Amendment: SEC Form 10-K/A filed by Starfighters Space Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
(Mark One)
For the fiscal year ended:
For the transition period from ______ to _______.
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Securities registered under Section 12(b) of the Exchange Act:
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Securities registered under Section 12(g) of the Exchange Act:
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(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction or an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recover analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant's most recently completed second fiscal quarter ($3.59 on June 30, 2025) was approximately $
The registrant had
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EXPLANATORY NOTE
Starfighters Space, Inc. ("Starfighters", the "Company", "we", "our", and "us") is filing this Amendment No. 1 on Form 10-K/A (this "Amendment No. 1") to amend its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, originally filed with the Securities and Exchange Commission ("SEC") on April 15, 2026 (the "Original Filing"). Capitalized terms not otherwise defined in this Amendment No. 1 shall have the same meanings assigned to such terms in the Original Filing.
We are filing this Amendment No. 1 to amend our Company's previously issued consolidated financial statements for the years ended December 31, 2025 and 2024. We are amending our consolidated financial statements for the years ended December 31, 2025 and 2024, to expand the disclosure included in certain notes thereto, as follows, in response to comments provided to us by Staff at the Corporation Finance Division of the SEC:
3. Summary of Significant Accounting Policies
w) Segment Reporting
We have expanded this note in compliance with FASB ASC 280 as amended by FASB ASU 2023-07, to:
- Identify our Company's Chief Executive Officer as the Chief Operating Decision Maker (CODM);
- Disclose the significant segment expense categories that are regularly provided to the CODM;
- Identify the measure(s) of segment profit or loss used by our CODM to assess performance and allocate resources, and explain how the reported measure(s) are used by the CODM in evaluating the segment;
- Provide the amount and a qualitative description of other segment items included in our segment reporting; and
- Include reconciliations of total reportable segment measure(s) of profit or loss to consolidated income before taxes.
4. Property, Plant, and Equipment
We have expanded this note to include the following additional disclosure:
"The Company owns six F-104 aircrafts that were acquired through a common control transaction in 2022, which had zero carrying value at the time of acquisition from the transferring entity, and was carried at $nil upon recognition under ASC 805-50-30-5. The Company owns a seventh F-104 aircraft that was acquired in 2022 at no consideration. Accordingly, the Company reports zero carrying value on the F-104 aircrafts. The Company has full ownership and control over the aircrafts through SFII. The ownership rights and control over the aircrafts are not impacted by the recent resignation of the former Chief Executive Officer of the Company (Note 13)."
12. Correction of Immaterial Errors
We had previously provided disclosure in note 12 regarding the correction of prior interim errors identified for the three and six months ended June 30, 2025, and the three and nine months ended September 30, 2025. The previous disclosure consisted of a narrative description of these errors and discussed their directional impact on net loss and loss per share. This note has now been expanded to disclose the effect of the corrections on each financial statement line item for each prior period presented, as required by FASB ASC 250-10-50-7. We have provided tabular disclosure for each affected prior interim period, each line item impacted (including the resulting effect on net loss and net loss per share), showing the amount as previously reported, the amount of the correction, and the amount as corrected.
The cumulative effect of the corrections on the Company's accumulated deficit as of the beginning of the earliest period presented, December 31, 2024, was $0, as each of the three errors originated within, and was corrected within, interim periods of the fiscal year ended December 31, 2025. Accordingly, the Company's previously issued audited consolidated financial statements as of and for the year ended December 31, 2024, are unaffected by these corrections.
The Company assessed the materiality of each error, individually and in the aggregate, considering both quantitative and qualitative factors. Consistent with SEC Staff Accounting Bulletin No. 99, the Company did not rely on any single quantitative threshold but assessed materiality in light of the total mix of information available to a reasonable investor and, as required by FASB ASC 250-10-45-27, by reference to the estimated income for the full fiscal year and the effect on the trend of earnings.
Based on such quantitative and qualitative analysis, the Company concluded that the errors, individually and in the aggregate, were not material to the previously issued interim financial statements.
iii
14. Amendments to Previously Issued Financial Statements
We have included this note 14 to provide a summary of the amendments to the previously issued financial statements for the year ended December 31, 2025.
As required by Rule 12b-15 under the Exchange Act, a new certification by the Company's principal executive officer and principal financial officer are filed herewith as Exhibits 31.1 and 31.2 to this Amendment No. 1 pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act and the new certification filed herewith as Exhibit 32.1 to this Amendment No. 1 pursuant to Rule 13a-14(b) or 15d-14(b) of the Exchange Act. Because this Amendment No. 1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 4 and 5 of the certifications pursuant to Rule 13a-14(a) or 15d-14(a) have been omitted, in accordance with the guidance set forth in Question 161.01 of the Corporation Finance Interpretations of the Division of Corporation Finance of the SEC.
Except as described above, this Amendment No. 1 does not modify or update disclosure in, or exhibits to, the Original Filing. Furthermore, this Amendment No. 1 does not change any previously reported financial results, nor does it reflect events occurring after the date of the Original Filing. As such, information not affected by this Amendment No. 1 remains unchanged and reflects the disclosures made at the time the Original Filing was filed. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and other filings of the Company with the Securities and Exchange Commission.
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Table of Contents
Table of Contents
| PART II | Page | |
| Item 8 | Financial Statements and Supplementary Data | 1 |
| PART IV | ||
| Item 15 | Exhibits, Financial Statement Schedules | 2 |
v
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- 1 -
STARFIGHTERS SPACE, INC.
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2025
(Expressed in U.S. Dollars)
Index to the Financial Statements
F-1
 |
|
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |
| To the Board of Directors and Stockholders of Starfighters Space, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Starfighters Space, Inc. (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company's Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has a net loss from operations, negative cash flows from operations, and an accumulated deficit and that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. We have served as the Company's auditor since 2024. /s/ PCAOB ID: April 15, 2026 except for Note 14 and its impact on the consolidated financial statements, which is July 21, 2026 |
F-2
STARFIGHTERS SPACE, INC.
