Starfighters Space, Inc.
For the period ended Jun 30, 2026. Filed Aug 19, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 19, 2026
FJET$0.82+9.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-20.
0001062993-26-002803
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-19.
0001062993-26-004518
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 120 previous paragraphs and 107 current paragraphs.
46 unchanged; 26 reworded; 28 added; 48 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
While our central business activities are focused on the foregoing, we still provide specialized pilot-training, payload preparation and integration, and flight-testing services since we have the F-104s and capability and authorization to perform such training and testing services.
Current report
Private Placement Financing
Current report
On May 27, 2026, we completed a private placement of 5,223,879 Common Stock at a price of $3.35 per share to certain institutional investors, for aggregate gross proceeds of $17,499,995. We intend to use the net proceeds from the private placement to support operational expansion, infrastructure development, and continued advancement of its STARLAUNCH platform, including initiatives tied to launch readiness, mission execution capabilities, and broader space launch operations.
Current report
On August 10, 2026, the SFII's legal counsel filed a complaint in the 18 th Judicial Circuit in and for Brevard County, Florida (case number not yet assigned) against Hunter Daniels d/b/a Aerovision, Hunter Daniels, and Mark Daniels , alleging: (1) breach of contract against Aerovision due to its complete failure to perform under the Aircraft Agreement, despite SFII's complete performance under the Aircraft Agreement by providing $5 million in deposit funds to Aerovision (the "Deposits"); (2) conversion against Aerovision for its failure to return the Deposits rightfully belonging to SFII despite two demand letters demanding return of the Deposits; (3) unjust enrichment, in the alternative to the breach of contract claim, against Aerovision for its improper retaining of the Deposits despite its provision of no benefits to SFII in exchange; (4) fraudulent inducement due to Aerovision and the Daniels' improper conduct in inducing SFII to enter into the Aircraft Agreement despite Aerovision's seeming intention not to perform under the Aircraft Agreement; and (5) negligent misrepresentation, in the alternative to the fraudulent inducement claim, based on Aerovision's improper representations which induced SFII to enter into the Aircraft Agreement.
Current report
Results of Operations - Six Months Ended June 30, 2026, Comparison Against the Six Months Ended June 30, 2025
Current report
Selling, general and administrative
Current report
During the six months ended June 30, 2026, we incurred selling, general and administrative costs of $10,423,430 compared to $3,614,879 for the six months ended June 30, 2025, an increase of $6,808,551 year over year. The increase is primarily due to $4,464,752 incurred in stock-based compensation to management and consultants. Outside of stock-based compensation, the remaining increase of $2,343,799 is driven by non stock-based increases in marketing, professional fees, public company costs, and personnel costs by $1,636,875, $1,115,502, $333,881, and $367,349, respectively, and partially offset by decreases in business development and consulting fees by $762,125 and $459,754, respectively. Marketing costs increased as the Company embarked on a public relations campaign to raise awareness about its brand and business following the Company's listing on the NYSE American. Increase in professional fees mainly relates to additional legal, audit, and accounting fees incurred to fulfill the Company's increased reporting obligations as a result of becoming a public company in December 2025, as well as increased legal expenditures related to disputes the Company is party to, including those involving the Company's former CEO, the Aircraft Agreement, and access to certain bank accounts of the Company's subsidiaries in relation to the resignation of the Company's former CEO. Increase in public company costs is driven by the Company's listing on the NYSE American since December 2025. Increase in personnel costs is primarily due to the Company hiring numerous employees during the six months ended June 30, 2026, including hiring certain long-time contractors on a permanent basis.
Current report
Impairment of aircraft deposits
Current report
During the six months ended June 30, 2026, we recognized an impairment of aircraft deposits of $5,150,000 in relation to deposits we previously made for the Aircraft Agreement with Aerovision. We determined a loss contingency event has occurred during the six months ended June 30, 2026, due to the continued non-communication and failure to respond to our demand letters for performance or return of the deposits.
Current report
During the six months ended June 30, 2026, we earned interest income of $71,880 compared to $57,071 for the six months ended June 30, 2025, an increase of $14,809 year-over-year. Realized and unrealized gain on short-term investments for the six months ended June 30, 2026 was $196,956, compared to $25,050 for the comparative period, an increase of $171,906 year-over-year. Interest income is earned on the Company's short-term investments, and realized and unrealized gains are driven by fair value remeasurements of short-term investments as they approach maturity. The increases in both reflect the increase in balances of these short-term investments held by the Company in the current period.
Current report
Flight training income
Current report
During the six months ended June 30, 2026, we earned flight training income of $0 compared to $354,140 for the six months ended June 30, 2025, a decrease of $354,140 year-over-year. Flight training income is earned from occasional flight training activities undertaken by us for civil customers based on airspace availability, as well as availability of our personnel and equipment away from our primary activities. We have undertaken no such flights during the six months ended June 30, 2026.
