Starfighters Space, Inc. (FJET) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Starfighters Space, Inc. is an emerging growth company and smaller reporting company operating in the aerospace sector. The Company operates a fleet of seven F-104 supersonic aircraft from Kennedy Space Center, Florida, and Midland, Texas, focusing on suborbital launch services, R&D test beds, and pilot training. The Company completed its Initial Public Offering (IPO) on December 18, 2025, listing on the NYSE American under the symbol "FJET". As of the reporting date, the Company has not yet commenced principal commercial operations.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(4,269,131) | $(2,653,107) |
| Net Loss Per Share (Basic & Diluted) | $(0.10) | $(0.13) |
| Cash and Restricted Cash | $2,138,039 | $4,005,376 |
| Short-term Investments | $13,926,805 | $15,274,175 |
| Total Assets | $26,340,608 | $28,386,884 |
| Total Liabilities | $3,912,413 | $3,486,332 |
| Working Capital | $14,711,208 | $17,091,337 |
| Operating Cash Flow | $(3,963,542) | $(1,669,732) |
Note: The Company reported no revenue for the period. Interest income of $150,788 was recorded from short-term investments.
Material Changes vs. Prior Period
- Increased Net Loss: Net loss increased by $1.62 million year-over-year, driven primarily by higher operating expenses and a one-time loss from asset misappropriation.
- Operating Expenses: Total operating expenses rose to $4.05 million from $1.88 million. Significant increases included:
- Professional Fees: Increased to $1.33 million (from $192k), largely due to $912k in stock-based compensation and increased legal/audit fees post-IPO.
- Consulting Fees: Increased to $1.12 million (from $390k), driven by $984k in stock-based compensation.
- Advertising: Increased to $508k (from $81k) due to a new public relations campaign.
- Listing Fees: Increased to $233k (from $3k) reflecting public company maintenance costs.
- Asset Misappropriation: The Company recognized a $395,033 loss related to unauthorized withdrawals and transfers of funds by the former CEO, Rick Svetkoff, totaling $1.92 million. Of this amount, $1.53 million is recorded as "Due from Shareholder" (offset against related party notes), while the remainder was written off as a loss.
- Debt Settlement: All convertible debentures and the Space Florida note payable were fully converted to equity upon the IPO in December 2025, eliminating interest expense and derivative liability adjustments in Q1 2026.
Guidance, Outlook, Risks, and Contingencies
- Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. The Company has a history of losses, an accumulated deficit of $37.7 million, and expects cash on hand to be inadequate to satisfy obligations over the next 12 months without additional financing.
- Liquidity Restrictions: Due to litigation with the former CEO, Flagship Bank and Regions Bank have placed restrictions on subsidiary accounts. Approximately $1.4 million in cash and short-term investments are currently restricted and inaccessible.
- Legal Proceedings:
- Svetkoff Litigation: Former CEO Rick Svetkoff filed a lawsuit on April 9, 2026, seeking over $26 million in damages for alleged breach of fiduciary duty and deceptive practices. The Company denies all allegations.
- Mountain CI Holdings: A subsidiary is being sued for $610,000 regarding alleged unpaid loans from 2014-2021.
- Aircraft Acquisition Dispute: The Company has paid a $5 million deposit to Aerovision LLC for the acquisition of F-4 Phantom II aircraft. Aerovision has failed to provide availability information or respond to contact attempts, leaving the status of the $5 million deposit uncertain.
- Internal Controls: The Company identified material weaknesses in internal controls, specifically regarding banking authorities, segregation of duties, and accounting for unauthorized distributions.
Investor Verification Checklist
- Restricted Cash Status: Verify the exact amount of cash and investments frozen by Flagship and Regions banks and the timeline for potential release.
- Recovery of Misappropriated Funds: Assess the likelihood of recovering the $1.92 million in unauthorized transfers from the former CEO and related entities.
- Aerovision Deposit: Confirm the legal standing of the $5 million deposit paid to Aerovision and the status of the aircraft acquisition agreement.
- Capital Raise Plan: Review management's specific strategy for raising additional capital to address the going concern warning and fund operations for the next 12 months.
- Legal Exposure: Evaluate the potential financial impact of the $26 million lawsuit filed by the former CEO and the $610,000 claim by Mountain CI Holdings.