Sidus Space (NASDAQ: SIDU) ended the second quarter of 2024 with just $1.44m in cash. Over the first two quarters of 2024, quarterly operating and property/equipment purchase cash flows averaged -$5.8m. Even across 2023, Sidus Space averaged -$4.74m in quarterly cash flow. At either of these rates, Sidus should have burnt through its cash reserves in 3Q 2024 and announced announced a public stock offering. But Sidus announced no public offerings in Q3.
Sidus Space four times has used public stock offerings to raise equity to shore up its cash levels. (Sidus Space also used a private placement once in October 2023.) But Sidus Space survived Q3 2024 without a public offering or private placement. Sidus apparently stretched $1.44m in cash until now. Likely one of two things occurred: (1) Sidus significantly improved cashflow in Q3, or (2) Sidus took on debt.
Did cashflow increase due to Sidus suddenly increasing revenue in Q3 from Lizziesat-1 (or some other source)? Did they receive significant prepayments from customers? Maybe HEO Space? And is this how they avoided another stock offering in Q3? The financials suggest this may be possible, which would be hugely favorable for shareholders once announced.
But Sidus Space taking on debt is also not outside the realm of possibility. Sidus CEO Carol Craig in the past used her other company Craig Technical Consulting, Inc. to advance money to Sidus. $4m was advanced that way in 2021. At the end of FY 2021 Sidus held $3.47m in debt in the form of notes payable. (As of Q2 2024, Sidus’s debt stood at -$2.0m.) So Carol Craig loaning more money to Sidus in Q3 is also entirely plausible.
However, Sidus dropped a new S-1 registration statement on October 15th suggesting another public share offering is imminent. If this next public placement is anything like the last, investors stand to incur another round of steep losses.
(Sidus’s most recent public offering earlier this year, between prospectus publishing on February 29th and the day after closing of the public offering on March 6th, shareholders saw their SIDU stock value decline 48%.) The upcoming public offering will almost certainly drive the stock price down again. The question is will third quarter provide favorable news and balance this out? Based on the payload installed on Lizziesat-1, it seems impossible Lizziesat-1 will provide any material increase in revenue. However the lack of public offering really makes one wonder.
Sidus has not yet announced its Q3 earnings date. But last year on Nov 6th they announced the earnings call was scheduled for Nov 15th, and Sidus reported earnings on Nov 14th. So investors should know how 3Q went within four weeks.