant growth, it does not reflect the four-fold increase in the number of satellites resulting from the rise of cubesats, constellations and the introduction of low-cost systems for both manufacturing and launch, which will reduce average costs and market value. 4 Rapid growth in private investment in the commercial space industry has led to a wave of new companies reinventing major elements of the traditional space industry, including human spaceflight, satellites, and launch, in addition to unlocking entirely new market segments.
Although this indicates significant growth, it does not reflect the six-fold increase in the mass of smallsats resulting from the rise of cubesats, constellations and the introduction of low-cost systems for both manufacturing and launch, which reduce average costs per satellite. 10 Rapid growth in private investment in the commercial space industry has led to a wave of new companies reinventing major elements of the traditional space industry, including human spaceflight, satellites, and launch, in addition to unlocking entirely new market segments.
Until these developments occur, we are doing our part through the practice of recycling of metal and any used oil and coolant. As technologies continue to advance, we remain dedicated to preserving the Earth and continuing to evolve with newer technologies as they develop.
Until these developments occur, we are doing our part through the practice of recycling roughly 5,000 lbs. of metal a year coupled with the recycling of any used oil and coolant. As technologies continue to advance, we remain dedicated to preserving the Earth and continuing to evolve with newer technologies as they develop.
We plan to own and operate one of the industry’s leading U.S. based low earth orbit (“LEO”) small satellite (“smallsat” or “smallsats”) constellations.
We plan to own and operate one of the industry’s leading U.S. based low earth orbit (“LEO”) small satellite (“smallsat” or “smallsats”) constellations focused on earth observation and remote sensing.
Euroconsult anticipates that about 13,910 satellites Moreover, the rise of this market has also created a new market segment in nanosatellites and microsatellites, weighing less than 10 kg and between 10 and 100 kg, respectively.
Euroconsult anticipates that about 18,500 smallsats ( Moreover, the rise of this market has also created a new market segment in nanosatellites and microsatellites, weighing less than 10 kg and between 10 and 100 kg, respectively.
A key component of our focus on sustainability is found in our utilization of in-house 3D printing technology as a primary manufacturing asset. The development of 3D printing is host to a variety of manufacturing improvements but perhaps one of the chief benefits is the reduced environmental Impact of our manufacturing.
A key component of our focus on sustainability is found in our utilization of in-house 3D printing technology as a primary manufacturing asset. The development of 3D printing is host to a variety of manufacturing improvements but perhaps the chief benefits are seen in its reduction of environmental strain.
Before a satellite can use the spectrum and orbital resources it needs to fulfil its mission, it requires an associated ‘satellite filing’. The filing is a tool to obtain international recognition of these resources.
The ITU is the specialized agency responsible for principles and licensing of the use of orbit and spectrum. Before a satellite can use the spectrum and orbital resources it needs to fulfil its mission, it requires an associated ‘satellite filing’. The filing is a tool to obtain international recognition of these resources.
The growth in the satellite constellations market is being driven by technological advances in ground equipment, new business models, expanded funding, and growing demand for high bandwidth and lower latency.
A total of 3,335 smallsats 11 The growth in the LEO satellite constellations market is being driven by technological advances in ground equipment, new business models, expanded funding, and growing demand for high bandwidth and lower latency.
We filed for X-Band and S-Band Radio Frequencies licensing in February 2021 and were granted approval through a published filing by the International Telecommunications Union (ITU) on April 4, 2021. The ITU is the specialized agency responsible for principles and licensing of the use of orbit and spectrum.
We have received approval of International Telecommunications Union (ITU) spectrum licensing for both X-Band and S-Band frequencies. We filed for X-Band and S-Band Radio Frequencies licensing in February 2021 and were granted approval through a published filing by the International Telecommunications Union (ITU) on April 4, 2021.
Satellites are to be operated in a manner consistent with the regulations and procedures of the International Telecommunication Union (“ITU”), a specialized agency of the United Nations, which require the coordination of the operation of satellite systems in certain circumstances, and more generally are intended to avoid the occurrence of harmful interference among different users of the radio spectrum. 17 We have received approval of International Telecommunications Union (ITU) spectrum licensing for both X-Band and S-Band frequencies.
Satellites are to be operated in a manner consistent with the regulations and procedures of the International Telecommunication Union (“ITU”), a specialized agency of the United Nations, which require the coordination of the operation of satellite systems in certain circumstances, and more generally are intended to avoid the occurrence of harmful interference among different users of the radio spectrum.
Our patented technologies include a print head for regolith-polymer mixture and associated feedstock; a heat transfer system for regolith; a method for establishing a wastewater bioreactor environment; vertical takeoff and landing pad and interlocking pavers to construct same; and high-load vacuum chamber motion feedthrough systems and methods. Regolith is a blanket of unconsolidated, loose, heterogeneous superficial deposits covering solid rock.
Our patented space-related technologies include a print head for regolith-polymer mixture and associated feedstock; a heat transfer system for regolith; a method for establishing a wastewater bioreactor environment; vertical takeoff and landing pad and interlocking pavers to construct same; and high-load vacuum chamber motion feedthrough systems and methods.
It includes dust, broken rocks, and other related materials and is present on Earth, the Moon, Mars, some asteroids, and other terrestrial planets and moons. We continue to patent our products including our satellites, external platforms and other innovations.
Regolith is a blanket of unconsolidated, loose, heterogeneous superficial deposits covering solid rock. It includes dust, broken rocks, and other related materials and is present on Earth, the Moon, Mars, some asteroids, and other terrestrial planets and moons. We continue to patent our products including our satellites, external platforms and other innovations.
We also believe it is important to bridge the gap in the aerospace field by supporting young professionals through establishing partnerships with several organizations dedicated to providing STEM learning opportunities to a diverse array of students. 9 Governance Our governance structure is designed to promote transparency, efficiency, and ethics.
We are proud to support local STEM programs and schools in local communities. We are focused on bridging the gap in the aerospace field by supporting young professionals through establishing partnerships with several organizations dedicated to providing STEM learning opportunities to a diverse array of students. 9 Governance Our governance structure is designed to promote transparency, efficiency, and ethics.
Demand for large geosynchronous communications satellites dramatically declined as companies prepared to launch constellations of hundreds or thousands of smaller, less expensive broadband satellites in low and medium Earth orbits.
The demand for large geosynchronous satellites declined dramatically as companies prepared to launch constellations of smaller, cheaper broadband satellites in low and medium Earth orbits, resulting in a dramatic decrease in demand for large geosynchronous communications satellites.
As our satellite constellation grows, the amount of data we collect will scale, and we expect our revisit rate will improve. 7 Our cost efficient smallsats are designed from the ground-up to optimize performance per unit cost.
With six initial globally distributed ground stations, our constellation is designed for rapid tasking, collection, and delivery of high-revisit, high-resolution imagery and data analytics. As our satellite constellation grows, the amount of data we collect will scale, and we expect our revisit rate will improve. Our cost-efficient smallsats are designed from the ground-up to optimize performance per unit cost.
Any delays in our achieving full manufacturing capacity could adversely impact our results and growth plans. 8 Environmental, social, and corporate governance We are developing an Environmental, Social and Governance (ESG) policy that will implement the tracking of several indicators we believe are critical to ensure we are doing our part to continue sustainable growth and maximize shareholder value.
Environmental, social, and corporate governance While Environmental, Social and Governance (ESG) reporting is not mandatory, we are developing an ESG policy that will implement the tracking of several indicators we believe are critical to ensure we are doing our part to continue sustainable growth and maximize shareholder value.
As we expand service to additional countries and regions, we will become subject to additional governmental approvals and regulations. We will provide a number of services that rely on the use of radio-frequency spectrum, and the provision of such services is highly regulated.
We will provide a number of services that rely on the use of radio-frequency spectrum, and the provision of such services is highly regulated.
Furthermore, government agencies have realized the value of the private commercial space industry and have become increasingly more supportive and reliant on private companies to catalyze innovation and advance national space objectives.
Furthermore, government agencies have realized the value of the private commercial space industry and have become increasingly more supportive and reliant on private companies to catalyze innovation and advance national space objectives. In the United States, this has been evidenced by notable policy initiatives and by commercial contractors’ growing share of space activity.
We have been in business for ten years manufacturing space hardware and components, and in that time, implementation of policies and processes to mitigate environmental impact have been of upmost importance. Furthermore, since our inception, we have recognized the value of our employees and have always endeavored to prioritize employee well-being.
We have been in business for over ten years manufacturing space hardware and components, and in that time, implementation of policies and processes to mitigate environmental impact have been of upmost importance.
We anticipate that Phoenix will offer: ● 3U CubeSats (Up to 12) ● 6U CubeSats (Up to 6) ● 12U CubeSats (Up to 3) 13 Aerospace and Defense Manufacturing Services Our manufacturing capabilities combine our design engineering, precision machining, waterjet cutting, and wire harness fabrication experience to provide the highest quality and performance for mission critical systems.
We anticipate that Phoenix will offer: ● 3U CubeSats (Up to 12) ● 6U CubeSats (Up to 6) ● 12U CubeSats (Up to 3) Aerospace and Defense Manufacturing Services Our manufacturing capabilities combine our design engineering, precision machining, waterjet cutting, and wire harness fabrication experience to provide the highest quality and performance for mission critical systems. 13 Precision Machining and Assembly Our growing team of engineers and technicians, combined with state-of-the-art equipment support precision machining, fabrication, and assembly for prototypes, test articles, one-offs, low-rate initial production up through high volume Swiss screw machining production.
Our operating strategy is to continue to enhance the capabilities of our satellite constellation, to increase our international and domestic partnerships and to expand our analytics offerings in order to increase the value we deliver to our customers. Our two operating assets—our satellite constellation and hardware manufacturing capability—are mutually reinforcing and are a result of years of heritage and innovation.
Our operating strategy is to continue to enhance the capabilities of our satellite constellation, to increase our international and domestic partnerships and to expand our co-incident data analytics offerings in order to increase the value we deliver to our customers.
Thus far, we have not established a Research and Development department, nor have we incurred research and development expenses. We do not currently perform formal R&D and instead we engineer our solutions with additional enhancements and innovations as part of our normal design and engineering efforts.
