Sidus Space, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. The company designs and manufactures aerospace hardware and is developing satellite infrastructure and space-based data services. Its established manufacturing business remains the main source of revenue; satellite operations and data offerings are at an early stage. The filing was signed March 27, 2024.
Financial results and liquidity
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | $5.96 million | $7.29 million | Down 18% |
| Gross profit | $1.64 million | $1.44 million | Up 14% |
| Gross margin | 28% | 20% | Improved |
| SG&A | $14.17 million | $13.48 million | Up 5% |
| Net loss | $14.33 million | $12.84 million | Loss widened 12% |
| Adjusted EBITDA (non-GAAP) | $(10.89) million | $(9.71) million | Loss widened 12% |
| Cash used in operating activities | $11.75 million | $12.09 million | Cash use decreased 3% |
| Cash used in investing activities | $7.69 million | $2.10 million | Cash use increased |
Revenue declined mainly because of the timing of fixed-price milestone contracts, partly offset by satellite payload revenue. Management attributed improved gross profit and margin to a greater contribution from higher-margin satellite-related business and a different contract mix. SG&A increases included employee costs, professional fees and fundraising costs; lower insurance, satellite-license and investor-relations expenses partly offset them.
At year-end, cash was $1.22 million, current assets were $9.20 million and current liabilities were $12.22 million, producing a $3.02 million working-capital deficit, compared with $1.09 million of positive working capital a year earlier. Accumulated deficit was $42.79 million. The company said it depends on debt and equity financing because operating revenue is insufficient to fund operations; the filing provides no clear quantified cash-runway estimate.
Year-end liabilities included a $2.59 million asset-based loan and $2.02 million of notes payable. The revolving asset-based facility has a $3 million limit and a stated 15.2% annual interest rate. The Decathlon note is secured by company assets and is due at the earliest of December 9, 2024, a change of control or default; the filing estimates approximately $2.2 million, including accrued interest, will be due at maturity. Total interest, finance and asset-based loan expenses weighed on results.
Material developments and outlook
- Capital investment increased: 2023 purchases of property and equipment were $7.21 million, primarily for the satellite business; year-end construction in progress was $8.61 million.
- The company acquired substantially all Exo-Space assets in August 2023 for approximately $469,000, adding AI and on-orbit data-processing technology. Acquisition-related legal costs were $220,632.
- After year-end, Sidus reported net proceeds of $5.01 million from a January 2024 offering and $7.10 million from a February 2024 offering, plus $1.63 million of gross proceeds from warrant exercises. These financings add liquidity but dilute existing shareholders.
- Sidus reported completing LizzieSat-1 environmental testing in late 2023 and successfully launching and deploying its first satellite in March 2024. It also described a multi-launch SpaceX agreement, ITU spectrum and constellation approvals, and more than 20 ground-station partners. Further constellation and data-service revenue depends on execution, customer demand and regulatory approvals.
- No numerical financial guidance is provided. Management’s plans include scaling manufacturing and launches, growing payload hosting and data services, and potentially expanding subscription offerings. These plans are subject to substantial execution and financing risks.
- The filing identifies launch or satellite failure, delays, reliance on third-party launch providers and suppliers, competition, regulatory approvals, customer contract termination and the need for additional capital as significant risks. Sidus said it procured launch insurance for its next four launches, but does not maintain third-party liability insurance for its satellites; coverage may not cover all losses.
Other notable disclosures
- The statements received an unqualified audit opinion. The auditor was not engaged to audit internal control over financial reporting; management concluded controls were effective as of December 31, 2023.
- The company completed a 1-for-100 reverse stock split in December 2023; share and per-share information in the financial statements reflects the split.
- Class B shares carry ten votes per share. CTC, owned by CEO Carol Craig, held all 100,000 Class B shares and approximately 19.7% of the company’s voting power as of March 27, 2024. Related-party revenue was $952,220 in 2023.
- The cover-page response to the question combining whether the company filed all required reports in the preceding 12 months and whether it was subject to those requirements for the past 90 days is marked “No”; investors should review the filing history and any related explanation.
Important facts for investors to verify
- Current cash, cash burn and financing runway after the January and February 2024 offerings, including the effect of warrant exercises and resulting dilution.
- Debt terms, repayment sources and ability to meet the Decathlon note maturity and asset-based loan obligations.
- LizzieSat-1’s on-orbit performance, customer payload activity, revenue contribution and execution status of subsequent launches.
- Regulatory approvals still pending for constellation operations, and whether customer contracts and payload bookings translate into recurring revenue.
- The marked “No” reporting-compliance response on the cover page, and the company’s dual-class voting structure and related-party arrangements.