UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2025
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ________ to _________
Commission
file number 001-41154
SIDUS
SPACE, INC.
(Exact
name of registrant as specified in charter)
150 N. Sykes Creek Parkway, Suite 200 Merritt Island, FL 32953
(Address of principal executive offices) (Zip code)
(321)450-5633
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Class A Common stock, $0.0001 par value SIDU The Nasdaq Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act: None.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No☒
The
aggregate market value of the voting and non-voting common equity held by non-affiliates based on a closing sale price of $1.73 per share,
which was the last sale price of the Class A common stock as of June 30, 2025, the last business day of the registrant’s most recently
completed second fiscal quarter, was $31,493,756.
Number
of Class A common shares and Class B common shares outstanding as of March 31, 2026 was 66,419,852 and 100,000, respectively.
Documents
Incorporated by Reference:
Specified
portions of the registrant’s proxy statement, which will be filed with the Securities and Exchange Commission pursuant to Regulation
14 A in connection with the registrant’s 2026 Annual Meeting of Stockholders (the “Proxy Statement”), are incorporated
by reference into Part III of this Annual Report on Form 10-K. Except with respect to information specifically incorporated by reference
in this Annual Report, the Proxy Statement is not deemed to be filed as part hereof.
Table
of Contents
Page
Part I
Item 1. Business 5
Item 1A. Risk Factors 9
Item 1B. Unresolved Staff Comments 28
Item 1C. Cybersecurity 28
Item 2. Properties 29
Item 3. Legal Proceedings 29
Item 4. Mine Safety Disclosures 29
Part II
Item 6. [Reserved] 30
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 39
Item 8. Financial Statements and Supplementary Data 40
Item 9A. Controls and Procedures 41
Item 9B. Other Information 41
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 41
Part III
Item 10. Directors, Executive Officers and Corporate Governance 41
Item 11. Executive Compensation 41
Item 14. Principal Accountant Fees and Services 42
Part IV
Item 15. Exhibits and Financial Statement Schedules 42
Signatures 44
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 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 reliance on third-party suppliers and manufacturers;
● the success of competing products or services that are or become available;
All
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.
All
trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners. Use
or display by us of other parties’ trademarks, trade dress or products is not intended to and does not imply a relationship with,
or endorsements or sponsorship of, us by the trademark or trade dress owner. Solely for convenience, trademarks, tradenames and service
marks referred to in this Annual Report on Form 10-K appear without the ® and TM symbols, but those references are not intended
to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner
will not assert its rights, to these trademarks and trade names.
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
Sidus
Space® is an innovative space and defense technology company with core capabilities that include dual use satellite manufacturing
& technology integration, AI products and services, space and defense hardware components and space-based data solutions. With deep
heritage in flight-proven technologies, Sidus’ portfolio spans Low Earth Orbit (LEO), Geostationary Orbit (GEO) and Lunar satellites,
all-domain avionics and Guidance, Navigation and Control (GN&C) systems, Radio Frequency (RF) payloads, high-performance computing,
multi-disciplinary engineering services and artificial intelligence (AI) technologies.
Our
success is built on more than a decade of experience delivering flight-proven systems, platforms, devices, and hardware for customers
such as NASA, the Department of Defense (DoD), SpaceX, and Blue Origin. We are strategically headquartered on Florida’s Space Coast,
which provides easy access to nearby launch facilities, and we operate a 35,000-square-foot manufacturing, assembly, integration, and
testing facility which reduces production time. We have an experienced team with expertise in multi-disciplinary engineering, mission-critical
hardware manufacturing, satellite design, production, launch planning, mission operations, and in-orbit support.
Corporate
History:
Sidus
Space was formed out of Craig Technologies Aerospace Solutions (CTAS), which originated as the dedicated manufacturing and engineering
division of Craig Technologies, a company founded in 1999. CTAS itself was formally established in 2012 to expand Craig Technologies’
growing aerospace and defense manufacturing operations, supporting NASA, defense agencies, and commercial space companies with precision-machined
hardware, avionics assemblies, ISS flight components, and mission-critical engineering services.
