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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2023

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from ________ to _________

 Commission
file number 001-41154

 SIDUS

 (Exact
name of registrant as specified in charter)

 Delaware

 46-0628183

 (State
 or jurisdiction

 of
 Incorporation or organization)

 I.R.S.
 Employer

 Identification
 No.

 N. Sykes Creek Parkway, Suite 200

 Merritt
 Island, FL

 32953

 (Address
 of principal executive offices)

 (Zip
 code)

 (321) 450-5633

 (Registrant's
telephone number, including area code)

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Class
 A Common stock, $0.0001 par value

 SIDU

 The
 Nasdaq Stock Market LLC

 Securities
registered pursuant to Section 12(g) of the Act: None.

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No

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 definition 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

 Non-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.

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 of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery 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).

by check mark whether the registrant is a shell company (as defined by 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 based on a closing sale price of $18.10 per
share, which was the last sale price of the Class A common stock as of June 30, 2023, the last business day of the registrant's
most recently completed second fiscal quarter, was $ 10,732,413.

 Number
of Class A common shares and Class B common shares outstanding as of March 27, 2024 was 4,081,344 and 100,000, respectively.

 Documents
Incorporated by Reference: None.

 Table
of Contents

 Page

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 [Reserved]

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures about Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accountant Fees and Services

 Item
 15.

 Exhibits and Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 Signatures

 CAUTIONARY
NOTE ON FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These statements may be identified by such forward-looking terminology as "may,"
"should," "expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "continue" or the negative of these terms or other
comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections
about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually
achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially
from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements
involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:

 our
 projected financial position and estimated cash burn rate;

 our
estimates regarding expenses, future revenues and capital requirements;

 our
ability to continue as a going concern;

 our
 need to raise substantial additional capital to fund our operations;

 our
 ability to compete in the global space industry;

 our
 ability to obtain and maintain intellectual property protection for our current products and services;

 our
 ability to protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce
 or protect our intellectual property rights;

 the
 possibility that a third party may claim we have infringed, misappropriated or otherwise violated their intellectual property rights
 and that we may incur substantial costs and be required to devote substantial time defending against these claims;

 our
 reliance on third-party suppliers and manufacturers;

 the
 success of competing products or services that are or become available;

 our
 ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel;

 the
 potential for us to incur substantial costs resulting from lawsuits against us and the potential for these lawsuits to cause us to
 limit our commercialization of our products and services;

 All
of our forward-looking statements are as of the date of this Annual Report on Form 10-K only. In each case, actual results may differ
materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will
prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties
referred to in this Annual Report on Form 10-K or included in our other public disclosures or our other periodic reports or other documents
or filings filed with or furnished to the U.S. Securities and Exchange Commission (the "SEC") could materially and adversely
affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan
to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections
or other circumstances affecting such forward-looking statements occurring after the date of this Annual Report on Form 10-K, even if
such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements
or disclosures by us following this Annual Report on Form 10-K that modify or impact any of the forward-looking statements contained
in this Annual Report on Form 10-K will be deemed to modify or supersede such statements in this Annual Report on Form 10-K.

 This
Annual Report on Form 10-K may contain estimates and other statistical data made by independent parties and by us relating to market
size and growth and other data about our industry. We obtained the industry and market data in this annual report on Form 10-K from our
own research as well as from industry and general publications, surveys and studies conducted by third parties. This data involves a
number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we
operate that are subject to a high degree of uncertainty, including those discussed in "Risk Factors." We caution you not
to give undue weight to such projections, assumptions, and estimates. Further, industry and general publications, studies and surveys
generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness
of such information. While we believe that these publications, studies, and surveys are reliable, we have not independently verified
the data contained in them. In addition, while we believe that the results and estimates from our internal research are reliable, such
results and estimates have not been verified by any independent source.

 RISK
FACTOR SUMMARY

 Our
business is subject to significant risks and uncertainties that make an investment in us speculative and risky. Below we summarize what
we believe are the principal risk factors but these risks are not the only ones we face, and you should carefully review and consider
the full discussion of our risk factors in the section titled "Risk Factors," together with the other information in this
Annual Report on Form 10-K. If any of the following risks actually occurs (or if any of those listed elsewhere in this Annual Report
on Form 10-K occur), our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously
harmed. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important
factors that adversely affect our business.

 Our
 limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.

 We
 have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to achieve or maintain
 profitability.

 The
 success of our business will be highly dependent on our ability to effectively market and sell our commercial satellite manufacturing,
 launch, and data services for small LEO satellites

 Any
 setbacks we may experience during commercial satellite launches and other demonstration and commercial missions could have a material
 adverse effect on our business, financial condition and results of operation, and could harm our reputation.

 The
 market for commercial satellite manufacturing, launch and data services for small LEO satellites is not well established, is still
 emerging and may not achieve the growth potential we expect or may grow more slowly than expected.

 Our
 ability to grow our business depends on the successful development of our satellites and related technology, which is subject to
 many uncertainties, some of which are beyond our control.

 We
 routinely conduct hazardous operations in testing of our satellite subsystems, which could result in damage to property or persons.
 Unsatisfactory performance or failure of our satellites and related technology at launch or during operation could have a material
 adverse effect on our business, financial condition and results of operation.

 We
 may experience a total loss of our technology and products and our customers' payloads if there is an accident on launch or
 during the journey into space, and any insurance we have may not be adequate to cover our loss.

 Any
 delays in the development and manufacture of satellites and related technology may adversely impact our business, financial condition
 and results of operations.

 Our
 customized hardware and software may be difficult and expensive to service, upgrade or replace.

 Our
 satellites may collide with space debris or another spacecraft, which could adversely affect our operations.

 If
 we are unable to adapt to and satisfy customer demands in a timely and cost-effective manner, or if we are unable to manufacture
 our products at a quantity and quality that our customers demand, our ability to grow our business may suffer.

 If
 we are unable to maintain relationships with our existing launch partners or enter into relationships with new launch partners, we
 may be unable to reach our targeted annual launch rate, which could have an adverse effect on our ability to grow our business.

 Our
 business is subject to a wide variety of extensive and evolving government laws and regulations. Failure to comply with such laws
 and regulations could have a material adverse effect on our business.

 As
 of March 27, 2024, Craig Technical Consulting, Inc., or CTC, owns approximately 20% of the economic interest and voting power of
 our outstanding common stock. Although CTC controls less than a majority of the voting power of our Class B common stock, it may
 influence the outcome of such corporate actions requiring stockholder approval.

 PART
I

 Throughout
this Annual Report on Form 10-K, references to "we," "our," "us," the "Company," "Sidus,"
or "Sidus Space" refer to Sidus Space, Inc., individually, or as the context requires, collectively with its subsidiary.

 ITEM
1. BUSINESS

 Company
Overview

 Founded
in 2012, we are a growing U.S. commercial space company with an established manufacturing business who has been trusted to provide mission-critical
space hardware to many of the top aerospace businesses for over a decade. We plan to offer on-orbit services as the space economy expands;
said services are either in a developmental phase or soon to achieve flight heritage. We have strategically decided to expand our business
by moving up the satellite value chain by becoming a provider of responsive and scalable on-orbit infrastructure as well as collecting
Space and Earth observational data to capture larger market needs.

 To
address commercial and government customer needs and mission sets, we plan to organize into three core business lines: manufacturing
services; space-infrastructure-as-a-service; and space-based data and insights. Our vertically integrated model is complementary across
each line of business aiming to expand existing and unlock new potential revenue generating opportunities. Additionally, we look to further
transition into a subscription-based model upon the digitization of our manufacturing process as we expand alongside our space-based
focus.

 Products
and Services

 Manufacturing Services: Our manufacturing business is well-established, trusted by industry leaders and growing. Founded in 2012,
we have been manufacturing mission-critical and satellite hardware for over a decade for our principal customers and have supported major
government and commercial space programs like NASA's Artemis / Lunar Gateway missions, xEVAS, Boeing's Starliner, Sierra's
Dream Chaser, Airbus' OneWeb Satellites and the International Space Station.

 Our
manufacturing business operates within a 35,000 square foot facility and is adjacent to our clean-room facility. We hold an AS9100 Aerospace
certification, and we are International Traffic In Arms Regulations (ITAR) compliant thereby positioning us, in combination with our
existing tooling and capability, to address unique high-precision manufacturing requirements.

 Space-Infrastructure-as-a-Service: We are in the process of developing and launching space-based infrastructure and establishing
related ground-infrastructure support elements. Technology providers, constellation service providers and space-based data consumers
are expected to be our principal customers. Collectively, the end-to-end infrastructure that results is offered as "Space-as-a-Service"
to commercial customers and "Defense-as-a-Service" to certain government customers.

 Leveraging
our industry experience and flight heritage, we are producing our own line of hybrid additively manufactured (3D printed) satellites
in-house (LizzieSats) that are engineered to have the capacity and adaptability to simultaneously host payloads for Sidus driven purposes
(see Space-Data-as-a-Service below) and/or offer 'ride-share' opportunities for technology customers to deliver data to their
end users. We anticipate "bookings" on our infrastructure in our planned 'rideshare program' as a key performance
metric.

 Our
Space-Infrastructure-as-a-Service offering plans to provide: satellite design, satellite manufacture, constellation operations, and payload
hosting.

 As
of December 2023, we have:

 signed
 a multi-year and multi-launch agreement with Space-X thereby offering customers by extension a reliable, cost-effective launch service;

 successfully
 completed environmental testing of LizzieSat satellite as required by launch provider, SpaceX for expected 2024 launch;

 integrated
 Edge Artificial Intelligence (AI) software into LizzieSat satellite providing the company the ability to offer on-orbit tailored
 solutions to customers enabling geospatial data to be processed more effectively;

 obtained
 approval for a 100+ satellite constellation by the International Telecommunication Union (ITU);

 established
 partnerships with a globally diverse network of 20+ ground stations to provide our users with near continuous high-rate, "on-orbit
 to cloud", communications network;

 secured
 a mission operations center located on the Florida Space Coast, in Merritt Island, FL capable to manage satellite operations, orchestrate
 collection management tasks and satisfy data distribution requests with intentions to automate many elements of this process.

 Over
time, we plan to begin introducing additional services beyond on-orbit infrastructure services which may include lunar mapping missions,
in support of government requirements for on-orbit maneuverability. Each business opportunity is evaluated on an individual business
case basis and safeguarded against risk to our core business.

Space Data-as-a-Service and Insights: We plan to be a global provider of space-based data and insights by exclusively collecting data
that only can be captured from space with no terrestrial alternatives. We plan to initially focus on creating offerings in Earth-based
observations and Space situational awareness. These decisions are reinforced by the growing and large addressable markets they represent.

 To
date, the space-based data industry has largely launched one-satellite, one-payload, one-mission constellations to deliver one general
data type. Subsequently, downstream processing and associated analytics, at times, have experienced false-positives and ambiguous data
sets diminishing the value and utility of space-based data.

 Our
LizzieSat satellite platform addresses this shortcoming by allowing for differentiated data collection when compared to industry alternatives.
We plan to lead the next generation of Earth and Space data collection by:

Collecting on-orbit coincident data: LizzieSat is capable of hosting multiple-sensors on the same satellite to collect varying data types
at the same time and with the same collection geometry. On-orbit coincident collection benefits users by decreasing false positives with
complementary datasets that reinforce one another.

Analyzing data on the satellite on-orbit at "the edge": To maximize value and speed in data processing, in August 2023, we
acquired substantially all of the assets of Exo-Space, a cutting-edge Artificial Intelligence (AI) company to better facilitate (AI)
and Machine Learning (ML) on-board the satellite through hardware and software development. Our plans include integrating radiation hardened
AI/ML capabilities alongside our on-orbit coincident data collection.

Reducing data size: By processing data at the edge on-board LizzieSat, we expect to first reduce the file size by transmitting only the
processed solution, not the entire raw dataset. This enables us to move data from low-Earth orbit to higher orbit data relay services
(like Iridium) for a lower-cost and more continual data transmission option to our customers.

 The
net value of data collected from our planned LizzieSat constellation allows organizations to make better decisions with higher confidence,
increased accuracy and speed. The Company enriches this processed data with customizable analytics users control for their own-use case,
and in turn provides data as a subscription across industries to organizations so they are able to improve decision-making and mitigate
risk.

 We
support a broad range of international and domestic governments and commercial companies with hardware manufacturing including the Netherlands
Organization, U.S. Department of State, the U.S. Department of Defense, NASA, Collins Aerospace, Lockheed Martin, Teledyne Marine, Bechtel,
OneWeb Satellites, Parsons Corporation and L3Harris in areas that include launch vehicles, satellite hardware, and autonomous underwater
vehicles. Planned services that benefit current and future customers include delivering space-based data that can provide critical insight
for agriculture, commodities tracking, disaster assessment, illegal trafficking monitoring, energy, mining, oil and gas, fire monitoring,
classification of vegetation, soil moisture, carbon mass, Maritime AIS, Aviation ADS, and weather monitoring; providing the ability for
customers to demonstrate that a technology (hardware or software) performs successfully in the harsh environment of space and delivering
space services. We plan to own and operate one of the industry's leading U.S. based low earth orbit ("LEO") small satellite
("smallsat" or "smallsats") constellations focused on earth observation and remote sensing. Our operating strategy
is to continue to enhance the capabilities of our satellite constellation, to increase our international and domestic partnerships and
to expand our co-incident data analytics offerings in order to increase the value we deliver to our customers. Our two operating assets—our
satellite constellation and hardware manufacturing capability—are mutually reinforcing and are a result of years of heritage and
innovation.

 Key
Factors Affecting Our Results and Prospects

 We
believe that our performance and future success depend on several factors that present significant opportunities but also pose risks
and challenges, including competition from better known and well-capitalized companies, the risk of actual or perceived safety issues
and their consequences for our reputation and the other factors discussed under "Risk Factors." We believe the factors discussed
below are key to our success.

 Growing
our experienced space hardware operations

 We
are on track to grow our space and defense hardware operations, with a goal of expanding to two and a half shifts with an increased customer
base in the future. With current customers in space, marine, and defense industries, our contract revenue is growing, and we are in active
discussions with numerous potential customers, including government agencies, large defense contractors and private companies, to add
to our contracted revenue. In the past decade, we have fabricated Ground and Flight products for the NASA SLS Rocket and Mobile Launcher
as well as other Commercial Space and Satellite companies. Customers supported include Boeing, Lockheed Martin, Northrop Grumman, Dynetics/Leidos,
Blue Origin, United Launch Alliance, Collins Aerospace, L3Harris, OneWeb and Space Systems Loral/Maxar. Various products have been manufactured
including fluid, hydraulic and pneumatic systems, electrical control systems, cable harnesses, hardware lifting frames, umbilical plates,
purge and hazardous gas disconnects, frangible bolts, reef cutters, wave guides, customized platforms, and other precision machined and
electrical component parts for all types of Rockets, Ground, Flight and Satellite systems.

 Commencing
and Expanding Commercial Satellite Operations

 Our
goal is to help customers understand how space-based data can be impactful to day-to-day business. Our strategy includes increasing the
demand downstream by starting out as end user focused. While others are focused on data verticalization strategy specializing on a key
sectors or problem set, we believe that flexibility in production, low-cost bespoke design and 'Bringing Space Down to Earth'
for consumers will provide a scalable model for growth. With LizzieSat design reviews (PDR and CDR) successfully completed in 2022, we
began LizzieSat integration and testing in Q1 2023. We completed critical command and data system testing which validated the proper
functioning of the communications and data transfer paths between a LizzieSat satellite in space and the KSAT, Atlas Space Operations
and Leaf Space ground stations, a requirement for mission success of the LizzieSat constellation. In Q4 2023, we completed the
required environmental testing for launch on the SpaceX Falcon 9 and successfully launched and deployed our first satellite in March
2024.

 In
Q1 2023 we signed an agreement with SkyWatch for use of its TerraStream data-management platform. This agreement is expected to accelerate
the expansion of Sidus' commercial data distribution strategy, which includes white labeling data for the Company's existing
customers as well as driving growth of new data customers. Serving as a key contributor to the Space data marketplace, the agreement
is expected to generate additional revenue for the Company and engage customers that otherwise may not have connected with Sidus. In
Q3 2023 we announced the acquisition of substantially all the assets of Exo-Space, a cutting-edge California based firm specializing
in Edge Artificial Intelligence (AI) software and hardware applications in order to integrate EdgeAI capabilities into our planned constellation
with ExoSpace's FeatherEdge AI platform which will enable us to deliver near real-time intelligence derived from Earth Observation
data. Further expanding the capabilities of our constellation, we announced an agreement with SatLab to implement its second-generation
automated identification system (AIS) technology into the LizzieSat satellite constellation. AIS technology uses sophisticated
systems on board marine vessels to identify and track ships to prevent collisions and protect life at sea. The integration of this technology
into Sidus's satellites will enable more accurate vessel tracking and monitoring while providing valuable information about ship
movements in real time.

 We
have previously been approved for our X-band and S-band radio frequencies licensing through a published filing by the ITU on April 4,
2021. Such licenses are held through Aurea Alas, Ltd., an Isle of Man company, which is a VIE to us. The ITU filing contains approved
spectrum use for multiple X-Band and S-Band frequencies and seven different orbital planes, including 45 degrees.. In August 2023, the
FCC granted Sidus a LizzieSat-1 launch and operating license for launch and deploy on a SpaceX Falcon 9 mission called Transporter 10
to include approval for orbital operations utilizing the previously approved ITU S-band and X-band frequencies and ground station coverage.
We have also filed an FCC Part 25 license request for the LizzieSat satellite constellation missions one through six. The FCC Part 25
license request has gone through the mandatory review period and is pending approval. The National Oceanic and Atmospheric Administration
(NOAA), an agency of the U.S. Department of Commerce, granted a Tier 1 license authorizing Sidus to operate LizzieSat 1-3, a private
remote-sensing space system comprised of 3 satellites (LizzieSat #1 through LizzieSat #3 or LS-1 through LS-3) in 2024. The imagery from
Pan and SEIR imagers will be integrated into our FeatherBox AI onboard processor and combined with Automated Information Systems (AIS)
data to detect marine traffic migration and illegal fishing activities, detect methane emissions and detect vegetative stress in various
agricultural areas. Any delays in commencing our commercial launch operations, including due to delays or cost overruns in obtaining
NOAA licenses or other regulatory approvals for future operations or frequency requirements, could adversely impact our results and growth
plans.

 Our
Vertically Integrated Space Infrastructure

 We
are designing, developing, manufacturing, and planning to operate a constellation of proprietary smallsats. These satellites are designed
for multiple missions and customers and form the foundation of our satellite platform. Weighing approximately 100 kilograms each, these
hybrid 3D printed, modular satellites are more functional than cubesats and nanosatellites and less expensive to manufacture than the
larger satellites in the 200-600kg range. Launched into a LEO and operating in diverse orbits (28 -98 inclination, 300-650km
altitude) as approved by the International Telecommunication Union (ITU) in February 2021, our constellation will be optimally distributed
to provide maximum coverage for our customers in the government and commercial sectors. With six initial globally distributed ground
stations, our constellation is designed for rapid tasking, collection, and delivery of high-revisit, high-resolution imagery and data
analytics. As our satellite constellation grows, the amount of data we collect will scale, and we expect our revisit rate will improve.

 Our
cost-efficient smallsats are designed from the ground-up to optimize performance per unit cost. We can integrate technologies and deliver
data on demand at lower costs than legacy providers due to our vertical integration, use of Customer Off the Shelf (COTS) proven systems,
cost-efficiencies, capital efficient constellation design, and adaptable pricing models.

 We
manufacture our satellites at our Cape Canaveral facility. Our current configuration and facility is designed to manufacture 5-10 satellites
a month. Our vertical integration enables us to control our satellites through the entire design, manufacturing, and operation process.
Our years of experience manufacturing space hardware means we are able to leverage our manufacturing expertise and commercial best practices
for satellite production. Additionally, leveraging both in-house and partner-provided subsystem components and in-house design and integration
services, as well as operational support of satellites on orbit, to provide turn-key delivery of entire constellations offer "concept
to constellation" in months instead of years. Specifically, our Space and Defense-as-a-Service offerings encompass all aspects
of hosted satellite and constellation services, including hosting customer payloads onto our satellites, and delivering data and constellation
services to customers from our space platform. These services are expected to allow customers to focus on developing innovative payloads
rather than having to design or develop complete satellite buses or satellites or constellations, which we will provide, along with ancillary
services that are likely to include telemetry, tracking and control ("TT&C"), communications, processing, as well as
software development and maintenance. Our patented space-related technologies include a print head for regolith-polymer mixture and associated
feedstock; a heat transfer system for regolith; a method for establishing a wastewater bioreactor environment; vertical takeoff and landing
pad and interlocking pavers to construct same; and high-load vacuum chamber motion feedthrough systems and methods. Regolith is a blanket
of unconsolidated, loose, heterogeneous superficial deposits covering solid rock. It includes dust, broken rocks, and other related materials
and is present on Earth, the Moon, Mars, some asteroids, and other terrestrial planets and moons. We continue to patent our products
including our satellites, external platforms and other innovations.

Generation

 We
generate revenue by selling payload space on our satellite platform, providing engineering and systems integration services to strategic
customers on a project-by-project basis, and manufacturing space hardware. Additionally, we intend to add to our revenue by selling geospatial
data and actionable intelligence captured through our constellation. This support is typically contracted to both commercial and government
customers under fixed price contracts and often includes other services. Due to the size and capacity of our satellite, we plan to host
a diverse array of sensors such as Multispectral and Hyperspectral Earth Observing Imagers, Maritime Vessel RF Tracking receivers, UHF
IoT Transceivers, Optical Communications gear and others on a single platform that can simultaneously address the needs of many customer
requirements.

 Lowering
Manufacturing Cost and Schedule

 We
are developing a manufacturing model that provides rapid response to customer requirements including integration of customers technologies
and space-based data delivery. Our planned satellites are being designed to integrate Customer Off the Shelf (COTS) subsystems that are
space-proven, can be rapidly integrated into the satellite and replaced rapidly when customer needs change or evolve. Our vertically
integrated manufacturing processes give us the flexibility to make changes during the production cycle without impacting launch or costs.

 Environmental,
social, and corporate governance

 While
Environmental, Social and Governance (ESG) reporting is not mandatory, we are developing an ESG policy that will implement the tracking
of several indicators we believe are critical to ensure we are doing our part to continue sustainable growth and maximize shareholder
value. We have been in business for over ten years manufacturing space hardware and components, and in that time, implementation of policies
and processes to mitigate environmental impact have been of upmost importance. Furthermore, since our inception, we have recognized the
value of our employees and have always prioritized employee well-being through facets such as excellent benefits, programs, educational
assistance, and insurance of a safe and healthy work environment. We also understand that our efforts to promote value and well -being
are not limited to our employees. We are committed to the communities we belong to both locally and professionally. We recently started
to formalize this commitment, providing tangible benefits back to the community that supports us.

 Environmental

 As
the global awareness and importance of environmental sustainability increases, we recognize our duty to implement developments that not
only facilitate the evolution of aerospace solutions, but also promote environmentally conscious protocols yielding measurable results
toward the conservation of our planet. A key component of our focus on sustainability is found in our utilization of in-house 3D printing
technology as a primary manufacturing asset. The development of 3D printing is host to a variety of manufacturing improvements but perhaps
the chief benefits are seen in its reduction of environmental strain. Our LizzieSat constellation will contribute to this reduced impact
as a portion of the satellite bus is 3D printed.

 Manufacturing
parts with a 3D printer reduces overall energy consumption and waste, reducing our carbon footprint compared to its predecessor of conventional
machining. Additional benefits include the removal of waste and unnecessary energy associated with conventional machining, often resulting
in the production of more scrapped material per part than the material that part is composed of. While these are the biggest impacts,
the effects too can be seen in smaller scales. Due to the massive reduction in weight 3D printing provides, energy spent using cargo
ships and commercial vehicles for transportation sees a significant decrease. This reduction in weight is accompanied by a reduction
in space requirements for housing the material, cutting out the need for large storage spaces and the energy needed to maintain those
facilities.

 Looking
toward the future, the potential for exciting developments in the field of sustainability are of upmost importance. These developments
include the use of more biodegradable and/or recycled materials that can be used to manufacture parts and further benefit the environment.
Until these developments occur, we are doing our part through the practice of recycling roughly 5,000 lbs. of metal a year coupled with
the recycling of any used oil and coolant. As technologies continue to advance, we remain dedicated to preserving the Earth and continuing
to evolve with newer technologies as they develop.

 Social

 We
recognize the importance of our employees, the community with which we are situated as well as the global community. This recognition
has led us to implement a variety of actions that support society from the individual to global scale.

 Employee
well-being is at the heart of our commitment to provide a positive impact on all. With our core values being rooted in a familial and
communal structure, we uphold these values by offering our employees excellent benefits, programs, educational assistance, and insurance
of a safe and healthy work environment for all employees. We understand the importance of diversity in the workplace because it was built
by diversity.

 Community
on all scales is fundamental to our success, and because of that, we are committed to leaving a lasting impact on the community that
supports us. This commitment brought forth Sidus Serves, our way of actively improving life on earth. Community involvement is key to
our culture, and we believe in the power of volunteerism. We actively invest in the communities of our employees' by supporting
K-12 education, providing military and veteran assistance, environmental stewardship, and volunteering at local non-profit organizations.
We, and our employees, are passionate about the improvement of their communities through individual efforts and partnership with local,
regional, and national organizations. We are proud to support local STEM programs and schools in local communities. We are focused on
bridging the gap in the aerospace field by supporting young professionals through establishing partnerships with several organizations
dedicated to providing STEM learning opportunities to a diverse array of students.

 Governance

 Our
governance structure is designed to promote transparency, efficiency, and ethics. Through a qualified and diverse chain of command, we
are confident that our decision making will carry out performance at the highest degree. Our Board of Directors consists of professionals
with strong executive experience, business strategy and leadership skills. Our board consists of 3 independent directors alongside our
CEO and CTO including 2 women.

 Our
Growth Strategies

 We
are focused on empowering end users, developers, channel partners and the organizations they serve to quickly and easily access and integrate
real-time geospatial intelligence into their daily operations and also prove out technologies to further grow the space ecosystem. Our
growth strategy is driven by the following objectives:

 Increase
our overall customer base. We are an established heritage aerospace firm that is a part of the political and secular shift towards
space-based data coming from commercial satellite and intelligence providers. We have the opportunity to expand our current customer
base through a combination of direct and indirect sales strategies. We also plan to grow our direct sales teams and indirect sales channels.

 Expand
within our current customer base. As our space-as-a-service offerings grows and delivers results, we expect that our current customers
will increase their spending on our services.

 Continue
to penetrate international markets. We have increased our focus on international markets. We have a current pipeline of prospective
small underrepresented international governments and firms that can benefit from our support and services.

 Grow
distribution channels and channel partner ecosystem. We plan to invest in distribution channels and in our relationships with technology
partners, solution providers, strategic global system integrators, solution partners, and value-added-resellers to help us enter into
and expand in new markets while complementing our direct sales efforts. We have also established a Joint Cooperation and Marketing Agreement
with Dhruva, India's first private space company, to co-market, and sell our services in other countries.

 Global
Space Industry Overview

 In
recent years, the importance of the space economy has been growing as technological advances in both satellites and supporting terrestrial
technologies have enabled new commercial use cases. These use cases include satellite broadband, remote imaging, Internet-of-Things ("IOT")/Machine-to-Machine
("M2M") communications, defense-related applications, as well as others. As a result, several new and existing operators
have announced new satellite constellations to serve these use cases. Many of these announced constellations will consist of small LEO
satellites rather than large GEO satellites. With the flux of new entrants at all levels of the value chain, the small satellite value
chain has continued to evolve, especially in the launch sector, downstream value-added applications, M&As and consolidation between
stakeholders.

 The
rapid pace of innovation and technological advancements continue to drive the commercialization of space-based data, analytics, and insights,
enhancing their relevance to businesses, governments, and the general public. Furthermore, the demand for data that can be collected
from space is growing rapidly while the cost of accessing space is decreasing. Several key trends have emerged in the new space economy,
including the expansion of constellations and the availability of space-based data, the shift in user demand towards analytics and insights,
climate change adaptation, global security concerns, and advancements in on-board technologies.

 According
to Citi Report 2022: Space – Dawn of a New Age: published in 2022, forecasts a $1 trillion annual revenue for the space
economy by 2040, an increase from $370 billion in 2020 with forecasts of strong growth in satellites, government space budgets, as well
as new applications and industries in the field of space exploration. 1 In addition, Prospects for the Small Satellite Market
– A Euroconsult Report 8 th Edition July 2022, expects that over the next decade, the total manufacturing and launch
market value for small satellites is expected to reach $84 billion, more than 3.5 times the market value over 2012-2021. Although this
indicates significant growth, it does not reflect the six-fold increase in the mass of smallsats resulting from the rise of cubesats,
constellations and the introduction of low-cost systems for both manufacturing and launch, which reduce average costs per satellite.

 Rapid
growth in private investment in the commercial space industry has led to a wave of new companies reinventing major elements of the traditional
space industry, including human spaceflight, satellites, and launch, in addition to unlocking entirely new market segments. Furthermore,
government agencies have realized the value of the private commercial space industry and have become increasingly more supportive and
reliant on private companies to catalyze innovation and advance national space objectives. In the United States, this has been evidenced
by notable policy initiatives and by commercial contractors' growing share of space activity.

 Launch
Market

 Space
access has traditionally been limited to those with significant capital expenditures, with launch costs remaining high, with few exceptions.
Launch costs have traditionally been the primary bottleneck impeding the development of orbital activities. The frequency and availability
of launches, while acceptable for the legacy market (several times a year), has proved paralyzing to some operators of small satellites.
Although new launch provider entrants seek to offer higher launch rates and more flexibility to small satellites, capital remains the
main barrier to entry.

 After
years of launch bottlenecks, smallsats now enjoy more launch options as new launchers, brokers and smallsat dispensers become available
and facilitate access to space. According to Euroconsult, the smallsat launch market which was valued at $7.6 billion is set to grow
by +279% to $28.4 billion, however much of that launch value remains captive of national industries and vertically integrated players
(e.g., SpaceX). Since the demand for small satellites had been fragmented and considered less profitable than larger satellites, launch
providers had not actively pursued the launch business. However, this has now changed, as the launch supply has adapted rapidly.

 Small
Satellite Market

 Since
2018, a paradigm shift in the commercial space market has resulted in an increased demand for smallsats. Euroconsult states that smallsats
have become smaller in size over the past few years but have gained in performance. Technical advances have allowed them to expand their
mission capabilities, making them more resilient, effective, and lower cost. Miniaturization is a continuous process that allows the
customer to choose between lighter satellites with no change in capabilities, or bigger, more powerful, and more capable satellites with
greater capabilities. Other technical enablers include, but are not limited to:

 Extension
 of electrical propulsion use;

 Miniaturization
 of attitude sensors;

 Solar
 cells and batteries' efficiency improvement;

 COTS
 solutions for bus electronics; 3D printing.

 The
demand for large geosynchronous satellites declined dramatically as companies prepared to launch constellations of smaller, cheaper broadband
satellites in low and medium Earth orbits, resulting in a dramatic decrease in demand for large geosynchronous communications satellites.
New technologies in space and space-related sectors, particularly computational technologies, and data analytics, are facilitating the
miniaturization of satellite systems, thereby improving the market. Due to this, smallsats are now able to provide operational services
previously only available through heavier satellites. Euroconsult anticipates that about 18,500 smallsats (<500 kg) will launch over
2022-2031, or about 365 tons per year, (i.e., one ton per day on average over the next 10 years).

 Moreover,
the rise of this market has also created a new market segment in nanosatellites and microsatellites, weighing less than 10 kg and between
10 and 100 kg, respectively. While these satellites can be deployed individually, they can also be operated as part of a constellation,
a large group of satellites interconnected to provide a service, such as the Starlink satellite constellation's offering of global
internet connectivity. According to Euroconsult, the smallsat manufacturing market, which was valued at $15.5 billion over 2012-2021,
is set to grow by +258% to $55.6 billion over 2022-2031, driven by the multiplication of constellation projects from both commercial
and government stakeholders. The next decade will be defined primarily by the rollout of multiple constellation projects, which will
account for 81% of smallsats, mainly for commercial operators. A total of 3,335 smallsats <10 kg are expected to launch throughout
the next decade, i.e., more than twice the 1,656 launched over 2012-2021. Satellites in this category, especially cubesats, have gained
momentum recently: 1,187 were launched in the past 5 years alone.

