Firefly Aerospace Inc.

1. The Company and Initial Public Offering

Firefly Aerospace Inc. (“Firefly” or the “Company”)is headquartered in Cedar Park, Texas. The Company was incorporated under the laws of the State of Delaware on January 27, 2017 and commenced operations on May 1, 2017. On August 8, 2025, the Company completed an initial public offering (“IPO”) of shares of its common stock, par value $0.0001 per share. The Company’s common stock trades on the Nasdaq under the ticker “FLY.”

Firefly is a space and defense technology company providing comprehensive mission solutions to national security, government, and commercial customers with an established track record of success. The Company’s mission is to reliably and repeatedly launch, land, and operate space systems from Earth to the Moon and beyond. Backed by a world-class team and proven technology, Firefly has designed, developed, and deployed its launch vehicles and dynamic spacecraft solutions to support critical customer missions across the space domain. The Company’s vertically-integrated approach encompasses the design, manufacturing and operation of small and medium launch vehicles, landers and spacecraft, as well as the development of complementary remote sensor, missile defense, and command and control software systems. Its purpose-built family of products aligns with the ongoing paradigm shift in government missions and procurement processes, where speed, efficiency, and economics drive customer decision-making. Through its offerings across launch and spacecraft solutions, its vertically-integrated product lines, and its infrastructure, Firefly is a partner of choice for national security, government, and commercial customers for their critical space missions.

On October 31, 2025, the Company completed its acquisition of SciTec, Inc. (“SciTec”), a leader in advanced national security technologies. The acquisition advanced the Company’s comprehensive space services by adding mission-proven defense software analytics, remote sensor, and multi-phenomenology data expertise. SciTec’s core capabilities – which include missile warning, tracking and defense, intelligence, surveillance and reconnaissance, space domain awareness, and autonomous command and control – supplement Firefly’s launch, lunar, and in-space services. SciTec has further added ground and onboard data processing as well as AI-enabled systems designed for low latency operations to support advanced threat tracking and response across multiple domains.

As an early-stage company with a limited commercial operating history, Firefly is subject to all of the risks and expenses associated with a start-up company. The Company must, among other things, respond to competitive developments, attract, retain, and motivate qualified personnel, and support the expense of marketing new products based on innovative technology. The Company expects to transition to operations as a manufacturing company, capable of producing and selling products at scale, on the date that the technological feasibility of the Alpha rocket is confirmed. The Company defines technological feasibility as satisfying three specific conditions: (i) reaching product qualification, (ii) achieving production readiness, and (iii) having successfully deployed a customer’s payload into its specific orbit and final destination. The Company has successfully deployed customer payloads into their specific orbits or destinations. The Company’s executive leadership comprised of at least the Chief Operating Officer and the Chief Technology Officer shall determine at what point the Company’s products have been fully qualified to reach technological feasibility and full-rate production. Until this determination is made, the Company has not recorded any inventory amounts, and all costs incurred are expensed.

The unaudited condensed consolidated financial statements of the Company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business. From inception, the Company has incurred an accumulated deficit totaling $1.3 billion as of September 30, 2026, and has incurred $213.8 million and $137.7 million in negative cash flows from operations during the nine months ended September 30, 2026 and 2025, respectively.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Certain information and disclosures normally included in the audited consolidated financial statements have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary for the fair statement of the unaudited condensed consolidated balance sheets, statements of net loss and comprehensive loss, statements of cash flows, and statements of convertible preferred stock and stockholders’ equity (deficit) for these interim periods. The results for the interim period are not necessarily indicative of the results that may be expected for a full year. All intercompany balances and transactions have been eliminated.

Use of Estimates

The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates.

Prior Period Reclassifications

Certain immaterial prior period amounts have been reclassified to conform to the current period presentation.

Concentration of Credit Risk

The Company estimates expected credit losses based on relevant information about past events, including historical credit loss experience and current conditions, such as the length of time accounts receivable are past due, customer payment histories, any specific customer collection issues identified, current market conditions which may affect customer financial condition, and reasonable and supportable forecasts of future credit losses. When measuring expected credit losses, the Company pools similar country risk and credit risk characteristics. Changes in the relevant information may significantly affect the estimates of expected credit losses. The Company writes off accounts receivable that have become uncollectible.

Major customers are defined as those individually comprising more than 10% of the Company’s total revenue. The Company’s revenues related to its major customers were as follows:

*Customer did not represent more than 10% of the Company's consolidated revenue for the period.

The Company's accounts receivable related to its major customers were as follows:

*Customer did not represent more than 10% of the Company's consolidated accounts receivable, net for the period.

Recently Issued Accounting Standards

Recently Issued Accounting Pronouncements Not Yet Adopted

ASU 2023-06

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification (“ASC”). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of ASC topics, allow investors to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the ASC with the SEC’s regulations. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this ASU are to be applied prospectively. The Company does not expect that ASU 2023-06 will have a material impact on its consolidated financial statements.

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is currently evaluating the impact of adopting the ASU.

ASU 2025-11

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies the applicability of ASC 270, Interim Reporting, and the form and content of interim financial statements. In addition, ASU 2025-11 requires entities to disclose material events occurring since the last annual reporting period. ASU 2025-11 will be effective for interim periods beginning January 1, 2028, and can be applied on a prospective or retrospective basis. The Company is in the process of evaluating the impact of this guidance on its financial statements; however, the Company does not expect that it will have a material impact on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

ASU 2025-05

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides entities with a practical expedient to simplify the estimation of expected credit losses on current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers, by allowing the assumption that conditions as of the balance sheet date will not change during the remaining life of the asset. ASU 2025-05 is effective for annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted. The Company elected to apply the practical expedient in its assessment of the allowance for credit losses as of January 1, 2026, which did not have a material impact on the Company’s consolidated financial statements and related disclosures.

ASU 2025-06

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, to improve the operability and application of guidance related to capitalized software development costs. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The guidance may be applied prospectively, retrospectively, or using a modified retrospective basis that is based on the status of the project and whether software costs were capitalized before the date of adoption. The Company early adopted ASU 2025-06 effective January 1, 2026 on a prospective basis. The adoption of ASU 2025-06 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

3. Business Combinations

Space-ng

On June 23, 2026, the Company completed the acquisition of all of the outstanding capital stock of Space-ng Inc. (“Space-ng”) in exchange for purchase consideration of $16.0 million, consisting of approximately $0.4 million in cash, $2.3 million in deferred cash payments, $10.1 million in common stock, and $3.2 million of certain other net assets recorded by the Company related to arrangements in place between Firefly and Space-ng at the time of acquisition. Space-ng is a leader in AI-powered vision navigation and autonomous guidance systems. At the acquisition date, the fair value of the assets acquired was $17.7 million, inclusive of $2.5 million of finite-lived intangible assets and $13.5 million of goodwill. The fair value of liabilities assumed was $1.7 million. The Company issued 515,767 shares of common stock in connection with the acquisition. Of the total 515,767 shares issued,142,955 shares were issued in exchange for unvested restricted stock of Space-ng and those shares remain subject to each holder’s continued employment with the Company over a period of four years. These shares were accounted for separately from purchase consideration as stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation.