CONSOLIDATED BALANCE SHEETS
| December 31, 2025 | December 31, 2024 | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash | $ | $ | ||||
| Restricted cash | ||||||
| Short-term investments | ||||||
| Due from related party | ||||||
| Prepaid expenses | ||||||
| Deferred financing charges | ||||||
| Other receivable | ||||||
| Total current assets | ||||||
| Right of use assets - operating lease, net | ||||||
| Property, plant, and equipment, net of accumulated depreciation of $ |
||||||
| Long-term deposits | ||||||
| Total assets | $ | $ | ||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | $ | ||||
| Deferred income | ||||||
| Derivative liability | ||||||
| Lease liability | ||||||
| Interest payable | ||||||
| Grant payable | ||||||
| Convertible debentures, net | ||||||
| Note payable | ||||||
| Related party notes payable | ||||||
| Total current liabilities | ||||||
| Lease liability - non-current | ||||||
| Total liabilities | $ | $ | ||||
| Commitments and contingencies - see Note 11 | ||||||
| Stockholders' Equity (Deficit) | ||||||
| Common stock, $ |
||||||
| Common stock subscribed | ||||||
| Additional paid-in-capital | ||||||
| Accumulated deficit | ( |
) | ( |
) | ||
| Total stockholders' equity (deficit) | ( |
) | ||||
| Total liabilities and stockholders' equity (deficit) | $ | $ |
The accompanying notes are an integral part of these consolidated financial statements
F-3
STARFIGHTERS SPACE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Year ended December 31, |
||||||
| 2025 | 2024 | |||||
| Operating expenses | ||||||
| Advertising and promotion | $ | $ | ||||
| Bank and interest charges | ||||||
| Business development | ||||||
| Consulting fees | ||||||
| Contract labor and fuel | ||||||
| Depreciation | ||||||
| Directors' fees | ||||||
| Franchise tax | ||||||
| Insurance | ||||||
| Licenses | ||||||
| Listing fees | ||||||
| Management fees | ||||||
| Office and administrative | ||||||
| Professional fees | ||||||
| Relocation costs | ||||||
| Rent expense | ||||||
| Repairs and maintenance | ||||||
| Research and development | ||||||
| Travel and entertainment | ||||||
| Vehicle | ||||||
| Total operating expenses | ( |
) | ( |
) | ||
| Other income (expense) | ||||||
| Amortization of debt discount | ( |
) | ( |
) | ||
| Change in fair value of derivative liability | ( |
) | ( |
) | ||
| Other income | ||||||
| Grant income | ||||||
| Interest expense | ( |
) | ( |
) | ||
| Interest income | ||||||
| Write-off of other receivable | ( |
) | ||||
| Exchange loss | ( |
) | ( |
) | ||
| Total other income (expense) | ( |
) | ( |
) | ||
| Net loss before taxes | ( |
) | ( |
) | ||
| Income tax expense (benefit) | ||||||
| Net loss | $ | ( |
) | $ | ( |
) |
| Weighted average number of shares - Basic and diluted | ||||||
| Net loss per share - Basic and diluted | $ | ( |
) | $ | ( |
) |
The accompanying notes are an integral part of these consolidated financial statements
F-4
STARFIGHTERS SPACE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
| Common Stock | ||||||||||||||||||
| Number of Shares |
Amount | Common Stock Subscribed |
Additional Paid-In- Capital |
Deficit | Total Stockholders' Equity (Deficit) |
|||||||||||||
| Balance, January 1, 2024 | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||
| Reg A financing | ||||||||||||||||||
| Reg A financing share issuance costs | - | ( |
) | ( |
) | |||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||
| Issuance of former stock subscriptions | ( |
) | ||||||||||||||||
| Reg A financing | ||||||||||||||||||
| Reg A financing share issuance costs | - | ( |
) | ( |
) | |||||||||||||
| Initial Public Offering | ||||||||||||||||||
| Initial Public Offering share issuance costs | - | ( |
) | ( |
) | |||||||||||||
| Conversion of convertible debentures | ||||||||||||||||||
| Conversion of note payable | ||||||||||||||||||
| Cashless exercise of warrants | ( |
) | ||||||||||||||||
| RSUs vesting | ( |
) | ||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( |
) | $ | |||||||||||
The accompanying notes are an integral part of these consolidated financial statements
F-5
STARFIGHTERS SPACE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year ended December 31, | ||||||
| 2025 | 2024 | |||||
| Cash flows from operating activities | ||||||
| Net loss | $ | ( |
) | $ | ( |
) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
| Depreciation | ||||||
| Amortization of ROU asset | ||||||
| Unrealized gain on investments | ( |
) | ( |
) | ||
| Realized gain on investments | ( |
) | ( |
) | ||
| Amortization of debt discount | ||||||
| Change in fair value of derivative liability | ||||||
| Stock-based compensation | ||||||
| Write-off of other receivable | ||||||
| Changes in operating assets and liabilities: | ||||||
| Accrued interest | ||||||
| Other receivable | ( |
) | ||||
| Accounts payable and accrued liabilities | ||||||
| Due to related party | ( |
) | ||||
| Deferred income | ( |
) | ( |
) | ||
| Grant payable | ||||||
| Prepaid expenses | ( |
) | ||||
| Lease liability | ( |
) | ( |
) | ||
| Net cash used in operating activities | ( |
) | ( |
) | ||
| Cash flows from investing activities | ||||||
| Additions to long-term deposits | ( |
) | ( |
) | ||
| Purchase of property and equipment | ( |
) | ||||
| Purchase of short-term investments | ( |
) | ( |
) | ||
| Redemption of short-term investments | ||||||
| Net cash used in investing activities | ( |
) | ( |
) | ||
| Cash flows from financing activities | ||||||
| Repayment of related party notes payable | ( |
) | ( |
) | ||
| Issuance costs for convertible debentures | ( |
) | ||||
| Proceeds from convertible debentures | ||||||
| Proceeds from Regulation A financing | ||||||
| Proceeds from Initial Public Offering | ||||||
| Cash paid for financing costs | ( |
) | ( |
) | ||
| Net cash provided by financing activities | ||||||
| (Decrease) increase in cash | ( |
) | ||||
| Cash and restricted cash, beginning of year | ||||||
| Cash and restricted cash, end of year | $ | $ | ||||
| Cash | $ | $ | ||||
| Restricted cash | ||||||
| Total cash and restricted cash, end of year | $ | $ | ||||
| Supplemental cash flow information | ||||||
| Income taxes paid | $ | $ | ||||
| Interest paid | $ | $ | ||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||
| Right of use asset additions | $ | $ | ||||
| Right of use asset modifications | $ | $ | ||||
| Shares issued for common stock subscribed | $ | $ | ||||
| Deferred financing costs recognized as share issuance costs | $ | $ | ||||
| Notes and interest payable converted into shares | $ | $ | ||||
| Convertible debentures and derivative liabilities converted into shares | $ | $ | ||||
| Initial derivative liability from issuance of convertible notes | $ | $ | ||||
The accompanying notes are an integral part of these consolidated financial statements
F-6
1. NATURE OF OPERATIONS
Starfighters Space Inc. ("SFS" or the "Company") was incorporated on September 6, 2022, under the laws of the State of Delaware. On December 18, 2025, the Company successfully closed their initial public offering and the Company's common shares are now traded on the NYSE American LLC (the "NYSE American") under the trading symbol "FJET". The Company's registered office is held at 850 New Burton Road, Suite 201, Dover, DE 19904.
The Company's principal operating facility is located in Cape Canaveral, Florida. The Company operates from the NASA Kennedy Space Center in Florida, with an additional base of operations at Midland International Air & Space Port in Texas, and has a fleet of seven F-104 Fighter jets that are capable of flying MACH 2+. The Company is currently in the process of gaining a launch waiver and license for its first space launch to launch rockets carrying payloads for data testing from their jets into suborbital space. Upon successful suborbital space flight, the Company intends to develop infrastructure for orbital space launch. The Company has not yet commenced its principal operations as of December 31, 2025.
