INNOVATIVE SOLUTIONS AND SUPPORT, INC._September 30, 2025

 UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

 FORM 10-K

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

 For the fiscal year ended September 30, 2025

 OR

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

 For the transition period from to.

 Commission File No. 001-41503

 (Exact name of registrant as specified in its charter)

 Pennsylvania
(State or other jurisdiction of incorporation)

 23-2507402
(IRS Employer Identification No.)

 720 Pennsylvania Drive, Exton, Pennsylvania
(Address of principal executive offices)

 19341
(Zip Code)

 ( 610) 646-9800
(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

 Common Stock par value $.001 per share

 ISSC

 Nasdaq Stock Market, LLC

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

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

 Indicate 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

 Indicate 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

 Indicate 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

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 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.

 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Indicate 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).

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of the registrant's common stock held by non-affiliates of the registrant as of March 31, 2025 (the last business day of the registrant's most recently completed second quarter) was approximately $ 81.8 million (based on the closing sale price of the registrant's common stock on the Nasdaq Stock Market on such date). Shares of common stock held by each executive officer and director and by each person who owns 10% or more of the registrant's outstanding common stock have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

 As of November 30, 2025, there were 17,752,354 outstanding shares of the registrant's common stock.

 Documents Incorporated by Reference

 The information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K will be found in the Company's definitive proxy statement for its 2026 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and such information is incorporated herein by this reference.

 2025 Annual Report on Form 10-K

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

 Item 6.

 Selected Consolidated Financial Data

 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 Accounting Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 FORWARD-LOOKING STATEMENTS
 This Annual Report on Form 10-K contains forward looking statements within the meaning 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 forward-looking statements are based largely on current expectations and projections about future events and trends affecting the business, are not guarantees of future performance, and involve a number of risks, uncertainties and assumptions that are difficult to predict. In this Annual Report on Form 10-K, the words "anticipates," "believes," "may," "will," "estimates," "continues," "anticipates," "intends," "forecasts," "expects," "plans," "could," "should," "would," "is likely,"" projected," "might," "potential," "preliminary," "provisionally," and similar expressions, as they relate to the business or to its management, are intended to identify forward looking statements, but they are not exclusive means of identifying them. Unless the context otherwise requires, all references herein to "IA," the "Registrant," the "Company," "we," "us" or "our" are to Innovative Solutions and Support, Inc. and its consolidated subsidiaries. ThrustSense and COCKPIT/IP, among others, are trademarks of the Company. All other trademarks appearing herein are held by their respective owners. Subsequent use of the Company's trademarks in this Annual Report on Form 10-K may occur without the applicable superscript symbol ( or TM) in order to facilitate the readability of this Annual Report on Form 10-K and are not a waiver of rights that may be associated with the relevant trademarks.
 The forward-looking statements in this Annual Report on Form 10-K are only predictions, and actual events or results may differ materially. In evaluating such statements, a number of risks, uncertainties and other factors could cause actual results, performance, financial condition, cash flows, prospects and opportunities to differ materially from those expressed in, or implied by, the forward-looking statements. These risks, uncertainties and other factors include those set forth in Item 1A (Risk Factors) of this Annual Report on Form 10-K and the following factors:

 market acceptance of the Company's Vmc a Mitigation, flight panel display systems, NextGen Flight Deck, ThrustSense Autothrottle and COCKPIT/IP or other planned products or product enhancements;

 continued market acceptance of the Company's air data systems and products;

 the competitive environment and new product offerings from competitors;

 difficulties in developing, producing or improving the Company's planned products or product enhancements;

 the deferral or termination of programs or contracts for convenience by customers;

 the ability to service the international market;

 the availability of government funding;

 the impact of general economic trends on the Company's business;

 disruptions in the Company's supply chain, customer base and workforce;

 the ability to gain, drive and sustain regulatory approval, including domestic and international certifications, of products in a timely manner;

 delays in receiving components from third-party suppliers;

 the bankruptcy or insolvency of one or more key customers;

 protection of intellectual property rights, including via securing patents;

 the ability to respond to technological change;

 failure to recruit and retain key personnel;

 risks related to succession planning;

 a cybersecurity incident;

 risks related to our self-insurance program;

 potential future acquisitions and integration of prior and potential future acquisitions;

 the costs of compliance with present and future laws and regulations;

 changes in law, including changes to corporate tax laws in the United States and the availability of certain tax credits; and

 other factors disclosed from time to time in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC").

 Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. Except as expressly required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise after the date of this report. Results of operations in any past period should not be considered indicative of the results to be expected for future periods. Fluctuations in operating results may result in fluctuations in the price of the Company's common stock.

 The forward-looking statements in this Annual Report on Form 10-K are intended to be subject to the safe harbor protection provided by Sections 27A of the Securities Act, and Section 21E of the Exchange Act.
 Investors should also be aware that while the Company, from time to time, communicates with securities analysts, it is against its policy to disclose any material non-public information or other confidential commercial information. Accordingly, shareholders should not assume that the Company agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, the Company has a policy against issuing or confirming financial projections, forecasts or opinions issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, neither such reports nor the projections, forecasts or opinion contained therein are the responsibility of the Company.
 SUMMARY OF RISK FACTORS
 The following is a summary of the principal risks described in Part I, Item 1A. "Risk Factors" in this Annual Report on Form 10-K. We believe that the risks described in the "Risk Factors" section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the "Risk Factors" section and the other information contained in this Annual Report on Form 10-K.
 Risks Related to Our Business and Industry

 If the Company fails to enhance existing products, or to develop and achieve market acceptance for flat panel displays, flight control computers, display generators, flight management systems, autothrottle technology and other new products that meet customer requirements, its business, financial condition and results of operation may be affected adversely.

 Growth of the Company's customer base could be limited by delays or difficulties in completing development and introduction of planned products or product enhancements.

 If the Company fails to modify or improve its products in response to evolving industry standards and government regulations, its products could become obsolete rapidly.

 We design, manufacture and service products that incorporate advanced technologies; the introduction of new products and technologies involves risks, and we may not realize the degree or timing of benefits initially anticipated.

 We may pursue strategic acquisitions, investments, strategic partnerships, product line acquisitions or other ventures. The Company may be unable to successfully integrate and realize the anticipated benefits of recent acquisitions.

 The Company's revenue and operating results may vary significantly from quarter to quarter, which may cause its stock price to decline.

 Our sales in the commercial aircraft market are subject to downturns affecting the aerospace industry generally.

 Risks related to performance, schedule, cost and requirements of the F-16 program could adversely affect our performance.

 Our success depends, in part, on our ability to develop new technologies, products and services and efficiently produce and deliver existing products.

 Geopolitical, macroeconomic and public health events and conditions could adversely affect our business, financial condition and operating results.

 Due to the inherent nature of our products and the industry in which we operate, a product safety failure or quality issue could seriously harm to our business.

 We serve a limited number of customers and face customer concentration risk.

 Our customers may terminate their contracts with us at any time, which could adversely affect our business.

 Changes in U.S. government priorities, spending levels and response to world events could adversely affect the Company's ability to maintain or grow the revenue the Company receives through government contracting.

 Geopolitical factors and changes in policies and regulations could adversely affect our business.

 Government contracts are subject to special risks as a result of the U.S. government's audit practices.

 The Company could be subjected to unanticipated losses in the event that the Company suffers cost overruns or contractual penalties in connection with fixed-price contracts or service arrangements to perform specified design and EDC services.

 The Company relies on third-party suppliers for components of its products, including several sole source suppliers, and any interruption in the supply of these components could hinder its ability to deliver products on a timely basis.

 The impacts of global supply chain and labor market disruptions on our supply chain have negatively affected and will continue to negatively affect our business.

 Our subcontractors and third-party suppliers may fail to deliver high quality products, materials or services, which may result in a failure of our products or services and a violation of applicable law.

 Our competitors have greater resources and experience than us, and if we are not able to compete successfully, our business, financial condition and results of operations will be substantially adversely affected.

 The Company depends on key personnel to manage its business effectively, and an inability to attract and retain key employees and plan for management succession could adversely impact the Company's ability to compete.

 We self-insure a significant portion of our employee medical insurance program, which exposes us to unpredictable costs that may negatively affect our financial performance.

 The Company has limited experience in marketing and distributing its products internationally, which may limit the Company's ability to penetrate international markets and increase international sales.

 Risks Related to Intellectual Property, Privacy, Cybersecurity, and Technical Infrastructure

 Our intellectual property rights are important to our operations, and we could suffer loss if they infringe upon others' rights or are infringed upon by others.

 Certain of our products incorporate and rely upon licensed third-party technology.

 A cyber security incident or other technology disruption could have a negative impact on our business.

 Legal and Regulatory Risks

 The Company is subject to various laws and regulations. Changes to, or failure by the Company to comply with, these laws and regulations could have a significant negative impact on the Company's business and operations.

 Exports and imports of certain of our products are subject to various export controls, sanctions and import regulations and may require authorization from regulatory agencies of the U.S. or other countries.

 Litigation with customers, employees and others could harm our reputation and impact operating results.

 Tax changes could affect the Company's effective tax rate and future profitability.

 Tariffs and other trade policies could have a substantial impact on our business.

 If the Company fails to maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial condition, results of operations or cash flows.

 Risks Related to Our Common Stock, Capital Markets and Indebtedness

 Our common stock may be affected by limited trading volume and may fluctuate significantly.

 Our common stock has experienced and may continue to experience significant price fluctuations, which could result in a loss of a significant portion of an investment and interfere with our efforts to grow our business.

 Because we do not intend to declare cash dividends on our shares of common stock in the foreseeable future, shareholders must rely on appreciation of the value of our common stock for any return on their investment.

 Volatility and weakness in capital markets may adversely affect credit availability and related financing costs, which could adversely affect the Company.

 There are risks associated with our outstanding and future indebtedness.

 Item 1. Business.
 INTRODUCTION
 As used in this Annual Report on Form 10-K, unless expressly stated otherwise or the context otherwise requires, the terms "IA" or "the Company", "we", "us" and "our", refers to Innovative Solutions & Support, Inc. dba Innovative Aerosystems and its subsidiaries.
 Incorporated in Pennsylvania in 1988, IA is a vertically integrated provider of flight solutions and equipment to commercial air transport, general aviation markets, the United States Department of Defense ("DoD") and allied foreign militaries.
 On October 6, 2025, the Company rebranded and adopted our new trade name, Innovative Aerosystems.
 We operate in one business segment that designs, develops, manufactures, sells and services avionics products and systems for retrofit applications and Original Equipment Manufacturers ("OEMs").
 In the fiscal year ended September 30, 2025, we reported net sales of $84.3 million, an increase of 78.6% on a year-over-year basis from $47.2 million in the fiscal year ended September 30, 2024, and net income of $15.6 million, an increase of 123.3% on a year-over-year basis from $7.0 million in the fiscal year ended September 30, 2024.
 At September 30, 2025, our backlog was $77.4 million compared with $89.2 million at September 30, 2024. Backlog at September 30, 2024 included $74.3 million of acquired backlog as a result of the September 27, 2024 acquisition. Backlog is converted into sales in future periods as work is performed or deliveries are made. Our backlog does not include additional future orders that may be received under our current OEM contracts. We expect to recognize approximately 44 % of our backlog over the next 12 months and approximately 92% over the next 24 months as revenue, with the remainder recognized thereafter.
 During the fiscal year ended September 30, 2025, we made important progress on our commercial growth strategy, highlighted by several key awards and contract wins across our commercial, military and business aviation markets. In October 2024, we announced our ThrustSense Autothrottle system was selected by the US Army to be installed on their C-12 (B200) aircraft equipped with ProLine21 avionics suites. Deliveries of the ThrustSense Autothrottle system for this application began in September 2024, with ongoing installations anticipated. In August 2024, we received a multi-million dollar production contract from a major aerospace company to supply our 19" Multifunction Display (MFD) with Integrated Mission Computer. This order marks our latest OEM contract and builds on existing programs with Pilatus for the PC-24, Textron for the King Air 260/360 and Boeing for the KC-46A, KC-767 and the T-7A
 OUR BUSINESS MODEL
 We specialize in providing systems integrations capabilities that include the design, manufacture, sale and servicing of high-performance avionics products and systems used in both commercial and military aircraft platforms.
 As a systems integrator, we leverage our proven expertise in developing end-to-end systems that combine mechanical, electrical, software, and avionics components into an integrated solution. Our activities as an integrator include system design and analysis; integration and testing; regulatory compliance and documentation; and lifecycle support.
 Our systems integration activities leverage our owned intellectual property and our products and service capabilities, together with third-party technologies that, in combination, provide our customers with advanced solutions on an on-demand basis.
 We believe that our ability to source and integrate advanced componentry provides our customers with a unique value proposition, one that helps to reduce cost and optimize fleet utilization.
 Currently, we support multiple OEM platforms, including those with the Boeing Company, Eclipse Aerospace, Lockheed Martin, and Pilatus Aircraft.

 Products
 We manufacture, market, and sell a wide range of high-value, advanced avionics solutions for commercial air transport, business aviation, and military customers. We source our products through internal research and development, as well as through the opportunistic licensing and acquisition of mature product lines that complement our existing business.
 We believe that acquiring additional product lines creates opportunities to leverage cost synergies through better utilization of our skilled engineering team and existing operational capacity, while also expanding our customer base. These acquisitions also enable us to market our internally developed products to newly acquired customers.
 As our product offerings focus on individual avionics components and systems, we are able to market our products to both original equipment manufacturers that are building new aircraft and customers participating in the retrofit market.
 Our product portfolio consists of the following five categories:
 Integrated Flight Deck Systems COCKPIT/IP that include primary flight/navigation displays, crew alerting and engine displays, integrated standby instruments and mission displays;
 Navigation Systems that include flight management systems, mission computers, navigation radios and transponders;
 Communication Systems that include communication radios, audio panels and radio management units;
 Sensors and Control Systems that include air data computers, attitude and heading reference systems, magnetometers, inertial reference units, GPS receivers, utility management systems and flight control computers; and
 Advanced Flight Actuators that include an array of linear and rotary smart-actuators for movement of aircraft levers and surfaces.
 Manufacturing Engineering & Design
 We believe that our customers value our history of technological innovation, new product development and technical expertise across multiple platforms. As of September 30, 2025, we held 171 U.S. and international patents relating to our products and systems. We invest heavily in engineering and development, with approximately 37 % of our full-time employees serving in engineering-related roles as of September 30, 2025.
 We operate an 85,000-square-foot design, manufacturing, and office facility in Exton, Pennsylvania. We are certified to both ISO 9001 and AS9100D, internationally recognized standards that define effective quality management practices. These certifications demonstrate our rigorous processes for employee training, product design, and manufacturing, ensuring that products and related services consistently meet or exceed customer quality requirements. All of our products also undergo extensive, fully documented quality-control testing before shipment.
 In the quarter ended June 30, 2025, the Company completed construction of an additional 40,000 square feet of capacity at the Exton facility, expanding it to a total of 85,000 square feet. This expansion is expected to increase IA's manufacturing capacity by more than 300%, supporting our commercial growth strategy and enabling IA to capitalize on recent transactions with Honeywell. We expect to leverage this more than three-fold increase in capacity to meet growing demand and scale production efficiently.
 Sales & Marketing
 Our multi-channel sales strategy targets passenger and cargo carrying aircraft operators, general aviation owner/operators, maintenance, repair and overhaul ("MRO") dealer networks, distributors, avionics integrators, aircraft modification centers, the Department of Defense (the "DoD"), DoD contractors and OEMs.
 Periodically, the Company evaluates our sales and marketing efforts with respect to these focus areas and, where appropriate, makes use of third-party sales representatives who receive compensation through commissions based on performance.