Goodwill recognized from this acquisition, which was accounted for as a business combination under ASC 805, Business Combinations, is primarily attributable to expected synergies. The Company expects to finalize the purchase price allocation for the acquisition within the allowable measurement period. Pro forma results of operations reflecting the acquisition of Space-ng have not been presented, as the impact of the acquisition on the Company’s consolidated financial results is not material.

SciTec

On October 31, 2025, the Company completed the acquisition of all of the outstanding capital stock of SciTec for a purchase price of$550.3 million, consisting of$277.4 million in cash, net of cash acquired,$269.6 million in common stock, and a$3.3 million post-closing working capital adjustment. SciTec has over four decades of experience and offers industry-leading AI-enabled defense software applications and big data processing capabilities in the forms of cloud-based, on-premise, and edge processing of high volumes of data from satellites across all orbits that are complementary to Firefly’s launch, lunar, and in-space vehicles. This acquisition is expected to complement the Company’s full-service hardware and software offerings to space and defense customers. SciTec is based in Princeton, New Jersey, and has facilities in Boulder, Colorado; El Segundo, California; Fairborn, Ohio; Huntsville, Alabama; and Herndon, Virginia.

The acquisition was accounted for as a business combination under ASC 805, Business Combinations, with the Company identified as the acquirer. The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available during the measurement period, a period not to exceed 12 months from the acquisition date. In connection with the acquisition, the Company incurred acquisition-related costs of $24.4 million, which were expensed as incurred on the date of closing.

During the second quarter of 2026, the Company finalized its net working capital adjustment with the seller, resulting in increases in purchase consideration and goodwill of$3.3 million.

During the third quarter of 2026, the Company identified, through post-acquisition integration and validation procedures, additional operating lease arrangements that existed as of the October 31, 2025 acquisition date. The impact of these adjustments are recorded within right-of-use assets and operating lease liabilities, and reflected in the measurement period adjustments in the table below with no impact to goodwill. Additionally, the Company finalized the federal and state income tax returns for SciTec for periods prior to the SciTec acquisition date. As a result of this finalization, the Company identified a measurement period adjustment resulting in a decrease in income tax payable, presented below in accrued expenses, and the recognition of an income tax receivable, presented below in other current assets, with a corresponding decrease in goodwill of$3.4 million.

The following table presentsthe consideration paid, the fair value of the assets acquired, and liabilities assumed as of the date of acquisition, as well as the cumulative measurement period adjustments through September 30, 2026:

The fair value of the property and equipment, and working capital items, including accounts receivable, other current assets, accounts payable, accrued expenses, and other current liabilities, approximates their respective carrying values at the date of the acquisition, as well as any adjustments recorded during the measurement period. Operating lease liabilities were remeasured at the present value of the remaining lease payments using the Company’s incremental borrowing rate as of the acquisition date. The corresponding right-of-use assets were measured at an amount equal to the remeasured lease liabilities.

The following table presents the fair value of acquired identifiable intangible assets at the date of the acquisition:

On the acquisition date, trade name and trademarks, developed technology, and customer relationships are classified as finite-lived intangible assets and are subject to annual impairment assessments under ASC 350-30-35-18 through 35-20.

The fair value of the acquired intangible assets, including trade name and trademarks and developed technology, was determined using the relief from royalty method, while the fair value of the customer relationships was determined using the multi-period excess earnings method. Significant assumptions used in the determinations of the fair values include forecasted revenue growth rates, assumed royalty rates and the market-participant discount rate. The useful lives used in the valuation analysis were based on the economic life of each intangible asset. The Company amortizes its intangible assets based on the methodology that approximates the pattern in which it expects to benefit economically from the assets.

Goodwill generated from this business combination is primarily attributable to expected synergies from the transaction and incremental revenue and profit to be derived from the Company’s expansion into full-service hardware and software for its space and defense customers. The goodwill recognized is not deductible for U.S. income tax purposes.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents the combined results of operations as if SciTec had been acquired as of the beginning of fiscal year 2025. The unaudited pro forma results include certain adjustments to revenue and net loss directly attributable to each acquisition, including transaction costs.

For the SciTec acquisition, transaction costs of approximately $29.6 million are assumed to have been incurred on January 1, 2025 and recognized during 2025, of which $24.4 million were incurred by SciTec and $5.2 million were incurred by the Company.

The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined businesses had the acquisitions actually occurred at the beginning of the respective periods, nor is it indicative of the future results of operations of the combined businesses.

4. Revenue

The following table presents revenue disaggregated by type:

The Company has contracts with commercial and government entities to provide launch and integration services for payloads requiring transportation into orbit via launch vehicles. These contracts may include milestone payments and deposits. The Company considers the performance obligation under these contracts to be the initiation of the launch and recognizes revenue at that point in time. When the contract contains multiple performance obligations, stand-alone selling prices are established for each performance obligation in the contract based on cost-plus margin or market prices for similar goods and services.

The Company also enters into contracts with its customers to provide engineering services and related components, and to develop and provide licenses for intellectual property. In these cases, the Company’s performance obligation is satisfied over time since the tasks are performed according to the customer’s specifications, which creates an asset with no alternative use to the Company, for which the Company has an enforceable right to payment for performance completed to date. The measure of progress over time is based upon an input method using a cost-to-cost measure which best depicts the transfer of control to the customer. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Estimating the total cost at completion of a performance obligation requires management to make estimates related to items such as subcontractor performance, material costs and availability, labor costs and productivity, and the costs of overhead. If the estimate of total costs to be incurred for a contract exceeds the total estimate of revenue to be earned, a provision for the entire loss on the contract is recognized in the period the loss is identified. Engineering services billed hourly are recognized over time.