 The
growth in the LEO satellite constellations market is being driven by technological advances in ground equipment, new business models,
expanded funding, and growing demand for high bandwidth and lower latency. Though this satellite constellations market remains nascent
in maturity, we anticipate considerable growth over the coming years in the launch industry as companies continue to seek versatile and
low-cost ways to deliver single satellites to specific orbits or deploy their satellite constellations. Furthermore, we anticipate the
growth of the satellite constellations market to contribute business to our Satellite Services offerings. LEO satellite constellations
have relatively short lifespans on orbit, resulting in a requirement to launch replenishment satellites every few years.

 Our
Products and Services

 Space
Services

 We
provide the following services to our customers:

 Satellite/Space
Hardware Manufacturing

 For
over a decade, we have manufactured space-rated and human-rated hardware and components. During this time, we have provided components
and systems for the International Space Station, the Boeing Starliner, NASA's SLS, Lockheed Martin's Orion, and several other
programs and customers.

 At
a combined 35,000 square-feet, our manufacturing facilities are all encompassing allowing us to vertically integrate and pipeline the
manufacturing process without the need for outsourcing of precision machining, electronics assembly and testing, or 3D printing.

 LEO
Launch and Deployment Services

 We
strive to become a trusted platform for providing an affordable approach for launch, payload hosting, and deployment services in space.
Our planned diverse range of launch, in-orbit, and deployment platforms is planned to be tailored to complement any mission.

 Space-Based
Geospatial Intel, Imagery and Data Analytics

 We
anticipate delivering reliable high-impact analytics and insights to international and domestic customers by combining our platform with
multiple imaging solutions to increase the efficacy and emergence of data. We intend to collect, analyze, enrich, and deliver data gathered
from our custom constellation to provide intelligent analytics to its customers. Our comprehensive data collection is expected to create
a repository of insights for aviation, maritime, weather, space services, earth intelligence and observation, and federal industries
from the ultimate vantage point – space.

 Space
Platforms

 We
anticipate offering a variety of affordable space platforms which allow our clients to conduct full missions and/or test new technologies
in space at a reduced schedule and cost. Our platforms include:

 External
Flight Test Platform (EFTP)

 Our
External Flight Test Platform offers multiple industries to develop, test, and fly experiments, hardware, materials, and advanced electronics
on the ISS at a reduced cost and schedule. Potential payloads include optical communications, materials, satellite components, electroplating,
and pharmaceutical testing. The EFTP includes integration and delivery to the ISS and has a typical deployment period of 15 weeks. All
payloads can be returned after the mission if requested by the payload provider. Our EFTP is characterized by:

 Highly
 reconfigurable platform

 Available
 space: 1100 in 3 (payloads are NOT required to conform to CubeSat form factors)

 Power:
 28V connectors (up to 2 available)

 Flight
 computer available to support a wide array of sensor data

 Additive
 and traditional manufacturing available to support payload development

 Two
 left-hand circular polarized (LHCP) spiral antennae available with a frequency band of 2 to 18 GHz (nadir and zenith facing)

 GPS
 patch antenna option

 LizzieSat TM
 (LS)

 LizzieSat
(LS) is currently in development as a hybrid 3D manufactured Low Earth Orbit (LEO) microsatellite that focuses on rapid, cost-effective
development and testing of innovative spacecraft technologies for multiple customers. LS is planned to combine static component testing
and LEO spacecraft development and deployment to provide complete life cycle services to commercial and government customers for Internal
Research & Development (IR&D), data analytics and/or proof of concept. We anticipate that LS will leverage our in-house low-cost
additive manufacturing of satellites using the Markforged X7, an industrial 3D printer featuring a dual nozzle print system that supports
continuous carbon fiber and Kevlar reinforcement, to provide rapid, agile development of spacecraft due to its modular design.

 Controlling
the satellite production process from design through manufacturing enables us to upgrade our satellites during production and also integrate
customer technologies at varying points during the build process. This allows us to continuously improve our satellites' capabilities
as well as build out and maintain our constellation at a relatively low cost.

 SSIKLOPS
(Space Station Integrated Kinetic Launcher for Orbital Payload Systems)

 We
provide turnkey services to manage and execute the successful integration and on-orbit operations of satellite payloads using the International
Space Station Integrated Kinetic Launcher for Orbital Payload Systems (SSIKLOPS). SSIKLOPS fills the payload deployment gap between small
CubeSat launchers and major payloads by supporting the Low Earth Orbit (LEO) microsatellite market (up to 116kg). The SSIKLOPS is a mechanism
used to robotically deploy satellites from the ISS and is designed to provide a method to transfer internally stowed satellites to the
external environment.

 On
November 5, 2018 we were awarded a 5-year indefinite delivery indefinite quantity contract by NASA to provide services to manage and
perform the work for the successful integration and on-orbit operations of the platform for U.S. government customers with the option
to utilize the platform for commercial efforts as well. Pursuant to the agreement, we are responsible for marketing and operating the
SSIKLOPS as well as sustaining the SSIKLOPS and associated hardware.

 Our
offerings include operation, engineering, and manufacturing to provide full life-cycle payload support. SSIKLOPS utilizes NASA's
ISS resupply vehicles to launch small satellites to the ISS in a controlled pressurized environment in soft stow bags. The satellites
are processed through the ISS pressurized environment by the astronaut crew allowing satellite system diagnostics prior to orbit insertion.
Orbit insertion is achieved through use of the Japanese Aerospace Exploration Agency's Experiment Module Robotic Airlock (JEM Airlock),
and one of the ISS Robotic Arms. Sidus and SSIKLOPS provide small satellites the infrastructure to be deployed from the ISS into LEO
with minimal technical, environmental, logistical, and cost challenges.

 Phoenix
Deployer

 Phoenix
is currently in development as a CubeSat deployer utilizing the SSIKLOPS deployment platform to deploy CubeSats from the ISS. Phoenix
offers a low-cost and high availability deployer option for CubeSats within the 3U to 12U range. U refers to the standard 'Cubesat'
dimensions (Units or "U") of 10 cm x 10 cm x 10 cm which are used to describe space on spacecraft). We anticipate that Phoenix
will offer:

 3U
 CubeSats (Up to 12)

 6U
 CubeSats (Up to 6)

 12U
 CubeSats (Up to 3)

 Aerospace
and Defense Manufacturing Services

 Our
manufacturing capabilities combine our design engineering, precision machining, waterjet cutting, and wire harness fabrication experience
to provide the highest quality and performance for mission critical systems.

 Precision
Machining and Assembly

 Our
growing team of engineers and technicians, combined with state-of-the-art equipment support precision machining, fabrication, and assembly
for prototypes, test articles, one-offs, low-rate initial production up through high volume Swiss screw machining production. We utilize
the latest CNC machining and turning processes to deliver high-quality, complex and on-demand parts for specialized industries including
the space sector.

 CNC
 Swiss Screw Machining

 CMM,
 VCMM Quality Inspection

 EDM
 Wire and Waterjet Cutting

 3-D
 Printing

 Welding

 3D
Printing

 From
early-stage product development to functional finished parts, Sidus offers commercial and industrial-grade additive manufacturing solutions.
Our 3D printers enable us to provide rapid manufacturing with industrial micron-level laser scanning accuracy and 50 m repeatability.
Using Continuous Fiber Fabrication technology, we can produce parts at an enhanced schedule that are stronger than 6061 Aluminum and
40% lighter. Sidus provides internal engineering support to optimize the functional performance, product life cycle, and accuracy of
its customers' specific 3D printed technology to ensure repeatability and consistency across prints. Our 3D printing capabilities
include:

 Functional
 Prototypes and Models

 Production
 Parts

 End-life
 Production

 Tool
 Development

 Patterns
 and Molds

 Jigs
 and Fixtures

 Fly-Away
 Parts

 Mechanical/Electrical
Assembly and Test

 Flight/Ground
 Cable and Wire Harnesses

 Ground
 Support Equipment

 Manned
 Spaceflight Rated Hardware

 Satellite
 Components

 Part
 Task Trainer Hardware

 As
part of our 35,000 square foot manufacturing facility, we have a reconfigurable electronics and cable harness fabrication lab with the
necessary equipment, staff and square footage to produce space flight and ground cables and electronic chassis. Our experience and capabilities
include manufacturing, assembly and testing of a wide selection of electrical control cabinet and electronic cabinet modification and
fabrication processes. We have extensive experience assembling electronics, including soldering, crimping, multi-pinned connector terminations,
fusion splicing, molding, potting, and testing.

 Certifications
include NASA 8739.4, NASA 8739.5, J STD 001 and IPC A 610. Our IPC-J-STD-001 accredited technicians adhere to NASA work standards KSC-E-165,
KSC-GP-864, KSC-STD-132, all required for NASA 8739.4 credentials with other industry-standard certifications.

 Design
Engineering

 We
provide quality in-house design engineering services from up-front analysis to integration, assembly, and test. Our ISO 9001:2015 / AS9100D
certified engineering capabilities include the ability to perform initial design concepts or value-add engineering change recommendations
to existing engineering. Our multidisciplinary engineering experience and talent cover a broad spectrum of capabilities, enabling an
even more comprehensive range of projects. Our design engineering capabilities include:

 Requirements
 Definition – Product development and process optimization

 Verification/Validation
 (multiple checks and balance) – Meets specification and intended purpose

 Model
 Based Systems Engineering – Use of visual modeling vs document-based information exchange

 3D
 CAD & 2D Engineering Release – Managing, planning, scheduling, and controlling

 Test
 Procedures and Performance – Meets customer driven requirements

 Operations/Maintenance
 Manuals – Fully integrated and procedurally driven

 System
 Integration – Horizontal sub-system integration approach to projects and programs

 Design
 for Life Cycle Cost & Manufacturing – Incorporation of innovative design manufacturing

 Model
 Based Data Control – Complex design verification/validation

 Finite
 Element and Failure Mode & Effects Analysis

 Design
 for Manufacturability

 Program
Management

 We
provide Program and Project Management to help improve project performance and provide oversight of complex projects and contracts through
day-to-day support and expert knowledge. With a business culture that always puts the customer first, we provide dedicated project management
services throughout the lifecycle of our customer's project or program to ensure the project goes according to schedule. Program
management services include:

 Supply
 chain management

 Customer
 requirement compliance

 Logistics
 and configuration management

 Resource
 and budget control

 Customer
/ Market Research

 The
need to provide commercial testing capabilities in space has been growing for many years and has become a requirement for many innovating
companies. According to Euroconsult's Prospectus for the Small Satellite Market, 8th Edition released in July of 2022, Euroconsult
reported 1,738 small satellites were launched in 2021 which is 1.5x more than 2020 (1,195 small satellites launched in 2020). The small
satellite industry is gearing up for significant expansion in terms of capabilities and demand. According to Euroconsult's report,
the number of satellites to be launched from 2022 to 2031 is estimated to be 18,500. As the small satellite market grows, the requirement
for rapid flight proven testing is becoming more crucial. Although ground-based testing is available, it does not provide a mirrored
testing environment for spacecraft and subcomponent testing. We intend to address this need with our Sidus Constellation. Furthermore,
customization of the Sidus Constellation with appropriate technology can provide subscription data and imagery services for customers
whose needs prompt consideration for a separate constellation. Currently, our core market corresponds most directly with satellite manufacturing
and offering LEO space-as-a-service solutions. However, we believe our addressable market can also continue to expand in similar and
adjacent industries such as government and defense manufacturing. We have generated space-related manufacturing revenue since 2012, and
we have been generating revenue from our commercial constellation space offering since the first quarter of 2022 as we continue to secure
customers for missions subsequent to LizzieSat-1 (LS-1). We signed a multi-launch agreement with SpaceX for five LizzieSat rideshare
missions beginning in 2023. These five satellite missions support previously announced customers as well as potential future customers
as we continue to layer new missions into our pipeline.

 Sales
and Marketing

 We
market our services to both government and commercial customers. Initially we are leveraging our existing relationships to help promote
our expanded service offerings. We believe our executive management team has extensive reach in the space and satellite industry.

 Our
marketing efforts focus on communicating the benefits of our solutions and educating our customers, the media and analysts about the
advantages of our innovative technology. We strive to raise the awareness of our company, market our products and generate sales leads
through industry events, public relations efforts, marketing materials, social media and our website. Attendance at key industry events
is an important component of our marketing efforts. Our CEO, Carol Craig, has been invited to speak and participate in panel discussions
at industry events and will continue to take advantage of these opportunities to spread awareness of our services. We believe a combination
of these efforts strengthens our brand and may enhance our market position in our industry.

 Competition

 The
small satellite services industry at-large is highly competitive but has significant barriers to entry, including the cost and difficulty
associated with successfully developing, building, and launching a satellite constellation and obtaining various governmental and regulatory
approvals. In addition to cost, there is a significant amount of lead time associated with obtaining the required licenses, building,
and launching the satellite constellation, and developing and deploying the ground station technology. We currently face substantial
general competition from other service providers that offer a range of space-based data collection options. There are also several competitors
working to develop innovative solutions to compete in this industry.

 Our
Competitive Differentiation

 We
believe that we are well-positioned to compete with legacy space-based data providers and other emergent providers due to our vertical
integration strategy that combines rapid production with flexible technology insertion points. This approach enables us to address three
primary barriers that have limited the legacy industry in achieving a broader market adoption and penetration including: easy access
to data and information, access to low-cost data, and customized, bespoke response to customer needs. Key elements of our competitive
differentiation include the following:

 Low-cost
sensor data capture. Our smallsat constellation is leveraging the disruptive economics of small satellites to enable us to capture
data in a more cost-effective manner than legacy satellite providers. We can deliver our proprietary geospatial imagery on demand at
a lower cost than legacy providers due to our cost-efficiencies, capital efficient constellation design, and adaptable, disruptive pricing
models, among other things, which enables us to expand our customer base to commercial organizations that have previously been priced
out of the geospatial intelligence market.

 On-demand
delivery of low-cost geospatial analytics through subscription contracts to commercial customers. Geospatial intelligence and analytics
have generally been prohibitively expensive for many commercial customers, with price points geared towards government end users. Our
constellation is designed to provide our services to commercial customers at a low cost, which we expect will expand our base of potential
customers. Our data monetization strategy includes selling data directly to other companies and consumers, selling data to data aggregation
firms, listing our data on a data marketplace and leveraging a white label data commerce platform.

 Proprietary,
low-cost smallsat assembly. We design satellites and manufacture our satellites in-house. Controlling the satellite production process
from design through manufacturing enables us to upgrade our satellites during production, integrate customer technologies and data needs
at various points during the entire production cycle and continuously improve our satellites' capabilities, as well as build out
and maintain our optimal constellation size at a relatively low cost. Our low-cost satellites benefit from longer life and decreasing
launch and on-orbit costs and our planned multi-mission constellation with vertical integration equals efficient use of capital expenses.

 Our
Intellectual Property

 We
continually invest in innovative solutions and as of December 31, 2023 have 6 space related patents approved or pending, which ownership
was transferred to us by one of our principal shareholders, Craig Technologies, at no charge. Our patented technologies include a print
head for regolith-polymer mixture and associated feedstock for which a notice of allowance was received by us in October 2021; a heat
transfer system for regolith which patent expires in June 2039; a method for establishing a wastewater bioreactor environment which patent
expires in July 2039; vertical takeoff and landing pad and interlocking pavers to construct same which patent expires in April 2039;
and high-load vacuum chamber motion feedthrough systems and methods which patent expires in May 2039.

 We
seek to establish and maintain our proprietary rights in our technology and products through a combination of patents, copyrights, trademarks,
trade secrets and contractual rights. We also seek to maintain our trade secrets and confidential information through nondisclosure policies,
the use of appropriate confidentiality agreements and other security measures. We have registered a number of patents and trademarks
in the United States and in other countries and have a number of patent filings pending determination. There can be no assurance, however,
that these rights can be successfully enforced against competitive products in any particular jurisdiction. Although we believe the protection
afforded by our patents, copyrights, trademarks, trade secrets and contracts has value, the rapidly changing technology in the satellite
and wireless communications industries and uncertainties in the legal process make our future success dependent primarily on the innovative
skills, technological expertise and management abilities of our employees rather than on the protections afforded by patent, copyright,
trademark and trade secret laws and contractual rights.

 Certain
of our products include software or other intellectual property licensed from third parties. While it may be necessary in the future
to seek or renew licenses relating to various aspects of our products, we believe, based upon past experience and standard industry practice,
that such licenses generally could be obtained on commercially reasonable terms. Nonetheless, there can be no assurance that the necessary
licenses would be available on acceptable terms, if at all.

 The
industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent claims and related
litigation regarding patent and other intellectual property rights. We cannot assure you that our patents and other proprietary rights
will not be challenged, invalidated or circumvented, that others will not assert intellectual property rights to technologies that are
relevant, or that our rights will give us a competitive advantage. In addition, the laws of some foreign countries may not protect our
proprietary rights to the same extent as the laws of the United States.

 The
commercial space industry is driven by rapidly changing technologies and innovation, and our success will require significant expenditure
in Research and Development to develop new technologies, services, products, and offerings. While we have incurred research and development
expenses related to our LizzieSat satellite, we have not established a separate Research & Development department. We engineer our
solutions with additional enhancements and innovations as part of our normal design and engineering efforts. We intend on setting up
a formal Research and Development team in the future so we can more easily streamline our new products and get to market faster. If we
fail to raise adequate funds to develop a robust Research and Development department and strategy, we will likely be unable to execute
on our business plan.

 Regulatory

 Our
business is subject to extensive rules, regulations, statutes, orders and policies imposed by the government in the United States and
in foreign jurisdictions.

 Federal
Communications Commission (FCC)

 In
August 2023, the FCC approved the LizzieSat-1 launch and operating license for launch and deploy on a SpaceX Falcon 9. In addition, we
filed a Part 25 license request with the FCC for the LizzieSat constellation through LizzieSat five mission. The FCC Part 25 license
request is currently in the review period.

 A
NOAA License request was approved in December 2023 to fly Dragonfly Gecko on LizzieSat One and Owl and Hawk imagers on LizzieSat one
through three which detect methane emissions and vegetative stress. The Gecko images on LizzieSat one will be integrated into our FeatherBox
AI onboard processor and Automated Information Systems (AIS) to detect marine traffic migration and illegal fishing activities. The Owl
and Hawk images will be integrated into our Featherbox AI onboard processor and Automated Information Systems (AIS) to enhance detection
of marine traffic and illegal fishing. Any delays in commencing our commercial launch operations, including due to delays or cost overruns
in obtaining NOAA licenses or other regulatory approvals for future operations or frequency requirements, could adversely impact our
results and growth plans.

 International
Telecommunications Union (ITU)

 We
are required to comply with the laws and regulations of, and often obtain approvals from, national and local authorities in connection
with our services. As we expand service to additional countries and regions, we will become subject to additional governmental approvals
and regulations. We will provide a number of services that rely on the use of radio-frequency spectrum, and the provision of such services
is highly regulated. Satellites are to be operated in a manner consistent with the regulations and procedures of the International Telecommunication
Union ("ITU"), a specialized agency of the United Nations, which require the coordination of the operation of satellite systems
in certain circumstances, and more generally are intended to avoid the occurrence of harmful interference among different users of the
radio spectrum.

 We
have received approval of International Telecommunications Union (ITU) spectrum licensing for both X-Band and S-Band frequencies. We
filed for X-Band and S-Band Radio Frequencies licensing in February 2021 and were granted approval through a published filing by the
International Telecommunications Union (ITU) on April 4, 2021. The ITU is the specialized agency responsible for principles and licensing
of the use of orbit and spectrum. Before a satellite can use the spectrum and orbital resources it needs to fulfil its mission, it requires
an associated 'satellite filing'. The filing is a tool to obtain international recognition of these resources.

 International
Traffic in Arms Regulations ("ITAR") and Export Controls

 Our
business is subject to, and we must comply with, stringent U.S. import and export control laws, including the ITAR and Export Administration
Regulations ("EAR") of the Bureau of Industry and Security of the U.S. Department of Commerce. The ITAR generally restricts
the export of hardware, software, technical data, and services that have defense or strategic applications. The EAR similarly regulates
the export of hardware, software, and technology that has commercial or "dual-use" applications (i.e., for both military
and commercial applications) or that have less sensitive military or space-related applications that are not subject to the ITAR. The
regulations exist to advance the national security and foreign policy interests of the U.S.

 The
U.S. government agencies responsible for administering the ITAR and the EAR have significant discretion in the interpretation and enforcement
of these regulations. The agencies also have significant discretion in approving, denying, or conditioning authorizations to engage in
controlled activities. Such decisions are influenced by the U.S. government's commitments to multilateral export control regimes,
particularly the Missile Technology Control Regime concerning the spaceflight business.

 Many
different types of internal controls and measures are required to ensure compliance with such export control rules. In particular, we
are required to maintain registration under the ITAR; determine the proper licensing jurisdiction and classification of products, software,
and technology; and obtain licenses or other forms of U.S. government authorizations to engage in activities, including the performance
by foreign persons, related to and who support our spaceflight business. Under the ITAR, we must receive permission from the Directorate
of Defense Trade Controls to release controlled technology to foreign person employees and other foreign persons.

 Employees/Human
Capital

 As
of December 31, 2023, we had 72 full-time employees and 10 part-time employees. We are not party to any collective bargaining agreements.
Our workforce is concentrated in the "Florida Space Coast," however we are accustomed to working as a cohesive team with
remote workers which should be beneficial as we expand and add employees in different geographical areas nationwide and worldwide. Our
management team is comprised of our CEO and five (5) of her direct reports who, collectively, have management responsibility for our
business. Our management team places significant focus and attention on matters concerning our human capital assets, particularly our
diversity, capability development, and succession planning. Accordingly, we regularly review employee development and succession plans
for each of our functions to identify and develop our pipeline of talent.

 Available
Information

 Our
website address is www.sidusspace.com. The contents of, or information accessible through, our website are not part of this Annual
Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings
with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments
to those reports, available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish
such reports to, the SEC. The public may read and copy the materials we file with the SEC at the SEC's Public Reference Room at
100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other
information. The address of the SEC's website is www.sec.gov. The information contained in the SEC's website is not
intended to be a part of this filing.

 ITEM
1A. RISK FACTORS.

 An
investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other
information in this Annual Report on Form 10-K before investing in our common stock. Our business and results of operations could be
seriously harmed by any of the following risks. The risks set out below are not the only risks we face. Additional risks and uncertainties
not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition
and/or operating results. If any of the following events occur, our business, financial condition and results of operations could be
materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose all or part
of your investment.

 Risk
Factors Relating to Our Operations and Business

 Our
limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.

 Our
limited operating history makes it difficult to evaluate our future prospects and the risks and challenges it may encounter. Risks and
challenges we have faced or expects to face include our ability to:

 forecast
 our revenue and budget for and manage our expenses;

 attract
 new customers and retain existing customers;

 effectively
 manage our growth and business operations, including planning for and managing capital expenditures for our current and future space
 and space-related systems and services, managing our supply chain and supplier relationships related to our current and future product
 and service offerings, and integrating acquisitions;

 anticipate
 and respond to macroeconomic changes and changes in the markets in which we operate;

 maintain
 and enhance the value of our reputation and brand;

 develop
 and protect intellectual property; and

 hire,
 integrate and retain talented people at all levels of our organization.

 If
we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those
described elsewhere in this " Risk Factors " section, our business, financial condition and results of operations could
be adversely affected. Further, because we have limited historical financial data and operate in a rapidly evolving market, any predictions
about its future revenue and expenses may not be as accurate as they would be if it had a longer operating history or operated in a more
developed market. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by
growing companies with limited operating histories in rapidly changing industries. If our assumptions regarding these risks and uncertainties,
which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results
of operations could differ materially from its expectations and its business, financial condition and results of operations could be
adversely affected.

 We
have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to achieve or maintain
profitability.

 We
have incurred significant losses since our inception. We incurred net losses of $14,328,348 and $12,839,968 for the years ended December
31, 2023 and 2022, respectively. While we have generated limited revenue to date, we have not yet achieved production level satellite
manufacturing, launch and data activities, and it is difficult for us to predict our future operating results. As a result, our losses
may be larger than anticipated, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able
to maintain or increase profitability.

 We
expect our operating expenses to increase over the next several years as we commence production level satellite manufacturing and satellite
launch activities, continue to refine and streamline our design and manufacturing processes, make technical improvements, increase our
launch cadence, hire additional employees and initiate research and development efforts relating to new products and technologies, including
our space services business. These efforts may be more costly than we expect and may not result in increased revenue or growth in our
business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from
achieving or maintaining profitability or positive cash flow. Furthermore, if our future growth and operating performance fail to meet
investor or analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers
or expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.

 We
may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we
need it, on acceptable terms or at all.

 In
the future, we could be required to raise capital through public or private financing or other arrangements. Such financing may not be
available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. For example, the global
COVID-19 health crisis and related financial impact has resulted in, and may continue to result in, significant disruption and volatility
of global financial markets that could adversely impact our ability to access capital. We may sell equity securities or debt securities
in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent
transactions, our current investors may be materially diluted. Any debt financing, if available, may involve restrictive covenants and
could reduce our operational flexibility or profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our
business or respond to competitive pressures.

 The
success of our business will be highly dependent on our ability to effectively market and sell our commercial satellite manufacturing,
launch, and data services for small LEO satellites.

 We
expect that our success will be highly dependent, especially in the foreseeable future, on our ability to effectively forecast, market
and sell our launch and data services for small LEO satellites. We have limited experience in forecasting, marketing and selling such
services, and if we are unable to utilize our current or future sales organization effectively in order to adequately target and engage
our potential customers, our business may be adversely affected.

 Our
success depends, in part, on our ability to attract new customers in a cost-effective manner. We expect that we will need to make significant
investments in order to attract new customers. Our sales growth is dependent upon our ability to implement strategic initiatives, and
these initiatives may not be effective in generating sales growth. In addition, marketing campaigns, which we have not historically utilized,
can be expensive and may not result in the acquisition of customers in a cost-effective manner, if at all. Further, as our brand becomes
more widely known, future marketing campaigns or brand content may not attract new customers at the same rate as past campaigns or brand
content. If we are unable to attract new customers, our business, financial condition and results of operations will be harmed.

 Any
setbacks we may experience during commercial satellite launches and other demonstration and commercial missions could have a material
adverse effect on our business, financial condition and results of operation, and could harm our reputation.

 The
success of our launch and satellite services business will depend on our ability to successfully and regularly deliver customer satellites
into orbit. In November 2019, we successfully launched EFTP, our on-orbit external experimental facility hosted on the NanoRacks International
Space Station External Platform (NREP). Additionally, in January of 2020, a microsatellite was successfully launched from the ISS using
our SSIKLOPS platform for the STP program office. In March 2024, we launched our first LizzieSat satellite.

 There
is no guarantee that our planned commercial launches or subsequent commercial launches thereafter will be successful. While we believe
that our launch partners have built operational processes to ensure that the design, manufacture, performance and servicing of their
launch vehicles and rockets meet rigorous performance goals, there can be no assurance that our launch partners will not experience operational
or process failures and other problems during our first commercial launch or any planned launches thereafter. Any failures or setbacks,
particularly on our first commercial launches, could harm our reputation and have a material adverse effect on our business, financial
condition and results of operation.

 The
market for commercial satellite manufacturing, launch and data services for small LEO satellites is not well established, is still emerging
and may not achieve the growth potential we expect or may grow more slowly than expected.

 The
market for in-space infrastructure services, in particular commercial satellite manufacturing, launch and data services for small LEO
satellites, has not been well established and is still emerging. Our estimates for the total addressable launch market and satellite
market are based on several internal and third-party estimates, including our contracted revenue, the number of potential customers who
have expressed interest in our satellite launch and data services, assumed prices and production costs for our services, assumed flight
cadence, our ability to leverage our current manufacturing and operational processes and general market conditions. While we believe
our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions
supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
As a result, our estimates of the annual total addressable market for our services, as well as the expected growth rate for the total
addressable market for our services, may prove to be incorrect.

 Our
ability to grow our business depends on the successful development of our satellites and related technology, which is subject to many
uncertainties, some of which are beyond our control.

 Our
current objectives focus on the development of small satellites and integration capabilities and related technology. If we do not complete
this development in our anticipated timeframes or at all, our ability to grow our business will be adversely affected. The successful
development of our satellite capabilities and related technology involves many uncertainties, some of which are beyond our control, including,
but not limited to:

 timing
 in making further enhancements to our product design and specifications;

 successful
 completion of our planned commercial satellite launches;

 our
 ability to obtain additional applicable approvals, licenses or certifications from regulatory agencies, if required, and maintaining
 current approvals, licenses or certifications;

 performance
 of our manufacturing facilities despite risks that disrupt productions, such as natural disasters and hazardous materials;

 performance
 of a limited number of suppliers for certain raw materials and supplied components;

 performance
 of our third-party contractors that support our future research and development activities;

 our
 ability to maintain rights from third parties for intellectual properties critical to our future research and development activities;

 our
 ability to fund and maintain our future research and development activities, particularly the development of various enhancements
 that increase the data transfer capacity of our satellite; and

 the
 impact of the COVID-19 pandemic on us, our customers, suppliers and distributors, and the global economy.

 We
routinely conduct hazardous operations in testing of our satellite subsystems, which could result in damage to property or persons. Unsatisfactory
performance or failure of our satellites and related technology at launch or during operation could have a material adverse effect on
our business, financial condition and results of operation.

 We
manufacture and operate highly sophisticated products for the commercial space, aerospace and defense industries and conduct activities
that depend on complex technology. Although there have been and will continue to be technological advances in spaceflight, our operations
remain an inherently hazardous and risky activity. Launch failures, explosions and other accidents on launch or during flight have occurred
for others and will likely occur in the future.

 While
we have built operational processes to ensure that the design, manufacture, performance and servicing of our products and related technologies
meet rigorous quality standards, there can be no assurance that we will not experience operational or process failures and other problems,
including through manufacturing or design defects, cyber-attacks or other intentional acts, that could result in potential safety risks.
We may experience a total loss of our customers' payloads and our own payloads if there is an accident or failure at launch or
during the journey into space, which could have a material adverse effect on our results of operations and financial condition. For some
missions, we or our customers can elect to buy launch insurance, which can reduce our monetary losses from any launch failure, but even
in this case we will have losses associated with our inability to test our technology in space and delays with further technology development.
Any insurance we or our customers have may not be adequate to cover our or their loss, respectively.

 Any
actual or perceived safety or reliability issues may result in significant reputational harm to our businesses, in addition to tort liability,
maintenance, increased safety infrastructure and other costs that may arise. Such issues could result in delaying or cancelling planned
launches, increased regulation or other systemic consequences. Our inability to meet our safety standards or adverse publicity affecting
our reputation as a result of accidents, mechanical failures, damages to customer property or medical complications could have a material
adverse effect on our business, financial condition and results of operation.

 We
may experience a total loss of our technology and products and our customers' payloads if there is an accident on launch or during
the journey into space, and any insurance we have may not be adequate to cover our loss.

 Although
there have been and will continue to be technological advances in spaceflight, it is still an inherently dangerous activity. Explosions
and other accidents on launch or during the flight have occurred and will likely occur in the future. If such incident should occur,
we will likely experience a total loss of our systems, products, technologies and services and our customers' payloads. The total
or partial loss of one or more of our products or customer payloads could have a material adverse effect on our results of operations
and financial condition. For some missions, we can elect to buy launch insurance, which can reduce our monetary losses from the launch
failure, but even in this case we will have losses associated with our inability to test our technology in space and delays with further
technology development.

 Any
delays in the development and manufacture of satellites and related technology may adversely impact our business, financial condition
and results of operations.

 We
have previously experienced, and may experience in the future, delays or other complications in the design, manufacture, launch, production,
delivery and servicing ramp of satellites and related technology. If delays like this arise or recur, if our remediation measures and
process changes do not continue to be successful or if we experience issues with planned manufacturing improvements or design and safety,
we could experience issues in sustaining the ramp of our spaceflight system or delays in increasing production further.