Current report
Loss to misappropriation of assets
Current report
Other income, net
Current report
Selling, general and administrative
Current report
Research and development
Current report
Impairment of aircraft deposits
Current report
During the three months ended June 30, 2026, we recognized an impairment of aircraft deposits of $5,150,000 in relation to deposits we previously made for the Aircraft Agreement with Aerovision. We determined a loss contingency event has occurred during the three months ended June 30, 2026, due to the continued non-communication and failure to respond to our demand letters for performance or return of the deposits.
Current report
Interest income
Current report
During the three months ended June 30, 2026, we earned interest income of $43,583 compared to $25,718 for the three months ended June 30, 2025, an increase of $17,865 year-over-year. Realized and unrealized gain on short-term investments for the three months ended June 30, 2026 was $74,465, compared to $13,628 for the comparative period, an increase of $60,837 year-over-year. Interest income is earned on the short-term investments, and realized and unrealized gains are driven by fair value remeasurements of short-term investments as they approach maturity.
Current report
Flight training income
Current report
During the three months ended June 30, 2026, we earned flight training income of $0 compared to $266,240 for the three months ended June 30, 2025, a decrease of $266,240 year-over-year. Flight training income is earned from occasional flight training activities undertaken by us for civil customers based on airspace availability, as well as availability of our personnel and equipment away from our primary activities. We have undertaken no such flights during the three months ended June 30, 2026.
Current report
Amortization of debt discount
Current report
Interest expense
Current report
Other income, net
Current report
Critical Accounting Estimates
Current report
There have been no material changes to the Company's critical accounting estimates from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Current report
On July 7, 2026, the Company issued 124,999 Common Shares for the settlement of 124,999 RSUs vested upon grant on June 25, 2026.
Removed paragraphs (48)
Previous report
Defense, Civil, Academic and Commercial Services; and
Previous report
Pilot and Astronaut Training.
Previous report
Resignations of Rick Svetkoff and Brenda Svetkoff
Previous report
On February 19, 2026, our Board of Directors received by email a resignation letter pursuant to which Rick Svetkoff resigned as the Chief Executive Officer, President, Chairman and director of the Company. In his resignation letter, Mr. Svetkoff indicated that his disagreement with the Board and the Company related to the operations, policies and practices of the Company acting through the Board led to his decision to resign from all officer positions and as a director of the Company. Although Mr. Svetkoff's resignation has not materially affected our day-to-day operations, it remains unclear at this time whether his departure will adversely affect our ability to compete in the long term.
Previous report
Also, on February 19, 2026, the Board received by email a resignation letter from Brenda Svetkoff, the spouse of Mr. Svetkoff, pursuant to which Mrs. Svetkoff resigned as the Secretary of the Company. In her resignation letter, Mrs. Svetkoff indicates that her disagreement with the Board and the Company related to the operations, policies and practices of the Company acting through the Board led to her decision to resign from acting as the Secretary of the Company.
Previous report
Copies of the resignation letters received from Mr. and Mrs. Svetkoff were included as Exhibits 17.1 and 17.2, respectively, to the Company's current report on Form 8-K, as filed with the SEC on February 25, 2026.
Previous report
The Company respectfully disagrees with the substance of and the assertions and characterizations that are contained in the resignation letters of Mr. Svetkoff and Mrs. Svetkoff.
Previous report
Appointment of Tim Franta as Chief Executive Officer
Previous report
On February 22, 2026, following the resignation of Mr. Svetkoff as the Chief Executive Officer, President and Chairman, the Board of Directors at a meeting appointed Tim Franta, then a current director and the VP Development, as the Chief Executive Officer of the Company. In addition to assuming his new duties as Chief Executive Officer, Mr. Franta continues to serve the Company as a director and VP Development.
Previous report
Advertising and promotion
Previous report
During the three months ended March 31, 2026, we incurred advertising and promotion expenses of $508,462 compared to $81,173 for the three months ended March 31, 2025, an increase of $427,289 year over year. During the three months ended March 31, 2026, the Company embarked on a public relations campaign to raise awareness about its brand and business following the Company's listing on the NYSE American, whereas the Company incurred lower ongoing public relations expenses during the three months ended March 31, 2025. Furthermore, in 2026, advertising and promotion expenses also include $10,287 in stock-based compensation related to RSUs issued in 2025 to a marketing consultant. There was no stock-based compensation in the comparative period.
Previous report
Business development
Previous report
During the three months ended March 31, 2026, we incurred business development expenses of $144,015 compared to $180,000 for the three months ended March 31, 2025. The current period expenditure is solely stock-based compensation related to RSUs issued in 2025 to a business development advisor of the Company, which will vest by June 2026. In the comparative period, such expenses were paid in cash and were incurred for corporate advisory and investor outreach activities associated with the Company's then-ongoing financing and listing efforts through its Regulation A financing.