The Company has contracts with commercial and government entities to provide end-to-end services to integrate payloads into Blue Ghost and Elytra for transport to the Moon, to perform on-orbit space domain awareness missions, and for deorbit services, as well as to develop and provide software, sensor, and data processing capabilities for national defense missions. These contracts include firm-fixed-price, time-and-materials, and cost-plus pricing structures. For commercial payload services the Company considers the performance obligation to be the integration and delivery of customer payloads to specified destinations. These contracts typically require that the customer make milestone payments as specific conditions and tasks are performed. For software, sensor, and data processing contracts, the Company considers the performance obligation to be the development and implementation of the contracted solution. These contracts require customers to make milestone payments as specific conditions and tasks are performed, or regular periodic payments as costs are incurred. When the contract contains multiple performance obligations, stand-alone selling prices are established for each performance obligation in the contract based on cost-plus margin or observable market prices for similar goods and services. Performance obligations are satisfied over time since either (1) the tasks are performed according to the customer’s specifications and create an asset with no alternative use to the Company, or (2) the customer receives and consumes benefits as work is completed and the Company has an enforceable right to payment for performance completed to date.

For Spacecraft Solutions arrangements, the measure of progress over time is based upon an input method using a cost-to-cost measure which best depicts the transfer of control to the customer. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Estimating the total costs at completion of a performance obligation requires management to make estimates related to items such as subcontractor performance, material costs and availability, labor costs and productivity, and the costs of overhead. If estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recognized in the period the loss is estimated.

Generally, the Company's Spacecraft Solutions contracts do not contain an embedded lease because the Company is able to derive more than insignificant economic benefits from the various capabilities provided through these contracts. However, in the limited instances when the customer obtains substantially all of the economic benefits, determined at contract inception, the contract is determined to include an embedded lease. For such arrangements, the Company has determined that the customer is the deemed accounting owner of the asset during the construction period. As a result, the Company determined it is providing services for the integration and delivery of the customer payload for those arrangements, and accounts for them based on the guidance for contracts with customers.

For all revenue streams, the Company considers customer payments that are contingent on the success of a mission or that are dependent on award criteria to be variable consideration. The Company assesses the likelihood of success of a mission or achievement of contractual award requirements at inception and may defer the recognition of some or all of the variable consideration until success of the mission is assured or the award fee amount is determined.

The Company’s contracts may provide customers with termination for convenience clauses, which may or may not include termination penalties. In some contracts, the size of the contractual termination penalty increases closer to the scheduled launch date. At the inception of each contract, the Company evaluates the contract’s termination provisions and the impact on the accounting contract term (i.e., the period in which the Company has enforceable rights and obligations). This includes evaluating whether there are termination penalties and, if so, whether they are considered substantive. The Company applies judgment in determining whether the termination penalties are substantive.

Some of the Company's contracts with customers include options that allow the customer to acquire additional solutions or renew existing services in the future. The solutions and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, because they are contingent upon option exercise by the applicable customer. The Company evaluates customer options for material rights, and if the options are determined to provide a material right to the customer, the option granting a material right is recognized as a separate performance obligation at the onset of the arrangement. The Company allocates a portion of the transaction price to the option granting a material right based on the relative standalone selling prices of the performance obligations in the contract. The standalone selling price of the option is determined based on standalone selling price of the underlying performance obligation, the identified discount inherent in the option, and the estimated probability that the customer will exercise the option. Amounts allocated to material rights are not recognized as revenue until the option is exercised.

The Company has elected the following practical expedients related to revenue: (1) the Company does not account for significant financing components if the period between revenue recognition and when the customer pays for the product or service will be one year or less, (2) the Company recognizes revenue equal to the amount it has a right to invoice when the amount corresponds directly with the value to the customer of the Company’s performance to date, (3) the Company does not account for shipping and handling activities as a separate performance obligation, but rather as an activity performed to transfer the promised good or service, and (4) the Company allocates the total consideration expected to be received from the customer to the total goods or services expected to be provided to the customer, including any expected contract term renewals.

The Company includes in its computation of remaining performance obligations customer orders for which it has accepted signed sales orders. Due to their nature, time-and-materials contracts contain variable consideration; however, in general, the Company’s performance obligations under time-and-materials contracts qualify for the “right to invoice” practical expedient. Under this practical expedient, the Company recognizes revenue over time, in the amount to which the Company has a right to invoice. In addition, the Company is not required to estimate such variable consideration upon inception of the contract and reassess the estimate each reporting period. The Company determined that this method best represents the transfer of services, as upon billing the Company has a right to consideration from a customer in an amount that directly corresponds with the value to the customer of the Company’s performance completed to date. At September 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $549.3 million. External factors, such as customer and supplier acceleration or delays, can affect the timing of revenue recognized on performance obligations. The Company expects to recognize approximately 37.4% of its remaining performance obligations as revenue within the next 12 months, and approximately 22.6% of its remaining performance obligations during the following 12 months, with the remaining 40.0% thereafter. The remaining performance obligations do not include variable consideration that has been determined to be constrained.

Contract Balances

Contract assets and liabilities reflect timing differences between the receipt of consideration and the fulfillment of performance obligations under a contract with a customer. Contract assets reflect performance obligations satisfied and revenue recognized in advance of customer billings. Contract liabilities reflect consideration received before the satisfaction of a performance obligation.

Unbilled receivables are contract assets that are classified as trade receivables because only the passage of time is required before payment of that consideration is due. Unbilled receivables are recorded within accounts receivable. Contract assets that are not unbilled receivables are separately presented on the unaudited condensed consolidated balance sheets. Contract liabilities are recorded within deferred revenue.

Contract assets consisted of the following:

Deferred revenue consisted of the following:

During the nine months ended September 30, 2026 and 2025, the Company recognized $74.2 million and$67.2 million, respectively, of revenue that was included in the contract liabilities balance at the beginning of each period.

Loss Contracts

The Company recognizes a contract loss provision when the current estimate of the consideration expected to be received is less than the current estimate of total estimated costs to complete the contract. For purposes of determining the existence or amount of a contract loss, the Company considers total contract consideration, including any variable consideration constrained for revenue recognition purposes. The Company may experience favorable or unfavorable changes in contract losses from time to time due to changes in estimated contract costs and modifications that result in changes to contract prices.

During the three and nine months ended September 30, 2026, the Company recognized both favorable and unfavorable changes in contract loss provisions, including a favorable change resulting from a contract modification on a firm-fixed-price contract that eliminated the related contract loss provision. During the nine months ended September 30, 2026, the Company recorded one new contract loss provision for a firm-fixed-price contract. The Company recorded total contract loss provisions of$12.4 million and$8.0 million as of September 30, 2026 and December 31, 2025, respectively.

