Sidus Space Inc.

Previous wording

Our goal is to enable customers to meet their mission objectives with cost-effective solutions and to help them understand how space-based data can be impactful to day-to-day business. Our strategy includes increasing the demand downstream by starting out as end user focused. While others are focused on a data verticalization strategy specializing in key sectors or a problem set, we believe that flexibility in production, low-cost, standardized design and offering ‘Space Access Reimagined’ for consumers will provide a scalable model for growth. In just over twelve months, we successfully launched and began operations with three LizzieSat® multi-mission satellites for a multi-mission constellation. Designed to be modular, flexible, and cost-effective, our proven LizzieSat® platform enables rapid mission configuration and scalability across a wide range of satellite sizes, efficiently addressing unique mission requirements. Built with several proprietary Sidus designs for reusable core components, our smart vertical integration provides greater control over the supply chain, ensuring seamless integration of all components—whether developed in-house or sourced externally. This integrated approach offers a distinct advantage over competitors who rely on purchasing and integrating hardware, software, and subsystems from multiple vendors.

Current wording

Our goal is to enable customers to meet their mission objectives with cost-effective solutions and to help them understand how space-based data can be impactful to day-to-day business. Our strategy includes increasing the demand downstream by starting out as end user focused. While others are focused on a data verticalization strategy specializing in key sectors or a problem set, we believe that flexibility in production, low-cost, standardized design and offering ‘Space Access Reimagined’ for consumers will provide a scalable model for growth. In just over two years, we successfully launched and began operations with three LizzieSat® multi-mission satellites for a multi-mission fleet. Designed to be modular, flexible, and cost-effective, our proven LizzieSat® platform enables rapid mission configuration and scalability across a wide range of satellite sizes, efficiently addressing unique mission requirements. Built with several proprietary Sidus designs for reusable core components, our smart vertical integration provides greater control over the supply chain, ensuring seamless integration of all components—whether developed in-house or sourced externally. This integrated approach offers a distinct advantage over competitors who rely on purchasing and integrating hardware, software, and subsystems from multiple vendors.

Previous wording

In Q2 2024, we announced the successful on-orbit activation of the FeatherEdge™ processer which enables us to deliver near real-time intelligence derived from earth observation data. Further expanding the capabilities of our constellation, we implemented the SatLab A/S second-generation automated identification system (AIS) technology into the LizzieSat® satellite constellation. AIS technology uses sophisticated systems on board marine vessels to identify and track ships to prevent collisions and protect life at sea. The integration of this technology, combined with data from optical sensors on board LizzieSat®, enables unique vessel tracking and monitoring solutions while providing valuable information about ship movements in real time. In addition to AIS technology, we have integrated visual spectrum and multispectral imagers into our sensor suite and expect to expand the sensors to include software defined multispectral or hyperspectral sensors for future satellite missions.

Current wording

In 2024 and 2025, we completed commissioning of FeatherEdge™ GEN-2 and activated AI edge-computing capabilities on all three LizzieSat® satellites. Further expanding the capabilities of our satellite fleet, we implemented the SatLab A/S second-generation automated identification system (AIS) technology into the LizzieSat® satellite fleet. AIS technology uses sophisticated systems on board marine vessels to identify and track ships to prevent collisions and protect life at sea. The integration of this technology, combined with data from optical sensors on board LizzieSat®, enables unique vessel tracking and monitoring solutions while providing valuable information about ship movements in real time. In addition to AIS technology, we have integrated visual spectrum and multispectral imagers into our sensor suite and expect to expand the sensors to include software defined multispectral or hyperspectral sensors for future satellite missions.

Previous wording

We currently have several satellites in production and expect to launch four to six more LizzieSat® satellites ranging from 100kg to 400kg over the next 24 months. In addition, we expect to begin building satellites for other customers including lunar missions.

Current wording

We currently have several satellites in production and expect to launch 2-3 LizzieSat® satellites ranging from 100kg to 400kg over the next three years. We are also actively building satellites for additional customer missions, including under our Lonestar Holdings lunar satellite manufacturing program.

Previous wording

We are designing, developing, manufacturing, and operating a constellation of proprietary smallsats in addition to designing and building variations of our satellites for other customer missions. These satellites are designed for multiple missions and customers and form the foundation of our satellite platform. Our initial satellites weigh approximately 100 kilograms each and are designed to be more functional than cubesats and nanosatellites and less expensive to manufacture than our competitors. In addition to our own hybrid 3D printed, modular satellites, we are designing and manufacturing customized satellites using our standard design for LEO and lunar applications for customers that include government and commercial entities.