Previous report
Consulting fees
Previous report
During the three months ended March 31, 2026, we incurred consulting fees of $1,124,862 compared to $390,350 for the three months ended March 31, 2025, an increase of $734,512 year-over-year. In the current quarter, consulting fees include $984,060 in stock-based compensation related to options and RSUs issued during the previous year. There was no stock-based compensation in the comparative period. Cash-based consulting fees were $140,802, which was a decrease of $249,548 compared to the prior year. In the comparative period, the Company incurred certain corporate advisory and consulting expenses in relation to its go-public efforts, which were not repeated in Q1 2026, following the successful completion of the Company's IPO in December 2025.
Previous report
Contract labor and fuel
Previous report
During the three months ended March 31, 2026, we incurred contract labor and fuel expenses of $331,116 compared to $185,775 for the three months ended March 31, 2025, an increase of $145,341 year-over-year. In the current quarter, contract labor and fuel include $143,744 in stock-based compensation related to options issued in 2025 to members of the operations team based at Kennedy Space Center. There was no stock-based compensation in the comparative period. The cash-based expenses for contract labor and fuel remained consistent year-over-year with similar level of flight activities undertaken in the current year.
Previous report
Directors' fees
Previous report
During the three months ended March 31, 2026, we incurred directors' fees of $44,000 compared to $42,000 for the three months ended March 31, 2025, which is relatively consistent year-over-year.
Previous report
Insurance
Previous report
During the three months ended March 31, 2026, we incurred insurance expense of $205,754 compared to $21,157 for the three months ended March 31, 2025, an increase of $184,597. Insurance expenses of the Company included coverages for its operations of F-104 aircrafts, as well as directors' and officers' ("D&O") coverages. The increase is mainly due to increased D&O coverages connected to the Company's listing on the NYSE American.
Previous report
Management fees
Previous report
Management fees for the three months ended March 31, 2026 were ($347,410) compared to expense of $75,000 for the three months ended March 31, 2025, a decrease of $422,410 year-over-year. In the current quarter, the Company paid cash management fees of $50,000 to the Company’s former CEO for overseeing the day to day operations, netted off by a reversal of previously-recognized stock-based compensation of $397,410 related to options previously issued but forfeited by the Company’s former CEO upon his resignation in February 2026. There was no stock-based compensation in the comparative period.
Previous report
Office and administrative
Previous report
During the three months ended March 31, 2026, we incurred office and administrative expenses of $47,320 compared to $78,125 for the three months ended March 31, 2025, a decrease of $30,805 year-over-year. The decrease in administrative expenses is correlated to the reduced level of administrative work required, following the Company's successful completion of its IPO.
Previous report
Listing fees
Previous report
During the three months ended March 31, 2026, we incurred listing fees of $233,149 compared to $3,049 for the three months ended March 31, 2025, an increase of $230,100 year-over-year. Listing fees reflect public company costs of the Company, including transfer agent expenses, periodic fees for maintaining listings on the NYSE American, expenditures for public filings, among others. The year-over-year increase reflects increased ongoing obligations of the Company following the completion of its IPO in December 2025 to become a public company.
Previous report
Professional fees
Previous report
Rent expense
Previous report
During the three months ended March 31, 2026, we incurred rent expense of $130,753 compared to $102,751 for the three months ended March 31, 2025, an increase of $28,002 year-over-year. The Company entered into a new short-term lease for a new temporary hangar lease in Texas commencing June 2025, resulting in an increase in rent expense incurred.
Previous report
Repairs and maintenance
Previous report
During the three months ended March 31, 2026, we incurred repair and maintenance expenses of $2,379 compared to $5,994 for the three months ended March 31, 2025, a decrease of $3,615, which remained relatively consistent year over year.
Previous report
Travel and entertainment
Previous report
During the three months ended March 31, 2026, we incurred travel and entertainment expenditures of $113,140 compared to $255,454 for the three months ended March 31, 2025, a decrease of $142,314 year-over-year. During the comparative period, the Company was actively travelling and entertaining prospective investors, resulting in higher expenditures than in the current year.
Previous report
Other income
Previous report
During the three months ended March 31, 2026, we earned other income of $15,000 compared to $87,900 for the three months ended March 31, 2025, a decrease of $72,900 year-over-year. Other income consists of ancillary income earned for providing pilot training and equipment testing services, and varies with the availability of airspace, equipment and personnel.
Previous report
Grant income
Previous report
During the three months ended March 31, 2026, we earned interest income of $150,788 compared to $42,775 for the three months ended March 31, 2025, an increase of $108,013 year-over-year.