5. Property and Equipment, Net

Property and equipment, net consisted of the following:

Depreciation expense was$6.3 million and$4.6 million for the three months ended September 30, 2026 and 2025, respectively, and$21.0 million and$12.5 million for the nine months ended September 30, 2026 and 2025, respectively, and was recorded in the unaudited condensed consolidated statements of net loss within cost of sales, research and development, and selling, general, and administrative expenses.

6. Accrued Expenses

Accrued expenses consisted of the following:

7. Intangible Assets, Net

The following tables present the gross carrying amounts and accumulated amortization related to the Company's intangible assets:

The Company capitalizes certain development costs incurred in connection with its internal-use software products including specific software upgrades and enhancements when it is probable the expenditures will result in additional features and functionality. Costs incurred prior to meeting the probable-to-complete threshold are expensed as incurred. Once the probable-to-complete threshold is satisfied, internal and external costs, if direct and incremental, are capitalized until the application is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing, at which time amortization of the capitalized software begins. Internally-developed software is amortized on a straight-line basis over its estimated useful life, generally three to five years.

The Company capitalized$2.1 million and$6.5 million of both internal-use software licenses and software-in-development during the three months ended September 30, 2026. Capitalized costs associated with software-in-development are not amortized until the related assets are substantially complete and ready for their intended use. Amortization expense related to the Company’s finite-lived intangible assets was$7.0 million and$22.2 million for the three and nine months ended September 30, 2026, respectively. The Company didnot recognize any amortization expense related to its finite-lived intangible assets for the three and nine months ended September 30, 2025.

The following table presents expected amortization expense related to the Company’s intangible assets recorded as of September 30, 2026:

8. Goodwill

Changes in the carrying amount of goodwill are detailed below:

Goodwill is defined as an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. At September 30, 2026, the Company has only one operating segment, which represents its only reportable segment. Refer to Note 3. Business Combinationsfor further detail of the items comprising the changes in goodwill during the nine months ended September 30, 2026.

9. Fair Value Measurement

The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, certain prepaid expenses, other current assets, accrued liabilities, and other current liabilities approximate fair value because of their short-term maturities.

The Company issued warrants to purchase Series J Preferred Stock (the “Series J Warrants”) in connection with the Company’s entrance into a financing agreement pursuant to which certain term loans were made to the Company (refer to Note 11. Notes Payable for further detail). The Company used a Black-Scholes option-pricing valuation model to value the Series J Warrants as of September 30, 2026.

The following tables present the fair values, and key inputs applied in the valuations, of the Series J Warrants:

During each of the three and nine months ended September 30, 2026 and 2025, no warrants were issued. The fair value remeasurement of the Series J Warrants resulted in a decrease in fair value of$4.0 million for the three months ended September 30, 2026, and an increase of$0.3 million for the nine months ended September 30, 2026, respectively. No warrants were exercised during thethree and nine months ended September 30, 2026.

The following tables present, by level within the fair value hierarchy, our financial assets and liabilities measured at fair value:

10. Leases

The Company has existing operating and finance leases for corporate offices, facilities, vehicles and certain equipment. The Company’s leases have remaining terms varying from less thanone year to 16 years, some of which include options to extend the lease term. For purposes of calculating lease liabilities, lease terms include options to extend the lease when it is reasonably certain that the Company will exercise such options.

The components of lease expense were as follows:

Amortization of right-of-use assets was recorded within research and development, and selling, general, and administrative expenses, interest on lease liabilities was recorded within interest expense, and operating lease expense was recorded within research and development, and selling, general, and administrative expenses, each in the unaudited condensed consolidated statements of net loss.

Operating and finance lease right-of-use assets and liabilities were as follows:

The operating lease right-of-use assets and liabilities as of September 30, 2026 include measurement period adjustments associated with the SciTec acquisition. See Note 3. Business Combinations. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments.

Failed Sales and Leasebacks

The Company leases various equipment through purchase and leaseback agreements with terms between fiveand seven years. The purchase and leaseback agreements provide an option for Firefly to purchase the equipment for nominal consideration that the Company is reasonably certain to exercise. The purchase and leaseback agreements were evaluated under the sale and leaseback guidance in ASC 842-40, Leases – Sale and Leaseback Transactions. Due to the purchase option, the transactions were accounted for as failed sales and leasebacks, and the Company has accounted for the purchase and leaseback agreements as financings.

As a result, the Company has reflected the manufacturing equipment on its unaudited condensed consolidated balance sheets in property and equipment, net, and recognizes depreciation expense over its estimated useful life. As of September 30, 2026, the Company’s notes payable, current and non-current, related to failed sales and leasebacks were $7.7 million and $16.6 million, respectively. As of December 31, 2025, the Company’s related notes payable, current and non-current, were $6.0 millionand $21.1 million, respectively. The Company does not recognize rent expense related to these purchase and leaseback agreements. Instead, periodic lease payments are recognized as interest expense and reductions of the principal balance of the financing liability.

For the three months ended September 30, 2026, payments of $1.6 million were made under the purchase and leaseback agreements in addition to interest expense of $0.5 million, and during the nine months ended September 30, 2026, payments of $4.9 million were made under the purchase and leaseback agreements in addition to interest expense of $1.5 million.

For the three months ended September 30, 2025, payments of $1.4 million were made under the purchase and leaseback agreements including interest expense of $0.6 million, and during thenine months ended September 30, 2025, payments of $4.1 million were made under the purchase and leaseback agreements, including interest expense of $1.8 million.

11. Notes Payable

Financing Agreement

On July 17, 2023, the Company entered into a financing agreement (as amended from time to time and last amended August 13, 2024, the “Financing Agreement”) among the Company, as the Borrower, certain subsidiaries of the Company (collectively, “Guarantors”), lenders (the “Lenders”) and U.S. Bank Trust Company, N.A., as administrative agent and collateral agent (“Agent”). The Financing Agreement provided term loans in the aggregate principal amount of$136.1 million, comprised of$103.5 million principal amount of term A loans (the “Term A Loans”) and$32.6 million principal amount of term B loans (the “Term B Loans,” and together with the Term A Loans, and along with the incremental term loans from subsequent amendments from time to time, the “Term Loans”). The Term Loans were scheduled to mature on July 17, 2028 (the “Term Loan Maturity Date”).

All obligations under the Financing Agreement were guaranteed by the Company and Guarantors, comprised of all wholly owned domestic subsidiaries of the Company other than certain excluded subsidiaries, and were secured by substantially all of the Company’s assets.

An AON Insurance Policy was issued to the Agent on behalf of the Lenders, which indemnified the Lenders up to$103.5 million of the Term A Loans for any loss incurred if the Company fails to pay the Term Loans when due. The Company paid the initial insurance premium of$15.0 million using the proceeds from the Term Loans. The Company was required to pay the insurer an exit fee equal to 0.75% of the principal amount of the Term A Loans on the date on which the loans were prepaid.

