Company: SIDU
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010989
Chunk: 48

Company: Sidus Space Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 2
Chunk 48
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    ●
    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 the Company’s revenue category, 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 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.

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.

Inventory

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

Credit
Losses

The
provision for expected credit losses