While we have incurred research and development expenses related to our LizzieSat satellite, we have not established a separate Research & Development department. We engineer our solutions with additional enhancements and innovations as part of our normal design and engineering efforts.
Our strategy includes increasing the demand downstream by starting out as end user focused. While others are focused on data verticalization strategy specializing on a key sectors or problem set, we believe that flexibility in production, low-cost bespoke design and ‘Bringing Space Down to Earth’ for consumers will provide a scalable model for growth.
While others are focused on data verticalization strategy specializing on a key sectors or problem set, we believe that flexibility in production, low-cost bespoke design and ‘Bringing Space Down to Earth’ for consumers will provide a scalable model for growth. With LizzieSat design reviews (PDR and CDR) successfully completed in 2022, we began LizzieSat integration and testing in Q1 2023.
We believe the combination of the proven flight heritage and years of industry experience of a traditional space company with the disruptive innovation of a new space startup such as our 3D printing of spacecraft and focus on intellectual property makes us very well positioned in the global space economy. 6 Key Factors Affecting Our Results and Prospects We believe that our performance and future success depend on several factors that present significant opportunities but also pose risks and challenges, including competition from better known and well-capitalized companies, the risk of actual or perceived safety issues and their consequences for our reputation and the other factors discussed under “Risk Factors.” We believe the factors discussed below are key to our success.
Our two operating assets—our satellite constellation and hardware manufacturing capability—are mutually reinforcing and are a result of years of heritage and innovation. 6 Key Factors Affecting Our Results and Prospects We believe that our performance and future success depend on several factors that present significant opportunities but also pose risks and challenges, including competition from better known and well-capitalized companies, the risk of actual or perceived safety issues and their consequences for our reputation and the other factors discussed under “Risk Factors.” We believe the factors discussed below are key to our success.
We actively invest in the communities of our employees and are passionate about the improvement of their communities through individual efforts and partnership with local, regional, and national organizations.
We actively invest in the communities of our employees’ by supporting K-12 education, providing military and veteran assistance, environmental stewardship, and volunteering at local non-profit organizations. We, and our employees, are passionate about the improvement of their communities through individual efforts and partnership with local, regional, and national organizations.
Such licenses are held through Aurea Alas, Ltd., an Isle of Man company, which is a variable interest entity (“VIE”)to us. Our filing contains approved spectrum use for multiple X-Band and S-Band frequencies and five different orbital planes. Additionally, we filed and received approval for a NOAA license related to our initial launch.
Such licenses are held through Aurea Alas, Ltd., an Isle of Man company, which is a VIE to us. The ITU filing contains approved spectrum use for multiple X-Band and S-Band frequencies and seven different orbital planes, including 45 degrees. .
We support a broad range of international and domestic government and commercial companies with its hardware manufacturing including the Department of State, the Department of Defense, NASA, Collins Aerospace, Lockheed Martin, Teledyne Marine, Bechtel, and L3Harris in areas that include launch vehicles, satellite hardware, and autonomous underwater vehicles.
Department of State, the U.S. Department of Defense, NASA, Collins Aerospace, Lockheed Martin, Teledyne Marine, Bechtel, OneWeb Satellites, Parsons Corporation and L3Harris in areas that include launch vehicles, satellite hardware, and autonomous underwater vehicles.
Regulatory Our business is subject to extensive rules, regulations, statutes, orders and policies imposed by the government in the United States and in foreign jurisdictions. International Telecommunications Union (ITU) We are required to comply with the laws and regulations of, and often obtain approvals from, national and local authorities in connection with our services.
International Telecommunications Union (ITU) We are required to comply with the laws and regulations of, and often obtain approvals from, national and local authorities in connection with our services. As we expand service to additional countries and regions, we will become subject to additional governmental approvals and regulations.
Our low-cost satellites benefit from longer life and decreasing launch and on-orbit costs and our planned multi-mission constellation with vertical integration equals efficient use of capital expenses. 16 Our Intellectual Property We continually invest in innovative solutions and as of December 31, 2022 have 6 space related patents approved or pending, which ownership was transferred to us by our majority shareholder, Craig Technologies, at no charge.
Our Intellectual Property We continually invest in innovative solutions and as of December 31, 2023 have 6 space related patents approved or pending, which ownership was transferred to us by one of our principal shareholders, Craig Technologies, at no charge.
Revenue Generation We generate revenue by selling payload space on our satellite platform, providing engineering and systems integration services to strategic customers on project-by-project basis, and manufacturing space hardware. This support is typically contracted to both commercial and government customers under fixed price contracts and often includes other services.
Revenue Generation We generate revenue by selling payload space on our satellite platform, providing engineering and systems integration services to strategic customers on a project-by-project basis, and manufacturing space hardware. Additionally, we intend to add to our revenue by selling geospatial data and actionable intelligence captured through our constellation.
This EVA capability is to be provided as a service for the NASA International Space Station (ISS), Artemis Program (Gateway and Human Landing System), and Commercial Space missions. Commencing and Expanding Commercial Satellite Operations Our goal is to help customers understand how space-based data can be impactful to day-to-day business.
Commencing and Expanding Commercial Satellite Operations Our goal is to help customers understand how space-based data can be impactful to day-to-day business. Our strategy includes increasing the demand downstream by starting out as end user focused.
According to Euroconsult’s April 2021 small satellite market report, the next decade will be defined primarily by the rollout of multiple constellations, which will account for 84% of smallsats, mainly for commercial operators. The number of small satellites launched has increased from 39 in 2011 to 1,202 in 2020.
The next decade will be defined primarily by the rollout of multiple constellation projects, which will account for 81% of smallsats, mainly for commercial operators.
We also understand that our efforts to promote value and well-being are not limited to our employees. We are committed to the communities we belong to and have endeavored to provide tangible benefits back to the community that supports us.
We are committed to the communities we belong to both locally and professionally. We recently started to formalize this commitment, providing tangible benefits back to the community that supports us.
Lowering Manufacturing Cost and Schedule We are developing a manufacturing model that provides for rapid response to customer requirements including integration of customers technologies and space-based data delivery.
Due to the size and capacity of our satellite, we plan to host a diverse array of sensors such as Multispectral and Hyperspectral Earth Observing Imagers, Maritime Vessel RF Tracking receivers, UHF IoT Transceivers, Optical Communications gear and others on a single platform that can simultaneously address the needs of many customer requirements. 8 Lowering Manufacturing Cost and Schedule We are developing a manufacturing model that provides rapid response to customer requirements including integration of customers technologies and space-based data delivery.
It can also be driven by the need to secure its supply chain and keeping key differentiators in house, or when no compatible supply is available. 11 Our Products and Services Space Services We provide the following services to our customers: Satellite/Space Hardware Manufacturing For over a decade, we have manufactured space-rated and human-rated hardware and components.
LEO satellite constellations have relatively short lifespans on orbit, resulting in a requirement to launch replenishment satellites every few years. Our Products and Services Space Services We provide the following services to our customers: Satellite/Space Hardware Manufacturing For over a decade, we have manufactured space-rated and human-rated hardware and components.
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ITEM 1. BUSINESS Company Overview Founded in 2012, we are a vertically integrated provider of Space-as-a-Service solutions including end-to-end satellite support.
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ITEM 1. BUSINESS Company Overview Founded in 2012, we are a growing U.S. commercial space company with an established manufacturing business who has been trusted to provide mission-critical space hardware to many of the top aerospace businesses for over a decade.
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The company combines mission critical hardware manufacturing; multi-disciplinary engineering services; satellite design, manufacture, launch planning, mission operations and in-orbit support; and space-based data collection with a vision to enable space flight heritage status for new technologies and deliver data and predictive analytics to both domestic and global customers.
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We plan to offer on-orbit services as the space economy expands; said services are either in a developmental phase or soon to achieve flight heritage.
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We have over ten (10) years of commercial, military and government manufacturing experience combined with space qualification experience, existing customers and pipeline, and International Space Station (ISS) heritage hardware.
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We have strategically decided to expand our business by moving up the satellite value chain by becoming a provider of responsive and scalable on-orbit infrastructure as well as collecting Space and Earth observational data to capture larger market needs.
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In addition, we are building a multi-mission satellite constellation using our hybrid 3D printed multipurpose satellite to provide continuous, near real-time Earth Observation and Internet-of-Things (IOT) data for the global space economy.
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To address commercial and government customer needs and mission sets, we plan to organize into three core business lines: manufacturing services; space-infrastructure-as-a-service; and space-based data and insights. Our vertically integrated model is complementary across each line of business aiming to expand existing and unlock new potential revenue generating opportunities.
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We have designed and are manufacturing LizzieSat (LS) for our LEO satellite constellation operating in diverse orbits (28°-98° inclination, 300-650km altitude) as approved by the International Telecommunication Union (ITU) in February 2021. LS is expected to begin operations in 2023. Initial launches are planned via NASA CRS2 program agreement and launch service rideshare contracts.
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Additionally, we look to further transition into a subscription-based model upon the digitization of our manufacturing process as we expand alongside our space-based focus. Products and Services ● Manufacturing Services : Our manufacturing business is well-established, trusted by industry leaders and growing.
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Each LS is 100kg with 35kg dedicated to payloads including remote sensing instruments.
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Founded in 2012, we have been manufacturing mission-critical and satellite hardware for over a decade for our principal customers and have supported major government and commercial space programs like NASA’s Artemis / Lunar Gateway missions, xEVAS, Boeing’s Starliner, Sierra’s Dream Chaser, Airbus’ OneWeb Satellites and the International Space Station.
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Payloads (Sidus or customer owned) can collect data over multiple Earth based locations, record it onboard, and downlink via ground passes to Sidus Mission Control Center (MCC) in Merritt Island, FL. 5 Leveraging our existing manufacturing operations, flight hardware manufacturing experience and commercial off the shelf subsystem hardware, we believe we can deliver customer sensors to orbit in months, rather than years.
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Our manufacturing business operates within a 35,000 square foot facility and is adjacent to our clean-room facility.
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In addition, we intend on delivering high-impact data for insights on aviation, maritime, weather, space services, earth intelligence and observation, financial technology (Fintech) and the Internet of Things.