Current wording

We are designing, developing, manufacturing, and operating a fleet of proprietary smallsats in addition to designing and building variations of our satellites for other customer missions. These satellites are designed for multiple missions and customers and form the foundation of our satellite platform. Our initial satellites weigh approximately 100 kilograms each and are designed to be more functional than cubesats and nanosatellites and less expensive to manufacture than our competitors. In addition to our own hybrid 3D printed, modular satellites, we are designing and manufacturing customized satellites using our standard design for LEO and lunar applications for customers that include government and commercial entities.

Previous wording

We design and manufacture satellites at our Cape Canaveral facility. Our current configuration and facility is designed to manufacture multiple satellites per month. Our vertical integration enables us to control our satellites through the entire design, manufacturing, and operation process. Our years of experience manufacturing space hardware means we can leverage our manufacturing expertise and commercial best practices for satellite production. Additionally, leveraging both in-house and partner-provided subsystem components and in-house design and integration services as well as operational support of satellites on orbit, provides turn-key delivery of satellites to offer “concept to constellation” in months instead of years. Specifically, our offerings are expected to encompass all aspects of hosted satellite and constellation services, including hosting customer technologies onto our satellites, and delivering data and constellation services to customers from our space platform. These services are expected to allow customers to focus on developing innovative technologies rather than having to design or develop complete satellite buses or constellations. Additionally, we provide ancillary services that include telemetry, tracking and control, communications, processing, as well as software development and maintenance.

Current wording

We design and manufacture satellites at our Cape Canaveral facility. Our current configuration and facility is designed to manufacture multiple satellites per month. Our vertical integration enables us to control our satellites through the entire design, manufacturing, and operation process. Our years of experience manufacturing space hardware means we can leverage our manufacturing expertise and commercial best practices for satellite production. Additionally, leveraging both in-house and partner-provided subsystem components and in-house design and integration services as well as operational support of satellites on orbit, provides turn-key delivery of satellites to offer “concept to fleet” in months instead of years. Specifically, our offerings are expected to encompass all aspects of hosted satellite and fleet services, including hosting customer technologies onto our satellites, and delivering data and fleet services to customers from our space platform. These services are expected to allow customers to focus on developing innovative technologies rather than having to design or develop complete satellite buses or fleets. Additionally, we provide ancillary services that include telemetry, tracking and control, communications, processing, as well as software development and maintenance.

Previous wording

Our patented space-related technologies include a print head for regolith-polymer mixture and associated feedstock; a heat transfer system for regolith; a method for establishing a wastewater bioreactor environment; vertical takeoff and landing pad and interlocking pavers to construct same; and high-load vacuum chamber motion feedthrough systems and methods. Regolith is a blanket of unconsolidated, loose, heterogeneous superficial deposits covering solid rock. It includes dust, broken rocks, and other related materials and is present on earth, the moon, Mars, some asteroids, and other terrestrial planets and moons. We continue to patent our products including our satellites, external platforms and other innovations. Sidus holds 14 granted patents and 13 pending applications.

Current wording

Our patented space-related technologies include a print head for regolith-polymer mixture and associated feedstock; a heat transfer system for regolith; a method for establishing a wastewater bioreactor environment; vertical takeoff and landing pad and interlocking pavers to construct same; and high-load vacuum chamber motion feedthrough systems and methods. Regolith is a blanket of unconsolidated, loose, heterogeneous superficial deposits covering solid rock. It includes dust, broken rocks, and other related materials and is present on earth, the moon, Mars, some asteroids, and other terrestrial planets and moons. We continue to patent our products including our satellites, external platforms and other innovations. We hold 15 issued patents and 11 pending patent applications as of March 31, 2026.

Previous wording

We generate revenue by selling technology space on our satellite platform, providing engineering and systems integration services to strategic customers on a project-by-project basis, and manufacturing space hardware for other space and defense entities to include satellites. Additionally, we intend to add to our revenue by selling geospatial data and actionable intelligence captured through our constellation. This support is typically contracted to both commercial and government customers under fixed price contracts and often includes other services. Due to the size and capacity of our satellite, we plan to expand the diverse array of sensors on each satellite such as Multispectral and Hyperspectral Earth Observing Imagers, Maritime Vessel RF Tracking receivers, UHF IoT Transceivers, Optical Communications systems, and others. Integrating multiple sensors and technologies on a single multi-mission satellite can simultaneously address the needs of multiple customers and their requirements.