 If
we encounter difficulties in scaling our delivery or servicing capabilities, if we fail to develop and successfully commercialize our
satellites and related technologies, if we fail to develop such technologies before our competitors, or if such technologies fail to
perform as expected, are inferior to those of our competitors or are perceived as less safe than those of our competitors, our business,
financial condition and results of operations could be materially and adversely impacted.

 Our
customized hardware and software may be difficult and expensive to service, upgrade or replace.

 Some
of the hardware and software we use in operations is significantly customized and tailored to meet our requirements and specifications
and could be difficult and expensive to service, upgrade or replace. Although we expect to maintain inventories of some spare parts,
it nonetheless may be difficult, expensive or impossible to obtain replacement parts for the hardware due to a limited number of those
parts being manufactured to our requirements and specifications. Also, our business plan contemplates updating or replacing some of the
hardware and software in our network as technology advances, but the complexity of our requirements and specifications may present us
with technical and operational challenges that complicate or otherwise make it expensive or infeasible to carry out such upgrades and
replacements. If we are not able to suitably service, upgrade or replace our equipment, our ability to provide our services and therefore
to generate revenue could be harmed.

 Our
satellites may collide with space debris or another spacecraft, which could adversely affect our operations.

 Although
we expect to comply with best practices and international orbital debris mitigation requirements to actively maneuver our satellites
to avoid potential collisions with space debris or other spacecraft, these abilities are limited by, among other factors, uncertainties
and inaccuracies in the projected orbit location of, and predicted collisions with, debris objects tracked and cataloged by governments
or other entities. Additionally, some space debris is too small to be tracked and therefore its orbital location is unknown; nevertheless,
this debris is still large enough to potentially cause severe damage or a failure of our satellites should a collision occur. If our
satellites collide with space debris or other spacecraft, our products and services could be impaired. Also, a failure of one or more
of our satellites or the occurrence of equipment failures, collision damage, or other related problems that may result during the de-orbiting
process could constitute an uninsured loss and could materially harm our financial condition.

 If
we are unable to adapt to and satisfy customer demands in a timely and cost-effective manner, or if we are unable to manufacture our
products at a quantity and quality that our customers demand, our ability to grow our business may suffer.

 The
success of our business depends in part on effectively managing and maintaining our space services, manufacturing our products, conducting
a sufficient number of launches to meet customer demand and providing customers with an experience that meets or exceeds their expectations.
Even if we succeed in developing our products and completing launches within our targeted timeline, we could thereafter fail to develop
the ability to produce these products at quantity with a quality management system that ensures that each unit performs as required.
Any delay in our ability to produce products or complete launches at rate and with a reliable quality management system could have a
material adverse on our business.

 If
our current or future space services do not meet expected performance or quality standards, including with respect to customer safety
and satisfaction, this could cause operational delays. Further, launching satellites within restricted airspace require advance scheduling
and coordination with government agencies and range owners and other users, and any high priority national defense assets will have priority
in the use of these resources, which may impact our cadence of our space operations or could result in cancellations or rescheduling.
Any operational or manufacturing delays or other unplanned changes to our ability to conduct our launches could have a material adverse
effect on our business, financial condition and results of operations.

 We
may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.

 If
our operations continue to grow as planned, of which there can be no assurance, we will need to expand our sales and marketing, customer
and commercial strategy, products and services, supply, and manufacturing and distribution functions and initiate research and development.
We will also need to continue to leverage our manufacturing and operational systems and processes, and there is no guarantee that we
will be able to scale the business and the manufacture of spacecraft as currently planned or within the planned timeframe. The continued
expansion of our business may also require additional manufacturing and operational facilities, as well as space for administrative support,
and there is no guarantee that we will be able to find suitable locations or partners for the manufacture and operation of our products.

 Our
continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in
hiring, training and managing an increasing number of employees, finding manufacturing capacity to produce our products and related equipment,
and delays in production and launches. These difficulties may result in the erosion of our brand image, divert the attention of management
and key employees and impact financial and operational results. In addition, in order to continue to expand our presence around the globe,
we expect to incur substantial expenses as we continue to attempt to streamline our manufacturing process, increase our launch cadence,
hire more employees, and fund research and development efforts relating to new products and technologies and expand our business. If
we are unable to drive commensurate growth, these costs, which include lease commitments, headcount and capital assets, could result
in decreased margins, which could have a material adverse effect on our business, financial condition and results of operations.

 Our
prospects and operations may be adversely affected by changes in consumer preferences and economic conditions that affect demand for
satellite services.

 Because
our business is currently concentrated on commercial satellite manufacturing, launch and data services, we are vulnerable to changes
in consumer preferences or other market changes. The global economy has in the past, and will in the future, experience recessionary
periods and periods of economic instability. During such periods, our potential customers may choose not to expend the amounts that we
anticipate based on our expectations with respect to the addressable market for satellite services. There could be a number of other
effects from adverse general business and economic conditions on our business, including insolvency of any of our third-party suppliers
or contractors, decreased consumer confidence, decreased discretionary spending and reduced customer or governmental demand for satellites
and other products we produce, which could have a material adverse effect on our business, financial condition and results of operations.

 Adverse
publicity stemming from any incident involving us or our competitors, could have a material adverse effect on our business, financial
condition and results of operations.

 We
are at risk of adverse publicity stemming from any public incident involving our company, our people or our brand. If any of our launch
partners' vehicles or our satellites or those of one of our competitors were to be involved in a public incident, accident or catastrophe,
this could create an adverse public perception of satellite launch or manufacturing activities and result in decreased customer demand
for launch and satellite services, which could cause a material adverse effect on our business, financial conditions and results of operations.
Further, if our launch partners' vehicles or rockets were to be involved in a public incident, accident or catastrophe, we could
be exposed to significant reputational harm or potential legal liability. Any reputational harm to our business could cause customers
with existing contracts with us to cancel their contracts and could significantly impact our ability to make future sales. The insurance
we carry may be inapplicable or inadequate to cover any such incident, accident or catastrophe. In the event that our insurance is inapplicable
or not adequate, we may be forced to bear substantial losses from an incident or accident.

 If
we are unable to maintain relationships with our existing launch partners or enter into relationships with new launch partners, we may
be unable to reach our targeted annual launch rate, which could have an adverse effect on our ability to grow our business.

 We
do not own or operate our own launch vehicles. We rely on third party launch partners to launch our and our customers' satellites.
We may in the future experience delays in our efforts to secure additional launch partners. Challenges as a result of regulatory processes
or in the ability of our partners to secure the necessary permissions to establish launch sites could delay our ability to achieve our
target cadence and could adversely affect our business.

 We
are dependent on third-party launch vehicles to deliver our systems, products, and technologies into space. If the number of companies
offering launch services or the number of launches does not grow in the future or there is a consolidation among companies who offer
these services, this could result in a shortage of space on these launch vehicles, which may cause delays in our ability to meet our
customers' needs. Additionally, a shortage of space available on launch vehicles may cause prices to increase or cause delays in
our ability to meet our customers' needs. Either of these situations could have a material adverse effect on our results of operations
and financial condition.

 Further,
if a launch is delayed, our timing for recognition of revenue may be impacted depending on the length of the delay and the nature of
the contract with the customers with payloads on such delayed flight. Such a delay in recognizing revenue could materially impact our
financial statements or result in negative impacts to our earnings during a specified time period, which could have a material effect
on our results of operations and financial condition.

 We
rely on a limited number of suppliers for certain raw materials and supplied components. We may not be able to obtain sufficient raw
materials or supplied components to meet our manufacturing and operating needs, or obtain such materials on favorable terms, which could
impair our ability to fulfill our orders in a timely manner or increase our costs of production.

 Our
ability to manufacture our products is dependent upon sufficient availability of raw materials and supplied components, which we secure
from a limited number of suppliers. Our reliance on suppliers to secure these raw materials and supplied components exposes us to volatility
in the prices and availability of these materials. We may not be able to obtain sufficient supply of raw materials or supplied components,
on favorable terms or at all, which could result in delays in manufacture of our products or increased costs.

 In
addition, we have in the past and may in the future experience delays in manufacture or operation as we go through the requalification
process with any replacement third-party supplier, as well as the limitations imposed by International Traffic in Arms Regulations and
other restrictions on transfer of sensitive technologies. Additionally, the imposition of tariffs on such raw materials or supplied components
could have a material adverse effect on our operations. Prolonged disruptions in the supply of any of our key raw materials or components,
difficulty qualifying new sources of supply, implementing use of replacement materials or new sources of supply or any volatility in
prices could have a material adverse effect on our ability to operate in a cost-efficient, timely manner and could cause us to experience
cancellations or delays of scheduled launches, customer cancellations or reductions in our prices and margins, any of which could harm
our business, financial condition and results of operations.

 Failure
of third-party contractors could adversely affect our business.

 We
are dependent on various third-party contractors to develop and provide certain of our components of and processes to our products. Should
we experience complications with any of these components and services, we may need to delay our manufacturing activities or delay or
cancel scheduled launches. We face the risk that any of our contractors may not fulfill their contracts and deliver their products or
services on a timely basis, or at all. We have in the past experienced, and may in the future experience, operational complications with
our contractors. The ability of our contractors to effectively satisfy our requirements could also be impacted by such contractors'
financial difficulty or damage to their operations caused by fire, terrorist attack, natural disaster, or other events. The failure of
any contractors to perform to our expectations could result in shortages of certain manufacturing or operational components for our spacecraft
or delays in spaceflights and harm our business. Our reliance on contractors and inability to fully control any operational difficulties
with our third-party contractors could have a material adverse effect on our business, financial condition, and results of operations.

 We
expect to face intense competition in the commercial space market and other industries in which we may operate.

 We
face intense competition in the commercial space market and amongst our competitors. Currently, our primary competitors in the commercial
satellite market are Blacksky, Spire, Hawkeye 360, LoftOrbital, York Aerospace Systems and IceEye. In addition, we are aware of a significant
number of entities actively engaged in developing commercial launch capabilities for small and medium sized satellite payloads, including
ABL, Rocketlab, Blue Origin, United Launch Alliance and Firefly, among others. Many of our current and potential competitors are larger
and have substantially greater financial or other resources than we currently have or expect to have in the future, and thus may be better
positioned to exploit the market need for small payloads and targeted orbital delivery, which is the focus of our business. They may
also be able to devote greater resources to the development of their current and future technologies, which could overlap with our technologies,
or the promotion and sale of their products and services. Our competitors could offer small launch vehicles at lower prices, which could
undercut our business strategy and potential competitive edge. Our current and potential competitors may also establish cooperative or
strategic relationships amongst themselves or with third parties that may further enhance their resources and offerings relative to ours.
Further, it is possible that domestic or foreign companies or governments, some with greater experience in the aerospace industry or
greater financial resources than we possess, will seek to provide products or services that compete directly or indirectly with ours
in the future. Any such foreign competitor, for example, could benefit from subsidies from, or other protective measures by, its home
country.

 We
believe our ability to compete successfully as a commercial provider of launch and satellite services does and will depend on a number
of factors, which may change in the future due to increased competition, including the price of our products and services, consumer satisfaction
for the experiences we offer, and the frequency and availability of our products and services. If we are unable to compete successfully,
our business, financial condition and results of operations could be adversely affected.

 We
may in the future invest significant resources in developing new service offerings and exploring the application of our proprietary technologies
for other uses and those opportunities may never materialize.

 While
our primary focus for the foreseeable future will be on commencing our commercial launch activities, increasing our launch cadence, and
fully expanding our satellite operations center, we may also invest significant resources in developing new technologies, services, products,
and offerings. However, we may not realize the expected benefits of these investments. These anticipated technologies, however, are unproven
and these products or technologies may never materialize or be commercialized in a way that would allow us to generate ancillary revenue
streams. Relatedly, if such technologies become viable offerings in the future, we may be subject to competition from our competitors
within the commercial launch and satellite industries, some of which may have substantially greater monetary and knowledge resources
than we have and expect to have in the future to devote to the development of these technologies. Such competition or any limitations
on our ability to take advantage of such technologies could impact our market share, which could have a material adverse effect on our
business, financial condition, and results of operations.

 Such
research and development initiatives may also have a high degree of risk and involve unproven business strategies and technologies with
which we have limited operating or development experience. They may involve claims and liabilities (including, but not limited to, personal
injury claims), expenses, regulatory challenges, and other risks that we may not be able to anticipate. There can be no assurance that
customer demand for such initiatives will exist or be sustained at the levels that we anticipate, or that any of these initiatives will
gain sufficient traction or market acceptance to generate sufficient revenue to offset any new expenses or liabilities associated with
these new investments. Further, any such research and development efforts could distract management from current operations and would
divert capital and other resources from our more established offerings and technologies. Even if we were to be successful in developing
new products, services, offerings or technologies, regulatory authorities may subject us to new rules or restrictions in response to
our innovations that may increase our expenses or prevent us from successfully commercializing new products, services, offerings, or
technologies.

 If
we fail to adequately protect our proprietary intellectual property rights, our competitive position could be impaired and we may lose
valuable assets, generate reduced revenue and incur costly litigation to protect our rights.

 Our
success depends, in part, on our ability to protect our proprietary intellectual property rights, including certain methodologies, practices,
tools, technologies and technical expertise we utilize in designing, developing, implementing, and maintaining applications and processes
used in our satellite systems and related technologies. To date, we have relied primarily on trade secrets and other intellectual property
laws, non-disclosure agreements with our employees, consultants and other relevant persons and other measures to protect our intellectual
property and intend to continue to rely on these and other means, including patent protection, in the future. However, the steps we take
to protect our intellectual property may be inadequate, and we may choose not to pursue or maintain protection for our intellectual property
in the United States or foreign jurisdictions. We will not be able to protect our intellectual property if we are unable to enforce our
rights or if we do not detect unauthorized use of our intellectual property. Despite our precautions, it may be possible for unauthorized
third parties to copy our technology and use information that we regard as proprietary to create technology that competes with ours.

 Further,
the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and mechanisms for
enforcement of intellectual property rights in some foreign countries may be inadequate. To the extent we expand our international activities,
our exposure to unauthorized copying and use of our technologies and proprietary information may increase. Accordingly, despite our efforts,
we may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating our technology and intellectual
property.

 We
rely in part on trade secrets, proprietary know-how and other confidential information to maintain our competitive position. Although
we enter into non-disclosure and invention assignment agreements with our employees, enter into non-disclosure agreements with our customers,
consultants, and other parties with whom we have strategic relationships and business alliances and enter into intellectual property
assignment agreements with our consultants and vendors, no assurance can be given that these agreements will be effective in controlling
access to and distribution of our technology and proprietary information. Further, these agreements do not prevent our competitors from
independently developing technologies that are substantially equivalent or superior to our products.

 Protecting
and defending against intellectual property claims may have a material adverse effect on our business.

 Our
success depends in part upon successful prosecution, maintenance, enforcement and protection of our owned and licensed intellectual property.

 To
protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigation
may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Such litigation could be
costly, time consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property.
Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking
the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology, as well as
any costly litigation or diversion of our management's attention and resources, could disrupt our business, as well as have a material
adverse effect on our financial condition and results of operations. The results of intellectual property litigation are difficult to
predict and may require us to stop using certain technologies or offering certain services or may result in significant damage awards
or settlement costs. There is no guarantee that any action to defend, maintain or enforce our owned or licensed intellectual property
rights will be successful, and an adverse result in any such proceeding could have a material adverse impact on our business, financial
condition, operating results, and prospects.

 In
addition, we may from time-to-time face allegations that we are infringing, misappropriating or otherwise violating the intellectual
property rights of third parties, including the intellectual property rights of our competitors. We may be unaware of the intellectual
property rights that others may claim cover some or all of our technology or services. Irrespective of the validity of any such claims,
we could incur significant costs and diversion of resources in defending against them, and there is no guarantee any such defense would
be successful, which could have a material adverse effect on our business, contracts, financial condition, operating results, liquidity,
and prospects.

 Even
if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and
the time and resources necessary to litigate or resolve them, could divert the time and resources of our management team, and harm our
business, our operating results and our reputation.

 The
majority of our customer contracts may be terminated by the customer at any time for convenience as well as other provisions permitting
the customer to discontinue contract performance for cause (for example, if we do not achieve certain milestones on a timely basis).
If our contracts are terminated or if we experience any other contract-related risks, our results of operations may be adversely impacted.
In addition, some of our customers are government entities, which subjects us to additional risks including early termination, audits,
investigations, sanctions, and penalties.

 We
are subject to a variety of contract-related risks. Some of our existing customer contracts, including those with the government, include
provisions allowing the customers to terminate their contracts for convenience, with a termination penalty for at least the amounts already
paid, or to terminate the contracts for cause (for example, if we do not achieve certain milestones on a timely basis). Customers that
terminate such contracts may also be entitled to a pro rata refund of the amount of the customer's deposit. In addition, some of
our customers are pre-revenue startups or otherwise not fully established companies, which exposes us to a degree of counterparty credit
risk.

 Part
of our strategy is to market our space and satellite manufacturing and launch and data services to key government customers. We expect
we may derive limited revenue from contracts with NASA and the U.S. government and may enter into further contracts with the U.S. or
foreign governments in the future, and this subjects us to statutes and regulations applicable to companies doing business with the U.S.
government, including the Federal Acquisition Regulation. These U.S. government contracts customarily contain provisions that give the
government substantial rights and remedies, many of which are not typically found in commercial contracts, and which are unfavorable
to contractors. For instance, most U.S. government agencies include provisions that allow the government to unilaterally terminate or
modify contracts for convenience, in which case the counterparty to the contract may generally recover only its incurred or committed
costs and settlement expenses and profit on work completed prior to the termination. If the government terminates a contract for default,
the defaulting party may be liable for any extra costs incurred by the government in procuring undelivered items from another source.

 Our
government contracts may be subject to the approval of appropriations being made by the U.S. Congress to fund the expenditures under
these contracts. In addition, government contracts normally contain additional requirements that may increase our costs of doing business,
reduce our profits, and expose us to liability for failure to comply with these terms and conditions. These requirements include, for
example:

 specialized
 disclosure and accounting requirements unique to government contracts;

 financial
 and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds
 have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with
 the U.S. government;

 public
 disclosures of certain contract and company information; and

 mandatory
 socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental
 compliance requirements.

 Government
contracts are also generally subject to greater scrutiny by the government, which can initiate reviews, audits, and investigations regarding
our compliance with government contract requirements. In addition, if we fail to comply with government contract laws, regulations and
contract requirements, our contracts may be subject to termination, and we may be subject to financial and/or other liability under our
contracts, the Federal Civil False Claims Act (including treble damages and other penalties), or criminal law. In particular, the False
Claims Act's "whistleblower" provisions also allow private individuals, including present and former employees, to
sue on behalf of the U.S. government. Any penalties, damages, fines, suspension, or damages could adversely affect our ability to operate
our business and our financial results. If any customer were to unexpectedly terminate, cancel, or decline to exercise an option to renew
with respect to one or more of our significant contracts for any reason, including as a result of our failure to meet certain performance
milestones, or if a government customer were to suspend or debar us from doing business with such government, our business, financial
condition, and results of operations would be materially harmed.

 If
we commercialize outside the United States, we will be exposed to a variety of risks associated with international operations that could
materially and adversely affect our business.

 As
part of our growth, we aim to establish offices and partnerships outside of the United States. We plan to continue to build our pipeline
of global customers to include joint ventures and strategic partnerships. As we expand internationally, we expect that we would be subject
to additional risks related to entering into international business relationships, including:

 restructuring
 our operations to comply with local regulatory regimes;

 identifying,
 hiring and training highly skilled personnel;

 unexpected
 changes in tariffs, trade barriers and regulatory requirements, including through the International Traffic in Arms Regulations,
 or ITAR, Export Administration Regulations, or EAR, and Office of Foreign Assets Control, or OFAC;

 economic
 weakness, including inflation, or political instability in foreign economies and markets;

 compliance
 with tax, employment, immigration, and labor laws for employees living or traveling abroad;

 foreign
 taxes, including withholding of payroll taxes;

 the
 need for U.S. government approval to operate our spaceflight systems outside the United States;

 foreign
 currency fluctuations, which could result in increased operating expenses and reduced revenue;

 government
 appropriation of assets;

 workforce
 uncertainty in countries where labor unrest is more common than in the United States; and

 disadvantages
 of competing against companies from countries that are not subject to U.S. laws and regulations, including the U.S. Foreign Corrupt
 Practices Act, or FCPA, OFAC regulations and U.S. anti-money laundering regulations, as well as exposure of our foreign operations
 to liability under these regulatory regimes.

 Our
business is subject to a wide variety of extensive and evolving government laws and regulations. Failure to comply with such laws and
regulations could have a material adverse effect on our business.

 We
are subject to a wide variety of laws and regulations relating to various aspects of our business, including with respect to our satellite
system operations, employment and labor, health care, tax, privacy and data security, health and safety, and environmental issues. Laws
and regulations at the foreign, federal, state, and local levels frequently change, especially in relation to new and emerging industries,
and we cannot always reasonably predict the impact from, or the ultimate cost of compliance with, current or future regulatory or administrative
changes. We monitor these developments and devote a significant amount of management's time and external resources towards compliance
with these laws, regulations and guidelines, and such compliance places a significant burden on management's time and other resources,
and it may limit our ability to expand into certain jurisdictions. Moreover, changes in law, the imposition of new or additional regulations
or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate and
could have a material adverse effect on our sales, profitability, cash flows and financial condition.

 Failure
to comply with these laws, such as with respect to obtaining and maintaining licenses, certificates, authorizations and permits critical
for the operation of our business, may result in civil penalties or private lawsuits, or the suspension or revocation of licenses, certificates,
authorizations or permits, which would prevent us from operating our business. For example, deploying space assets such as satellites
in the United States require licenses and permits from certain agencies of the Department of Transportation, including the Federal Aviation
Administration, or FAA, and review by other agencies of the U.S. Government, including the National Oceanic and Atmospheric Administration,
or "NOAA", the Department of Defense, Department of State, NASA, Federal Communications Commission, or the "FCC"
and the International Telecommunications Union, or the "ITU". License approval includes an interagency review of safety,
operational, national security, and foreign policy and international obligations implications, as well as a review of foreign ownership.
Delays in licensing and approvals allowing us to deploy our commercial satellites could adversely affect our ability to operate our business
and our financial results.

 Moreover,
regulation of our industry is still evolving, and new or different laws or regulations could affect our operations, increase direct compliance
costs for us or cause any third-party suppliers or contractors to raise the prices they charge us because of increased compliance costs.
Application of these laws to our business may negatively impact our performance in various ways, limiting the collaborations we may pursue,
further regulating the export and re-export of our products, services, and technology from the United States and abroad, and increasing
our costs and the time necessary to obtain required authorization. The adoption of a multi-layered regulatory approach to any one of
the laws or regulations to which we are or may become subject, particularly where the layers are in conflict, could require alteration
of our manufacturing processes or operational parameters which may adversely impact our business. We may not be in complete compliance
with all such requirements at all times and, even when we believe we are in complete compliance, a regulatory agency may determine that
we are not. The timing of our satellite deployments may depend on the ability of our partners to secure regulatory licenses from the
FAA and the FCC/ITU.

 A
component of our near-term strategy involves increasing our launch cadence by accelerating our development and production efforts and
adding additional launch partners. Our ability to achieve this increased launch cadence within the timeframe in which we hope to do so
will depend on the ability of our launch partners to secure the necessary regulatory licenses from the FAA, the FCC/ITU and other regulatory
authorities. If our launch partners fail to obtain the licenses necessary to support our anticipated launch cadence, or any delays or
hurdles that present in our interactions with the FAA, the FCC/ITU or other regulatory authorities, could impact our ability to grow
our business, could delay our ability to execute on our existing and future customer contracts and could adversely affect our business
and results of operations.

 We
are subject to stringent U.S. export and import control laws and regulations. Unfavorable changes in these laws and regulations or U.S.
government licensing policies, our failure to secure timely U.S. government authorizations under these laws and regulations, or our failure
to comply with these laws and regulations could have a material adverse effect on our business, financial condition, and results of operation.

 Our
business is subject to stringent U.S. import and export control laws and regulations as well as economic sanctions laws and regulations.
We are required to import and export our products, software, technology, and services, as well as run our operations in the United States,
in full compliance with such laws and regulations, which include the EAR, the ITAR, and economic sanctions administered by the Treasury
Department's OFAC. Similar laws that impact our business exist in other jurisdictions. These foreign trade controls prohibit, restrict,
or regulate our ability to, directly or indirectly, export, deemed export, re-export, deemed re-export or transfer certain hardware,
technical data, technology, software, or services to certain countries and territories, entities, and individuals, and for end uses.
If we are found to be in violation of these laws and regulations, it could result in civil and criminal, monetary and non-monetary penalties,
the loss of export or import privileges, debarment, and reputational harm.

 Pursuant
to these foreign trade control laws and regulations, we are required, among other things, to (i) maintain a registration under the ITAR,
(ii) determine the proper licensing jurisdiction and export classification of products, software, and technology, and (iii) obtain licenses
or other forms of U.S. government authorization to engage in the conduct of our spaceflight business. The authorization requirements
include the need to get permission to release controlled technology to foreign person employees and other foreign persons. Changes in
U.S. foreign trade control laws and regulations, or reclassifications of our products or technologies, may restrict our operations. The
inability to secure and maintain necessary licenses and other authorizations could negatively impact our ability to compete successfully
or to operate our spaceflight business as planned. Any changes in the export control regulations or U.S. government licensing policy,
such as those necessary to implement U.S. government commitments to multilateral control regimes, may restrict our operations. Given
the great discretion the government has in issuing or denying such authorizations to advance U.S. national security and foreign policy
interests, there can be no assurance we will be successful in our future efforts to secure and maintain necessary licenses, registrations,
or other U.S. government regulatory approvals.

 Under
the "Exon-Florio Amendment" to the U.S. Defense Production Act of 1950, as amended (the "DPA"), the U.S. President
has the power to disrupt or block certain foreign investments in U.S. businesses if he determines that such a transaction threatens U.S.
national security. The Committee on Foreign Investment in the United States ("CFIUS") has been delegated the authority to
conduct national security reviews of certain foreign investments. CFIUS may impose mitigation conditions to grant clearance of a transaction.

 The
Foreign Investment Risk Review Modernization Act ("FIRRMA"), enacted in 2018, amended the DPA to, among other things, expand
CFIUS's jurisdiction beyond acquisitions of control of U.S. businesses. Under FIRRMA, CFIUS also has jurisdiction over certain
foreign non-controlling investments in U.S. businesses that are involved with critical technology or critical infrastructure, or that
collect and maintain sensitive personal data of U.S. citizens ("TID U.S. Businesses"), if the foreign investor receives specified
triggering rights in connection with its investment. We are a TID U.S. Business because we develop and design technologies that would
be considered critical technologies. Certain foreign investments in TID U.S. Businesses are subject to mandatory filing with CFIUS. These
restrictions on the ability of foreign persons to invest in us could limit our ability to engage in strategic transactions that could
benefit our stockholders, including a change of control, and could also affect the price that an investor may be willing to pay for our
common stock.

 Failure
to comply with federal, state, and foreign laws and regulations relating to privacy, data protection and consumer protection, or the
expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could
adversely affect our business and our financial condition.

 We
collect, store, process, and use personal information and other customer data, and we rely in part on third parties that are not directly
under our control to manage certain of these operations and to collect, store, process and use payment information. Due to the volume
and sensitivity of the personal information and data we and these third parties manage and expect to manage in the future, as well as
the nature of our customer base, the security features of our information systems are critical. A variety of federal, state, and foreign
laws and regulations govern the collection, use, retention, sharing and security of this information. Laws and regulations relating to
privacy, data protection and consumer protection are evolving and subject to potentially differing interpretations. These requirements
may not be harmonized, may be interpreted, and applied in a manner that is inconsistent from one jurisdiction to another or may conflict
with other rules or our practices. As a result, our practices may not have complied or may not comply in the future with all such laws,
regulations, requirements, and obligations.

 We
expect that new industry standards, laws and regulations will continue to be proposed regarding privacy, data protection and information
security in many jurisdictions. We cannot yet determine the impact such future laws, regulations and standards may have on our business.
Complying with these evolving obligations is costly.

 As
we expand our international presence, we may also become subject to additional privacy rules, many of which, such as the General Data
Protection Regulation promulgated by the European Union (the "GDPR") and national laws supplementing the GDPR, such as in
the United Kingdom, are significantly more stringent than those currently enforced in the United States. The law requires companies to
meet stringent requirements regarding the handling of personal data of individuals located in the EEA. These more stringent requirements
include expanded disclosures to inform customers about how we may use their personal data through external privacy notices, increased
controls on profiling customers and increased rights for data subjects (including customers and employees) to access, control and delete
their personal data. In addition, there are mandatory data breach notification requirements. The law also includes significant penalties
for non-compliance, which may result in monetary penalties of up to the higher of 20.0 million or 4% of a group's worldwide
turnover for the preceding financial year for the most serious violations. The GDPR and other similar regulations require companies to
give specific types of notice and informed consent is required for the placement of a cookie or similar technologies on a user's
device for online tracking for behavioral advertising and other purposes and for direct electronic marketing, and the GDPR also imposes
additional conditions in order to satisfy such consent, such as a prohibition on pre-checked tick boxes and bundled consents, thereby
requiring customers to affirmatively consent for a given purpose through separate tick boxes or other affirmative action.

 A
significant data breach or any failure, or perceived failure, by us to comply with any federal, state or foreign privacy or consumer
protection-related laws, regulations or other principles or orders to which we may be subject or other legal obligations relating to
privacy or consumer protection could adversely affect our reputation, brand and business, and may result in claims, investigations, proceedings
or actions against us by governmental entities or others or other penalties or liabilities or require us to change our operations and/or
cease using certain data sets. Depending on the nature of the information compromised, we may also have obligations to notify users,
law enforcement or payment companies about the incident and may need to provide some form of remedy, such as refunds, for the individuals
affected by the incident.

 Failures
in our technology infrastructure could damage our business, reputation and brand and substantially harm our business and results of operations.

 If
our main data center were to fail, or if we were to suffer an interruption or degradation of services at our main data center, we could
lose important manufacturing and technical data, which could harm our business. Our facilities are vulnerable to damage or interruption
from earthquakes, hurricanes, floods, fires, cyber security attacks, terrorist attacks, power losses, telecommunications failures, and
similar events. In the event that our or any third-party provider's systems or service abilities are hindered by any of the events
discussed above, our ability to operate may be impaired. A decision to close the facilities without adequate notice, or other unanticipated
problems, could adversely impact our operations. Any of the aforementioned risks may be augmented if our or any third-party provider's
business continuity and disaster recovery plans prove to be inadequate. The facilities also could be subject to break-ins, computer viruses,
sabotage, intentional acts of vandalism and other misconduct. Any security breach, including personal data breaches, or incident, including
cybersecurity incidents, that we experience could result in unauthorized access to, misuse of or unauthorized acquisition of our or our
customers' data, the loss, corruption or alteration of this data, interruptions in our operations or damage to our computer hardware
or systems or those of our customers. Moreover, negative publicity arising from these types of disruptions could damage our reputation.
We may not carry sufficient business interruption insurance to compensate us for losses that may occur as a result of any events that
cause interruptions in our service. Significant unavailability of our services due to attacks could cause users to cease using our services
and materially and adversely affect our business, prospects, financial condition, and results of operations.

 We are highly dependent on our senior management
team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not
be able to successfully implement our business strategy.

 Our success depends, in significant part, on the continued
services of our senior management team and on our ability to attract, motivate, develop, and retain a sufficient number of other highly
skilled personnel, including engineers, manufacturing and quality assurance, design, finance, marketing, sales and support personnel.
Our senior management team has extensive experience in the aerospace industry, and we believe that their depth of experience is instrumental
to our continued success. The loss of any one or more members of our senior management team, for any reason, including resignation or
retirement, could impair our ability to execute our business strategy and have a material adverse effect on our business, financial condition,
and results of operations.