Previous report
Loss on disposal of property, plant, and equipment
Previous report
During the three months ended March 31, 2026, we recognized a loss on disposal of property, plant, and equipment, in relation to a vehicle that was paid for by SFII in 2022 that was not returned to the Company's possession upon the resignation of the former CEO of the Company.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Reworded paragraphs (26)
Previous wording
The Company was founded and incorporated under the laws of the State of Delaware on September 6, 2022. On December 17, 2025, the Company successfully closed its initial public offering and on December 18, 2025, our common shares were listed for trading on the NYSE American under the trading symbol "FJET". Our goal is to make space accessible to entrepreneurs, researchers, industry participants, and the government at a high cadence and the right cost.
Current wording
The Company was founded and incorporated under the laws of the State of Delaware on September 6, 2022. Our common shares are listed for trading on the NYSE American under the trading symbol "FJET". Our goal is to make space accessible to entrepreneurs, researchers, industry participants, and the government at a high cadence and the right cost.
Previous wording
We operate the world's only commercial fleet of flight-ready F-104 supersonic aircraft. Recent increases in government expenditures and commercial investment are driving growth in the space economy. This increase has created a demand for services such as the National Aeronautics and Space Administration ("NASA") owned F-104s used to provide. To our knowledge, there is currently no other commercially available aircraft to the public with the capabilities of the Lockheed F-104 in terms of speed and climbing performance. We plan to fulfill these needs through a fleet of seven (7) F-104 aircraft. Based at NASA's Kennedy Space Center, the aircraft provide the following four groups of services:
Current wording
We operate the world's only commercial fleet of flight-ready F-104 supersonic aircraft. Recent increases in government expenditures and commercial investment are driving growth in the space economy. This increase has created a demand for services similar to those that the F-104s formerly owned by the National Aeronautics and Space Administration ("NASA") used to provide. To our knowledge, there is currently no other commercially available aircraft to the public with the capabilities of the F-104 in terms of speed and climbing performance. We plan to fulfill these needs through a fleet of seven (7) F-104 aircraft and operate from NASA's Kennedy Space Center in Florida, with an additional base of operations at Midland International Air & Space Port in Texas. We have three aircraft that are flight-ready available for customers or development flights, three of our aircraft are flight-capable, and one aircraft is not flight-capable. Our current activities are focused on the following groups of services:
Previous wording
Launch Services and Access to Space;
Current wording
Launch Services and Access to Space; and
Previous wording
Research and Development (R&D) and Test and Evaluation (T&E) Test Bed;
Current wording
Airborne Testbed for Hypersonic Research and Development (R&D) and Test and Evaluation (T&E) Test Bed for commercial, academic, civil and government clients;
Previous wording
Current Status of Aerovision Aircraft Acquisition Agreement
Current wording
Current Status of Aerovision Aircraft Acquisition Agreement and Litigation Against Aerovision
Previous wording
SFII paid the two instalments of the initial deposit advance to Aerovision, totaling $5,000,000, on January 24, 2025, and March 3, 2025. However, Aerovision has not provided any information as to the availability of any of the F-4 Phantom II aircraft contemplated to be purchased by SFII, and all recent attempts by our Company to contact Aerovision have been unsuccessful. We, acting through SFII, are reviewing what remedies might be available under the Aircraft Agreement.
Current wording
SFII paid the two instalments of the initial deposit advance to Aerovision, totaling $5,000,000, on January 24, 2025, and March 3, 2025. However, Aerovision has not provided any information as to the availability of any of the F-4 Phantom II aircraft contemplated to be purchased by SFII, and all recent attempts by our Company to contact Aerovision have been unsuccessful. We, acting through SFII, are reviewing what remedies might be available under the Aircraft Agreement. As of June 30, 2026, the Company has fully impaired the deposits paid to Aerovision.
Previous wording
On April 9, 2026, Richard "Rick" Svetkoff filed a complaint in the 18th Judicial Circuit in and for Brevard County, Florida (Case No. 26TC-245660994), against the Company, Timothy Franta (the Company's current CEO and a board member), board members Sean Bromley, Brian Goldmeier and Geoffrey "Hak" Hickman, and Flagship Bank as trustee for funds held in the name of the Company's wholly-owned subsidiary, SFII. Mr. Svetkoff previously served as the Company's CEO, President and Executive Chairman, and as a Director, until his voluntary resignation from these positions on February 19, 2026. Following his resignation, the Company removed Mr. Svetkoff as an officer and director of SFII, a corporation formed under the laws of the State of Florida, and Starfighters International, Inc., a corporation formed under the laws of Texas, on March 9, 2026, and caused Articles of Amendment to be filed for SFII with the Florida Secretary of State office on March 27, 2026. In addition, the Company removed Mr. Svetkoff as an officer and director of Starfighters, Inc. ("SI"), a corporation formed under the laws of the State of Florida, on April 2, 2026, and caused Articles of Amendment to be filed for SI with the Florida Secretary of State office on April 3, 2026.