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We hold an AS9100 Aerospace certification, and we are International Traffic In Arms Regulations (ITAR) compliant thereby positioning us, in combination with our existing tooling and capability, to address unique high-precision manufacturing requirements. ● Space-Infrastructure-as-a-Service : We are in the process of developing and launching space-based infrastructure and establishing related ground-infrastructure support elements.
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While our business has historically been centered on the design and manufacture of space hardware, our expansion into manufacture of spacecraft as well as on-orbit constellation management services and space data applications has led us to innovating in the area of space data applications. We continue to patent our products including our satellites, external platforms and other innovations.
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Technology providers, constellation service providers and space-based data consumers are expected to be our principal customers. Collectively, the end-to-end infrastructure that results is offered as “Space-as-a-Service” to commercial customers and “Defense-as-a-Service” to certain government customers.
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Sidus offerings include a broad area of market sub-segments, such as: ● Mission Critical Hardware Manufacturing ● Multi-Disciplinary Engineering Services ● Satellite Design, Production, Launch Planning, Mission Operations, and In-Orbit Support ● On-Orbit Testing of Space Ecosystem Technologies and Hardware ● Data and Analytics Derived from Satellite Missions Each of these areas and initiatives addresses a critical component of our cradle-to-grave solution and value proposition for the space economy as a Space-as-a-Service company.
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Leveraging our industry experience and flight heritage, we are producing our own line of hybrid additively manufactured (3D printed) satellites in-house (LizzieSats) that are engineered to have the capacity and adaptability to simultaneously host payloads for Sidus driven purposes (see Space-Data-as-a-Service below) and/or offer ‘ride-share’ opportunities for technology customers to deliver data to their end users.
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The majority of our revenues to date have been from our space related hardware manufacturing, however, 2022 revenue includes revenue related to our multi-mission constellation and our hybrid 3D printed LizzieSat satellite.
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We anticipate “bookings” on our infrastructure in our planned ‘rideshare program’ as a key performance metric. Our Space-Infrastructure-as-a-Service offering plans to provide: satellite design, satellite manufacture, constellation operations, and payload hosting.
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Our strategy is to capitalize on the rapid growth and deployment of millions of low-cost GPS enabled terrestrial, IoT, and space-based sensors to provide data to global customers in near real-time.
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As of December 2023, we have: ● signed a multi-year and multi-launch agreement with Space-X thereby offering customers by extension a reliable, cost-effective launch service; 5 ● successfully completed environmental testing of LizzieSat satellite as required by launch provider, SpaceX for expected 2024 launch; ● integrated Edge Artificial Intelligence (AI) software into LizzieSat satellite providing the company the ability to offer on-orbit tailored solutions to customers enabling geospatial data to be processed more effectively; ● obtained approval for a 100+ satellite constellation by the International Telecommunication Union (ITU); ● established partnerships with a globally diverse network of 20+ ground stations to provide our users with near continuous high-rate, “on-orbit to cloud”, communications network; ● secured a mission operations center located on the Florida Space Coast, in Merritt Island, FL capable to manage satellite operations, orchestrate collection management tasks and satisfy data distribution requests with intentions to automate many elements of this process.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation law, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock. 40 Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.
Biggest changeAny provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.
We have not historically obtained and may not maintain launch or in-orbit insurance coverage for our satellites to address the risk of potential systemic anomalies, failures, collisions with our satellites or other satellites or debris, or catastrophic events affecting the existing satellite system.
We have not historically obtained and may not maintain launch or in-orbit insurance coverage for our satellites to address the risk of potential systemic anomalies, failures, collisions with our satellites or other satellites or debris, or catastrophic events affecting the existing satellite system.
We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries.
We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries.
As we expand internationally, we expect that we would be subject to additional risks related to entering into international business relationships, including: ● restructuring our operations to comply with local regulatory regimes; ● identifying, hiring and training highly skilled personnel; ● unexpected changes in tariffs, trade barriers and regulatory requirements, including through the International Traffic in Arms Regulations, or ITAR, Export Administration Regulations, or EAR, and Office of Foreign Assets Control, or OFAC; ● economic weakness, including inflation, or political instability in foreign economies and markets; ● compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; ● foreign taxes, including withholding of payroll taxes; ● the need for U.S. government approval to operate our spaceflight systems outside the United States; 28 ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue; ● government appropriation of assets; ● workforce uncertainty in countries where labor unrest is more common than in the United States; and ● disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the U.S.
As we expand internationally, we expect that we would be subject to additional risks related to entering into international business relationships, including: ● restructuring our operations to comply with local regulatory regimes; ● identifying, hiring and training highly skilled personnel; ● unexpected changes in tariffs, trade barriers and regulatory requirements, including through the International Traffic in Arms Regulations, or ITAR, Export Administration Regulations, or EAR, and Office of Foreign Assets Control, or OFAC; ● economic weakness, including inflation, or political instability in foreign economies and markets; ● compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; ● foreign taxes, including withholding of payroll taxes; ● the need for U.S. government approval to operate our spaceflight systems outside the United States; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue; ● government appropriation of assets; ● workforce uncertainty in countries where labor unrest is more common than in the United States; and ● disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the U.S.
The successful development of our satellite capabilities and related technology involves many uncertainties, some of which are beyond our control, including, but not limited to: ● timing in making further enhancements to our product design and specifications; ● successful completion of our planned commercial satellite launches; ● our ability to obtain additional applicable approvals, licenses or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications; ● performance of our manufacturing facilities despite risks that disrupt productions, such as natural disasters and hazardous materials; ● performance of a limited number of suppliers for certain raw materials and supplied components; ● performance of our third-party contractors that support our future research and development activities; ● our ability to maintain rights from third parties for intellectual properties critical to our future research and development activities; ● our ability to fund and maintain our future research and development activities, particularly the development of various enhancements that increase the data transfer capacity of our satellite; and ● the impact of the COVID-19 pandemic on us, our customers, suppliers and distributors, and the global economy.
The successful development of our satellite capabilities and related technology involves many uncertainties, some of which are beyond our control, including, but not limited to: ● timing in making further enhancements to our product design and specifications; ● successful completion of our planned commercial satellite launches; ● our ability to obtain additional applicable approvals, licenses or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications; ● performance of our manufacturing facilities despite risks that disrupt productions, such as natural disasters and hazardous materials; 20 ● performance of a limited number of suppliers for certain raw materials and supplied components; ● performance of our third-party contractors that support our future research and development activities; ● our ability to maintain rights from third parties for intellectual properties critical to our future research and development activities; ● our ability to fund and maintain our future research and development activities, particularly the development of various enhancements that increase the data transfer capacity of our satellite; and ● the impact of the COVID-19 pandemic on us, our customers, suppliers and distributors, and the global economy.
Our certificate of incorporation requires that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for each of the following: ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim for breach of any fiduciary duty owed by any director, officer, or other employee of ours to the Company or our stockholders, creditors or other constituents; ● any action asserting a claim against us or any director or officer of ours arising pursuant to, or a claim against us or any of our directors or officers, with respect to the interpretation or application of any provision of, the DGCL, our certificate of incorporation or bylaws; or ● any action asserting a claim governed by the internal affairs doctrine; provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any of the foregoing actions for lack of subject matter jurisdiction, any such action or actions may be brought in another state court sitting in the State of Delaware.
Our certificate of incorporation requires that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for each of the following: ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim for breach of any fiduciary duty owed by any director, officer, or other employee of ours to the Company or our stockholders, creditors or other constituents; ● any action asserting a claim against us or any director or officer of ours arising pursuant to, or a claim against us or any of our directors or officers, with respect to the interpretation or application of any provision of, the DGCL, our certificate of incorporation or bylaws; or ● any action asserting a claim governed by the internal affairs doctrine; 37 provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any of the foregoing actions for lack of subject matter jurisdiction, any such action or actions may be brought in another state court sitting in the State of Delaware.
Risks and challenges we have faced or expects to face include our ability to: ● forecast our revenue and budget for and manage our expenses; ● attract new customers and retain existing customers; ● effectively manage our growth and business operations, including planning for and managing capital expenditures for our current and future space and space-related systems and services, managing our supply chain and supplier relationships related to our current and future product and service offerings, and integrating acquisitions; ● anticipate and respond to macroeconomic changes and changes in the markets in which we operate; ● maintain and enhance the value of our reputation and brand; ● develop and protect intellectual property; and ● hire, integrate and retain talented people at all levels of our organization.
Risks and challenges we have faced or expects to face include our ability to: ● forecast our revenue and budget for and manage our expenses; ● attract new customers and retain existing customers; 18 ● effectively manage our growth and business operations, including planning for and managing capital expenditures for our current and future space and space-related systems and services, managing our supply chain and supplier relationships related to our current and future product and service offerings, and integrating acquisitions; ● anticipate and respond to macroeconomic changes and changes in the markets in which we operate; ● maintain and enhance the value of our reputation and brand; ● develop and protect intellectual property; and ● hire, integrate and retain talented people at all levels of our organization.
Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our products. 26 Protecting and defending against intellectual property claims may have a material adverse effect on our business. Our success depends in part upon successful prosecution, maintenance, enforcement and protection of our owned and licensed intellectual property.
Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our products. Protecting and defending against intellectual property claims may have a material adverse effect on our business. Our success depends in part upon successful prosecution, maintenance, enforcement and protection of our owned and licensed intellectual property.
We may elect not to avail ourselves of this exemption from new or revised accounting standards and, therefore, may be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
We may elect not to avail ourselves of this exemption from new or revised accounting standards and, therefore, may be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. 36 We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
We have limited experience in forecasting, marketing and selling such services, and if we are unable to utilize our current or future sales organization effectively in order to adequately target and engage our potential customers, our business may be adversely affected. Our success depends, in part, on our ability to attract new customers in a cost-effective manner.
We have limited experience in forecasting, marketing and selling such services, and if we are unable to utilize our current or future sales organization effectively in order to adequately target and engage our potential customers, our business may be adversely affected. 19 Our success depends, in part, on our ability to attract new customers in a cost-effective manner.
Such a delay in recognizing revenue could materially impact our financial statements or result in negative impacts to our earnings during a specified time period, which could have a material effect on our results of operations and financial condition. 24 We rely on a limited number of suppliers for certain raw materials and supplied components.