Current wording

We generate revenue by selling technology space on our satellite platform, providing engineering and systems integration services to strategic customers on a project-by-project basis, and manufacturing space hardware for other space and defense entities to include satellites. Additionally, we intend to add to our revenue by selling geospatial data and actionable intelligence captured through our satellite fleet. This support is typically contracted to both commercial and government customers under fixed price contracts and often includes other services. Due to the size and capacity of our satellite, we plan to expand the diverse array of sensors on each satellite such as Multispectral and Hyperspectral Earth Observing Imagers, Maritime Vessel RF Tracking receivers, UHF IoT Transceivers, Optical Communications systems, and others. Integrating multiple sensors and technologies on a single multi-mission satellite can simultaneously address the needs of multiple customers and their requirements.

Previous wording

We have been in business for over ten years manufacturing space hardware and components, and in that time, implementation of policies and processes to mitigate environmental impact have been of upmost importance. Furthermore, since our inception, we have recognized the value of our employees and have always prioritized employee well-being through facets such as excellent benefits, programs, educational assistance, and insurance of a safe and healthy work environment. We also understand that our efforts to promote value and well-being are not limited to our employees. We are committed to the communities we belong to both locally and professionally. We recently started to formalize this commitment, providing tangible benefits back to the community that supports us.

Current wording

We have been in business for over twelve years manufacturing space hardware and components, and in that time, implementation of policies and processes to mitigate environmental impact have been of upmost importance. Furthermore, since our inception, we have recognized the value of our employees and have always prioritized employee well-being through facets such as excellent benefits, programs, educational assistance, and insurance of a safe and healthy work environment. We also understand that our efforts to promote value and well-being are not limited to our employees. We are committed to the communities we belong to both locally and professionally. We have formalized this commitment, providing tangible benefits back to the community that supports us.

Previous wording

Continue to penetrate international markets. We have expanded our strategic focus to include international markets, actively building a pipeline of prospective partnerships with small, underrepresented governments and global companies that can benefit from our expertise and services. As part of this initiative, we have signed partnership agreements with companies in Germany, Japan, Bahrain, and India to explore potential joint venture opportunities.

Current wording

Continue to penetrate international markets. We have expanded our strategic focus to include international markets, actively building a pipeline of prospective partnerships with small, underrepresented governments and global companies that can benefit from our expertise and services. As part of this initiative, we have signed partnership agreements with companies in Germany, Japan, India, Spain, the Netherlands, and Belgium to explore potential joint venture opportunities.

Previous wording

Total revenue for the three months ended September 30, 2025 decreased $570,900 compared to the three months ended September 30, 2024. Non-related party revenue decreased by approximately 68% for the three months ended September 30, 2025, to approximately $559,000 as compared to approximately $1.8 million for the three months ended September 30, 2024. This was primarily driven by the timing of fixed price milestone contracts revenue. Related party revenue increased 562% to approximately $739,000 for the three months ended September 30, 2025 versus approximately $112,000 for the three months ended September 30, 2024. This was influenced by the timing of fixed-price milestone contracts.

Current wording

Total revenue for the three months ended March 31, 2026 increased approximately $121,000 or 51% compared to the three months ended March 31, 2025. Non-related party revenue increased by approximately 56% for the three months ended March 31, 2026, to approximately $250,000 as compared to approximately $161,000 for the three months ended March 31, 2025. This was primarily driven by the addition of new customer contracts including Lonestar Data Holdings and Teledyne Marine. Related party revenue increased 40% to approximately $109,000 for the three months ended March 31, 2026 versus approximately $78,000 for the three months ended March 31, 2025. This was influenced by increased work performed for our related party as their contract activity grew.

Previous wording

Cost of revenue increased 42% for the three months ended September 30, 2025 to approximately $2.6 million as compared to approximately $1.8 million for the three months ended September 30, 2024 and included approximately $654,000 related party cost of sales as of September 30, 2025 and approximately $58,000 as of September 30, 2024. The overall increase in cost of revenue was primarily driven by a mix of contracts of varying types, satellite and related software depreciation expense increase of approximately $500,000 versus 2024, and approximately $250,000 increased direct labor costs due to the contracts processed in the quarter were more labor intensive.

Current wording

Cost of revenue decreased 25% for the three months ended March 31, 2026 to approximately $1.4 million as compared to approximately $1.9 million for the three months ended March 31, 2025 and included approximately $31,000 related party cost of sales for the three months ended March 31, 2026 and approximately $38,000 for the three months ended March 31, 2025. The overall decrease in cost of revenue was primarily driven by lower satellite and related software depreciation expense and improved cost discipline in the manufacturing side of our business.