Current wording
On April 9, 2026, Richard "Rick" Svetkoff, former Chief Executive Officer, President, Chairman and director of the Company, filed a complaint in the 18th Judicial Circuit in and for Brevard County, Florida (Case No. 26TC-245660994), against the Company, Timothy Franta (the Company's current CEO and a board member), board members Sean Bromley, Brian Goldmeier and Geoffrey "Hak" Hickman, and Flagship Bank as trustee for funds held in the name of the Company's wholly-owned subsidiary, SFII. Mr. Svetkoff previously served as the Company's CEO, President and Executive Chairman, and as a Director, until his voluntary resignation from these positions on February 19, 2026. Following his resignation, the Company removed Mr. Svetkoff as an officer and director of SFII, a corporation formed under the laws of the State of Florida, and Starfighters International, Inc., a corporation formed under the laws of Texas, on March 9, 2026, and caused Articles of Amendment to be filed for SFII with the Florida Secretary of State office on March 27, 2026. In addition, the Company removed Mr. Svetkoff as an officer and director of Starfighters, Inc. ("SI"), a corporation formed under the laws of the State of Florida, on April 2, 2026, and caused Articles of Amendment to be filed for SI with the Florida Secretary of State office on April 3, 2026.
Previous wording
The Company is preparing to file a response to the complaint and is evaluating potential counterclaims and other claims against Mr. Svetkoff and related parties, which may include claims for conversion, misappropriation of corporate assets, and breach of fiduciary duty. The Company reserves all rights and defenses in connection with this matter, cannot predict the outcome of this matter, and an adverse result could have a material adverse effect on the Company business, financial condition, cash flows, or results of operations.
Current wording
The Company is preparing to file a motion to dismiss the complaint and is evaluating potential counterclaims and other claims against Mr. Svetkoff and related parties, which may include claims for conversion, misappropriation of corporate assets, and breach of fiduciary duty. The Company reserves all rights and defenses in connection with this matter, cannot predict the outcome of this matter, and an adverse result could have a material adverse effect on the Company business, financial condition, cash flows, or results of operations.
Previous wording
In addition, due to ongoing dispute over control of bank accounts, Regions Bank has also placed restrictions on all accounts held by our Texas subsidiary with the bank, which held cash and short-term investments totaling approximately $0.2 million.
Current wording
In addition, due to ongoing dispute over control of bank accounts, Regions Bank has also placed restrictions on all accounts held by our Texas subsidiary with the bank, which held cash totaling approximately $0.2 million.
Previous wording
During the three months ended March 31, 2025, the Company recorded a change in the fair value of its derivative liability of $704,662, whereas there were no equivalent expenses in the current period. The derivative liability resulted from a conversion option on the Company's previously existing convertible debt which was bifurcated as the number of shares to be issued upon conversion may vary. The change in fair value reflects updates to key valuation inputs into the Monte Carlo valuation, including the Company's share price, expected volatility and time to maturity. The convertible debt was fully converted and settled in December 2025, concurrently with the Company's IPO.
Current wording
During the six months ended June 30, 2025, the Company recorded a change in the fair value of its derivative liability of $548,763, whereas there were no equivalent expenses in the current period. The derivative liability resulted from a conversion option on the Company's previously existing convertible debt which was bifurcated as the number of shares to be issued upon conversion may vary. The change in fair value reflects updates to key valuation inputs into the Monte Carlo valuation, including the Company's share price, expected volatility and time to maturity. The convertible debt was fully converted and settled in December 2025, concurrently with the Company's IPO.
Previous wording
During the three months ended March 31, 2026, we recognized a loss from misappropriation of assets of $395,033 in relation to withdrawal and transfer of funds of the Company by the former CEO of the Company without approval of the Board of Directors or the Audit Committee of the Company, totaling $1,921,159. The portion to which we recognized a loss for represented excess amounts over related party notes payable which we owed to the former CEO and his related entities, for which we determined there is no sufficient evidence for its collectability.
Current wording
During the six months ended June 30, 2026, we recognized a loss to misappropriation of assets of $395,033 in relation to withdrawal and transfer of funds of the Company by the former CEO of the Company without approval of the Board of Directors or the Audit Committee of the Company, totaling $1,921,159. The portion to which we recognized a loss for represented excess amounts over related party notes payable owed to the former CEO and his related entities of $1,526,126 which we applied against amounts withdrawn. We determined there is no sufficient evidence for collectability of the excess amounts.
Previous wording
During the three months ended March 31, 2026, we incurred a net loss of $4,269,131 compared to net loss of $2,653,107 for the three months ended March 31, 2025. An analysis of the increase in net loss of $1,616,024 including the major components of our results for the periods, is below.
Current wording
During the three months ended June 30, 2026, we incurred a net loss of $11,458,207 compared to net loss of $1,934,427 for the three months ended June 30, 2025. An analysis of the increase in net loss of $9,523,780 including the major components of our results for the periods, is below.