 Raw Materials
 We require the use of various raw materials in our manufacturing processes. We purchase a variety of manufactured component parts from various suppliers. We also purchase replacement parts, which are utilized in our various repair and overhaul operations. At times, we concentrate our orders among a few suppliers in order to strengthen our supplier relationships. Most of our raw materials and component parts are generally available from multiple suppliers at competitive prices.
 Disruptions in the global supply chain have resulted in delays in the availability of certain raw materials and increased raw material prices, among other costs, including labor. As the fiscal year ended September 30, 2025 progressed, raw material price escalation moderated, although our ability to obtain raw materials and components in a timely and cost-efficient manner remains a strategic focus entering fiscal year 2026. Although we continue to evaluate various opportunities to expand our procurement network, OEM certification processes associated with aerospace products could prevent efficient replacement of a supplier, raw material or component part.
 Suppliers
 The Company's manufacturing activities consist primarily of assembling and testing components and subassemblies and integrating them into finished systems. Typically, the Company purchases components for products, including any necessary raw materials, from third-party suppliers, several of which are sole source, and assembles them in a clean room environment. Many of the components purchased are standard products, although certain parts are made to the Company's specifications. Although there are a limited number of suppliers of particular components, management believes other suppliers could provide similar components on comparable terms.
 When appropriate, the Company enters into long-term supply agreements and uses its relationships with long-term suppliers to improve product quality and availability and reduce delivery times and product costs. In addition, the Company identifies alternative suppliers for important component parts. Generally, the introduction of component parts from new suppliers into existing products requires FAA certification of the entire finished product if the newly sourced component varies significantly from the original drawings and specifications.
 OUR CUSTOMERS AND PRODUCT DISTRIBUTION
 The Company's customers include the U.S. federal government (including the DoD, the Department of Interior and the Department of Homeland Security), Air Transport Services Group Inc. ("ATSG"), Amazon.com, Inc., American Airlines, Inc., Boeing, Deutsche Post DHL Group, FedEx Corporation ("FedEx"), Icelandair, L3Harris Technologies, Inc. ("L3 Harris Technologies"), Lockheed Martin Corporation ("Lockheed Martin"), Pilatus, Sierra Nevada Corporation, Textron, and the Department of National Defense (Canada), among others.
 The Company's revenue is concentrated with a limited number of customers. In the fiscal year ended September 30, 2025, our three largest customers, Lockheed Martin, Pilatus, and Boeing accounted for 36%, 8% and 5% of total revenue, respectively. In the fiscal year ended September 30, 2024, our three largest customers, Pilatus, Textron and Honeywell accounted for 23%, 7% and 7% of total revenue, respectively. In fiscal year ended September 30, 2023, the three largest customers, Pilatus, ATSG and Textron accounted for 23%, 12% and 10% of total revenue, respectively.
 Retrofit Market
 The aviation retrofit market involves the modification, refurbishment, or upgrade of existing aircraft to improve performance, safety, fuel efficiency, passenger experience, or regulatory compliance. This market has been growing, especially as airlines and operators seek to extend the lifetime of existing fleets, reduce operational costs, and meet new environmental standards. Historically, most of the Company's sales have come from the retrofit market, which the Company has pursued because of the growing need to support the world's aging fleet of aircraft. The design and airframes of many types of older aircraft generally exceed the technology and technical capabilities of the original cockpit instruments and avionics. The Company has developed products that enable owners and operators to upgrade their aircraft by retrofitting them with the Company's products at a competitive cost with equipment that provides instruments with capabilities and technology equivalent to newer aircraft.
 We expect our main customers in the retrofit market will continue to be the DoD and defense contractors, aircraft operators and aircraft modification centers.

 U.S. Department of Defense and Defense Contractors. The Company markets its products directly to the DoD and to domestic and international defense contractors for end use in military aircraft retrofit programs. DoD programs generally take one of two forms: a subcontract with a prime government contractor, such as Boeing, Lockheed Martin, or L3 Harris Technologies, or a direct contract with the appropriate government entity, such as the U.S. Air Force. The government's desire for cost-effective retrofit of its aircraft has led it to purchase commercial off-the-shelf equipment rather than to develop specially designed products, which are usually more costly and take longer to implement. These retrofit contracts tend to be on arms-length commercial terms, although some termination and other provisions of typical government contracts may be incorporated as described below under "Government Regulation." Each government agency or general contractor usually retains the right to modify or terminate a contract at any time at its convenience. Upon such alteration or termination, the Company is typically entitled to compensation for items already delivered and reimbursement for allowable costs incurred.
 Aircraft Operators. The Company markets its products to aircraft operators, including commercial airlines, cargo carriers and business and general aviation aircraft owners or suppliers, primarily for retrofitting of aircraft owned or operated by these customers. The Company's commercial fleet customers include or have included, among others, American Airlines, Inc., ATSG, FedEx and Icelandair. The Company sells these customers a range of products and services.
 Aircraft Modification Centers. Aircraft modification centers, which repair and retrofit private aircraft, represent the primary retrofit market for private and corporate jets. The Company has established relationships with a several aircraft modification centers throughout the United States which act as distribution outlets and installation centers for the Company's products.
 Original Equipment Manufacturers
 The Company sells components to OEMs for use in original construction of aircraft. The Company has signed a multi-year agreement with Textron to supply ThrustSense Autothrottles for their King Air 360 and King Air 260 production aircraft. The Company has also developed and manufactures the utilities management system for the Pilatus' PC-24 aircraft under a multi-year production contract. The Company also markets its products to other OEMs including, among others, Boeing and Lockheed Martin.
 COMPETITIVE CONDITIONS
 We experience competition in our aerospace and defense markets across suppliers of competitive products and services as well as with vertically integrated primes. We believe that the principal points of competition in our markets are product quality, reliability, price, design and engineering capabilities, product development, conformity to customer specifications, timeliness of delivery, effectiveness of the distribution organization and quality of support after the sale. We believe IA has demonstrated a track record of performance excellence across each of these areas that has resulted in long-standing customer relationships, often characterized by recurring contractual relationships.
 With respect to our products, the Company's principal competitors include Honeywell Aerospace, Collins Aerospace, GE Aerospace, Thales Defense & Security, Inc., Elbit Systems and Garmin Ltd.
 OUR COMPETITIVE STRENGTHS
 • Vertically integrated model. IA can reduce its time-to-market through in-house design, manufacturing and testing capabilities; full-service integration and repair capabilities; and deep technical expertise.
 • Systems integration expertise. IA's extensive system integration expertise is a key differentiator within the market and provides a compelling value to its Company's customer base. We believe this expertise enhances ease of installation, reduces aircraft downtime and reduces system complexity.
 • Retrofit application expertise. The average age of the global commercial airline fleet has been increasing over the last 20 years and reached a record level of 14.8 years in late 2024, according to the International Air Transport Association. Extending an aircraft's lifespan increases maintenance demands, since age brings wear and tear that requires more frequent and thorough inspections and replacement of parts that fail or reach their lifetime limits. IA specializes in retrofitting older aircraft with state-of-the-art avionics, such as Flat Panel Display Systems and Autothrottles that significantly improve functionality and compliance with current aviation standards.

 • Strong Product and IP Portfolio. As of September 30, 2025, the Company held 46 U.S. patents. The Company also holds 125 international patents and has 17 trademarks. Certain of these patents cover technology relating to air data measurement systems, and others cover technology relating to flat panel display systems and other aspects of the COCKPIT/IP product.
 • Depth of experience in serving global customers. IA has experience serving both commercial and military customers with global reach, including, among others, Amazon, American Airlines, BAE Systems, Boeing, DHL, Eclipse Aviation, FedEx, Lockheed Martin, Pilatus, and Textron.
 INDUSTRY OUTLOOK
 We operate in highly competitive markets. Since our inception more than 35 years ago, our markets have experienced significant growth, leading to new entrants with considerable financial resources and scale. During this time, IA has built a strong position with a portfolio of established, long-term customers that value our ability to deliver reliable, high-quality products that incorporate advanced technologies together with expert technical support, and a competitive, value-centric approach to product pricing.
 We believe that, in times of adverse economic conditions, customers that may have otherwise elected to purchase newly manufactured aircraft may be interested instead in retrofitting existing aircraft as a cost-effective alternative, thereby enhancing the retrofit market opportunity for the Company.
 A wide range of information is critical for the proper and safe operation of aircraft. With advances in technology, new types of information to assist pilots are becoming available for display in cockpits, such as satellite-based weather, ground terrain maps and Automatic Dependent Surveillance-Broadcast ("ADS-B") navigation. We believe that aircraft cockpits will continue evolving into comprehensive information centers, delivering an expanding range of data, whether mandated by regulation or demanded by pilots, to support the safe and efficient operation of aircraft. We further expect the market to progress toward increasingly autonomous flight, with the flight deck integrating additional transitional technologies as the industry advances along the path to full autonomy.
 Historically, equipment data, such as engine and fuel-related information, were displayed on analog mechanical instruments. Engine and fuel instruments provide information on engine activity, including oil and hydraulic pressures and temperature. These instruments are clustered throughout an aircraft's cockpit. Individual instruments tend to be replaced more frequently than the aircraft itself due to obsolescence and normal wear-and-tear. Increasingly, operators are replacing their clusters of analog mechanical instruments with integrated display systems, such as IA's panel displays.
 As airspace and airport environments become increasingly congested, the aviation industry and its regulators are placing greater emphasis on technologies, procedures and regulatory frameworks designed to enable higher traffic capacity while maintaining or improving safety, operational efficiency and environmental performance. Emerging technologies and procedures, including traffic-avoidance systems, ground-awareness tools, enhanced navigation and vertical-position accuracy, runway-incursion prevention technologies and expanded digital communication capabilities, are expected to require new and intuitive methods for presenting situational-awareness information to pilots. The Company believes that its flat-panel display and other products are well suited to address these evolving requirements and to support the industry's ongoing demand for improved cockpit information systems.
 STRATEGY
 The foundation of our value creation framework is our focused business strategy which seeks to deliver stable commercial growth, including both organic and inorganic growth, operational excellence and disciplined capital allocation. Key elements of the strategy include the following:
 Targeted Growth
 • Expand product line portfolio.
 The Company believes that its new Liberty Flight Deck (LFD) will be a key driver of its next phase of growth. The Liberty Flight Deck is a customer-centric, fully customizable design that can be tailored for most aircraft types, including large passenger and cargo, business aviation, and military applications. Unique features within the LFD facilitate significant pilot workload reduction that we believe will eventually to lead to single operations in air transport (part 25) aircraft and full flight autonomy over time.

 The Company develops innovative products by integrating its avionics, engineering, and design expertise with commercially available technologies, components, and products originating from non-aviation industries, including the personal computer and telecommunications sectors. The Company's COCKPIT/IP system components illustrate its capability to incorporate selected non-avionic technologies into aviation applications. For example, the Company identified an unmet need in the turboprop aircraft market arising from the absence of an available autothrottle system. In response, the Company invested in the development of a turboprop autothrottle and subsequently introduced its ThrustSense Autothrottle, which incorporates patented technologies. The Company believes that its turboprop autothrottle offers an effective and comparatively less complex solution relative to other available systems and includes multiple sensing and safety features. The Company intends to continue to pursue opportunities associated with its position as the first provider of an autothrottle system for turboprop aircraft.
 • Focus on retrofit opportunity.
 Given an aging global aircraft fleet, cockpit avionics upgrades for existing aircraft continue to be a significant opportunity for the Company. We believe that retrofit of an aircraft with the COCKPIT/IP FPDS, FMS and integrated standby unit system components is cost effective compared to the acquisition of a new aircraft and can provide similar functionality to that of new aircraft.
 • Expand presence in flat panel display market.
 Given the versatility, visual appeal, and lower cost of displaying a series of instruments and other flight relevant information on a single flat panel, the Company anticipates that flat panel displays will continue to increasingly replace individual analog and digital instrument LCDs and cathode ray tubes. The Company anticipates that its COCKPIT/IP has significant benefits over competitive flat panel displays, including lower cost, larger size, reduced weight, enhanced viewing angles, and a broader array of functions.
 The Company's patented and proprietary Integrity Checking Processor and Zooming features provide increased situational awareness, reliability, performance and utility to the owner/operator. Accordingly, we believe that these advantages will allow the Company to generate increased revenues from the COCKPIT/IP product and increase our market share. In addition, the Company expects that demand for new aircraft, FAA mandates and obsolescence issues on older aircraft will contribute to this growth.
 • Evaluate potential acquisitions and strategic partnerships.
 As a part of the Company's growth strategy, we continuously evaluate acquisition opportunities and opportunities to make investments in complementary businesses, technologies, services or products. In addition, we may enter into strategic partnerships with parties who can provide access to assets, additional product or services offerings, additional distribution or marketing synergies or additional industry expertise in order to enhance and expand the Company's product offerings, technology and capabilities in its current and future products. Any newly acquired products and technology may enable the Company to sell to a new group of buyers and introduce them to our broader range of products, particularly newly acquired product lines.
 • Increase Military diversification.
 The U.S. military is actively moving away from excessive reliance on the traditional top five prime contractors (Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, and RTX) through a strategic push for diversification, rapid acquisition of innovative technologies, and a concerted effort to leverage non-traditional suppliers and small businesses. Consequently, the Company is expanding its presence in the military market by focusing on winning contracts for key domestic and FMS defense programs, such as the C130 avionics upgrades, which the Company believes will increase the potential for even greater military market penetration.
 Improve Operational Efficiency
 • Leverage insourcing initiatives.
 The Company works to build on its legacy of strong operational execution to generate attractive margins through both increased operating leverage from greater revenues and internal margin initiatives. The Company believes it can realize efficiencies in the manufacturing and repair of the acquired Honeywell products by insourcing the production of product sub-assemblies. We also expect to benefit from greater fixed cost leverage as we utilize the manufacturing capacity at our Exton facility more effectively. We intend to realize additional efficiencies through sourcing and procurement initiatives in an effort to drive cost savings.

 Return-Focused Capital Allocation Strategy
 Employ a disciplined, return-focused capital allocation strategy. Our primary focus will be on capital deployment in support of our growth initiatives. The Company remains committed to maintaining strong financial flexibility.
 Recent Acquisitions
 In June 2023, the Company entered into an Asset Purchase and License Agreement (the "June 2023 Honeywell Agreement") with Honeywell International, Inc. ("Honeywell") pursuant to which Honeywell sold, assigned or licensed certain assets related to its inertial, communication and navigation product lines, including a sale of certain inventory, equipment and customer-related documents, an assignment of certain contracts and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its inertial, communication and navigation product lines to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company for cash consideration of $35.9 million.
 In July 2024, the Company entered into an exclusive license agreement and acquired additional key assets for certain communication and navigation product lines from Honeywell (the "July 2024 Honeywell Asset Acquisition"). This transaction complemented the previous Honeywell license and asset acquisition completed in June 2023. Total consideration was $4.2 million in cash.
 On September 27, 2024, the Company entered into a second Asset Purchase and License Agreement (the "September 2024 Honeywell Agreement") with Honeywell, pursuant to which Honeywell sold, assigned or licensed certain assets related to its various generations of military display generators and flight control computers, including a sale of certain inventory, equipment and customer-related documents; an assignment of certain contracts; and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its various generations of military display generators and flight control computers to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company for consideration of $14.2 million in cash. The exclusive licensing of these product lines from Honeywell is a unique opportunity for the Company that enhances its current offerings in the air transport, military and business aviation markets. In addition, there are potential cost synergies from better utilization of the Company's skilled engineering team and its existing operational capacity. The Company believes the September 2024 Honeywell Agreement will help to accelerate the Company's growth and enhance its global reputation for delivering best price-for-performance product and service solutions.
 INTELLECTUAL PROPERTY
 We have various trade secrets, proprietary information, trademarks, trade names, patents, copyrights and other intellectual property rights, which we believe, in the aggregate but not individually, are important to our business. The Company's products are manufactured, marketed and sold using a portfolio of patents, trademarks, licenses, and other forms of intellectual property, some of which expire in the future. The Company develops and acquires new intellectual property on an ongoing basis. As of September 30, 2025, the Company held 46 U.S. patents. The Company also holds 125 international patents and has 17 trademarks. Based on the broad scope of the Company's product lines, management believes that the loss or expiration of any single intellectual property right would not have a material effect on our consolidated financial statements.
 HUMAN CAPITAL RESOURCES
 Our ability to attract, develop and retain top talent across all of our business functions, and particularly in highly technical areas, has a significant impact on organizational success. Accordingly, our human capital management strategy places a significant focus on both attracting a diverse, highly skilled workforce and engaging and developing talent from within by creating a work environment that promotes inclusion and equitability. By providing our valued employees the opportunity to enhance their skillsets, develop their careers and pursue excellence through numerous training and development opportunities, we consistently emphasize the importance of innovation and continuous improvement throughout our organization.

 We attract and compensate our employees by offering a competitive total compensation package which includes benefits, resources, and programs that support health, physical, mental, and financial wellness. The benefits package we offer, coupled with employee recognition opportunities and employee engagement activities help create a comprehensive employee experience.

 As of September 30, 2025, we had 147 full-time employees as compared to 133 full-time employees as of September 30, 2024. On an as-needed basis, we employ temporary personnel with specialized disciplines to fill staffing gaps. We do not have any employees represented by a union, and we believe that our relations with our employees are good. We provide our team members with ongoing

 opportunities to share thoughts and perspectives on company and employment-related matters through surveys, all-hands meetings, and management open door policies. Our management, with oversight from the Compensation and Nominating & Corporate Governance Committee of our board of directors, monitors the hiring, retention, and management of our employees.

 GOVERNMENT REGULATION

 Environmental Regulation

 We are subject to regulations administered by the U.S. Environmental Protection Agency, the U.S. Occupational Safety and Health Administration, various state, county, and local agencies acting in cooperation with federal and state authorities. Among other things, these regulatory bodies impose restrictions to control air, soil, and water pollution, to protect against occupational exposure to chemicals, including health and safety risks, and to require notification or reporting of the storage, use, and release of certain hazardous chemicals and substances. The extensive regulatory framework imposes compliance burdens and risks on us. Governmental authorities have the power to enforce compliance with these regulations and to obtain injunctions or impose civil and criminal fines in the case of violations.

 The Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") imposes strict, joint and several liability on the present and former owners and operators of facilities that release hazardous substances into the environment. The Resource Conservation and Recovery Act of 1976 ("RCRA") regulates the generation, transportation, treatment, storage, and disposal of hazardous waste. In addition, the Occupational Safety and Health Act, which requires employers to provide a place of employment that is free from recognized and preventable hazards that are likely to cause serious physical harm to employees, obligates employers to provide notice to employees regarding the presence of hazardous chemicals and to train employees in the use of such substances.