Risks and Uncertainties
Disruption of global financial markets and a recession or market correction, including the ongoing military conflicts between Russia and Ukraine and the related sanctions imposed against Russia as well as the escalating geopolitical tensions in the Middle East, the significant tariffs imposed by the United States on imports from other countries and other global macroeconomic factors such as inflation and rising interest rates, could reduce the Company's ability to access capital, which could in the future negatively affect the Company's liquidity and could materially affect the Company's business and the value of its common stock.
2. BASIS OF PRESENTATION
a) Basis of presentation
The accompanying consolidated financial statements include the accounts of Starfighters Space Inc. and its wholly owned subsidiaries, and are presented using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. References to the "ASC" hereafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board ("FASB") as the source of authoritative U.S. GAAP.
As of December 31, 2025, the Company's subsidiaries were:
| Name of subsidiary | Place of incorporation | Incorporated | Ownership |
| Starfighters International, Inc. (Florida) | Florida, the United States | December 3, 2018 | |
| Starfighters, Inc. | Florida, the United States | November 16, 1995 | |
| Starfighters International, Inc. (Texas) | Texas, the United States | March 29, 2024 |
b) Going concern
The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the years ended December 31, 2025 and 2024, the Company recorded a net loss of $
2. BASIS OF PRESENTATION (CONTINUED)
These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date of the consolidated financial statements being issued. The ability of the Company to continue as a going concern is dependent upon the Company's ability to raise additional funds and implement its business plan. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Such adjustments could be material.
As of December 31, 2025, the Company had cash in the amount of $
c) Functional and presentation currencies
The consolidated financial statements of the Company are presented in United States dollars. The functional currency of the Company and its subsidiaries is the United States dollar.
d) Emerging growth company
The Company is an "Emerging Growth Company", as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and it has taken advantage of certain exemptions that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial reporting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
e) Use of estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company's management to make judgments, estimates and assumptions about future events that impact the amounts reported in the consolidated financial statements. Actual results may differ from these estimates.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held with banks, and when applicable, short-term, highly liquid deposits which are either cashable or with original maturities of less than three months. The Company did not hold any cash equivalents as of December 31, 2025 or 2024. At times, the Company's cash balance exceeds the federally insured limits. The total uninsured cash and cash equivalents balance as of December 31, 2025 was $
b) Restricted cash
Restricted cash are deposits held with banks that are held as collateral for the corporate credit cards of the Company. As of December 31, 2025 and 2024, the Company had restricted cash of $50,592 and $50,089, respectively.
c) Short-term investments
The Company's short-term investments are treasury notes and certificates of deposit with original maturities greater than 3 months and less than one year. The certificate of deposit held by the Company as of December 31, 2024 matured in 2025. The certificate of deposit had an interest rate of
d) Receivables and Allowance for Credit Losses
Receivables are carried at original invoice amount, less any estimate made for credit losses. The allowance for credit losses is the Company's best estimate of the amount of expected credit losses in the Company's existing receivables over the contractual term. We evaluate our exposure to credit loss on both a collective and individual basis. We evaluate such receivables on an individual customer basis and take into account any relevant available information, which begins with historical credit loss experience and consideration of current and expected conditions and market trends (such as general economic conditions, other microeconomic and macroeconomic considerations, etc.) and reasonable and supportable forecasts that could impact the collectability of such receivables over the contractual term individually or in the aggregate. Changes in circumstances relating to these factors may result in the need to increase or decrease our allowance for credit losses in the future. The allowance for credit losses was $0 and $0 as of December 31, 2025 and December 31, 2024, respectively.
e) Property, plant, and equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the double-declining method for vehicles, and straight-line method for remaining classes of property and equipment, over the estimated useful lives of the respective assets. Depreciable assets retired or sold are removed from the accounts and any resulting gain or loss is reflected in income for the period. Major replacements or betterments are capitalized while maintenance and repairs are expensed as incurred. The estimated useful lives of the classes of property and equipment are as follows:
| Vehicles | |
| Aircraft improvements | |
| Display Airplane | |
| Engines |
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
f) Long-term deposits
Long-term deposits are comprised entirely of deposits paid in advance for property and equipment, where control of the assets have not yet transferred to the Company.
g) Leases
The Company adopted ASC 842, Leases, as amended, on January 1, 2020 ("ASC 842"). The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease.
The Company determines if an arrangement contains a lease at inception as defined by ASC 842. To meet the definition of a lease under ASC 842, the contractual arrangement must convey to the Company the right to control the use of an identifiable asset for a period of time in exchange for consideration. Right of Use ("ROU") assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.
h) Impairment of long-lived assets
Long-lived assets or asset groups held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Circumstances that could trigger a review include, but are not limited to: significant decreases in the market price of the assets; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the assets; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the assets; and current expectation that the assets will more likely than not be sold or disposed significantly before the end of their estimated useful life.
When indicators of potential impairment are present the Company prepares a projected undiscounted cash flow analysis for the respective asset or asset group. If the sum of the undiscounted cash flows is less than the carrying value of the asset or asset group, an impairment loss is recognized equal to the excess of the carrying value over the fair value, if any. Fair value can be determined using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Recognized impairment losses are not reversed. There were no impairments noted during the years ended December 31, 2025 or 2024.
i) Financial instruments measurements and fair value of financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial instruments are accounted for in accordance with ASC 320, ASC 825 and ASC 815, as applicable. The Company's short-term investments are classified as trading securities and are measured at fair value, with unrealized gains and losses recognized in earnings.
Financial instruments, including cash, restricted cash, due from related party, accounts payable and accrued liabilities, and related party notes payable, are carried at their carrying values, which approximate fair value due to the short-term nature of these instruments.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derivative liabilities are measured at fair value on a recurring basis, with changes in fair value recognized in earnings.
Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred all risks and rewards of ownership.
Financial liabilities are derecognized when the obligations specified in the contract are discharged, cancelled, or expire.
ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company's own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.
ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following, based on the nature of the valuation inputs:
- Level 1: quoted prices (unadjusted) for identical assets or liabilities in active markets;
- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and,
- Level 3: one or more significant inputs used in a valuation technique are unobservable in determining fair values of the asset or liability.
Determination of fair value and the resulting hierarchy requires the use of observable market data where available. The classification of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement.
