Item 1A. Risk Factors 19
Item 1B. Unresolved Staff Comments 42
Item 2. Properties 42
Item 3. Legal Proceedings 42
Item 4. Mine Safety Disclosures 41
Part II
Item 6. [Reserved] 43
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 48
Item 8. Financial Statements and Supplementary Data 49
Item 9A. Controls and Procedures 50
Item 9B. Other Information 51
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 51
Part III
Item 10. Directors, Executive Officers and Corporate Governance 51
Item 11. Executive Compensation 55
Item 14. Principal Accountant Fees and Services 60
Part IV
Item 15. Exhibits and Financial Statement Schedules 61
Signatures 63
CAUTIONARY
NOTE ON FORWARD-LOOKING STATEMENTS
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”). 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. 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. Actual results or events could differ materially
from the plans, intentions and expectations disclosed in these forward-looking statements. 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 need to raise substantial additional capital to fund our operations;
● our ability to compete in the global space industry;
● our reliance on third-party suppliers and manufacturers;
● the success of competing products or services that are or become available;
All
of our forward-looking statements are as of the date of this Annual Report on Form 10-K only. 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. 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. Securities and Exchange Commission (the “SEC”) could materially and adversely
affect our business, prospects, financial condition and results of operations. 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. 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.
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. 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. 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. 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. 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.
RISK
FACTOR SUMMARY
Our
business is subject to significant risks and uncertainties that make an investment in us speculative and risky. Below we summarize what
we believe are the principal risk factors but these risks are not the only ones we face, and you should carefully review and consider
the full discussion of our risk factors in the section titled “Risk Factors,” together with the other information in this
Annual Report on Form 10-K. If any of the following risks actually occurs (or if any of those listed elsewhere in this Annual Report
on Form 10-K occur), our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously
harmed. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important
factors that adversely affect our business.
PART
I
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.
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. 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. 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.
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. 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. Each LS is 100kg with 35kg dedicated to payloads including
remote sensing instruments. 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.
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. 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. 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. Sidus
offerings include a broad area of market sub-segments, such as:
● Mission Critical Hardware Manufacturing
● Multi-Disciplinary Engineering Services
● 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. 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.
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. 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. 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. 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
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. As we are now entering a new commercial space age, the number of commercial sensors
on orbit has expanded from a handful of large expensive commercial satellites just a few years ago to now hundreds and in the near future
thousands of sensors that will ultimately change the way we see and understand our world. Our mission is to enable our existing and future
customers to prove out new technologies for the space ecosystem rapidly and at low cost and also have access to space-based data on-demand
for any problem set or business need. We believe we can deliver this at a lower cost than legacy providers due to our vertically integrated
cost-efficiencies, capital efficient constellation design, and improved pricing models with improved data accessibility. 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.
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.
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. 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. In the past decade, we have fabricated ground and flight products for the NASA SLS Rocket and Mobile Launcher
as well as other commercial space and satellite companies. Customers supported include Boeing, Lockheed Martin, Northrop Grumman, Dynetics/Leidos,
Blue Origin, United Launch Alliance, Collins Aerospace, L3Harris, OneWeb and Space Systems Loral/Maxar. Various products have been manufactured
including fluid, hydraulic and pneumatic systems, electrical control systems, cable harnesses, hardware lifting frames, umbilical plates,
purge and hazardous gas disconnects, frangible bolts, reef cutters, wave guides, customized platforms, and other precision machined and
electrical component parts for all types of Rockets, Ground, Flight and Satellite systems. In June 2022, the NASA xEVAS, 12 year, $3.5
Billion multiple award contract was awarded to Collins Aerospace and Axiom Space. We are a member of the Collins Aerospace team and expect
to support this contract upon execution of task orders issued by NASA and contracts with independent commercial entities. The Exploration
Extravehicular Activity Services, or xEVAS Program is expected to include the design, development, production, hardware processing, and
sustainment of an integrated Extravehicular Activity (EVA) capability that includes a new Spacesuit and ancillary hardware, such as Vehicle
Interface Equipment and EVA tools. 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. 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. Critical Design Review (CDR) was successfully completed in the third fiscal quarter
of 2022. Initial contracts for launch were signed in December of 2021 with NASA and Mission Helios, a blockchain company. We are in active
discussions with numerous potential customers, including domestic and international government agencies, for payload hosting and data
related to our planned satellite launches over the next 24 months.