 Our operations require the use of a limited amount of chemicals and other materials, which are classified under applicable laws as hazardous chemicals and substances. We follow all federal, state and local rules and regulations regarding the disposal of these chemicals and associated waste.

 Federal Aviation Administration Regulation

 We are subject to regulation by the Federal Aviation Administration ("FAA") under the provisions of the Federal Aviation Act of 1958, as amended. The FAA prescribes standards and licensing requirements for aircraft and aircraft components. We are subject to inspections by the FAA and may be subjected to fines and other penalties (including orders to cease production) for noncompliance with FAA regulations. Our failure to comply with applicable regulations could result in the termination of or our disqualification from some of our contracts, which could have a material adverse effect on our operations.

 GOVERNMENT CONTRACT COMPLIANCE

 Our government contracts and sub-contracts are subject to the procurement rules and regulations of the U.S. Government. Many of the contract terms are dictated by these rules and regulations. Specifically, cost-based pricing is determined under the Federal Acquisition Regulation ("FAR"), which provide guidance on the types of costs that are allowable in establishing prices for goods and services under U.S. Government contracts. For example, costs such as those related to charitable contributions, advertising, interest expense, and public relations are unallowable, and therefore not recoverable through sales. During and after the fulfillment of a government contract, we may be audited in respect of the direct and allocated indirect costs attributed thereto. These audits may result in adjustments to our contract costs. Additionally, we may be subject to U.S. Government inquiries and investigations because of our participation in government procurement. Any inquiry or investigation can result in fines or limitations on our ability to continue to bid for government contracts and fulfill existing contracts. We believe that we are in compliance with all federal, state, and local laws and regulations governing our operations and have obtained all material licenses and permits required for the operation of our business.

 The U.S. Government generally has the ability to terminate our contracts, in whole or in part, without prior notice, for convenience or for default based on performance. If a U.S. Government contract were to be terminated for convenience, we generally would be protected by provisions covering reimbursement for costs incurred on the contract and profit on those costs, but not the anticipated profit that would have been earned had the contract been completed. In the unusual circumstance where a U.S. Government contract does not have such termination protection, we attempt to mitigate the termination risk through other means. Termination resulting from our default may expose us to liability and could have a material adverse effect on our ability to compete for other contracts. The U.S. Government also has the ability to stop work under a contract for a limited period of time for its convenience. In the event of a stop work order, we generally would be protected by provisions covering reimbursement for costs incurred on the contract to date and

 for costs associated with the temporary stoppage of work on the contract. However, such temporary stoppages and delays could introduce inefficiencies for which we may not be able to negotiate full recovery from the U.S. Government and could ultimately result in termination for convenience or reduced future orders on certain contracts. Additionally, we may be required to continue to perform for some period of time on certain of our U.S. Government contracts, even if the U.S. Government is unable to make timely payments.

 Backlog

 September 30

 2025

 2024

 Backlog, beginning of period

 $

 89,232,576

 $

 13,450,881

 Plus: bookings during period, net

 72,493,211

 48,672,715

 Plus: acquired through acquisition

 —

 74,307,000

 Less: sales recognized during period

 (84,296,889)

 (47,198,020)

 Backlog, end of period

 $

 77,428,898

 $

 89,232,576

 Backlog represents the value of contracts and purchase orders, less the revenue recognized to date on those contracts and purchase orders. The backlog excludes potential future sole-source production orders from products developed under the Company's engineering development contracts ("EDC") programs, including the Pilatus PC-24, the KC-46A and the Textron King Air 360 and King Air 260 ThrustSense Autothrottle programs. Although the Company believes that the orders included in backlog are firm, most of the backlog involves orders that can be modified or terminated by the customer.

 At September 30, 2025, our backlog was $77.4 million compared with $89.2 million at September 30, 2024. Backlog is converted into sales in future periods as work is performed or deliveries are made. We expect to recognize approximately 44% of our backlog over the next 12 months and approximately 92% over the next 24 months as revenue, with the remainder recognized thereafter.

 Item 1A. Risk Factors.
 1A Risk Factors
 Risks Related to Our Business and Industry
 If the Company fails to enhance existing products, or to develop and achieve market acceptance for flat panel displays, flight control computers, display generators, flight management systems, autothrottle technology and other new products that meet customer requirements, its business, financial condition and results of operation may be affected adversely.
 The Company spends a large portion of its research and development efforts in developing and marketing the FPDS, FMS, ThrustSense Autothrottle, military display generators and flight control computers and other complementary products. The Company's ability to grow and diversify its operations through the introduction and sale of new products is dependent upon its continued success in product development and engineering activities, its sales and marketing efforts, its ability to acquire new products from strategic partnerships and acquisitions, and its ability to obtain necessary regulatory approvals to sell such products. Sales growth will depend in part on market acceptance of and demand for FPDS, FMS, ThrustSense Autothrottle, military display generators and flight control computers and any other products we develop in the future. The Company cannot be certain that it will be able to develop, acquire, introduce or market its FPDS, FMS, ThrustSense Autothrottle, military display generators and flight control computers or other new products or product enhancements in a timely or cost-effective manner, or that any new products or product enhancements will receive market acceptance or necessary regulatory approval. In addition, the Company's business is dependent upon maintaining its reputation and relationships with existing customers and potential partners. If the Company's performance or the performance of the Company's products does not meet its customers' expectations, the Company's reputation and its relationships could be damaged, which may have a material adverse impact on the Company's business, financial condition and results of operations.

 Growth of the Company's customer base could be limited by delays or difficulties in completing development and introduction of planned products or product enhancements.
 Our growth strategy is dependent in part upon our successful entry into new markets. In seeking new customers, the Company may have difficulty in displacing the products of incumbent competitors who are more familiar with such markets and the needs of target customers. The Company cannot be assured that potential customers will accept its products or that existing customers will not abandon them. Similarly, due to the nature of the Company's products, potential customers may not be willing to expend the resources and effort required to replace existing competitive technology and parts with the Company's products.
 If the Company fails to modify or improve its products in response to evolving industry standards and government regulations, its products could become obsolete rapidly.
 Our products must continue to evolve as the industry evolves, and simultaneously continue to comply with government standards. Future generations of flat panel displays, air data systems, engine and fuel displays, flight management systems and computers and autothrottle technology which embody new technologies or new industry standards could render the Company's products obsolete. The market for aviation products is subject to rapid technological change, new product introductions, changes in customer preferences, and evolving industry standards and government regulations. The Company's future success will depend on its ability to:
 • embrace rapidly changing technologies;
 •

 develop and introduce timely, high-quality, cost-effective new products and product enhancements to address the increasingly sophisticated needs of its customers; and

 • adapt the Company's products to evolving industry standards and government regulations; and
 These factors may be costly to the Company, and there is no assurance that the Company will be successful in its strategy.
 Furthermore, new regulations or product standards, and changes to existing product standards could require the Company to change its products and underlying technology and expend significant costs to come into compliance. Many of our customer contracts additionally require us to comply with strict industry standards. The policies and regulations applicable to the Company may be modified, interpreted, and applied inconsistently, which may result in the Company's noncompliance with applicable rules. If the Company is found to be noncompliant with applicable regulations or rules imposed by certain contracts, the Company may face significant fines, reputational harm, and other regulatory consequences (such as, loss of certain certifications or operational restrictions). Any of the foregoing consequences may adversely affect the Company's business, financial condition and results of operations.
 We design, manufacture and service products that incorporate advanced technologies; the introduction of new products and technologies involves risks, and we may not realize the degree or timing of benefits initially anticipated.
 The design, development, production, sale and support of innovative commercial aerospace and defense systems and products involves advanced technologies. We invest substantial amounts in research and development efforts to pursue advancements in a wide range of technologies, products and services aimed at meeting the ever-evolving product, program and service needs of our customers. Our ability to realize the anticipated benefits of our investments depends on a variety of factors, including meeting development, production, certification and regulatory approval schedules; receiving regulatory approvals; execution of internal and external performance plans; achieving cost and production efficiencies; availability and quality of supplier- and internally-produced parts and materials; availability of supplier and internal facility capacity to perform maintenance, repair and overhaul services; availability of test equipment; development of complex software; hiring and training of qualified personnel; identification of emerging technological trends for our target end-customers; the level of customer interest in new technologies and products and customer acceptance of our products and technologies. For example, our customers manufacture or acquire end products and systems that incorporate certain of our products. These end products and systems may also incorporate additional technologies manufactured by third parties and involve additional risks and uncertainties. As a result, the performance and industry acceptance of these larger systems and end products could affect the level of customer interest in and acceptance of our products in the marketplace. In addition, many of our products must adhere to strict regulatory and market-driven safety and performance standards in a variety of jurisdictions. The evolving nature of these standards, along with the long duration of development, production and aftermarket support programs, creates uncertainty regarding program profitability, particularly with our aircraft engine products. Development efforts divert resources from other potential investments in our businesses, and these efforts may not lead to the development of new technologies or products on a timely

 basis or meet the needs of our customers as fully as competitive offerings. In addition, the industries for our products or products that incorporate our technologies may not develop or grow as we anticipate. We or our customers, suppliers or subcontractors may encounter difficulties in developing and producing new products and services and may not realize the degree or timing of benefits initially anticipated or may otherwise suffer significant adverse financial consequences. Due to the design complexity of our products or those of our customers or third-party manufacturers that incorporate our products into theirs or our customers' products, we may experience delays in completing the development and introduction of new products or we may experience the suspension of production after these products enter into service due to safety concerns. Delays and/or suspension of production could result in increased development costs or deflect resources from other projects. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition and results of operations.
 We may pursue strategic acquisitions, investments, strategic partnerships, product line acquisitions or other ventures, and our business could be materially harmed if we fail to successfully identify, evaluate, complete, and integrate such transactions. Acquisitions involve inherent risks that may adversely affect our operating results and financial condition. The Company may be unable to successfully integrate and realize the anticipated benefits of recent acquisitions.
 Our growth strategy includes evaluating acquisition opportunities and opportunities to make investments in complementary businesses, technologies, services or products, or to enter into strategic partnerships with parties who can provide access to those assets, additional product or services offerings, additional distribution or marketing synergies or additional industry expertise.
 We may not be able to identify suitable acquisition, investment or strategic partnership candidates, or if we do identify suitable candidates in the future, we may not be able to complete transactions with such partners on commercially favorable terms, or at all. Our ability to find partners to further our growth strategy is likely to be affected by factors outside of our control in the aerospace industry such as the activities of pilot unions, pilot shortages and labor strikes, along with other economic and geopolitical factors. Any one of these factors may impede our ability to find strategic partners.
 Acquisitions involve various inherent risks, such as: our ability to assess accurately the value, strengths, weaknesses, internal controls, contingent and other liabilities and potential profitability of acquisition candidates; difficulties in integrating acquired businesses, our potential inability to achieve identified financial, operating and other synergies anticipated to result from an acquisition, and integration issues associated with internal controls of acquired businesses; the diversion of management's attention from our existing businesses; the potential impairment of assets; potential unknown liabilities associated with a business that we acquire or in which we invest, including environmental liabilities; potential margin dilution and production delays associated with consolidating acquired facilities and manufacturing operations. Any past or future acquisition could also result in such risks. Due diligence performed prior to closing acquisitions may not uncover certain risks or liabilities that could materially impact our business, financial condition and results of operations.
 We may not successfully integrate business, operational, and financial activities such as internal controls, the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act") compliance, cyber security measures, the GDPR and similar privacy laws and other corporate governance and regulatory matters, operations, personnel or products related to acquisitions we may make in the future. Over the past two years, we have acquired several product lines from Honeywell to enhance the Company's current offerings in various markets, including communication and navigation product lines and display generators and flight control computers. As the assets acquired from Honeywell are intended to further the Company's revenue in the retrofit market and are intended to be incorporated into U.S. government contract work, the Company must comply with further regulatory requirements, including heightened security measures, that it may not achieve. If the Company fails to obtain all regulatory approvals required to use the Honeywell assets as intended, the Company may fail to realize the anticipated benefits of these transactions in a timely manner or at all, as it may not be able to generate any revenue in the intended markets.
 The success of the Honeywell acquisitions, including anticipated benefits and potential additional revenue opportunities, will depend in part on the Company's ability to successfully integrate the Honeywell product lines in a manner that results in various benefits, including, among other things, enhancing the Company's current offerings in the air transport, military and business aviation markets, creating potential cost synergies, accelerating the Company's growth and enhancing its global reputation.
 The ongoing process of integrating the Honeywell assets could result in a loss of key personnel, cause an interruption of, or loss of momentum in, the activities of one or more of the Company's businesses or inconsistencies in standards, controls, procedures and policies and impair the ability of the Company to maintain relationships with customers and employees. The diversion of management's attention from other business concerns and any delays or difficulties encountered in connection with the integration of the Honeywell assets could have an adverse effect on the Company's business, financial condition and results of operations.

 Additionally, we may incur significant costs and risks in integrating Honeywell product lines, including the risk of additional demands on our resources, systems, procedures and controls. We may also incur significant transaction costs in connection with future acquisitions, including acquisitions that we do not complete for any reason. We are required to expense such transaction costs as incurred, which may have a material adverse impact on our financial results.
 The Company's revenue and operating results may vary significantly from quarter to quarter, which may cause its stock price to decline.
 Historically, the Company's revenue and operating results have varied from quarter to quarter, and may continue to vary, which may adversely affect our business, financial condition and results of operations, and cause our stock price to decline. As such, our historical results of operations should not be relied upon as accurate indications of future performance. Variance in the Company's revenue may be caused by multiple factors, including:
 • demand for products and/or delivery schedule changes by its customers;
 •

 capital expenditure budgets of aircraft owners and operators, and appropriation cycles of the U.S. government and foreign governments;

 •

 changes in the use of the Company's products, including air data systems, flat panel displays, flight management systems, autothrottle technology display generals and flight control computers;

 • delays in obtaining government approval for new products;
 • new product introductions by competitors;
 • changes in the Company's pricing policies or pricing policies of competitors; and
 •

 costs related to possible acquisition of technologies or businesses, including the cost to pursue and negotiate acquisitions and integrate such products and business thereafter.

 Many of these factors are outside of the Company's control, and difficult to predict. The unpredictable nature of the Company's business and results of operations could result in revenue that is lower than anticipated. If we fail to perform as investors or other analysts may have anticipated, our stock price may delice as a result.
 Our sales in the commercial aircraft market are subject to downturns affecting the aerospace industry generally.
 Sales of our products may be impacted by downturns in the global economy within the industry in which we operate and can adversely affect our business, financial condition and results of operations. For example, in recent years, sales across the commercial OEM sector saw a decline due in large part to the decrease in production by Boeing and Airbus related to reduced demand for commercial air travel because of the COVID-19 pandemic.
 Similarly, the operation of an aircraft is inherently subject to various risks, and the technological advances, including those contained in our products and services, may be impacted by safety hazards or accidents. Any mechanical error or adverse external condition may result in death or injury to personnel and passengers, which could impact customer and consumer confidence in the aerospace industry. Reduced confidence in the safety and reliability of the air transportation services industry could lead to a reduction in demand for the Company's products and services, particularly if such accidents or disasters were due to a safety fault.
 The F-16 program comprises a material portion of our revenue and reductions or delays in funding for this program and risks related to performance, schedule, cost and requirements of the program could adversely affect our performance.
 The F-16 program, which consists of multiple production and sustainment contracts, is our largest program and represented 36.7% of our total consolidated net sales in 2025. A decision by the U.S. Government, international partners, or FMS customer countries to cut spending on this program or reduce or delay planned orders would have an adverse impact on our business and results of operations. Given the size and complexity of the F-16 program, we anticipate that there will be continual reviews related to aircraft performance, program and delivery schedule, cost and requirements as part of the DoD, Congressional and international countries' oversight and budgeting processes. Challenges and risks associated with this program include supplier performance, contract approval and receiving

 funding for contracts on a timely basis, the level of cost associated with life cycle operations, sustainment and potential contractual obligations, inflation-related cost pressures, the ability to improve affordability and potential competition from next-generation or other platforms.
 We also may not be successful in making hardware upgrades and other modernization capabilities in a timely manner, including as a result of dependencies on suppliers, which could increase costs and create schedule delays. Our ability to capture and retain future F-16 growth in development, production and sustainment is dependent on the success of our efforts to achieve F-16 customer affordability, supply chain improvements, continued reliability improvements and other efficiencies, some of which are outside our control.
 Public health events and conditions could adversely affect our business, financial condition and operating results.
 We face a wide variety of risks related to public health crises, epidemics, pandemics or similar events. If a new health epidemic or outbreak were to occur, we could experience broad and varied effects similar to the impact of COVID-19, including adverse impacts to our workforce and supply chain, inflationary pressures and increased costs, schedule or production delays, market volatility and other financial ramifications. If any of these were to occur, our future results and performance could be adversely impacted.
 Due to the inherent nature of our products and the industry in which we operate, a product safety failure or quality issue could seriously harm our business.
 There can be no assurance that the complex system designs and components contained in the Company's products were not designed with, or manufactured containing, errors, omissions, or defects, particularly when the Company incorporates new technologies into its products or when it releases new versions or enhancements of its existing products. Any failure or error in the Company's products during a flight presents a substantial risk to the operation of the aircraft, as products provide information necessary for a safe and efficient flight, and as a result, a risk to the safety of persons aboard such flights. In the event a defect or error is detected in any of the Company's products, the Company may be required to issue a recall, face liability in litigation or pay damages, which may result in a delay or loss of revenues, cancellation of customer contracts, damage to the Company's reputation, and litigation costs.
 Additionally, such occurrences could materially impair the production of our products, result in damage to equipment, personal injury or death, and potential legal liability. Although we currently maintain insurance in amounts which we consider adequate, the nature of these risks is such that liabilities might exceed policy limits, the liabilities and hazards might not be insurable, or we may elect in the future not to insure against such liabilities due to high premium costs or other reasons, in which event we could incur significant costs that could have a materially adverse effect upon our business, financial condition and results of operations.
 We serve a limited number of customers and face customer concentration risk.
 The Company's revenue is concentrated in a limited number of customers. During the fiscal year ended September 30, 2025 the Company derived 57 % of its revenue from a limited number of customers. The Company continues to expect a relatively small number of customers to account for a majority of its revenue for the foreseeable future. Any disruption in the Company's business with those customers, whether as a result of changes in demand for the customer's services, adverse changes in the customer's industry generally or other challenges in securing or renewing contracts, could have a material adverse impact on our business, financial condition and results of operations.
 Additionally, much of the Company's revenue is concentrated in contracts in the retrofit market with the U.S. government (including the DoD, the Department of Interior and the Department of Homeland Security) and foreign governments. Retrofit contracts with the DoD typically are not required to be renewed by the DoD and are terminable by the DoD at their convenience. Contracts with foreign governments may contain similar provisions. There can be no assurance that we will continue to be awarded contracts by the U.S. government or any foreign government, as the market for the Company's products is highly competitive.
 Our customers may terminate their contracts with us at any time which would adversely affect our business.
 In general, the Company's customer contracts typically contain provisions which permit the customer to terminate the agreement for their convenience, at any time. There can be no assurance that any of the Company's customers will continue their contractual relationship and obligations with the Company, and therefore, we cannot guarantee any future sales. Given the Company's limited customer concentration, if customers terminate their contracts with the Company without cause, prior to its expiration date, the Company's business, financial condition and results of operations would likely be harmed.