 Competition for qualified highly skilled personnel
can be strong, and we can provide no assurance that we will be successful in attracting or retaining such personnel now or in the future.
We have not yet started production level satellite manufacturing, launch and data operations, and our estimates of the required team size
to support our estimated flight rates may require increases in staffing levels that may require significant capital expenditure. Further,
any inability to recruit, develop and retain qualified employees may result in high employee turnover and may force us to pay significantly
higher wages, which may harm our profitability. Additionally, we only carry key man insurance for our Chief Executive Officer, and the
loss of any key employee or our inability to recruit, develop and retain these individuals as needed, could have a material adverse effect
on our business, financial condition, and results of operations.

 Any acquisitions, partnerships, or joint ventures
that we enter into could disrupt our operations and have a material adverse effect on our business, financial condition and results of
operations.

 From time to time, we may evaluate potential strategic
acquisitions of businesses, including partnerships or joint ventures with third parties, both domestic and international. We may not be
successful in identifying acquisition, partnership, and joint venture candidates. In addition, we may not be able to continue the operational
success of such businesses or successfully finance or integrate any businesses that we acquire or with which we form a partnership or
joint venture. We may have potential write-offs of acquired assets and/or an impairment of any goodwill recorded as a result of acquisitions.
Furthermore, the integration of any acquisition may divert management's time and resources from our core business and disrupt our
operations or may result in conflicts with our business. Any acquisition, partnership or joint venture may not be successful, may reduce
our cash reserves, may negatively affect our earnings and financial performance and, to the extent financed with the proceeds of debt,
may increase our indebtedness. We cannot ensure that any acquisition, partnership, or joint venture we make will not have a material adverse
effect on our business, financial condition, and results of operations.

 We may experience difficulties in integrating
the operations of acquired companies into our business and in realizing the expected benefits of these acquisitions.

 Acquisitions involve numerous risks, any of which
could harm our business and negatively affect our financial condition and results of operations. The success of any acquisition will depend
in part on our ability to realize the anticipated business opportunities from combining their and our operations in an efficient and effective
manner. These integration processes could take longer than anticipated and could result in the loss of key employees, the disruption of
each company's ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology
systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees
or other third parties, or our ability to achieve the anticipated benefits of the acquisitions, and could harm our financial performance.
If we are unable to successfully or timely integrate the operations of an acquired company with our business, we may incur unanticipated
liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the acquisitions, or
fully offset the costs of the acquisition, and our business, results of operations and financial condition could be materially and adversely
affected.

 We are subject to many hazards and operational
risks that can disrupt our business, including interruptions or disruptions in service at our primary facilities, which could have a material
adverse effect on our business, financial condition, and results of operations.

 Our operations are subject to many hazards and operational
risks inherent to our business, including general business risks, product liability and damage to third parties, our infrastructure or
properties that may be caused by fires, floods and other natural disasters, power losses, telecommunications failures, terrorist attacks,
human errors and similar events. Additionally, our manufacturing operations are hazardous at times and may expose us to safety risks,
including environmental risks and health and safety hazards to our employees or third parties.

 Moreover, our operations are entirely based in and
around our Cape Canaveral, Florida facility, where our machine shop, production facilities, administrative offices, and engineering functions
are located. Any significant interruption due to any of the above hazards and operational to the manufacturing or operation of our facilities,
including from weather conditions, growth constraints, performance by third-party providers (such as electric, utility or telecommunications
providers), failure to properly handle and use hazardous materials, failure of computer systems, power supplies, fuel supplies, infrastructure
damage, disagreements with the owners of the land on which our facilities are located could result in manufacturing delays or the delay
or cancellation of our planned commercial satellite launches and, as a result, could have a material adverse effect on our business, financial
condition and results of operations.

 In addition, our insurance coverage may be inadequate
to cover our liabilities related to such hazards or operational risks. Moreover, we may not be able to maintain adequate insurance in
the future at rates we consider reasonable and commercially justifiable, and insurance may not continue to be available on terms as favorable
as our current arrangements. The occurrence of a significant uninsured claim, or a claim in excess of the insurance coverage limits maintained
by us, could harm our business, financial condition and results of operations.

 We have not historically obtained and may not
maintain launch or in-orbit insurance coverage for our satellites to address the risk of potential systemic anomalies, failures, collisions
with our satellites or other satellites or debris, or catastrophic events affecting the existing satellite system. If one or more of our
launches result in catastrophic failure or one or more of our in-orbit satellites or payloads fail, and we have not obtained insurance
coverage, we could be required to record significant impairment charges for the satellite or payload.

 We have not historically obtained and may not maintain
launch or in-orbit insurance coverage for our satellites to address the risk of potential systemic anomalies, failures, collisions with
our satellites or other satellites or debris, or catastrophic events affecting the existing satellite system. If one or more of our in-orbit
uninsured satellites or payloads fail, or one or more of our uninsured satellites is destroyed during failed launch, we could be required
to record significant impairment charges for the satellite or payload. We may review the purchase of launch insurance on a case-by-case
basis evaluating the launch history of our launch provider, number of satellites to be deployed on the launch vehicle, the status of our
constellation, our ability to launch additional satellites in the near term, and the cost of insurance, among other factors. As a result
of our case-by-case evaluation process, we have procured launch insurance for our next four upcoming launches, which policies are subject
to the typical terms and conditions regarding, among other things, cancellation and scope of coverage. We do not maintain third-party
liability insurance with respect to our satellites. Accordingly, we currently have no insurance to cover any third-party damages that
may be caused by any of our satellites, including personal and property insurance. If we experience significant uninsured losses, such
events could have a material adverse impact on our business, financial condition and results of operations.

 Natural disasters, unusual weather conditions,
epidemic outbreaks, global health crises, terrorist acts and political events could disrupt our business and flight schedule.

 The occurrence of one or more natural disasters such
as tornadoes, hurricanes, fires, floods and earthquakes, unusual weather conditions, epidemic outbreaks, terrorist attacks or disruptive
political events in certain regions where our facilities are located, or where our third-party contractors' and suppliers'
facilities are located, could adversely affect our business, financial condition, and results of operations. Severe weather, such as rainfall,
snowfall, or extreme temperatures, may impact the ability of our satellite launch and data services to be carried out as planned, resulting
in additional expense to reschedule such service, thereby reducing our sales and profitability. Terrorist attacks, actual or threatened
acts of war or the escalation of current hostilities, or any other military or trade disruptions impacting our domestic or foreign suppliers
of components of our products, may impact our operations by, among other things, causing supply chain disruptions and increases in commodity
prices, which could adversely affect our raw materials or transportation costs. These events also could cause or act to prolong an economic
recession in the United States or abroad. To the extent these events also impact one or more of our suppliers or contractors or result
in the closure of any of their facilities or our facilities, commence our commercial satellite launch activities as planned or thereafter
increase our launch cadence. In addition, the disaster recovery and business continuity plans we have in place currently are limited and
are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the
limited nature of our disaster recovery and business continuity plans and, more generally, any of these events could cause consumer confidence
and spending to decrease, which could adversely impact our commercial satellite manufacturing, launch and data operations.

 Our operating results may fluctuate significantly,
which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any
guidance we may provide.

 Our quarterly and annual operating results may fluctuate
significantly, which makes it difficult for us to predict our future operating results. These fluctuations may occur due to a variety
of factors, many of which are outside of our control, including, but not limited to:

 the number of satellite launch missions we schedule for a period, the price at which we sell them and our ability schedule additional launch missions for repeat customers;

 unexpected weather patterns, maintenance issues, natural disasters or other events that force us to cancel or reschedule launches;

 the cost of raw materials or supplied components critical for the manufacture and operation of our satellite equipment;

 the timing and cost of, and level of investment in, research and development relating to our technologies and our current or future facilities;

 developments involving our competitors;

 changes in governmental regulations or in the status of our regulatory approvals or applications;

 future accounting pronouncements or changes in our accounting policies; and

 general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.

 The individual or cumulative effects of factors discussed
above could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our
operating results on a period-to-period basis may not be meaningful.

 This variability and unpredictability could also result
in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results
fall below the expectations of analysts or investors or below any guidance we may provide, or if the guidance we provide is below the
expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur
even when we have met any previously publicly stated guidance we may provide.

 We may become involved in litigation that may
materially adversely affect us.

 From time to time, we may become involved in various
legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial,
product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations
and proceedings. Such matters can be time-consuming, divert management's attention and resources from the operation of our business,
and cause us to incur significant expenses or liability or require us to change our business practices. Because of the potential risks,
expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious
claims or defenses. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will
not have a material adverse effect on our business.

 We have been focused on developing satellite
manufacturing and launch capabilities and services since 2013. This limited operating history makes it difficult to evaluate our future
prospects and the risks and challenges it may encounter.

 Because we have limited historical financial data
and operate in a rapidly evolving market, any predictions about its future revenue and expenses may not be as accurate as they would be
if it had a longer operating history or operated in a more developed market. We have encountered in the past, and will encounter in the
future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or
if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business,
financial condition and results of operations could be adversely affected.

 The markets for commercial satellite manufacturing,
launch and data services have not been well established as the commercialization of space is a relatively new development and is rapidly
evolving. Our estimates for the total addressable markets for satellite launch and data services are based on a number of internal and
third-party estimates, including our contracted revenue and sales pipeline, assumed prices at which we can offer services, assumed frequency
of service, our ability to leverage our current manufacturing and operational processes and general market conditions. As a result, our
estimates of the annual total addressable markets for in-space infrastructure services, as well as the expected growth rate for the total
addressable market for that experience, may prove to be incorrect.

 We are subject to environmental regulation and
may incur substantial costs.

 We are subject to federal, state, local and foreign
laws, regulations, and ordinances relating to the protection of the environment, including those relating to emissions to the air, discharges
to surface and subsurface waters, safe drinking water, greenhouse gases and the management of hazardous substances, oils and waste materials.
Federal, state, and local laws and regulations relating to the protection of the environment may require a current or previous owner or
operator of real estate to investigate and remediate hazardous or toxic substances or petroleum product releases at or from the property.
Under federal law, generators of waste materials, and current and former owners or operators of facilities, can be subject to liability
for investigation and remediation costs at locations that have been identified as requiring response actions. Compliance with environmental
laws and regulations can require significant expenditures. In addition, we could incur costs to comply with such current or future laws
and regulations, the violation of which could lead to substantial fines and penalties.

 We may have to pay governmental entities or third
parties for property damage and for investigation and remediation costs that they incurred in connection with any contamination at our
current and former properties without regard to whether we knew of or caused the presence of the contaminants. Liability under these laws
may be strict, joint and several, meaning that we could be liable for the costs of cleaning up environmental contamination regardless
of fault or the amount of waste directly attributable to us. Even if more than one person may have been responsible for the contamination,
each person covered by these environmental laws may be held responsible for all of the clean-up costs incurred. Environmental liabilities
could arise and have a material adverse effect on our financial condition and performance. We do not believe, however, that pending environmental
regulatory developments in this area will have a material effect on our capital expenditures or otherwise materially adversely affect
its operations, operating costs, or competitive position.

 The COVID-19 pandemic has and could continue
to negatively affect various aspects of our business, make it more difficult for us to meet our obligations to our customers, and result
in reduced demand for our products and services, which could have a material adverse effect on our business, financial condition, results
of operations, or cash flows.

 In December 2019, a novel strain of coronavirus was
reported to have surfaced in Wuhan, China, and it has since spread throughout other parts of the world, including the United States. Any
outbreak of contagious diseases or other adverse public health developments could have a material adverse effect on our business operations.
These impacts to our operations have included and could again in the future include disruptions or restrictions on the ability of our
employees and customers to travel or our ability to pursue collaborations and other business transactions, travel to customers and/or
conduct live demonstrations of our products, oversee the activities of our third-party manufacturers and suppliers. We may also be impacted
by the temporary closure of the facilities of suppliers, manufacturers, or customers.

 Changes in tax laws or regulations may increase
tax uncertainty and adversely affect results of our operations and our effective tax rate.

 We will be subject to taxes in the United States and
certain foreign jurisdictions. Due to economic and political conditions, tax rates in various jurisdictions, including the United States,
may be subject to change. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing
statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or their interpretation.
In addition, we may be subject to income tax audits by various tax jurisdictions. Although we believe our income tax liabilities are reasonably
estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities
could have a material impact on the results of our operations. Further, we may be unable to utilize our net operating losses in the event
a change in control is determined to have occurred.

 Our Chief Executive Officer, Carol Craig, is
also the Chief Executive Officer of CTC, our principal stockholder, and may allocate her time to such other business thereby causing conflicts
of interest in her determination as to how much time to devote to our affairs. This could have a negative impact on our ability to implement
our plan of operation.

 Our Chief Executive Officer, Carol Craig, is also
the Chief Executive Officer of CTC and may not commit her full time to our affairs, which may result in a conflict of interest in allocating
her time between our business and the other business. Ms. Craig spends approximately 50 hours per week working for us. Furthermore, our
Chief Executive Officer is not obligated to contribute any specific number of her hours per week to our affairs. If other business affairs
require our Chief Executive Officer to devote more amounts of time to other affairs, including the business of CTC, it could limit their
ability to devote time to our affairs and could have a negative impact on our ability to implement our plan of operation.

 Risks Related to our Relationship with Craig Technical
Consulting, Inc.

 CTC controls the direction of our business,
and the concentrated ownership of our common stock will prevent you and other stockholders from influencing significant decisions.

 CTC owns approximately 20% of the economic interest
and voting power of our outstanding common stock as of March 27,2024. Although CTC controls less than a majority of the voting power of
our outstanding Class B common stock, it may influence the outcome of such corporate actions requiring stockholder approval, including
election and removal of directors. If CTC continues to hold its shares of our Class B common stock, it could continue to influence these
actions for an extended period of time or indefinitely.

 The ownership by our Chief Executive Officer
of shares of CTC common stock may create, or may create the appearance of, conflicts of interest.

 The ownership by our Chief Executive Officer of shares
of CTC common stock may create, or may create the appearance of, conflicts of interest. Ownership by our Chief Executive Officer of common
stock of CTC, creates, or, may create the appearance of, conflicts of interest when she is faced with decisions that could have different
implications for CTC than the decisions have for us. Our Chief Executive Officer has agreed to recuse herself with respect to voting on
any matter coming before either CTC's or our board of directors related to our relationship with CTC, although she will still be
permitted to participate in discussions and negotiations. Any perceived conflicts of interest resulting from investors questioning the
independence of our management or the integrity of corporate governance procedures may materially affect our stock price.

 Risks Related to Our Class A Common Stock

 We are currently listed on The Nasdaq Capital
Market. If we are unable to maintain listing of our securities on Nasdaq or any stock exchange, our stock price could be adversely affected
and the liquidity of our stock and our ability to obtain financing could be impaired and it may be more difficult for our stockholders
to sell their securities.

 Although our common
stock is currently listed on The Nasdaq Capital Market, we may not be able to continue to meet the exchange's minimum listing requirements
or those of any other national exchange. If we are unable to maintain listing on Nasdaq or if a liquid market for our common stock does
not develop or is sustained, our common stock may remain thinly traded.

 The listing rules of
Nasdaq require listing issuers to comply with certain standards in order to remain listed on its exchange. If, for any reason, we should
fail to maintain compliance with these listing standards and Nasdaq should delist our securities from trading on its exchange and we
are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of
which could have a material adverse effect on our stockholders:

 the liquidity of our common stock;

 the market price of our common stock;

 our ability to obtain financing for the continuation
 of our operations;

 the number of institutional and general investors
 that will consider investing in our common stock;

 the number of investors in general that will consider
 investing in our common stock;

 the number of market makers in our common stock;

 the availability of information concerning the trading
 prices and volume of our common stock; and

 the number of broker-dealers willing to execute trades
 in shares of our common stock.

 The dual-class
structure of our common stock as contained in our amended and restated certificate of incorporation, as amended, has the effect of concentrating
voting influence with those stockholders who held our Class B common stock prior to our initial public offering. This ownership could
limit your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and
any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions requiring stockholder
approval, and that may adversely affect the trading price of our Class A common stock.

 Our Class B common
stock has ten votes per share, and our Class A common stock, which is the stock that we sold in our initial public offering, has one
vote per share. CTC holds all of the issued and outstanding shares of our Class B common stock, representing approximately 20% of the
voting power of our outstanding capital stock. In addition, because of the ten-to-one voting ratio between our Class B and Class A common
stock, the holder of our Class B common stock could continue to have significant influence in the voting power of our common stock and
therefore significantly influence all matters submitted to our stockholders for approval until converted by our Class B common stockholder.
This significant influence may limit or preclude your ability to influence corporate matters for the foreseeable future, including the
election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of
our assets or other major corporate transactions requiring stockholder approval. In addition, this concentrated control may prevent or discourage
unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders.
As a result, such influence may adversely affect the market price of our Class A common stock.

 Future transfers by
holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions
as specified in our amended and restated certificate of incorporation, such as transfers to family members and certain transfers effected
for estate planning purposes. The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing
the relative voting power of those holders of Class B common stock who retain their shares in the long term. As a result, it is possible
that one or more of the persons or entities holding our Class B common stock could gain significant voting influence as other holders
of Class B common stock sell or otherwise convert their shares into Class A common stock.

 We cannot predict
the effect our dual-class structure may have on the market price of our Class A common stock.

 We cannot predict whether
our dual-class structure will result in a lower or more volatile market price of our Class A common stock, adverse publicity or other
adverse consequences. For example, certain index providers have announced and implemented restrictions on including companies with multiple-class
share structures in certain of their indices. In July 2017, FTSE Russell announced that it would require new constituents of its indices
to have greater than 5% of the company's voting rights in the hands of public stockholders, and S&P Dow Jones announced that
it would no longer admit companies with multiple-class share structures to certain of its indices. Affected indices include the Russell
2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Also in 2017,
MSCI, a leading stock index provider, opened public consultations on its treatment of no-vote and multi-class structures and temporarily
barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity
securities "with unequal voting structures" in its indices and to launch a new index that specifically includes voting rights
in its eligibility criteria. Under such announced and implemented policies, the dual-class structure of our common stock would make us
ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds and other investment vehicles that
attempt to passively track those indices would not invest in our Class A common stock. These policies are relatively new and it is unclear
what effect, if any, they will have on the valuations of publicly-traded companies excluded from such indices, but it is possible that
they may adversely affect valuations, as compared to similar companies that are included. Due to the dual-class structure of our common
stock, we will likely be excluded from certain indices and we cannot assure you that other stock indices will not take similar actions.
Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock
indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors.
As a result, the market price of our Class A common stock could be adversely affected.+

 We could be subject
to securities class action litigation.

 In the past, securities
class action litigation has often been brought against companies following a decline in the market price of their securities. This risk
is especially relevant for us because biotechnology companies have experienced significant share price volatility in recent years. If
we face such litigation, it could result in substantial costs and a diversion of management's attention and resources, which could
harm our business.

 If securities
or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the
shares and trading volume could decline.

 The trading market
for our Class A common stock will depend in part on the research and reports that securities or industry analysts publish about us or
our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers
us downgrades our Class A common stock or publishes inaccurate or unfavorable research about our business, the market price for our Class
A common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us
regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our
common stock to decline.

 We do not expect to pay dividends in the foreseeable
future, and you must rely on price appreciation of your shares of Class A common stock for return on your investment.

 We have paid no cash dividends on any class of our
stock to date, and we do not anticipate paying cash dividends in the near term. For the foreseeable future, we intend to retain any earnings
to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our stock. Accordingly,
investors must be prepared to rely on sales of their shares after price appreciation to earn an investment return, which may never occur.
Investors seeking cash dividends should not purchase our shares. Any determination to pay dividends in the future will be made at the
discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions
imposed by applicable law and other factors our board deems relevant.

 We will incur increased costs as a public company,
and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

 As a public company, and particularly after we no
longer qualify as an emerging growth company, we will incur significant legal, accounting, and other expenses that we did not incur previously.
The Sarbanes-Oxley Act of 2002 ("SOX"), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements
of Nasdaq, and other applicable securities rules and regulations impose various requirements on U.S. reporting public companies, including
the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and
other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations
will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect
that these rules and regulations may make it more expensive for us to obtain director and officer liability insurance, which in turn could
make it more difficult for us to attract and retain qualified senior management personnel or members for our board of directors. In addition,
these rules and regulations are often subject to varying interpretations, and, as a result, their application in practice may evolve over
time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance
matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Pursuant to Section 404 of SOX ("Section
404"), we will be required to furnish a report by our senior management on our internal control over financial reporting.

 While we remain an emerging growth company, we will
not be required to include an attestation report on internal control over financial reporting issued by our independent registered public
accounting firm. To prepare for eventual compliance with Section 404, once we no longer qualify as an emerging growth company, we will
be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.
In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work
plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as
appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement
process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within
the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404.

 We are an "emerging growth company,"
and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.

 We are an "emerging growth company," as
defined in the Jumpstart Our Business Startups Act ("the JOBS Act"). For as long as we continue to be an emerging growth company,
we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies, including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations
regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and stockholder approval of any golden parachute payments not previously approved. We will remain an emerging growth company until the
earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering, (b)
in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our common stock held by non-affiliates exceeds $700 million as of the end of our prior second fiscal quarter,
and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

 In addition, under the JOBS Act, emerging growth companies
may delay adopting new or revised accounting standards until such time as those standards apply to private companies. We may elect not
to avail ourselves of this exemption from new or revised accounting standards and, therefore, may be subject to the same new or revised
accounting standards as other public companies that are not emerging growth companies.

 We cannot predict if investors will find our common
stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there
may be a less active trading market for our common stock and our share price may be more volatile.

 Anti-takeover provisions contained in our certificate
of incorporation and bylaws as well as provisions of Delaware law, could impair a takeover attempt.

 Our certificate of incorporation, bylaws and Delaware
law contain provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable
by our board of directors. Our corporate governance documents include provisions:

 authorizing "blank check" preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock;

 limiting the liability of, and providing indemnification to, our directors and officers;

 limiting the ability of our stockholders to call and bring business before special meetings;

 requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;

 controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; and

 providing our board of directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings.

 These provisions, alone or together, could delay or
prevent hostile takeovers and changes in control or changes in our management.

 As a Delaware corporation, we are also subject to
provisions of Delaware law, including Section 203 of the Delaware General Corporation law, which prevents some stockholders holding more
than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially
all of our outstanding common stock.

 Any provision of our certificate of incorporation,
bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders
to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay
for our Class A common stock.

 Our amended and restated certificate of incorporation,
as amended, designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and
proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial
forum for disputes with us or our directors, officers, or other employees.

 Our certificate of incorporation requires that, unless
we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent
permitted by law, be the sole and exclusive forum for each of the following:

 any derivative action or proceeding brought on our behalf;

 any action asserting a claim for breach of any fiduciary duty owed by any director, officer, or other employee of ours to the Company or our stockholders, creditors or other constituents;

 any action asserting a claim against us or any director or officer of ours arising pursuant to, or a claim against us or any of our directors or officers, with respect to the interpretation or application of any provision of, the DGCL, our certificate of incorporation or bylaws; or

 any action asserting a claim governed by the internal affairs doctrine;

 provided, that, if and only if the Court of Chancery
of the State of Delaware dismisses any of the foregoing actions for lack of subject matter jurisdiction, any such action or actions may
be brought in another state court sitting in the State of Delaware.

 The exclusive forum provision is limited to the extent
permitted by law, and it will not apply to claims arising under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Securities Act of 1933, as amended (the "Securities Act"), or for any other federal securities laws which provide for
exclusive federal jurisdiction.

 Our Amended and Restated Certificate of Incorporation,
as amended, provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United
States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities
Act or the Securities Exchange Act of 1934, as amended. Any person or entity purchasing or otherwise acquiring any interest in shares
of our capital stock are deemed to have notice of and consented to this provision.

 Furthermore, Section 22 of the Securities Act creates
concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts
have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent
or contrary rulings by different courts, among other considerations, our second amended and restated certificate of incorporation provides
that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause
of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially
valid, a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against us, our directors, officers,
or other employees in a venue other than in the federal district courts of the United States of America. In such instance, we would expect
to vigorously assert the validity and enforceability of the exclusive forum provisions of our second amended and restated certificate
of incorporation.

 Although we believe this provision benefits us by
providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, this provision may limit
or discourage a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors,
officers, or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively,
if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable
in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect
our business and financial condition.

 We note that there is uncertainty as to whether a
court would enforce the provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations
thereunder. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the
types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.

 ITEM 1B. UNRESOLVED STAFF
COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 We believe cybersecurity
is critical to advancing our technological developments. As a U.S. commercial space company with an established manufacturing business,
we face a multitude of cybersecurity threats common to most industries, such as ransomware and denial-of service. Our customers, suppliers,
subcontractors, and business partners face similar cybersecurity threats, and a cybersecurity incident impacting us or any of these entities
could materially adversely affect our business strategy, performance, and results of operations. These cybersecurity threats and related
risks make it imperative that we expend resources on cybersecurity.

 Risk Management

 We engage third-party services
to conduct evaluations of our security controls, whether through penetration testing, independent audits, or consulting on best practices
to address new challenges. We have established cybersecurity security awareness training and ongoing monitoring.

 In the event of an incident,
we intend to follow our cybersecurity incident response plan, which outlines the steps to be followed from incident detection to mitigation,
and notification. We contract with external firms that have extensive information technology and program management experience. We have
implemented a governance structure and processes to assess, identify, manage, and report cybersecurity risks. As a commercial space company,
we must comply with extensive regulations, including requirements imposed by the Department of Defense related to contracts with government
agencies and reporting cybersecurity incidents to the SEC. In addition to following SEC guidance and implementing pre-existing third party
frameworks, we have developed our own practices and frameworks, which we believe enhance our ability to identify and manage cybersecurity
risks. Assessing, identifying, and managing cybersecurity related risks are factored into our overall business approach. We rely heavily
on our supply chain to deliver our products and services, and a cybersecurity incident at a subcontractor, or business partner could materially
adversely impact us. We require that our subcontractors report cybersecurity incidents to our IT Incident Response Coordinator who will
investigate the direct impact of the incident. Once a potential incident has been confirmed, the Incident Response Coordinator will notify
senior management that activation of the incident response plan is required and assign a severity rating, ranging from none to critical,
based on the perceived impact.

 Governance

 The Audit Committee has oversight
responsibility for risks and incidents relating to cybersecurity threats, including compliance with disclosure requirements, cooperation
with law enforcement, and related effects on financial and other risks, and it reports any findings and recommendations, as appropriate,
to the full Board for consideration. Senior management regularly discusses cyber risks and trends and, should they arise, any material
incidents with the Audit Committee.

 While we have not experienced
any material cybersecurity threats or incidents in recent years, there can be no guarantee that we will not be the subject of future threats
or incidents. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a
cybersecurity incident that could have a material adverse effect on us. While we maintain cybersecurity insurance, the costs related to
cybersecurity threats or disruptions may not be fully insured. See "Risk Factors" for a discussion of cybersecurity risks.

 ITEM 2. PROPERTIES

 Our corporate headquarters is located at 150 N. Sykes
Creek Parkway, Suite 200, Merritt Island, Florida 32953. We occupy facilities totaling approximately 3500 square feet under a sublease
from Craig Technical Consulting, Inc., a principal stockholder and an entity owned and controlled by our Chief Executive Officer, Carol
Craig, pursuant to a commercial sublease agreement (the "Lease Agreement"), dated August 1, 2021. The Lease Agreement currently
has a 3-year term. We currently pay $4,847 per month plus applicable sales and use tax, which is currently 6.5% in Brevard County. We
believe this location is adequate for our current operations and needs.

 In addition, our manufacturing spaces are located
at 175 Imperial Boulevard, Cape Canaveral, FL 32920 and 400 Central Boulevard, Cape Canaveral, FL 32920. We are under lease agreements
with 400 W. Central, LLC for these spaces. The Lease agreements for 175 Imperial Boulevard and 400 W. Central Boulevard currently have
concurrent lease terms with one year options that end on May 31, 2024. We pay a combined amount of $24,042 per month plus applicable sales
and use tax, which is currently 6.5% in Brevard County. We have a total of 35,000 square feet of leased space in these buildings. We believe
our manufacturing spaces are adequate for our current operations and will allow for expected initial growth.

 ITEM 3. LEGAL PROCEEDINGS

 From time to time, we may become involved in various
lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an
adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such
legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition
or operating results.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market Information

 On December 14, 2021, our common stock began trading
on The Nasdaq Capital Market under the symbol "SIDU." Prior to that time, there was no public market for our common stock.

 Stockholders

 As of March 27, 2024, there were 9,327 stockholders
of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes
stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees. This number of
holders of record also does not include stockholders whose shares may be held in trust by other entities.

 Dividend Policy

 We have never paid or declared any cash dividends
on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain
all available funds and any future earnings to fund the development and expansion of our business. Any future determination to pay dividends
will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial
condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors
deems relevant.

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

 You should read the following discussion and analysis
of our financial condition and plan of operations together with and our accompanying consolidated financial statements and the related
notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains
forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed
below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed
in the section titled "Risk Factors" included elsewhere in this Annual Report on Form 10-K. All amounts in this report are
in U.S. dollars, unless otherwise noted.

 Overview of Operations

 We are a space-as-a-service company focused on commercial
satellite design, manufacture, launch, and data collection with a vision to enable space flight heritage status for new technologies and
deliver data and predictive analytics to both domestic and global customers. We are building an all-inclusive space-as-a-service platform
for the global space economy. We are developing and plan to launch 100 kg (220-pound) satellites with available space to rapidly integrate
customer sensors and technologies. By developing a plug-and-play operating system for space, we believe we can deliver customer sensors
to orbit in months, rather than years. In addition, we intend on delivering high-impact data for insights on aviation, maritime, weather,
space services, earth intelligence and observation, financial technology (Fintech) and the Internet of Things. The majority of our revenues
to date have been from our space related hardware manufacturing, however, 2023 revenue includes revenue related to our multi-mission constellation
and our hybrid 3D printed LizzieSat satellite.

 Forward-Looking Statements and Industry Data

 This Annual Report on Form 10-K contains forward-looking
statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements may
be identified by such forward-looking terminology as "may," "should," "expects," "intends,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential,"
"continue" or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series
of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve
substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking
statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking
statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the
risks and uncertainties inherent in our statements regarding:

 our projected financial position and estimated cash burn rate;

 our estimates regarding expenses, future revenues and capital requirements;

 our ability to continue as a going concern;

 our need to raise substantial additional capital to fund our operations;

 our ability to compete in the global space industry;

 our ability to obtain and maintain intellectual property protection for our current products and services;

 our ability to protect our intellectual property rights and the potential for us to incur substantial costs from lawsuits to enforce or protect our intellectual property rights;

 the possibility that a third party may claim we have infringed, misappropriated or otherwise violated their intellectual property rights and that we may incur substantial costs and be required to devote substantial time defending against these claims;

 our reliance on third-party suppliers and manufacturers;

 the success of competing products or services that are or become available;

 our ability to expand our organization to accommodate potential growth and our ability to retain and attract key personnel;

 the potential for us to incur substantial costs resulting from lawsuits against us and the potential for these lawsuits to cause us to limit our commercialization of our products and services;

 All of our forward-looking statements are as of the
date of this Annual Report on Form 10-K only. In each case, actual results may differ materially from such forward-looking information.
We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material
adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Annual Report on Form 10-K or included
in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities
and Exchange Commission (the "SEC") could materially and adversely affect our business, prospects, financial condition and
results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements
to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking
statements occurring after the date of this Annual Report on Form 10-K, even if such results, changes or circumstances make it clear that
any forward-looking information will not be realized. Any public statements or disclosures by us following this Annual Report on Form
10-K that modify or impact any of the forward-looking statements contained in this Annual Report on Form 10-K will be deemed to modify
or supersede such statements in this Annual Report on Form 10-K.

 This Annual Report on Form 10-K may contain estimates
and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry.
We obtained the industry and market data in this Annual Report on Form 10-K from our own research as well as from industry and general
publications, surveys and studies conducted by third parties. This data involves a number of assumptions and limitations and contains
projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty,
including those discussed in "Risk Factors." We caution you not to give undue weight to such projections, assumptions, and
estimates. Further, industry and general publications, studies and surveys generally state that they have been obtained from sources believed
to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these publications,
studies, and surveys are reliable, we have not independently verified the data contained in them. In addition, while we believe that the
results and estimates from our internal research are reliable, such results and estimates have not been verified by any independent source.