We
filed for X-band and S-band radio frequencies licensing in February 2021 and were granted approval through a published filing by the
ITU on April 4, 2021. 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. 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. 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. Launched into a LEO and operating in diverse orbits (28°-98° inclination, 300-650km
altitude) as approved by the International Telecommunication Union (ITU) in February 2021, our constellation will be optimally distributed
to provide maximum coverage for our customers in the government and commercial sectors. 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. Our planned average daily revisit rate, from dawn to dusk, is 10 times a day or approximately 90 minutes. 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. 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. 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. Additionally, leveraging both in-house and partner-provided subsystem components and in-house
design and integration services, as well as operational support of satellites on orbit, to provide turn-key delivery of entire constellations
offer “concept to constellation” in months instead of years. 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. These services are expected to allow customers to focus on developing innovative payloads rather
than having to design or develop complete satellite buses or satellites or constellations, which we will provide, along with ancillary
services that are likely to include telemetry, tracking and control (“TT&C”), communications, processing, as well as
software development and maintenance. 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. 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.
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. Additionally, we intend to add to our revenue by
selling geospatial data captured through our constellation. Our data monetization strategy includes selling data directly to other companies
and consumers, selling data to data aggregation firms, listing our data on a data marketplace and leveraging a white label data commerce
platform.
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. 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
satellite production process is based around normally readily available materials and COTS systems and is highly scalable. We believe
that our ongoing innovations in design and manufacturing will further reduce our per satellite costs. We invested approximately $16 million
in our business and manufacturing facility through December 31, 2022, and we expect the facility will be at full capacity by the end
of 2024. We anticipate that this will enable us to increase the pace of satellite manufacturing and launch cadence. While we believe
that our estimate is reliable, the development of our manufacturing facility may take longer than planned, including due to delays in
obtaining federal and state regulatory approvals of our final construction plans or any changes that are required to be made to those
plans. Any delays in our achieving full manufacturing capacity could adversely impact our results and growth plans.
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. 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 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.
Environmental
As
the global awareness and importance of environmental sustainability increases, we recognize our duty to implement developments that not
only facilitate the evolution of aerospace solutions, but also promote environmentally conscious protocols yielding measurable results
toward the conservation of our planet. 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. Our LizzieSat constellation will contribute to this
reduced impact as a portion of the satellite bus is 3D printed.
Manufacturing
parts with a 3D printer reduces overall energy consumption and waste, reducing our carbon footprint compared to its predecessor of conventional
machining. 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. Due to the massive reduction in weight 3D printing provides, energy spent using cargo ships
and commercial vehicles for transportation sees a significant decrease. This reduction in weight is accompanied by a reduction in space
requirements for housing the material, cutting out the need for large storage spaces and the energy needed to maintain those facilities.
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. 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.
Social
We
recognize the importance of our employees, the community with which we are situated as well as the global community. This recognition
has led us to implement a variety of actions that support society from the individual to global scale.
Employee
well-being is at the heart of our commitment to provide a positive impact on all. We understand the importance of diversity in the workplace
because we were built on diversity. Being a service-disabled, veteran-owned, woman-owned, and Hispanic minority-owned business reflects
the open and diverse environment we provide to all who are a part of it.
Community
on all scales is fundamental to our success, and because of that, we are committed to leaving a lasting impact on the community that
supports us. This commitment brought forth Sidus Serves, our way of actively improving life on earth. Community involvement is key to
our culture, and we believe in the power of volunteerism. 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
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.
Governance
Our
governance structure is designed to promote transparency, efficiency, and ethics. Through a qualified and diverse chain of command, we
are confident that our decision making will carry out performance at the highest degree. Our Board of Directors consists of professionals
with strong executive experience, business strategy and leadership skills. Our board consists of 3 independent directors alongside our
CEO and CTO including 2 women.