 Changes in U.S. government priorities, spending levels and response to world events could adversely affect the Company's ability to maintain or grow the revenue the Company receives through government contracting.
 A significant portion of the Company's sales derives from defense contractors or U.S. government agencies in connection with government aircraft retrofit or OEM contracts. The military and defense market is significantly dependent upon government budget trends, particularly the U.S. Department of Defense budget. In addition to normal business risks, our procurement of products and services are subject to unique risks largely beyond our control. U.S. Department of Defense budgets could be negatively impacted by several factors, including, but not limited to, a change in defense spending policy, the U.S. government's budget deficits, spending priorities (for example, shifting funds to efforts to combat the impact of the pandemic or efforts to assist Ukraine in the Russia and Ukraine conflict), the cost of sustaining the U.S. military presence internationally, possible political pressure to reduce U.S. government military spending and the ability of the U.S. government to enact appropriations bills and other relevant legislation. The impact of any such reductions in defense appropriations and/or reductions in U.S. defense spending could result in delays in procurement of products and services due to lack of funding and negatively impact the Company's business, financial condition and results of operations.
 Defense spending may also be reduced as a result of the change in presidential administration, and other political factors affecting the U.S. government such as budget deficits, spending priorities (such as, pandemics or emerging conflicts), pressures related to the cost of sustaining the U.S. military presence internationally and reducing U.S. military presence generally, and the ability of the government to efficiently enact appropriations bills and other relevant legislation. While we are unable to precisely predict what actions the new administration will take, President-elect Donald Trump has indicated that his administration will treat national security much differently that the current and previous presidential administrations. While difficult to predict, the new administration's policies to reduce U.S. military presence and foreign military aid could result in a decrease in defense spending, and negatively impact the Company's revenue in the retrofit market.
 Additionally, U.S. government contracts are funded by agency budgets that operate on a fiscal year basis. As a result, government contracts are often not fully funded at inception. The remaining funds are only made available as appropriated by Congress over time, and thus subject to delay. Further, congressional appropriation and presidential approval are required for funding the governmental agencies with which we contract. In the past few years, the government has not been able to complete its budget process before the end of its fiscal year, resulting in government shutdowns, as well as insufficient funding for government agencies. For example, in October 2025, the U.S. federal government shut down for 43 days. We anticipate the federal budget, debt ceiling, regulatory environment and potential tax reform will continue to be subject to debate and compromise shaped by, among other things, the current administration and Congress, heightened political tensions, the global security environment, inflationary pressures and macroeconomic conditions. Additionally, the administration continues to take steps to evaluate government-wide and defense-specific staffing and procurement, which includes assessing mission priorities, procurement methods, program performance and other factors and then potentially taking action based on those assessments. In particular, the administration has issued executive orders aimed at deregulating the Department of Defense's procurement process to achieve a more efficient and nimble procurement process. If the Company and its products are unable to successfully compete with its competitors in any reformed procurement environment, or if the administration's efforts result in the Company facing a disadvantage in contracting decisions due to its size, history, product mix or any other factor, such reforms could result in impacts to both our current and future business prospects and financial performance. As a result, our sales revenue in the retrofit market are vulnerable to both delays in funding and reductions in spending. If our government contracts are not fully funded, or significant programs or contracts with the U.S. government are terminated, our business, financial condition and results of operations would be substantially adversely affected.
 Geopolitical factors and changes in policies and regulations could adversely affect our business.
 Our international sales and operations are sensitive to changes in foreign national priorities, foreign government budgets, and regional and local political and economic factors, including volatility in energy prices or supply, political or civil unrest, changes in threat environments and political relations, military conflicts, geopolitical uncertainties, and changes in U.S. foreign policy. Our international sales and operations are also sensitive to changes in foreign government laws, regulations and policies, including those related to tariffs, sanctions, embargoes, export and import controls and other trade restrictions. Events such as increased trade restrictions or retaliatory trade policies, renegotiation of existing trade agreements, or regime change can affect demand for our products and services, the competitive position of our products, our supply chain, and our ability to manufacture or sell products in certain countries. Further, operations in emerging market countries are subject to additional risks, including volatility in gross domestic product and rates of economic growth, government instability, cultural differences (such as employment and business practices), the imposition of exchange and capital controls, and risks associated with exporting components manufactured in those countries for incorporation into finished products completed in other countries. While these factors and their impact are difficult to

 predict, any one or more of them could have a material adverse effect on our competitive position, results of operations, financial condition or liquidity.
 In addition, given the role of our defense businesses in the support of the national security interests of the U. S. and its allies, we are subject to risks and uncertainties relating to policies of the U.S. and its allies, as well as other countries, including those that are or become regarded as potential adversaries or threats. We engage in both direct commercial sales, which generally require U.S. government licenses and approvals, as well as foreign military sales, which are government-to-government transactions initiated by, and carried out at the direction of, the U.S. government. Changes in budgets and spending levels, policies, or priorities, which are subject to geopolitical risks and threats, may impact our defense businesses, including the timing of and delays in U.S. government licenses and approvals for sales, the risk of sanctions or other restrictions, as well as potential human rights issues associated with the use of our defense products. These risks and uncertainties may directly or indirectly impact our commercial businesses as well.
 Government contracts are subject to special risks as a result of the U.S. government's audit practices.
 Our contracts with the U.S. government require us to comply with extensive laws and regulations in the performance of such contracts. The U.S. government regularly investigates and audits its suppliers' compliance with applicable regulations and performance under the relevant government contracts.
 If a government inquiry or investigation uncovers improper or illegal activities by us, our employees, or others working on our behalf, we could be subject to civil or criminal penalties or administrative sanctions, including contract termination, revocation of required security clearances, fines, forfeiture of fees, suspension of payment and suspension or debarment from doing business with U.S. government agencies, any of which could materially adversely impact our reputation, business, financial condition and results of operations. Additionally, ensuring we are fully compliant with new and existing government regulations could increase our costs, reduce our margins and adversely affect our competitiveness. Furthermore, our contractual obligations with the U.S. government include certain classified information, which imposes security requirements that limit our ability to discuss our performance on these contracts, including any specific risks, disputes and claims.
 The Company could be subjected to unanticipated losses in the event that the Company suffers cost overruns or contractual penalties in connection with fixed-price contracts or service arrangements to perform specified design and EDC services.
 During the fiscal year ended September 30, 2025, approximately 7% percent of the Company's total sales were derived from fixed-price EDC arrangements with customers to perform specified design and EDC services related to its products. These arrangements allow the Company to benefit by recovering some of its product development costs, but it carries the risk of potential cost overruns. If the Company's initial cost estimates are incorrect, it can incur one-time charges that may be quite high and losses on these contracts. These EDC arrangements can expose the Company to potential losses because the customer may compel the Company to complete a project or, in the event of a termination for default, pay the incremental cost of its replacement by another provider. Because some of these projects involve new technologies and applications, and can last for more than a year, unforeseen events such as technological difficulties, fluctuations in the price of raw materials, problems with subcontractors, and cost overruns can result in the contractual price becoming less favorable or even unprofitable to the Company over time. Furthermore, if the Company does not meet project deadlines or if its products do not meet customer specifications, it may need to renegotiate contracts on less favorable terms, be forced to pay penalties or liquidated damages, or suffer losses if the customer exercises its right to terminate its agreement early. The Company's results of operations are dependent on its ability to maximize earnings from the EDC service arrangements. Similarly, if the Company is unable to meet deadlines and customer specifications, its reputation in the industry may suffer harm, which may have a negative impact on the Company's ability to retain its current customers and attract new customers. Lower earnings caused by cost overruns could furthermore have a negative impact on the Company's business, financial condition and results of operations.
 The Company relies on third-party suppliers for components of its products, including several sole source suppliers, and any interruption in the supply of these components could hinder its ability to deliver products on a timely basis.
 The Company's manufacturing process consists primarily of assembling components purchased from its supply chain. Further, there are a limited amount of suppliers that are able to produce certain components. Several of our suppliers are sole source suppliers. If we lose a significant or sole source supplier, or our key suppliers' businesses fail, our ability to purchase components at all (in the case of sole source suppliers) or in sufficient quantities and on commercially reasonable terms would be seriously harmed as it may take a long time, and involve significant costs, to identify and qualify a sufficient alternative supplier.

 If the Company is unable to maintain relationships with key third-party suppliers, the development and distribution of its products could be delayed until equivalent components can be obtained and integrated into the products. In addition, substitution of certain components from other manufacturers may require product redesign or FAA, EASA or other approvals, which could delay the Company's ability to ship products, and any increase in component costs, including the costs of any necessary raw materials, in the Company's supply chain could adversely affect the Company's business, financial condition and results of operations.
 The impacts of global supply chain and labor market disruptions on our supply chain have negatively affected and will continue to negatively affect our business.
 Our performance requires a variety of raw materials, supplier-provided parts, components, sub-systems and contract manufacturing services, and we rely on U.S. and non-U.S. suppliers (including third-party manufacturing suppliers, subcontractors and service providers) and commodity markets for these materials and services. In some instances, we depend upon a single source of supply, manufacturing, services support or assembly, or participate in commodity markets that may be subject to allocations of limited supplies by suppliers. In addition, our defense businesses are subject to specific procurement requirements that limit the types of materials they use. Our defense businesses also must require suppliers to comply with various DoD requirements, including cybersecurity requirements, any of which requirements may further limit the suppliers and subcontractors they may utilize. Identifying and qualifying second- or third- source suppliers can be difficult, time-consuming and may result in increased costs. Additionally, an open conflict or war across any region, including, but not limited to, the conflicts in Ukraine and Israel, could affect our ability to obtain raw materials.
 In addition, global supply chain and labor markets are continuing to experience high levels of disruption, causing significant materials and parts shortages, as well as delivery delays, labor shortages, distribution issues, energy cost increases and price increases. Current geopolitical conditions, including sanctions and other trade restrictive activities and strained intercountry relations, are contributing to these issues. Certain of our suppliers and subcontractors have been unable to hire and retain sufficient qualified personnel for their performance. We and our suppliers and subcontractors have also experienced difficulties in procuring necessary raw materials and components, including microelectronics. All of the above have contributed to price increases. These issues have led to significant supplier and subcontractor performance failures and delays. As a result of these various problems, we have had difficulties receiving necessary materials, components, other supplies and third-party services timely or at all, which have negatively impacted production flow in our factories, hindered our ability to perform on our commitments to customers and negatively affected our results of operations, financial condition and liquidity. Our supply costs have increased due to the above factors. Continuing high inflation has exacerbated these increases and increased our operating costs.
 Additionally, an open conflict or war across any region, including, but not limited to, the conflicts in Ukraine and Israel, could affect our ability to obtain raw materials.
 The timing of the impacts of these supply chain risks and issues and our ability to mitigate them are uncertain and difficult to predict. However, we expect the current supply chain, labor availability and price issues, and their negative impacts on our business, to continue. In particular, we expect to experience prolonged delays for certain critical component parts and sub-systems. Furthermore, the existing supply chain and labor market issues could be compounded by other events, such as an economic downturn; supplier capacity constraints for other reasons; supplier quality issues (for example, defects or fraudulent parts); supplier closing, bankruptcy or financial difficulties; price increases for various reasons; worsening shortages of raw materials or commodities; and energy supply constraints, including as a result of war or other geopolitical actions, natural disaster (including the effects of climate change), health pandemic or other business continuity events, or transport and distribution issues, any of which could further negatively impact our ability to meet our commitments to customers or increase our operating costs and therefore incrementally affect our results of operations, financial condition and liquidity.

 Our subcontractors and third-party suppliers may fail to deliver high quality materials, products or services, which may result in a failure of our products or services and a violation of applicable law.
 The suppliers the Company depends on may not be able to timely deliver a sufficient number of components on that are of a reliable quality on commercially reasonable terms. We also depend on our key third-party suppliers to provide materials that comply with our specifications. If any products or materials that are provided by our suppliers do not comply with our specifications, and we do not discover such noncompliance until after those parts are installed and as a result the products fails, the Company would be harmed, potentially resulting in a loss of its ISO 9001 and AS9100D certifications, loss of customers, harm to reputation, product recalls and liability for any other harm caused. Such failures could delay or stop our production, result in possible lost sales and seriously threaten our business, financial condition and results of operations.
 Similarly, as we continue to acquire new product lines and expand the scope of our business, we require an increasing level of support from subcontractors. We are liable for the work of our subcontractors under each applicable agreement pursuant to which subcontractors assist. If our subcontractors violate the provisions of any applicable contract, or violate applicable laws or regulations, our relationship with such customer will be negatively impacted, and could result in a customer terminating our contract for default. A termination for default could expose us to liability, including liability for the costs of re-procurement, damage our reputation and impair our ability to compete for future contracts.
 Our competitors have greater resources and experience than us, and if we are not able to compete, our business, financial condition and results of operations will be substantially adversely affected.
 The markets for the Company's products are intensely competitive and subject to rapid technological change. Our primary competitors include Honeywell, Collins Aerospace, Thales Defense & Security, Inc., Garmin Ltd. and GE Aviation Systems. All of these competitors have substantially greater financial, technical, and human capital resources than the Company. In addition, these competitors have much greater experience in, and resources for, marketing their products. As a result, the Company's competitors may be able to respond more quickly to new or emerging technologies and customer preferences, or to devote greater resources to development, promotion and sale of their products than the Company. The Company's competitors may have greater name recognition and more extensive customer bases. Such competition could result in price reductions, fewer customer orders, reduced gross margins, and loss of market share.
 The Company depends on key personnel to manage its business effectively, and an inability to attract and retain key employees and plan for management succession could adversely impact the Company's ability to compete.
 The Company's success depends on the efforts, abilities, and expertise of its senior management and other key personnel. There can be no assurance that the Company will be able to attract or retain such employees, and the loss of important personnel could damage its ability to execute its business strategy. Competition for skilled personnel is intense, and the Company may not be able to attract or retain additional qualified employees.
 In addition, our ability to execute our growth strategy is dependent upon our ability to retain our Chief Executive Officer, Shahram Askarpour. Mr. Askarpour's skills and expertise are important to the Company's ability to expand its operations into different markets and further its acquisition strategy. However, there is much competition in the aerospace market for qualified executives such as Mr. Askarpour. If we are unable to retain integral members of our executive team, our competitive position in the market, relationships with potential partners, and our ability to execute our strategic business plan may be adversely affected.
 The Company's future success will depend in part on its ability to implement and improve its operational, administrative and financial systems and controls and to manage, train and expand its employee base. The Company cannot provide assurance that current and planned personnel levels, systems, procedures and controls will be adequate to support its current and future customer base. In such a circumstance, the Company may not be able to fully capitalize on existing and potential market opportunities. Similarly, the Company plans to further enhance in sales and distribution capabilities in the retrofit markets. It will be expensive and time consuming for the Company to hire a larger sales force for government and defense sales, and it may not be successful in finding appropriately qualified candidates that are able to implement the Company's strategy.
 Any delays or difficulties encountered in maintaining a sufficient workforce could impair the Company's ability to attract new customers or maintain its relationships with existing customers. In addition, effective succession planning is important to our long-term success. Failure to ensure effective transfers of knowledge and smooth transitions involving senior management and other key personnel could hinder the execution of our strategic planning.