Previous wording
During the three months ended March 31, 2026, we incurred professional fees of $1,331,822 compared to $192,414 for the three months ended March 31, 2025, an increase of $1,139,408 year-over-year. In the current quarter, professional fees included $912,078 in stock-based compensation related to options and RSUs issued in 2025 for services from a number of individuals, including the Company's CFO, and cash fees of $419,744. There was no stock-based compensation in the comparative period. The year-over-year increase relates to additional legal, audit, and accounting fees incurred to fulfill the Company's increased reporting obligations as a result of becoming a public company in December 2025, as well as increased legal expenditures related to disputes the Company is party to, including those involving the Company's former CEO, the Aircraft Agreement, and access to certain bank accounts of the Company's subsidiaries in relation to the resignation of the Company's former CEO.
Current wording
During the three months ended June 30, 2026, we incurred selling, general and administrative costs of $6,448,238 compared to $1,990,805 for the three months ended June 30, 2025, an increase of $4,457,433 year-over-year. The increase is mainly due to $2,667,978 incurred in stock-based compensation to management and consultants. Outside of stock-based compensation, the remaining increase of $1,789,455 is driven by non stock-based increases in marketing, professional fees, and personnel costs by $1,219,873, $891,172, and $367,349, respectively, and partially offset by decreases in business development and consulting fees by $582,125 and $210,206, respectively. Marketing costs increased as the Company embarked on a public relations campaign to raise awareness about its brand and business following the Company's listing on the NYSE American. Increase in professional fees mainly relates to additional legal, audit, and accounting fees incurred to fulfill the Company's increased reporting obligations as a result of becoming a public company in December 2025, as well as increased legal expenditures related to disputes the Company is party to, including those involving the Company's former CEO, the Aircraft Agreement, and access to certain bank accounts of the Company's subsidiaries in relation to the resignation of the Company's former CEO. Increase in personnel costs is primarily due to the Company hiring numerous employees during the three months ended June 30, 2026, including hiring certain long-time contractors on a permanent basis.
Previous wording
During the three months ended March 31, 2026, we incurred research and development expenses of $83,263 compared to $255,479 for the three months ended March 31, 2025 a decrease of $172,216 year-over-year. The decrease reflected the completion of the initial phase of testing for the Company's StarLaunch platform, as announced in January 2026 and disclosed earlier in this management's discussion and analysis.
Current wording
During the three months ended June 30, 2026, we incurred research and development expenses of $1,918 compared to $186,513 for the three months ended June 30, 2025, a decrease of $184,595 year-over-year. The decrease reflected the completion of the initial phase of testing for the Company's StarLaunch platform, as announced in January 2026 and disclosed earlier in this management's discussion and analysis, with the Company currently preparing for further research and development activities.
Previous wording
During the three months ended March 31, 2025, the Company recognized amortization of the discount on its convertible debt of $117,067, whereas there were no equivalent expenses in the current period. The discount related to a bifurcated conversion option transaction costs incurred for a previously outstanding convertible debt financing. The convertible debt was fully converted and settled in December 2025, concurrently with the Company's IPO.
Current wording
During the three months ended June 30, 2025, the Company recognized amortization of the discount on its convertible debt of $121,914, whereas there were no equivalent expenses in the current period. The discount related to a bifurcated conversion option and transaction costs incurred for a previously outstanding convertible debt financing. The convertible debt was fully converted and settled in December 2025, concurrently with the Company's IPO.
Previous wording
During the three months ended March 31, 2026, we incurred no interest expense compared to $118,410 for the three months ended March 31, 2025. Interest expense consisted of interest on convertible debentures of the Company which were carried at 5% per annum and raised to 8% per annum in February 2025, and note payable to Space Florida which was carried at 3% per annum. These loans were converted into common stock upon the Company's listing on the NYSE American in December 2025, and are no longer outstanding.
Current wording
During the three months ended June 30, 2026, we incurred no interest expense compared to $152,132 for the three months ended June 30, 2025. Interest expense consisted of interest on convertible debentures of the Company which were carried at 5% per annum and raised to 8% per annum in February 2025, and note payable to Space Florida which was carried at 3% per annum. These loans were converted into common stock upon the Company's listing on the NYSE American in December 2025, and are no longer outstanding.
Previous wording
During the three months ended March 31, 2026, we earned grant income of $24,000 compared to $40,000 for the three months ended March 31, 2025, a decrease of $16,000 period-over-period. Grant income consists of expense reimbursement received or is receivable by the Company in connection with rent expenses and costs of relocation of assets and operations to Midland, Texas, in accordance with the Economic Development Agreement with the MDC.
Current wording
During the three months ended June 30, 2026, we earned other income, net of $23,901 compared to $55,452 for the three months ended June 30, 2025, a decrease of $31,551 year-over-year. The decrease is primarily due to the $37,011 decrease in grant income. Grant income consists of expense reimbursement received or is receivable by the Company in connection with rent expenses and costs of relocation of assets and operations to Midland, Texas, in accordance with the Economic Development Agreement with the MDC.