The Financing Agreement required the Company to fund certain collateral accounts, comprised of interest reserve accounts and an insurance premium reserve account. Cash interest due but not paid from available unrestricted cash was payable from the interest reserve accounts, and funds deposited in the insurance premium account were used to pay the insurance premiums when due.

The Company paid$18.7 million in debt issuance costs, including both lender fees and third-party costs, using the proceeds of the Term Loans.

The Term Loans bore fixed interest rates. The interest rate for the Term A Loans was 13.875% per annum. The interest rate for the Term B Loans was 13.875% per annum from the initial closing date to the third anniversary of the initial closing date and 19.135% per annum thereafter until the Term Loan Maturity Date. Interest was computed on the basis of a 360‑day year for the actual number of days elapsed and payable monthly in cash and in arrears on the last business day of each calendar month.

Mandatory prepayments were required to be made upon the occurrence of certain events. Voluntary prepayments were permitted in whole or in part at any time. All prepayments were subject to a specified premium that applies for the first 24 months following the initial closing date, calculated as the present value of the sum of the amounts of each unpaid interest payment due during the specified premium period computed using a discount rate equal to the treasury rate on the day one business day prior to the date of prepayment, plus 0.5%.

The Financing Agreement contained certain covenants including a requirement for a minimum cash balance, financial covenants, and negative covenants customary for transactions of this type, including a specific covenant to the interest reserve accounts to maintain a minimum interest reserve amount equal to 7.9% of the aggregate balance of the Term Loans.

The initial debt issuance costs, including the insurance premium paid, estimated second premium and final premium, exit fee and discount created by allocating proceeds to the fair value of the Series J Warrants issued in connection with the issuance of the Term Loans (refer to Note 9. Fair Value Measurementfor further detail), were deferred and amortized to interest expense over the contractual term of the Term Loans using the effective interest method.

The subsequent amendments of the Financing Agreement following the initial closing date did not result in a troubled debt restructuring and were all accounted for as debt modifications. As a result, the third-party costs incurred were expensed and newly incurred lender fees, along with the previously deferred and unamortized issuance costs of the Term Loans prior to the amendments, were deferred and amortized over the remaining contractual term of the Term Loans.

Term Loans Extinguishment

On August 8, 2025, the Company completed its IPO and used a portion of the net proceeds to fully repay the outstanding Term Loans under the Financing Agreement. The repayment included the principal amounts of the outstanding Term Loans, accrued interest, and applicable prepayment premiums.

The Company recognized a loss on extinguishment of debt of$30.4 million, which includes the write-off of unamortized debt issuance costs, specified premium, and the exit fee associated with the Term A Loans and Term B Loans. The specified premium applicable to the prepayment was calculated in accordance with the terms of the Financing Agreement.

Following the repayment, all obligations under the Financing Agreement, including guarantees and collateral arrangements, were terminated. The interest reserve accounts and insurance premium reserve account were released, and the related restricted cash balances were reclassified to unrestricted cash.

Interest expense recognized related to the Term Loans was as follows:

Revolving Line of Credit

On August 8, 2025, following the completion of the IPO, the Company entered into a new credit agreement providing for a senior secured revolving credit facility (the “Revolving Credit Facility”) in the aggregate principal amount of$125.0 million, which includes a sublimit for the issuance of letters of credit in an amount up to$15.0 million and a sublimit for swingline loans in an amount up to$7.5 million.

On November 7, 2025, the Company amended the credit agreement to, among other things, increase the then-existing commitments under the Revolving Credit Facility by$135.0 million for an aggregate principal amount of$260.0 million.

On April 3, 2026, the Company amended the credit agreement to, among other things, further increase the existing commitments under the Revolving Credit Facility by$45.0 million, for an aggregate principal amount of$305.0 million.

The Revolving Credit Facility matures on August 8, 2028.

Prior to April 3, 2026, the loans under the Revolving Credit Facility bore interest at a variable rate per annum equal to, at the Company’s option, either (a) term SOFR plus a 3.00% spread or (b) an alternative base rate (as set forth in the credit agreement) plus a 2.00% spread. After giving effect to the April 3, 2026 amendment, the loans under the Revolving Credit Facility bear interest at a variable rate per annum equal to, at the Company’s option, either (a) term SOFR plus a 3.25% spread or (b) an alternative base rate (as set forth in the credit agreement) plus a 2.25% spread.

A commitment fee of 0.375% per annum is applied on the unused commitments under the Revolving Credit Facility.

Capitalized debt issuance costs are amortized into interest expense over the term of the Revolving Credit Facility on a straight-line basis. The remaining unamortized debt issuance costs for the Revolving Credit Facility totaled$3.2 million as of September 30, 2026. Interest expense recognized during the three months ended September 30, 2026 related to the Revolving Credit Facility was$0.7 million, including$0.3 million of contractual interest expense and$0.4 million of amortization of debt issuance costs. Interest expense recognized during the nine months ended September 30, 2026 related to the Revolving Credit Facility was$4.2 million, including$3.0 million of contractual interest expense and$1.2 million of amortization of debt issuance costs.

On February 18, 2026, the Company repaid the$260.0 million in then-outstanding aggregate principal. At September 30, 2026, the Revolving Credit Facility remained undrawn.

The following table presents the Company’s outstanding debt:

(1)The unamortized issuance costs do not include the$3.2 million of debt issuance costs related to the Revolving Credit Facility included in other current assets and other assets, less current portion.

(2)Includes obligations related to various equipment recorded as failed sale and leaseback transactions. Refer to Note 10. Leasesfor further detail.

The following table summarizes the future principal payments on notes payable in each of the next five years and thereafter:

(1)The unamortized issuance costs do not include the$3.2 million of debt issuance costs related to the Revolving Credit Facility included in other current assets and other assets, less current portion.

12. Commitments and Contingencies

Litigation and Claims

The Company is involved in various pending and threatened litigation matters in the ordinary course of business. In the future, it may be subject to additional legal proceedings, the scope and severity of which is unknown and could adversely affect its business. In addition, from time to time, the Company may receive letters or other forms of communication asserting claims against it.