 We self-insure a significant portion of our employee medical insurance program, which may expose us to unpredictable costs and negatively affect our financial performance.
 We self-insure a significant portion of our employee medical insurance program and related benefit claims. The estimated liability for the self-funded portion of our insurance program is determined actuarially, based on claims filed historically, demographic factors and an estimate of claims incurred but not yet reported. Unanticipated changes in any applicable actuarial assumptions or management estimates underlying our recorded liabilities for these losses could result in materially different amounts of expense than expected under these programs, which could have a material adverse effect on our business, financial condition and results of operations. In addition, the premiums for this coverage could increase in the future, or we could be forced to raise our self-insured retention amounts. If these expenses increase, or if we experience a claim in excess of our reserve and/or coverage limits, it could also have a material adverse effect on our business, financial condition and results of operations.
 The Company has limited experience in marketing and distributing its products internationally, which may limit the Company's ability to penetrate international markets and increase international sales.
 The Company plans to derive increasing revenues from sales outside the U.S., particularly in Europe and Asia. Risks inherent in doing business internationally include:
 • differing regulatory requirements;
 •

 legal uncertainty regarding liability and the enforceability of agreements and accounts receivable collection and longer collection periods;

 • tariffs, trade and investment barriers, and other regulatory barriers;
 • uncertainty of protection of our intellectual property rights;
 • heightened risk of unfair or corrupt business practices in certain locations;
 • political and economic instability, including changes in government budgets and wars, such as the wars in the Ukraine and Israel;
 • changes in diplomatic and trade relationships;
 •

 failure by our employees or agents to comply with U.S. laws affecting the activities of U.S. companies abroad, including the Foreign Corrupt Practices Act of 1977, as amended;

 •

 difficulty with staffing and managing widespread operations and in recruiting local experienced personnel, and the costs and expenses associated with such activities;

 • the impact of recessions in economies outside the U.S.; and
 • variances and unexpected changes in local laws and regulations.
 Currently, all of the Company's international sales are denominated in U.S. dollars. An increase in the dollar's value compared to other currencies could render the Company's products less competitive in international markets. In the future, the Company may be required to conduct sales in foreign countries local currencies, thus exposing it to fluctuations and volatility in exchange rates that could adversely affect its operating results. Further, as we pursue customers in Asia and other less developed markets throughout the world, our potential inability to ensure the creditworthiness of counterparties could impose additional risks and affect our overall profitability. Emerging market operations, in particular, can present many risks, including volatility in gross domestic product, economic and government instability, and the imposition of exchange controls and capital controls. We must also hire and train qualified personnel to manage our foreign operations. We may experience difficulties in recruiting, training, managing, and retaining an international staff, specifically sales management and sales personnel, which may impact sales productivity in foreign markets.
 These factors and their impact are difficult to predict, and any one or more of them could have a material adverse effect on our competitive position, business, financial condition and results of operations.

 Risks Related to Intellectual Property, Privacy, Cybersecurity, and Technical Infrastructure
 Our intellectual property rights are important to our operations, and we could suffer loss if they infringe upon others' rights or are infringed upon by others.
 We rely on a combination of patents, and trade secrets, confidentiality provisions and licensing arrangements to establish and protect our proprietary rights. To this end, as of September 30, 2025, the Company holds 46 U.S. patents and has 17 trademarks. In addition, the Company holds 125 international patents. The Company's success and ability to compete will depend in part on its ability to obtain and maintain patent or other protection for its technology and products, both in the U.S. and internationally. The value of our products relies substantially on our technical innovation in fields in which there are many patent filings. However, there is no guarantee that our patent applications will become issued patents. Moreover, even if approved, our patents may thereafter be successfully challenged by others or otherwise become invalidated for a variety of reasons. Thus, any patents we currently have or may later acquire may not provide us a significant competitive advantage. If our products are not protected by patents, our technology may be rendered obsolete by competitors that may develop similar technology using our ideas and our technology, which will seriously harm our ability to generate sales revenue.
 Additionally, patent protection related litigation is time consuming and expensive. The Company has incurred, and may continue to incur, significant legal and other costs in defense of its intellectual property. Further, if a successful claim of patent infringement were made against the Company, and if the Company were unable to develop non-infringing technology, or to license the infringed or similar technology on a timely and cost-effective basis, the Company may lose entire product lines, and as a result, incur substantial losses in revenue, and incur substantial costs in development new, non-infringing technology. Additionally, if the Company is found to have infringed upon the intellectual property rights of a third-party, reputational harm to the Company would likely occur, and harm the Company's ability to license its technology, or license technology from others.
 Certain of our products incorporate and rely upon licensed third-party technology.
 As part of our growth strategy, we have obtained licenses to third-party technology to improve our products. We may be required to renegotiate our currently licensed technology in the future and may seek to license additional technology from other third parties to enhance our products and position in the market. However, there is no guarantee that third-party licenses will be available to us, or continue to be made available to us, on terms acceptable and beneficial to the Company. If we are unable to maintain our current licenses or obtain additional licenses to further improve our products, we may be required to develop lower quality and less innovative products and as a result, our business, financial condition and results of operations may suffer.
 A cyber security incident or other technology disruption could have a negative impact on our business.
 We face certain security threats and technology disruptions, including threats to our information technology ("IT") infrastructure, attempts to gain access to our or our customers' proprietary or classified information, threats of terrorism, and failures of our technology tools and systems. Our IT networks and related systems are critical to the operation of our business and essential to our ability to successfully perform day-to-day operations. We are also involved with IT systems for certain customers and other third parties, for which we face similar security threats as for our own, including, in particular, the DoD. Cybersecurity threats—which include, but are not limited to, computer viruses, ransomware, break-ins, sabotage, spyware, other malware, attempts to access information, denial of service attacks and other electronic security breaches—are persistent and evolve quickly. In general, such threats have increased in frequency, scope and potential impact in recent years. Further, a variety of technological tools and systems, including both company-owned IT and technological services provided by outside parties, support our critical functions. These technologies, as well as our products, are subject to failure and the user's inability to have such technologies properly supported, updated, expanded or integrated into other technologies and, in certain cases, may contain open source and third-party software which may unbeknownst to us contain defects or viruses that pose unintended risks. These risks could materially harm our business or reputation.
 Threat actors (such as ransomware groups) are becoming increasingly sophisticated and using tools and techniques that are designed to circumvent security controls, to evade detection and to remove or obfuscate forensic evidence. Our and our customers, suppliers and other third-parties' technology systems and networks may be damaged, disrupted, or compromised by malicious events, such as cyberattacks (including computer viruses, ransomware, and other malicious and destructive code, phishing attacks, and denial of service attacks), physical or electronic security breaches, natural disasters, fire, power loss, terrorism, war, telecommunications and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized

 access or use by persons inside our organization, or persons with access to systems inside our organization. Such attacks or security breaches may be perpetrated by internal bad actors, such as employees or contractors, or by third parties. Furthermore, because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until after they are launched against a target, we and our customers, suppliers and other third parties may be unable to anticipate these techniques or implement adequate preventative measures.
 While we have implemented what we believe is an appropriate information security program with cybersecurity procedures, practices, and controls, the control systems, cybersecurity program, infrastructure, physical facilities of, and personnel associated with the third parties that we rely on are beyond our control and we cannot guarantee that our or our customers', suppliers' and other third parties' systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our products and services. In addition, there can be no assurance that actions we have taken to implement appropriate measures and controls will be sufficient to prevent disruptions to critical systems, unauthorized release of confidential information or corruption of data. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. The security measures we have implemented may become subject to third-party security breaches, employee error, malfeasance, faulty password management or other irregularities. For example, third parties may attempt to fraudulently induce employees or customers into disclosing user names, passwords or other sensitive information, which may in turn be used to access our IT systems. In the past, we have experienced immaterial breaches of our IT systems, which we have sought to address through upgrades to our IT security systems. However, these security systems cannot provide absolute security. To the extent we were to experience a breach of our systems and were unable to protect sensitive data, such a breach could materially damage business partner and customer relationships and curtail or otherwise impact the use of our IT systems. Moreover, if a security breach of our IT systems affects our computer systems or results in the release of personally identifiable or other sensitive information of customers, business partners, employees and other third parties, our reputation and brand could be materially damaged, use of our products and services could decrease, and we could be exposed to a risk of loss, litigation and potential liability. Further, as cyber threats continue to evolve, the Company may be required to expend significant resources to continue to modify or enhance its protective measures or to investigate and remediate any security vulnerabilities. Additionally, the continuing and evolving threat of cybersecurity attacks has resulted in evolving legal and compliance matters, including increased regulatory focus on prevention, which could require the Company to expend significant additional resources to meet such requirements, which as a result may also harm the Company's reputation.
 Any such cybersecurity event could require significant management attention and resources, negatively impact our reputation among our customers and the public and challenge our eligibility for future work on sensitive or classified systems, which could have a material adverse effect on our business, financial condition and results of operations.
 Legal and Regulatory Risks
 The Company is subject to various laws and regulations. Changes to, or failure by the Company to comply with, these laws and regulations could have a significant negative impact on the Company's business and operations.
 The aerospace industry is highly regulated by the U.S. government as well as other international agencies. The Company is subject to, and must comply with, various laws and regulations, including, but not limited to, the product-related and other regulations of the FAA and the EASA, U.S. government procurement regulations, the rules and regulations of the SEC, and local, state, federal, and international tax codes, import and export controls and customs laws, employment and employment-related laws, environmental laws, intellectual property laws, and consumer protection statutes. Although the Company has obtained approvals to install its products from most foreign civil aviation authorities, including the European Union, United Kingdom and China, which require the Company to comply with applicable aviation laws in such foreign jurisdictions, there can be no assurance that the Company will be able to maintain such approvals in the future.
 Failure to comply with all applicable laws could result in investigation and remediation costs to the Company and could adversely impact the business, financial condition and results of operations of the Company. Failure to comply with applicable regulations could also result in significant fines. In addition, new or more stringent governmental regulations may be adopted in the future, which may require us to incur significant expenses to become compliant with new regulations in a timely manner.
 In the performance of our contracts with the U.S. government, we operate in a highly regulated environment, and we are subject to routine audits and reviews by the U.S. government and its agencies, such as the Defense Contract Audit Agency ("DCCA"). These

 agencies routinely review contract performance and compliance with applicable laws, regulations and standards. Systems that are subject to review include, but are not limited to, cybersecurity systems, accounting systems, and purchasing systems. Our supply chain is also subject to some of the same government contractual obligations. The U.S. government may, if it deems appropriate conduct an investigation into possible illegal or unethical activity in connection with these contracts. Investigations of this nature are common in the defense industry, and lawsuits may result.
 Exports and imports of certain of our products are subject to various export control, sanctions and import regulations and may require authorization from regulatory agencies of the U.S. or other countries.
 We must comply with various laws and regulations relating to the export and import of products, services and technology from and into the U.S. and other countries having jurisdiction over our operations. In the U.S., these laws and regulations include, among others, the Export Administration Regulations (EAR) administered by the U.S. Department of Commerce, the International Traffic in Arms Regulations (ITAR) administered by the U.S. Department of State, embargoes and sanctions regulations administered by the U.S. Department of the Treasury, and import regulations administered by the U.S. Department of Homeland Security and the U.S. Department of Justice. Certain of our products, services and technologies have military or strategic applications and are on the U.S. Munitions List of the ITAR, the Commerce Control List of the EAR or are otherwise subject to the EAR, and/or the U.S. Munitions Import List and we are required to obtain licenses and authorizations from the appropriate U.S. government agencies before selling these products outside of the U.S. or importing these products into the U.S. U.S. foreign policy or foreign policy of other licensing jurisdictions may affect the licensing process or otherwise prevent us from engaging in business dealings with certain individuals, entities or countries. Any failure by us, our customers or our suppliers to comply with these laws and regulations could result in civil or criminal penalties, fines, seizure of our products, adverse publicity, restrictions on our ability to export or import our products, or the suspension or debarment from doing business with the U.S. government. Moreover, any changes in export control, sanctions or import regulations may further restrict the export or import of our products or services, and the possibility of such changes requires constant monitoring to ensure we remain compliant. Our ability to obtain required licenses and authorizations on a timely basis or at all is subject to risks and uncertainties, including changing U.S. government laws, regulations or foreign policies, delays in Congressional action, or geopolitical and other factors. If we are not successful in obtaining or maintaining the necessary licenses or authorizations in a timely manner, our sales relating to those approvals may be prevented or delayed, and revenue and profit previously recognized may be reversed. Any restrictions on the export or import of our products or product lines could have a material adverse effect on our business, financial condition and results of operations.
 Litigation with customers, employees and others could harm our reputation and impact operating results.
 In the ordinary course of business, we may be involved in lawsuits and regulatory actions with customers, employees and others. These actions may involve claims for, among other things, compensation for alleged personal injury and product liability claims. Additionally, we may be subject to employment-related claims alleging discrimination, harassment, wrongful termination and wage issues, including those relating to overtime compensation. We are susceptible to claims filed by customers alleging responsibility for breaches of contract or from product defects, and we are also subject to lawsuits filed by patent holders alleging patent infringement. These types of claims, as well as other types of lawsuits to which we are subject from time to time, can distract management's attention from core business operations and impact operating results, particularly if a lawsuit results in an unfavorable outcome, or could harm the Company's reputation with customers, employees, investors and others.
 Tax changes could affect the Company's effective tax rate and future profitability.
 The Company's future results could be negatively affected by changes in the effective tax rate due to changes in the Company's overall profitability, changes to statutory tax rates in the U.S. and in other jurisdictions, changes in tax legislation, and the results of audits and examinations of previously filed tax returns. In addition, adverse changes in the underlying profitability and financial outlook of our operations or future changes in tax law could lead to changes in the value of tax assets or liabilities that we currently or in the future may hold, which could materially affect our results of operations. Further, the nature and impact of any future changes to tax law, and the resulting impact on our business, financial condition and results of operations, are uncertain.
 Tariffs and other trade policies could have a substantial impact on our business.
 The Company's business is dependent upon the availability of raw materials and components for assembly. U.S. relations with the rest of the world remains uncertain with respect to taxes, trade policies and tariffs, especially as the political landscape changes due to the recent U.S. presidential and congressional elections. Changes in U.S. administrative policy may lead to significant increases in tariffs for imported goods among other possible changes. President-elect Donald Trump has indicated that his administration is likely to

 impose significant tariffs on imported goods. The imposition of such tariffs may strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the United States. Similarly, interest rates may continue to rise and create further uncertainty and volatility in the market which would negatively impact our business, financial condition and results of operations. In addition, the potential exists that other countries may impose retaliatory tariffs, which could adversely affect the Company's sales to those countries.
 These political and economic changes could have a material effect on global economic conditions and the stability of financial markets and could significantly reduce global trade. In addition to potential increases on tariffs, wars or conflicts could affect our ability to obtain raw materials. Ongoing and future conflicts and other geopolitical events may result in sanctions or other export controls imposed by the U.S. or United Nations.
 As the Company plans to increase its sales in international markets, any such international instability and reduction in global trade could negatively impact the Company's expansion plans and international sales. Such risks may also affect our customers' budgets and their policies which may adversely affect our sales revenue.
 If the Company fails to maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial condition, results of operations or cash flows, which may adversely affect investor confidence in the Company and, as a result, the value of the Company's common stock.
 The Sarbanes-Oxley Act requires, among other things, that the Company maintain effective internal control over financial reporting and disclosure controls and procedures. Under Section 404 of the Sarbanes-Oxley Act, the Company is required to furnish a report by management on, among other things, the effectiveness of the Company's internal control over financial reporting. This assessment must include disclosure of any material weaknesses identified by management in the Company's internal control over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. Although the Company is not currently required to provide an attestation from its auditors on the effectiveness of the Company's internal control over financial reporting, it may become subject to such requirement in the future.
 The Company's compliance with Section 404 requires that it compile the system and process documentation necessary to perform an appropriate evaluation. During the evaluation and testing process, if the Company identifies one or more material weaknesses in its internal control over financial reporting, it will be unable to assert that its internal control over financial reporting is effective. The Company cannot assure you that there will not be material weaknesses or significant deficiencies in its internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit the Company's ability to accurately report its financial condition, results of operations or cash flows. If the Company is unable to conclude that its internal control over financial reporting is effective, or if its independent registered public accounting firm determines the Company has a material weakness or significant deficiency in its internal control over financial reporting once that firm begin its reviews, the Company could lose investor confidence in the accuracy and completeness of its financial reports, the market price of its common stock could decline, and it could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in the Company's internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict the Company's future access to the capital markets.
 Risks Related to Our Common Stock, Capital Markets and Indebtedness
 Our common stock may be affected by limited trading volume and may fluctuate significantly.
 Our common stock is traded on the Nasdaq Global Select Market. Although an active trading market has developed for our common stock, there can be no assurance that an active trading market for our common stock will be sustained. Failure to maintain an active trading market for our common stock may adversely affect our shareholders' ability to sell our common stock in short time periods, or at all. Our common stock has experienced, and may experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our common stock.