Previous wording
We continually monitor and manage cash flow to assess the liquidity necessary to fund operations and capital projects. We manage our capital resources and adjust them to take into account changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust our capital resources, we may, where necessary, control the amount of working capital, pursue financing or manage the timing of our capital expenditures. As of March 31, 2026, we had a positive working capital of $14,711,208 (current assets of $18,205,092, less current liabilities of $3,493,884) and as of December 31, 2025, we had a positive working capital of $17,091,337 (current assets of $20,143,416, less current liabilities of $3,052,079).
Current wording
We continually monitor and manage cash flow to assess the liquidity necessary to fund operations and capital projects. We manage our capital resources and adjust them to take into account changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust our capital resources, we may, where necessary, control the amount of working capital, pursue financing or manage the timing of our capital expenditures. As of June 30, 2026, we had a positive working capital of $25,742,338 (current assets of $28,094,778, less current liabilities of $2,352,440) and as of December 31, 2025, we had a positive working capital of $17,091,337 (current assets of $20,143,416, less current liabilities of $3,052,079).
Previous wording
Furthermore, as disclosed earlier, within our current assets, cash and short-term investments of $1,188,044 were restricted by Flagship Bank due to ongoing litigation involving Rick Svetkoff, our former CEO and Director; a further $210,532 of cash and short-term investments were restricted by Regions Bank due to ongoing disputes over ownership and control of bank accounts with Rick Svetkoff; and $1,526,126 recognized as due from shareholder was part of $1,921,159 that was identified to have been unauthorized withdrawals and transfers by Rick Svetkoff from our Flagship Bank and Regions Bank accounts without approval by our board of directors or audit committee prior to his resignation, which we intend to pursue a recovery of, but do not currently have access thereto. The balance of $395,033 was recorded as loss to misappropriation of assets.
Current wording
Furthermore, as disclosed earlier, cash and short-term investments of $1,192,986 were restricted by Flagship Bank due to ongoing litigation involving Rick Svetkoff, our former CEO and Director; a further $211,119 of cash and short-term investments were restricted by Regions Bank due to ongoing disputes over ownership and control of bank accounts with Rick Svetkoff; and $1,921,159 was identified to have been unauthorized withdrawals and transfers by Rick Svetkoff from our Flagship Bank and Regions Bank accounts without approval by our board of directors or audit committee prior to his resignation. After setting off related party notes payable of $1,526,126 owed to him and his affiliates, the balance of $395,033 was recorded as loss to misappropriation of assets.
Previous wording
Based on this assessment, we have material uncertainties about our business that may cast substantial doubt about our ability to continue as a going concern. Accordingly, our ability to continue as a going concern is dependent upon our ability to raise sufficient funds to pay ongoing operating expenditures and to meet our obligations. See further discussion related to our ability to continue as a going concern within Note 2 to our unaudited condensed consolidated interim financial statements for the three months ended March 31, 2026 and 2025 under "- Basis of Presentation - Going Concern."
Current wording
Based on this assessment, we have material uncertainties about our business that may cast substantial doubt about our ability to continue as a going concern. Accordingly, our ability to continue as a going concern is dependent upon our ability to raise sufficient funds to pay ongoing operating expenditures and to meet our obligations. See further discussion related to our ability to continue as a going concern within Note 1 to our unaudited condensed consolidated interim financial statements for the six months ended June 30, 2026 and 2025 under "Nature of operations and going concern."
Previous wording
As of March 31, 2026, and December 31, 2025, we had $2,138,039 and $4,631,720 in cash (including restricted cash), respectively. We are actively managing current cash flows until such time that we are profitable.
Current wording
As of June 30, 2026 and December 31, 2025, we had $2,399,572 and $4,631,720 in cash (including restricted cash), respectively. We are actively managing current cash flows until such time that we are profitable.
Previous wording
Our net cash used in operating activities is primarily due to cash payments for operating expenses that we incur in the day-to-day operations of the business. Net cash used in operating activities for the three months ended March 31, 2026, was $3,963,542 compared to $1,669,732 for the three months ended March 31, 2025. The loss for the three months ended March 31, 2026, of $4,269,131 was amplified by $1,476,646 in working capital items and offset by $1,782,235 in non-cash items consisting mainly of stock-based compensation. This compares to a loss of $2,653,107 for the comparative period, that was offset by $146,800 in changes in working capital items and $836,575 in non-cash items consisting mainly of amortization of the convertible debt discount and change in fair value of derivative liability.
