Starfighters Space (FJET) risk factors, FY2025 10-K

Risks Related to our Business and Industry

1. 01We are operating in an evolving industry, which makes it difficult to forecast our revenue, plan our expenses and evaluate our business and future prospects
2. 02A significant portion of our business model is dependent upon the ongoing development of certain key technologies, which will require increased investment and operating expenses in the future, which may in turn impact our ability to reach and maintain revenue and profitability milestones
3. 03We will require significant capital investment in order to meet our objectives, and lack of that investment or the success of the execution of our plan may impact our ability to continue as a going concern
4. 04Our business relationships with various governmental and private entities are subject to the policies, priorities, regulations, mandates and funding levels of such entities and may be negatively or positively impacted by any change thereto
5. 05Our future revenue and operating results are dependent on our ability to generate a sustainable order rate for our products and services and develop new technologies to meet the needs of our customers or potential new customers
6. 06Our business critically depends upon our ability to develop, produce, test and successfully deploy our platform, which requires continued development in order to be proven to deliver our solution and stay relevant as the market demands change and mature
7. 07Disruptions in U.S. government operations and funding could have a material adverse effect on our revenues, earnings and cash flows, and otherwise adversely affect our financial condition
8. 08We may not be successful in developing new technology, and the technology we are successful in developing may not meet the needs of our customers or potential new customers
9. 09We operate in highly competitive industries and in various jurisdictions across the world which may cause us to have to reduce our prices
10. 10We often rely on a single vendor or a limited number of vendors to provide certain key products or services and the inability of these key vendors to meet our needs could have a material adverse effect on our business
11. 11We depend on several specialized suppliers for the majority of specialized supply needs. Disruptions in the supply of key raw materials or components and difficulties in the supplier qualification process, as well as increases in prices of raw materials, could adversely impact us
12. 12Developments related to the conflict in the Middle East and the global response, could adversely affect our business, financial condition and results of operations
13. 13The expansion of our operations subjects us to additional risks that can adversely affect our operating results
14. 14Any of these risks could harm our operations and reduce our sales, adversely affecting our business, operating results, financial condition and growth prospects
15. 15Our revenue, results of operations and reputation may be negatively impacted if our platform fails to operate in the expected manner
16. 16Our business involves significant risks and uncertainties that may not be covered by insurance
17. 17The amount of insurance coverage that we maintain may not be adequate to cover all claims or liabilities. Existing coverage may be canceled while we remain exposed to the risk and it is not possible to obtain insurance to protect against all operational risks, natural hazards and liabilities
18. 18Interruption or failure of our infrastructure could hurt our ability to effectively perform our daily operations and provide and produce our products and services, which could damage our reputation and harm our operating results
19. 19damage our reputation with our customers (particularly agencies of various governments) and the public generally
20. 20Our technology may violate the proprietary rights of third parties, which could have a negative impact on our operations
21. 21Indemnity provisions in certain agreements potentially expose us to losses
22. 22We may not have adequate capital to fund our business and may need substantial additional funding to continue operations. We may not be able to raise capital when needed, if at all, which would force us to delay, reduce or eliminate our business development efforts and could cause our business to fail
23. 23Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition
24. 24If we are unable to hire, retain or motivate qualified personnel, consultants, independent contractors, and advisors, we may not be able to grow effectively
25. 25We are highly dependent on the services of Tim Franta, our new Chief Executive Officer, and if we are unable to retain Mr. Franta, our ability to compete could be harmed
26. 26We have historically been highly dependent on the services of Rick Svetkoff, our former President and Chief Executive Officer, and it remains unclear whether his recent departure will adversely affect our ability to compete
27. 27Failure to develop our internal controls over financial reporting as we grow could have an adverse impact on us. We have identified material weaknesses in our internal controls over financial reporting as of December 31, 2025, which we may not be able to remedy in a timely manner
28. 28Failure to comply with United States federal and state laws relating to employment could subject us to penalties and other adverse consequences
29. 29Changes to applicable United States tax laws and regulations or exposure to additional income tax liabilities could affect our business and future profitability
30. 30We may be subject to litigation and other legal proceedings that could adversely affect our business, financial condition, and results of operations, and the outcome of pending litigation is inherently uncertain
31. 31Misconduct by our officers, directors or employees could expose us to financial losses, legal liability, reputational harm and negative publicity, any of which could have a material adverse effect on our business
32. 32We are unable to predict the extent to which epidemics, pandemics, and similar outbreaks, including the global COVID-19 pandemic, may adversely impact our business operations, financial performance, results of operations and stock price

Risks Related to Our Common Stock

1. 33If we issue additional Common Stock, stockholders may experience dilution in their ownership of the Company
2. 34We do not intend to pay dividends and there will thus be fewer ways in which you are able to make a gain on your investment
3. 35We may be at an increased risk of securities class action litigation
4. 36Our former President and Chief Executive Officer, Rick Svetkoff, exercises significant control over the Company