 Our common stock has experienced and may continue to experience significant price fluctuations, which could cause you to lose a significant portion of your investment and interfere with our efforts to grow our business.
 Stock markets are subject to significant price fluctuations that may be unrelated to the operating performance of particular companies, and accordingly the market price of our common stock may change frequently and by large margins. In addition, the market price of our common stock has fluctuated and may continue to fluctuate substantially due to a variety of other factors. Possible exogenous incidents and trends may also impact the capital markets generally and our common stock prices specifically. For example, the war in the Middle East and the war between Russia and Ukraine and resulting economic sanctions imposed by many countries on Russia have led to disruption, instability and volatility in the U.S. and global markets and industries and are expected to have a negative impact on the U.S. and broader global economies. The timing of your purchase and sale of our common stock relative to fluctuations in its trading price may result in you losing a significant portion of your investment.
 Because we do not intend to declare cash dividends on our shares of common stock in the foreseeable future, shareholders must rely on appreciation of the value of our common stock for any return on their investment.
 We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, we expect that only appreciation of the price of our common stock, if any, will provide a return to investors in this offering for the foreseeable future.
 Volatility and weakness in capital markets may adversely affect credit availability and related financing costs, which could adversely affect the Company.
 Bank and capital markets can experience periods of volatility and disruption which may adversely affect our ability to access the capital markets as needed. The general economic conditions in the U.S. and abroad is uncertain and historically has been negative. There can be no assurance that market conditions will improve.
 Further, companies in the transportation industry and sales in the commercial airline markets historically have been negatively impacted by poor economic conditions. In the past, these sales have been affected by airline profitability, which is impacted by, among other things, fuel and labor costs, price competition, interest rates, downturns in the global economy and national and international events.
 Furthermore, because of the lengthy research and development cycle involved in bringing new products to market, we cannot predict the economic conditions that will exist when a new product is introduced. A reduction in capital spending in the aviation or defense industries could have a significant effect on the demand for our products, which could have an adverse effect on our financial performance or results of operations.
 During these periods of volatility and disruption, additional risks to the Company include:
 •

 declines in revenues and profitability from reduced orders, payment delays or other factors caused by the economic problems of customers;

 • reprioritization of government spending away from defense programs in which the Company participates;
 • reduced access to credit sources and ability to raise capital; and
 • disruptions in supplies or increased supply prices associated with any financial constraints faced by vendors.
 Such volatility in the market may also negatively impact our customers and suppliers' ability to raise capital or obtain credit to continue operating. Such conditions may negatively impact the demand and production of our products, which can adversely affect our business, financial condition and results of operations.
 There are risks associated with our outstanding and future indebtedness.
 The Company has indebtedness pursuant to loan agreements and lines of credit with JP Morgan Chase Bank, N.A. and may pursue additional sources of credit or borrowed money in the future under these existing credit facilities and/or enter into new financing

 arrangements. We may fail to pay these or additional future obligations, as and when required. Specifically, if we are unable to generate sufficient cash flows from operations or borrow sufficient funds in the future to service or refinance our debt, our business, financial condition and results of operations will be harmed. Any downgrades from credit rating agencies such as Moody's Investors Service or Standard & Poor's Rating Services may adversely impact our ability to obtain additional financing or the terms of such financing and reduce the market capacity for our commercial paper. Furthermore, if prevailing interest rates or other factors result in higher interest rates upon any potential future financing, then interest expense related to the refinance indebtedness would increase.
 In addition, all the agreements governing our indebtedness subject us to continued compliance with certain financial and negative covenants. A breach of any of our covenants under our operative agreements could result in a default under such an agreement. If any such default occurs, we may be required to refinance all or part of our debt, sell strategic assets at unfavorable prices, incur additional indebtedness or issue common stock or other equity securities. Additionally, if we default under our secured loan agreements, the lenders thereunder will have a right to proceed against the collateral granted to them to secure the debt, which includes available cash. In such a circumstance, we may not have sufficient assets to repay our debt in full. We may also not be able to, at any given time, refinance our debt, sell assets, incur additional indebtedness or issue equity securities on terms acceptable to us, in amounts sufficient to meet our needs. If we are able to raise additional funds through the issuance of equity securities, such issuance would also result in dilution to our shareholders. Our inability to service our obligations or refinance our debt could have a material and adverse effect on our business, financial condition and results of operations.
 Item 1B. Unresolved Staff Comments.
 None
 Item 1C. Cybersecurity.
 Safeguarding the Company's information technology ("IT") systems, intellectual property, and the confidential information and personal data that customers, suppliers, business partners, employees and others share is a critical concern. As such, the Company has processes in place to assess, identify, and manage material cybersecurity threats and incidents. The Company's cybersecurity strategy includes policies, procedures, and technology that proactively safeguard its operations against cybersecurity threats. The Company utilizes IT that enables its team to access both operational and financial performance data in real time, while, at the same time, identifying and preventing cybersecurity threats and risks. The Company aims to incorporate industry best practices throughout its cybersecurity processes and its cybersecurity framework leverages internationally recognized standards. These processes incorporate preventative, detective and corrective controls to identify relevant cyber risks and include network and endpoint protection technologies that are designed to block and detect security events at the perimeter and within its network as well as evaluation and monitoring of detected security events. The Company continuously monitors activity, frequently scans applications and systems for vulnerabilities to risk from cybersecurity threats. Continuous monitoring of the Company's networks and systems for threats and vulnerabilities is a key component of the Company's strategy, supported by the analysis of threat intelligence from external sources. This multi-layered approach enables early detection and facilitates prompt response to potential cybersecurity threats.
 Management reviews the Company's IT, data security and other systems, processes, policies, procedures and controls at least annually to (a) identify, assess, monitor and mitigate cybersecurity risks; and (b) identify measures to protect and safeguard against cybersecurity threats and breaches of confidential information and data and IT infrastructure and its other assets or assets of its customers or other third parties in the Company's possession or custody.
 The Company has not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected it or are reasonably likely to materially affect it, including its operations, business strategy, results of operations, or financial condition.
 The Company 's management supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by it; and alerts and reports produced by security tools deployed in the IT environment.

 Item 2. Properties.
 In the fiscal year ended September 30, 2001, the Company purchased 7.5 acres of land in the Eagleview Corporate Park in Exton, Pennsylvania. Shortly thereafter, the Company constructed a 45,000 square foot design, manufacturing and office facility on this site. During the fiscal year ended September 30, 2025, the Company expanded the facility by approximately an additional 40,000 square feet. Subsequent to October 2025, we operate an 85,000 square foot design, manufacturing, and office facility in Exton, Pennsylvania, which we believe is adequate to meet the needs of the Company for the foreseeable future.
 Item 3. Legal Proceedings.
 In the ordinary course of business, the Company is at times subject to various legal proceedings and claims. The Company does not believe any such matters that are currently pending will, individually or in the aggregate, have a material effect on the results of operations or financial position.
 Item 4. Mine Safety Disclosures.
 Not applicable.
 Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
 Market Information
 The Company's common stock has been traded on the Nasdaq Global Select Market tier of the Nasdaq Stock Market, LLC under the symbol "ISSC" since its initial public offering on August 4, 2000.
 Holders of Common Stock
 As of December 4, 2025, there were approximately ten registered holders of the Company's common stock. A substantially greater number of holders of the Company's common stock are beneficial holders, whose shares of record are held by banks, brokers and other financial institutions in "street name."
 Dividends
 The Company's has not paid cash dividends since the fiscal year ended September 30, 2021. The Company intends to retain future earnings, if any, to finance the development and growth of its business and does not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of any dividend in the future will be at the discretion of the Board of Directors and will depend on then-existing conditions, including our operating results, financial condition, business prospects and other factors the Board of Directors may deem relevant.
 Securities Authorized for Issuance under Equity Compensation Plans

 The following table sets forth additional information as of September 30, 2025 with respect to the shares of common stock that may be issued upon the exercise of options and other rights under our existing equity compensation plans and arrangements in effect as of September 30, 2025. The information includes the number of shares covered by, and the weighted average exercise price of, outstanding options and the number of shares remaining available for future grant, excluding the shares to be issued upon exercise of outstanding options.

 Securities Authorized for Issuance under Equity Compensation Plans

 Number of

 securities

 remaining

 Number of

 available for

 securities to be

 Weighted-

 future issuance

 issued upon

 average

 under equity

 exercise of

 exercise price

 compensation

 outstanding

 of outstanding

 plans (excluding

 options,

 options,

 securities

 warrants and

 warrants and

 reflected in

 rights (a)

 rights (b) (1)

 column(a) (c) (2)

 Equity compensation plans approved by security holders (3)

 945,769

 $

 8.07

 1,375,682

 Equity compensation plans not approved by security holders

 -

 -

 -

 Total

 945,769

 $

 8.07

 1,375,682

 (1)
 Consists of the weighted average exercise price of outstanding options ("NQSOs") and time vested stock options with a market based exercise price condition ("MSOs") as of September 30, 2025.

 (2)
 Consists entirely of shares of common stock that remain available for future issuance under 2019 Stock-Based Incentive Compensation Plan as of September 30, 2025.

 (3)
 Consists of 361,613 NQSO's, 72,062 MSO's, 311,094 time-vested Restricted Stock Units ("RSUs") and 201,000 market-based restricted stock units ("MSUs") outstanding as of September 30, 2025 under the 2019 Stock-Based Incentive Compensation Plan.

 (3)
 RSUs and MSU's were excluded when determining the weighed-average exercise price of outstanding options, warrants and rights.

 Issuer Purchases of Equity Securities
 We did not repurchase any of our equity securities during fiscal year 2025.
 Recent Sales of Unregistered Securities
 We did not issue any equity securities during fiscal year 2025 that were not registered under the Securities Act and that have not otherwise been described in a Quarterly Report on Form 10-Q or a Periodic Report on Form 8-K.

 Item 6. [Reserved]
 This item is not longer required.

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
 Objective
 The following discussion provides an analysis of the Company's financial condition, cash flows and results of operations from management's perspective and should be read in conjunction with "Selected Consolidated Financial Data" and the consolidated financial statements and related notes included in this Annual Report on Form 10-K. Our objective is to also provide discussion of events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or of future financial condition and to offer information that provides understanding of our financial condition, cash flows and results of operations.
 Overview
 The Company was incorporated in Pennsylvania on February 12, 1988. The Company operates in one business segment as a systems integrator that designs, develops, manufactures, sells and services, air data equipment, engine display systems, standby equipment, primary flight guidance, autothrottles and cockpit display systems for retrofit applications and OEMs. The Company supplies integrated FMS, FPDS, FPDS with autothrottle, air data equipment, integrated standby units, integrated standby units with autothrottle and advanced GPS receivers that enable reduced carbon footprint navigation, communication and navigation products and inertial reference units.
 The Company has continued to position itself as a system integrator, which provides the Company with the capability and potential to generate more substantive orders over a broader product base. This strategy, as both a manufacturer and integrator, has positioned the company to deliver cost-effective solutions for the general aviation, commercial air transport, the DoD/governmental and foreign military markets. This approach, combined with the Company's deep industry experience across OEMs and platforms is designed to enable the Company to develop high-quality products and systems, to reduce product time to market and to achieve cost advantages over products offered by its competitors.
 The Company sells to both the OEM and the retrofit markets. Customers include various OEMs, commercial air transport carriers and corporate/general aviation companies, the DoD and its commercial contractors, aircraft operators, aircraft modification centers, government agencies and foreign militaries. Occasionally, the Company sells its products directly to the DoD; however, the Company sells its products primarily to commercial customers for end use in DoD programs. Sales to defense contractors are generally made on commercial terms, although some of the termination and other provisions of government contracts are applicable to these contracts. The Company's retrofit projects are generally pursuant to either a direct contract with a customer or a subcontract with a general contractor to a customer (including government agencies).
 In June 2023, the Company entered into an agreement with Honeywell ("The June 2023 Honeywell Agreement") pursuant to which Honeywell sold, assigned or licensed certain assets related to its inertial, communication and navigation product lines, including a sale of certain inventory, equipment and customer-related documents, an assignment of certain contracts and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its inertial, communication and navigation product lines to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company for cash consideration of $35.9 million.
 In July 2024, the Company entered into an exclusive license agreement and acquired additional key assets for certain communication and navigation product lines from Honeywell (the "July 2024 Honeywell Asset Acquisition"). This transaction complemented the previous Honeywell license and asset acquisition completed in June 2023. Total consideration was $4.2 million in cash.
 On September 27, 2024, the Company entered into a further agreement with Honeywell (the "September 2024 Honeywell Agreement"), pursuant to which Honeywell sold, assigned or licensed certain assets related to its various generations of military display generators and flight control computers, including a sale of certain inventory, equipment and customer-related documents; an assignment of certain contracts; and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its various generations of military display generators and flight control computers to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company for consideration of $14.2 million in cash.
 Following the acquisition of Honeywell's military display generators and flight control computers business, Honeywell has continued to manufacture these products and maintain related inventory at its facilities under the September 2024 Honeywell Agreement. Revenue, and costs from this production are attributed to and reported by the Company; however, the Company relies on Honeywell

 for access to the operational and financial data needed to prepare its financial statements. The Company has limited ability to oversee the operations or verify the data received from Honeywell, making it difficult to predict revenues and gross margins. Over the coming months, the production of the military display generators and flight control computers business will cease at Honeywell facilities and transition to the Company's facilities. During this transition process, production will be temporarily halted while the Company ramps up its production and inventory at its facilities. In anticipation of the transition, Honeywell is expected to accelerate its production of these products in the short term. We anticipate this will lead to a spike in revenues in the short term followed by a temporary dip in revenues before revenues are normalized.
 As a result, the Company anticipates revenues related to the September 2024 Honeywell Agreement will continue to fluctuate significantly over the next few quarters. The transition from Honeywell to Company facilities will involve certain risks that may impact operational performance and reported results. While the Company cannot assure that the transition will not adversely affect operations and reported results, it is committed to closely monitoring the integration process. The Company remains confident in the long-term benefits of the Honeywell acquisitions.
 Cost of sales related to product and service sales comprises materials, components and third-party avionics purchased from suppliers, direct labor and overhead costs. Many of the components are standard, although certain parts are manufactured to meet the Company's specifications. The overhead portion of Cost of sales are primarily comprised of salaries and benefits, building occupancy costs, supplies and outside service costs related to production, purchasing, material control and quality control. Cost of sales also includes warranty costs.
 Cost of sales related to EDC sales comprises engineering labor, consulting services and other costs associated with specific design and development projects. These costs are incurred pursuant to contractual arrangements and are accounted for typically as contract costs within Cost of sales, with reimbursement accounted for as a sale in accordance with the percentage-of-completion method or completed contract method of accounting. Company funded R&D expenditures relate to internally funded efforts for the development of new products and the improvement of existing products. These costs are expensed as incurred and reported as R&D expenses. The Company intends to continue investing in the development of new products that complement current product offerings and to expense associated R&D costs as they are incurred.
 Selling, general and administrative ("SG&A") expenses consist of sales, marketing, business development, professional services, salaries and benefits for executive and administrative personnel, facility costs, recruiting, legal, accounting and other general corporate expenses.
 The Company sells its products to agencies of the United States and foreign governments, aircraft operators, aircraft modification centers and OEMs. Customers have been and may continue to be affected by changes in economic conditions both in the United States and abroad. Such changes may cause customers to curtail or delay their spending on both new and existing aircraft. Factors that can impact general economic conditions and the level of spending by customers include, but are not limited to, general levels of consumer spending, increases in fuel and energy costs, conditions in the real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence, inflation, public health crises and pandemics and other macroeconomic factors that affect spending behavior. Furthermore, spending by government agencies may be reduced in the future. If customers curtail or delay their spending or are forced to declare bankruptcy or liquidate their operations because of adverse economic conditions, the Company's revenues and results of operations would be affected adversely. For example, in the fiscal year ended September 30, 2025, changes in U.S. administrative tariff policy, have led to increases in tariffs for imported goods. Thus far, the impact to Company has been nominal.

