Sidus Space(SIDU) - 2024 Q3 - Quarterly Report

LizzieSat™ Satellite Platform and Capabilities - The company's LizzieSat™ satellite platform achieved first launch mission success in March 2024, marking a significant milestone in its space mission capabilities[94] - LizzieSat™ is equipped with FeatherEdge™ AI for on-orbit processing, enabling efficient data processing and delivery, including visual spectrum, methane, and AIS data collection[92] - LizzieSat™ platform enhancements include a processor capable of handling 100 trillion operations per second (TOPS) and upgraded payload processing up to 12 Gb/s[95] - LizzieSat™ offers Constellation-as-a-Service (CaaS), allowing multiple customers to share satellite and constellation resources for Earth Observation (EO) and Non-Earth Imaging (NEI) data collection[101] - Integrated Edge AI software into LizzieSat-1, with next-gen Edge AI software planned for LizzieSat-3, enhancing geospatial data processing and rapid data transfer[112] - Successfully launched LizzieSat multi-mission satellite in Q1 2024 and activated FeatherEdge AI platform in Q2 2024 for near real-time intelligence[126][127] - LizzieSat-1 successfully completed NASA Stennis Space Center ASTRA primary mission objectives, leading to additional funding for new critical mission objectives over the next 12 months[109] - Completed LizzieSat-2 build, planned for Q4 2024 launch, and nearing completion of LizzieSat-3, planned for Q1 2025 launch[111] - Developed Sidus LVDS Switch Card, enhancing payload processor capabilities for LizzieSat-2 and LizzieSat-3[118] Regulatory Approvals and Licenses - The company received FCC approval in October 2024 to operate a micro constellation of remote sensing, multi-mission satellites in Low Earth Orbit (LEO)[95] - Received FCC approval for a micro constellation of remote sensing, multi-mission satellites in Low Earth Orbit (LEO)[117] - Received NOAA Tier 1 license for LizzieSat1-3 operations, enabling remote-sensing space system deployment[128] Manufacturing and Technology - The company operates a 35,000-square-foot manufacturing facility in Florida, ISO 9001:2015 and AS9100 Rev. D certified, supporting space and defense hardware production[93] - The company's 3D printing technology reduces satellite production costs and lead times while maintaining structural integrity, with a Technology Readiness Level (TRL) of TRL-9 for space applications[107] Space-as-a-Service and Business Model - The company's Space-as-a-Service model reduces customer capital expenditures by eliminating the need for satellite design, development, and manufacturing[98] - The company's FeatherEdge AI/ML solution enhances on-orbit data processing, enabling autonomous satellite operations and cloud-based data processing for space applications[103] - Signed a multi-year and multi-launch agreement with Space-X, offering customers reliable and cost-effective launch services with a steady cadence of launches[110] - Signed agreement with Neuraspace for Space Traffic Management and LEOP support, enhancing constellation operation capabilities[113] Financial Performance - Revenue increased by 90% to $1.87 million in Q3 2024 compared to $985,520 in Q3 2023[139] - Non-related party revenue increased by 131% to $1.8 million in Q3 2024, driven by fixed-price milestone contracts and satellite-related revenue[140] - Cost of revenue increased by 69% to $1.83 million in Q3 2024, primarily due to a mix of contracts and increased depreciation expense in satellite-related business[141] - Gross profit improved by 140% to $38,171 in Q3 2024 from a gross loss of $96,281 in Q3 2023, driven by higher-margin satellite-related sales[143] - Selling, General, and Administrative expenses decreased by 15% to $3.21 million in Q3 2024, primarily due to reduced professional fees and payroll expenses[144][145] - Net loss decreased by 4% to $3.9 million in Q3 2024 compared to $4.08 million in Q3 2023[139] - Total revenue for the nine months ended September 30, 2024, decreased by 17% to $3.85 million, driven by a change in contract mix and lower satellite-related revenue[148][149] - Cost of revenue for the nine months ended September 30, 2024, increased by 38% to $4.57 million, primarily due to a mix of contracts and increased depreciation expense[150] - Adjusted EBITDA improved by 33% to a loss of $2.45 million in Q3 2024 compared to a loss of $3.67 million in Q3 2023, driven by reduced capital raise expenses and increased depreciation[158] - Mission Operations Support expense increased by $531,000 to $604,000 for the nine months ended September 30, 2024, due to ground support for the first satellite launched in March 2024[154] - Net loss for the nine months ended September 30, 2024 was $11.8 million, a 7% increase from $11.0 million in the same period in 2023[160] - Adjusted EBITDA improved by 9% to $(8.3) million in the nine months ended September 30, 2024 compared to $(9.1) million in the same period in 2023[160] Cash Flow and Financing - Current liabilities increased by 13% to $13.8 million as of September 30, 2024 from $12.2 million as of December 31, 2023, primarily due to an increase in asset-based loan liability[164] - Cash used in operating activities was $10.3 million for the nine months ended September 30, 2024, a 3% increase from $10.0 million in the same period in 2023[164] - Cash provided by financing activities was $15.4 million for the nine months ended September 30, 2024, a 6% increase from $14.6 million in the same period in 2023[164] - Cash on hand decreased by 23% to $1.2 million as of September 30, 2024 from $1.6 million as of December 31, 2023[164] - The company completed a public offering in March 2024, issuing 1,321,000 shares at $6.00 per share for net proceeds of $7.1 million[172] - The company completed a public offering in January 2024, issuing 1,181,800 shares at $4.50 per share and pre-funded warrants for net proceeds of $5.0 million[172] Revenue Recognition and Contracts - Revenue from fixed price manufacturing contracts is recognized using the percentage-of-completion method based on costs incurred[178] - Revenue from fixed price contracts related to satellite payloads with milestone payments is recognized when milestones are met[179] Regulatory and Reporting Exemptions - The company is evaluating the benefits of relying on exemptions and reduced reporting requirements under the JOBS Act as an "emerging growth company"[188] - The company intends to rely on exemptions including not providing an auditor's attestation report on internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act[188] - The company will remain an "emerging growth company" until it reaches $1.07 billion in total annual gross revenues, the fifth anniversary of its IPO, issues over $1 billion in nonconvertible debt, or is deemed a large accelerated filer by the SEC[188] - The company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a "smaller reporting company" under Rule 12b-2 of the Exchange Act[189] Geospatial Intelligence and Mission Support - Expanded geospatial intelligence capabilities following NGA award and NASA Lunar Terrain Vehicle Services Contract[116] - Achieved flight heritage for FeatherEdge edge computing hardware and software solutions[115]