Sidus
Space represents the strategic evolution of this heritage, transforming from a manufacturing-focused organization into a fully integrated
space and defense technology company in 2021, encompassing satellite design and production, advanced AI-enabled computing, mission operations,
and space-based data solutions. With our mission of Space Access Reimagined®, we are committed to rapid innovation, adaptable and
cost-effective solutions, and the optimization of space system and data collection performance.
Business
Model:
Sidus
Space’s business model supports multiple customer engagement pathways across the space mission lifecycle. The Company generates
revenue through a combination of:
● Satellite platform sales and customization
● Payload hosting and mission services
● Engineering and systems integration services
● Space and defense hardware manufacturing
● Sales of proprietary computing products
● Emerging subscription-based access to space-derived data and analytics
Customer
contracts may be fixed-price or milestone-based and vary in scope, duration, and technical complexity depending on mission requirements,
funding structures, and regulatory approvals. As a result, the timing and amount of revenue recognized may fluctuate between reporting
periods.
Products
and Services:
Sidus delivers an integrated portfolio of satellite
platforms, AI-enabled computing systems, precision manufacturing capabilities, mission operations services, and regulatory support that
collectively enable end-to-end space and defense solutions. Through vertically integrated engineering, advanced manufacturing, and flight-proven
technologies, Sidus provides flexible and scalable offerings to commercial, government, defense, and intelligence customers.
LizzieSat®
Satellite Platform:
LizzieSat
(LS) is a modular, hybrid 3D-printed satellite architecture designed to support multi-mission deployments across LEO, GEO, cislunar,
and lunar orbits. The platform supports a broad range of payloads and mission objectives and is designed to enable rapid customer technology
integration.
Sidus has successfully launched
three LizzieSat platforms (LS-1, LS-2, and LS-3) since 2024, with additional missions planned. Current platform configurations include:
● LunarLizzieTM: 400-800kg with expanded power and precision timing
AI
Enabled Edge Computing Systems:
Sidus has developed the Orlaith AI Ecosystem, integrating
the FeatherEdgeTM radiation-tolerant edge processor with the CieloTM AI software suite. These technologies enable on-orbit data
processing and near real-time analytics for applications including maritime monitoring, environmental intelligence, space situational
awareness, and defense use cases.
Sidus has also developed the
FortisTM VPX family of modular computing products, designed to support SOSA and MOSA-aligned architectures for command, data handling,
AI/ML processing, and precision navigation across air, land, sea and space domains.
Manufacturing
and Engineering Services:
Sidus operates a vertically integrated manufacturing
and engineering facility supporting precision machining, additive manufacturing, avionics and assembly, cable harness fabrication, and
environmental testing. The Company’s manufacturing operations are certified to ISO 9001 and AS9100 standards and support space-grade
and defense-grade hardware production.
Mission
Operations and Regulatory Support:
Sidus provides end-to-end mission operations services,
including mission planning, payload integration, satellite monitoring and control, and data delivery. The Company operates a 24/7 Mission
Control Center and maintains regulatory authorizations from the FCC, NOAA, and ITU, supporting current and planned satellite missions.
Key
Programs, Partnerships, and Operational Milestones:
During
fiscal year 2025, Sidus Space advanced multiple satellite missions, technology development initiatives, customer programs, and strategic
partnerships that support its space and defense offerings. These activities included the continued expansion of its on-orbit satellite
fleet, progress in artificial intelligence-enabled computing systems and open-architecture avionics, and execution of manufacturing,
integration, and mission services contracts across commercial, government, intelligence and defense markets.
Mission
and Satellite Milestones:
Advanced
Computing, AI and VPX Platform Development:
● Introduced Sidus VPX technology, including:
Lunar
and GEO Program Progress:
Strategic
Partnership and International Expansion:
Government
and Defense Contracts:
○ Electrical harnesses and cable assemblies
○ Mechanical components and assemblies
○ Welding services
Hardware
Deliveries and Engineering Execution:
Mission
Operations:
Leadership
and Organizational Advancements:
Differentiation:
Sidus
differentiates its offerings through a vertically integrated operating model that combines satellite design and manufacturing, advanced
computing and AI capabilities, mission operations, and space-grade manufacturing within a single organizational structure. This integration
enables rapid customer technology insertion, multi-mission flexibility, on-orbit adaptability through software updates, and reduced reliance
on third-party suppliers.