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. The Company determined that the derivative liability relating to the embedded conversion feature in the convertible notes is a Level 3 liability. See Note 6 for the significant inputs used and for a roll-forward of the Level 3 liability.
j) Derivative Liabilities
The Company evaluates its financial instruments and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market at each balance sheet date and recorded as a liability and the change in fair value is recorded in the consolidated statements of operations. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the consolidated balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the consolidated balance sheet date.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company uses the Monte Carlo simulation model to value derivative liabilities. This model uses Level 3 inputs in the fair value hierarchy established by ASC 820, Fair Value Measurement. The significant inputs and assumptions to the Monte Carlo simulation model are disclosed in Note 6.
k) Warrant instruments
The Company accounts for Warrants issued in accordance with the guidance contained in FASB ASC 815, Derivatives and Hedging. Under ASC 815-40, the Warrants meet the criteria for equity treatment and as such will be recorded in stockholders' equity (deficit). If the Warrants and no longer meet the criteria for equity treatment, they will be recorded as a liability and remeasured each period with changes recorded in the statement of operations.
l) Deferred offering costs
Deferred offering costs consist of specific incremental underwriting, legal and other expenses that are directly attributable to the Company's Regulation A Tier 2 Offering and initial public offering, and are incurred prior to the completion of an offering. The Company capitalizes such deferred offering costs in accordance with ASC 340, Other Assets and Deferred Costs. Upon completion of an offering, such deferred offering costs are recorded as a reduction of gross proceeds of offerings within stockholders' equity (deficit). Costs associated with an aborted offering are not deferred and are expensed as incurred.
m) Related parties
Related parties, which can be a corporation or individual, are considered to be related if either the Company or the other party have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or significant influence.
n) Income taxes
The Company's tax provision consists of taxes currently payable or receivable, plus any change during the period in deferred tax assets and liabilities. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settles. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that is it more likely than not that some portion of the deferred tax asset will not be realized.
During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting for income taxes requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if available evidence indicates it is more likely than not that the tax position will be fully sustained upon review by taxing authorities, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount with a greater than 50 percent likelihood of being realized upon ultimate settlement. For tax positions that are 50 percent or less likely of being sustained upon audit, the Company does not recognize any portion of that benefit in the financial statements. The Company is not aware of any issues under review that could result in significant payments, accruals or a material deviation from its position.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
o) Loss per share
Basic earnings (loss) per share ("EPS") is calculated by dividing profit or loss attributable to ordinary equity holders (numerator) by the weighted average number of ordinary shares outstanding (denominator) during the period. The denominator is calculated by adjusting the shares issued at the beginning of the period by the number of shares bought back during the period, multiplied by a time-weighting factor.
Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential units. The effects of anti-dilutive options and potential units are ignored in calculating diluted EPS. All options and potential units are considered anti-dilutive when the Company is in a loss position.
The Company has the following anti-dilutive securities as of December 31, 2025 and 2024:
| 2025 | 2024 | |||||
| Warrants | ||||||
| Options | ||||||
| Restricted Share Units | ||||||
As of December 31, 2024, due to the terms of the conversion option for the Note Payable (Note 5) and Convertible Debentures (Note 6), the Company could not predict the anti-dilutive shares for these instruments, and as such, they were excluded from the above table.
p) Other income
The Company earns ancillary income from contracts with customers for pilot training and equipment testing. The income is recognized at a point in time which is upon the completion of the services, which the Company has determined is the completion of a flight. There is no variable consideration for these ancillary services.
From time to time, the Company receives consideration in advance of the services being rendered; this is presented as deferred income on the consolidated balance sheets. The Company also extends credit for payments to be received for services provided; this is presented as receivables on the consolidated balance sheets.
The following table summarizes the deferred income activity for the year ended December 31, 2025 and December 31, 2024:
| Balance as of January 1, 2024 | $ | ||
| Recognition of income recorded as deferred income as of December 31, 2024 | ( |
) | |
| Deferral of income billed during the year | |||
| Balance as of December 31, 2024 | $ | ||
| Recognition of income recorded as deferred income as of December 31, 2025 | ( |
) | |
| Deferral of income billed during the year | |||
| Balance as of December 31, 2025 | $ |
q) Grant income
The Company receives certain cost reimbursements from an economic development corporation in Texas (Note 11). The income is recognized at a point in time when the Company completes its obligations for entitling to such reimbursements and included in grant income on the consolidated statements of operations.
Amounts received by the Company that the Company is not yet entitled to, and subject to refunds, are recognized as a payable, until the Company's completion of its obligations to earn the reimbursements.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
r) Advertising and Promotion Costs
Advertising and promotion costs are expensed as incurred. Advertising and promotion expense for the years ended December 31, 2025 and 2024, were $
s) Stock-Based Compensation
The Company applies the provisions of ASC 718, Compensation-Stock Compensation ("ASC 718"), which requires the measurement and recognition of compensation expense for all stock-based awards in the consolidated statements of operations. For stock options issued, the Company estimates each option's grant-date fair value using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates, and expected dividend yields of the Common Stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, generally the vesting term. Forfeitures are recorded as incurred instead of estimated at the time of grant and revised.
t) Research and Development
Research and development costs are expensed as incurred, in accordance with ASC 730, Research and Development. During the year ended December 31, 2025, all of these costs are with a single vendor who performed contracted research and testing and consumed materials in research and development activities. The Company may also incur personnel-related costs, including salaries, benefits, and stock-based compensation, where applicable. Nonrefundable advance payments for research and development activities are capitalized and expensed as the related services are performed. Research and development expense for the years ended December 31, 2025 and 2024, were $
u) Subsequent Events
The Company evaluated subsequent events through April 15, 2026, the date in which the consolidated financial statements were issued.
v) Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes: Improvements to Income Tax Disclosures." This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. The Company adopted ASU 2023-09 as of January 1, 2025, which had no material impact on the Company's consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures". The amendments in ASU No. 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to the financial statements for certain categories of expenses that are included on the face of the financial statements. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of this guidance on its disclosures.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements". The amendments in ASU No. 2025-11 are intended to improve the clarity and usability of interim reporting guidance by reorganizing Topic 270, clarifying when interim reporting requirements apply, and consolidating interim disclosure requirements that are currently dispersed throughout the Codification. The amendments are effective for fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its interim reporting processes and disclosures.
w) Segment Reporting
ASC Topic No. 280, Segment Reporting ("ASC 280"), establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. ASC 280 also establishes standards for related disclosures about products and services, geographic areas, and major customers.
Operating segments are defined as components of an entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and assess performance. The Company's CODM is the Chief Executive Officer.
The Company has determined that it has a single operating and reportable segment comprising all of the Company's operations, which is principally the operations of F-104 Fighter jets and development of infrastructure for orbital space launch. All of the Company's operations are attributable to the United States.
The CODM receives and reviews financial information at the consolidated entity level. The Company uses one measure of performance and does not segregate the Company's business for internal reporting. The key measure of segment profit and loss that the CODM uses to allocate resources and assess performance is the Company's net loss before taxes, as presented in the Company's consolidated statement of operations. Operating results and assets are reviewed by the CODM primarily for purposes of assessing financial needs of operations, making resource allocation decisions and for evaluating financial performance.
Segment assets are the same as consolidated total assets of $
The table below details the Company's revenues, significant expenses, and other segment items and reconciles those amounts to the Company's consolidated net loss before taxes as computed under U.S. GAAP in the Consolidated Statements of Operations:
| Year ended December 31, |
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| 2025 | 2024 | |||||
| Revenue | $ | $ | ||||
| Less: | ||||||
|
Consulting fees |
||||||
|
Professional fees |
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|
Business development |
||||||
|
Advertising and promotion |
||||||
|
Contract labor and fuel |
||||||
|
Research and development |
||||||
|
Management fees |
||||||
|
Interest expense |
||||||
|
Change in fair value of derivative liability |
||||||
|
Amortization of debt discount |
||||||
|
Other segment items* |
||||||
| Net loss before taxes | $ | ( |
) | $ | ( |
) |
(*) Other segment items consists of travel and entertainment, rent expense, office and administrative expenses, insurance, directors' fees, franchise tax, vehicle expenses, relocation costs, listing fees, repairs and maintenance, depreciation, bank charges, licenses, other income, grant income, interest income, write-off of other receivable, and exchange loss, none of which is individually significant.
4. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment consist of the following:
| December 31, 2025 |
December 31, 2024 |
|||||
| Vehicles | $ | $ | ||||
| Aircraft improvements | ||||||
| Engines | ||||||
| Display aircraft | ||||||
| Accumulated depreciation | ( |
) | ( |
) | ||
| Net book value | $ | $ |
The Company owns six F-104 aircrafts that were acquired through a common control transaction in 2022, which had zero carrying value at the time of acquisition from the transferring entity, and was carried at $
Depreciation expense for the years ended December 31, 2025 and 2024, was $
5. NOTE PAYABLE
On February 16, 2012, the Company secured a loan with Space Florida in the amount of $
On September 16, 2022, the Company and Space Florida amended the agreement to extend the maturity date to November 1, 2033 and to increase the interest rate to
5. NOTE PAYABLE (CONTINUED)
On November 1, 2024, the Company and Space Florida entered into an amendment to the loan to confirm that the rate of interest is
During the year ended December 31, 2025, the Company issued
6. CONVERTIBLE DEBENTURES
The convertible debentures bear interest at
During the year ended December 31, 2023, the Company closed the secured convertible debenture financing as follows:
- Tranche 1, on February 24, 2023 for gross proceeds of $
- Tranche 2, on July 14, 2023 for gross proceeds of $
- Tranche 3, on September 15, 2023 for gross proceeds of $
- Tranche 4, on December 28, 2023 for gross proceeds of $
The convertible debentures were determined to be hybrid financial instruments comprised of a debt host liability and an embedded derivative liability, as under the conversion feature the number of shares that will or may be issued to settle the notes may vary. Upon issuance, the fair value of the debt host liability was determined to be $
The fair value of the initial derivative and the transaction costs incurred were recorded as debt discount and are amortized over the life of the convertible notes using the effective interest method.
During the year ended December 31, 2024, the Company closed the secured convertible debenture financing as follows:
- Tranche 5, on May 14, 2024 and August 15, 2024 for gross proceeds of $
The convertible debentures were determined to be hybrid financial instruments comprised of a debt host liability and an embedded derivative liability, as under the conversion feature, the number of shares that will or may be issued to settle the debentures may vary. Upon issuance, the fair value of the debt host liability was determined to be $
6. CONVERTIBLE DEBENTURES (CONTINUED)
On December 19, 2024, holders of the convertible debentures approved an amendment to the debenture indenture, originally dated as of February 24, 2023, such that the maturity of the convertible
debentures was extended from February 24, 2025 to December 31, 2025, and the convertible debentures bear interest of
Debt discount amortization during the year ended December 31, 2025 and 2024 was $
On December 18, 2025, the debt was automatically converted into
A summary of convertible debt as of and for the year ended December 31, 2025, and December 31, 2024 is as follows:
| Tranche 1 | Tranche 2 | Tranche 3 | Tranche 4 | Tranche 5 | Total | |||||||||||||
| As of January 1, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||
| Issuances | ||||||||||||||||||
| Fair value of conversion feature | ( |
) | ( |
) | ||||||||||||||
| Transaction costs | ( |
) | ( |
) | ||||||||||||||
| Amortization of debt discount | ||||||||||||||||||
| Interest | ||||||||||||||||||
| As of December 31, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||
| Amortization of debt discount | ||||||||||||||||||
| Interest | ||||||||||||||||||
| Conversion | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||
| As of December 31, 2025 | $ | $ | $ | $ | $ | $ |
A roll-forward of the derivative liability, which is categorized at Level 3 on the fair value hierarchy, for the years ended December 31, 2025 and December 31, 2024 is as follows:
| Derivative liabilities | |||
| As of January 1, 2024 | $ | ||
| Fair value of embedded derivative liability recognized | |||
| Change in fair value | |||
| As of December 31, 2024 | $ | ||
| Change in fair value | |||
| Conversion | ( |
) | |
| As of December 31, 2025 | $ |
6. CONVERTIBLE DEBENTURES (CONTINUED)
The key inputs used in the Monte Carlo model for the embedded conversion feature at initial measurement were as follows:
| Tranche 1 | Tranche 2 | Tranche 3 | Tranche 4 | Tranche 5 | |||||||||||
| Risk-free interest rate | |||||||||||||||
| Expected term (years) | |||||||||||||||
| Expected volatility | |||||||||||||||
| Probability of an IPO | |||||||||||||||
| Stock price | $ | $ | $ | $ | $ |
The Company's use of a Monte Carlo simulation model required the use of the subjective assumptions:
- The stock price was determined from a 409A valuation which determined that the market approach using the last price raised was the appropriate basis for the fair value of the common stock;
- The volatility was derived from comparable public companies;
- For the early redemption option the Company estimated this at 0% for all valuation dates. The Company estimated this default at 0% for all valuation dates;
- The probability of a successful IPO occurring was based on management's best estimate; and
- The conversion price is not subject to reset provisions for subsequent financing events
The key inputs used in the Monte Carlo model for the embedded conversion feature at December 31, 2024 were as follows:
| Tranche 1 | Tranche 2 | Tranche 3 | Tranche 4 | Tranche 5 | |||||||||||
| Risk-free interest rate | |||||||||||||||
| Expected term (years) | |||||||||||||||
| Expected volatility | |||||||||||||||
| Probability of an IPO | |||||||||||||||
| Stock price | $ | $ | $ | $ | $ |
7. LEASES
On June 1, 2022, the Company entered into a one-year lease for hangar space. The lease agreement provided for four renewal terms of one year each. Management has determined that the renewals are likely to be utilized and the renewal terms are included in the calculation of the lease liability and right of use asset. In 2022, the Company recognized a right of use operating lease asset in the amount of $
On July 1, 2025, upon renewal of the hangar lease, the Company entered into an amendment to the lease agreement, providing for rental of additional hangar space for a proportionate increase of monthly rental costs. In 2025, the Company recognized the additional space as a separate right of use operating lease asset, in the amount of $
On October 1, 2025, the Company entered into an amendment of the lease for hangar space, which reduced hangar space under lease for a proportionate decrease in monthly rental costs, as well as extending the lease until May 2031. The rental cost will increase by
7. LEASES (CONTINUED)
Lease liabilities are measured at the commencement date based on the present value of future lease payments. As the Company's lease did not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a discount rate of
The discount rate is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of comparable value to the right-of-use asset in a similar economic environment. The discount rate therefore reflects what the Company "would have to pay", which requires estimation when no observable rates are available or where the applicable rates need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the discount using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates. The Company determined its discount rate based on the rate used by comparable public companies.