On November 11, 2025, one of Firefly’s purported stockholders filed a putative class action complaint in the United States District Court for the Western District of Texas in an action originally captioned Diamond v. Firefly Aerospace Inc., et al., Case No. 1:25-cv-01812 (W.D. Tex.) (the “Securities Action”). The original complaint named Firefly and certain of Firefly’s current and former directors and officers as defendants, and asserted claims for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder and Sections 11 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), arising from allegedly false or misleading statements or omissions of purportedly material fact concerning the demand and growth prospects of Firefly’s Spacecraft Solutions offerings and the operational readiness and commercial viability of the Alpha rocket. On March 26, 2026, the Court appointed co-lead plaintiffs, pursuant to the Private Securities Litigation Reform Act of 1995 and recaptioned the case as In re Firefly Aerospace Securities Litigation. The co-lead plaintiffs filed an amended complaint on May 29, 2026, asserting the same causes of action but naming additional defendants, including certain of Firefly’s investors and their affiliates and the underwriters from Firefly’s IPO and, among other changes, removing claims of allegedly false or misleading statements or omissions relating to Firefly’s Spacecraft Solutions offerings. On July 30, 2026, Firefly and the other defendants moved to dismiss the amended complaint in full. On September 23, 2026, one of the two co-lead plaintiffs filed a notice voluntarily dismissing his claims and notifying the Court that the other co-lead plaintiff would continue to pursue all claims asserted against all defendants in the amended complaint on behalf of the putative class. On September 30, 2026, the remaining lead plaintiff filed an opposition to defendants’ motion to dismiss the amended complaint. On October 30, 2026, defendants filed a reply in further support of defendants’ motion to dismiss the amended complaint, which motion remains pending. Firefly intends to defend itself vigorously against these allegations and claims, but is currently unable to predict the outcome of this lawsuit and therefore cannot determine the likelihood of loss nor estimate a range of possible loss.

On December 23, 2025, one of Firefly’s purported stockholders filed a complaint in the United States District Court for the Western District of Texas in an action captioned Shadowbolt v. Kim, et al., Case No. 1:25-cv-02126 (W.D. Tex.) (the “Shadowbolt Action”). The plaintiff seeks to pursue claims, purportedly on Firefly’s behalf, against certain of Firefly’s current and former directors and officers for alleged breaches of fiduciary duty and contribution under Section 21D of the Exchange Act and Section 11(f) of the Securities Act, among other common law causes of action, arising from substantially the same allegations at issue in the Securities Action. On August 7, 2026, another of Firefly’s purported stockholders filed a second related stockholder derivative complaint, asserting substantially the same allegations as the Shadowbolt Action also in the United States District Court for the Western District of Texas in an action captioned Shaw v. Kim, et al., Case No. 1:26-cv-02187 (W.D. Tex.) (the “Shaw Action,” and together with the Shadowbolt Action, the “Derivative Actions”). The Derivative Actions have been consolidated and are stayed in their entirety pending entry of final judgment, including after any appeals have been pursued or exhausted, in the Securities Action. Firefly is currently unable to predict the outcome of these lawsuits and therefore cannot determine the likelihood of loss nor estimate a range of possible loss.

In addition to the above, in the ordinary course of business, Firefly is involved in a variety of pending and threatened litigation matters, and in the future, Firefly may be subject to additional legal proceedings, the scope of which is unknown and could adversely affect our business. In addition, from time to time, Firefly may receive letters or other forms of communication asserting claims against the Company. Regardless of the outcome, these proceedings could adversely impact the Company's business because of defense costs, diversion of management resources, and other factors. Although the results of legal proceedings and claims are inherently unpredictable and uncertain, Firefly currently does not believe that these matters, individually or in the aggregate, will materially affect Firefly’s business, financial position, results of operations or cash flows.

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of a possible loss can be established, the most probable amount in the range is accrued. If no amount within the range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees, and other directly related costs expected to be incurred.

The Company does not believe that any such matters, individually or in the aggregate, will materially affect the Company’s consolidated financial condition, results of operations, or cash flows.

The Company didnot recognize any contingent liabilities as of September 30, 2026. The Company recognized$2.3 million of contingent liabilities related to Spaceflight, Inc. in other non-current liabilities as of December 31, 2025. Due to the resolution of certain underlying matters, the balance decreased by$2.3 million during the nine months ended September 30, 2026 which resulted in a net gain recognized in the condensed consolidated statement of net loss and comprehensive loss.

Indemnification Agreements

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company also currently has directors’ and officers’ insurance.

13. Stockholders’ Equity and Redeemable Convertible Preferred Stock

Initial Public Offering

On August 8, 2025, the Company completed an IPO of an aggregate of 22.2 million shares of its common stock, par value $0.0001 (which included the exercise in full by the underwriters of their option to purchase an additional 2.9 million shares of common stock) at a public offering price of$45.00 per share, for an aggregate offering price of$998.6 million. The Company received aggregate proceeds of$932.3 million, net of$57.4 million of underwriting discounts and commissions and$11.4 million of offering costs.

In connection with the closing of the IPO, all of the then-outstanding shares of the Company’s redeemable convertible preferred stock (collectively, the “Preferred Stock”) were converted into 105.8 million shares of common stock. All outstanding warrants issued to purchase common stock (the “Common Warrants”) were automatically exercised into 1.0 million shares of common stock, and 0.6 million shares of common stock are reserved for issuance upon exercise of the Series J Warrants (as defined in Note 9. Fair Value Measurement).

On August 8, 2025, the Company used a portion of the net proceeds from the IPO to repay the Term Loans under the Financing Agreement (each as defined in Note 11. Notes Payable), together with the specified prepayment premium of$11.4 million and accrued interest.

In connection with the IPO, the Company effected a 1-for-3.2544 reverse stock split of its common stock and a proportionate decrease in the number of its authorized shares. All share and per share information, including share-based compensation, throughout the accompanying unaudited condensed consolidated financial statements has been retroactively adjusted to reflect the reverse stock split.

On June 1, 2026, the Company completed an underwritten public offering of 12.0 million shares of common stock at a public offering price of$48.00 per share (the “Registered Equity Offering”), consisting of 4.0 million shares offered by the Company and 8.0 million shares offered by certain entities affiliated with AE Industrial Partners (collectively, “AE Industrial”). The Company received net proceeds of$181.6 million, after deducting underwriting discounts and commissions of$7.9 million and offering expenses of$2.6 million. The Company did not receive any proceeds from the sale of shares by AE Industrial.

Of the offering expenses,$2.5 million was directly attributable to the offering and offset against additional paid-in capital. The remaining$0.1 million was expensed during the nine months ended September 30, 2026. See Note 16. Related Party Transactions.