Sidus’
modular satellite platforms and open-architecture computing systems are designed to support deployment across multiple orbits, mission
profiles, and industry sectors while maintaining flexibility to adapt to evolving customer requirements.
Market
Landscape and Competition:
The
global space economy continues to grow, driven by declining launch costs, advancements in satellite technology, and increased demand
for space-based data and analytics. The small satellite market is capital-intensive and characterized by long development cycles, regulatory
dependencies, and launch schedule variability.
Sidus
competes with a range of commercial space companies including Spire, BlackSky, Hawkeye 360, Satellogic, Iceye, Loft Orbital, York Space
Systems, Apex, and K2Space, as well as larger aerospace and defense contractors. Sidus’ vertically integrated model and ability
to rapidly integrate customer technologies serve as competitive differentiators within this evolving market.
Human
Capital:
As
of December 31, 2025, Sidus employed 99 full-time employees across engineering, software, machining, satellite operations, program management,
and administrative roles. The Company emphasizes training, safety, and STEM engagement.
Available
Information
Our
website address is www.sidusspace.com. The contents of, or information accessible through, our website are not part of this Annual
Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings
with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments
to those reports, available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish
such reports to, the SEC. The public may read and copy the materials we file with the SEC at the SEC’s Public Reference Room at
100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. 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.
ITEM
1A. RISK FACTORS.
An
investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other
information in this Annual Report on Form 10-K before investing in our common stock. Our business and results of operations could be
seriously harmed by any of the following risks. The risks set out below are not the only risks we face. Additional risks and uncertainties
not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition
and/or operating results. If any of the following events occur, our business, financial condition and results of operations could be
materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose all or part
of your investment.
Risk
Factors Relating to Our Operations and Business
Our
limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
Risks and challenges we have faced or expect
to face include our ability to:
● forecast our revenue and budget for and manage our expenses;
● attract new customers while retaining and expanding existing relationships;
● manage supply chain dependencies for space-rated components and materials;
● anticipate changes in our commercial, defense, and international markets;
● advance, protect our intellectual property portfolio; and
If
we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those
described elsewhere in this “Risk Factors” section, our business, financial condition and results of operations could
be adversely affected. Further, because we have limited historical financial data and operate in a rapidly evolving market, any predictions
about future revenue and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more
developed market. 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. If our assumptions regarding these risks and uncertainties,
which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results
of operations could differ materially from expectations and our business, financial condition and results of operations could be
adversely affected.
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 $29,474,304 and $17,524,056 for the years ended December
31, 2025 and 2024, respectively. While we have generated limited revenue to date, we have not yet achieved production level satellite
manufacturing, launch and data activities, and it is difficult for us to predict our future operating results. 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.
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. These efforts may be more costly than we expect and may not result in increased revenue or growth in our
business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from
achieving or maintaining profitability or positive cash flow. Furthermore, if our future growth and operating performance fail to meet
investor or analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers
or expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.
We
may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we
need it, on acceptable terms or at all.
In the future, we could be required to raise capital through public or
private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise
capital when needed could harm our business. We may sell equity securities or debt securities in one or more transactions at prices and
in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, our current investors may
be materially diluted. Any debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility
or profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures.
The
success of our business will be highly dependent on our ability to effectively market and sell our commercial satellite manufacturing,
launch, and data services for LEO, GEO, cislunar, and lunar missions along with our proprietary hardware offerings, including edge computing systems, VPX computing platforms, and broader
space and defense manufacturing services.
We
expect that our success will be highly dependent, especially in the foreseeable future, on our ability to effectively forecast,
market and sell our manufacturing, launch and data services for satellites, proprietary hardware offerings, and broader space and defense manufacturing
services. 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 expect that we will need to make significant
investments in order to attract new customers. Our sales growth is dependent upon our ability to implement strategic initiatives, and
these initiatives may not be effective in generating sales growth. In addition, marketing campaigns, which we have not historically utilized,
can be expensive and may not result in the acquisition of customers in a cost-effective manner, if at all. Further, as our brand becomes
more widely known, future marketing campaigns or brand content may not attract new customers at the same rate as past campaigns or brand
content. 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.
