The company remains in a trading halt as it seeks to fill positions vacated by two non-executive Australian directors. In a quarterly report to the Australian Securities Exchange (ASX), SAS said their resignation impacted on the company’s ability to legally close the $7.4 million Second Tranche and Priority Offer capital raising required to fund ongoing operations and the business plan.
SAS, which plans a global satellite communications network, said it was finalising negotiations on the new 6U Agreement and the Pearls Agreement with Danish satellite maker GomSpace.
Once this new 6U Agreement is settled, SAS will be able to address the increased demand to provide global internet of things (IOT) and machine to machine (M2M) services outside of the equatorial region.
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“Should new definitive agreements not be finalised with GomSpace (by May 8, 2019, or such longer period as the parties may agree), it is likely that SAS will need to delay its operating strategy within the time frame as currently planned,” it said.
On the plus side, SAS said the response to the new global coverage constellation for IoT and M2M services has been highly positive. Sixteen of SAS’ existing customers had expressed their intent to increase the value of their existing contracts. That includes major telecommunication companies such as BT Telecom, Telespazio, Globe Teleservices and Gondwana.
Based on preliminary commercial discussions, new market opportunities were also opening with the potential for new revenue generating agreements.
During the quarter, SAS signed a memorandum of understanding (MoU) with Brazilian telco Arycom Capacidade Satelital and seven new reseller agreements.
SAS said negotiations with US debt financing for launch were progressing, with a term sheet being finalised.
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The company has also made good progress in reducing operating costs, now down around $2 million per year. Founders and directors have taken a 50 per cent pay cut.
SAS, based in Perth, is planning what it calls the Pearls constellation of around 200 nanosatellites in equatorial orbit, providing low cost communication and internet services for markets in Africa, South America and Asia.
Under its new 6U agreement with GomSpace, there will be an additional constellation of eight to 16 satellites in high inclination orbits, allowing full global coverage.
Launch is planned for early next year. The company has signed launch MoUs with Arianespace and Rocket Lab.
SAS managing director and chief executive Meir Moalem said it was unfortunate that recent developments had affected company progress.
“However, we have an exciting path ahead and due to hard work and determination, we believe we found the best path forward,” he said.
“The board and management are very focused on delivering on the opportunities we see for the business, and look forward to updating the market in relation to future progress.”
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