14. Stock-Based Compensation

2017 and 2024 Equity Incentive Plans

In October 2017, the Company adopted and approved the 2017 Stock Plan (the “2017 Plan”) under which 3.1 million shares of the Company’s common stock were originally reserved for issuance to employees, directors, and consultants. In 2023, the Company twice amended the 2017 Plan to increase the number of reserved shares to a total of approximately 26.7 million. In 2024, the Company twice amended the 2017 Plan to increase the number of reserved shares by an additional 11.3 million shares to a total of approximately 38.1 million. Under the 2017 Plan, the Company may grant stock options, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”). Options granted under the Plan may be either incentive stock options (“ISOs”) or stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors). Awards granted under the 2017 Plan generally vest based on service over various periods ranging from immediately to five years. Certain performance-based awards vest upon the occurrence of a qualified liquidity event (including a change in control or IPO), while some awards may accelerate vesting upon such an event. Options expire as determined by the Board of Directors but not more than ten years after the date of grant, unless the holder of an ISO owns more than 10% of the voting power in the Company, in which case the term cannot exceed five years. The Company hadno shares of common stock available for future issuance under the 2017 Plan as of September 30, 2026.

In 2024, the Company established a Performance-Based Incentive Compensation Plan (the “2024 Plan”) that allows for the issuance of stock options, RSAs, RSUs, and cash incentives to employees, directors, and consultants. The stock-based awards granted under the 2024 Plan are governed in accordance with the terms and conditions of the 2017 Plan. The 2024 Plan also included cash incentive opportunities tied to the achievement of specific performance goals. Subsequent to the adoption of the 2025 Plan (as defined below), no further awards were granted under the 2017 Plan or the 2024 Plan.

2025 Omnibus Incentive Plan

In July 2025, the Board of Directors adopted, and the Company’s stockholders approved, the Firefly Aerospace Inc. 2025 Omnibus Incentive Plan (the “2025 Plan”). The 2025 Plan authorizes grants of stock options, stock appreciation rights, RSAs, RSUs, performance awards, other stock‑based awards, cash awards, and substitute awards. The 2025 Plan reserves 24.1 million shares of common stock, subject to annual increases beginning January 1, 2026 equal to the lesser of (i)3% of shares outstanding or (ii) a smaller amount determined by the Board of Directors. RSUs and restricted stock granted under the 2025 Plan vest based on service, performance conditions, or both, and unvested units are typically forfeited upon termination.

Compensation cost for employee stock-based awards is based on the estimated grant date fair value and is recognized over the vesting period of the applicable award on a straight-line basis for service-based awards with graded vesting.

2025 Employee Stock Purchase Plan

In August 2025, the Board of Directors adopted, and the Company’s shareholders approved, the 2025 Employee Stock Purchase Plan (the “ESPP”). The ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to the Company’s employees. The option purchase price will be designated by the ESPP administrator but will not be less than 85% of the fair market value of a share of the Company’s common stock on the applicable enrollment date or the applicable exercise date, whichever is lower. A total of 3.2 million shares of the Company’s common stock was initially reserved for issuance under the ESPP. In addition, the number of shares available for issuance under the ESPP is increased annually on January 1 of each fiscal year beginning in 2026 by an amount equal to the lesser of (i)1.0% of the shares outstanding on the last day of the immediately preceding fiscal year or (ii) a lesser amount determined by the Company’s Board of Directors; provided, however, that no more than 3.2 million shares may be issued per year in total under the ESPP.

RSUs

Subsequent to the IPO, the Company grants service-based RSUs to employees, all of which relate to the Company’s common stock, under the 2025 Plan. RSUs that have been awarded to employees generally vest over periods between two and four years from the grant date. The service-based vesting condition for these awards is generally satisfied by rendering continuous service, generally for one to four years, during which time the grants will vest either with a cliff vesting period of one year and continued vesting quarterly thereafter or quarterly from the vesting commencement date. The fair value of RSUs is based on the closing market price of the Company’s common stock on the grant date. The Company records stock-based compensation expense related to RSUs on a straight-line basis over the requisite service period.

During the three and nine months ended September 30, 2026, the Company granted RSUs to certain employees under the 2025 Plan. Each RSU represents the right to receive one share of the Company’s common stock upon vesting. The RSUs granted generally vest over the requisite service period specified in each award agreement. Unvested RSUs are forfeited upon termination of employment, unless otherwise provided under the award terms.

The following table summarizes RSU activity during thenine months ended September 30, 2026:

The total fair value of RSUs vested during the three and nine months ended September 30, 2026 was$15.6 million and$17.0 million, respectively. Total unrecognized compensation cost related to unvested RSUs was$158.9 million, which is expected to be recognized over a weighted‑average period of 2.8 years.

Stock Options

The following table summarizes stock option activity during thenine months ended September 30, 2026:

The Company did not grant any employee stock options for the nine months ended September 30, 2026. Unrecognized compensation expense related to stock options, which are expected to be recognized over a weighted-average period of 1.4 years and 2.3 years, was$1.1 million and$2.1 million for the nine months ended September 30, 2026 and 2025, respectively. The aggregate intrinsic value of the options outstanding was$164.7 million and$18.2 million as of September 30, 2026 and 2025, respectively. The aggregate intrinsic value of the options exercisable was$140.3 million and$13.0 million as of September 30, 2026 and 2025, respectively.

Determination of Fair Value

The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options. The determination of the fair value of stock options on the date of grant is affected by the stock price as well as assumptions regarding several complex and subjective variables. These variables include expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates, and expected dividends.

Expected Term

The expected term represents the period that the stock-based awards are expected to be outstanding. The option grants qualify to be “plain vanilla”, and the Company used the simplified method to determine the expected term. The simplified method calculates the expected term as the average of the time-to-vesting and contractual life of the option.

Volatility

Since the Company has limited historical data regarding the volatility of its common stock, the expected volatility used is based on volatility of similar entities, referred to as “guideline” companies. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size.

Risk-Free Interest Rate

The risk-free rate is based on U.S. Treasury issues with remaining terms similar to the expected term on the options.

Dividend Yield

The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model.

Stock-Based Compensation Expense

Total stock-based compensation expense related to options and RSUs was allocated to research and development and selling, general and administrative expense as follows:

15. Income Taxes

The Company computes its provision for income taxes by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusts the provision for discrete tax items recorded in the period.

The Company recognized an immaterial tax provision for the three months ended September 30, 2026 and recognized an immaterial tax provision for the nine months ended September 30, 2026. The Company hadno provision for income taxes for either the three or nine months ended September 30, 2025.

16. Related Party Transactions

In connection with the Registered Equity Offering, the Company paid offering costs of $2.5 million. The Company determined that $1.7 million of these costs were attributable to AE Industrial’s secondary offering. AE Industrial paid all underwriting fees incurred in connection with the secondary component of the offering.