Our
Growth Strategies
We
are focused on empowering end users, developers, channel partners and the organizations they serve to quickly and easily access and integrate
real-time geospatial intelligence into their daily operations and also prove out technologies to further grow the space ecosystem. Our
growth strategy is driven by the following objectives:
Increase
our overall customer base. We are an established heritage aerospace firm that is a part of the political and secular shift towards
space-based data coming from commercial satellite and intelligence providers. We have the opportunity to expand our current customer
base through a combination of direct and indirect sales strategies. We also plan to grow our direct sales teams and indirect sales channels.
Expand
within our current customer base. As our space-as-a-service offerings grows and delivers results, we expect that our current customers
will increase their spending on our services.
Continue
to penetrate international markets. We have increased our focus on international markets. We have a current pipeline of prospective
small underrepresented international governments and firms that can benefit from our support and services.
Grow
distribution channels and channel partner ecosystem. We plan to invest in distribution channels and in our relationships with technology
partners, solution providers, strategic global system integrators, solution partners, and value-added-resellers to help us enter into
and expand in new markets while complementing our direct sales efforts. 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. These use cases include satellite broadband, remote imaging, Internet-of-Things (“IOT”)/Machine-to-Machine
(“M2M”) communications, defense-related applications, as well as others. As a result, several new and existing operators
have announced new satellite constellations to serve these use cases. Many of these announced constellations will consist of small LEO
satellites rather than large GEO satellites. According to a October 2019 SpaceNews report, SpaceX alone has filed for up to 30,000, and
Amazon and OneWeb have also announced plans to launch a significant number of satellites.
According
to Morgan Stanley research, as reported in February 2021, the $350 billion global space industry could surge to over $1 trillion by 2040.
In 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. 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. 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.
Launch
Market
We
are witnessing a shift in the launch requirements of satellite operators, as the launch industry adjusts to the increasing volume of
launches and the shift from larger satellites to smallsats. According to a study, conducted and published by the NASA Ames Research Center
in 2016, in recent years, the satellite market has been undergoing a major evolution with new space companies replacing the traditional
approach of deploying a few large, complex and costly satellites with a multitude of smaller, less complex and cheaper satellites. This
new approach has created a sharp increase in the number of launched satellites and so the historic trends are no longer representative.
The
launch industry’s initial response was the introduction of ridesharing, allowing multiple operators to share the cost of a large
launch vehicle. This combined with the emergence of new launch vehicles reduced launch costs and increased access to space for small
satellite operators. However, operators must wait until a particular rideshare is full for their launch. In addition, all small satellites
on a single rideshare are delivered to a single orbital destination. From there, small satellites must either complete a time-consuming
orbit raise to their desired orbit, requiring a significant on-board propulsion system or an in-space shuttle. While in-space shuttling
reduces the need for satellite propulsion capability, shuttles add significant expense and take weeks or months to reach the desired
orbit.
Small
Satellite Market
Another
paradigm shift in the commercial space market is the rise of the small satellite market. Starting several years ago in 2018, the space
industry began a dramatic transformation. 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.
Euroconsult anticipates that about 13,910 satellites <500 kg will be launched in the next ten years, according to the 7th edition
of its small satellite market report released in April 2021. This total represents a 38% increase over the 10,100 satellites that were
expected in its previous edition.
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. While these satellites can be deployed individually, they can also be operated as part of a constellation,
a large group of satellites interconnected to provide a service, such as the Starlink satellite constellation’s offering of global
internet connectivity. 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. In just the period between 2019 to 2020 there has
been over 300% growth going from 289 to 1202. According to a report published in 2021 by Bryce Space & Technology, 40% of all smallsats
launched in last 10 years were launched in 2020.