Such a delay in recognizing revenue could materially impact our financial statements or result in negative impacts to our earnings during a specified time period, which could have a material effect on our results of operations and financial condition. We rely on a limited number of suppliers for certain raw materials and supplied components.
Additionally, our manufacturing operations are hazardous at times and may expose us to safety risks, including environmental risks and health and safety hazards to our employees or third parties. Moreover, our operations are entirely based in and around our Cape Canaveral, Florida facility, where our machine shop, production facilities, administrative offices, and engineering functions are located.
Additionally, our manufacturing operations are hazardous at times and may expose us to safety risks, including environmental risks and health and safety hazards to our employees or third parties. 30 Moreover, our operations are entirely based in and around our Cape Canaveral, Florida facility, where our machine shop, production facilities, administrative offices, and engineering functions are located.
If the government terminates a contract for default, the defaulting party may be liable for any extra costs incurred by the government in procuring undelivered items from another source. 27 Our government contracts may be subject to the approval of appropriations being made by the U.S. Congress to fund the expenditures under these contracts.
If the government terminates a contract for default, the defaulting party may be liable for any extra costs incurred by the government in procuring undelivered items from another source. Our government contracts may be subject to the approval of appropriations being made by the U.S. Congress to fund the expenditures under these contracts.
As a result, our estimates of the annual total addressable markets for in-space infrastructure services, as well as the expected growth rate for the total addressable market for that experience, may prove to be incorrect. We are subject to environmental regulation and may incur substantial costs.
As a result, our estimates of the annual total addressable markets for in-space infrastructure services, as well as the expected growth rate for the total addressable market for that experience, may prove to be incorrect. 32 We are subject to environmental regulation and may incur substantial costs.
If we are not able to suitably service, upgrade or replace our equipment, our ability to provide our services and therefore to generate revenue could be harmed. 22 Our satellites may collide with space debris or another spacecraft, which could adversely affect our operations.
If we are not able to suitably service, upgrade or replace our equipment, our ability to provide our services and therefore to generate revenue could be harmed. Our satellites may collide with space debris or another spacecraft, which could adversely affect our operations.
These restrictions on the ability of foreign persons to invest in us could limit our ability to engage in strategic transactions that could benefit our stockholders, including a change of control, and could also affect the price that an investor may be willing to pay for our common stock. 30 Failure to comply with federal, state, and foreign laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could adversely affect our business and our financial condition.
These restrictions on the ability of foreign persons to invest in us could limit our ability to engage in strategic transactions that could benefit our stockholders, including a change of control, and could also affect the price that an investor may be willing to pay for our common stock. 28 Failure to comply with federal, state, and foreign laws and regulations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could adversely affect our business and our financial condition.
Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide. 34 We may become involved in litigation that may materially adversely affect us.
Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide. We may become involved in litigation that may materially adversely affect us.
Our customized hardware and software may be difficult and expensive to service, upgrade or replace. Some of the hardware and software we use in operations is significantly customized and tailored to meet our requirements and specifications and could be difficult and expensive to service, upgrade or replace.
Some of the hardware and software we use in operations is significantly customized and tailored to meet our requirements and specifications and could be difficult and expensive to service, upgrade or replace.
If we are unable to drive commensurate growth, these costs, which include lease commitments, headcount and capital assets, could result in decreased margins, which could have a material adverse effect on our business, financial condition and results of operations. 23 Our prospects and operations may be adversely affected by changes in consumer preferences and economic conditions that affect demand for satellite services.
If we are unable to drive commensurate growth, these costs, which include lease commitments, headcount and capital assets, could result in decreased margins, which could have a material adverse effect on our business, financial condition and results of operations. 22 Our prospects and operations may be adversely affected by changes in consumer preferences and economic conditions that affect demand for satellite services.
Significant unavailability of our services due to attacks could cause users to cease using our services and materially and adversely affect our business, prospects, financial condition, and results of operations. 31 We are highly dependent on our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
Significant unavailability of our services due to attacks could cause users to cease using our services and materially and adversely affect our business, prospects, financial condition, and results of operations. 29 We are highly dependent on our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
As a result, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock.
As a result, it is possible that one or more of the persons or entities holding our Class B common stock could gain significant voting influence as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock.
This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions requiring stockholder approval, and that may adversely affect the trading price of our Class A common stock.
This ownership could limit your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions requiring stockholder approval, and that may adversely affect the trading price of our Class A common stock.
This concentrated control may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions requiring stockholder approval.
This significant influence may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions requiring stockholder approval.
Our Class B common stock has ten votes per share, and our Class A common stock, which is the stock that we sold in our initial public offering, has one vote per share. CTC holds all of the issued and outstanding shares of our Class B common stock, representing approximately 92.6% of the voting power of our outstanding capital stock.
Our Class B common stock has ten votes per share, and our Class A common stock, which is the stock that we sold in our initial public offering, has one vote per share. CTC holds all of the issued and outstanding shares of our Class B common stock, representing approximately 20% of the voting power of our outstanding capital stock.
We face intense competition in the commercial space market and amongst our competitors. Currently, our primary competitors in the commercial satellite market are Blacksky, Spire, Hawkeye 360, LoftOrbital, and IceEye.
We face intense competition in the commercial space market and amongst our competitors. Currently, our primary competitors in the commercial satellite market are Blacksky, Spire, Hawkeye 360, LoftOrbital, York Aerospace Systems and IceEye.
Additionally, in January of 2020, a microsatellite was successfully launched from the ISS using our SSIKLOPS platform for the STP program office. There is no guarantee that our planned commercial launches or subsequent commercial launches thereafter will be successful.
Additionally, in January of 2020, a microsatellite was successfully launched from the ISS using our SSIKLOPS platform for the STP program office. In March 2024, we launched our first LizzieSat satellite. There is no guarantee that our planned commercial launches or subsequent commercial launches thereafter will be successful.
Investors seeking cash dividends should not purchase our shares. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.
Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.
Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions as specified in our amended and restated certificate of incorporation, such as transfers to family members and certain transfers effected for estate planning purposes.
As a result, such influence may adversely affect the market price of our Class A common stock. 34 Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions as specified in our amended and restated certificate of incorporation, such as transfers to family members and certain transfers effected for estate planning purposes.
In addition, because of the ten-to-one voting ratio between our Class B and Class A common stock, the holder of our Class B common stock could continue to control a majority of the combined voting power of our common stock and therefore control all matters submitted to our stockholders for approval until converted by our Class B common stockholder.
In addition, because of the ten-to-one voting ratio between our Class B and Class A common stock, the holder of our Class B common stock could continue to have significant influence in the voting power of our common stock and therefore significantly influence all matters submitted to our stockholders for approval until converted by our Class B common stockholder.
If we encounter difficulties in scaling our delivery or servicing capabilities, if we fail to develop and successfully commercialize our satellites and related technologies, if we fail to develop such technologies before our competitors, or if such technologies fail to perform as expected, are inferior to those of our competitors or are perceived as less safe than those of our competitors, our business, financial condition and results of operations could be materially and adversely impacted.
If we encounter difficulties in scaling our delivery or servicing capabilities, if we fail to develop and successfully commercialize our satellites and related technologies, if we fail to develop such technologies before our competitors, or if such technologies fail to perform as expected, are inferior to those of our competitors or are perceived as less safe than those of our competitors, our business, financial condition and results of operations could be materially and adversely impacted. 21 Our customized hardware and software may be difficult and expensive to service, upgrade or replace.
We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to achieve or maintain profitability. We have incurred significant losses since our inception. We incurred net losses of $12,839,968 and $3,746,138 for the years ended December 31, 2022 and 2021, respectively.
We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to achieve or maintain profitability. We have incurred significant losses since our inception. We incurred net losses of $14,328,348 and $12,839,968 for the years ended December 31, 2023 and 2022, respectively.
Launch failures, explosions and other accidents on launch or during flight have occurred for others and will likely occur in the future. 21 While we have built operational processes to ensure that the design, manufacture, performance and servicing of our products and related technologies meet rigorous quality standards, there can be no assurance that we will not experience operational or process failures and other problems, including through manufacturing or design defects, cyber-attacks or other intentional acts, that could result in potential safety risks.
While we have built operational processes to ensure that the design, manufacture, performance and servicing of our products and related technologies meet rigorous quality standards, there can be no assurance that we will not experience operational or process failures and other problems, including through manufacturing or design defects, cyber-attacks or other intentional acts, that could result in potential safety risks.
If our launch partners fail to obtain the licenses necessary to support our anticipated launch cadence, or any delays or hurdles that present in our interactions with the FAA, the FCC/ITU or other regulatory authorities, could impact our ability to grow our business, could delay our ability to execute on our existing and future customer contracts and could adversely affect our business and results of operations. 29 We are subject to stringent U.S. export and import control laws and regulations.
If our launch partners fail to obtain the licenses necessary to support our anticipated launch cadence, or any delays or hurdles that present in our interactions with the FAA, the FCC/ITU or other regulatory authorities, could impact our ability to grow our business, could delay our ability to execute on our existing and future customer contracts and could adversely affect our business and results of operations.
In addition, we are aware of a significant number of entities actively engaged in developing commercial launch capabilities for small and medium sized satellite payloads, including Virgin Orbit, Relativity, ABL, and Firefly, among others.
In addition, we are aware of a significant number of entities actively engaged in developing commercial launch capabilities for small and medium sized satellite payloads, including ABL, Rocketlab, Blue Origin, United Launch Alliance and Firefly, among others.
If, for any reason, we should fail to maintain compliance with these listing standards and Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our stockholders: ● the liquidity of our common stock; ● the market price of our common stock; ● our ability to obtain financing for the continuation of our operations; ● the number of institutional and general investors that will consider investing in our common stock; ● the number of investors in general that will consider investing in our common stock; ● the number of market makers in our common stock; ● the availability of information concerning the trading prices and volume of our common stock; and ● the number of broker-dealers willing to execute trades in shares of our common stock. 37 The dual-class structure of our common stock as contained in our amended and restated certificate of incorporation, as amended, has the effect of concentrating voting control with those stockholders who held our Class B common stock prior to our initial public offering.