 You should read the following discussion and analysis
of our financial condition and results of operations together with our unaudited interim consolidated financial statements and the related
notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains
forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed
below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed
in the section titled "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022,
as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are
in U.S. dollars, unless otherwise noted.

 Throughout this Annual Report on Form 10-K, references
to "we," "our," "us," the "Company," "Sidus," or "Sidus Space"
refer to Sidus Space, Inc., individually, or as the context requires, collectively with its subsidiary.

 Overview

 Description of Business

 Founded in 2012, we are a growing U.S. commercial
space company with an established manufacturing business who has been trusted to provide mission-critical space hardware to many of the
top aerospace businesses for over a decade. We plan to offer on-orbit services as the space economy expands; said services are either
in a developmental phase or soon to achieve flight heritage. We have strategically decided to expand our business by moving up the satellite
value chain by becoming a provider of responsive and scalable on-orbit infrastructure as well as collecting Space and Earth observational
data to capture larger market needs.

 To address Commercial and Government customer needs
and mission sets, we plan to organize into three core business lines: manufacturing services; space-infrastructure-as-a-service; and space-based
data and insights. Our vertically integrated model is complementary across each line of business aiming to expand existing and unlock
new potential revenue generating opportunities. Additionally, we look to further transition into a subscription-based model upon the digitization
of our manufacturing process as we expand alongside our space-based focus.

 Products and Services

 Manufacturing Services: Our manufacturing
business is well-established, trusted by industry leaders and growing. Founded in 2012, we have been manufacturing mission-critical and
satellite hardware for over a decade for our principal customers and have supported major Government and Commercial space programs like
NASA's Artemis / Lunar Gateway missions, xEVAS, Boeing's Starliner, Sierra's Dream Chaser, Airbus' OneWeb Satellites
and the International Space Station.

 Our manufacturing business operates within a 35,000
square foot facility and is adjacent to our clean-room facility. We hold an AS9100 Aerospace certification, and we are International Traffic
In Arms Regulations (ITAR) compliant thereby positioning us, in combination with our existing tooling and capability, to address unique
high-precision manufacturing requirements.

 Space-Infrastructure-as-a-Service:
We are in the process of developing and launching space-based infrastructure and establishing related ground-infrastructure support elements.
Payload providers are our principal customers and target customers who wish to outsource constellation operations. Collectively, the end-to-end
infrastructure that results is offered as "Space-as-a-Service" to commercial customers and "Defense-as-a-Service"
to certain government customers.

 Leveraging our industry experience and flight heritage,
we are producing our own line of additively manufactured (3D printed) satellites in-house (LizzieSats) that are engineered to have the
capacity and adaptability to simultaneously host our payloads for our own purposes (see Space-Data-as-a-Service below) or offer 'ride-share'
opportunities for payload customers to deliver data to their end users. We anticipate "bookings" on our infrastructure in
our planned 'rideshare program' as a key performance metric.

 Our Space-Infrastructure-as-a-Service offering plans
to provide: satellite design, satellite manufacture, constellation operations, and payload hosting.

 As of December 31, 2023, we have:

 signed a multi-year and multi-launch agreement
with Space-X thereby offering customers by extension a reliable, cost-effective launch service;

 obtained approval for a 100+ satellite constellation
by the International Telecommunication Union (ITU);

 established partnerships with a globally diverse
network of 20+ ground stations to provide our users with near continuous high-rate, "on-orbit to cloud", communications network;

 secured a mission operations center located
on the Florida Space Coast, in Merritt Island, FL capable to manage satellite operations, orchestrate collection management tasks and
satisfy data distribution requests with intentions to automate many elements of this process.

 Over time, we plan to begin introducing additional
services beyond on-orbit infrastructure services which may include lunar mapping missions, in support of government requirements for on-orbit
maneuverability. Each business opportunity is evaluated on an individual business case basis and safeguarded against risk to our core
business.

 Space Data-as-a-Service and Insights: We plan
to be a global provider of space-based data and insights by exclusively collecting data that only can be captured from space with no terrestrial
alternatives. We plan to initially focus on creating offerings in Earth-based observations and Space situational awareness. These decisions
are reinforced by the growing and large addressable markets they represent.

 To date, the space-based data industry has largely
launched one-satellite, one-payload, one-mission constellations to deliver one general data type. Subsequently, downstream processing
and associated analytics, at times, have experienced false-positives and ambiguous data sets diminishing the value and utility of space-based
data.

 Our LizzieSat satellite platform addresses this shortcoming
by allowing for differentiated data collection when compared to industry alternatives. We plan to lead the next generation of Earth and
Space data collection by:

 Collecting on-orbit coincident data: LizzieSat
is capable of hosting multiple-sensors on the same satellite to collect varying data types at the same time and with the same collection
geometry. On-orbit coincident collection benefits users by decreasing false positives with complementary datasets that reinforce one another.

 Analyzing data on the satellite on-orbit at
"the edge": In order to maximize value and speed in data processing, in August 2023, we acquired substantially all of the
assets of Exo-Space, a cutting-edge Artificial Intelligence (AI) company to better facilitate (AI) and Machine Learning (ML) on-board
the satellite through hardware and software development. Our plans include integrating radiation hardened AI/ML capabilities alongside
our on-orbit coincident data collection.

 Reducing data size: By processing data at
the edge on-board LizzieSat, we are able to first reduce the file size by transmitting only the processed answer, not the entire raw dataset.
This enables us to move data from low-Earth orbit to higher orbit data relay services (like Iridium) for a lower-cost and more continual
data transmission option to our customers.

 The net value of data collected from our planned LizzieSat
constellation allows organizations to make better decisions with higher confidence, increased accuracy and speed. The Company enriches
this processed data with customizable analytics users control for their own-use case, and in turn provide data as a subscription across
industries to organizations so they are able to improve decision-making and mitigate risk.

 We support a broad range of international and domestic
governments and commercial companies with hardware manufacturing including the Netherlands Organization, U.S. Department of State, the
U.S. Department of Defense, NASA, Collins Aerospace, Lockheed Martin, Teledyne Marine, Bechtel, and L3Harris in areas that include launch
vehicles, satellite hardware, and autonomous underwater vehicles. Planned services that benefit current and future customers include delivering
space-based data that can provide critical insight for agriculture, commodities tracking, disaster assessment, illegal trafficking monitoring,
energy, mining, oil and gas, fire monitoring, classification of vegetation, soil moisture, carbon mass, Maritime AIS, Aviation ADS, and
weather monitoring; providing the ability for customers to demonstrate that a technology (hardware or software) performs successfully
in the harsh environment of space and delivering space services. We plan to own and operate one of the industry's leading U.S. based
low earth orbit ("LEO") small satellite ("smallsat" or "smallsats") constellations focused on earth
observation and remote sensing. Our operating strategy is to continue to enhance the capabilities of our satellite constellation, to increase
our international and domestic partnerships and to expand our analytics offerings in order to increase the value we deliver to our customers.
Our two operating assets—our satellite constellation and hardware manufacturing capability—are mutually reinforcing and are
a result of years of heritage and innovation.

 Key Factors Affecting Our Results and Prospects

 We believe that our performance and future success
depend on several factors that present significant opportunities but also pose risks and challenges, including competition from better
known and well-capitalized companies, the risk of actual or perceived safety issues and their consequences for our reputation and the
other factors discussed under "Risk Factors." We believe the factors discussed below are key to our success.

 Growing our experienced space hardware operations

 We are on track to grow our space and defense hardware
operations, with a goal of expanding to two and a half shifts with an increased customer base in the future. With current customers in
space, marine, and defense industries, our contract revenue is growing, and we are in active discussions with numerous potential customers,
including government agencies, large defense contractors and private companies, to add to our contracted revenue. In the past decade,
we have fabricated Ground and Flight products for the NASA SLS Rocket and Mobile Launcher as well as other Commercial Space and Satellite
companies. Customers supported include Boeing, Lockheed Martin, Northrop Grumman, Dynetics/Leidos, Blue Origin, United Launch Alliance,
Collins Aerospace, L3Harris, OneWeb and Space Systems Loral/Maxar. Various products have been manufactured including fluid, hydraulic
and pneumatic systems, electrical control systems, cable harnesses, hardware lifting frames, umbilical plates, purge and hazardous gas
disconnects, frangible bolts, reef cutters, wave guides, customized platforms, and other precision machined and electrical component parts
for all types of Rockets, Ground, Flight and Satellite systems.

 Commencing and Expanding Commercial Satellite
Operations

 Our goal is to help customers understand how space-based
data can be impactful to day-to-day business. Our strategy includes increasing the demand downstream by starting out as end user focused.
While others are focused on data verticalization strategy specializing on a key sectors or problem set, we believe that flexibility in
production, low-cost bespoke design and 'Bringing Space Down to Earth' for consumers will provide a scalable model for growth.
With LizzieSat design reviews (PDR and CDR) successfully completed in 2022, we began LizzieSat integration and testing in Q1 2023. We
completed critical command and data system testing which validated the proper functioning of the communications and data transfer paths
between a LizzieSat satellite in space and the KSAT, Atlas Space Operations and Leaf Space ground stations, a requirement for mission
success of the LizzieSat constellation.

 In Q1 2023 we signed an agreement with SkyWatch for
use of its TerraStream data-management platform. This agreement is expected to accelerate the expansion of Sidus' commercial data
distribution strategy, which includes white labeling data for the Company's existing customers as well as driving growth of new
data customers. Serving as a key contributor to the Space data marketplace, the agreement is expected to generate additional revenue for
the Company and engage customers that otherwise may not have connected with Sidus. In Q3 2023 we announced the acquisition of substantially
all the assets of Exo-Space, a cutting-edge California based firm specializing in Edge Artificial Intelligence (AI) software and hardware
applications in order to integrate EdgeAI capabilities into our planned constellation with ExoSpace's FeatherEdge AI platform which
will enable us to deliver near real-time intelligence derived from Earth Observation data. Further expanding the capabilities of our constellation,
we announced an agreement with SatLab to implement its second-generation automated identification system (AIS) technology into the LizzieSat
satellite constellation. AIS technology uses sophisticated systems on board marine vessels to identify and track ships to prevent collisions
and protect life at sea. The integration of this technology into Sidus's satellites will enable more accurate vessel tracking and
monitoring while providing valuable information about ship movements in real time.

 In January 2023, we were awarded a follow-on agreement
for the next phase of NASA's Autonomous Satellite Technology for Resilient Applications (ASTRA) project. During this phase of the
ASTRA project, the Autonomous Systems Lab (ASL) team at NASA's Stennis Space Center near Bay St. Louis, Mississippi, will join Sidus
Space to integrate ASTRA's autonomous operational on-orbit capabilities on a Sidus-built LizzieSat satellite as the organizations
transition to the operational phase of the program.

 In February 2023, we executed a multi-million dollar
agreement with The Netherlands Organization for Applied Scientific Research (TNO) to deploy and test TNO's laser communications
technology aboard our LizzieSat satellite expanding our international presence.

 In June 2023, we were awarded 2 contracts with Space
Florida. We will be working with Space Florida to integrate specialized equipment on a Sidus-built LizzieSat satellite as part of 2 Florida-Israel
Innovation Partnership projects.

 We are in active discussions with numerous potential
customers, including domestic and international government agencies, for payload hosting and data related to our planned satellite launches
over the next 24 months.

 We have previously been approved for our X-band and
S-band radio frequencies licensing through a published filing by the ITU on April 4, 2021. Such licenses are held through Aurea Alas,
Ltd., an Isle of Man company, which is a VIE to us. The ITU filing contains approved spectrum use for multiple X-Band and S-Band frequencies
and seven different orbital planes, including 45 degrees. In August 2023, the FCC approved the LizzieSat-1 launch and operating license
for launch and deploy on a SpaceX Falcon 9. In addition, we filed a Part 25 license request with the FCC for the LizzieSat constellation
through LizzieSat six mission. The FCC Part 25 license request is currently in the review period. A NOAA License request was approved
to fly Dragonfly Gecko on LizzieSat One. The Gecko images will be integrated into our FeatherBox AI onboard processor and Automated Information
Systems (AIS) to detect marine traffic migration and illegal fishing activities. Any delays in commencing our commercial launch operations,
including due to delays or cost overruns in obtaining NOAA licenses or other regulatory approvals for future operations or frequency requirements,
could adversely impact our results and growth plans.

 Our Vertically Integrated Space Infrastructure

 We are designing, developing, manufacturing, and planning
to operate a constellation of proprietary smallsats. These satellites are designed for multiple missions and customers and form the foundation
of our satellite platform. Weighing approximately 100 kilograms each, these hybrid 3D printed, modular satellites are more functional
than cubesats and nanosatellites and less expensive to manufacture than the larger satellites in the 200-600kg range. Launched into a
LEO and operating in diverse orbits (28 -98 inclination, 300-650km altitude) as approved by the International Telecommunication
Union (ITU) in February 2021, our constellation will be optimally distributed to provide maximum coverage for our customers in the government
and commercial sectors. With six initial globally distributed ground stations, our constellation is designed for rapid tasking, collection,
and delivery of high-revisit, high-resolution imagery and data analytics. As our satellite constellation grows, the amount of data we
collect will scale, and we expect our revisit rate will improve.

 Our cost-efficient smallsats are designed from the
ground-up to optimize performance per unit cost. We can integrate technologies and deliver data on demand at lower costs than legacy providers
due to our vertical integration, use of Customer Off the Shelf (COTS) proven systems, cost-efficiencies, capital efficient constellation
design, and adaptable pricing models.

 We manufacture our satellites at our Cape Canaveral
facility. Our current configuration and facility is designed to manufacture 5-10 satellites a month. Our vertical integration enables
us to control our satellites through the entire design, manufacturing, and operation process. Our years of experience manufacturing space
hardware means we are able to leverage our manufacturing expertise and commercial best practices for satellite production. Additionally,
leveraging both in-house and partner-provided subsystem components and in-house design and integration services, as well as operational
support of satellites on orbit, to provide turn-key delivery of entire constellations offer "concept to constellation" in
months instead of years. Specifically, our Space and Defense-as-a-Service offerings encompass all aspects of hosted satellite and constellation
services, including hosting customer payloads onto our satellites, and delivering services to customers from our space platform. These
services are expected to allow customers to focus on developing innovative payloads rather than having to design or develop complete satellite
buses or satellites or constellations, which we will provide, along with ancillary services that are likely to include telemetry, tracking
and control ("TT&C"), communications, processing, as well as software development and maintenance. Our patented technologies
include a print head for regolith-polymer mixture and associated feedstock; a heat transfer system for regolith; a method for establishing
a wastewater bioreactor environment; vertical takeoff and landing pad and interlocking pavers to construct same; and high-load vacuum
chamber motion feedthrough systems and methods. Regolith is a blanket of unconsolidated, loose, heterogeneous superficial deposits covering
solid rock. It includes dust, broken rocks, and other related materials and is present on Earth, the Moon, Mars, some asteroids, and other
terrestrial planets and moons. We continue to patent our products including our satellites, external platforms and other innovations.

 Revenue Generation

 We generate revenue by selling payload space on our
satellite platform, providing engineering and systems integration services to strategic customers on a project-by-project basis, and manufacturing
space hardware. Additionally, we intend to add to our revenue by selling geospatial data and actionable intelligence captured through
our constellation. This support is typically contracted to both commercial and government customers under fixed price contracts and often
includes other services. Due to the size and capacity of our satellite, we are able to host a diverse array of sensors such as Multispectral
and Hyperspectral Earth Observing Imagers, Maritime Vessel RF Tracking receivers, UHF IoT Transceivers, Optical Communications gear and
others on a single platform that can simultaneously address the needs of many customer requirements.

 Lowering Manufacturing Cost and Schedule

 We are developing a manufacturing model that provides
rapid response to customer requirements including integration of customers technologies and space-based data delivery. Our planned satellites
are being designed to integrate Customer Off the Shelf (COTS) subsystems that are space-proven, can be rapidly integrated into the satellite
and replaced rapidly when customer needs change or evolve. Our vertically integrated manufacturing processes give us the flexibility to
make changes during the production cycle without impacting launch or costs.

 Environmental, social, and corporate governance

 While Environmental, Social and Governance (ESG) reporting
is not mandatory, we are developing an ESG policy that will implement the tracking of several indicators we believe are critical to ensure
we are doing our part to continue sustainable growth and maximize shareholder value. We have been in business for over ten years manufacturing
space hardware and components, and in that time, implementation of policies and processes to mitigate environmental impact have been of
upmost importance. Furthermore, since our inception, we have recognized the value of our employees and have always prioritized employee
well-being through facets such as excellent benefits, programs, educational assistance, and insurance of a safe and healthy work environment.
We also understand that our efforts to promote value and well -being are not limited to our employees. We are committed to the communities
we belong to both locally and professionally. We recently started to formalize this commitment, providing tangible benefits back to the
community that supports us.

 Environmental

 As the global awareness and importance of environmental
sustainability increases, we recognize our duty to implement developments that not only facilitate the evolution of aerospace solutions,
but also promote environmentally conscious protocols yielding measurable results toward the conservation of our planet. A key component
of our focus on sustainability is found in our utilization of in-house 3D printing technology as a primary manufacturing asset. The development
of 3D printing is host to a variety of manufacturing improvements but perhaps the chief benefits are seen in its reduction of environmental
strain. Our LizzieSat constellation will contribute to this reduced impact as a portion of the satellite bus is 3D printed.

 Manufacturing parts with a 3D printer reduces overall
energy consumption and waste, reducing our carbon footprint compared to its predecessor of conventional machining. Additional benefits
include the removal of waste and unnecessary energy associated with conventional machining, often resulting in the production of more
scrapped material per part than the material that part is composed of. While these are the biggest impacts, the effects too can be seen
in smaller scales. Due to the massive reduction in weight 3D printing provides, energy spent using cargo ships and commercial vehicles
for transportation sees a significant decrease. This reduction in weight is accompanied by a reduction in space requirements for housing
the material, cutting out the need for large storage spaces and the energy needed to maintain those facilities.

 Looking toward the future, the potential for exciting
developments in the field of sustainability are of upmost importance. These developments include the use of more biodegradable and/or
recycled materials that can be used to manufacture parts and further benefit the environment. Until these developments occur, we are doing
our part through the practice of recycling roughly 5,000 lbs. of metal a year coupled with the recycling of any used oil and coolant.
As technologies continue to advance, we remain dedicated to preserving the Earth and continuing to evolve with newer technologies as they
develop.

 Social

 We recognize the importance of our employees, the
community with which we are situated as well as the global community. This recognition has led us to implement a variety of actions that
support society from the individual to global scale.

 Employee well-being is at the heart of our commitment
to provide a positive impact on all. With our core values being rooted in a familial and communal structure, we uphold these values by
offering our employees excellent benefits, programs, educational assistance, and insurance of a safe and healthy work environment for
all employees. We understand the importance of diversity in the workplace because it was built by diversity.

 Community on all scales is fundamental to our success,
and because of that, we are committed to leaving a lasting impact on the community that supports us. This commitment brought forth Sidus
Serves, our way of actively improving life on earth. Community involvement is key to our culture, and we believe in the power of volunteerism.
We actively invest in the communities of our employees' by supporting K-12 education, providing military and veteran assistance,
environmental stewardship, and volunteering at local non-profit organizations. We, and our employees, are passionate about the improvement
of their communities through individual efforts and partnership with local, regional, and national organizations. We are proud to support
local STEM programs and schools in local communities. We are focused on bridging the gap in the aerospace field by supporting young professionals
through establishing partnerships with several organizations dedicated to providing STEM learning opportunities to a diverse array of
students.

 Governance

 Our governance structure is designed to promote transparency,
efficiency, and ethics. Through a qualified and diverse chain of command, we are confident that our decision making will carry out performance
at the highest degree. Our Board of Directors consists of professionals with strong executive experience, business strategy and leadership
skills. Our board consists of 3 independent directors alongside our CEO and CTO including 2 women.

 Global Space Industry Overview

 In recent years, the importance of the space economy
has been growing as technological advances in both satellites and supporting terrestrial technologies have enabled new commercial use
cases. These use cases include satellite broadband, remote imaging, Internet-of-Things ("IOT")/Machine-to-Machine ("M2M")
communications, defense-related applications, as well as others. As a result, several new and existing operators have announced new satellite
constellations to serve these use cases. Many of these announced constellations will consist of small LEO satellites rather than large
GEO satellites. With the flux of new entrants at all levels of the value chain, the small satellite value chain has continued to evolve,
especially in the launch sector, downstream value-added applications, M&As and consolidation between stakeholders.

 The rapid pace of innovation and technological advancements
continue to drive the commercialization of space-based data, analytics, and insights, enhancing their relevance to businesses, governments,
and the general public. Furthermore, the demand for data that can be collected from space is growing rapidly while the cost of accessing
space is decreasing. Several key trends have emerged in the new space economy, including the expansion of constellations and the availability
of space-based data, the shift in user demand towards analytics and insights, climate change adaptation, global security concerns, and
advancements in on-board technologies.

 According to Citi Report 2022: Space – Dawn
of a New Age: published in 2022, forecasts a $1 trillion annual revenue for the space economy by 2040, an increase from $370 billion
in 2020 with forecasts of strong growth in satellites, government space budgets, as well as new applications and industries in the field
of space exploration. 1 In addition, Prospects for the Small Satellite Market – A Euroconsult Report 8 th
Edition July 2022, expects that over the next decade, the total manufacturing and launch market value for small satellites is expected
to reach $84 billion, more than 3.5 times the market value over 2012-2021. Although this indicates significant growth, it does not reflect
the six-fold increase in the mass of smallsats resulting from the rise of cubesats, constellations and the introduction of low-cost systems
for both manufacturing and launch, which reduce average costs per satellite.

 Rapid growth in private investment in the commercial
space industry has led to a wave of new companies reinventing major elements of the traditional space industry, including human spaceflight,
satellites, and launch, in addition to unlocking entirely new market segments. Furthermore, government agencies have realized the value
of the private commercial space industry and have become increasingly more supportive and reliant on private companies to catalyze innovation
and advance national space objectives. In the United States, this has been evidenced by notable policy initiatives and by commercial contractors'
growing share of space activity.

 Launch Market

 Space access has traditionally been limited to those
with significant capital expenditures, with launch costs remaining high, with few exceptions. Launch costs have traditionally been the
primary bottleneck impeding the development of orbital activities. The frequency and availability of launches, while acceptable for the
legacy market (several times a year), has proved paralyzing to some operators of small satellites. Although new launch provider entrants
seek to offer higher launch rates and more flexibility to small satellites, capital remains the main barrier to entry.

 After years of launch bottlenecks, smallsats now enjoy
more launch options as new launchers, brokers and smallsat dispensers become available and facilitate access to space. According to Euroconsult,
the smallsat launch market which was valued at $7.6 billion is set to grow by +279% to $28.4 billion, however much of that launch value
remains captive of national industries and vertically integrated players (e.g., SpaceX). Since the demand for small satellites had been
fragmented and considered less profitable than larger satellites, launch providers had not actively pursued the launch business. However,
this has now changed, as the launch supply has adapted rapidly.

 Small Satellite Market

 Since 2018, a paradigm shift in the commercial space
market has resulted in an increased demand for smallsats. Euroconsult states that smallsats have become smaller in size over the past
few years but have gained in performance. Technical advances have allowed them to expand their mission capabilities, making them more
resilient, effective, and lower cost. Miniaturization is a continuous process that allows the customer to choose between lighter satellites
with no change in capabilities, or bigger, more powerful, and more capable satellites with greater capabilities. Other technical enablers
include, but are not limited to:

 Extension of electrical propulsion use;

 Miniaturization of attitude sensors;

 Solar cells and batteries' efficiency improvement;

 COTS solutions for bus electronics; 3D printing.

 The demand for large geosynchronous satellites declined
dramatically as companies prepared to launch constellations of smaller, cheaper broadband satellites in low and medium Earth orbits, resulting
in a dramatic decrease in demand for large geosynchronous communications satellites. New technologies in space and space-related sectors,
particularly computational technologies, and data analytics, are facilitating the miniaturization of satellite systems, thereby improving
the market. Due to this, smallsats are now able to provide operational services previously only available through heavier satellites.
Euroconsult anticipates that about 18,500 smallsats (<500 kg) will launch over 2022-2031, or about 365 tons per year, (i.e., one ton
per day on average over the next 10 years).

 Moreover, the rise of this market has also created
a new market segment in nanosatellites and microsatellites, weighing less than 10 kg and between 10 and 100 kg, respectively. While these
satellites can be deployed individually, they can also be operated as part of a constellation, a large group of satellites interconnected
to provide a service, such as the Starlink satellite constellation's offering of global internet connectivity. According to Euroconsult,
the smallsat manufacturing market, which was valued at $15.5 billion over 2012-2021, is set to grow by +258% to $55.6 billion over 2022-2031,
driven by the multiplication of constellation projects from both commercial and government stakeholders. The next decade will be defined
primarily by the rollout of multiple constellation projects, which will account for 81% of smallsats, mainly for commercial operators.
A total of 3,335 smallsats <10 kg are expected to launch throughout the next decade, i.e., more than twice the 1,656 launched over
2012-2021. Satellites in this category, especially cubesats, have gained momentum recently: 1,187 were launched in the past 5 years alone.

 The growth in the LEO satellite constellations market
is being driven by technological advances in ground equipment, new business models, expanded funding, and growing demand for high bandwidth
and lower latency. Though this satellite constellations market remains nascent in maturity, we anticipate considerable growth over the
coming years in the launch industry as companies continue to seek versatile and low-cost ways to deliver single satellites to specific
orbits or deploy their satellite constellations. Furthermore, we anticipate the growth of the satellite constellations market to contribute
business to our Satellite Services offerings. LEO satellite constellations have relatively short lifespans on orbit, resulting in a requirement
to launch replenishment satellites every few years.

 Results of Operations

 Comparison of year ended December 31, 2023 to
year ended December 31, 2022

 The following table provides certain selected financial
information for the periods presented:

 2023

 2022

 Change

 %

 $
 5,962,785

 $
 7,293,408

 $
 (1,330,623
)

 (18
)%

 Cost of revenue

 4,321,482

 5,855,275

 (1,533,793
)

 (26
)%

 Gross Profit (Loss)

 1,641,303

 1,438,133

 203,170

 %

 Gross Profit Percentage

 %

 %

 SG&A expense

 14,166,617

 13,482,432

 684,185

 %

 Other expense

 (1,803,034
)

 (795,669
)

 (1,007,365
)

 %

 $
 (14,328,348
)

 $
 (12,839,968
)

 $
 (1,488,380
)

 %

 Total revenue for the twelve months ended December
31, 2023 decreased approximately $1.3 million compared to total revenue for the twelve months ended December 31, 2022. Non-related party
revenue decreased by approximately 20% for the twelve months ended December 31, 2023. to approximately $5.0 million as compared to approximately
$6.25 million for the twelve months ended December 31, 2022 and was primarily driven by the timing of fixed price milestone contracts
offset by satellite payload revenue. Related party revenue for the year decreased approximately 9% to $952,220 for the twelve months ended
December 31, 2023 versus approximately $1.0 million for twelve months ended December 31, 2022 and was driven by timing of fixed price
milestone contracts our related party entered into and outsourcing less of its work to us.

 Cost of Revenue

 Cost of revenue decreased 26% for the twelve months
ended December 31, 2023 to approximately $4.3 million as compared to approximately $5.9 million for the twelve months ended December 31,
2022 and included approximately $588,000 related party cost of sales as of December 31, 2023 and approximately $136,363 as of December
3, 2022. The decrease was primarily driven by mix of contracts and an increase in our higher margin satellite related business that helped
to offset continued increased supply chain related costs in the manufacturing side of our business.

 Gross Profit (Loss)

 The 14% increase in our gross margin for the twelve
months ended December 31, 2023 to approximately $1.6 million as compared to approximately $1.4 million for the twelve months ended December
31, 2022 is driven by the increase in our higher margin satellite business.

 Selling, General, and Administrative Expenses

 Selling, general, and administrative expenses increased
approximately $684,000 when compared with the same period in 2022, the increase year over year was primarily due to the following:

 This increase was primarily related to the following
increases:

 An increase of $684,000 in professional fees to $1,931,000 compared to $ 1,248,000 in 2022 due to legal costs related to various corporate matters, fundraising, and acquisition of Exo-Space.

 An increase of $205,000 in fundraising expenses to $321,000 compared to $116,000 in 2022 was due to the timing of our capital raise.

 An increase of approximately $1.7 million in employee expenses to approximately $7.2 million compared to approximately $5.5 million in 2022 in order to support the needs of the business.

 These increases were partially offset by the following
decreases:

 A decrease of $ 596,000 in D&O insurance
to $948,000 compared to $ 1,544,000 in 2022 was due to a reduction in insurance rates.

 A decrease of $ 141,200 in licenses related to
our satellite side of our business to $106,800 compared to $248,000 in 2022 primarily related to a change in estimate that extended
the service period and reduced period expense.

 A decrease of $1.2 million in IR/PR expenses to $0 compared to $1.2 million in 2022 related to a one-time charge in stock-based consulting fees for investor relations

 Total other income (expense)

 During the year ended December 31, 2023, we had gain
on sale of equipment of $17,950, finance expense of $917,848, and interest expense of $747,420 and asset-based loan expense of $155,716.

 During the year ended December 31, 2022, we had interest
expense of $781,376 and asset-based loan expense of $14,293.

 NON-GAAP MEASURES

 To provide investors with additional information in
connection with our results as determined in accordance with GAAP, we use non-GAAP measures of adjusted EBITDA. We use adjusted EBITDA
in order to evaluate our operating performance and make strategic decisions regarding future direction of the company since it provides
a meaningful comparison to our peers using similar measures. We define adjusted EBITDA as net income (as determined by U.S. GAAP) adjusted
for interest expense, depreciation and amortization expense, acquisition deal costs, severance costs, capital market and advisory fees,
equity-based compensation and warrant costs. These non-GAAP measures may be different from non-GAAP measures made by other companies since
not all companies will use the same measures. Therefore, these non-GAAP measures should not be considered in isolation or as a substitute
for relevant U.S. GAAP measures and should be read in conjunction with information presented on a U.S. GAAP basis.

 The following table reconciles adjusted EBITDA to
net loss (the most comparable GAAP measure) for the twelve months ended December 31 2023, and 2022:

 Twelve Months Ended

 2023

 2022

 Change

 %

 Net Income / (Loss)

 $
 (14,328,348
)

 (12,839,968
)

 $
 (1,488,380
)

 %

 Interest Expense (i)

 903,136

 795,669

 107,467

 %

 Depreciation and Amortization

 217,107

 238,859

 (21,752
)

 (9
)%

 Acquisition Deal Costs (ii)

 220,632

 -

 220,632

 -

 Severance Costs

 147,222

 63,769

 83,453

 %

 Capital Market and advisory fees (iii)

 927,875

 824,036

 103,839

 %

 Equity-based compensation (iv)

 104,038

 1,209,000

 (1,104,962
)

 (91
)%

 Warrant costs (v)

 917,848

 -

 917,848

 -

 Total Non-GAAP Adjustments

 3,437,858

 3,131,333

 306,525

 %

 Adjusted EBITDA

 (10,890,490
)

 (9,708,635
)

 (1,181,855
)

 %

 (i)

 Sidus Space incurred increased interest expense due to short-term note payable becoming due in Q4 2024 and interest expense related to an asset-based loan.

 (ii)

 Sidus Space incurred one-time legal costs associated with the acquisition of Exo-Space, an Artificial Intelligence (AI) company.

 (iii)

 Sidus Space incurred one-time stock issuance costs in 2023 and 2022, respectively.

 (iv)

 Sidus Space issued stock-based compensation for services rendered in 2023 and 2022, respectively.

 (v)

 Sidus Space incurred one-time costs related to underwriter warrants during 2023.

 Liquidity and Capital Resources

 The following table provides selected financial data
about us as of December 31, 2023, and December 31, 2022.