 Results of Operations
 The following table sets forth statements of operations data expressed as a percentage of total Net sales for the fiscal years indicated:

 Twelve Months Ending September 30,

 2025

 2024

 2023

 Net sales:

 Product

 64.2

 %

 51.4

 %

 64.9

 %

 Services

 35.8

 %

 48.6

 %

 35.1

 %

 Total net sales

 100.0

 %

 100.0

 %

 100.0

 %

 Cost of sales:

 Product

 32.6

 %

 22.4

 %

 27.9

 %

 Services

 19.3

 %

 22.6

 %

 10.9

 %

 Total cost of sales

 51.9

 %

 45.0

 %

 38.7

 %

 Gross profit

 48.1

 %

 55.0

 %

 61.3

 %

 Operating expenses:

 Research and development

 4.7

 %

 8.8

 %

 9.0

 %

 Selling, general and administrative

 19.4

 %

 25.6

 %

 31.1

 %

 Total operating expenses

 24.1

 %

 34.4

 %

 40.1

 %

 Operating income

 24.0

 %

 20.6

 %

 21.2

 %

 Interest expense

 (2.0)

 %

 (2.0)

 %

 (1.1)

 %

 Interest income

 0.0

 %

 0.3

 %

 1.5

 %

 Other income

 1.9

 %

 —

 %

 0.4

 %

 Income before income taxes

 23.8

 %

 18.9

 %

 22.0

 %

 Income tax expense

 5.1

 %

 9.2

 %

 4.6

 %

 18.7

 %

 9.7

 %

 17.4

 %

 Fiscal Year Ended September 30, 2025 Compared to Fiscal Year Ended September 30, 2024

 Historically, the Company presented Customer service and Engineering and development contracts Net Sales and Cost of sales separately on the Consolidated Statements of Operations. For the fiscal year ended September 30, 2024, the Company has aggregated these items into one category, "Services" and reclassified Customer service and Engineering and development contracts revenues as well as Cost of sales to conform the presentation of the Consolidated Statements of Operations for fiscal year ended September 30, 2023. Consequently, Services revenues and cost of sales primarily comprise Customer Service, EDC and Royalties. See Footnote 3. Summary of Significant Accounting Policies, ("Reclassifications ") for additional information.

 Net sales. Net sales in fiscal year 2025 increased $37.1 million, or 78.6%, to $84.3 million from $47.2 million in fiscal year 2024. Net sales of $84.3 million for fiscal year 2025 comprised $53.3 million in organic Net sales and $31.0 million in Net sales related to the September 2024 Honeywell Agreement. The increase in Net sales was driven primarily by a $29.8 million, or 122.7 %, increase in Product sales derived from the September 2024 Honeywell Agreement, an increase in commercial air transport sales of $10.5 million, partially offset by a decrease of $3.7 million in sales in business aviation. Services sales for fiscal year 2025 increased $7.3 million, or 31.8%, compared to Services sales for fiscal year 2024 of $22.9 million. The increase in Services sales primarily reflects increases in engineering development services of $3.4 million and an increase in customer service sales from the product lines acquired from Honeywell of $1.4 million, partially offset by a decrease in legacy customer service revenue of $0.6 million.
 Cost of sales. Cost of sales was $43.8 million, or 51.9 % of Net sales, for fiscal year 2025 compared to $21.2 million, or 45.0 % of Net sales, for fiscal year 2024. The increase in Cost of sales was primarily the result of a significant increase in overall sales volume. The Company's overall gross margin for fiscal year 2025 was 48.1 % compared to 55.0% for fiscal year 2024. The decrease in overall gross margin percentage for fiscal year 2025 compared to fiscal year 2024, was primarily the result of unfavorable changes in product mix, increased depreciation and cost inefficiencies due to hiring and training of additional personnel and other integration costs associated with the September 2024 Honeywell Agreement. The factors that have affected and will continue to affect the Company's gross margin include depreciation resulting from recent product line acquisitions and the increased proportion of military sales in the Company's sales mix.
 Research and development. R&D expense decreased $0.1 million, or 3.5 %, to $4.0 million for fiscal year 2025 from $4.1 million for fiscal year 2024. As a percentage of net sales, R&D expenses decreased to 4.7% of net sales for fiscal year 2025 from 8.8% of net sales for fiscal year, 2024. The decrease in R&D expenses as a percentage of revenues in the quarter was primarily the result of additional revenues for fiscal year 2025 compared to the same period last year. In fiscal 2025 $2.6 million of R&D expense was recharacterized as Cost of sales related to the EDC sales as compared to $1.3 million in fiscal year 2024, which was offset by $1.2 million in additional engineering staffing to support the Company's development programs.

 Selling, general, and administrative.
 SG&A expenses increased $4.3 million or 35.8 %, to $16.4 million for fiscal year 2025 from $12.1 million for fiscal year 2024. The increase in SG&A expense for fiscal year 2025 was primarily the result of increases in professional services fees and other related fees of $0.8 million primarily due to corporate initiatives. In addition, the Company incurred increased depreciation and amortization expenses of $1.1 million related to the customer relationships and intangible assets resulting from the combined acquisitions and $2.0 million due to employee related expenses and benefits resulting from increased headcount, and $0.4 million increase in other operating expenses. As a percentage of Net sales, SG&A expenses were 19.4% for fiscal year 2025 compared to 25.6% for fiscal year 2024.

 Interest income. Interest income was $0.1 million for fiscal year 2025 and fiscal 2024.
 Other income. Other income was $1.5 million in fiscal year 2025, which was primarily from monies received of $1.9 million with respect to the Employee Retention Tax Credits ("ERTC"), offset by a $0.4 million one-time ERTC related settlement fee. The Company did not have any other income for fiscal year 2024.
 Income taxes. Income tax expense was $4.3 million in fiscal year 2025 as compared to income tax expense of $1.9 million in fiscal year 2024. The effective tax rate in fiscal year 2025 was 21.7% as compared to 20.9% in fiscal year 2024. The increase in income tax expense was primarily due to an increase in earnings in fiscal year 2025.
 Net income. As a result of the factors described above, the Company's net income in fiscal year 2025 was $15.6 million compared to net income of $7.0 million in fiscal year 2024. On a fully diluted basis, net income per share was $0.88 in fiscal year 2025, compared to a net income of $0.40 per share in fiscal year 2024.

 Fiscal Year Ended September 30, 2024 Compared to Fiscal Year Ended September 30, 2023

 Net sales. Net sales in fiscal year 2024 increased $12.4 million, or 36.0%, to $47.2 million from $34.8 million in fiscal year 2023. The increase in Net sales was driven by a 7% increase or $1.7 million in product sales. The increase in product sales was related to increases in business aviation sales of $1.5 million and an increase of $0.5 million in defense sales, offset by a decline in commercial air transport sales of $0.3 million. The increase in business aviation sales was driven by increase in demand to support aircraft production. The increase in defense sales was primarily driven by increased market demand for our products. The decrease in commercial air transport was primarily due to the decline that occurred during the first half of fiscal year 2024. We began to experience a recovery in commercial air transport demand during the second half of 2024. Services sales in fiscal year 2024 increased $10.7 million, or 87.6%, compared to fiscal year 2023. The increase in service sales primarily reflects customer service sales of $9.7 million due to sales from the product lines acquired from Honeywell, which included a $1.7 million true-up payment from Honeywell for services performed by third parties, primarily offset by a $0.3 million decrease in legacy customer service.

 Cost of sales. Cost of sales was $21.3 million, or 45.0% of Net sales, in fiscal year 2024 compared to $13.5 million, or 38.7% of Net sales, in fiscal year 2023. The increase in Cost of sales was primarily the result of an increase in Services sales volume. The Company's overall gross margin in fiscal year 2024 was 55.0% compared to 61.3% in fiscal year 2023. The decrease in overall gross margin percentage for fiscal year 2024 is primarily the result of changes in product mix, increased depreciation and cost inefficiencies due to hiring and training of additional personnel and other integration costs.

 Research and development. R&D expenses were $4.1 million in fiscal year 2024 and $3.1 million in fiscal year 2023. The increase in R&D expense was due to higher salaries and benefits due to higher headcount. As a percentage of Net sales, R&D expense decreased slightly to 8.8% of Net sales for fiscal year 2024 compared to 9.0% for fiscal year 2023.

 Selling, general, and administrative. SG&A expenses increased $1.3 million or 11.9%, to $12.1 million from $10.8 million in fiscal year 2023. The increase in SG&A expense in fiscal year 2024 was primarily the result of increases in consulting and legal fees of $0.9 million primarily due to acquisition related expenses and increased costs of $0.6 million as a result of the recruitment of a new CFO and other corporate initiatives. In addition, the Company incurred amortization expense of $1.2 million related to the customer relationships intangible asset resulting from the combined acquisitions. These increases were partially offset by a $0.2 million gain from the sale of the Company's King Air aircraft. As a percentage of Net sales, selling, general and administrative expenses were 25.6% in fiscal year 2024 compared to 31.1% for fiscal year 2023.

 Interest income. Interest income of $0.1 million in fiscal year 2024 decreased by $0.4 million as compared to interest income in fiscal year 2023 of $0.5 million. The decrease in interest income was primarily the result of the decrease in the average cash balance in fiscal year 2024 and a general decrease in interest rates as compared to fiscal year 2023.

 Other income. The Company did not have any other income for fiscal year 2024. Other income was $0.2 million in fiscal year 2023.

 Income taxes. Income tax expense was $1.9. million in fiscal year 2024 as compared to income tax expense of $1.6 million in fiscal year 2023. The effective tax rate in fiscal year 2024 was 20.9% as compared to 21.1% in fiscal year 2023. The increase in income tax expense was primarily due to an increase in earnings in fiscal year 2024.
 Net income. As a result of the factors described above, the Company's net income in fiscal year 2024 was $7.0 million compared to net income of $6.0 million in fiscal year 2023. On a fully diluted basis, net income per share was $0.40 in fiscal year 2024, compared to a net income of $0.35 per share in fiscal year 2023.

 Liquidity and Capital Resources
 Sources of Liquidity
 The following table highlights key financial measurements of the Company:

 As of

 As of

 2025

 2024

 Cash and cash equivalents

 $

 2,693,595

 $

 538,977

 Accounts receivable

 $

 12,956,476

 $

 12,612,482

 Current assets

 $

 50,727,300

 $

 34,685,698

 Current liabilities

 $

 16,661,109

 $

 7,265,254

 Contract liability

 $

 2,481,929

 $

 340,481

 Other non-current liabilities

 $

 22,096,502

 $

 28,478,352

 Quick ratio (1)

 0.94

 1.81

 Current ratio (2)

 3.04

 4.77

 Twelve Months Ended September 30,

 2025

 2024

 2023

 Cash flow activities:

 Net cash provided by operating activities

 $

 13,303,318

 $

 5,796,222

 $

 2,096,174

 Net cash (used in) investing activities

 (6,512,106)

 (16,881,440)

 (36,158,373)

 Net cash (used in) provided by financing activities

 (4,636,594)

 8,527,002

 19,908,846

 (1)
 Calculated as: the sum of cash and cash equivalents plus accounts receivable, net, divided by current liabilities

 (2)
 Calculated as: current assets divided by current liabilities

 The Company's principal source of liquidity has been cash flows from current year operations and cash accumulated from prior years' operations, supplemented with our revolving credit facility. Cash is used principally to finance inventory, accounts receivable, contract assets, payroll, debt service and acquisitions, as well as the Company's known contractual and other commitments (including those described in footnote 19, " Lease Recognition " to the financial statements contained in this Annual Report on Form 10-K. The Company's existing cash balances and anticipated cash flows from operations, together with borrowings under our revolving credit facility, are expected to be adequate to satisfy the Company's liquidity needs for at least the next 12 months. Apart from what has been disclosed in this Management's Discussion and Analysis, management is not aware of any trends, events or uncertainties that have had or are likely to have a material impact on our liquidity, financial condition and capital resources.
 The declaration and payment of any dividend in the future will be at the discretion of the Company's Board of Directors.
 2025 Credit Agreement
 On July 18, 2025, the Company, its wholly-owned subsidiary Innovative Solutions and Support, LLC ("Borrower") and certain domestic subsidiaries entered into a Credit Agreement (the "2025 Credit Agreement") with J.P. Morgan Chase Bank, N.A. (the "Bank") and the other lender parties thereto, which Credit Agreement provides for the Bank to extend to the Borrower credit facilities in an aggregate principal amount of up to $100.0 million (the "JPM Facility"), consisting of the following:
 1)
 a $25,000,000 initial term loan facility (the "Initial Term Loan");

 2)
 a $30,000,000 revolving credit facility (the "Revolving Facility"); and

 3)
 a $45,000,000 delayed draw term loan facility (the "Delayed Draw Term Loan").

 The JPM Facility replaced the A&R Revolving Line of Credit with PNC described below under the heading "Prior Debt Facility."
 See footnote 20. Loan Agreement, for additional disclosures related the 2025 Credit Agreement.

 Stifel Sales Agreement
 On September 22, 2023, the Company entered into an at-the-market equity offering Sales Agreement (the "ATM Sales Agreement") with Stifel, Nicolaus & Company, Incorporated (the "Sales Agent"), pursuant to which the Company may offer and sell from time to time through the Sales Agent up to $40 million of shares of its common stock. The shares will be offered and sold pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-267595), which was declared effective by the SEC on October 14, 2022. The Company filed a prospectus supplement, dated September 22, 2023, with the SEC in connection with the offer and sale of the shares. Subject to the terms and conditions of the ATM Sales Agreement, the Sales Agent will use commercially reasonable efforts to sell shares of the Company's common stock from time to time, based upon the Company's instructions. The Company is not obligated to sell any shares under the ATM Sales Agreement, and the Company or the Sales Agent may at any time suspend solicitation and offers under the ATM Sales Agreement or terminate the ATM Sales Agreement. The Company has provided the Sales Agent with customary indemnification rights, and the Sales Agent will be entitled to compensation for its services of up to 3.0% of the gross sales price per share of the shares of the Company's common stock sold through the Sales Agent. Sales of the shares of the Company's common stock, if any, under the ATM Sales Agreement may be made in transactions that are deemed to be "at the market offerings" as defined in Rule 415 under the Securities Act, including sales made directly on or through Nasdaq or any other existing trading market for the Company's common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices and/or any other method permitted by law.
 During the fiscal years ended September 30, 2024 and September 30,2025, we did not sell any shares of common stock under the ATM Sales Agreement.
 Prior Debt Facility
 In connection with the June 2023 Honeywell Agreement, the Company entered into a term loan with PNC Bank for $20.0 million to fund a portion of the June 2023 Honeywell Agreement. In addition to providing for the Term Loan, the Loan Agreement, together with a corresponding Line of Credit Note in favor of PNC, executed on May 11, 2023, provided for a senior secured Revolving Line of Credit in an aggregate principal amount of $10,000,000, with an expiration date of May 11, 2028.
 On December 19, 2023, the Company and PNC entered into the Restated Loan Amendment and the corresponding Restated Line of Credit Note and Restated Rider, to increase the aggregate principal amount available under the Company's senior secured revolving line of credit from $10 million to $30 million and extend the maturity date until December 19, 2028. The proceeds of the Restated Line of Credit Note was used for working capital and other general corporate purposes, for acquisitions as permitted under the Restated Loan Amendments and to pay off and close the loan evidenced by that certain Term Note executed in favor of PNC, dated June 28, 2023, which provided for a senior secured term loan in aggregate principal amount of $20 million, with a maturity date of June 28, 2028.
 On September 30, 2024, in connection with the July 2024 Honeywell Asset Acquisition and the September 2024 Honeywell Agreement, the Company entered into the Loan 2024 Amendment with PNC, which amended certain terms of the Loan Agreement to increase the line of credit with PNC. Concurrently with the Loan 2024 Amendment, the Company entered into (i) A&R Revolving Line of Credit Note, and (ii) A&R Rider. The A&R Revolving Line of Credit Note provided for a senior secured revolving line of credit in an aggregate principal amount of $35 million, with an expiration date of December 19, 2028 (the "Revolving Line of Credit"). The interest rate applicable to loans outstanding under the Revolving Line of Credit was a rate per annum equal to the sum of (A) Daily SOFR (as defined in the A&R Revolving Line of Credit Note) plus (B) an unadjusted spread of the Applicable SOFR Margin plus (C) a SOFR adjustment of ten basis points. The Applicable SOFR Margin ranges from 1.5% to 2.5% depending on the Company's funded debt to EBITDA ratio, as defined in the A&R Revolving Line of Credit Note. The A&R Rider provided for how PNC will make advances to the Company under the Revolving Line of Credit.
 On July 18th, 2025, the outstanding balance drawn on the A&R Revolving Line of Credit of $25,342,529 was fully paid.
 Future Funding Requirements
 The Company's existing cash balances, anticipated cash flows from operations and current banking facility are expected to be adequate to satisfy the Company's liquidity needs for at least the next 12 months.
 Apart from what has been disclosed above, management is not aware of any trends, events or uncertainties that have had or are likely to have a material impact on our liquidity, financial condition and capital resources.