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. Though this satellite constellations market remains nascent in maturity,
we anticipate considerable growth over the coming years in the launch industry as companies continue to seek versatile and low-cost ways
to deliver single satellites to specific orbits or deploy their satellite constellations. Furthermore, we anticipate the growth of the
satellite constellations market to contribute business to our Satellite Services offerings. LEO satellite constellations have relatively
short lifespans on orbit, resulting in a requirement to launch replenishment satellites every few years.
According
to Prospects for the Small Satellite Market – A Euroconsult Report 7th Edition April 2021, smallsats are often viewed by entrepreneurs
as enablers of disruptive business models because of the growing data needs of the digital economy. Rapid, constant improvement of smallsats
from one generation to the next means new capabilities and possibilities may constantly be developed. Further, investment in the space
industry is still accelerating from 2020 and beyond. Vertically-integrated players attract the most funding. In the growing smallsat
industry, with lower entry barriers and shorter timeframes, tangible investment opportunities in manufacturing are available. Just between
2018 and 2020, start-ups involved in smallsat integration raised $1.4B (SpaceX excluded) while pure smallsat subsystems manufacturers,
$0.2B. Among integrators, by far the most successful recipients of funding are vertically-integrated players who produce and operate
their own constellation while directly providing service to the end user. Vertical integration becomes especially relevant when there
is a recurring production need (e.g. limited lifetimes, need for cyclical replacements) and when economies of scale are possible. 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.
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. During this time, we have provided components
and systems for the International Space Station, the Boeing Starliner, NASA’s SLS, Lockheed Martin’s Orion, and several other
programs and customers.
At
a combined 35,000 square-feet, our manufacturing facilities are all encompassing allowing us to vertically integrate and pipeline the
manufacturing process without the need for outsourcing of precision machining, electronics assembly and testing, or 3D printing.
LEO
Launch and Deployment Services
We
strive to become a trusted platform for providing an affordable approach for launch, payload hosting, and deployment services in space.
Our planned diverse range of launch, in-orbit, and deployment platforms is planned to be tailored to complement any mission.
Space-Based
Geospatial Intel, Imagery and Data Analytics
We
anticipate delivering reliable high-impact analytics and insights to international and domestic customers by combining our platform with
multiple imaging solutions to increase the efficacy and emergence of data. We intend to collect, analyze, enrich, and deliver data gathered
from our custom constellation to provide intelligent analytics to its customers. Our comprehensive data collection is expected to create
a repository of insights for aviation, maritime, weather, space services, earth intelligence and observation, and federal industries
from the ultimate vantage point – space.
Space
Platforms
We
anticipate offering a variety of affordable space platforms which allow our clients to conduct full missions and/or test new technologies
in space at a reduced schedule and cost. Our platforms include:
External
Flight Test Platform (EFTP)
Our
External Flight Test Platform offers multiple industries to develop, test, and fly experiments, hardware, materials, and advanced electronics
on the ISS at a reduced cost and schedule. Potential payloads include optical communications, materials, satellite components, electroplating,
and pharmaceutical testing. The EFTP includes integration and delivery to the ISS and has a typical deployment period of 15 weeks. All
payloads can be returned after the mission if requested by the payload provider. Our EFTP is characterized by:
● Highly reconfigurable platform
● Power: 28V connectors (up to 2 available)
● Flight computer available to support a wide array of sensor data
● GPS patch antenna option
LizzieSatTM
(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. LS is planned to combine static component testing
and LEO spacecraft development and deployment to provide complete life cycle services to commercial and government customers for Internal
Research & Development (IR&D), data analytics and/or proof of concept. We anticipate that LS will leverage our in-house low-cost
additive manufacturing of satellites using the Markforged X7, an industrial 3D printer featuring a dual nozzle print system that supports
continuous carbon fiber and Kevlar reinforcement, to provide rapid, agile development of spacecraft due to its modular design.
Controlling
the satellite production process from design through manufacturing enables us to upgrade our satellites during production and also integrate
customer technologies at varying points during the build process. This allows us to continuously improve our satellites’ capabilities
as well as build out and maintain our constellation at a relatively low cost.