The
success of our launch and satellite services business will depend on our ability to successfully and regularly deliver customer satellites
into orbit. In November 2019, we successfully launched EFTP, our on-orbit external experimental facility hosted on the NanoRacks International
Space Station External Platform (NREP). 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, in December 2024 we launched
our second LizzieSat and in March 2025, we launched our third LizzieSat satellite
There
is no guarantee that our planned commercial launches or subsequent commercial launches thereafter will be successful. While we believe
that our launch partners have built operational processes to ensure that the design, manufacture, performance and servicing of their
launch vehicles and rockets meet rigorous performance goals, there can be no assurance that our launch partners will not experience operational
or process failures and other problems during any of our planned launches. Any failures or setbacks could harm our reputation and have
a material adverse effect on our business, financial condition and results of operation.
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 in-space infrastructure services, in particular commercial satellite manufacturing, launch and data services for small LEO
satellites, has not been well established and is still emerging. Our estimates for the total addressable launch market and satellite
market are based on several internal and third-party estimates, including our contracted revenue, the number of potential customers who
have expressed interest in our satellite launch and data services, assumed prices and production costs for our services, assumed flight
cadence, our ability to leverage our current manufacturing and operational processes and general market conditions. While we believe
our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions
supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
As a result, our estimates of the annual total addressable market for our services, as well as the expected growth rate for the total
addressable market for our services, may prove to be incorrect.
Our
ability to grow our business depends on the successful development of our satellites and related technology, which is subject to many
uncertainties, some of which are beyond our control.
Our
current objectives focus on the continued development of small satellites and integration capabilities and related technology. If we
do not continue this development in our anticipated timeframes, our ability to grow our business will be adversely affected. 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:
● successful completion of our planned commercial satellite launches;
We
routinely conduct hazardous operations in testing our satellite subsystems, which could result in damage to property or persons. Unsatisfactory
performance or failure of our satellites and related technology at launch or during operation could have a material adverse effect on
our business, financial condition and results of operation.
We
manufacture and operate highly sophisticated products for the commercial space, aerospace and defense industries and conduct activities
that depend on complex technology. Although there have been and will continue to be technological advances in spaceflight, our operations
remain an inherently hazardous and risky activity. Launch failures, explosions and other accidents on launch or during flight have occurred
for others and will likely occur in the future.
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.
We may experience a total loss of our customers’ payloads and our own payloads if there is an accident or failure at launch or
during the journey into space, which could have a material adverse effect on our results of operations and financial condition. For some
missions, we or our customers can elect to buy launch insurance, which can reduce our monetary losses from any launch failure, but even
in this case we will have losses associated with our inability to test our technology in space and delays with further technology development.
Any insurance we or our customers have may not be adequate to cover our or their loss, respectively.
Any
actual or perceived safety or reliability issues may result in significant reputational harm to our businesses, in addition to tort liability,
maintenance, increased safety infrastructure and other costs that may arise. Such issues could result in delaying or cancelling planned
launches, increased regulation or other systemic consequences. Our inability to meet our safety standards or adverse publicity affecting
our reputation as a result of accidents, mechanical failures, damages to customer property or medical complications could have a material
adverse effect on our business, financial condition and results of operation.
We
may experience a total loss of our technology and products and our customers’ payloads if there is an accident on launch or during
the journey into space, and any insurance we have may not be adequate to cover our loss.
Although
there have been and will continue to be technological advances in spaceflight, it is still an inherently dangerous activity. Explosions
and other accidents on launch or during the flight have occurred and will likely occur in the future. If such incident should occur,
we will likely experience a total loss of our systems, products, technologies and services and our customers’ payloads. The total
or partial loss of one or more of our products or customer payloads could have a material adverse effect on our results of operations
and financial condition. For some missions, we can elect to buy launch insurance, which can reduce our monetary losses from the launch
failure, but even in this case we will have losses associated with our inability to test our technology in space and delays with further
technology development.
Our satellites and platform could fail to perform
or perform at reduced levels of service because of technological malfunctions, satellite failures, or loss of connectivity, which could
materially and adversely affect our business, financial condition and results of operations.