If, for any reason, we should fail to maintain compliance with these listing standards and Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our stockholders: ● the liquidity of our common stock; ● the market price of our common stock; ● our ability to obtain financing for the continuation of our operations; ● the number of institutional and general investors that will consider investing in our common stock; ● the number of investors in general that will consider investing in our common stock; ● the number of market makers in our common stock; ● the availability of information concerning the trading prices and volume of our common stock; and ● the number of broker-dealers willing to execute trades in shares of our common stock.
If any customer were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts for any reason, including as a result of our failure to meet certain performance milestones, or if a government customer were to suspend or debar us from doing business with such government, our business, financial condition, and results of operations would be materially harmed.
If any customer were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts for any reason, including as a result of our failure to meet certain performance milestones, or if a government customer were to suspend or debar us from doing business with such government, our business, financial condition, and results of operations would be materially harmed. 26 If we commercialize outside the United States, we will be exposed to a variety of risks associated with international operations that could materially and adversely affect our business.
In addition, this concentrated control may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders. As a result, such concentrated control may adversely affect the market price of our Class A common stock.
In addition, this concentrated control may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans and, more generally, any of these events could cause consumer confidence and spending to decrease, which could adversely impact our commercial satellite manufacturing, launch and data operations.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans and, more generally, any of these events could cause consumer confidence and spending to decrease, which could adversely impact our commercial satellite manufacturing, launch and data operations. 31 Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.
CTC controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other stockholders from influencing significant decisions. CTC owns a 92.6% of the economic interest and voting power of our outstanding common stock as of December 31, 2022.
CTC controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other stockholders from influencing significant decisions. CTC owns approximately 20% of the economic interest and voting power of our outstanding common stock as of March 27,2024.
Moreover, regulation of our industry is still evolving, and new or different laws or regulations could affect our operations, increase direct compliance costs for us or cause any third-party suppliers or contractors to raise the prices they charge us because of increased compliance costs.
Delays in licensing and approvals allowing us to deploy our commercial satellites could adversely affect our ability to operate our business and our financial results. 27 Moreover, regulation of our industry is still evolving, and new or different laws or regulations could affect our operations, increase direct compliance costs for us or cause any third-party suppliers or contractors to raise the prices they charge us because of increased compliance costs.
Any such foreign competitor, for example, could benefit from subsidies from, or other protective measures by, its home country. 25 We believe our ability to compete successfully as a commercial provider of launch and satellite services does and will depend on a number of factors, which may change in the future due to increased competition, including the price of our products and services, consumer satisfaction for the experiences we offer, and the frequency and availability of our products and services.
We believe our ability to compete successfully as a commercial provider of launch and satellite services does and will depend on a number of factors, which may change in the future due to increased competition, including the price of our products and services, consumer satisfaction for the experiences we offer, and the frequency and availability of our products and services.
Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition. 41 We note that there is uncertainty as to whether a court would enforce the provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
As a result, our losses may be larger than anticipated, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able to maintain or increase profitability. 19 We expect our operating expenses to increase over the next several years as we commence production level satellite manufacturing and satellite launch activities, continue to refine and streamline our design and manufacturing processes, make technical improvements, increase our launch cadence, hire additional employees and initiate research and development efforts relating to new products and technologies, including our space services business.
We expect our operating expenses to increase over the next several years as we commence production level satellite manufacturing and satellite launch activities, continue to refine and streamline our design and manufacturing processes, make technical improvements, increase our launch cadence, hire additional employees and initiate research and development efforts relating to new products and technologies, including our space services business.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our common stock to decline.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our common stock to decline. 35 We do not expect to pay dividends in the foreseeable future, and you must rely on price appreciation of your shares of Class A common stock for return on your investment.
If we are unable to successfully or timely integrate the operations of an acquired company with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the acquisitions, or fully offset the costs of the acquisition, and our business, results of operations and financial condition could be materially and adversely affected. 32 We are subject to many hazards and operational risks that can disrupt our business, including interruptions or disruptions in service at our primary facilities, which could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to successfully or timely integrate the operations of an acquired company with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the acquisitions, or fully offset the costs of the acquisition, and our business, results of operations and financial condition could be materially and adversely affected.
We do not believe, however, that pending environmental regulatory developments in this area will have a material effect on our capital expenditures or otherwise materially adversely affect its operations, operating costs, or competitive position. 35 The COVID-19 pandemic has and could continue to negatively affect various aspects of our business, make it more difficult for us to meet our obligations to our customers, and result in reduced demand for our products and services, which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
The COVID-19 pandemic has and could continue to negatively affect various aspects of our business, make it more difficult for us to meet our obligations to our customers, and result in reduced demand for our products and services, which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide. Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results.
Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results.
In addition, we have in the past and may in the future experience delays in manufacture or operation as we go through the requalification process with any replacement third-party supplier, as well as the limitations imposed by International Traffic in Arms Regulations and other restrictions on transfer of sensitive technologies.
We may not be able to obtain sufficient supply of raw materials or supplied components, on favorable terms or at all, which could result in delays in manufacture of our products or increased costs. 23 In addition, we have in the past and may in the future experience delays in manufacture or operation as we go through the requalification process with any replacement third-party supplier, as well as the limitations imposed by International Traffic in Arms Regulations and other restrictions on transfer of sensitive technologies.
Such competition or any limitations on our ability to take advantage of such technologies could impact our market share, which could have a material adverse effect on our business, financial condition, and results of operations.
Such competition or any limitations on our ability to take advantage of such technologies could impact our market share, which could have a material adverse effect on our business, financial condition, and results of operations. 24 Such research and development initiatives may also have a high degree of risk and involve unproven business strategies and technologies with which we have limited operating or development experience.
Irrespective of the validity of any such claims, we could incur significant costs and diversion of resources in defending against them, and there is no guarantee any such defense would be successful, which could have a material adverse effect on our business, contracts, financial condition, operating results, liquidity, and prospects.
Irrespective of the validity of any such claims, we could incur significant costs and diversion of resources in defending against them, and there is no guarantee any such defense would be successful, which could have a material adverse effect on our business, contracts, financial condition, operating results, liquidity, and prospects. 25 Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could divert the time and resources of our management team, and harm our business, our operating results and our reputation.
Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. 39 We are an “emerging growth company,” and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.
Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404.
As long as CTC beneficially controls a majority of the voting power of our outstanding Class B common stock, it will generally be able to determine the outcome of all corporate actions requiring stockholder approval, including the election and removal of directors.
Although CTC controls less than a majority of the voting power of our outstanding Class B common stock, it may influence the outcome of such corporate actions requiring stockholder approval, including election and removal of directors.
We plan to continue to build our pipeline of global customers to include joint ventures and strategic partnerships.
As part of our growth, we aim to establish offices and partnerships outside of the United States. We plan to continue to build our pipeline of global customers to include joint ventures and strategic partnerships.
Any failures or setbacks, particularly on our first commercial launches, could harm our reputation and have a material adverse effect on our business, financial condition and results of operation. 20 The market for commercial satellite manufacturing, launch and data services for small LEO satellites is not well established, is still emerging and may not achieve the growth potential we expect or may grow more slowly than expected.
The market for commercial satellite manufacturing, launch and data services for small LEO satellites is not well established, is still emerging and may not achieve the growth potential we expect or may grow more slowly than expected.
Accordingly, we currently have no insurance to cover any third-party damages that may be caused by any of our satellites, including personal and property insurance.
Accordingly, we currently have no insurance to cover any third-party damages that may be caused by any of our satellites, including personal and property insurance. If we experience significant uninsured losses, such events could have a material adverse impact on our business, financial condition and results of operations.
We do not expect to pay dividends in the foreseeable future, and you must rely on price appreciation of your shares of Class A common stock for return on your investment. We have paid no cash dividends on any class of our stock to date, and we do not anticipate paying cash dividends in the near term.
We have paid no cash dividends on any class of our stock to date, and we do not anticipate paying cash dividends in the near term. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our stock.
For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our stock. Accordingly, investors must be prepared to rely on sales of their shares after price appreciation to earn an investment return, which may never occur.
Accordingly, investors must be prepared to rely on sales of their shares after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our shares.
We have not yet delivered our 3D printed satellites into orbit, and any setbacks we may experience during our first commercial satellite launch and other demonstration and commercial missions could have a material adverse effect on our business, financial condition and results of operation, and could harm our reputation.
If we are unable to attract new customers, our business, financial condition and results of operations will be harmed. Any setbacks we may experience during commercial satellite launches and other demonstration and commercial missions could have a material adverse effect on our business, financial condition and results of operation, and could harm our reputation.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“the JOBS Act”).
We are an “emerging growth company,” and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors. We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“the JOBS Act”).
If CTC continues to hold its shares of our Class B common stock, it could remain our controlling stockholder for an extended period of time or indefinitely.
If CTC continues to hold its shares of our Class B common stock, it could continue to influence these actions for an extended period of time or indefinitely. 33 The ownership by our Chief Executive Officer of shares of CTC common stock may create, or may create the appearance of, conflicts of interest.
Such research and development initiatives may also have a high degree of risk and involve unproven business strategies and technologies with which we have limited operating or development experience. They may involve claims and liabilities (including, but not limited to, personal injury claims), expenses, regulatory challenges, and other risks that we may not be able to anticipate.
They may involve claims and liabilities (including, but not limited to, personal injury claims), expenses, regulatory challenges, and other risks that we may not be able to anticipate.
If we experience significant uninsured losses, such events could have a material adverse impact on our business, financial condition and results of operations. 33 Natural disasters, unusual weather conditions, epidemic outbreaks, global health crises, terrorist acts and political events could disrupt our business and flight schedule.
Natural disasters, unusual weather conditions, epidemic outbreaks, global health crises, terrorist acts and political events could disrupt our business and flight schedule.
The concentrated voting power of these stockholders could have the effect of delaying or preventing an acquisition of the company or another significant corporate transaction. 38 We could be subject to securities class action litigation. In the past, securities class action litigation has often been brought against companies following a decline in the market price of their securities.
As a result, the market price of our Class A common stock could be adversely affected.+ We could be subject to securities class action litigation. In the past, securities class action litigation has often been brought against companies following a decline in the market price of their securities.