SSIKLOPS
(Space Station Integrated Kinetic Launcher for Orbital Payload Systems)
We
provide turnkey services to manage and execute the successful integration and on-orbit operations of satellite payloads using the International
Space Station Integrated Kinetic Launcher for Orbital Payload Systems (SSIKLOPS). SSIKLOPS fills the payload deployment gap between small
CubeSat launchers and major payloads by supporting the Low Earth Orbit (LEO) microsatellite market (up to 116kg). The SSIKLOPS is a mechanism
used to robotically deploy satellites from the ISS and is designed to provide a method to transfer internally stowed satellites to the
external environment.
On
November 5, 2018 we were awarded a 5-year indefinite delivery indefinite quantity contract by NASA to provide services to manage and
perform the work for the successful integration and on-orbit operations of the platform for U.S. government customers with the option
to utilize the platform for commercial efforts as well. Pursuant to the agreement, we are responsible for marketing and operating the
SSIKLOPS as well as sustaining the SSIKLOPS and associated hardware.
Our
offerings include operation, engineering, and manufacturing to provide full life-cycle payload support. SSIKLOPS utilizes NASA’s
ISS resupply vehicles to launch small satellites to the ISS in a controlled pressurized environment in soft stow bags. The satellites
are processed through the ISS pressurized environment by the astronaut crew allowing satellite system diagnostics prior to orbit insertion.
Orbit insertion is achieved through use of the Japanese Aerospace Exploration Agency’s Experiment Module Robotic Airlock (JEM Airlock),
and one of the ISS Robotic Arms. Sidus and SSIKLOPS provide small satellites the infrastructure to be deployed from the ISS into LEO
with minimal technical, environmental, logistical, and cost challenges.
Phoenix
Deployer
Phoenix
is currently in development as a CubeSat deployer utilizing the SSIKLOPS deployment platform to deploy CubeSats from the ISS. Phoenix
offers a low-cost and high availability deployer option for CubeSats within the 3U to 12U range. U refers to the standard ‘Cubesat’
dimensions (Units or “U”) of 10 cm x 10 cm x 10 cm which are used to describe space on spacecraft). 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.
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. We utilize
the latest CNC machining and turning processes to deliver high-quality, complex and on-demand parts for specialized industries including
the space sector.
● CNC Swiss Screw Machining
● CMM, VCMM Quality Inspection
● EDM Wire and Waterjet Cutting
● 3-D Printing
● Welding
3D
Printing
From
early-stage product development to functional finished parts, Sidus offers commercial and industrial-grade additive manufacturing solutions.
Our 3D printers enable us to provide rapid manufacturing with industrial micron-level laser scanning accuracy and 50 μm repeatability.
Using Continuous Fiber Fabrication technology, we can produce parts at an enhanced schedule that are stronger than 6061 Aluminum and
40% lighter. Sidus provides internal engineering support to optimize the functional performance, product life cycle, and accuracy of
its customers’ specific 3D printed technology to ensure repeatability and consistency across prints. Our 3D printing capabilities
include:
● Functional Prototypes and Models
● Production Parts
● End-life Production
● Tool Development
● Patterns and Molds
● Jigs and Fixtures
● Fly-Away Parts
Mechanical/Electrical
Assembly and Test
● Flight/Ground Cable and Wire Harnesses
● Ground Support Equipment
● Manned Spaceflight Rated Hardware
● Satellite Components
● Part Task Trainer Hardware
As
part of our 35,000 square foot manufacturing facility, we have a reconfigurable electronics and cable harness fabrication lab with the
necessary equipment, staff and square footage to produce space flight and ground cables and electronic chassis. Our experience and capabilities
include manufacturing, assembly and testing of a wide selection of electrical control cabinet and electronic cabinet modification and
fabrication processes. We have extensive experience assembling electronics, including soldering, crimping, multi-pinned connector terminations,
fusion splicing, molding, potting, and testing.