 December
 31,

 December
 31,

 2023

 2022

 Change

 %

 Current
 assets

 $
 9,202,310

 $
 7,449,868

 $
 1,752,442

 %

 Current
 liabilities

 $
 12,219,356

 $
 6,359,052

 $
 5,860,304

 %

 Working
 capital (deficiency)

 $
 (3,017,046
)

 $
 1,090,816

 $
 (4,107,862
)

 (377
)%

 Liquidity is the ability of a company to generate
funds to support asset growth, satisfy disbursement needs, maintain reserve requirements, and otherwise operate on an ongoing basis. We
had insufficient operating revenues, so we are currently dependent on debt financing and sale of equity to fund operations.

 We had an accumulated deficit of approximately $42.8
million and working capital deficiency of approximately $3.0 million as of December 31, 2023 compared to accumulated deficit of approximately
$28.3 million and working capital of approximately $1.1 million as of December 31, 2022. As of December 31, 2023, we had approximately
$1.2 million of cash compared to approximately $2.3 million of cash as of December 31, 2022.

 As of December 31, 2023, the working capital
deficiency is primarily due to our build out of our LizzieSat satellite in anticipation of our Q1 2024 launch. As of December 31,
2022, the working capital surplus was due to funds raised through financing in relation to our equity line of credit.

 Current assets increased by approximately $1.8 million,
or 24%, to $9.2 million as of December 31, 2023 from approximately $7.4 million as of December 31, 2022. The increase is primarily attributable
to prepaid assets to support the needs of the business.

 Current liabilities increased by approximately $5.8
million, or 92%, to approximately $12.2 million as of December 31, 2023 from approximately $6.4 million as of December 31, 2022. The increase
was attributable to an increase in accounts payable and other current liabilities and our asset-based loan liability.

 On January 29, 2024, the Company entered into a public
offering of an aggregate of 1,181,900 shares of Class A Common Stock and pre-funded warrants to purchase up to an aggregate of 69,900
shares of Class A Common Stock in lieu of Shares, which have been sold pursuant to that certain Underwriting Agreement, dated January
29, 2024, by and between the Company and the Representative of the Underwriters. Gross proceeds from the offering were $5,632,650 and
net proceeds after underwriter discount, various fees and expenses was $5,008,259.

 On February 29, 2024, the Company entered into a public
offering of an aggregate of 1,321,000 shares of Class A Common Stock, which have been sold pursuant to that certain Underwriting Agreement,
dated February 29, 2024, by and between the Company and the Representative of the Underwriters. Gross proceeds from the offering were
$7,926,000 and net proceeds after underwriter discount, various fees and expenses was $7,102,527.

 Cash Flow

 2023

 2022

 Change

 %

 Cash used in operating activities

 $
 (11,749,442
)

 $
 (12,093,908
)

 $
 344,466

 (3
)%

 Cash used in investing activities

 $
 (7,691,844
)

 $
 (2,099,858
)

 $
 (5,591,986
)

 %

 Cash provided by financing activities

 $
 18,362,134

 $
 2,778,180

 $
 15,583,954

 %

 Cash on hand

 $
 1,216,107

 $
 2,295,259

 $
 (1,079,152
)

 (47
)%

 Cash Flow from Operating Activities

 Year ended December 31, 2023 and 2022

 For the years ended December 31, 2023 and 2022, we
did not generate positive cash flows from operating activities. For the year ended December 31, 2023, net cash flows used in operating
activities was approximately $11.7 million compared to approximately $12.1 million during the year ended December 31, 2022.

 Cash flows used in operating activities for the year
ended December 31, 2023, of approximately $11.7 million is comprised of a net loss of $14.3 million, which was reduced by non-cash expenses
of $917,848 for issuing warrants as compensation of underwriter services, $104,038 for stock based compensation, $17,871 for bad debt
expense and $217,107 for depreciation and amortization, and a decrease in net change in working capital of approximately $1.3 million.

 Cash flows used in operating activities for the year
ended December 31, 2022 of approximately $12.1 million is comprised of a net loss of approximately $12.9 million, which was reduced by
non-cash expenses of $1.2 million for one-time stock-based consulting fees, $22,500 for bad debt expense and approximately $319,936 for depreciation and amortization,
and an increase in net change in working capital of $805,376.

 Cash Flows from Investing Activities

 During the year ended December 31, 2023, we purchased
property and equipment in the amount of approximately $7.2 million with approximately $483,644 related to Exo-Space acquisition and approximately
$6.7 million primarily related to the satellite side of our business.

 During the year ended December 31, 2022, we purchased
property and equipment in the amount of approximately $2.1 million primarily related to the satellite side of our business.

 Cash Flows from Financing Activities

 During the year ended December 31, 2023, net cash
provided in financing activities of approximately $18.4 million included our January 2023, April 2023 and October 2023 capital raises
of approximately $16.6 million net proceeds, partially offset by approximately $2.1 million net repayment of an asset-based loan agreement,
repayment of notes payable of approximately $303,000 and dividend payments on Series A preferred stock units.

 During the year ended December 31, 2022, net cash
provided in financing activities of approximately $2.8 million included $3.2 million in net proceeds from issuance of common stock, proceeds
from asset-based loan agreement approximately $502,000 and payments of approximately $148,000 to pay off our finance leases, and repayments
of notes payable – related party to Craig Technical Consulting, Inc., one of our principal stockholders, of $797,500.

 Off-Balance Sheet Arrangements

 We do not have any off-balance sheet arrangements
or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special
purpose entities.

 Critical Accounting Policies and Significant
Judgments and Estimates

 This discussion and analysis of our financial condition
and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting
principles in the United States ("GAAP"). The preparation of these financial statements requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our
historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described
in more detail in the notes to our financial statements included elsewhere in this annual report on Form 10-K, we believe that the following
accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant
areas involving management's judgments and estimates.

 We believe our most critical accounting policies and
estimates relate to the following:

 Revenue Recognition

 Credit losses

 Lease Accounting

 Stock Option and Warrant Valuation

 Revenue Recognition

 We adopted ASC 606 – Revenue from Contracts
with Customers using the modified retrospective transition approach. The core principle of ASC 606 is that revenue should be recognized
in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled for exchange of those goods or services. Our updated accounting policies and related disclosures are
set forth below, including the disclosure for disaggregated revenue. The impact of adopting ASC 606 was not material to the Consolidated
Financial Statements.

 Our revenue is recognized under Topic 606 in a manner
that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the
following elements:

 executed contracts with our customers that we believe are legally enforceable;

 identification of performance obligations in the respective contract;

 determination of the transaction price for each performance obligation in the respective contract;

 Allocation of the transaction price to each performance obligation; and

 recognition of revenue only when we satisfy each performance obligation.

 These five elements, as applied to each of our revenue
category, is summarized below:

 executed contracts with our customers that we believe are legally enforceable;

 identification of performance obligations in the respective contract;

 determination of the transaction price for each performance obligation in the respective contract;

 Allocation of the transaction price to each performance obligation; and

 recognition of revenue only when we satisfy each performance obligation.

 Revenues from fixed price contracts that are still
in progress at month end are recognized on the percentage-of-completion method, measured by the percentage of total costs incurred to
date to the estimated total costs for each contract. This method is used because management considers total costs to be the best available
measure of progress on these contracts. Revenue from fixed price contracts and time-and-materials contracts that are completed in the
month the work was started are recognized when the work is shipped.

 Revenues from fixed price contracts that require milestone
payments are recognized at the time of the milestone being met. This method is used because management considers that the payments are
nonrefundable unless the entity fails to perform as promised. If the customer terminates the contract, we are entitled only to retain
any progress payments received from the customer and we have no further rights to compensation from the customer. Even though the payments
made by the customer are nonrefundable, the cumulative amount of those payments is not expected, at all times throughout the contract,
to at least correspond to the amount that would be necessary to compensate us for performance completed to date. Accordingly, we account
for the progress under the contract as a performance obligation satisfied at a point in time.

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

 Credit Losses

 The provision for expected credit losses on trade
receivables are estimated based on historical information, customer solvency and changes in customer payment terms and practices. The
Company will calibrate its provision matrix to adjust the historical credit loss experience with forward-looking information. The amount
of expected credit losses is sensitive to changes in circumstances and of forecast economic conditions. The Company's historical
credit loss experience and forecast of economic conditions may also not be representative of the customer's actual default in the
future. The company will utilize the Allowance Method based on the accounts receivable aging in order to accrue bad debt expense.

 Leases

 In February 2016, the FASB issued ASU 2016-02, Leases
(Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases in the balance sheet. Additionally,
in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) – Targeted Improvements, which, among other things, provides an additional
transition method that would allow entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial
statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

 We determine if an arrangement is a lease at inception.
Operating leases are included in operating lease right-of-use ("ROU") assets, operating lease liabilities - current, and operating
lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities,
and other long-term liabilities in our balance sheets.

 ROU assets represent our right to use an underlying
asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease
ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most
of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest
for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes
any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is
reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the
lease term.

 Leases with a lease term of 12 months or less at inception
are not recorded on our balance sheet and are expensed on a straight-line basis over the lease term in our statement of operations.

 Stock Option and Warrant Valuation

 We use the Black-Scholes option-pricing model to value
all options and Class A common stock warrants. Estimating the fair value of stock options using the Black-Scholes option-pricing model
requires the application of significant assumptions, such as the fair value of our Class A common stock, the estimated term of the options,
risk-free interest rates, the expected volatility of the price of our Class A common stock, and an expected dividend yield. Each of these
assumptions is subjective, requires significant judgment, and is based upon management's best estimates. If any of these assumptions
were to change significantly in the future, equity-based compensation related to future awards may differ significantly, as compared with
awards previously granted.

 JOBS Act

 On April 5, 2012, the JOBS Act was enacted. Section
107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act of 1933, as amended ("Securities Act") for complying with new or revised accounting
standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those
standards would otherwise apply to private companies.

 We have chosen to take advantage of the extended transition
periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until those standards
would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not be comparable to
those of companies that comply with public company effective dates for complying with new or revised accounting standards.

 We are in the process of evaluating the benefits of
relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the
JOBS Act, as an "emerging growth company," we intend to rely on certain of these exemptions, including without limitation,
(i) providing an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404(b)
of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board
("PCAOB") regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information
about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an "emerging growth company"
until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii)
the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which
we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to
be a large accelerated filer under the rules of the SEC.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

 As a smaller reporting company, we are not required
to provide the information required by this item.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

 SIDUS SPACE, INC.

 Report of Independent Registered Public Accounting Firm (PCAOB ID: 5041)

 Consolidated Balance Sheets at December 31, 2023 and 2022

 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Stockholder's Equity (Deficit) for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

 Notes to the Consolidated Financial Statements

 Report of Independent Registered Public Accounting
Firm

 To the Board of Directors and Shareholders of Sidus
Space, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of Sidus Space, Inc. as of December 31, 2023 and 2022, the related statements of operations, stockholders'
equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audit. 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 audit in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 audit included performing procedures to assess
the risks of material misstatement of the 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 financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 /S/ BF Borgers CPA PC (PCAOB ID 5041)

 We have served as the Company's auditor since 2021

 Lakewood, CO

 March 27, 2024

 F- 1

 SIDUS

 CONSOLIDATED BALANCE SHEETS

 2023

 2022

 Assets

 Current assets

 Cash

 $
 1,216,107

 $
 2,295,259

 Accounts receivable

 1,175,077

 850,340

 Accounts receivable - related parties

 67,447

 168,170

 Accounts receivable

 67,447

 168,170

 1,217,929

 583,437

 Contract asset

 77,124

 Contract asset - related party

 Contract asset

 Prepaid and other current assets

 5,405,453

 3,476,748

 Total current assets

 9,202,310

 7,449,868

 Property and equipment, net

 9,570,214

 2,554,992

 Operating lease right-of-use assets

 115,573

 249,937

 Intangible asset

 398,135

 -

 Other assets

 64,880

 42,778

 Total Assets

 $
 19,351,112

 $
 10,297,575

 Liabilities and Stockholders' Equity

 Current liabilities

 Accounts payable and other current liabilities

 $
 6,697,562

 $
 3,415,845

 Accounts payable and accrued interest - related party

 677,039

 566,636

 Contract liability

 77,124

 Contract liability - related party

 Contract liability

 Asset-based loan liability

 2,587,900

 502,349

 Notes payable

 2,017,286

 1,599,150

 Operating lease liability

 119,272

 199,158

 Total current liabilities

 12,219,356

 6,359,052

 Operating lease liability - non-current

 -

 63,310

 Total Liabilities

 12,219,356

 6,422,362

 Commitments and contingencies

 -

 -

 Stockholders' Equity'

 Preferred Stock: 5,000,000 shares authorized; $ 0.0001 par value; no shares issued and outstanding

 -

 -

 Series A convertible preferred stock: 2,000 shares authorized; 372 and 0 shares issued and outstanding, respectively

 -

 -

 Preferred stock value

 -

 -

 Common stock: 210,000,000 authorized; $ 0.0001 par value

 -

 -

 Class A common stock: 200,000,000 shares authorized; 983,173 and 80,227 shares issued and outstanding, respectively

 Class B common stock: 10,000,000 shares authorized; 100,000 shares issued and outstanding

 Common stock value

 Additional paid-in capital

 49,918,441

 32,131,041

 Accumulated deficit

 ( 42,786,793
)

 ( 28,255,846
)

 Total Stockholders' Equity

 7,131,756

 3,875,213

 Total Liabilities and Stockholders' Equity

 $
 19,351,112

 $
 10,297,575

 See auditor's report and notes to the audited financial statements

 F- 2

 SIDUS

 CONSOLIDATED STATEMENTS OF OPERATIONS

 2023

 2022

 2023

 2022

 $
 5,010,565

 $
 6,250,780

 Revenue - related parties

 952,220

 1,042,628

 Total - revenue

 5,962,785

 7,293,408

 Cost of revenue

 4,321,482

 5,855,275

 Gross profit (loss)

 1,641,303

 1,438,133

 Operating expenses

 Selling, general and administrative expenses

 14,166,617

 13,482,432

 Total operating expenses

 14,166,617

 13,482,432

 Net loss from operations

 ( 12,525,314
)

 ( 12,044,299
)

 Other income (expense)

 Other income

 17,950

 -

 Interest expense

 ( 747,420
)

 ( 781,376
)

 Asset-based loan expense

 ( 155,716
)

 ( 14,293
)

 Finance expense

 ( 917,848
)

 -

 Total other income (expense)

 ( 1,803,034
)

 ( 795,669
)

 Loss before income taxes

)

)

 Provision for income taxes

 -

 -

 $
)

 $
)

 Dividend on Series A preferred Stock

 ( 202,599
)

 -

 Net loss attributed to stockholders

 ( 14,530,947
)

)

 Basic and diluted loss per common share

 $
 ( 23.11
)

 $
 ( 74.80
)

 Basic and diluted weighted average number of common shares outstanding

 619,986

 171,658

 See auditor's report and notes to the audited financial statements

 F- 3

 SIDUS SPACE, INC.

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 Capital

 Deficit

 Total

 Series
 A

 Preferred
 Stock

 Class
 A Common Stock

 Class
 B Common Stock

 Additional

 Paid-In

 Accumulated

 Capital

 Deficit

 Total

 Balance - December 31, 2021

 -

 $
 -

 65,748

 26,075,932

 ( 15,415,878
)

 10,660,071

 -

 Class A common stock issued for cash

 -

 -

 11,487

 -

 -

 3,221,354

 -

 3,221,355

 Class A common stock issued for service

 -

 -

 3,000

 -

 -

 -

 1,209,000

 -

 1,209,000

 Debt forgiveness related party

 -

 -

 -

 -

 -

 -

 1,624,755

 -

 1,624,755

 -

 -

 -

 -

 -

 -

 -

)

)

 Balance - December 31, 2022

 -

 $
 -

 80,235

 $

 $

 $
 32,131,041

 $
 ( 28,255,846
)

 $
 3,875,213

 Balance

 -

 $
 -

 80,235

 $

 $

 $
 32,131,041

 $
 ( 28,255,846
)

 $
 3,875,213

 Series A preferred stock units issued

 2,000

 -

 -

 -

 -

 -

 1,811,000

 -

 1,811,000

 Class A common stock issued for conversion of Series
 A preferred stock and dividend

 ( 1,628
)

 -

 176,791

 -

 -

 166,465

 -

 166,483

 Class A common stock units issued

 -

 -

 150,000

 -

 -

 14,784,419

 -

 14,784,434

 Class A common stock issued for exercise of warrants

 -

 -

 529,940

 -

 -

 3,634

 -

 3,687

 Warrants issued for finance expense

 -

 -

 -

 917,848

 917,848

 Vested Board Compensation

 -

 -

 -

 -

 -

 -

 54,350

 -

 54,350

 Stock option expense

 -

 -

 -

 -

 49,688

 -

 49,688

 Dividend on Series A preferred Stock

 -

 -

 -

 -

 -

 -

 -

 ( 202,599
)

 ( 202,599
)

 Common stock issue for reverse split adjustment

 -

 -

 46,207

 -

 -

 ( 4
)

 -

 -

 -

 -

 -

 -

 -

 -

)

)

 Balance - December 31, 2023

 $
 -

 983,173

 $

 $

 $
 49,918,441

 $
 ( 42,786,793
)

 $
 7,131,756

 Balance

 $
 -

 983,173

 $

 $

 $
 49,918,441

 $
 ( 42,786,793
)

 $
 7,131,756

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 4

 SIDUS

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 2023

 2022

 2023

 2022

 Cash Flows From Operating Activities:

 $
)

 $
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Stock based compensation

 1,021,886

 1,209,000

 Finance Expense

 -

 -

 Depreciation and amortization

 217,107

 319,936

 Bad debt

 17,871

 22,500

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 290,839
)

 ( 741,984
)

 Accounts receivable - related party

 100,723

 275,112

 ( 624,881
)

 ( 455,935
)

 Contract asset

 ( 16,192
)

 ( 60,932
)

 Contract asset - related party

 ( 28,191
)

 ( 14,982
)

 Prepaid expenses and other assets

 ( 1,950,807
)

 ( 1,911,941
)

 Accounts payable and accrued liabilities

 3,986,275

 2,049,484

 Accounts payable and accrued liabilities - related party

 110,403

 50,099

 Contract liability

 16,192

 Contract liability - related party

 28,191

 ( 48,429
)

 Changes in operating lease assets and liabilities

 ( 8,832
)

 ( 6,800
)

 Net Cash used in Operating Activities

 ( 11,749,442
)

 ( 12,093,908
)

 Cash Flows From Investing Activities:

 Purchase of property and equipment

 ( 7,208,200
)

 ( 2,099,858
)

 Cash paid for asset acquisition

 ( 483,644
)

 -

 Net Cash used in Investing Activities

 ( 7,691,844
)

 ( 2,099,858
)

 Cash Flows From Financing Activities:

 Proceeds from issuance of common stock units

 14,788,121

 3,221,355

 Proceeds from issuance of Series A preferred stock units

 1,811,000

 -

 Proceeds from asset-based loan agreement

 6,379,624

 502,349

 Repayment of asset-based loan agreement

 ( 4,294,073
)

 -

 Proceeds from notes payable

 -

 -

 Repayment of notes payable

 ( 302,983
)

 -

 Payment of lease liabilities

 -

 ( 148,019
)

 Repayment of notes payable - related party

 -

 ( 797,505
)

 Dividend paid

 ( 19,555
)

 -

 Net Cash provided by Financing Activities

 18,362,134

 2,778,180

 Net change in cash

 ( 1,079,152
)

 ( 11,415,586
)

 Cash, beginning of period

 2,295,259

 13,710,845

 Cash, end of period

 $
 1,216,107

 $
 2,295,259

 Supplemental cash flow information

 Cash paid for interest

 $
 190,920

 $
 284,178

 Cash paid for taxes

 $
 -

 $
 -

 Non-cash Investing and Financing transactions:

 Debt forgiveness

 $
 -

 $
 1,624,755

 Class A common stock issued for conversion of Series A convertible preferred stock

 $
 166,483

 $
 -

 Common stock issue for reverse split adjustment

 $
 -

 $
 -

 Modification of right-of-use asset and lease liability

 $
 135,235

 $
 -

 Class A common stock issued for exercised cashless warrant

 $
 -

 $
 -

 The
accompanying notes are an integral part of these consolidated financial statements.

 F- 5

 SIDUS

 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

 DECEMBER
31, 2023 AND 2022

 Note
1. Organization and Description of Business

 Organization

 Sidus
Space Inc. ("Sidus", "we", "us" or the "Company"), was formed as Craig Technologies Aerospace
Solutions, LLC, in the state of Florida, on July 17, 2012. On April 16, 2021, the Company filed a Certificate of Conversion to register
and incorporate with the state of Delaware and on August 13, 2021 changed the company name to Sidus Space, Inc.

 Description
of Business

 Founded
in 2012, we are a growing U.S. commercial space company with an established manufacturing business who has been trusted to provide mission-critical
space hardware to many of the top aerospace businesses for over a decade. We plan to offer on-orbit services as the space economy expands;
said services are either in a developmental phase or soon to achieve flight heritage. We have strategically decided to expand our business
by moving up the satellite value chain by becoming a provider of responsive and scalable on-orbit infrastructure as well as collecting
Space and Earth observational data to capture larger market needs.

 To
address Commercial and Government customer needs and mission sets, we plan to organize into three core business lines: manufacturing
services; space-infrastructure-as-a-service; and space-based data and insights. Our vertically integrated model is complementary across
each line of business aiming to expand existing and unlock new potential revenue generating opportunities. Additionally, we look to further
transition into a subscription-based model upon the digitization of our manufacturing process as we expand alongside our space-based
focus.

 Reverse
Stock Split

 On
December 6, 2023, the Board approved a one-for-one hundred (1-for-100) reverse split of the Company's issued and outstanding shares
of Common Stock (the "Reverse Stock Split"). On December 19, 2023, the Company filed with the Secretary of State of the State
of Delaware a certificate of amendment to its certificate of incorporation (the "Certificate of Amendment") to effect the
Reverse Stock Split. All share and per share information in these financial statements retroactively reflect this reverse stock split.

 Note
2. Summary of Signification Accounting Policies

 Basis
of 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. For the full year ended December 31, 2022, the Company has reclassified operating expenses to selling,
general and administrative expenses.

 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.

 F- 6

 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 statements or tax returns.

 Cash
and Cash Equivalents

 For
purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market
funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents. The Company
had no cash equivalents at December 31, 2023 and 2022.

 Periodically,
the Company may carry cash balances at financial institutions more than the federally insured limit of $ 250,000 per institution. The
amount in excess of the FDIC insurance as of December 31, 2023, was $ 966,107. The Company has not experienced losses on these accounts
and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is
not significant.

 Accounts
Receivable

 Accounts
receivable are stated at the amount of consideration from customers of which the Company has an unconditional right to receive plus any
accrued and unpaid interest. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables,
historical collection information and existing economic conditions. The Company sells certain accounts receivable with recourse in order
to accelerate the receipt of cash.

 Bad
Debt and Allowance for Doubtful Accounts

 Historically
the Company has been able to collect all past due amounts and has not written off past due invoices, therefore there is limited historical
data on the company's historical losses or expected losses at this time. In compliance with GAAP the Company has determined the
following policy will be followed regarding outstanding customer invoices.

 An
allowance for doubtful accounts has been established to reflect the anticipated uncollectible value of the related receivable account.
Review procedures have been established to provide a realistic reserve based on past collection experience and anticipated losses on
the receivables.

 F- 7

 The
company will utilize the allowance method based on accounts receivable aging in order to accrue bad debt expense and the contra balance
sheet account, allowance for doubtful accounts. The accounts receivable aging will be reviewed quarterly and necessary adjustments made
to the allowance for doubtful accounts account balance. The Company will review their policy annually to determine if adjustments should
be made based on more recent accounts receivable trends.

the years ended December 31, 2023 and 2022, the Company recorded bad debt of $ 17,871 and $ 22,500, respectively.

 Stock
Based Compensation

 The
Company accounts for stock-based compensation awards in accordance with ASC Topic 718, "Compensation – Stock Compensation."
The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the consolidated
statements of operations and comprehensive income based on the estimated fair value of those awards on the grant date and amortized on
a straight-line basis over the requisite service period or vesting period. The Company records forfeitures as they occur.

 Share-based
payments are valued using a Black-Scholes option pricing model. The grants are amortized on a straight-line basis over the requisite
service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized
compensation cost is reversed in the period related to the termination of service.

 The
expected option term is computed using the "simplified" method as permitted under the provisions of ASC 718-10-S99. The Company
uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate the expected term. The share price as of the grant date
was determined by current market prices for our common stock. Expected volatility is based on the historical stock price volatility of
comparable companies' common stock, as our stock does not have sufficient historical trading activity. Risk free interest rates
were obtained from U.S. Treasury rates for the applicable periods.

 Contract
Assets and Contract Liabilities

 The
amounts included within contract assets and contract liabilities are related to the company's long-term construction contracts.
Retainage for which the company has an unconditional right to payment that is only subject to the passage of time is classified as contracts
receivable. Retainage subject to conditions other than the passage of time are included in contract assets and contract liabilities on
a net basis at the individual contract level. Contract assets represent revenue recognized in excess of amounts paid or payable (contracts
receivable) to the company on uncompleted contracts. Contract liabilities represent the company's obligation to perform on uncompleted
contracts with customers for which the company has received payment or for which contracts receivable are outstanding.

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

 Property
and Equipment

 Property
and equipment, consisting mostly of plant and machinery, motor vehicles and computer equipment, is recorded at cost reduced by accumulated
depreciation and impairment, if any. Construction in progress generally involves short-term capital projects and is not depreciated until
the development has reached completion and the asset has been put into service. Depreciation expense is recognized over the assets'
estimated useful lives of three to ten years using the straight-line method. Major additions and improvements are capitalized as additions
to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective
assets, are expensed as incurred. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively.
When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed
on the recoverability of the carrying amounts.

 F- 8

 Long-Lived
Assets

 Long-lived
assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets
may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison
of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its
estimated fair value.

 Fair
Value Measurements

 The
Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring
basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement.
The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining
fair value. The three tiers are defined as follows:

 Level
 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;

 Level
 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace
 for identical or similar assets and liabilities; and

 Level
 3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

 The
Company's financial instruments, including cash, accounts receivable, prepaid expense and other current assets, accounts payable
and accrued liabilities, and loans payable, are carried at historical cost. At December 31, 2023 and 2022, the carrying amounts of these
instruments approximated their fair values because of the short-term nature of these instruments.

 Business
Combinations

 Business
combinations are recorded using the acquisition method of accounting. The purchase price of the acquisition is allocated to the tangible
assets, liabilities, identifiable intangible assets acquired and non-controlling interest, if any, based on their estimated fair values
as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses
are expensed as incurred.

 Intangible
Assets

 Intangible
assets with an indefinite life are not amortized and are tested for impairment annually or more frequently if events or changes in circumstances
indicate that they might be impaired.

 Intangible
assets with finite lives are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives
of the respective assets.

 Acquired
intangible assets from business combinations are recognized and measured at fair value at the time of acquisition. The identifiable intangible
asset recognized in the Company's acquisitions is a customer list, which will be tested for impairment annually.

Recognition

 The
Company adopted ASC 606 – Revenue from Contracts with Customers using the modified retrospective transition approach. The core
principle of ASC 606 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled for exchange of those goods or services. The
Company's updated accounting policies and related disclosures are set forth below, including the disclosure for disaggregated revenue.
The impact of adopting ASC 606 was not material to the Consolidated Financial Statements.

 F- 9

from the Company is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers
in return for expected consideration and includes the following elements:

 executed
 contracts with the Company's customers that it believes are legally enforceable;

 identification
 of performance obligations in the respective contract;

 determination
 of the transaction price for each performance obligation in the respective contract;

 Allocation
 of the transaction price to each performance obligation; and

 recognition
 of revenue only when the Company satisfies each performance obligation.

 These
five elements, as applied to each of the Company's revenue category, is summarized below:

 Revenues
from fixed price contracts that are still in progress at month end are recognized on the percentage-of-completion method, measured by
the percentage of total costs incurred to date to the estimated total costs for each contract. This method is used because management
considers total costs to be the best available measure of progress on these contracts. Revenue from fixed price contracts and time-and-materials
contracts that are completed in the month the work was started are recognized when the work is shipped. To achieve this core principle,
we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine
the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the
Company satisfies a performance obligation.

 Revenues
from fixed price service contracts that contain provisions for milestone payments are recognized at the time of the milestone being met
and payment received. This method is used because management considers that the payments are nonrefundable unless the entity fails to
perform as promised. If the customer terminates the contract, the Company is entitled only to retain any progress payments received from
the customer and the Company has no further rights to compensation from the customer. Even though the payments made by the customer are
nonrefundable, the cumulative amount of those payments is not expected, at all times throughout the contract, to at least correspond
to the amount that would be necessary to compensate the Company for performance completed to date. Accordingly, the Company accounts
for the progress under the contract as a performance obligation satisfied at a point in time. To achieve this core principle, we apply
the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the
transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company
satisfies a performance obligation.

 Cost
of revenue

 Costs
are recognized when incurred. Cost of revenue consists of direct labor, subcontract, materials, depreciation on machinery and equipment,
and other direct costs.

 Net
Income (Loss) Per Share of Common Stock

 The
Company has adopted ASC Topic 260, "Earnings per Share" which requires presentation of basic earnings per share on
the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator
and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed
by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share
is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares
of common stock during the period to reflect the potential dilution that could occur from common stock issuable through contingent share
arrangements, stock options and warrants unless the result would be antidilutive.

 F- 10

 For
the years ended December 31, 2023 and 2022, the following common stock equivalents were excluded from the computation of diluted net
loss per share as the result of the computation was anti-dilutive.

of Diluted Net
Loss Per Share

 2023

 2022

 Warrants

 232,677

 -

 Series A convertible preferred stock

 283,512

 -

 Total common stock equivalents

 657,980

 -

 Leases

 We
determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU")
assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are
included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.

 ROU
assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present
value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental
borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement
date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include
options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments
is recognized on a straight-line basis over the lease term.

 Leases
with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight-line basis over
the lease term in our statement of operations.

 Income
Taxes

 The
Company adopted FASB ASC 740, Income Taxes, at its inception. Under FASB ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, 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 settled. 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. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities.
The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of December 31, 2023
or December 31, 2022.

 Warrants

 The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's
specific terms and applicable authoritative guidance in FASB ASC 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.

 F- 11

 Recent
Accounting Pronouncements

 In
June 2022, the FASB issued ASU 2022-03, ASC Subtopic "Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities
Subject to Contractual Sale Restrictions". These amendments clarify that a contractual restriction on the sale of an equity security
is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments
in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning
after December 15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard
on its consolidated financial statements.

 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 with Aurea. 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. The Company is responsible for 100% of the operations of Aurea and derives 100% of the
net profits or losses derived from the business operations. The assets, liabilities and the operations of Aurea from the date of inception
(July 20, 2020), were included in the Company's consolidated financial statements.

 Through
a declaration of trust, 100 % of the voting rights of Aurea's shareholders have been transferred to the Company so that the Company
has effective control over Aurea and has the power to direct the activities of Aurea that most significantly impact its economic performance.
There are no restrictions on the consolidated VIE's assets and on the settlement of its liabilities and all carrying amounts of
VIE's assets and liabilities are consolidated with the Company's financial statements.

 If
facts and circumstances change such that the conclusion to consolidate the VIE has changed, the Company shall disclose the primary factors
that caused the change and the effect on the Company's financial statements in the periods when the change occurs.

 As
of December 31, 2023 and 2022, Aurea's assets and liabilities are as follows:

of Variable Interest Entities Assets and Liabilities

 2023

 2022

 Assets

 Cash

 $
 52,492

 $
 76,517

 Prepaid and other current assets

 13,164

 11,394

 Total Assets

 $
 65,656

 $
 87,911

 Liability

 Accounts payable and other current liabilities

 $
 74,219

 $
 29,005

 For
the years ended December 31, 2023 and 2022, Aurea's net loss was $ 157,467 and $ 136,344 respectively.