The success of our business depends on the successful
launch, deployment, and sustained operation of our satellites. Satellites are subject to significant operational risks while in orbit,
including technical failures, component malfunctions, loss of connectivity, and damage from space debris or solar activity. We may experience
a total loss of a satellite during launch or fail to maintain communication once in orbit. Additionally, even if successfully deployed,
a satellite may suffer a premature “end-of-life” event or a degradation in performance that results in a permanent loss of connectivity
and subsequent impairment.
Any
delays in the development and manufacture of satellites and related technology may adversely impact our business, financial condition
and results of operations.
We
have previously experienced, and may experience in the future, delays or other complications in the design, manufacture, launch, production,
delivery and servicing ramp of satellites and related technology. If delays like this arise or recur, if our remediation measures and
process changes do not continue to be successful or if we experience issues with planned manufacturing improvements or design and safety,
we could experience issues in sustaining the ramp of our spaceflight system or delays in increasing production further.
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.
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. Although we expect to maintain inventories of some spare parts,
it nonetheless may be difficult, expensive or impossible to obtain replacement parts for the hardware due to a limited number of those
parts being manufactured to our requirements and specifications. Also, our business plan contemplates updating or replacing some of the
hardware and software in our network as technology advances, but the complexity of our requirements and specifications may present us
with technical and operational challenges that complicate or otherwise make it expensive or infeasible to carry out such upgrades and
replacements. 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.
Although
we expect to comply with best practices and international orbital debris mitigation requirements to actively maneuver our satellites
to avoid potential collisions with space debris or other spacecraft, these abilities are limited by, among other factors, uncertainties
and inaccuracies in the projected orbit location of, and predicted collisions with, debris objects tracked and cataloged by governments
or other entities. Additionally, some space debris is too small to be tracked and therefore its orbital location is unknown; nevertheless,
this debris is still large enough to potentially cause severe damage or a failure of our satellites should a collision occur. If our
satellites collide with space debris or other spacecraft, our products and services could be impaired. Also, a failure of one or more
of our satellites or the occurrence of equipment failures, collision damage, or other related problems that may result during the de-orbiting
process could constitute an uninsured loss and could materially harm our financial condition.
If
we are unable to adapt to and satisfy customer demands in a timely and cost-effective manner, or if we are unable to manufacture our
products at a quantity and quality that our customers demand, our ability to grow our business may suffer.
The
success of our business depends in part on effectively managing and maintaining our space services, manufacturing our products, conducting
a sufficient number of launches to meet customer demand and providing customers with an experience that meets or exceeds their expectations.
Even if we succeed in developing our products and completing launches within our targeted timeline, we could thereafter fail to develop
the ability to produce these products at quantity with a quality management system that ensures that each unit performs as required.
Any delay in our ability to produce products or complete launches at rate and with a reliable quality management system could have a
material adverse on our business.
If
our current or future space services do not meet expected performance or quality standards, including with respect to customer safety
and satisfaction, this could cause operational delays. Further, launching satellites within restricted airspace requires advance scheduling
and coordination with government agencies and range owners and other users, and any high priority national defense assets will have priority
in the use of these resources, which may impact our cadence of our space operations or could result in cancellations or rescheduling.
Any operational or manufacturing delays or other unplanned changes to our ability to conduct our launches could have a material adverse
effect on our business, financial condition and results of operations.
We
may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.
If
our operations continue to grow as planned, of which there can be no assurance, we will need to expand our sales and marketing, customer
and commercial strategy, products and services, supply, and manufacturing and distribution functions and initiate research and development.
We will also need to continue to leverage our manufacturing and operational systems and processes, and there is no guarantee that we
will be able to scale the business and the manufacture of spacecraft as currently planned or within the planned timeframe. The continued
expansion of our business may also require additional manufacturing and operational facilities, as well as space for administrative support,
and there is no guarantee that we will be able to find suitable locations or partners for the manufacture and operation of our products.