Certifications
include NASA 8739.4, NASA 8739.5, J STD 001 and IPC A 610. 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. Our ISO 9001:2015 / AS9100D
certified engineering capabilities include the ability to perform initial design concepts or value-add engineering change recommendations
to existing engineering. Our multidisciplinary engineering experience and talent cover a broad spectrum of capabilities, enabling an
even more comprehensive range of projects. Our design engineering capabilities include:
● Requirements Definition – Product development and process optimization
● Test Procedures and Performance – Meets customer driven requirements
● Operations/Maintenance Manuals – Fully integrated and procedurally driven
● 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. With a business culture that always puts the customer first, we provide dedicated project management
services throughout the lifecycle of our customer’s project or program to ensure the project goes according to schedule. Program
management services include:
● Supply chain management
● Customer requirement compliance
● Logistics and configuration management
● Resource and budget control
● Schedule
Customer
/ Market Research
The
need to provide commercial testing capabilities in space has been growing for many years and has become a requirement for many innovating
companies. According to Euroconsult’s Prospectus for the Small Satellite Market, 8th Edition released in July of 2022, Euroconsult
reported 1,738 small satellites were launched in 2021 which is 1.5x more than 2020 (1,195 small satellites launched in 2020). The small
satellite industry is gearing up for significant expansion in terms of capabilities and demand. According to Euroconsult’s report,
the number of satellites to be launched from 2022 to 2031 is estimated to be 18,500. As the small satellite market grows, the requirement
for rapid flight proven testing is becoming more crucial. Although ground-based testing is available, it does not provide a mirrored
testing environment for spacecraft and subcomponent testing. We intend to address this need with our Sidus Constellation. Furthermore,
customization of the Sidus Constellation with appropriate technology can provide subscription data and imagery services for customers
whose needs prompt consideration for a separate constellation. Currently, our core market corresponds most directly with satellite manufacturing
and offering LEO space-as-a-service solutions. 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. 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. Initially we are leveraging our existing relationships to help promote
our expanded service offerings. We believe our executive management team has extensive reach in the space and satellite industry.
Our
marketing efforts focus on communicating the benefits of our solutions and educating our customers, the media and analysts about the
advantages of our innovative technology. We strive to raise the awareness of our company, market our products and generate sales leads
through industry events, public relations efforts, marketing materials, social media and our website. Attendance at key industry events
is an important component of our marketing efforts. Our CEO, Carol Craig, has been invited to speak and participate in panel discussions
at industry events and will continue to take advantage of these opportunities to spread awareness of our services. We believe a combination
of these efforts strengthens our brand and may enhance our market position in our industry.
Competition
The
small satellite services industry at-large is highly competitive but has significant barriers to entry, including the cost and difficulty
associated with successfully developing, building, and launching a satellite constellation and obtaining various governmental and regulatory
approvals. In addition to cost, there is a significant amount of lead time associated with obtaining the required licenses, building,
and launching the satellite constellation, and developing and deploying the ground station technology. We currently face substantial
general competition from other service providers that offer a range of space-based data collection options. 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. This approach enables us to address three
primary barriers that have limited the legacy industry in achieving a broader market adoption and penetration including: easy access
to data and information, access to low-cost data, and customized, bespoke response to customer needs. Key elements of our competitive
differentiation include the following:
Low-cost
sensor data capture. Our smallsat constellation is leveraging the disruptive economics of small satellites to enable us to capture
data in a more cost-effective manner than legacy satellite providers. We can deliver our proprietary geospatial imagery on demand at
a lower cost than legacy providers due to our cost-efficiencies, capital efficient constellation design, and adaptable, disruptive pricing
models, among other things, which enables us to expand our customer base to commercial organizations that have previously been priced
out of the geospatial intelligence market.
On-demand
delivery of low-cost geospatial analytics through subscription contracts to commercial customers. Geospatial intelligence and analytics
have generally been prohibitively expensive for many commercial customers, with price points geared towards government end users. Our
constellation is designed to provide our services to commercial customers at a low cost, which we expect will expand our base of potential
customers. Our data monetization strategy includes selling data directly to other companies and consumers, selling data to data aggregation
firms, listing our data on a data marketplace and leveraging a white label data commerce platform.