 F- 12

 Note
4. Prepaid expense and Other current assets

 As
of December 31, 2023 and 2022, prepaid expense and other current assets are as follows:

of Prepaid Expense and Other Current Assets

 2023

 2022

 Prepaid insurance

 $
 699,310

 $
 994,450

 Prepaid components

 1,258,965

 950,679

 Prepaid satellite services & licenses

 3,313,706

 1,367,125

 Prepaid software

 91,258

 107,000

 VAT receivable

 -

 -

 Other current assets

 42,214

 57,494

 Total

 $
 5,405,453

 $
 3,476,748

the years ended December 31, 2023 and 2022, the Company recorded interest expense of $ 26,302 and $ 23,407 related to financing of our
prepaid insurance policies.

 Note
5. Inventory

 As
of December 31, 2023 and 2022, inventory is as follows:

of Inventory

 2023

 2022

 Work in Process

 $
 1,217,929

 $
 583,437

 Note
6. Property and Equipment

 At
December 31, 2023 and 2022, property and equipment consisted of the following:

of Property and Equipment

 2023

 2022

 Office equipment

 $
 17,061

 $
 17,061

 Computer equipment

 41,233

 37,296

 Vehicle

 35,424

 28,143

 Software

 482,127

 158,212

 Machinery

 3,209,719

 3,386,111

 Leasehold improvements

 397,536

 372,867

 R&D software

 9,655

 386,182

 Construction in progress

 8,609,902

 1,497,276

 Property and equipment, gross

 12,802,657

 5,883,148

 Accumulated depreciation

 ( 3,232,443
)

 ( 3,328,156
)

 Property and equipment, net of accumulated depreciation

 $
 9,570,214

 $
 2,554,992

 As
of December 31, 2023 and 2022, construction in progress represents components to be used in the manufacturing of our satellites.

 Depreciation
expense of property and equipment for the years ended December 31, 2023 and 2022 is $ 217,107 and $ 319,936 of which $ 176,321 and $ 181,005
are included as components of cost of revenue, respectively.

the years ended December 31, 2023 and 2022, the Company purchased assets of $ 7,208,200 and $ 2,099,858, respectively.

 F- 13

 Note
7. Business Acquisition

 On
August 18, 2023, the Company entered into an Asset Conveyance Agreement (the "Purchase Agreement") with Exo-Space Inc., a
Delaware corporation ("Exo-Space"), and certain shareholders thereof. The Purchase Agreement provided for the acquisition
by the Company of substantially all of the assets of Exo-Space (the "Assets") which includes the customer contracts and lists
related to Exo-Space's business of providing analytics services by (i) providing on-orbit data processing services, including satellite
imaging intelligence services, and (ii) the development of artificial intelligence and machine learning technology and software used
for the on-orbit processing of data (the "Business") from Exo-Space. The purchase price for the Assets was approximately
$ 468,000 in cash.

 In
addition, on August 18, 2023, the Company entered into a Sale of Business Non-Competition and Non-Solicitation Agreement with Exo-Space
Inc. and each of Jeremy Allam ("Allam"), Mark Lorden ("Lorden"), Marcel Lariviere ("Lariviere") and
Tate Schaar ("Schaar" and collectively, with Allam, Lorden and Lariviere, the "Sellers") pursuant to which the
Sellers agreed to keep confidential certain information related to the Business and agreed to a five (5) year non-compete and non-solicitation.

 On
August 21, 2023 (the "Closing Date"), the Company completed its acquisition of the Assets related to Exo-Space (the "Acquisition").
As part of the Acquisition, Jeremy Allam, Marcel Lariviere, Mark Lorden and Tate Schaar entered into employment agreements with the Company
which granted non-statutory stock options to Jeremy Allam, Marcel Lariviere, Mark Lorden and Tate Schaar with respect to the following
number of shares of the Company's common stock: 1,898,502 (Allam); 949,251 (Lariviere); 711,938 (Lorden) and 395,521 (Schaar).
These option awards were made outside of the Company's 2021 Omnibus Equity Incentive Plan and are made pursuant to the NASDAQ inducement
grant exception in connection with such individuals' commencement of employment with the Company which is August 21, 2023. The
option awards have an exercise price of $ 0.16 which is equal to the fair market value of our stock on August 21, 2023, the date of grant
of such options. The options have a five ( 5)-year term and shall vest in four (4) equal installments on each of the first four (4) anniversaries
of the date of grant, in each case subject to the optionee continuing to provide services to the Company through the applicable vesting
date. Notwithstanding the foregoing vesting conditions, no portion of the options shall be exercisable prior to the second (2 nd)
anniversary of the date of grant. In the event that the applicable optionee resigns from employment for any reason prior to the second
(2 nd) anniversary of the date of grant, the option will be immediately cancelled and terminated on the date of such resignation.

 Pro
forma results of operations have not been presented because the effects of the Acquisition was not material to our consolidated results
of operations. Acquisition-related costs included legal fees of $ 220,632 and were expensed as incurred. The following table summarizes
the amounts for the business acquisition which were allocated to the fair value of aggregated net assets acquired:

of Business Acquisition Allocated to Fair Value of Net Assets Acquired

 Cash paid

 $
 468,663

 Assets Acquired:

 Accounts receivable

 $
 51,769

 9,611

 Property and equipment

 9,148

 Intangible asset

 398,135

 Total

 $
 468,663

 Note
8. Accounts payable and other current liabilities

 At
December 31, 2023 and 2022, accounts payable and other current liabilities consisted of the following:

of Accounts payable and Other Current Liabilities

 2023

 2022

 Accounts payable

 $
 4,716,964

 $
 1,483,467

 Payroll liabilities

 1,250,330

 820,451

 Credit card liability

 93,826

 44,650

 Other payable

 156,885

 239,110

 Dividend payable

 16,566

 -

 Accrued interest - related party

 -

 -

 Insurance payable

 462,991

 828,167

 Total accrued expenses
 and other liabilities

 $
 6,697,562

 $
 3,415,845

 F- 14

 Note
9. Asset-based loan

 The
Company is party to a recourse loan and security agreement with an unrelated lender dated November 30, 2022, whereby the lender will
provide loans secured by certain accounts receivable for up to 90 % of the face amount, which is paid to the Company in the form of a
cash advance. The Company has a revolving line of credit for $ 3 million with a loan interest rate of 15.2 % annum on outstanding balances.
 Additionally, in the event of default the Lender at its option can increase the loan interest rate by 5% per annum for each month or
partial month default on outstanding balances. Under the loan and security agreement, the Company must pay back any invoices that become
uncollectable. As of December 31, 2023 and 2022, the asset-based loan was $ 2,587,900 and $ 502,349, respectively. For the years ended
December 31, 2023 and 2022, the costs and interest incurred by the Company in connection with the loan and security agreement activities
were $ 155,716 and $ 14,293, respectively.

 Note
10. Contract assets and liabilities

 At
December 31, 2023 and 2022, contract assets and contract liabilities consisted of the following:

of Contract Assets and Liabilities

 Contract assets

 2023

 2022

 Revenue recognized in excess of amounts paid or payable (contracts receivable) to the company on uncompleted contracts (contract asset), excluding retainage

 $
 -

 $
 -

 Retainage included in contract assets due to being conditional on something other than solely passage of time

 77,124

 Retainage included in contract assets due to being conditional on something other than solely passage of time – related party

 Total contract assets

 $
 120,297

 $
 75,914

 Contract liabilities

 2023

 2022

 Payments received or receivable (contracts receivable) in excess of revenue recognized on uncompleted contracts (contract liability), excluding retainage

 $
 -

 $
 -

 Retainage included in contract liabilities due to being conditional on something other than solely passage of time

 77,124

 Retainage included in contract liabilities due to being conditional on something other than solely passage of time – related party

 Total contract liabilities

 $
 120,297

 $
 75,914

 F- 15

 Note
11. Leases

 Operating
lease

 We
have a noncancelable operating lease entered in November 2016 for our office facility that expires in July 2021 and has renewal options
to May 2024. The monthly "Base Rent" is $ 10,392 and the Base Rent is increased by 2.5 % each year. In May 2023 the Company
exercised its option and extended the lease to May 31, 2024.

 In
May 2021, we entered into a new lease agreement for our office and warehouse space that expires in May 2024. The Company shall have the
option to terminate the lease after 12 months and 24 months from the commencement date. The monthly "Base Rent" is $ 11,855
and the Base Rent may be increased by 2.5 % each year.

 We
recognized total lease expense, primarily related to our operating leases, on a straight-line basis in accordance with ASC 842.

 As
of December 31, 2023 and 2022, the Company recorded a refundable security deposit of $ 10,000 for its warehouse space and is included
in other assets on the balance sheet.

 The
operating lease expense were as follows:

of Operating lease expense

 2023

 2022

 Year Ended December 31,

 2023

 2022

 Operating lease cost

 $
 353,329

 $
 338,389

 Supplemental
balance sheet information related to operating leases was as follows:

 Summary
of Other Supplemental Information

 2023

 2022

 Operating lease right-of-use assets at inception

 $
 1,276,515

 $
 1,119,675

 Accumulated amortization

 ( 1,160,942
)

 ( 869,738
)

 Total operating lease right-of-use assets

 $
 115,573

 $
 249,937

 Operating lease liabilities - current

 $
 119,272

 $
 199,158

 Operating lease liabilities - non-current

 -

 63,310

 Total operating lease liabilities

 $
 119,272

 $
 262,468

 Weighted-average remaining lease term — operating leases (year)

 0.42

 1.20

 Weighted-average discount rate — operating leases

 4.73
 %

 4.86
 %

 Future
minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year at December 31, 2023
were as follows:

 Summary
of Future Minimum Lease Payments Under Operating Leases

 Year Ending December 31,

 2024

 $
 120,211

 Thereafter

 -

 Total undiscounted lease payments

 120,211

 Less: Imputed interest

 ( 939
)

 Operating lease liabilities

 119,272

 F- 16

 Finance
lease

 The
Company leases machinery and office equipment under non-cancellable finance lease arrangements. The term of those capital leases is at
the range from 59 months to 83 months and annual interest rate is at the range from 4 % to 6 %.

the year ended December 31, 2022, the Company fully paid off the two outstanding finance leases totaling $ 148,019, prior to maturity
dates. As of December 31, 2023 and 2022, the Company does not have any additional financing lease commitments.

the years ended December 31, 2023 and 2022, the Company recorded depreciation of finance lease assets of $ 0 and $ 49,076 and interest
expense of finance lease of $ 0 and $ 1,891, respectively.

 Note
12. Notes Payable

 Decathlon
Note

 On
December 3, 2021, we entered into a Loan Assignment and Assumption Agreement, or Loan Assignment, with Decathlon Alpha IV, L.P., or Decathlon
and Craig Technical Consulting, Inc ("CTC") pursuant to which we assumed the Decathlon Note. In connection with our assumption
of the Decathlon Note, CTC reduced the principal of the Note Payable – related party by $ 1.4 million for an aggregate principal
balance of $ 2.6 million. The Company recorded a reclassification of $ 1,106,164 from Note Payable – related party to Note payable
– non- current (Decathlon note) and recorded forgiveness of note payable – related party of $ 293,836. (See Note 12)

 Management
believes that the assumption of the Decathlon Note from CTC is in our best interests because in connection therewith, Decathlon released
us from a cross-collateralization agreement it was a party to with CTC for a loan of a greater amount. Also in connection with the Loan
Assignment on December 3, 2021, we entered into a Revenue Loan and Security Agreement, or RLSA, with Decathlon and our CEO, Carol Craig,
pursuant to which we pay interest based on a minimum rate of one (1) times the amount advanced and make monthly payments based on a percentage
of our revenue calculated as an amount equal to the product of (i) all revenue for the immediately preceding month multiplied by (ii)
the Applicable Revenue Percentage, defined as 4 % of revenue for payments due during any month. The Decathlon Note is secured by our assets
and is guaranteed by CTC and matures the earliest of: (i) December 9, 2024, (ii) immediately prior to a change of control, or (iii) upon
an acceleration of the obligations due to a default under the RLSA. As a result, on December 31, 2021, the Company recorded the forgives
of note payable-related party of $ 293,836 and the reclass of $ 1,106,164 from Note Payable – related party to Note Payable.

the years ended December 31, 2023 and 2022, the Company recorded interest expense of $ 721,119 and $ 738,048, respectively, which included
an additional accrual estimate based on the principal and accrued but unpaid interest payment due when the note matures, and made payments
of $ 252,983 and $ 258,949, respectively. As of December 31, 2023 and 2022, the Company recorded principal amount and accrued interest
of $ 2,017,286 and $ 1,599,150 on the balance sheet, respectively. At maturity the Company will be required to pay approximately $ 2.2 M
representing the Decathlon Note and accrued but unpaid interest.

 Note
13. Related Party Transactions

and Accounts Receivable

 The
Company recognized revenue of $ 952,220
and $ 1,042,628
for the years ended December 31, 2023 and 2022 and accounts receivable of $ 67,447
and $ 168,170
and contract liability of $ 43,173
and $ 14,982 as
of December 31, 2023 and 2022, respectively, from contracts entered into by Craig Technical Consulting, Inc, a principal stockholder, and subcontracted to the Company for four customers.

 Accounts
Payable

 As
of December 31, 2023 and 2022, the Company owed $ 677,039 and $ 566,636 to Craig Technical Consulting, Inc. Advances are unsecured, due
on demand and non-bearing-interest.

 Note
Payable – Related Party

the year ended December 31, 2022, the Company repaid $ 797,505 and the note payable and accrued interest was forgiven by Craig Technical
Consulting, Inc. The Company recorded debt forgiveness of note payable and accrued interest of $ 1,624,755 to additional paid in capital.

 F- 17

 As
of December 31, 2023 and 2022, the Company had note payable – related party current of $ 0 and $ 1,000,000 and non-current of $ 0
and $ 1,350,000, respectively.

 Cost
of Revenue

 For
the years ended December 31, 2023 and 2022, the Company recorded cost of revenue to Craig Technical Consulting, Inc. of $ 588,267 and
$ 136,363, and general and administrative expense of $ 24,363 and $ 12,267, respectively.

 Professional
Service Agreements

 A
Professional Services Agreement, effective November 15, 2021, was made, between the Company and Craig Technical Consulting, Inc. The
period of performance for this Agreement was December 1, 2021, through November 30, 2022. The agreement was amended and the term of agreement
was extended to November 30, 2024.

the year ended December 31, 2023 and 2022, the Company recorded professional services of $ 106,057 and $ 160,475, respectively.

 Sublease

 On
August 1, 2021, the Company entered into a Sublease Agreement with its related party and a principal shareholder ("Sublandlord"),
whereby the Company shall sublease certain offices, rooms and shared use of common spaces located at 150 Sykes Creek Parkway, Merritt
Island, FL. The Lease is a month-to-month lease and may be terminated with 30 day's notice to the Sublandlord. The monthly rent
shall be $ 4,570 from inception through January 31, 2022, $ 4,707 from February 1, 2022 to January 31, 2023 and $ 4,847 from February 1,
2023 to January 31, 2024. During the years ended December 31, 2023 and 2022, the Company recorded $ 58,024 and $ 56,349 to lease expenses.

 Note
14. Commitments and Contingencies

 Litigation

 The
Company is currently involved in various civil litigation in the normal course of business none of which is considered material.

 License
Agreement

 The
consolidated financial statements include Aurea Alas Limited, which is a variable interest entity of which we are the primary beneficiary
(see Note 3). On August 18, 2020, Aurea entered into a license agreement with a third-party vendor (the "Vendor"), whereby
they licensed the rights to use certain available radio frequency spectrum for satellite communications. The Company shall pay an annual
Reservation Fee of $ 120,000 while the Company pursues up to four (4) NGSO satellite filing(s) via the Vendor. The Reservation Fee is
levied on the date the filing(s) is received at the International Telecommunication Union (ITU). The Reservation Fee is payable annually
at the anniversary of the date of receipt, as long as the customer retains the NGSO filing(s). The Reservation Fee payment continues
to be payable until any of the frequency assignments of the NGSO filing(s) are brought into use. Upon the submission to the ITU to bring
into use any of the frequency assignments of a given constellation, an annual License Fee of $ 120,000 shall be paid in lieu of the Reservation
Fee. On February 1, 2021, the Vendor submitted the license filing to the ITU and on April 6, 2021, the ITU published the license filing
for LIZZIE IOMSAT. Payments began in February 2021. For the years ended December 31, 2023 and 2022 the Company recorded payments of $ 120,000
in Other General and Administrative expenses.

 F- 18

 Note
15. Stockholder's Equity

 Authorized
Capital Stock

 Effective
July 3, 2023, the Company filed Amended and Restated Certificate of Incorporation to amend for authorized capital stock to authorize
the Company to issue 215,000,000 shares.

 The
Company has authorized 5,000,000 shares of preferred stock with a par value of $ 0.0001.

 The
Company has authorized 210,000,000 shares of common stock with a par value of $ 0.0001, consisting of 200,000,000 shares of Class A Common
Stock and 10,000,000 shares of Class B Common Stock. The Class B Common Stock is entitled to 10 votes for every 1 vote of the Class A
Common Stock.

 Series
A Convertible Preferred Stock

 On
October 11, 2023, the Company entered into a securities purchase agreement (the "Purchase Agreement") with certain institutional
investors, pursuant to which the Company agreed to issue and sell to such investor, in a registered direct offering (the "Offering"),
an aggregate of 2,000 shares of the Company's Series A convertible preferred stock, par value $ 0.0001 per share and stated value
of $ 1,000 per share (the "Series A Preferred Stock") at an offering price of $ 1,000 per share. Each share of Series A Preferred
Stock is convertible into shares of the Company's Class A Common Stock at an initial conversion price of $ 10.152 per share (the
"Conversion Price"). The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications
and the like, and subject to price-based adjustment, on a "full ratchet" basis, in the event of any issuances of Common Stock,
or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject
to certain exceptions). The Series A Preferred Stock (and the shares of the Company's Class A common stock (the "Class A
Common Stock")) underlying the Series A Preferred Stock) were offered by the Company pursuant to its shelf registration statement
on Form S-3 (File No. 333-273430), which was originally filed with the Securities and Exchange Commission (the "SEC") on
July 26, 2023 and declared effective by the SEC on August 14, 2023. Concurrently with the sale of the Series A Preferred Stock, pursuant
to the Purchase Agreement in a concurrent private placement, for each share of Class A Common Stock issuable upon conversion of the Series
A Preferred Stock purchased by the investor, such investor received from the Company an unregistered warrant (the "Warrant")
to purchase one share of Class A Common Stock (the "Warrant Shares"). Each Warrant will be exercisable for one share of the
Company's Class A Common Stock at an exercise price of $ 10.152 per share, will be exercisable immediately upon issuance, and will
have a term of five years from the date of issuance. The exercise price is subject to customary adjustments for stock dividends, stock
splits, reclassifications and the like, and subject to price-based adjustment, on a "full ratchet" basis, in the event of
any issuances of Class A Common Stock, or securities convertible, exercisable or exchangeable for Class A Common Stock, at a price below
the then-applicable exercise price (subject to certain exceptions).

the year ended December 31, 2023, 1,628 shares of Series A convertible preferred stock and a related dividend of $ 166,483 were converted
into 176,791 shares of Class A common stock.

 The
Company had 372 and 0 shares of Series A Convertible preferred stock issued and outstanding as of December 31, 2023 and 2022, respectively.

 Class
A Common Stock

 The
Company had 983,173 and 80,227 shares of Class A common stock issued and outstanding as of December 31, 2023 and 2022, respectively.

 Fiscal
year 2023

 On
January 30, 2023, the Company offered an aggregate of up to 26,400 shares of our Class A common stock and pre-funded warrants to purchase
up to an aggregate 123,600 shares of Class A common stock. In addition, the company issued 22,500 prefunded warrants to cover over-allotments.
All pre-funded warrants were exercised and total issued stock in this offering was 172,500 aggregate shares of Class A common stock.
The purchase price for each share of Class A common stock was $ 30.0. Warrants equal to 4% of the number of securities issued by the Company
in the offering were issued to the underwriter at an exercise price of 125% of the offering price per share. Gross proceeds from the
offering were approximately $ 5.2 million, and net proceeds of approximately $ 4.6 million after underwriter expenses.

 F- 19

 On
April 20, 2023, the Company sold an aggregate of 85,720 shares of our Class A Common Stock and pre-funded warrants to purchase up to
an aggregate 217,310 shares of Class A Common Stock and warrants to purchase up to 303,030 shares of Class A Common Stock. In addition,
the Company sold 37,880 shares of Class A Common Stock and 37,880 of accompanying warrants to purchase shares of Class A Common Stock
pursuant to the partial exercise of the underwriter's over-allotment option. The purchase price for each share of Class A Common
Stock and accompanying warrant was $ 33.0. Warrants equal to 3% of the number of securities issued by the Company in the offering at an
exercise price of 125% of the offering price per share was issued to the underwriter. Gross proceeds from the offering were approximately
$ 11.2 million, and net proceeds of approximately $ 10.2 million after underwriting discounts and commissions and estimated offering expenses
payable by us.

the year ended December 31, 2023, 166,530 Class A Common Stock were issued upon cashless exercise of warrants and 363,410 Class A Common
Stock were issued upon exercise of pre-funded warrants of $ 3,634.

 Fiscal
year 2022

the year ended December 31, 2022, the Company issued 14,487 shares of common stock as follows:

 3,000
 restricted shares for consulting services valued at $ 1,209,000, pursuant to the Sidus Space, Inc. 2021 Omnibus Equity Incentive Plan.

 11,487
 shares issued under the Purchase Agreement (inclusive of 904 commitment shares to the underwriter), for aggregate proceeds of $ 3,596,355.
 The net proceeds to the Company, after deducting broker fees and issuance costs of $ 375,000, were $ 3,221,355.

 Class
B Common Sock

 The
Company had 100,000 shares of Class B common stock issued and outstanding as of December 31, 2023 and 2022.

 Warrants

 January
2023 offering

 For
the year ended December 31, 2023, the Company issued a total of 146,100 pre-funded warrants exercisable for a period of five years at
an exercise price per share of $ 30.0 in connection with the common stock sold in January 2023. These warrants were fully exercised into
Class A Common stock as part of the offering previously described. In addition, the Company issued a total of 6,901 underwriter warrants
exercisable 180 days after the January 30, 2023 date of the offering agreement, for a period of five years at an exercise price per share
of $ 37.5 in connection with the common stock sold.

 April
2023 offering

 For
the year ended December 31, 2023, the Company issued a total of 217,310 pre-funded warrants and 340,910 warrants exercisable for a period
of five years at an exercise price per share of $ 33.0 in connection with the common stock sold in April 2023. During the second and third
quarters of 2023, a total of 217,310 pre-funded warrants and 333,049 warrants were exercised into Class A Common stock. In addition,
the Company issued a total of 10,228 underwriter warrants exercisable 180 days after the April 20,2023 date of the offering agreement,
for a period of five years at an exercise price per share of $ 41.25 in connection with the common stock sold.

 October
2023 offering

 For
the year ended December 31, 2023, the Company issued 197,006 warrants exercisable for a period of five years at an exercise price per
share of $ 10.152 in connection with the Series A Convertible Preferred stock sold in October 2023. In addition, the Company issued a
total of 11,820 underwriter warrants exercisable any time after the October 11, 2023 date of the offering for a period of five years
at an exercise price per share of $ 12.69 in connection with the common stock sold.

 F- 20

 For
the year ended December 31, 2023, and 2022, the Company recognized finance expense of $ 917,848 and $ 0, respectively, for underwriter
warrants issue for compensation of services.

 The
Company utilizes the Black-Scholes model to value its warrants. The Company utilized the following assumptions:

of Warrant Valuation Assumption

 Year
 ended

 December
 31,

 2023

 Expected term

 years

 Expected average volatility

 - 190
 %

 Expected dividend yield

 -

 Risk-free interest rate

 3.62
 - 3.96
 %

 A
summary of activity of the warrants during the year ended December 31, 2023 as follows:

of Activity of Warrant

 Weighted average

 Average

 shares

 Exercise Price

 Life (years)

 Outstanding, December 31, 2022

 -

 $
 -

 -

 146,100

 30.00

 5.00

 558,220

 33.00

 5.00

 6,901

 37.50

 5.00

 10,228

 41.25

 5.00

 11,820

 12.69

 5.00

 197,006

 10.15

 5.00

 Exercised

 ( 146,100
)

 30.00

 -

 Exercised

 ( 550,359
)

 33.00

 -

 Expired

 -

 -

 -

 Outstanding, December 31, 2023

 233,816

 $
 13.22

 4.73

 Exercisable, December 31, 2023

 233,816

 $
 0.13

 4.73

 The
intrinsic value of the warrants as of December 31, 2023 is $ 0.

 Stock
Options

 On
August 21, 2023, the Company granted 39,552 options with an exercise price of $ 16.0, with a term of five ( 5) years to exercise from the
grant date, to employees of the Company. Options issued vest at 25% of shares subject to the option on each anniversary date, on August
21, 2024, 2025, 2026 and 2027.

 In
October 2023, the Company granted 200 options with an exercise price of $ 100.0, with a term of five ( 5) years to exercise from the grant
date, to an employee of the Company under separation agreement. Options vest at grant date.

 The
Company utilizes the Black-Scholes model to value its stock options. The Company utilized the following assumptions:

of Utilizes Black-Scholes Model to Value of Stock Options

 Year Ended

 2023

 Expected term

 2.50 - 3.75 years

 Expected average volatility

 %

 Expected dividend yield

 -

 Risk-free interest rate

 4.46 - 5.02 %

 F- 21

the year ended December 31, 2023, the Company granted 39,752 options valued at $ 583,580. During the year ended December 31, 2023, the
Company recognized stock option expense of $ 49,688 and as of December 31, 2023, $ 533,892 remains unamortized. The intrinsic value of
the 39,752 options outstanding as of December 31 2023, is $ 0.

 A
summary of activity of the stock options during the year ended December 31, 2023, is as follows:

of Activity of Stock Options

 Options Outstanding

 Weighted

 Weighted Average

 Average Remaining life

 Options

 Exercise Price

 (years)

 Outstanding, December 31, 2022

 -

 $
 -

 -

 39,752

 16.42

 5.00

 Exercised

 -

 -

 -

 Forfeited/canceled

 -

 -

 -

 Outstanding, December 31, 2023

 39,752

 $
 16.42

 4.64

 Exercisable options, December 31, 2023

 $
 100.00

 4.82

 Note
16. Income tax

 The
Company has not made a provision for income taxes for the year ended December 31, 2023 and 2022, since the Company has the benefit of
net operating losses in these periods and the Company changed from a limited liability partnership to a C corporation during 2021.

 Due
to uncertainties surrounding the Company's ability to generate future taxable income to realize deferred income tax assets arising
as a result of net operating losses carried forward, the Company has not recorded any deferred income tax assets as of December 31, 2023.
The Company has incurred a net operating loss of $ 14,217,254. The net operating loss carry forwards can offset 80 percent of future taxable
income and carryforward indefinitely as determined by respective tax regulating authorities. The Company's net operating loss carry
forwards may be subject to annual limitations, which could eliminate, reduce or defer the utilization of the losses because of an ownership
change as defined in Section 382 of the Internal Revenue Code U.S. federal tax returns are closed by statute for years through 2014.
The status of state and non-U.S. tax examinations varies due to the numerous legal entities and jurisdictions in which the Company operates.

 A
reconciliation between expected income taxes, computed at the federal income tax rate of 21 % applied to the pretax accounting loss, and
our blended state income tax rate of 5.5 % in 2023 and 2022, and the income tax net expense included in the consolidated statements of
operations for the years ended December 31, 2023 and 2022 is as follows:

of Income Tax Reconciliation Income Tax Net Expenses

 2023

 2022

 2023

 2022

 Loss for the year

 $
)

 $
)

 Income tax (recovery) at statutory rate

 $
 ( 3,009,000
)

 $
 ( 2,689,782
)

 State income tax expense, net of federal tax effect

 ( 788,100
)

 ( 704,467
)

 Permanent difference and other

 -

 -

 Change in valuation allowance

 3,797,100

 3,394,249

 Income tax expense per books

 $
 -

 $
 -

 F- 22

 Net
deferred tax assets consist of the following components as of:

of Net Deferred Tax Assets

 2023

 2022

 Non-operating loss carryforward

 $
 8,109,149

 $
 4,312,049

 Valuation allowance

 ( 8,109,149
)

 ( 4,312,049
)

 Net deferred tax asset

 $
 -

 $
 -

 Note
17. Subsequent Events

 Subsequent
to December 31, 2023, 372 shares of Series A Convertible Preferred Stock and dividend payable of $ 27,374 were converted into 435,984
shares of Class A common stock.

 Subsequent
to December 31, 2023, 418,724 warrants were exercised into shares of Class A common stock. Gross proceeds from the exercise of the warrants
was $ 1,631,524.

 On
January 29, 2024, the Company entered into a public offering of an aggregate of 1,181,900 shares of Class A Common Stock and pre-funded
warrants to purchase up to an aggregate of 69,900 shares of Class A Common Stock in lieu of Shares, which have been sold pursuant to
that certain Underwriting Agreement, dated January 29, 2024, by and between the Company and the Representative of the Underwriters. Gross
proceeds from the offering were $ 5,632,650 and net proceeds after underwriter discount, various fees and expenses was $ 5,008,259.

 On
February 29, 2024, the Company entered into a public offering of an aggregate of 1,321,000 shares (the " Shares ") of
Class A Common Stock, which have been sold pursuant to that certain Underwriting Agreement, dated February 29, 2024, by and between the
Company and the Representative of the Underwriters. Gross proceeds from the offering were $ 7,926,000 and net proceeds after underwriter
discount, various fees and expenses was $ 7,102,527.

 F- 23

 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM
9A. CONTROLS AND PROCEDURES

 As
of the end of the period covered by this Report, we conducted an evaluation, under the supervision and with the participation of our
Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file
or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the SEC's
rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer,
or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 Changes
in Internal Control over Financial Reporting

 There
were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d)
of Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the fourth quarter ended December 31, 2023 that have materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 Management's
Report on Internal Control over Financial Reporting

 Our
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange
Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on
the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December
31, 2023.

 ITEM
9B. OTHER INFORMATION

 None.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 Not
applicable.

 PART
III

 ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 The
following table sets forth the name, age and positions of our executive officers and directors as of March 27, 2024.

 Name

 Age

 Position

 Carol
 Craig

 Chief
 Executive Officer and Director

 Bill
 White (1)

 Chief
 Financial Officer

 Dana
 Kilborne

 Cole
 Oliver

 Leonardo
 Riera (2)

 Chairman

 Richard
 Berman (3)

 (1)
Mr. White joined the Company as Chief Financial Officer in February 2024.

 (2)
Mr. Riera joined the Company as a director in April 2023.

 (3)
Mr. Berman joined the Company as a director in January 2024.

 The
business background and certain other information about our directors and executive officers is set forth below.

 Carol
Craig. Ms. Craig is the founder of our company and has served as our Chief Executive Officer and Chairwoman since 2014. Ms. Craig
is also the founder and Chief Executive Officer of Craig Technical Consulting, Inc., an engineering and technology company since 1999.
Ms. Craig graduated from Knox College with a BA in Computer Science and a BS in Computer Science Engineering from University of Illinois.
She also has a MS degree in Electrical and Computer Engineering from the University of Massachusetts at Amherst. She is currently pursuing
a PhD in Systems Engineering at the Florida Institute of Technology. Carol is a former P-3 Orion Naval Flight Officer and one of the
first women eligible to fly in combat. She has served on over 30 boards that include educational, aerospace and defense industry and
non-profit organizations. Ms. Craig was selected to serve on our board of directors due to her extensive experience in the space industry
and her relationships with key players in commercial space along with her position as CEO.

 Bill
White. Mr. White has over 30 years of experience in financial management, operations, and
business development. He served as chief financial officer, treasurer, and secretary of Intellicheck, Inc., a technology company listed
on the Nasdaq from 2012 to 2022. Before working at Intellicheck, Inc., he served 12 years as the chief financial officer, secretary and
treasurer of FocusMicro, Inc. ("FM") and the CFO of Prophase Labs, Inc. As co-founder of FM, Mr. White played an integral
role in growing the business from the company's inception to over $36 million in annual revenue in a five-year period. Mr. White
has broad domestic and international experience including managing rapid and significant growth, import/export, implementing tough cost
management initiatives, exploiting new growth opportunities, merger and acquisitions, strategic planning, resource allocation, tax compliance
and organization development. Prior to co-founding FM, he served 15 years in various financial leadership positions in the government
sector. Mr. White started his career in Public Accounting. Mr. White holds a Bachelor of Arts in Business Administration from Washington
State University and is a Certified Fraud Examiner.

