Company: SIDU
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010989
Chunk: 99

Company: Sidus Space Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 99
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 to us.

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Cost
of Revenue

Cost
of revenue increased 93% for the three months ended March 31, 2025 to approximately $1.9 million as compared to approximately $966,000
for the three months ended March 31, 2024 and included approximately $38,000 related party cost of sales as of March 31, 2025 and approximately
$167,000 as of March 31, 2024. The overall increase in cost of revenue was primarily driven by a mix of contracts of varying types, satellite
and related software depreciation expense increase of approximately $611,000 versus 2024 and continued increased supply chain related
costs in the manufacturing side of our business.

Gross
Profit (Loss)

The
2037% decrease in our gross margin for the three months ended March 31, 2025 to a loss of approximately $1.6 million as compared to a
profit of approximately $84,000 for the three months ended March 31, 2024, was driven primarily by higher satellite and related depreciation
costs, our mix of varying types of contracts with higher material and labor expenses and a decrease in our higher margin business.

Selling,
General, and Administrative Expenses

Selling,
general, and administrative expenses increased approximately $800,000 when compared with the same period in 2024. This was primarily
due to the following:

    ●
    An
    increase of approximately $1.2 million in general and administrative labor costs and benefits to $2.7 million compared to $1.5 million
    in 2024. This increase was primarily driven by approximately $470,000 related to increased headcount to support the needs of the business,
    $410,000 related to expense accruals associated with equity-based compensation and bonus plans implemented in Q1 2025 and $215,000
    related to employee severance costs.

    ●
    An
    increase of approximately $72,000 in fees related to rebooking and payment timing with our launch provider and fees related to the
    January 2025 payoff of our note payable. Total fees were $98,000 compared to $26,000 in 2024.

    ●
    An
    increase of approximately $68,000 in depreciation expense to approximately $98,000 compared to approximately $30,000 in 2024.

    ●
    An
    increase of approximately $43,000 in