The following table presents net lease cost and other supplemental lease information:
| December 31, 2025 | December 31, 2024 | |||||
| Lease cost: | ||||||
| Operating lease cost | $ | $ | ||||
| Variable lease cost | ||||||
| Short term lease cost | ||||||
| Net lease cost | ||||||
| Cash paid for operating lease liabilities | $ | ( |
) | $ | ( |
) |
As of December 31, 2025 and December 31, 2024, the Company's lease liability is as follows:
| Lease liability | December 31, 2025 | December 31, 2024 | ||||
| Current portion of operating lease liability | $ | $ | ||||
| Long-term portion of operating lease liability | ||||||
| $ | $ |
Future minimum lease payments to be paid by the Company as a lessee as of December 31, 2025 are as follows:
| Operating lease commitments and lease liability | |||
| 2026 | $ | ||
| 2027 | |||
| 2028 | |||
| 2029 | |||
| 2030 | |||
| 2031 | |||
| Total future minimum lease payments | |||
| Discount | ( |
) | |
| Total | $ | ||
The lease has a remaining term of
8. STOCKHOLDERS' EQUITY (DEFICIT)
a) Common stock
On January 6, 2025, the Company closed a round of its Reg A Offering in relation to funds already received as of December 31, 2024 and issued
On February 27, 2025 and March 13, 2025, the Company closed two rounds of its Reg A Offering for gross proceeds of $
On April 11, 2025, the Company closed a round of its Reg A Offering and issued
On May 14, 2025, the Company closed a round of its Reg A Offering for gross proceeds of $
On July 23, 2025, the Company closed a round of its Reg A Offering and issued
On December 17, 2025, the Company closed the final round of its Reg A Offering as its initial public offering and issued
On December 18, 2025, the Company issued
On December 18, 2025, the Company also issued
8. STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
On December 26, 2025, the Company issued
On December 31, 2025, the Company issued
Common stock activity during the year ended December 31, 2024
On October 23, 2024, November 11, 2024 and November 29, 2024, the Company conducted closings of its offering under Regulation A of Section 3(b) of the Securities Act of 1933, as amended, for Tier 2 offerings ("Reg A Offering"), pursuant to which an aggregate of
On December 23, 2024, the Company closed another round of its Reg A Offering and was to issue
b) Warrants
A summary of Common Stock warrant activity during the year ended December 31, 2025 is as follows:
| Number of warrants |
Weighted average exercise price |
Weighted average remaining life in years |
Aggregate intrinsic value |
|||||||||
| Outstanding, December 31, 2024 | $ | $ | ||||||||||
| Issued | ||||||||||||
| Exercised | ( |
) | ||||||||||
| Outstanding, December 31, 2025 | $ | $ | ||||||||||
| Vested, December 31, 2025 | $ | $ |
As previously noted, in connection with the 2025 Offerings and 2024 Offerings, the Company was required to issue
| December 31, 2025 | December 31, 2024 | |||||
| Expected volatility | ||||||
| Expected term (years) | ||||||
| Risk-free interest rate | ||||||
| Dividend yield |
8. STOCKHOLDERS' DEFICIT (CONTINUED)
The stock price in the model was based on a 409A valuation which determined that the market approach using the last price raised was the appropriate basis for the fair value of the common stock, the volatility was based on the historical volatility of comparable public companies, and the expected term is the life of the warrant.
c) Options
A summary of Common Stock option activity during the year ended December 31, 2025 is as follows:
| Number of options |
Weighted average exercise price |
Weighted average remaining life in years |
Aggregate intrinsic value |
|||||||||
| Outstanding, December 31, 2024 | $ | - | $ | |||||||||
| Issued | ||||||||||||
| Outstanding, December 31, 2025 | $ | $ | ||||||||||
| Vested, December 31, 2025 | $ | - | $ |
On August 12, 2025, the Company granted
On September 29, 2025, the Company granted
No options were granted during the year ended December 31, 2024.
The Company recognized $
The Company valued the stock options using the Black-Scholes model. Based on the below inputs, the Company determined that the options had a fair value of $
| Expected volatility | |
| Expected term (years) | |
| Risk-free interest rate | |
| Dividend yield |
The stock price in the model was based on a 409A valuation which determined that the market approach using the last price raised was the appropriate basis for the fair value of the common stock, the volatility was based on the historical volatility of comparable public companies, and the expected term applied the simplified method under ASC 718, and is the midpoint between vesting date and expiration date of the options.
8. STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
d. Restricted share units ("RSUs")
A summary of RSU activity during the year ended December 31, 2025 is as follows:
| Number of RSUs |
|||
| Outstanding, December 31, 2024 | |||
| Issued | |||
| Vested | ( |
) | |
| Outstanding, December 31, 2025 |
On August 12, 2025, the Company granted
Among the RSUs granted to each recipient,
During the year ended December 31, 2025,
No RSUs were granted during the year ended December 31, 2024.
The Company recognized $
9. RELATED PARTY TRANSACTIONS
Due From Related Party
As of December 31, 2025 and 2024, $
As of December 31, 2025, $
Management Fees
During the years ended December 31, 2025 and 2024, management fees of $
Consulting Fees
During the years ended December 31, 2025 and 2024, the Company incurred an expense of $
During the years ended December 31, 2025 and 2024, the Company incurred an expense of $
During the years ended December 31, 2025 and 2024, the Company incurred an expense of $
During the years ended December 31, 2025 and 2024, the Company incurred an expense of $
Contract Labor
During the years ended December 31, 2025 and 2024, the Company incurred expenses of $
Director Fees
During the years ended December 31, 2025 and 2024, directors fees of $
9. RELATED PARTY TRANSACTIONS (CONTINUED)
Professional Fees
During the years ended December 31, 2025 and 2024, the Company incurred professional fee expenses of $
During the years ended December 31, 2025 and 2024, the Company incurred professional fee expenses of $
Stock-based Compensation
During the year ended December 31, 2024, the Company recognized no stock-based compensation, as there were no Options nor RSUs issued.
