Business Context and Reporting Period
Company: Starfighters Space, Inc. (NYSE American: FJET)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: Starfighters operates the world's only commercial fleet of flight-ready Lockheed F-104 supersonic aircraft. The company provides pilot/astronaut training, in-flight testing, and is developing air-launched rocket systems (StarLaunch I and II) for suborbital and orbital payload delivery. Operations are based at Kennedy Space Center, Florida, and Midland International Air & Space Port, Texas.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue (Other Income) | $516,640 | $234,900 |
| Net Loss | $(16,543,616) | $(7,908,777) |
| Operating Expenses | $(15,333,932) | $(4,301,083) |
| Cash and Restricted Cash | $4,631,720 | $7,100,699 |
| Working Capital | $17,091,337 | $(7,676,263) |
| Short-Term Investments | $15,274,175 | $1,006,517 |
| Convertible Debentures | $0 (Converted) | $7,244,961 |
Note: The company reports "Other Income" rather than traditional revenue, derived from pilot training and equipment testing. The filing does not provide a clear value for gross margins as cost of revenue is not explicitly separated from operating expenses.
Material Changes vs. Prior Period
- Net Loss Expansion: Net loss increased by $8.6 million (109%) year-over-year, driven by a $11 million increase in operating expenses.
- Capital Raise: Completed a Regulation A Tier 2 offering and Initial Public Offering (IPO) in December 2025, raising approximately $22.1 million in the final round and converting $8.3 million of convertible debentures into equity.
- Expense Drivers: Significant increases in consulting fees ($3.3M increase), business development ($1.5M increase), and advertising ($1.3M increase) due to IPO preparation and public relations campaigns. Stock-based compensation totaled $6.1 million in 2025 compared to $0 in 2024.
- Liquidity Shift: Working capital improved from a deficit of $7.7 million in 2024 to a surplus of $17.1 million in 2025, primarily due to equity financing and the conversion of debt.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary and Outlook
Management targets its first commercial launch by year-end 2026, pending FAA licensing. The company is developing the StarLaunch I rocket for suborbital missions and StarLaunch II for low earth orbit. Recent milestones include successful wind tunnel testing for StarLaunch I in January 2026.
Risks and Contingencies
- Going Concern: Auditors have expressed substantial doubt about the company's ability to continue as a going concern. Despite positive working capital, management anticipates cash on hand will not be adequate to satisfy obligations over the next 12 months without additional financing.
- Internal Control Weaknesses: The company identified seven material weaknesses in internal controls over financial reporting as of December 31, 2025, including lack of controls over banking authorities, management override of controls, and incorrect recognition of stock-based compensation.
- Legal Proceedings: On April 9, 2026, former CEO Rick Svetkoff filed a lawsuit against the company and current directors seeking over $26 million in damages, alleging breach of fiduciary duty and deceptive practices. The company denies these allegations.
- Unauthorized Transfers: Subsequent to year-end, the company identified unauthorized transfers of approximately $1.9 million by the former CEO to himself and related entities without board approval.
- Executive Turnover: Former CEO Rick Svetkoff resigned in February 2026. Tim Franta was appointed as the new CEO.
Investor Verification Checklist
- Cash Burn Rate: Verify the sufficiency of the $4.6 million cash balance against the projected operating burn rate given the "substantial doubt" going concern warning.
- Legal Exposure: Assess the potential financial impact of the $26 million lawsuit filed by the former CEO and the status of the internal investigation into unauthorized fund transfers.
- Regulatory Milestones: Confirm the timeline for obtaining the FAA launch license required for commercial operations in 2026.
- Internal Controls: Review the remediation plan for the seven identified material weaknesses in financial reporting controls.
- Related Party Transactions: Scrutinize the $2.2 million purchase of jet engines from a company 50% owned by the former CEO and other related party loans totaling over $1.5 million.