Company: SIDU
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024043
Chunk: 8

Company: Sidus Space Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 8
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480, Distinguishing Liabilities from Equity (“ASC 480”)
and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether
the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,
among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the
time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair
value of the warrants was estimated using a Black-Scholes pricing model.

Recent
Accounting Pronouncements

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. ASU 2024-03 is effective for fiscal years beginning
after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently
evaluating the impact of adopting ASU 2024-03.

The
Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will
have a material impact on its financial statements.

Note
3. Variable Interest Entity

The
consolidated financial statements include Aurea Alas Limited, which is a variable interest entity of which we are the primary beneficiary,
and on August 26, 2020, the Company entered into a licensing agreement