During the year ended December 31, 2025, the Company granted the following Options and RSUs to related parties:
During the years ended December 31, 2025, the Company incurred stock-based compensation arising from RSUs amounting to $
During the years ended December 31, 2025 the Company incurred stock-based compensation arising from options amounting to $
Commitments and Contingencies
The Company entered into an agreement with a company owned 50% by the former CEO, who is also a significant shareholder. The agreement is to buy jet engines. The purchase price of the jet engines is $
9. RELATED PARTY TRANSACTIONS (CONTINUED)
Notes Payable
On August 14, 2010, Company entered into a loan agreement with the former CEO, who is also a significant shareholder, in the amount of $
On August 14, 2010, the Company entered into a loan agreement with an entity owned by the spouse of the former CEO, who is also a significant shareholder, in the amount of $
On April 10, 2016, the Company entered into a loan agreement with a company owned 50% by the former CEO, who is also a significant shareholder in the amount of $
On August 1, 2022, the Company entered into a loan agreement with the CEO, who is also a significant shareholder, in the amount of $
10. INCOME TAXES
The Company files a consolidated tax return including Starfighters Space, Inc, Starfighters International, Inc, and Starfighters, Inc. The components of the Company's provision for income taxes for the years ended December 31, 2025 and 2024 are as follows:
| December 31, 2025 | December 31, 2024 | |||||
| Current: | ||||||
| Federal | $ | $ | ||||
| State | ||||||
| Total current | ||||||
| Deferred: | ||||||
| Federal | ( |
) | ( |
) | ||
| State | ( |
) | ( |
) | ||
| Total deferred | ( |
) | ( |
) | ||
| Permanent book/tax differences | ||||||
| Change in valuation allowance | ||||||
| Total tax benefit | $ | $ |
A reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows:
| December 31, 2025 | December 31, 2024 | |||||
| Loss before income taxes | $ | ( |
) | $ | ( |
) |
| Expected recovery at federal rate of 21% | ( |
) | ( |
) | ||
| Expected recovery at state rate of 5.5% | ( |
) | ( |
) | ||
| Permanent book/tax differences | ||||||
| Change in valuation allowance | ||||||
| Total tax benefit | $ | $ |
10. INCOME TAXES (CONTINUED)
| December 31, 2025 | December 31, 2024 | |||||
| US federal statutory rate | ||||||
| State rate* | ||||||
| Effects of: | ||||||
| Amortization of debt discount | ( |
|||||
| Permanent book/tax differences | ( |
|||||
| Valuation allowance | ( |
( |
||||
* State taxes in Florida made up the majority (greater than 50%) of the tax effect in this category.
The effective tax rate for 2025 is materially consistent with the prior year comparable period due to the continued full valuation allowance recorded against net deferred tax assets:
Deferred Income Tax
The significant components of the deferred tax assets and liabilities consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||
| Deferred tax assets | ||||||
|
Net operating loss carryforwards |
$ | $ | ||||
|
Property, plant and equipment |
||||||
|
Convertible debt |
||||||
|
Research and experimental expenditures |
||||||
|
Stock-based compensation |
||||||
| Total deferred tax assets | ||||||
| Deferred tax liabilities | ||||||
|
Derivative liabilities |
( |
) | ||||
|
Property, plant and equipment |
( |
) | ||||
|
Short-term investments |
( |
) | ||||
| Total deferred tax liabilities | ( |
) | ( |
) | ||
| Valuation allowance | ( |
) | ( |
) | ||
| Net deferred tax asset | $ | $ |
As of December 31, 2025, the Company had approximately $
In assessing the realizability of deferred tax assets, management considers all positive and negative evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the Company's ability to realize the benefit of the deferred tax assets, primarily related to the history of cumulative operating losses, the net deferred tax assets are fully offset by a valuation allowance at December 31, 2025 and 2024.
10. INCOME TAXES (CONTINUED)
The Company and its subsidiaries file a consolidated U.S. federal income tax return and a consolidated Florida corporate income tax return. The consolidated U.S. federal and Florida income tax returns for tax years 2022 through 2024 remain subject to examination by the applicable taxing authorities. In addition, tax years since inception remain subject to examination to the extent of unutilized net operating loss carryforwards or other tax attributes generated in those years.
The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense.
11. COMMITMENTS AND CONTINGENCIES
Issuance of option to consultant and officer
On September 1, 2023, the Company entered into an agreement with a consultant. Under the agreement, the Company was obligated to issue
The agreement also calls for
On August 12, 2025, the Company granted
On January 1, 2024, the Company entered into an agreement with the Chief Financial Officer (the "CFO"). Under the agreement, the Company was obligated to issue
The agreement also calls for
On August 12, 2025, the Company granted
Midland Economic Development Agreement
On October 7, 2024, the Company entered into an economic development agreement (the "Economic Development Agreement") with Midland Development Corporation ("MDC"), whereby MDC has agreed to provide certain incentives to the Company for (i) expansion of its business operations to the Midland International Air & Space Port ("KMAF"), (ii) creation and retention of primary jobs within the corporate limits of the City of Midland, and (iii) relocation of certain capital assets and equipment at the Midland International Air & Space Port. In connection with the Economic Development Agreement, the Company has a commitment to enter into certain temporary, short-term, and long-term hangar leases at KMAF, and the MDC would provide reimbursements of lease payments until a long-term hangar lease is being entered into. For the year ended December 31, 2025, the Company incurred short-term rent expenses of $
For the year ended December 31, 2025, the Company is entitled to grant income related to reimbursement of these costs of $
11. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Aerovision Aircraft Acquisition Agreement
On October 31, 2024, the Company entered into an aircraft acquisition agreement ("Aircraft Agreement") with Aerovision LLC ("Aerovision"), pursuant to which the Company agreed to purchase from Aerovision various used aircrafts and associated spare equipment (the "Aircraft Transactions") in phases. The subject aircraft for acquisition pursuant to the Aircraft Agreement are: (i) twelve F-4 Phantom II aircraft, (ii) one MD-83 with U.S. Federal Aviation Administration ("FAA") Registration N572AA, and (iii) one DC-9 with FAA Registration N932NA. The twelve F-4 Phantom II aircraft have recently been decommissioned by the Republic of Korea Air Force, and will have to be registered with the FAA after they are imported into the United States from South Korea.
The Aircraft Agreement requires an initial deposit advance in the amount of $
On January 28, 2025, the Company and Aerovision verbally agreed to amend the Aircraft Agreement regarding the Aircraft Transactions, pursuant to which: (i) the Company may elect not to proceed with Phase 3 and/or Phase 4; (ii) the initial deposit advance of $
If all four phases of the Aircraft Agreement are completed, the total cost of the agreement will be $
12. CORRECTION OF IMMATERIAL ERRORS
During the preparation of the Company's consolidated financial statements for the year ended December 31, 2025, the Company identified certain immaterial errors in the previously issued unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025; and for the three and nine months ended September 30, 2025.
The Company identified three errors affecting the previously issued unaudited condensed consolidated interim financial statements:
(i) an under-accrual of business development expenses, related to hourly billings for services between May and September 2025, where insufficient accruals for those services were provided based on information available at the time of reporting for those periods;
(ii) an over-recognition of consulting fees of $
(iii) an under-recognition of research and development expenses of $255,479 during the three months ended March 31, 2025, that was instead recorded in the three and six months ended June 30, 2026.
The Company determined business development expenses of $
12. CORRECTION OF IMMATERIAL ERRORS (CONTINUED)
A corresponding accounts payable and accrued liabilities of $
As of the three and six months ended June 30, 2025, and three and nine months ended September 30, 2025, the Company received services from a consultant for business development services, however provided insufficient accruals for those services based on information available at the time of reporting for those periods.