Previous wording

The 3503% decrease in our gross profit for the three months ended September 30, 2025 to a loss of approximately $1.3 million as compared to a profit of approximately $38,000 for the three months ended September 30, 2024, was driven primarily by higher satellite and related depreciation costs, our mix of varying types of contracts with higher labor expenses and a decrease in our higher margin business.

Current wording

The 36% improvement in our gross loss for the three months ended March 31, 2026 to a loss of approximately $1.1 million as compared to a loss of approximately $1.6 million for the three months ended March 31, 2025, was driven primarily by higher revenue and lower satellite and related software depreciation costs following the satellite impairment write-off in Q4 2025.

Previous wording

Selling, general, and administrative expenses increased approximately $1.1 million when compared with the same period in 2024. This was primarily due to the following:

Current wording

Selling, general, and administrative expenses decreased approximately $25,000 (less than 1%) when compared with the same period in 2025. This was primarily due to the following:

Previous wording

To provide investors with additional information in connection with our results as determined in accordance with GAAP, we use non-GAAP measures of adjusted EBITDA. We use adjusted EBITDA in order to evaluate our operating performance and make strategic decisions regarding future direction of the company since it provides a meaningful comparison to our peers using similar measures. We define adjusted EBITDA as net income (as determined by U.S. GAAP) adjusted for interest expense, depreciation and amortization expense, acquisition deal costs, severance costs, capital market and advisory fees, equity-based compensation and warrant costs. These non-GAAP measures may be different from non-GAAP measures made by other companies since not all companies will use the same measures. Therefore, these non-GAAP measures should not be considered in isolation or as a substitute for relevant U.S. GAAP measures and should be read in conjunction with information presented on a U.S. GAAP basis.

Current wording

To provide investors with additional information in connection with our results as determined in accordance with GAAP, we use non-GAAP measures of adjusted EBITDA. We use adjusted EBITDA in order to evaluate our operating performance and make strategic decisions regarding future direction of the company since it provides a meaningful comparison to our peers using similar measures. We define adjusted EBITDA as net income (as determined by U.S. GAAP) adjusted for interest expense, depreciation and amortization expense, capital raise expense, severance costs, equity-based compensation and impairment loss. These non-GAAP measures may be different from non-GAAP measures made by other companies since not all companies will use the same measures. Therefore, these non-GAAP measures should not be considered in isolation or as a substitute for relevant U.S. GAAP measures and should be read in conjunction with information presented on a U.S. GAAP basis.

Previous wording

We had an accumulated deficit of approximately $78.4 million and working capital of approximately $5.8 million as of September 30, 2025 compared to accumulated deficit of approximately $60.3 million and working capital of approximately $8.0 million as of December 31, 2024. As of September 30, 2025, we had approximately $12.7 million of cash as compared to approximately $15.7 million as of December 31, 2024.

Current wording

We had an accumulated deficit of approximately $95.0 million and working capital of approximately $29.3 million as of March 31, 2026 compared to accumulated deficit of approximately $89.8 million and working capital of approximately $35.7 million as of December 31, 2025. As of March 31, 2026, we had approximately $27.3 million of cash as compared to approximately $43.2 million as of December 31, 2025.

Previous wording

As of September 30, 2025 working capital is primarily due to funds raised in our September capital raise partially offset by the build out of our LizzieSat satellites in anticipation of additional upcoming launches. As of December 31, 2024, our working capital was primarily due to funds raised in our capital raises completed Q4 2024.

Current wording

As of December 31, 2025 the working capital surplus was primarily due to funds raised in our capital raises completed in Q3 and Q4 2025. As of March 31, 2026, our working capital reflects the use of cash for operations and the repayment of the asset-based loan in January 2026.

Previous wording

For the nine months ended September 30, 2025, net cash flows used in operating activities was approximately $14.1 million compared to approximately $10.3 million during the nine months ended September 30, 2024.

Current wording

For the three months ended March 31, 2026, net cash flows used in operating activities was approximately $5.6 million compared to approximately $3.2 million during the three months ended March 31, 2025.

Previous wording

Cash flows used in operating activities for the nine months ended September 30, 2025 of approximately $14.1 million is comprised of a net loss of approximately $18.1 million, which was reduced by non-cash expenses of approximately $625,000 for stock-based compensation, approximately $3.2 million for depreciation, and a decrease in working capital of approximately $158,000.

Current wording

Cash flows used in operating activities for the three months ended March 31, 2026 of approximately $5.6 million is comprised of a net loss of approximately $5.2 million, which was reduced by non-cash expenses of approximately $215,000 for stock-based compensation, approximately $612,000 for depreciation, and a decrease in net working capital of approximately $1.3 million.

