Company: SIDU
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001742
Chunk: 251

Company: Sidus Space Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1B
Chunk 251
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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. Retainage for which the company has an unconditional
right to payment that is only subject to the passage of time is classified as contracts receivable. Retainage subject to conditions other
than the passage of time are included in contract assets and contract liabilities on a net basis at the individual contract level. Contract
assets represent revenue recognized in excess of amounts paid or payable (contracts receivable) to the company on uncompleted contracts.
Contract liabilities represent the company’s obligation to perform on uncompleted contracts with customers for which the company
has received payment or for which contracts receivable are outstanding.

Inventory

Inventory consists of work in progress and consists
of estimated revenue calculated on a percentage of completion based on direct labor and materials in relation to the total contract value.
The Company does not maintain raw materials.

Property and Equipment

Property and equipment, consisting mostly of plant
and machinery, motor vehicles and computer equipment, is recorded at cost reduced by accumulated depreciation and impairment, if any.
Construction in progress generally involves short-term capital projects and is not depreciated until the development has reached completion
and the asset has been put into service. Depreciation expense is recognized over the assets’ estimated useful lives of three to ten
years using the straight-line method. Major additions and improvements are capitalized as additions to the property and equipment
accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as
incurred. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events
or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability
of the carrying amounts.

Long-Lived Assets

Long-lived assets are evaluated for impairment whenever
events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the
useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash
flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.

Fair Value Measurements

The Company uses a three-tier fair value hierarchy
to classify