We currently have agreements with the International Space Station and Vaya Space and expect to enter into a variety of arrangements to secure additional launch partners. We may in the future experience delays in our efforts to secure additional launch partners.
We rely on third party launch partners to launch our and our customers’ satellites. We may in the future experience delays in our efforts to secure additional launch partners.
Removed
If we are unable to attract new customers, our business, financial condition and results of operations will be harmed.
Added
As a result, our losses may be larger than anticipated, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able to maintain or increase profitability.
Removed
We rely on third party launch partners to launch our and our customers’ satellites. Part of our strategy involves increasing our launch cadence and reaching 100 satellites launched by 2026. Our ability to achieve such launch cadence targets will depend on our ability to maintain our relationships with our existing launch partners and add new launch partners in the future.
Added
Any failures or setbacks, particularly on our first commercial launches, could harm our reputation and have a material adverse effect on our business, financial condition and results of operation.
Removed
We may not be able to obtain sufficient supply of raw materials or supplied components, on favorable terms or at all, which could result in delays in manufacture of our products or increased costs.
Added
Launch failures, explosions and other accidents on launch or during flight have occurred for others and will likely occur in the future.
Removed
Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could divert the time and resources of our management team, and harm our business, our operating results and our reputation.
Added
Any such foreign competitor, for example, could benefit from subsidies from, or other protective measures by, its home country.
Removed
If we commercialize outside the United States, we will be exposed to a variety of risks associated with international operations that could materially and adversely affect our business. As part of our growth, we aim to establish offices and partnerships outside of the United States.
Added
We are subject to stringent U.S. export and import control laws and regulations.
Removed
Delays in licensing and approvals allowing us to deploy our commercial satellites could adversely affect our ability to operate our business and our financial results.
Added
We are subject to many hazards and operational risks that can disrupt our business, including interruptions or disruptions in service at our primary facilities, which could have a material adverse effect on our business, financial condition, and results of operations.
Removed
Even if CTC were to control less than a majority of the voting power of our outstanding Class B common stock, it may influence the outcome of such corporate actions so long as it owns a significant portion of our Class B common stock.
Added
We do not believe, however, that pending environmental regulatory developments in this area will have a material effect on our capital expenditures or otherwise materially adversely affect its operations, operating costs, or competitive position.
Removed
We may be a “controlled company” within the meaning of the Nasdaq rules and, as a result, may qualify for, and may rely on, exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.
Added
The dual-class structure of our common stock as contained in our amended and restated certificate of incorporation, as amended, has the effect of concentrating voting influence with those stockholders who held our Class B common stock prior to our initial public offering.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe pay a combined amount of $23,455.73 per month plus applicable sales and use tax, which is currently 6.5% in Brevard County. We have a total of 35,700 square feet of leased space in these buildings. We believe our manufacturing spaces are adequate for our current operations and will allow for expected initial growth.
Biggest changeWe pay a combined amount of $24,042 per month plus applicable sales and use tax, which is currently 6.5% in Brevard County. We have a total of 35,000 square feet of leased space in these buildings. We believe our manufacturing spaces are adequate for our current operations and will allow for expected initial growth.
We occupy facilities totaling approximately 3500 square feet under a sublease from Craig Technical Consulting, Inc., a principal stockholder and an entity owned and controlled by our Chief Executive Officer, Carol Craig, pursuant to a commercial sublease agreement (the “Lease Agreement”), dated August 1, 2021. The Lease Agreement currently has a 2-year term.
We occupy facilities totaling approximately 3500 square feet under a sublease from Craig Technical Consulting, Inc., a principal stockholder and an entity owned and controlled by our Chief Executive Officer, Carol Craig, pursuant to a commercial sublease agreement (the “Lease Agreement”), dated August 1, 2021. The Lease Agreement currently has a 3-year term.
We currently pay $4,707.18 per month plus applicable sales and use tax, which is currently 6.5% in Brevard County. We believe this location is adequate for our current operations and needs. In addition, our manufacturing spaces are located at 175 Imperial Boulevard, Cape Canaveral, FL 32920 and 400 Central Boulevard, Cape Canaveral, FL 32920.
We currently pay $4,847 per month plus applicable sales and use tax, which is currently 6.5% in Brevard County. We believe this location is adequate for our current operations and needs. In addition, our manufacturing spaces are located at 175 Imperial Boulevard, Cape Canaveral, FL 32920 and 400 Central Boulevard, Cape Canaveral, FL 32920.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeWe are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 39 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders As of March 15, 2023, there were 6,873 stockholders of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Biggest changeStockholders As of March 27, 2024, there were 9,327 stockholders of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. 42 Dividend Policy We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of year ended December 31, 2022 to year ended December 31, 2021 The following table provides certain selected financial information for the periods presented: Years Ended December 31, 2022 2021 Change % Revenue $ 7,293,408 $ 1,408,724 $ 5,884,684 418 % Cost of revenue 5,855,275 1,775,299 4,079,976 230 % Gross Profit (Loss) 1,438,133 (366,575 ) 1,804,708 492 % Gross Profit Percentage 20 % (26 %) Operating expense 13,482,432 3,146,957 10,335,475 328 % Other expense (795,669 ) (232,606 ) (563,063 ) 242 % Net loss $ (12,839,968 ) $ (3,746,138 ) $ (9,093,830 ) 243 % 43 Revenue The increase in non-related party revenue of 692% for the year ended December 31, 2022 to approximately $6.25 million as compared to approximately $789,400 for the year ended December 31, 2021 was primarily driven by increased sales staff which allowed for more aggressive pursuit of customers.
Biggest changeResults of Operations Comparison of year ended December 31, 2023 to year ended December 31, 2022 The following table provides certain selected financial information for the periods presented: Years Ended December 31, 2023 2022 Change % Revenue $ 5,962,785 $ 7,293,408 $ (1,330,623 ) (18 )% Cost of revenue 4,321,482 5,855,275 (1,533,793 ) (26 )% Gross Profit (Loss) 1,641,303 1,438,133 203,170 14 % Gross Profit Percentage 28 % 20 % SG&A expense 14,166,617 13,482,432 684,185 5 % Other expense (1,803,034 ) (795,669 ) (1,007,365 ) 127 % Net loss $ (14,328,348 ) $ (12,839,968 ) $ (1,488,380 ) 12 % 49 Revenue Total revenue for the twelve months ended December 31, 2023 decreased approximately $1.3 million compared to total revenue for the twelve months ended December 31, 2022.
As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards. We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act.
As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards. 55 We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act.
The company will utilize the Allowance Method based on the accounts receivable aging in order to accrue bad debt expense. 47 Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases in the balance sheet.
The company will utilize the Allowance Method based on the accounts receivable aging in order to accrue bad debt expense. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases in the balance sheet.
While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this annual report on Form 10-K, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. 46 We believe our most critical accounting policies and estimates relate to the following: ● Revenue Recognition ● Inventory ● Credit losses ● Lease Accounting Revenue Recognition We adopted ASC 606 – Revenue from Contracts with Customers using the modified retrospective transition approach.
While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this annual report on Form 10-K, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. 53 We believe our most critical accounting policies and estimates relate to the following: ● Revenue Recognition ● Inventory ● Credit losses ● ● Lease Accounting Stock Option and Warrant Valuation Revenue Recognition We adopted ASC 606 – Revenue from Contracts with Customers using the modified retrospective transition approach.
Accordingly, we account for the progress under the contract as a performance obligation satisfied at a point in time. Inventory Inventory consists of work in progress and finished goods and consists of estimated revenue calculated on a percentage of completion based on direct labor and materials in relation to the total contract value. We do not maintain raw materials.
Accordingly, we account for the progress under the contract as a performance obligation satisfied at a point in time. Inventory Inventory consists of work in progress and finished goods and consists of estimated revenue calculated on a percentage of completion based on direct labor and materials in relation to the total contract value.
Credit Losses The provision for expected credit losses on trade receivables are estimated based on historical information, customer solvency and changes in customer payment terms and practices. The Company will calibrate its provision matrix to adjust the historical credit loss experience with forward-looking information.
We do not maintain raw materials. 54 Credit Losses The provision for expected credit losses on trade receivables are estimated based on historical information, customer solvency and changes in customer payment terms and practices. The Company will calibrate its provision matrix to adjust the historical credit loss experience with forward-looking information.
For the year ended December 31, 2022, net cash flows used in operating activities was approximately $12.1 million compared to approximately $2.5 million during the year ended December 31, 2021.
For the year ended December 31, 2023, net cash flows used in operating activities was approximately $11.7 million compared to approximately $12.1 million during the year ended December 31, 2022.
The decrease is primarily attributable to the funds used to support the needs of the business. Current liabilities increased by approximately $2.5 million, or 67%, to approximately $6.4 million as of December 31, 2022 from $3.8 million as of December 31, 2021.
The increase is primarily attributable to prepaid assets to support the needs of the business. Current liabilities increased by approximately $5.8 million, or 92%, to approximately $12.2 million as of December 31, 2023 from approximately $6.4 million as of December 31, 2022.
Cash flows used in operating activities for the year ended 2022, comprised of a net loss of $12.8 million, which was reduced by non-cash expenses of $1.5 million for stock based compensation, bad debt expense and depreciation and amortization, and an increase in net change in working capital of approximately $800,000.
Cash flows used in operating activities for the year ended December 31, 2022 of approximately $12.1 million is comprised of a net loss of approximately $12.9 million, which was reduced by non-cash expenses of $1.2 million for one-time stock-based consulting fees, $22,500 for bad debt expense and approximately $319,936 for depreciation and amortization, and an increase in net change in working capital of $805,376.
Cash Flows from Investing Activities During the year ended December 31, 2022 we purchased property and equipment in the amount of approximately $2.1 million primarily related to construction in progress for LizzieSat and R&D software.
During the year ended December 31, 2022, we purchased property and equipment in the amount of approximately $2.1 million primarily related to the satellite side of our business.
As of December 31, 2021, the working capital surplus was primarily due to funds raised through equity sales in relation to our initial public offering. Current assets decreased by $8.5 million, or 53%, to $7.5 million as of December 31, 2022 from $16 million as of December 31, 2021.
As of December 31, 2022, the working capital surplus was due to funds raised through financing in relation to our equity line of credit. Current assets increased by approximately $1.8 million, or 24%, to $9.2 million as of December 31, 2023 from approximately $7.4 million as of December 31, 2022.