 Leonardo
Riera. Mr. Riera was appointed to our board of directors in April 2023 and appointed Chairman of the Board in September 2023.
Mr. Riera has over 35 years of experience in investment banking and fund management, including serving as Executive Director, Country
Head for Bankers Trust in Caracas, Venezuela for over 10 years and Head of Mergers and Acquisitions for Citicorp Investment Bank in Caracas,
Venezuela. Mr. Riera has served as President of LiNiCo Corporation, a subsidiary of Comstock Mining Inc. (NYSE: LODE), a renewable energy
and products company, since April 2022. Mr. Riera has served as a member of the board of directors and as Chief Strategy Officer of Vaya
Space, a privately held space and defense company based in Florida since March 2023. He has also served as a member of the board of directors
and chair of the audit committee of FenixOro Gold Corp. (FENX.CN), a Canadian company focused on acquiring and exploring gold projects,
since January 2021. Mr. Riera served as a member of the board of directors and as a member of the audit committee, nominating and corporate
governance committee and compensation committee of Medicine Man Technologies, Inc. (OTCQX: SHWZ), a vertically integrated regional cannabis
company based in Colorado, from June 2019 through January 2021. He also was Co-founder, Chief Executive Officer and Chairman of the Board
of Directors of EnviroPower Renewable, Inc. a renewable energy company from 2012 through 2018. Mr. Riera is the owner of and has served
as CEO of Latin American Advisors Inc. since 1988 through which he provides mergers and acquisitions, investment advisory, private equity
and strategic planning services. He was a consultant with McKinsey & Co. from 1984 through 1986. Mr. Riera served as President of
the International Banking Association of Venezuela for three terms. He was also Head of Asset Structuring and Credit for a $2 Billion
emerging market debt fund based in Florida, where he was responsible for investments in Russia, Ukraine, Kazakhstan, Mexico, China, Nigeria,
Singapore, Angola, and Brazil. Mr. Riera holds a degree in Economics from Universidad Cat lica Andr s Bello and an MBA
from the University of Pennsylvania's distinguished Wharton School of Business. We believe that Mr. Riera's financial and
executive experience qualifies him to serve on our Board of Directors.

 Dana
Kilborne. Ms. Kilborne was appointed to our board of directors in December 2021. Ms. Kilborne has been the President and CEO
of Cypress Bank & Trust since April 2018 and CEO of Cypress Capital Group since October 2019. She is also a director of both companies.
In 2004, she founded another Florida based community bank as President and CEO and sold the company in January 2018. Ms. Kilborne has
over thirty years of experience in the financial services industry in Florida. She served as a Director of the Federal Reserve Board
of Atlanta Bank, Jacksonville Branch and currently serves on the corporate boards of HealthFirst, Inc., Florida Tech, and NCMIC. She
is past Chair of the Economic Development Commission of the Space Coast, and of Holy Trinity Episcopal Academy, where she was also a
volunteer teacher. She has served on the board of several community organizations including the East Coast Zoological Society, the Advisory
Board of the Bisk College of Business at Florida Tech and many other local not for profit institutions. While in South Florida, she served
on the Downtown Development Authority of West Palm Beach and Rosarian Academy and was awarded the Orchid Award by the mayor of West Palm
Beach for her leadership in the community. Ms. Kilborne was selected to be a director based on her broad background in finance, accounting,
entrepreneurship and governance.

 Cole
Oliver. Mr. Oliver was appointed to our board of directors in December 2021. Mr. Oliver has been an equity partner in the law
firm of Rossway Swan Tierney Barry & Oliver since 2010. Prior to beginning in private practice, Mr. Oliver served as a federal law
clerk to The Honorable John Antoon, II, United States District Court Middle District of Florida. Currently, Mr. Oliver sits on the Board
of Directors for Cypress Capital Group and Cypress Bank & Trust. Additionally, Mr. Oliver remains an active member of the community,
currently serving as a Governing Board Member of the St. Johns River Water Management District, a member of the Brevard County Charter
Review Commission, and as the Treasurer of the Board of Directors for the Holy Trinity Episcopal Academy. Previously, Mr. Oliver has
served as the President of the East Coast Zoological Society and as a Member of the Brevard County Economic Development Commission. He
received his B.A. degree from Washington & Lee University as a history major and an MBA with a concentration in finance from Louisiana
State University. Additionally, Mr. Oliver earned his J.D. degree from the University of Florida, graduating magna cum laude and serving
as the Editor in Chief of the Florida Law review. Mr. Oliver was selected to serve on our board of directors due to his extensive legal
experience and his involvement and understanding of the impact of the space industry on local, federal and global economies.

 Richard
J. Berman. Mr. Berman's business career spans over 35 years of venture capital, senior management, and merger & acquisitions
experience. He has served as a director and/or officer of over a dozen public and private companies in the last five years. Currently,
he is the director of six public companies. Over the last decade he has served on the board of six companies that have reached over one
billion dollars in market value. Previously, Mr. Berman worked at Goldman Sachs and was Senior Vice President of Bankers Trust Company
where he started the M&A Leveraged Buyout Departments. Mr. Berman holds a Special Certificate from The Hague Academy of International
Law, a J.D. from Boston College Law School, an MBA in Finance and a B.S. from New York University (Stern). Mr. Berman was appointed to
our Board of Directors due to his extensive knowledge of public markets and emerging growth companies.

 Family
Relationships

 There
are no family relationships among any of our executive officers or directors.

 Arrangements
between Officers and Directors

 Except
as set forth in this Annual Report on Form 10-K, to our knowledge, there is no arrangement or understanding between any of our officers
or directors and any other person pursuant to which such officer or director was selected to serve as an officer or director of the Company.

 Involvement
in Certain Legal Proceedings

 We
are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters
in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set
forth under Item 401(f) of Regulation S-K.

 Committees
of Our Board of Directors

 Our
board of directors directs the management of our business and affairs, as provided by Delaware law, and conducts its business through
meetings of the board of directors and its standing committees. We have a standing audit committee and compensation committee. In addition,
from time to time, special committees may be established under the direction of the board of directors when necessary to address specific
issues.

 Audit
Committee

 Our
audit committee is responsible for, among other things:

 Approving
 and retaining the independent auditors to conduct the annual audit of our financial statements;

 the proposed scope and results of the audit;

 and pre-approving audit and non-audit fees and services;

 accounting and financial controls with the independent auditors and our financial and accounting staff;

 and approving transactions between us and our directors, officers and affiliates;

 establishing
 procedures for complaints received by us regarding accounting matters;

 overseeing
 internal audit functions, if any; and

 preparing
 the report of the audit committee that the rules of the SEC require to be included in our annual meeting proxy statement.

 Our
audit committee consists of Dana Kilborne, Cole Oliver and Leonardo Riera, with Ms. Kilborne serving as chair. Our board of directors
has affirmatively determined that Ms. Kilborne and Messrs. Oliver and Riera each meet the definition of "independent director"
under the Nasdaq rules, and that they meet the independence standards under Rule 10A-3. Each member of our audit committee meets the
financial literacy requirements of the Nasdaq rules. In addition, our board of directors has determined that Ms. Kilborne qualifies as
an "audit committee financial expert," as such term is defined in Item 407(d)(5) of Regulation S-K. Our board of directors
adopted a written charter for the audit committee, which is available on our principal corporate website at www.sidusspace.com.

 Compensation
Committee

 Our
compensation committee is responsible for, among other things:

 and recommending the compensation arrangements for management, including the compensation for our president and chief executive officer;

 establishing
 and reviewing general compensation policies with the objective to attract and retain superior talent, to reward individual performance
 and to achieve our financial goals;

 administering
 our stock incentive plans; and

 preparing
 the report of the compensation committee that the rules of the SEC require to be included in our annual meeting proxy statement.

 Our
compensation committee will consist of Dana Kilborne, Cole Oliver and Leonardo Riera, with Mr. Riera serving as chair. Our board has
determined that Ms. Kilborne and Messrs. Oliver and Riera are independent directors under Nasdaq rules. Our board of directors adopted
a written charter for the compensation committee, which will be available on our principal corporate website at www.sidusspace.com.

 Nominating
and Governance

 The
members of our nominating and governance committee are Dana Kilborne, Cole Oliver and Leonardo Riera. Mr. Oliver serves as the chairperson
of the committee. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified
to become our directors and in determining the composition of the board and its committees.

 The
nominating and corporate governance committee is responsible for, among other things: (i) identifying and evaluating individuals qualified
to become members of the board by reviewing nominees for election to the board submitted by stockholders and recommending to the board
director nominees for each annual meeting of stockholders and for election to fill any vacancies on the board, (ii) advising the board
with respect to board organization, desired qualifications of board members, the membership, function, operation, structure and composition
of committees (including any committee authority to delegate to subcommittees), and self-evaluation and policies, (iii) advising on matters
relating to corporate governance and monitoring developments in the law and practice of corporate governance, (iv) overseeing compliance
with our code of ethics, and (v) approving any related party transactions.

 The
nominating and corporate governance committee's methods for identifying candidates for election to our board of directors (other
than those proposed by our stockholders, as discussed below) includes the solicitation of ideas for possible candidates from a number
of sources—members of our board of directors, our executives, individuals personally known to the members of our board of directors,
and other research. The nominating and corporate governance committee may also, from time-to-time, retain one or more third-party search
firms to identify suitable candidates.

 In
making director recommendations, the nominating and corporate governance committee may consider some or all of the following factors:
(i) the candidate's judgment, skill, experience with other organizations of comparable purpose, complexity and size, and subject
to similar legal restrictions and oversight; (ii) the interplay of the candidate's experience with the experience of other board
members; (iii) the extent to which the candidate would be a desirable addition to the board and any committee thereof; (iv) whether or
not the person has any relationships that might impair his or her independence; and (v) the candidate's ability to contribute to
the effective management of our company, taking into account the needs of our company and such factors as the individual's experience,
perspective, skills and knowledge of the industry in which we operate.

 Delinquent
Section 16(a) Reports

 Section
16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our
equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other
equity securities. To our knowledge, based solely upon a review of Forms 3, 4, and 5 filed with the SEC during the fiscal year ended
December 31, 2023, we believe that our directors, executive officers, and greater than 10% beneficial owners have complied with all applicable
filing requirements during the fiscal year ended December 31, 2023.

 Code
of Business Conduct and Ethics

 We
have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal
executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
 A copy of the code is filed as an exhibit to this Annual Report on Form 10-K and is posted
on our website, www.sidusspace.com. We intend to post on our website all disclosures that are required by law or Nasdaq rules
concerning any amendments to, or waivers from, any provision of the code.

 ITEM
11. EXECUTIVE COMPENSATION

 Summary
Compensation Table

 The
following table provides certain summary information concerning compensation awarded to, earned by or paid to our Principal Executive
Officer and our other highest paid executive officers whose total annual salary and bonus exceeded $100,000 (collectively, the "named
executive officers") for fiscal years December 31, 2023 and 2022.

 All Other

 Salary

 Compensation

 Total

 Name and Principal Position

 Year

 ($)

 ($)

 ($)

 Carol Craig

 2023

 217,425

 217,425

 President & Chief Executive Officer

 2022

 125,000

 (1)

 125,000

 Teresa Burchfield (2)

 2023

 275,000

 275,000

 Former Chief Financial Officer

 2022

 185,906

 51,563

 237,469

 Jamie Adams(3)

 2023

 292,692

 87,500

 380,192

 Former Chief Technology Officer

 2022

 300,000

 75,000

 375,000

 (1)

 Ms.
 Craig waived bonus compensation for 2022.

 (2)

 Ms.
 Burchfield became our Chief Financial Officer on April 11, 2022 and stepped down from her position as CFO in Feb. 2024.

 (3)

 Mr.
 Adams left the Company in Oct. 2023.

 Outstanding
Equity Awards at December 31, 2023

 There
were no equity awards held by our named executive officers as of December 31, 2023.

 Non-Employee
Director Compensation

 The
following table presents the total compensation for each person who served as a non-employee member of our Board and received compensation
for such service during the fiscal year ended December 31, 2023. Other than as set forth in the table and described more fully below,
we did not pay any compensation, make any equity awards or non-equity awards to, or pay any other compensation to any of the non-employee
members of our Board in 2023. Directors who are also employees do not receive cash or equity compensation for service on our Board of
Directors in addition to compensation payable for their service as employees of the Company.

 Name

 Fees Earned or

 Paid in Cash ($)

 All Other

 Compensation ($)

 Total ($)

 Dana Kilborne

 45,000

 10,000

 55,000

 Cole Oliver

 45,000

 10,000

 55,000

 Leonardo Riera (1)

 47,500

 37,833

 85,333

 Miguel Valero (2)

 20,000

 20,000

 (1)

 Mr. Riera joined the Company as a director in April 2023.

 (2)

 Mr. Valero left the Company as a director in June 2023.

 Employment
Agreements

 In
December 2021, we entered into an employment agreement with Ms. Craig, pursuant to which Ms. Craig serves as our Founder and Chief Executive
Officer. Ms. Craig's employment agreement provided for an annual base salary of $125,000 and provides that Ms. Craig will be eligible
for an annual discretionary bonus, with a target equal to 100% of her base salary, based on the achievement of certain performance objectives
established by our Board of Directors. As of July 1, 2023, Ms. Craig's base salary was increased to $325,000. Ms. Craig's
employment agreement contains standard non-competition and non-solicitation provisions. Ms. Craig is also eligible to receive additional
equity-based compensation awards as the Company may grant from time to time. Ms. Craig's employment agreement further provides
for standard expense reimbursement, vacation time and other standard executive benefits.

 Pursuant
to Ms. Craig's employment agreement, in the event her employment is terminated without cause, due to a non-renewal by the Company,
or if she resigns for "good reason" (in each case, other than within twelve (12) months following a change in control), Ms.
Craig is entitled to (i) a cash payment equal to five (5) times the sum of her (x) annual base salary and (y) target bonus in effect
on her last day of employment; (ii) continuation of health benefits for a period of 24 months; (iii) a lump sum payment equal to the
amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination; (iv) a lump sum payment
equal to the amount of annual bonus that was accrued through the date of termination for the year in which employment ends; and (v) subject
to Ms. Craig's compliance with her restrictive covenants, the outstanding and unvested portion of any time-vesting equity award
that would have vested during the one (1) year period following Ms. Craig's termination had she remained an employee shall automatically
vest upon his termination date.

 In
the event that Ms. Craig's employment is terminated due to her death or disability, she will be entitled to receive (i) a lump
sum payment equal to the amount of any annual bonus earned with respect to a prior fiscal year, but unpaid as of the date of termination;
(ii) a lump sum payment equal to the amount of annual bonus that was accrued for the year in which employment ends; and (iii) the acceleration
and vesting in full of any then outstanding and unvested portion of any time-vesting equity award granted to her by the Company.

 In
the event that Ms. Craig's employment is terminated due to her non-renewal or resignation without "good reason," she
will be entitled to receive a lump sum payment equal to the amount of any annual bonus earned with respect to a prior fiscal year, but
unpaid as of the date of termination.

 In
the event that Ms. Craig's employment is terminated by the Company without cause, due to non-renewal by the Company, or if she
resigns for "good reason," in each case within twelve (12) months following a change in control, Ms. Craig is entitled to
(i) a cash payment equal to ten (10) times the sum of her (x) annual base salary and (y) target bonus in effect on her last day of employment;
(ii) continuation of health benefits for a period of 24 months; (iii) a lump sum payment equal to the amount of any annual bonus earned
with respect to a prior fiscal year, but unpaid as of the date of termination; (iv) a lump sum payment equal to the amount of annual
bonus that was accrued for the year in which employment ends prior to the date of termination; and (v) the acceleration and vesting in
full of any then outstanding and unvested portion of any time-vesting equity award granted to her by the Company.

 ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
following table sets forth certain information regarding the beneficial ownership of our common stock as of March 27, 2024 by:

 each
 of our named executive officers;

 each
 of our directors;

 all
 of our current directors and executive officers as a group; and

 each
 stockholder known by us to own beneficially more than five percent of our common stock.

 Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities.
Shares of common stock that may be acquired by an individual or group within 60 days of March 27, 2024, pursuant to the exercise of options
or warrants or conversion of preferred stock or convertible debt, are deemed to be outstanding for the purpose of computing the percentage
ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of
any other person shown in the table. Percentage of ownership is based on 4,081,344 and 100,000 shares of Class A common stock and Class
B common stock, issued and outstanding, respectively, as of March 27, 2024.

 Except
as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with
respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by such stockholders.
Unless otherwise indicated, the address for each director and executive officer listed is: c/o Sidus Space, Inc., 150 N. Sykes Creek
Parkway, Suite 200, Merritt Island, Florida 32953.

 Name of Beneficial Owner

 Shares of

 Class A

 Beneficially

 Owned

 Shares of

 Class B

 Beneficially

 Owned

 Percentage of

 Common Stock

 Beneficially

 Owned

 Directors and Executive Officers:

 Carol Craig (1)

 -

 Bill White (2)

 -

 Teresa Birchfield (3)

 Jamie Adams (4)

 Leonardo Riera

 -

 Dana Kilborne

 -

 Cole Oliver

 -

 Richard Berman (5)

 -

 Directors and Executive Officers as a group (8 persons)

 -

 5% or Greater Stockholders:

 Craig Technical Consulting, Inc.

 -

 19.7
 %

 Lind Global Partners II LLC

 222,200

 5.3
 %

 Ionic Ventures, LLC

 222,200

 5.3
 %

 (1)

 Carol
 Craig is the sole owner of Craig Technical Consulting, Inc. and has beneficial ownership of the Class B shares of common stock held
 by Craig Technical Consulting, Inc.

 (2)

 Mr.
 White joined the Company as CFO in February 2024.

 (3)

 Ms.
 Birchfield stepped down from her position as CFO in February 2024.

 (4)

 Mr.
 Adams left the Company in Oct. 2023.

 (5)

 Mr.
 Berman joined the Company as a director in January 2024.

 Securities
Authorized for Issuance Under Equity Compensation Plans

 The
following table summarizes information about our equity compensation plans as of December 31, 2023.

 Plan Category

 securities to be
 issued upon
 exercise of
 outstanding
 options,
 warrants and
 rights
 (a)

 Weighted
 average exercise
 price of
 outstanding
 options,
 warrants and
 rights

 securities
 remaining
 available for
 future issuance
 under equity
 compensation
 plans (excluding
 securities
 reflected in
 column (a))

 Equity compensation plans approved by security holder

 -

 -

 9,500

 Equity compensation plans not approved by security holder

 -

 -

 -

 Total

 -

 9,500

 ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The
following includes a summary of transactions during our fiscal years ended December 31, 2023 and December 31, 2022 to which we have been
a party, including transactions in which the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average of
our total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or, to our
knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons
had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and
other arrangements, which are described elsewhere in this prospectus. We are not otherwise a party to a related party transaction, and
no transaction is currently proposed, in which the amount of the transaction exceeds the lesser of $120,000 or 1% of the average of our
total assets at year-end for the last two completed fiscal years and in which a related person had or will have a direct or indirect
material interest.

 Our
corporate headquarters is located at 150 N. Sykes Creek Parkway, Suite 200 Merritt Island, Florida 32953. We occupy facilities totaling
approximately 3500 square feet under a sublease from Craig Technical Consulting, Inc., a principal stockholder and an entity owned and
controlled by our Chief Executive Officer, Carol Craig ("CTC"), pursuant to a commercial sublease agreement (the "Lease
Agreement"), dated August 1, 2021. The Lease Agreement is a month-to-month lease and may be terminated with 30 days' notice.
We currently pay $4,847 per month which includes applicable sales and use tax, which is currently 6.5% in Brevard County.

 As
of December 31, 2023 and 2022, we owed $527,476 to CTC for cash advances made to the Company. The advances are unsecured, due on demand
and non-bearing-interest.

 On
May 1, 2021, we converted $4 million in intercompany accounts receivable owed to CTC into a related party note payable (the "Note")
which included $1.1 million in payments toward a loan (the "CTC-Decathlon Note) to CTC and us by Decathlon Alpha IV, L.P., or Decathlon.
The principal balance of this Note outstanding (together with any accrued, but unpaid interest thereon) bears interest at a per annum
interest rate equal to the long term Applicable Federal Rate (as such term is defined in Section 1274(d) of the Internal Revenue Code
of 1986, as amended), and matures on September 30, 2025, and is payable in the amount of $250,000 every quarter for four years beginning
on Oct 1, 2021.

 On
December 3, 2021, we entered into a Loan Assignment and Assumption Agreement, or Loan Assignment, with Decathlon and CTC pursuant to
which we assumed principal amount of $1 million (the "Decathlon Note") which was part of the Note. In connection with our
assumption of the Decathlon Note, CTC reduced the principal of the Note by $1.4 million for an aggregate principal balance of $2.6 million.
Management believes that the assumption of the Decathlon Note from CTC was in our best interests because in connection therewith, Decathlon
released us from a cross-collateralization agreement it was a party to with CTC for a loan of a greater amount. Also in connection with
the Loan Assignment, on December 3, 2021, we entered into a Revenue Loan and Security Agreement, or RLSA, as amended, with Decathlon
and our CEO, Carol Craig, pursuant to which we pay interest based on a minimum rate of 1 times the amount advanced and make monthly payments
based on a percentage of our revenue calculated as an amount equal to the product of (i) all revenue for the immediately preceding month
multiplied by (ii) the Applicable Revenue Percentage, defined as 4% of revenue for payments due during any month. The Decathlon Note
is secured by our assets and was guaranteed by CTC and matured the earliest of: (i) December 9, 2024, (ii) immediately prior to a change
of control, or (iii) upon an acceleration of the obligations due to a default under the RLSA.

the year ended December 31, 2022, we repaid $797,505 and the Note and accrued interest was forgiven by CTC. We recorded debt forgiveness
of the Note and accrued interest of $1,624,755 to additional paid in capital.

 We
recognized revenue of $952,220 and $1,042,628 for the years ended December 31, 2023 from contracts entered into by CTC and subcontracted
to us for four customers of CTC pursuant to separate subcontracting agreements.

 For
the year ended December 31, 2023 and 2022, the Company recorded cost of revenue to Craig Technical Consulting, Inc. of approximately
$588,000 and $136,363, and general and administrative expense of $24,363 and $12,267, respectively.

 A
Professional Services Agreement, effective November 15, 2021, was made between us and CTC. The period of performance for this agreement
was December 1, 2021, through November 30, 2022. The agreement was amended, and the term of the agreement was extended to November 30,
2024.

the years ended December 31, 2023 and 2022, we recorded professional services of $106,057 and $160,475, respectively, under the Professional
Services Agreement.

 Related
Person Transaction Policy

 We
have adopted a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval
or ratification of related person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement
or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or
will be participants in which the amount involved exceeds the lesser of $120,000 or 1% of our total assets at year-end. Transactions
involving compensation for services provided to us as an employee or director are not covered by this policy. A related person is any
executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate
family members and any entity owned or controlled by such persons.

 Under
the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person
transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to
consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee
approval would be inappropriate, to another independent body of our board of directors, for review, consideration and approval or ratification.
The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related
persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to
or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information
that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable
us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our
Code of Business Conduct and Ethics, our employees and directors will have an affirmative responsibility to disclose any transaction
or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions,
our audit committee, or other independent body of our board of directors, will take into account the relevant available facts and circumstances
including, but not limited to:

 the
 risks, costs and benefits to us;

 the
 impact on a director's independence in the event that the related person is a director, immediate family member of a director
 or an entity with which a director is affiliated;

 the
 availability of other sources for comparable services or products; and

 the
 terms available to or from, as the case may be, unrelated third parties or to or from employees generally.

 The
policy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other
independent body of our board of directors, must consider, in light of known circumstances, whether the transaction is in, or is not
inconsistent with, our best interests and those of our stockholders, as our audit committee, or other independent body of our board of
directors, determines in the good faith exercise of its discretion.

 Independence
of the Board of Directors

 Our
board of directors undertook a review of the independence of our directors and considered whether any director has a relationship with
us that could compromise that director's ability to exercise independent judgment in carrying out that director's responsibilities.
Our board of directors has affirmatively determined that Dana Kilborne, Cole Oliver, Leonardo Riera and Miguel Valero are each an "independent
director," as defined under Nasdaq rules.

 ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The
following table sets forth the aggregate fees billed by as described below:

 2023

 2022

 Audit fees

 $
 93,000

 $
 72,500

 Audit related fees

 9,000

 16,000

 Tax fees

 -

 -

 All other fees

 -

 -

 $
 102,000

 $
 88,500

 Audit
Fees: Fees for audit services were $93,000 and $72,500 for the years ended December 31, 2023 and 2022, respectively. These are fees
for professional services performed by the principal auditor for the audit of our annual financial statements and services that are normally
provided in connection with statutory and regulatory filing or engagement.

 Audit-Related
Fees: Fees for audit-related services were $9,000 and $16,000 for the years ended December 31, 2023 and 2022. These are fees for
assurance and related services performed by the principal auditor that are reasonably related to the performance of the audit or review
of our financial statements. These services include attestations by the principal auditor that are not required by statute or regulation
and consulting on financial accounting/reporting standards.

 Tax
Fees: No fees for tax services were paid for the years ended December 31, 2023 and 2022. These are fees for professional services
performed by the principal auditor with respect to tax compliance, tax planning, tax consultation, returns preparation and review of
returns. The review of tax returns includes the Company and its consolidated subsidiaries.

 All
Other Fees: No all other fees were paid for the years ended December 31, 2023 and 2022. These are fees billed by the auditor for
products and services not included in the foregoing categories.

 Pre-Approval
Policies and Procedures

 In
accordance with the Sarbanes-Oxley Act, our audit committee charter requires the audit committee to pre-approve all audit and permitted
non-audit services provided by our independent registered public accounting firm, including the review and approval in advance of our
independent registered public accounting firm's annual engagement letter and the proposed fees contained therein. The audit committee
has the ability to delegate the authority to pre-approve non-audit services to one or more designated members of the audit committee.
If such authority is delegated, such delegated members of the audit committee must report to the full audit committee at the next audit
committee meeting all items pre-approved by such delegated members. In the fiscal years ended December 31, 2023 and 2022 all of the services
performed by our independent registered public accounting firm were pre-approved by the audit committee.

 PART
IV

 ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 (a)

 The
 following documents are filed as part of this report:

 (1)

 Financial
 Statements:

 Page

 to Consolidated Financial Statements:

 Consolidated
 Financial Statements:

 Report of the Independent Registered Public Accounting Firm

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Stockholders' Equity for the Years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

 Notes to the Consolidated Financial Statements for the Years ended December 31, 2023 and 2022

 The
consolidated financial statements required by this Item are included beginning at page F-1.

 (1)

 Financial
 Statement Schedules:

 All
financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in
the consolidated financial statements or the notes thereto.

 (b)
Exhibits

 The
following documents are included as exhibits to this report.

 Exhibit
 No.

 Title
 of Document

 3.1

 Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 3.2

 Certificate of Amendment of Amended and Restated Certificate of Incorporation dated August 24, 2021 (incorporated by reference to Exhibit 3.2 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 3.3

 Certificate of Amendment of Amended and Restated Certificate of Incorporation dated December 16, 2021 (incorporated by reference to Exhibit 3.3 to Form 10-K filed with the SEC on April 5, 2022)

 3.4

 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to Form 10-K filed with the SEC on April 5, 2022)

 3.5

 Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to Form 8-K filed on October 13, 2023)

 3.6

 Amendment No. 2 to Amended and Restated Bylaws of Sidus Space, Inc. (incorporated by reference to Exhibit 3.2 to Form 8-K filed on October 13, 2023

 4.1

 Description of the Registrant's Securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2 to Form 10-K filed with the SEC on April 5, 2022)

 4.2

 Form of Warrant (incorporated by reference to Exhibit 4.2 to Form S-1 filed with the SEC on March 27, 2023).

 4.3

 Form of Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on October 13, 2023).

 10.1

 Sidus Space, Inc. 2021 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 10-K filed with the SEC on April 5, 2022)

 10.2

 Revenue Loan and Security Agreement dated December 1, 2021 by and among Sidus Space, Inc., Carol Craig and Decathlon Alpha IV, L.P. (incorporated by reference to Exhibit 10.2 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 10.3

 Loan Assignment and Assumption Agreement dated December 1, 2021 by and between Decathlon Alpha IV, L.P., Craig Technical Consulting, Inc. and Sidus Space, Inc. (incorporated by reference to Exhibit 10.3 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 10.4

 Loan Agreement dated May 1, 2021 by and between Sidus Space, Inc. and Craig Technical Consulting, Inc. (incorporated by reference to Exhibit 10.4 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 10.5

 Form of Indemnification Agreement for Directors and Officers (incorporated by reference to Exhibit 10.5 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 10.6

 Lease Agreement dated as of November 29, 2016 between 400 W. Central LLC and Craig Technologies Properties, LLC (assigned to Sidus Space, Inc.) (incorporated by reference to Exhibit 10.6 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 10.7

 Lease Agreement dated as of May 21, 2021 between 400 W. Central LLC and Sidus Space, Inc. (incorporated by reference to Exhibit 10.7 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021).

 10.8

 Commercial Sublease Agreement dated August 1, 2021 by and between Sykes Creek Limited Partnership, Craig Technical Consulting, Inc. and Sidus Space, Inc. (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 10.9#

 NASA Contract Award dated November 5, 2018 (incorporated by reference to Exhibit 10.9 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 10.10+

 Employment Agreement between Sidus Space, Inc. and Carol Craig dated December 16, 2021 (incorporated by reference to Exhibit 10.10 to Form 10-K filed with the SEC on April 5, 2022)

 10.11

 Debt Forgiveness Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on June 9, 2022)

 10.12

 Asset Conveyance Agreement entered into as of August 18, 2023 by and among Sidus Space, Inc., Exo-Space Inc. and the equity holders of Exo-Space Inc. (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on August 22,2023)

 10.13

 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on October 13, 2023).

 10.14

 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on October 13, 2023).

 10.15

 First Amendment to Revenue Loan and Security Agreement dated November 16, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on December 6, 2023).

 14.1

 Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 to Form 10-K filed with the SEC on April 5, 2022)

 21.1

 List of Subsidiaries (incorporated by reference to Exhibit 21.1 to Amendment No. 1 to Form S-1 filed with the SEC on December 3, 2021)

 23.1

 Consent of BF Borgers CPA PC.

 Power of Attorney (included on signature page hereto).

 31.1

 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2

 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.1

 Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

 32.2

 Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

 97.1

 Clawback Policy

 101*

 Inline
 and Supplementary Data" of this Annual Report on Form 10-K

 104*

 Inline

 +
Management contract or compensatory plan or arrangement.

 #
Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit were omitted by means of marking such portions
with an asterisk because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly
disclosed.

 ITEM
16. FORM 10-K SUMMARY

 None.

 SIGNATURES

 Pursuant
to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report
on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this 27th day of March 2024.

 SIDUS

 /s/
 Carol Craig

 Carol
 Craig

 Chief
 Executive Officer (Principal Executive Officer)

 and
 Chairwoman

 POWER
OF ATTORNEY

 KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Carol Craig as his or her
attorney-in-fact, with full power of substitution and resubstitution, for him or her in any and all capacities, to sign any and all amendments
to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.

 Pursuant
to the requirements of the Securities Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/
 Carol Craig

 Chief
 Executive Officer (Principal Executive Officer)

 March

 Carol
 Craig

 /s/
 Bill White

 Chief
 Financial Officer

 (Principal
 Financial and Accounting Officer)

 March

 Bill
 White

 /s/
 Leonardo Riera

 and Chairman

 March

 Leonardo
 Riera

 /s/
 Dana Kilborne

 March

 Dana
 Kilborne

 /s/
 Cole Oliver

 March

 Cole
 Oliver

 /s/
 Richard Berman

 March

 Richard
 Berman