Previous wording

Cash flows used in operating activities for the nine months ended September 30, 2024 of approximately $10.3 million is comprised of a net loss of approximately $11.8 million, which was reduced by non-cash expenses of $236,040 for stock-based compensation and approximately $1.5 million for depreciation, and an increase in working capital of approximately $170,000.

Current wording

Cash flows used in operating activities for the three months ended March 31, 2025 of approximately $3.2 million is comprised of a net loss of approximately $6.4 million, which was reduced by non-cash expenses of approximately $252,000 for stock-based compensation and approximately $935,000 for depreciation, approximately $20,000 of non-cash fees on the asset-based loan and a decrease in net working capital of approximately $2.0 million.

Previous wording

During the nine months ended September 30, 2025 and 2024, we invested approximately $5.8 million and $5.1 million respectively in property and equipment primarily related to purchasing satellite related components and software.

Current wording

During the three months ended March 31, 2026 and 2025, Sidus Space invested approximately $3.7 million and $3.0 million respectively, in property and equipment primarily related to purchasing satellite related components and software.

Previous wording

During the nine months ended September 30, 2024, net cash provided in financing activities of approximately $15.4 million included multiple capital raises of approximately $13.7 million net proceeds from an asset-based loan of approximately $1.8 million and repayment of a note payable of $150,000.

Current wording

During the three months ended March 31, 2026, net cash used in financing activities of approximately $6.5 million primarily consisted of the repayment of the asset-based loan of approximately $8.2 million, partially offset by proceeds from the exercise of warrants of approximately $1.7 million.

Previous wording

During the nine months ended September 30, 2025, net cash provided in financing activities of $16.9 million included proceeds from multiple capital raises of approximately $15.5 million, proceeds from the exercise of warrants from our December 2024 capital raise of approximately $2.4 million and net proceeds of approximately $2.1 million from an asset-based loan and repayment of a note payable approximately $3.1 million.

Current wording

During the three months ended March 31, 2025, net cash provided in financing activities of approximately $2.2 million included proceeds from the exercise of warrants from our December 2024 capital raise of approximately $2.4 million and net proceeds of approximately $2.9 million from an asset-based loan and repayment of notes payable of approximately $3.1 million.

Previous wording

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this annual report on Form 10-K, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Current wording

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this Quarterly Report on Form 10-Q, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Previous wording

These five elements, as applied to each of the Company’s revenue category, are summarized below:

Current wording

These five elements, as applied to each of the Company’s revenue categories, are summarized below:

Previous wording

Revenues from fixed price contracts primarily related to the satellite side of the business that require milestone payments are recognized at the time of the milestone being met. This method is used because management considers that the payments are nonrefundable unless the Company fails to perform as promised. If the customer terminates the contract, we are entitled to retain any progress payments received from the customer and we have no further rights to compensation from the customer. Even though the payments made by the customer are nonrefundable, the cumulative amount of those payments is not expected, at all times throughout the contract, to at least correspond to the amount that would be necessary to compensate us for performance completed to date. Accordingly, we account for the progress under the contract as a performance obligation satisfied at a point in time.

Current wording

Revenues from fixed price contracts primarily related to the satellite side of the business that require milestone payments are recognized at the time of the milestone being met provided the milestone includes the delivery of a service or product. This method is used because management considers that the payments are nonrefundable unless the entity fails to perform as promised. If the customer terminates the contract, we are entitled to retain any progress payments received from the customer and we have no further rights to compensation from the customer. Even though the payments made by the customer are nonrefundable, the cumulative amount of those payments is not expected, at all times throughout the contract, to at least correspond to the amount that would be necessary to compensate us for performance completed to date. Accordingly, we account for the progress under the contract as a performance obligation satisfied at a point in time.

Previous wording

The Company accounts for the majority of its fixed price or time and materials contracts as performance obligations satisfied over times, due to the Company’s enforceable right to collect based on services provided through any applicable date of termination. Amounts recognized as revenue over time due to this, but in which the Company does not yet have the right to invoice for due to contractual arrangements are reflected as contract assets until such time as they are invoiced, and the Company has the right to receive payment.

Current wording

The Company accounts for the majority of its fixed price or time-and-materials contracts as performance obligations satisfied over time, due to the Company’s enforceable right to collect based on services provided through any applicable date of termination. Amounts recognized as revenue over time due to this, but in which the Company does not yet have the right to invoice for due to contractual arrangements are reflected as contract assets until such time as they are invoiced, and the Company has the right to receive payment.