Current wording
Our net cash used in operating activities is primarily due to cash payments for operating expenses that we incur in the day-to-day operations of the business. Net cash used in operating activities for the six months ended June 30, 2026, was $10,060,406 compared to $3,488,588 for the six months ended June 30, 2025. The loss for the six months ended June 30, 2026, of $15,727,338 was amplified by $3,973,420 in working capital items and offset by $9,640,352 in non-cash items consisting mainly of stock-based compensation of $4,464,752 and impairment of aircraft deposits of $5,150,000. This compares to a loss of $4,587,534 for the comparative period, that was offset by $282,916 in changes in working capital items and $816,030 in non-cash items consisting mainly of amortization of the convertible debt discount of $238,981 and change in fair value of derivative liability of $548,763.
Previous wording
Cash Provided by (Used in) Investing Activities
Current wording
Cash Used in Investing Activities
Previous wording
Net cash provided by (used in) investing activities for the three months ended March 31, 2026 was an inflow of $1,469,861 and relates to the redemption of short-term investments of $10,056,100, netted off by purchase of short-term investments of $8,586,239. Net cash used in investing activities during the comparative period was $5,295,422 and relates to deposits made toward the purchase of property, plant and equipment of $5,000,000 and the purchase of short-term investments of $295,422.
Current wording
Net cash used in investing activities for the six months ended June 30, 2026 was an outflow of $6,878,611 and relates to the redemption of short-term investments of $19,043,594, netted off by purchase of short-term investments of $25,811,038 and purchase of $111,167 of equipment. Net cash used in investing activities during the comparative period was $6,318,603 and relates to deposits made toward the purchase of property, plant and equipment of $6,000,000 and the purchase of short-term investments of $318,603.
Previous wording
During the three months ended March 31, 2025, the Company received gross proceeds from Reg A financing of $4,101,909 and paid for share issuance costs of $232,078, resulting in a net cash inflow of $3,869,831.
Current wording
Net cash provided by financing activities during the six months ended June 30, 2026 was $14,706,869 and relates to $17,499,995 from proceeds of issuance of shares less $1,267,000 of financing costs and an outflow of $1,526,126 related to unauthorized withdrawals by our former CEO for the repayment of related party loans. During the six months ended June 30, 2025, the Company received gross proceeds from Reg A financing of $6,919,701 and paid for share issuance costs of $398,878, resulting in a net cash inflow of $6,520,823.
Previous wording
The Company, as an issuer with less than $1.235 billion in total annual gross revenues during its last fiscal year, it will qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") and this status will be significant. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company, the Company:
Current wording
The Company, as an issuer with less than $1.235 billion in total annual gross revenues during its last fiscal year, will qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") and this status will be significant. An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company, the Company:
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
During the six months ended June 30, 2026, we incurred a net loss of $15,727,338 compared to net loss of $4,587,534 for the six months ended June 30, 2025. An analysis of the increase in net loss of $11,139,804 including the major components of our results for the periods, is below.
Current report — wording carried from elsewhere
During the six months ended June 30, 2026, we incurred research and development expenses of $85,181 compared to $441,992 for the six months ended June 30, 2025, a decrease of $356,811 year-over-year. The decrease reflected the completion of the initial phase of testing for the Company's StarLaunch platform, as announced in January 2026 and disclosed earlier in this management's discussion and analysis, with the Company currently preparing for further research and development activities.
Current report — wording carried from elsewhere
During the six months ended June 30, 2025, the Company recognized amortization of the discount on its convertible debt of $238,981, whereas there were no equivalent expenses in the current period. The discount related to a bifurcated conversion option and transaction costs incurred for a previously outstanding convertible debt financing. The convertible debt was fully converted and settled in December 2025, concurrently with the Company's IPO.
Current report — wording carried from elsewhere
During the six months ended June 30, 2026, we incurred no interest expense compared to $270,542 for the six months ended June 30, 2025. Interest expense consisted of interest on convertible debentures of the Company which were carried at 5% per annum and raised to 8% per annum in February 2025, and note payable to Space Florida which was carried at 3% per annum. These loans were converted into common stock upon the Company's listing on the NYSE American in December 2025, and are no longer outstanding.
Current report — wording carried from elsewhere
During the six months ended June 30, 2026, we earned other income, net of $57,470 compared to $91,362 for the six months ended June 30, 2025, a decrease of $33,892 year-over-year. The decrease is primarily due to the $53,011 decrease in grant income. Grant income consists of expense reimbursement received or is receivable by the Company in connection with rent expenses and costs of relocation of assets and operations to Midland, Texas, in accordance with the Economic Development Agreement with the MDC.
Current report — wording carried from elsewhere
Change in fair value of derivative liability
Current report — wording carried from elsewhere
During the three months ended June 30, 2025, the Company recorded an income arising from a change in the fair value of its derivative liability of $155,899, whereas there were no equivalent movement in the current period. The derivative liability resulted from a conversion option on the Company's previously existing convertible debt which was bifurcated as the number of shares to be issued upon conversion may vary. The change in fair value reflects updates to key valuation inputs into the Monte Carlo valuation, including the Company's share price, expected volatility and time to maturity. The convertible debt was fully converted and settled in December 2025, concurrently with the Company's IPO.