During the nine months ended September 30, 2025, AE Industrial purchased 0.3 million shares of Series D-1 Preferred Stock for an aggregate purchase price of$5.0 million and received $4.5 million for services related to the issuance of Series D-4 Preferred Stock, including placement, negotiation, and closing activities pursuant to a prior agreement. During the nine months ended September 30, 2026, there wereno such purchases by AE Industrial.

On August 8, 2025, in connection with the Company’s IPO, the Company repaid in full the Term Loans under the Financing Agreement, $21.1 million of which was held by AE Industrial. The repayment occurred prior to the contractual maturity of the Term Loans and triggered early extinguishment fees under the Financing Agreement, including specified premium and exit fees totaling $1.8 million payable to AE Industrial.

Accounts Payable and Expenses

The following transactions occurred between the Company and AE Industrial, which beneficially owned 29.54% of the Company’s common stock outstanding as of September 30, 2026. Even though the Company is part of AE Industrial’s portfolio of companies, it is not a part of AE Industrial’s consolidated tax return and files its tax returns independently.

On August 8, 2025, the Company entered into an Amended and Restated Consulting Agreement (the “Consulting Agreement”) with AE Industrial Operating Partners, LLC (“AE Operating”), an affiliate of AE Industrial. Under the Consulting Agreement, the Company will pay AE Operating an annual fee of approximately $2.4 million for consulting and advisory services until the earlier of August 8, 2027, or the time AE Industrial beneficially owns less than 10% of the Company’s outstanding common stock. Expenses for consulting and other fees recorded under this agreement for thethree and nine months ended September 30, 2026 were $0.8 million, and $2.5 million, respectively.

In addition to AE Operating, G.S. Precision, Deep Space Systems, and Redwire Corporation are also related parties of the Company, as these entities are part of AE Industrial’s investment portfolio or share a common board of directors with the Company.

The following is a summary of the Company’s related party accounts payable and accrued expenses as of September 30, 2026 and December 31, 2025, and related party research and development and selling, general, and administrative expenses:

In the normal course of business, the Company engages in transactions with certain vendors and customers where AE Industrial maintains a significant ownership interest and/or can exhibit significant influence on the operations of such parties. For both the three and nine months ended September 30, 2026 and 2025, transactions with other companies in AE Industrial’s investment portfolio were not material to the Company’s unaudited condensed consolidated financial statements.

17. Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during each period.

Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of fully dilutive common shares outstanding for the period using the treasury-stock method, the if-converted method, or two-class method for participating securities, whichever is more dilutive. Potentially dilutive shares are comprised of common stock warrants, RSUs, convertible notes and stock options. For the nine months ended September 30, 2026 and 2025, there was no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss and potentially dilutive shares being anti-dilutive. The Company has determined that all series of Preferred Stock were participating securities under the two-class method, however, holders of the Preferred Stock were not required to fund losses. Dividends were accreted for the Company’s outstanding shares of Series C, Series D-1 and Series D-3 Preferred Stock.

The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company:

A summary of the total number of securities excluded from diluted net loss per share that could be potentially dilutive in the future is as follows:

18. Segment and Geographical Info rmation

The Company has determined that it operates inone operating segment and as a result, manages its operations and allocates resources as asingle operating segment. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. The CODM uses net income or loss to evaluate the return on assets and to determine investment opportunities related to product development, platform enhancements, and new technologies. The CODM also uses net income or loss to monitor budget versus actual results. In the first quarter of fiscal 2026, the Company refined its segment reporting to better reflect how the CODM evaluates segment performance. Prior period segment results have been recast to conform to the current period presentation.

The following table includes the significant expense categories and amounts that are regularly provided to the CODM:

(1) Depreciation and amortization excludes the amortization of acquired intangibles, which is presented separately.

(2)Cost of sales excludes depreciation and amortization, and interest expense, which are presented separately.

(3)Research and development excludes depreciation and amortization, and stock-based compensation expense, which are presented separately.

(4)Selling, general, and administrative excludes depreciation and amortization, amortization of acquired intangibles, stock-based compensation expense, one-time costs related to the IPO, and transaction-related expenses, which are presented separately.

(5)Represents costs incurred related to the IPO that do not meet the direct and incremental criteria per SEC Staff Accounting Bulletin Topic 5.A to be netted against the gross proceeds of the offering and that are not expected to recur in the future.

(6)Other (income) expense, net, excludes interest income, interest expense, change in fair value of warrant liability, and gain on settlement of contingent liabilities, which are presented separately.

The measure of segment assets, including goodwill, is reported on the unaudited condensed consolidated balance sheets as total consolidated assets. Assets provided to the CODM are consistent with those reported on the unaudited condensed consolidated balance sheets with particular emphasis on the Company’s available liquidity, including its cash, cash equivalents, and short-term investments, and there are no other significant segment assets that would require disclosure or are regularly provided to the CODM.

The Company didnot recognize revenue or hold material property and equipment outside of the United States for thenine months ended September 30, 2026 and 2025, and as of September 30, 2026 and December 31, 2025, respectively.

19. Subsequent Events

On November 6, 2026, the Company entered into (i) an Intellectual Property License Agreement with AST SpaceMobile, Inc. (“AST SpaceMobile”) and (ii) a Supply and Services Agreement with AST & Science, LLC, a subsidiary of AST SpaceMobile (the “Supply and Services Agreement” and, together with the IP License Agreement, the “AST Agreements”), pursuant to which the Company has agreed to assist with the development of AST SpaceMobile's new heavy-lift launch vehicle, including manufacturing, testing and delivering flight-ready sets of Firefly's Miranda and Vira engines.

Under the AST Agreements, Firefly will grant AST SpaceMobile a license to certain Company intellectual property to enable AST SpaceMobile to manufacture rocket engines, and will supply AST SpaceMobile with Miranda and Vira engines, delivered flight-ready for the first three launches of AST SpaceMobile's launch vehicle. Firefly will also provide AST SpaceMobile with certain non-recurring engineering services, a dedicated team of engineers, systems engineering and technical assistance support, and training.

As consideration for entry into the AST Agreements, AST SpaceMobile will pay the Company a combination of cash and shares of its Class A common stock, which the Company estimates to be valued at approximately $1.3 billion. The payment of the consideration by AST is subject to customary milestones set forth in the AST Agreements.

The Company is currently evaluating the financial statement impact of this transaction.

The Company has evaluated subsequent events from September 30, 2026 through the date the financial statements were issued and has determined there are no other subsequent events that require disclosure or recognition in the unaudited condensed consolidated financial statements.