We had insufficient operating revenues, so we are currently dependent on debt financing and sale of equity to fund operations. We had an accumulated deficit of $28.2 million and working capital of $1.1 million as of December 31, 2022. As of December 31, 2022, we had $2.3 million of cash.
We had insufficient operating revenues, so we are currently dependent on debt financing and sale of equity to fund operations.
The increase was attributable to an increase in accounts payable and other current liabilities and our factoring liability, partially offset by the forgiveness of our related party note payable.
The increase was attributable to an increase in accounts payable and other current liabilities and our asset-based loan liability.
Leases with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight-line basis over the lease term in our statement of operations. JOBS Act On April 5, 2012, the JOBS Act was enacted.
Leases with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight-line basis over the lease term in our statement of operations. Stock Option and Warrant Valuation We use the Black-Scholes option-pricing model to value all options and Class A common stock warrants.
December 31, December 31, 2022 2021 Change % Current assets $ 7,449,868 $ 16,007,584 $ (8,557,716 ) (53 %) Current liabilities $ 6,359,052 $ 3,810,269 $ 2,548,783 67 % Working capital (deficiency) $ 1,090,816 $ 12,197,315 $ (11,106,499 ) (91 %) Liquidity is the ability of a company to generate funds to support asset growth, satisfy disbursement needs, maintain reserve requirements, and otherwise operate on an ongoing basis.
December 31, December 31, 2023 2022 Change % Current assets $ 9,202,310 $ 7,449,868 $ 1,752,442 24 % Current liabilities $ 12,219,356 $ 6,359,052 $ 5,860,304 92 % Working capital (deficiency) $ (3,017,046 ) $ 1,090,816 $ (4,107,862 ) (377 )% Liquidity is the ability of a company to generate funds to support asset growth, satisfy disbursement needs, maintain reserve requirements, and otherwise operate on an ongoing basis.
In addition, we intend on delivering high-impact data for insights on aviation, maritime, weather, space services, earth intelligence and observation, financial technology (Fintech) and the Internet of Things. The majority of our revenues to date have been from our space related hardware manufacturing, however, 2022 revenue includes revenue related to our multi-mission constellation and our hybrid 3D printed LizzieSat satellite.
In addition, we intend on delivering high-impact data for insights on aviation, maritime, weather, space services, earth intelligence and observation, financial technology (Fintech) and the Internet of Things.
Cost of Revenue Cost of revenue increased 230% for the year ended December 31, 2022 to $5.85 million as compared to approximately $1.77 million for the year ended December 31, 2021 and included $136,363 of related party cost of revenue as of December 31, 2022 and $0 as of December 31,2021.
Cost of Revenue Cost of revenue decreased 26% for the twelve months ended December 31, 2023 to approximately $4.3 million as compared to approximately $5.9 million for the twelve months ended December 31, 2022 and included approximately $588,000 related party cost of sales as of December 31, 2023 and approximately $136,363 as of December 3, 2022.
For the year ended December 31, 2021, net cash flows used in operating activities for the year ended 2021, comprised of a net loss of approximately $3.7 million, which was reduced by non-cash expenses of $1.4 million for stock based compensation, financing expenses, depreciation and amortization and lease liability amortization, an increase due to the forgiveness of PPP loans of approximately $634,000 and a decrease in net change in working capital of approximately $520,000.
Cash flows used in operating activities for the year ended December 31, 2023, of approximately $11.7 million is comprised of a net loss of $14.3 million, which was reduced by non-cash expenses of $917,848 for issuing warrants as compensation of underwriter services, $104,038 for stock based compensation, $17,871 for bad debt expense and $217,107 for depreciation and amortization, and a decrease in net change in working capital of approximately $1.3 million.
Gross Profit (Loss) The increase in our gross margin of approximately $1.8 million or approximately 492% for the year ended December 31, 2022 as compared to a gross profit loss of approximately $367,000 for the year ended December 31, 2021 is primarily attributable to an increase in revenue, the mix of contracts and an increase in our higher margin Satellite-as-a-Service business line.
Gross Profit (Loss) The 14% increase in our gross margin for the twelve months ended December 31, 2023 to approximately $1.6 million as compared to approximately $1.4 million for the twelve months ended December 31, 2022 is driven by the increase in our higher margin satellite business.
The increase in revenue from related parties of 68% to approximately $1.04 million for the year ended December 31, 2022 from approximately $619,000 for the year ended December 31, 2021 was driven by the mix of contracts as well as larger contracts our related party entered into with its customers, resulting in it outsourcing more of its work to us.
Related party revenue for the year decreased approximately 9% to $952,220 for the twelve months ended December 31, 2023 versus approximately $1.0 million for twelve months ended December 31, 2022 and was driven by timing of fixed price milestone contracts our related party entered into and outsourcing less of its work to us.
During the year ended December 31, 2021, net cash provided by financing activities of $16.4 million included proceeds from our initial public offering in December, 2021 of approximately $16.4 million, net proceeds from notes payable of approximately $307,000, payment on our finance leases of approximately $75,000, repayments of notes payable of approximately $16,000 and repayments of notes payable to CTC, our principal stockholder, of $250,000.
During the year ended December 31, 2022, net cash provided in financing activities of approximately $2.8 million included $3.2 million in net proceeds from issuance of common stock, proceeds from asset-based loan agreement approximately $502,000 and payments of approximately $148,000 to pay off our finance leases, and repayments of notes payable – related party to Craig Technical Consulting, Inc., one of our principal stockholders, of $797,500.
Cash Flow Years Ended December 31, 2022 2021 Change % Cash used in operating activities $ (12,093,908 ) $ (2,484,778 ) $ (9,609,130 ) 387 % Cash used in investing activities $ (2,099,858 ) $ (217,840 ) $ (1,882,018 ) 864 % Cash provided by financing activities $ 2,778,180 $ 16,393,301 $ (13,615,121 ) (83 )% Cash on hand $ 2,295,259 $ 13,710,845 $ (11,415,586 ) (83 )% 45 Cash Flow from Operating Activities Year ended December 31, 2022 and 2021 For the years ended December 31, 2022 and 2021, we did not generate positive cash flows from operating activities.
Gross proceeds from the offering were $7,926,000 and net proceeds after underwriter discount, various fees and expenses was $7,102,527. 52 Cash Flow Years Ended December 31, 2023 2022 Change % Cash used in operating activities $ (11,749,442 ) $ (12,093,908 ) $ 344,466 (3 )% Cash used in investing activities $ (7,691,844 ) $ (2,099,858 ) $ (5,591,986 ) 266 % Cash provided by financing activities $ 18,362,134 $ 2,778,180 $ 15,583,954 561 % Cash on hand $ 1,216,107 $ 2,295,259 $ (1,079,152 ) (47 )% Cash Flow from Operating Activities Year ended December 31, 2023 and 2022 For the years ended December 31, 2023 and 2022, we did not generate positive cash flows from operating activities.
During the year ended December 31, 2021, we had gain on forgiveness of PPP loan of $633,830, other expense of $504, financing expense related to our IPO of $768,905 and interest expense of $97,027. Liquidity and Capital Resources The following table provides selected financial data about us as of December 31, 2022, and December 31, 2021.
(v) Sidus Space incurred one-time costs related to underwriter warrants during 2023. 51 Liquidity and Capital Resources The following table provides selected financial data about us as of December 31, 2023, and December 31, 2022.
The percent change in the cost of revenue was smaller than the percent increase in revenue due to the mix of contracts and an increase in our higher margin Satellite-as-a-Service business line.
The decrease was primarily driven by mix of contracts and an increase in our higher margin satellite related business that helped to offset continued increased supply chain related costs in the manufacturing side of our business.
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Contracts increased as a result of the timing of industry needs, and proposals submitted.
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The majority of our revenues to date have been from our space related hardware manufacturing, however, 2023 revenue includes revenue related to our multi-mission constellation and our hybrid 3D printed LizzieSat satellite. 40 Forward-Looking Statements and Industry Data This Annual Report on Form 10-K contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
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The increase in cost of revenue was driven by increased materials purchases and other direct costs as a percentage of revenue. As a manufacturing entity, materials and other direct costs are a percentage of revenue.
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These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology.
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Operating Expenses Years Ended December 31, 2022 2021 Change % Operating expenses Payroll expenses $ 5,553,025 $ 1,503,236 $ 4,049,789 269 % Sales and marketing expenses 559,096 71,111 487,985 686 % Lease expense 338,389 253,311 85,078 34 % Depreciation expense 138,930 34,767 104,163 300 % Professional fees 2,461,077 335,604 2,125,473 633 % General and administrative expense 4,431,915 948,928 3,482,987 367 % Total $ 13,482,432 $ 3,146,957 $ 10,335,475 328 % Overall operating expenses increased by approximately $10.3 million or 328% to approximately $13.5 million for the year ended December 31, 2022 as compared to approximately $3.1 million for the year ended December 31, 2021.
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Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements.
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The increase is primarily attributed to an increase in our payroll expenses to approximately $5.55 million from approximately $1.5 million for the year ended December 31, 2021, as a result of an expansion of our staff to support the needs of the business, an increase in sales and marketing expenses to $559,096 from $71,111 primarily driven by increased general marketing and investor relations consulting expense, an increase in our lease expenses to $338,389 from $253,311 as a result of leasing more space for our business expansion, an increase in our professional fees from approximately $336,000 to approximately $2.46 million, which includes a one-time charge of $1.2 million in stock-based consulting fees for investor relations, a $600,000 one-time banking advisory fee as well as increased legal and accounting fees as a result of being a public company, and an increase in our other general and administrative costs to approximately $4.4 million from $948,928 for the prior period.
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Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements.
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This increase is related to the increase in the size of our Company and included $160,475 of related party professional services as of December 31, 2022 and $7,054 for the year ended December 31, 2021, as well as increased insurance, regulatory and other costs associated with being a public company. 44 Total other income (expense) During the year ended December 31, 2022, we had interest expense of $781,376 and factoring expense of $14,293.
