20-F/A: SatixFy Communications Ltd. Files Amended 20-F to Include Description of Securities and Updated Audit Report

SatixFy Communications Ltd. files an amendment to its annual report on Form 20-F to include a description of securities and an updated audit report with a dated signature.

Summary

• SatixFy Communications Ltd. has filed an amendment to its annual report on Form 20-F to include Exhibit 2.4, Description of Securities, which was previously omitted.
• The amendment also includes the Report of the Independent Registered Public Accounting Firm dated April 1, 2025.
• The audited consolidated financial statements as of and for the three fiscal years ended December 31, 2024, remain unchanged from the original filing.
• The company's ordinary shares are listed on the NYSE American under the trading symbol SATX.
• As of March 31, 2025, 86,649,556 ordinary shares were issued and outstanding.
• Each warrant entitles the holder to purchase one ordinary share at $11.50, subject to adjustments.
• The warrants expire five years after the closing of the Business Combination.
• The company may redeem the outstanding warrants at $0.01 per warrant if the last reported sale price of the ordinary shares equals or exceeds $18.00 per share.
• The company may also redeem the warrants at $0.10 per warrant if the reference value equals or exceeds $10.00 per share, allowing cashless exercise prior to redemption.
• The company is in a two-step merger transaction with MDA Space and Robotics Limited, with the company becoming an indirect wholly owned subsidiary of MDA Space.
• The merger consideration is $2.10 per ordinary share, representing an equity value of approximately $192 million.
• As of December 31, 2024, the Company had accumulated losses of $557 million, of which $45.7 million was derived during 2024.
• The company had a working capital deficit of $32 million and a negative operational cash flow of $17.7 million.
• The company has a net debt of $68 million due within 12 months from the date of signing these financial statements.
• The company entered into a Sales Agreement with A.G.P./Alliance Global Partners to offer and sell ordinary shares in an at-the-market offering for up to $7,145.
• In October 2023, the company completed the sale of SatixFy Space Systems UK Ltd to MDA Ltd for $40 million plus $20 million in advanced payments.
• The company is exposed to currency risk, mainly in relation to the New Israeli Shekel (NIS), the Euro (EUR), and the British Pound (GBP).

Sentiment

Score: 4

Explanation: The document contains both positive and negative elements. The merger agreement and sale of a subsidiary are positive developments, but the company's financial losses and debt obligations raise concerns.

Positives

• The company has a sales agreement to offer shares for up to $7,145.
• SatixFy Space Systems UK Ltd was sold to MDA Ltd for $40 million plus $20 million in advanced payments.
• The company is undergoing a merger with MDA Space and Robotics Limited for $2.10 per share, valuing the company at approximately $192 million.

Negatives

• As of December 31, 2024, the company's accumulated losses were $557 million.
• The company has a working capital deficit of $32 million and a negative operational cash flow of $17.7 million.
• The company has $68 million in net debt due within 12 months.

Risks

• The company faces currency risk related to the New Israeli Shekel, Euro, and British Pound.
• The company's ability to continue as a going concern is in substantial doubt due to accumulated losses, working capital deficit, and debt obligations.
• The company is subject to political, economic, and geo-political instability in Israel, which may affect its business.
• The company is subject to the ongoing war in Israel, which may create supply and demand irregularities in Israels economy in general or lead to macroeconomic indications of a deterioration of Israels economic standing, which may have a material adverse effect on the Company and its ability to effectively conduct the Companys operations.

Future Outlook

The company is set to be acquired by MDA Space and Robotics Limited, pending regulatory and shareholder approvals. The company will continue to focus on being a technology provider to satellite payload design companies.

Industry Context

The announcement reflects a strategic shift for SatixFy, focusing on chip technology rather than complete satellite systems, aligning with the trend of specialization in the space industry. The merger with MDA Space and Robotics Limited indicates consolidation in the space technology sector.

Comparison to Industry Standards

• The terms of the warrant redemption features are comparable to those seen in other special purpose acquisition company (SPAC) transactions, although the $10.00 redemption trigger is lower than the $18.00 trigger more commonly used.
• The company's financial performance, with significant accumulated losses and negative cash flow, is not uncommon for early-stage technology companies in the space industry, which often require substantial upfront investment in research and development.
• The merger with MDA Space and Robotics Limited is similar to other acquisitions in the space industry, where larger companies acquire smaller, innovative companies to expand their technology portfolio and market reach.

Legal Proceedings

• The Company, SatixFy Limited, and certain shareholders and directors of the Company (the Defendants) were served with two lawsuits filed in the district court in Tel Aviv on March 22, 2022, by certain plaintiffs purporting to be stockholders of the Company (the Plaintiffs).
• On December 12, 2022, the Company filed a complaint against Sensegain in the New York Supreme Court, County of New York, seeking specific performance by Sensegain under the Subscription Agreement or, in the alternative, damages in the amount Sensegain owes pursuant to the Subscription Agreement (plus applicable interest and fees).
• In June 2023, Alta Partners, LLC (Alta) filed a complaint against the Company in the U.S. District Court for the Southern District of New York claiming unspecified damages for an alleged breach by the Company of the warrant agreement in relation to certain of its public warrants allegedly held by Alta.

Related Party Transactions

• The Company and RaySat Ltd. (RaySat), an entity organized under the laws of the State of Israel and controlled by Mr. Yoav Leibovitch, the Companys Chairman of the board of directors and one of the Companys significant shareholders, are parties to a Services Agreement effective as of January 1, 2013 (as amended as of June 27, 2017, September 6, 2020, January 4, 2021, February 24, 2022, October 27, 2022 and February 25, 2024 ).
• On April 30, 2023, the Company and Ilan Gat Ltd. entered into a Separation Agreement pursuant to which Ms. Gat resigned from all positions at the Company and its subsidiaries, including serving as the President of the Company.

Stakeholder Impact

• Shareholders will receive $2.10 per share upon completion of the merger with MDA Space and Robotics Limited.
• Employees may experience changes in their roles and responsibilities as a result of the merger.
• Customers will benefit from the combined expertise and resources of SatixFy and MDA Space and Robotics Limited.
• Suppliers may see changes in their contracts and relationships with the company as a result of the merger.
• Creditors will be impacted by the company's debt obligations and the terms of the merger agreement.

Next Steps

• The company will seek shareholder and regulatory approval for the merger with MDA Space and Robotics Limited.
• The company will continue to execute its sales agreement with A.G.P./Alliance Global Partners.
• The company will focus on its role as a technology provider to satellite payload design companies.

Key Dates

Keywords

SatixFy, securities, warrants, merger, MDA, financials, debt, shares, losses, currency risk