Sidus Space(SIDU) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed consolidated financial statements for Q1 2025, showing a significant revenue decrease and an increased net loss Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows a decrease in total assets to $34.0 million from $37.7 million at year-end 2024 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $16,516,929 | $22,252,552 | | Cash | $11,711,301 | $15,703,579 | | Total Assets | $33,984,265 | $37,745,567 | | Total Current Liabilities | $14,229,336 | $14,209,502 | | Asset-based loan liability | $9,794,642 | $6,902,636 | | Total Liabilities | $14,229,336 | $14,209,502 | | Total Stockholders' Equity | $19,754,929 | $23,536,065 | Condensed Consolidated Statements of Operations For Q1 2025, the company reported a 77% year-over-year revenue decrease, a gross loss of $1.6 million, and a 68% wider net loss Consolidated Statements of Operations Highlights (Unaudited) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $238,494 | $1,050,155 | | Gross Profit (Loss) | $(1,628,478) | $84,064 | | Net Loss from Operations | $(6,072,920) | $(3,561,519) | | Net Loss | $(6,414,627) | $(3,810,500) | | Basic and Diluted Loss per Share | $(0.35) | $(1.42) | | Weighted Avg. Shares Outstanding | 18,228,267 | 2,719,812 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased to $19.8 million as of March 31, 2025, driven by a net loss partially offset by capital from warrant exercises - The ending balance of stockholders' equity was $19,754,929 as of March 31, 2025[13] - Key changes during Q1 2025 included a net loss of $6,414,627 and the issuance of Class A common stock for warrant exercises, which added $2,381,247 to equity[13] Condensed Consolidated Statements of Cash Flows The company used $3.2 million in cash from operations and $3.0 million in investing, resulting in a net cash decrease of $4.0 million Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash used in Operating Activities | $(3,207,213) | $(5,418,294) | | Net Cash used in Investing Activities | $(2,978,308) | $(2,230,118) | | Net Cash provided by Financing Activities | $2,193,243 | $12,604,064 | | Net change in cash | $(3,992,278) | $4,955,652 | | Cash, end of period | $11,711,301 | $6,171,759 | Notes to the Condensed Consolidated Financial Statements The notes detail business verticals, consolidation of an entity, an increased loan facility, stock grants, and high customer concentration - The company's business is structured across several verticals: Satellite Design and Manufacturing, Technology Design and Integration, AI-driven Space-based Data Solutions, Mission Planning Operations, AI/ML Products and Services, and Space and Defense Manufacturing[20] - The asset-based revolving line of credit was increased from $7 million to $10.5 million in January 2025, with an outstanding balance of $9.8 million as of March 31, 2025[67] - On February 1, 2025, the company granted 265,000 stock options and 265,000 Restricted Stock Units (RSUs) to employees[86][90] Customer Concentration (Q1 2025) | Customer | Percentage of Revenue | Percentage of Accounts Receivable | | :--- | :--- | :--- | | Bechtel | 25% | 13% | | Craig Technologies | 23% | 58% | | Xiomas Technologies | 15% | 2% | | Total (as a group) | 63% | 82% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 77% revenue decline due to contract timing, an increased net loss, and a decrease in cash to $11.7 million Overview of Operations and Key Achievements Sidus Space operates as a vertically integrated space mission enabler, highlighted by the successful launch of three LizzieSat® satellites - Successfully launched LizzieSat®-1, LizzieSat®-2, and LizzieSat®-3, establishing a micro-constellation for delivering near real-time data solutions[132] - Signed an extended preliminary contract valued at $120M to design and build a lunar fleet of Data Storage Spacecraft for Lonestar Data Holdings[132] - Received FCC approval for operation of a micro constellation and for Space-to-Space Data Relay Capability for LizzieSat®[132] - The LizzieSat® platform is differentiated by its ability to collect coincident data from multiple sensors and analyze data on-orbit using the Sidus Orlaith™ AI ecosystem[133] Results of Operations Q1 2025 revenue fell 77% due to milestone contract timing, while costs rose 93% from increased satellite depreciation Financial Performance Comparison (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $238,494 | $1,050,155 | $(811,661) | (77)% | | Cost of revenue | $1,866,972 | $966,091 | $900,881 | 93% | | Gross Profit (Loss) | $(1,628,478) | $84,064 | $(1,712,542) | (2037)% | | SG&A expense | $4,444,442 | $3,645,583 | $798,859 | 22% | | Net loss | $(6,414,627) | $(3,810,500) | $(2,604,127) | 68% | - The increase in SG&A was primarily due to a $1.2 million rise in labor costs and benefits, which included increased headcount, equity-based compensation accruals, and severance costs[172] Liquidity and Capital Resources The company's liquidity relies on external financing, with cash at $11.7 million and working capital at $2.3 million as of March 31, 2025 Working Capital Summary | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current assets | $16,516,929 | $22,252,552 | | Current liabilities | $14,229,336 | $14,209,502 | | Working capital | $2,287,593 | $8,043,050 | Cash Flow Summary (Q1 2025 vs Q1 2024) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $(3,207,213) | $(5,418,294) | | Cash used in investing activities | $(2,978,308) | $(2,230,118) | | Cash provided by financing activities | $2,193,243 | $12,604,064 | - Cash on hand decreased from $15.7 million at the end of 2024 to $11.7 million at the end of Q1 2025[179] Critical Accounting Policies and Estimates Key accounting policies involve significant judgment in revenue recognition, inventory valuation, and stock option valuation - Critical accounting policies include Revenue Recognition, Inventory, Credit Losses, Lease Accounting, and Stock Option and Warrant Valuation[192] - Revenue from manufacturing contracts is recognized over time using the percentage-of-completion method, while revenue from satellite contracts with milestones is recognized at the point in time a milestone is met[193][194] - The company is an "emerging growth company" and has elected to use the extended transition period for complying with new or revised accounting standards under the JOBS Act[204][205] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exempt from this disclosure as a "smaller reporting company" under SEC rules - As a "smaller reporting company," Sidus Space is exempt from the disclosure requirements of this item[207] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures are effective[209] - No material changes to internal control over financial reporting were identified during the first quarter of 2025[210] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not aware of any legal proceedings that would materially impact its business or financial condition - The company is not currently involved in any material litigation[212] Item 1A. Risk Factors No material changes have occurred to the risk factors disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the 2024 Annual Report on Form 10-K[213] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the reporting period - No unregistered sales of equity securities were made during the quarter[214] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[217] Item 6. Exhibits This section lists exhibits filed with the report, including officer certifications and Inline XBRL files - The exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, as well as Inline XBRL documents[218]