The Company also determined consulting fees of $
A corresponding prepaid expenses of $
The Company also determined research and development expenses of $
A tabular presentation of each affected prior interim period, for each line item impacted, showing the amount as previously reported, the amount of correction, and the amount as corrected, is as follows:
Unaudited condensed consolidated interim statement of operations for the three months ended March 31, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Research and development expenses | |||||||||
| Total operating expenses | |||||||||
| Net loss | |||||||||
| Loss per share |
Unaudited condensed consolidated balance sheet as of March 31, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Accounts payable and accrued liabilities | |||||||||
| Total current liabilities | |||||||||
| Total liabilities | |||||||||
| Accumulated deficit | ( |
) | ( |
) | ( |
) | |||
| Total stockholders' equity (deficit) | ( |
) | ( |
) | ( |
) |
Unaudited condensed consolidated statement of cash flows as of March 31, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Net loss for the year | ( |
) | ( |
) | ( |
) | |||
| Changes in non-cash working capital: Accounts payable and accrued liabilities | ( |
) | ( |
) | |||||
| Net cash used in operating activities | ( |
) | ( |
) |
Unaudited condensed consolidated interim statements of changes in stockholders' equity (deficit) as of March 31, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Accumulated deficit | ( |
) | ( |
) | ( |
) | |||
| Total stockholders' equity (deficit) | ( |
) | ( |
) | ( |
) |
Unaudited condensed consolidated interim statement of operations for the three months ended June 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Business development expenses | |||||||||
| Research and development expenses | ( |
) | |||||||
| Total operating expenses | |||||||||
| Net loss | |||||||||
| Loss per share |
Unaudited condensed consolidated interim statement of operations for the six months ended June 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Business development expenses | |||||||||
| Total operating expenses | |||||||||
| Net loss | |||||||||
| Loss per share |
Unaudited condensed consolidated balance sheet as of June 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Accounts payable and accrued liabilities | |||||||||
| Total current liabilities | |||||||||
| Total liabilities | |||||||||
| Accumulated deficit | ( |
) | ( |
) | ( |
) | |||
| Total stockholders' equity (deficit) | ( |
) | ( |
) | ( |
) |
Unaudited condensed consolidated statement of cash flows as of June 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Net loss for the year | ( |
) | ( |
) | ( |
) | |||
| Changes in non-cash working capital: Accounts payable and accrued liabilities | ( |
) | |||||||
| Net cash used in operating activities | ( |
) | ( |
) |
Unaudited condensed consolidated interim statements of changes in stockholders' equity (deficit) as of June 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Accumulated deficit | ( |
) | ( |
) | ( |
) | |||
| Total stockholders' equity (deficit) | ( |
) | ( |
) | ( |
) |
Unaudited condensed consolidated interim statement of operations for the three months ended September 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Business development expenses | |||||||||
| Consulting fees | ( |
) | |||||||
| Total operating expenses | |||||||||
| Net loss | |||||||||
| Loss per share |
Unaudited condensed consolidated interim statement of operations for the nine months ended September 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Business development expenses | |||||||||
| Consulting fees | ( |
) | |||||||
| Total operating expenses | |||||||||
| Net loss | |||||||||
| Loss per share |
Unaudited condensed consolidated balance sheet as of September 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Prepaid expenses | |||||||||
| Total current assets | |||||||||
| Total assets | |||||||||
| Accounts payable and accrued liabilities | |||||||||
| Total current liabilities | |||||||||
| Total liabilities | |||||||||
| Accumulated deficit | ( |
) | ( |
) | ( |
) | |||
| Total stockholders' equity (deficit) | ( |
) | ( |
) | ( |
) |
Unaudited condensed consolidated statement of cash flows as of September 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Net loss for the year | ( |
) | ( |
) | ( |
) | |||
| Changes in non-cash working capital: Prepaid expenses | ( |
) | ( |
) | ( |
) | |||
| Accounts payable and accrued liabilities | |||||||||
| Net cash used in operating activities | ( |
) | ( |
) |
Unaudited condensed consolidated interim statements of changes in stockholders' equity (deficit) as of September 30, 2025
| Line item | As previously reported | Adjustment | As corrected | ||||||
| Accumulated deficit | ( |
) | ( |
) | ( |
) | |||
| Total stockholders' equity (deficit) | ( |
) | ( |
) | ( |
) |
For the three months ended March 31, 2025, the corrected net loss is $
For the three and six months ended June 30, 2025, the corrected net loss is $
For the three and nine months ended September 30, 2025, the corrected net loss is $
The Company evaluated the corrections and has determined their impacts were immaterial, individually and in aggregate, to the previously issued unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025; and the previously issued unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2025.
13. SUBSEQUENT EVENTS
On January 5, 2026, the Company issued an aggregate of
On January 8, 2026, the Company issued
On February 3, 2026, Rick Svetkoff withdrew and transferred $
On February 17, 2026, Rick Svetkoff withdrew $
On February 19, 2026, Rick Svetkoff, the former CEO, and Brenda Svetkoff, the former Secretary and spouse of the former CEO, resigned from the Company.
On February 19, 2026, the Options granted to Rick Svetkoff, the former CEO, and Brenda Svetkoff, the former Secretary and spouse of the former CEO, amounting to
On February 22, 2026, Tim Franta was appointed as CEO of the Company.
On March 12, 2026, the Company issued
On April 2, 2026, the Company issued
On April 9, 2026, former CEO and Director, Rick Svetkoff filed a complaint against the Company, and its board members in the 18th Judicial Circuit in Brevard County, Florida. The complaint alleges that the defendants breached fiduciary duty, deceptive business practices, and improper control and alteration of corporate records and is seeking $
14. AMENDMENTS TO PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The Company has amended the previously issued consolidated financial statements for the year ended December 31, 2025 to expand disclosures in response to comments provided to the Company by Staff at the Corporation Finance Division of the SEC.
Amendments include:
- Note 3 - Summary of Significant Accounting Policies, addition to paragraph (w) for disclosures regarding segment reporting;
- Note 4 - Property, Plant, and Equipment, addition of disclosure regarding the ownership and accounting recognition of the Company's F-104 aircrafts acquired in 2022; and,
- Note 12 - Correction of Immaterial Errors, addition of tabular presentation to disclose effect of correction on each financial statement line item for prior interim period presented, showing the amounts as previously reported, the amount of correction, and the amount as corrected.
F-34
PART IV
ITEM 15 - EXHIBITS
The following exhibits are filed as part of this Annual Report.
- 2 -
- 3 -
Notes:
| (*) | Filed herewith |
| (**) | Furnished herewith |
| (‡) | Portions of this exhibit have been omitted |
- 4 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STARFIGHTERS SPACE, INC. | ||
| Dated: July 21, 2026 | By: | /s/ Tim Franta |
| Tim Franta, Chief Executive Officer | ||
| (Principal Executive Officer) and Director | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Dated: July 21, 2026 | By: | /s/ Tim Franta |
| Tim Franta, Chief Executive Officer (Principal Executive Officer) and Director | ||
| Dated: July 21, 2026 | By: | /s/ David Whitney |
| David Whitney, Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
| Dated: July 21, 2026 | By: | /s/ Sean Bromley |
| Sean Bromley, Director | ||
| Dated: July 21, 2026 | By: | /s/ Brian Goldmeier |
| Brian Goldmeier, Director | ||
| Dated: July 21, 2026 | By: | /s/ Geoffrey Hickman |
| Geoffrey P. Hickman, Director | ||
- 5 -