Company: SIDU
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001742
Chunk: 143

Company: Sidus Space Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 8
Chunk 143
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 Presentation

The financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented
in US dollars. The Company uses the accrual basis of accounting and has adopted a December 31 fiscal year end.

Certain prior year amounts have been reclassified
for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

     F-6 

Principles of Consolidation

The consolidated financial statements include the
variable interest entity (“VIE”), Aurea Alas Limited (“Aurea”), of which we are the primary beneficiary. Aurea
is a Limited company organized in the Isle of Man, which entered into a license agreement with a third party vendor, whereby they licensed
the rights to use certain available radio frequency spectrum for satellite communications. All intercompany transactions and balances
have been eliminated on consolidation.

For entities determined to be VIEs, an evaluation
is required to determine whether the Company is the primary beneficiary. The Company evaluates its economic interests in the entity specifically
determining if the Company has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic
performance (“the power”) and the obligation to absorb losses or the right to receive benefits that could potentially be
significant to the VIE (“the benefits”). When making the determination on whether the benefits received from an entity are
significant, the Company considers the total economics of the entity and analyzes whether the Company’s share of the economics
is significant. The Company utilizes qualitative factors, and, where applicable, quantitative factors, while performing the analysis.

Use of Estimates

The preparation of financial statements in conformity
with GAAP 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 financial statements and the reported amounts of expenses during the reporting
period. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Examples
of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations,,
the fair value of and/or potential impairment of property and equipment; product life cycles; useful lives of our property and equipment;
allowances for doubtful accounts; the market value of, and demand for, our inventory; fair value calculation of warrant; and the potential
outcome of uncertain tax positions that have been recognized in our consolidated financial