Company: SIDU
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001742
Chunk: 1166

Company: Sidus Space Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 1166
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 accounting policies
and estimates relate to the following:

    ●
    Revenue Recognition

    ●
    Inventory

    ●
    Credit losses

    ●
    ●
    Lease Accounting
    Stock Option and Warrant Valuation

Revenue Recognition

We adopted ASC 606 – Revenue from Contracts
with Customers using the modified retrospective transition approach. The core principle of ASC 606 is that revenue should be recognized
in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled for exchange of those goods or services. Our updated accounting policies and related disclosures are
set forth below, including the disclosure for disaggregated revenue. The impact of adopting ASC 606 was not material to the Consolidated
Financial Statements.

Our revenue is recognized under Topic 606 in a manner
that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the
following five elements:

    ●
    executed contracts with
    our customers that we believe are legally enforceable;

    ●
    identification of performance
    obligations in the respective contract;

    ●
    determination of the transaction
    price for each performance obligation in the respective contract;

    ●
    Allocation of the transaction
    price to each performance obligation; and

    ●
    recognition of revenue
    only when we satisfy each performance obligation.

These five elements, as applied to each of our revenue
categories, are summarized below:

Revenues primarily from manufacturing related fixed
price contracts that are still in progress at month end are recognized on the percentage-of-completion method, measured by the percentage
of total costs incurred to date to the estimated total costs for each contract. This method is used because management considers total
costs to be the best available measure of progress on these contracts. Revenue from fixed price contracts and time-and-materials contracts
that are completed in the month the work was started are recognized when the work is shipped.

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 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