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Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding: ● our projected financial position and estimated cash burn rate; ● our estimates regarding expenses, future revenues and capital requirements; ● our ability to continue as a going concern; ● our need to raise substantial additional capital to fund our operations; ● our ability to compete in the global space industry; ● our ability to obtain and maintain intellectual property protection for our current products and services; ● our ability to protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our intellectual property rights; ● the possibility that a third party may claim we have infringed, misappropriated or otherwise violated their intellectual property rights and that we may incur substantial costs and be required to devote substantial time defending against these claims; ● our reliance on third-party suppliers and manufacturers; ● the success of competing products or services that are or become available; ● our ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel; ● the potential for us to incur substantial costs resulting from lawsuits against us and the potential for these lawsuits to cause us to limit our commercialization of our products and services; All of our forward-looking statements are as of the date of this Annual Report on Form 10-K only.
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As of December 31, 2022, the working capital surplus is due to funds raised in our initial public offering and subsequent funding through our Common Stock Purchase Agreement and Registration Rights Agreement with B. Riley Principal Capital II, LLC.
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In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct.
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For the year ended December 31, 2021 we purchased approximately $218,000 of property and equipment primarily construction in progress for leasehold improvements in process for office space.
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An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Annual Report on Form 10-K or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S.
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Cash Flows from Financing Activities During the year ended December 31, 2022, net cash provided by financing activities of approximately $2.8 million included proceeds from additional stock purchased through our committed equity facility with B.
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Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations.
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Riley Principal Capital II, LLC of approximately $3.2 million, proceeds from factoring agreement of $502,349, payments on our finance leases of approximately $148,000, repayments of notes payable to CTC, our principal stockholder, of $797,505.
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Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Annual Report on Form 10-K, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized.
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These five elements, as applied to each of our revenue category, is summarized below: ● Product sales – revenue is recognized at the time of sale of equipment to the customer. ● Service sales – revenue is recognized based on the service been provided to the customer.
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Any public statements or disclosures by us following this Annual Report on Form 10-K that modify or impact any of the forward-looking statements contained in this Annual Report on Form 10-K will be deemed to modify or supersede such statements in this Annual Report on Form 10-K. 41 This Annual Report on Form 10-K may contain estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry.
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We obtained the industry and market data in this Annual Report on Form 10-K from our own research as well as from industry and general publications, surveys and studies conducted by third parties.
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This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty, including those discussed in “Risk Factors.” We caution you not to give undue weight to such projections, assumptions, and estimates.
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Further, industry and general publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these publications, studies, and surveys are reliable, we have not independently verified the data contained in them.
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In addition, while we believe that the results and estimates from our internal research are reliable, such results and estimates have not been verified by any independent source.
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You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.
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Our actual results may differ materially from those discussed below.
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Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as may be amended, supplemented or superseded from time to time by other reports we file with the SEC.
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All amounts in this report are in U.S. dollars, unless otherwise noted. Throughout this Annual Report on Form 10-K, references to “we,” “our,” “us,” the “Company,” “Sidus,” or “Sidus Space” refer to Sidus Space, Inc., individually, or as the context requires, collectively with its subsidiary.
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Overview Description of Business Founded in 2012, we are a growing U.S. commercial space company with an established manufacturing business who has been trusted to provide mission-critical space hardware to many of the top aerospace businesses for over a decade.
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We plan to offer on-orbit services as the space economy expands; said services are either in a developmental phase or soon to achieve flight heritage.
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We have strategically decided to expand our business by moving up the satellite value chain by becoming a provider of responsive and scalable on-orbit infrastructure as well as collecting Space and Earth observational data to capture larger market needs.
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To address Commercial and Government customer needs and mission sets, we plan to organize into three core business lines: manufacturing services; space-infrastructure-as-a-service; and space-based data and insights. Our vertically integrated model is complementary across each line of business aiming to expand existing and unlock new potential revenue generating opportunities.
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Additionally, we look to further transition into a subscription-based model upon the digitization of our manufacturing process as we expand alongside our space-based focus. Products and Services ● Manufacturing Services : Our manufacturing business is well-established, trusted by industry leaders and growing.
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Founded in 2012, we have been manufacturing mission-critical and satellite hardware for over a decade for our principal customers and have supported major Government and Commercial space programs like NASA’s Artemis / Lunar Gateway missions, xEVAS, Boeing’s Starliner, Sierra’s Dream Chaser, Airbus’ OneWeb Satellites and the International Space Station.
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Our manufacturing business operates within a 35,000 square foot facility and is adjacent to our clean-room facility.
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We hold an AS9100 Aerospace certification, and we are International Traffic In Arms Regulations (ITAR) compliant thereby positioning us, in combination with our existing tooling and capability, to address unique high-precision manufacturing requirements. ● Space-Infrastructure-as-a-Service : We are in the process of developing and launching space-based infrastructure and establishing related ground-infrastructure support elements.
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Payload providers are our principal customers and target customers who wish to outsource constellation operations.
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Collectively, the end-to-end infrastructure that results is offered as “Space-as-a-Service” to commercial customers and “Defense-as-a-Service” to certain government customers. 42 Leveraging our industry experience and flight heritage, we are producing our own line of additively manufactured (3D printed) satellites in-house (LizzieSats) that are engineered to have the capacity and adaptability to simultaneously host our payloads for our own purposes (see Space-Data-as-a-Service below) or offer ‘ride-share’ opportunities for payload customers to deliver data to their end users.
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We anticipate “bookings” on our infrastructure in our planned ‘rideshare program’ as a key performance metric. Our Space-Infrastructure-as-a-Service offering plans to provide: satellite design, satellite manufacture, constellation operations, and payload hosting.
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As of December 31, 2023, we have: ● signed a multi-year and multi-launch agreement with Space-X thereby offering customers by extension a reliable, cost-effective launch service; ● obtained approval for a 100+ satellite constellation by the International Telecommunication Union (ITU); ● established partnerships with a globally diverse network of 20+ ground stations to provide our users with near continuous high-rate, “on-orbit to cloud”, communications network; ● secured a mission operations center located on the Florida Space Coast, in Merritt Island, FL capable to manage satellite operations, orchestrate collection management tasks and satisfy data distribution requests with intentions to automate many elements of this process.
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Over time, we plan to begin introducing additional services beyond on-orbit infrastructure services which may include lunar mapping missions, in support of government requirements for on-orbit maneuverability.
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Each business opportunity is evaluated on an individual business case basis and safeguarded against risk to our core business. ● Space Data-as-a-Service and Insights: We plan to be a global provider of space-based data and insights by exclusively collecting data that only can be captured from space with no terrestrial alternatives.
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We plan to initially focus on creating offerings in Earth-based observations and Space situational awareness. These decisions are reinforced by the growing and large addressable markets they represent. To date, the space-based data industry has largely launched one-satellite, one-payload, one-mission constellations to deliver one general data type.
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Subsequently, downstream processing and associated analytics, at times, have experienced false-positives and ambiguous data sets diminishing the value and utility of space-based data. Our LizzieSat satellite platform addresses this shortcoming by allowing for differentiated data collection when compared to industry alternatives.
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We plan to lead the next generation of Earth and Space data collection by: ● Collecting on-orbit coincident data: LizzieSat is capable of hosting multiple-sensors on the same satellite to collect varying data types at the same time and with the same collection geometry.
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On-orbit coincident collection benefits users by decreasing false positives with complementary datasets that reinforce one another. ● Analyzing data on the satellite on-orbit at “the edge”: In order to maximize value and speed in data processing, in August 2023, we acquired substantially all of the assets of Exo-Space, a cutting-edge Artificial Intelligence (AI) company to better facilitate (AI) and Machine Learning (ML) on-board the satellite through hardware and software development.
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Our plans include integrating radiation hardened AI/ML capabilities alongside our on-orbit coincident data collection. ● Reducing data size: By processing data at the edge on-board LizzieSat, we are able to first reduce the file size by transmitting only the processed answer, not the entire raw dataset.
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This enables us to move data from low-Earth orbit to higher orbit data relay services (like Iridium) for a lower-cost and more continual data transmission option to our customers. The net value of data collected from our planned LizzieSat constellation allows organizations to make better decisions with higher confidence, increased accuracy and speed.
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The Company enriches this processed data with customizable analytics users control for their own-use case, and in turn provide data as a subscription across industries to organizations so they are able to improve decision-making and mitigate risk. 43 We support a broad range of international and domestic governments and commercial companies with hardware manufacturing including the Netherlands Organization, U.S.
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Department of State, the U.S. Department of Defense, NASA, Collins Aerospace, Lockheed Martin, Teledyne Marine, Bechtel, and L3Harris in areas that include launch vehicles, satellite hardware, and autonomous underwater vehicles.
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Planned services that benefit current and future customers include delivering space-based data that can provide critical insight for agriculture, commodities tracking, disaster assessment, illegal trafficking monitoring, energy, mining, oil and gas, fire monitoring, classification of vegetation, soil moisture, carbon mass, Maritime AIS, Aviation ADS, and weather monitoring; providing the ability for customers to demonstrate that a technology (hardware or software) performs successfully in the harsh environment of space and delivering space services.
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We plan to own and operate one of the industry’s leading U.S. based low earth orbit (“LEO”) small satellite (“smallsat” or “smallsats”) constellations focused on earth observation and remote sensing.
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Our operating strategy is to continue to enhance the capabilities of our satellite constellation, to increase our international and domestic partnerships and to expand our analytics offerings in order to increase the value we deliver to our customers. Our two operating assets—our satellite constellation and hardware manufacturing capability—are mutually reinforcing and are a result of years of heritage and innovation.
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Key Factors Affecting Our Results and Prospects We believe that our performance and future success depend on several factors that present significant opportunities but also pose risks and challenges, including competition from better known and well-capitalized companies, the risk of actual or perceived safety issues and their consequences for our reputation and the other factors discussed under “Risk Factors.” We believe the factors discussed below are key to our success.
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Growing our experienced space hardware operations We are on track to grow our space and defense hardware operations, with a goal of expanding to two and a half shifts with an increased customer base in the future.
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With current customers in space, marine, and defense industries, our contract revenue is growing, and we are in active discussions with numerous potential customers, including government agencies, large defense contractors and private companies, to add to our contracted revenue.

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Other SIDU 10-K year-over-year comparisons