Our
continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in
hiring, training and managing an increasing number of employees, finding manufacturing capacity to produce our products and related equipment,
and delays in production and launches. These difficulties may result in the erosion of our brand image, divert the attention of management
and key employees and impact financial and operational results. In addition, in order to continue to expand our presence around the globe,
we expect to incur substantial expenses as we continue to attempt to streamline our manufacturing process, increase our launch cadence,
hire more employees, and fund research and development efforts relating to new products and technologies and expand our business. 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.
Our
prospects and operations may be adversely affected by changes in consumer preferences and economic conditions that affect demand for
satellite services.
Because
our business is currently concentrated on commercial satellite manufacturing, launch and data services, we are vulnerable to changes
in consumer preferences or other market changes. The global economy has in the past, and will in the future, experience recessionary
periods and periods of economic instability. During such periods, our potential customers may choose not to expend the amounts that we
anticipate based on our expectations with respect to the addressable market for satellite services. There could be a number of other
effects from adverse general business and economic conditions on our business, including insolvency of any of our third-party suppliers
or contractors, decreased consumer confidence, decreased discretionary spending and reduced customer or governmental demand for satellites
and other products we produce, which could have a material adverse effect on our business, financial condition and results of operations.
Adverse
publicity stemming from any incident involving us or our competitors, could have a material adverse effect on our business, financial
condition and results of operations.
We
are at risk of adverse publicity stemming from any public incident involving our company, our people or our brand. If any of our launch
partners’ vehicles or our satellites or those of one of our competitors were to be involved in a public incident, accident or catastrophe,
this could create an adverse public perception of satellite launch or manufacturing activities and result in decreased customer demand
for launch and satellite services, which could cause a material adverse effect on our business, financial conditions and results of operations.
Further, if our launch partners’ vehicles or rockets were to be involved in a public incident, accident or catastrophe, we could
be exposed to significant reputational harm or potential legal liability. Any reputational harm to our business could cause customers
with existing contracts with us to cancel their contracts and could significantly impact our ability to make future sales. The insurance
we carry may be inapplicable or inadequate to cover any such incident, accident or catastrophe. In the event that our insurance is inapplicable
or not adequate, we may be forced to bear substantial losses from an incident or accident.
If
we are unable to maintain relationships with our existing launch partners or enter into relationships with new launch partners, we may
be unable to reach our targeted annual launch rate, which could have an adverse effect on our ability to grow our business.
We
do not own or operate our own launch vehicles. 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. Challenges as a result of regulatory processes
or in the ability of our partners to secure the necessary permissions to establish launch sites could delay our ability to achieve our
target cadence and could adversely affect our business.
We
are dependent on third-party launch vehicles to deliver our systems, products, and technologies into space. If the number of companies
offering launch services or the number of launches does not grow in the future or there is a consolidation among companies who offer
these services, this could result in a shortage of space on these launch vehicles, which may cause delays in our ability to meet our
customers’ needs. Additionally, a shortage of space available on launch vehicles may cause prices to increase or cause delays in
our ability to meet our customers’ needs. Either of these situations could have a material adverse effect on our results of operations
and financial condition.
Further,
if a launch is delayed, our timing for recognition of revenue may be impacted depending on the length of the delay and the nature of
the contract with the customers with payloads on such delayed flight. 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. We may not be able to obtain sufficient raw
materials or supplied components to meet our manufacturing and operating needs, or obtain such materials on favorable terms, which could
impair our ability to fulfill our orders in a timely manner or increase our costs of production.
Our
ability to manufacture our products is dependent upon sufficient availability of raw materials and supplied components, which we secure
from a limited number of suppliers. Our reliance on suppliers to secure these raw materials and supplied components exposes us to volatility
in the prices and availability of these materials. 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.
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. Additionally, the imposition of tariffs on such raw materials or supplied components
could have a material adverse effect on our operations. Prolonged disruptions in the supply of any of our key raw materials or components,
difficulty qualifying new sources of supply, implementing use of replacement materials or new sources of supply or any volatility in
prices could have a material adverse effect on our ability to operate in a cost-efficient, timely manner and could cause us to experience
cancellations or delays of scheduled launches, customer cancellations or reductions in our prices and margins, any of which could harm
our business, financial condition and results of operations.
Failure
of third-party contractors could adversely affect our business.
We