 The Company did not pay cash dividends in fiscal years 2023, 2024 or 2025. The Company intends to retain future earnings, if any, to finance the development and growth of its business and does not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of any dividend in the future will be at the discretion of the Company's Board of Directors and will depend on then-existing conditions, including our operating results, financial condition, business prospects and other factors the Board may deem relevant.
 Operating Activities
 The Company generated $13.3 million of cash from operating activities during fiscal year 2025, as compared to cash generated of $5.8 million during fiscal year 2024. The cash generated by operating activities for the year ended September 30, 2025 was primarily generated by net income of $15.6 million, including $1.5 million of net ERTC funds received in fiscal year 2025, non-cash compensation expenses for traditional and market-based stock options and traditional and market-based stock awards of $0.3 million and $2.0 million, respectively, and depreciation and amortization expense of $3.8 million. Changes in certain other working capital accounts drove the remainder of the increase for fiscal year 2025.
 The Company generated $5.8 million of cash from operating activities during fiscal year 2024, as compared to cash generated of $2.1 million during fiscal year 2023. The cash generated by operating activities for the year ended September 30, 2024 was primarily generated by net income of $7.0 million, an increase in non-cash compensation expenses for stock options and stock awards of $0.3 million and $0.7 million, respectively, and depreciation and amortization expense of $2.1 million. Changes in certain other working capital accounts drove the remainder of the increase for fiscal year 2024.
 Investing Activities
 Cash used in investing activities was $6.5 million for the fiscal year ended September 30, 2025 and was primarily due to expenditures related to additions and improvements in the Company's facilities, purchases of equipment and computer software investment related to the Company's ERP ("Enterprise Resource Planning") implementation.
 Cash used in investing activities was $16.8 million for the fiscal year ended September 30, 2024 and was primarily due to the $14.2 million acquisition of various generations of military display generators and flight control computers in September 2024 and the $4.2 million acquisitions of certain additional assets related to the Company's communication and navigation product lines in July of 2024. In addition, the Company spent $0.7 million for the purchases of property and equipment, partially offset by proceeds of $2.2 million from the sale of the Company's King Air aircraft. The Company plans to continue investing in capital equipment to support engineering development efforts and operations.
 Financing Activities
 Net cash used in financing activities was $4.6 million for the fiscal year ended September 30, 2025 and primarily consisted of approximately $27.0 million in borrowings against the 2025 Initial term loan, partially offset by the payoff of the previous revolving line of credit under the PNC Facility of approximately $25.3 million, the payoff of $2.0 million under the Revolving facility, a $0.6 million principal payment on the Initial Term Loan and the payment of approximately $1.0 million in initial borrowing fees.
 Net cash provided by financing activities was $8.5 million for the fiscal year ended September 30, 2024 and consisted of $43.8 million in payments against the Company's line of credit offset by $52.3 million in additional borrowings used to fund the Company's fiscal year ended September 30, 2024 acquisitions.
 Summary
 Future capital requirements depend upon numerous factors, including market acceptance of the Company's products, the timing and rate of expansion of business, acquisitions, joint ventures and other factors. IA has experienced increases in expenditures since its inception and anticipates that increases in expenditures will continue in the foreseeable future. The Company believes that its cash and cash equivalents will provide sufficient capital to fund operations for at least the next twelve months. However, the Company may need to develop and introduce new or enhanced products, respond to competitive pressures, invest in or acquire businesses or technologies, or respond to unanticipated requirements or developments. If sufficient funds are not available, the Company may not be able to introduce new products or compete effectively.

 Inflation
 The Company does not believe inflation had a material effect on its financial position or results of operations during the past three years; however, it cannot predict the future effects of inflation, if any.
 Environmental, Social and Governance Considerations
 We are committed to recruiting, motivating and developing a diversity of talent. We are an equal opportunity employer and a Vietnam Era Veterans' Readjustment Assistance Act federal contractor. All qualified applicants receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability status, protected veteran status or any other characteristic protected by law.
 The nature of the Company's business also supports long-term sustainability. Historically, a majority of the Company's sales have been generated from the retrofit market, in which the Company upgrades existing aircraft and equipment to improve functionality, safety, and regulatory compliance. These retrofit activities extend the useful life of in-service assets and reduce the likelihood that aircraft and related equipment will be retired or scrapped, thereby supporting reuse and waste reduction within the aviation industry. In addition, the Company's GPS receivers enable more efficient navigation practices that may reduce fuel consumption and associated carbon emissions.
 The Company is committed to further advancing its sustainability efforts and intends to strengthen its focus on managing and reducing the environmental impact of its operations. This includes evaluating opportunities to improve energy efficiency, minimize waste, and adopt environmentally responsible practices across its manufacturing and administrative functions.
 Critical Accounting Policies and Estimates
 We prepare our consolidated financial statements in conformity with generally accepted accounting principles ("GAAP"). See Part II, Item 8, "Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements," Note 3, " Significant Accounting and Reporting Policies," for additional information about our significant accounting and reporting policies that require us to make certain judgments and estimates in reporting our operating results and our assets and liabilities. The following paragraphs describe the accounting policies that require significant judgment and estimates due to inherent uncertainty or complexity.
 Revenue recognition
 The Company enters into sales arrangements with customers that, in general, provide for the Company to design, develop, manufacture and deliver large flat-panel display systems, flight information computers, autothrottles and advanced monitoring systems that measure and display critical flight information, including data relative to aircraft separation, airspeed, altitude and engine and fuel data measurements.
 Revenue from Contracts with Customers
 The Company accounts for revenue in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"). The core principle of ASC 606 is that an entity recognizes revenue when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services.
 To achieve this core principle, the Company applies the following five steps:

 1)
 Identify the contract with a customer

 The Company's contract with its customers typically is in the form of a purchase order issued to the Company by its customers and, to a lesser degree, in the form of a purchase order issued in connection with a formal contract executed with a customer. In addition, the Company enters fixed-price contracts, in which the Company agrees to perform the specified work for a pre-determined price. The contractual terms of the fixed-price contracts are usually long-term, however they often contain a termination for convenience clause that results in the Company treating these contracts as short-term under ASC 606. To the extent our actual costs vary from the estimates upon which the price was negotiated, the Company will generate more or less profit or could incur a loss. For the purpose of accounting for revenue under ASC 606, a contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. Payment terms are defined by when payment is typically due. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.
 2)
 Identify the performance obligations in the contract

 Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. Most of our revenue is derived from purchases under which we provide a specific product or service and, as a result, there is only one performance obligation. In the event that a contract includes multiple promised goods or services, such as an EDC contract, which includes both engineering services and a resulting product shipment, the Company must apply judgment to determine whether promised goods or services are capable of being distinct in the context of the contract. In these cases, the Company considers whether the customer could, on its own, or together with other resources that are readily available from third parties, produce the physical product using only the output resulting from the Company's completion of engineering services. If the customer cannot produce the physical product, then the promised goods or services are accounted for as a combined performance obligation.
 3)
 Determine the transaction price

 The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.
 4)
 Allocate the transaction price to performance obligations in the contract

 If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price by taking into account available information such as market conditions as well as the cost of the goods or services and the Company's normal margins for similar performance obligations.
 5)
 Recognize revenue when or as the Company satisfies a performance obligation

 The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Historically, the Company has also recognized revenue from EDC contracts and is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Contract costs include material, components and third-party avionics purchased from suppliers, direct labor and overhead costs.

 Acquisitions and Investments, and Goodwill and Other Indefinite-Lived Intangible Assets
 We allocate the purchase price of acquired entities to the underlying tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, with any excess recorded as goodwill. The valuations of the acquired assets and liabilities will impact the determination of future operating results. Determining the fair value of assets we acquire and liabilities we assume requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. We determine the fair values of intangible assets acquired generally in consultation with third-party valuation advisors. Fair value adjustments to the assets and liabilities are recognized and the results of operations of the acquired business are included in our consolidated financial statements from the effective date of the acquisition.
 Intangible assets other than goodwill are recognized if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the intangible asset can be sold, transferred, licensed or exchanged, regardless of the Company's intent to do so. Goodwill and identifiable intangible assets are recorded at their estimated fair value on the date of acquisition and are reviewed at least annually for impairment based on cash flow projections and fair value estimates.
 Inventories
 Inventories are stated at the lower of cost or net realizable value. Write-downs for slow-moving and obsolete inventories are provided based on current assessments about future product demand, production requirements for expected usage and usage for the last 12 months. Where we estimate that the net realizable value is below cost or have determined that future demand is lower than current inventory levels based on historical experience, current and projected market demand, current and projected volume trends and other relevant current and projected factors associated with the current economic conditions, a reduction in inventory cost to estimated net realizable value is recorded as a charge included in Cost of sales. Management believes that our estimates of excess and obsolete inventory are reasonable and material changes in future estimates or assumptions used to calculate our estimates are unlikely. However, actual results may differ materially from the estimates and additional provisions may be required in the future.
 Business Segments
 The Company operates in one business segment as a systems integrator that designs, develops, manufactures, sells and services flight guidance and cockpit display systems for OEMs and retrofit applications. Customers include various OEMs, commercial air transport carriers and corporate/general aviation companies, the DoD and its commercial contractors, aircraft operators, aircraft modification centers, government agencies and foreign militaries. The Company currently derives the majority of its revenues from the sale and service of this equipment and related EDC services. Most of the Company's sales, operating results and identifiable assets are generated in the United States. In fiscal years ended September 30, 2025, 2024 and 2023 Net sales outside the United States amounted to $16.4 million, $22.8 million and $15.5 million, respectively.
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
 The Company's operations are exposed to market risks primarily as a result of changes in interest rates. The Company does not use derivative financial instruments for speculative or trading purposes. We have exposure to interest rate risk, mainly related to our revolving credit facility, which has variable interest rates. Interest rate risk associated with our variable rate debt is the potential increase in interest expense from an increase in interest rates. Based on our aggregate outstanding variable rate debt balance of $24.3 million as of September 30, 2025, a hypothetical change +/- 1% change in variable interest rates would have affected interest expense by approximately $0.3 million.
 The Company's exposure to market risk for changes in interest rates relates to its cash equivalents. The Company's cash equivalents consist of funds invested in money market funds, which bear interest at a variable rate. A change in interest rates earned on the Company's cash equivalents would impact interest income and cash flows but would not impact the fair market value of the underlying instruments. Assuming that the balances during the fiscal year ended September 30, 2025 were to remain constant and that the Company did not act to alter the existing interest rate sensitivity, a hypothetical +/-1% change in interest rates would not have a material impact on our results of operations, financial position or cash flows.
 Item 8. Financial Statements and Supplementary Data.
 The financial statements of the Company listed in the index appearing under Item 8 herein are filed as part of this Annual Report on Form 10-K.

 Innovative Solutions and Support, Inc.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm PCAOB ID Number 248

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Shareholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 48-79

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 Board of Directors and Shareholders
 Innovative Solutions & Support, Inc.
 Opinion on the financial statements
 We have audited the accompanying consolidated balance sheets of Innovative Solutions & Support, Inc. (a Pennsylvania corporation) and subsidiaries (the "Company") as of September 30, 2025 and 2024, the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended September 30, 2025, 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 September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the 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 audits 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 audits 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 audits provide a reasonable basis for our opinion.
 Critical audit matter
 Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
 /s/ GRANT THORNTON LLP
 We have served as the Company's auditor since 2014.
 Philadelphia, Pennsylvania

 CONSOLIDATED BALANCE SHEETS

 2025

 2024

 ASSETS

 Current assets

 Cash and cash equivalents

 $

 2,693,595

 $

 538,977

 Accounts receivable

 12,956,476

 12,612,482

 Contract assets

 5,320,353

 1,680,060

 Inventories

 25,802,181

 12,732,381

 Prepaid inventory

 2,562,297

 5,960,404

 Prepaid expenses and other current assets

 1,392,398

 1,161,394

 Total current assets

 50,727,300

 34,685,698

 Goodwill

 6,703,104

 5,213,104

 Intangible assets, net

 23,582,615

 27,012,292

 Property and equipment, net

 18,804,536

 13,372,298

 Deferred income taxes

 2,824,132

 1,625,144

 Other assets

 718,466

 473,725

 Total assets

 $

 103,360,153

 $

 82,382,261

 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities

 Current portion of long-term debt

 $

 2,438,802

 $

 —

 Accounts payable

 3,578,411

 2,315,479

 Accrued expenses

 8,161,967

 4,609,294

 Contract liability

 2,481,929

 340,481

 Total current liabilities

 16,661,109

 7,265,254

 Long-term debt

 21,700,005

 28,027,002

 Other liabilities

 396,497

 451,350

 Total liabilities

 38,757,611

 35,743,606

 Commitments and contingencies (See Note 16)

 Shareholders' equity

 Preferred stock, 10,000,000 shares authorized, $.001 par value, of which 200,000 shares are authorized as Class A Convertible stock. No shares issued and outstanding at September 30, 2025 and September 30, 2024

 —

 —

 Common stock, $.001 par value: 75,000,000 shares authorized, 17,970,453 and 17,842,245 issued at September 30, 2025 and September 30, 2024, respectively

 17,631

 17,503

 Additional paid-in capital

 39,751,130

 37,415,031

 Retained earnings

 28,294,753

 12,667,093

 Treasury stock, at cost, 339,644 shares at September 30, 2025 and at September 30, 2024, respectively

 Total shareholders' equity

 64,602,542

 46,638,655

 Total liabilities and shareholders' equity

 $

 103,360,153

 $

 82,382,261

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

 CONSOLIDATED STATEMENTS OF OPERATIONS

 2025

 2024

 2023

 Net Sales:

 Product

 $

 54,080,207

 $

 24,279,918

 $

 22,589,657

 Services

 30,216,682

 22,918,102

 12,218,856

 Total net sales

 84,296,889

 47,198,020

 34,808,513

 Cost of sales:

 Product

 27,448,167

 10,570,521

 9,715,517

 Services

 16,336,841

 10,713,908

 3,781,925

 Total cost of sales

 43,785,008

 21,284,429

 13,497,442

 Gross profit

 40,511,881

 25,913,591

 21,311,071

 Operating expenses:

 Research and development

 3,992,086

 4,137,985

 3,129,518

 Selling, general and administrative

 16,447,805

 12,114,069

 10,822,505

 Total operating expenses

 20,439,891

 16,252,054

 13,952,023

 Operating income

 20,071,990

 9,661,537

 7,359,048

 Interest expense

 ( 1,725,205)

 ( 937,309)

 ( 393,281)

 Interest income

 18,943

 127,332

 518,188

 Other income

 1,585,735

 —

 151,317

 Income before income taxes

 19,951,463

 8,851,560

 7,635,272

 Income tax expense

 4,323,803

 1,853,180

 1,607,517

 $

 $

 $

 6,027,755

 Net income per common share:

 Basic

 $

 0.89

 $

 0.40

 $

 0.35

 Diluted

 $

 0.88

 $

 0.40

 $

 0.35

 Weighted average shares outstanding:

 Basic

 17,572,980

 17,459,823

 17,411,684

 Diluted

 17,829,033

 17,480,247

 17,419,185

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

 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

 Additional

 Total

 Common

 Paid-In

 Retained

 Treasury

 shareholders'

 Stock

 Capital

 Earnings

 Stock

 equity

 Balance, September 30, 2023

 $

 17,447

 $

 36,411,796

 $

 5,668,713

 $

 $

 38,636,984

 Share-based compensation

 1,003,235

 —

 —

 1,003,291

 —

 —

 —

 Balance, September 30, 2024

 $

 17,503

 $

 37,415,031

 $

 12,667,093

 $

 $

 46,638,655

 Share-based compensation

 2,336,099

 —

 —

 2,336,227

 —

 —

 —

 Balance, September 30, 2025

 $

 17,631

 $

 39,751,130

 $

 28,294,753

 $

 $

 64,602,542

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2025

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES:

 $

 $

 $

 6,027,755

 Adjustments to reconcile net income to net cash provided by operating activities:

 Depreciation and amortization

 3,733,721

 2,097,942

 697,943

 Share-based compensation

 2,336,227

 1,003,292

 1,450,428

 Amortization of loan fees

 40,269

 —

 —

 Impairment of long-lived assets

 —

 —

 44,400

 Gain on disposal of property and equipment

 —

 ( 160,577)

 —

 Deferred income taxes

 ( 1,253,842)

 ( 1,136,809)

 9,503

 (Increase) decrease in:

 Accounts receivable

 ( 343,994)

 ( 2,868,768)

 ( 5,446,257)

 Contract assets

 ( 3,640,294)

 ( 1,192,921)

 ( 324,397)

 Inventories

 ( 9,671,694)

 ( 2,338,176)

 ( 834,917)

 Prepaid expenses and other current assets

 ( 479,118)

 811,669

 69,458

 Other non-current assets

 ( 4,771)

 ( 294,969)

 ( 101,356)

 Increase (decrease) in:

 Accounts payable

 1,262,932

 978,203

 628,430

 Accrued expenses

 2,703,836

 624,346

 203,754

 Income taxes payable

 850,938

 1,077,488

 ( 257,055)

 Contract liabilities

 2,141,448

 197,122

 ( 115,823)

 Net cash provided by operating activities

 13,303,318

 5,796,222

 2,096,174

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchases of property and equipment

 ( 6,512,106)

 ( 657,790)

 ( 298,373)

 Acquisition of assets

 —

 ( 4,249,460)

 —

 Acquisition of a business

 —

 ( 14,200,000)

 ( 35,860,000)

 Proceeds from the sale of property and equipment

 —

 2,225,810

 —

 Net cash (used in) investing activities

 ( 6,512,106)

 ( 16,881,440)

 ( 36,158,373)

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Debt proceeds

 —

 52,352,827

 20,000,000

 Debt payments

 ( 28,027,002)

 ( 43,825,825)

 ( 500,000)

 Initial Term Loan debt proceeds

 25,000,000

 —

 —

 Initial Term Loan principal payments

 ( 625,000)

 —

 —

 Proceeds from exercise of stock options

 —

 —

 408,846

 Payments of debt issuance costs

 ( 984,592)

 —

 —

 Net cash (used in) provided by financing activities

 ( 4,636,594)

 8,527,002

 19,908,846

 Net increase (decrease) in cash and cash equivalents

 2,154,618

 ( 2,558,216)

 ( 14,153,353)

 Cash and cash equivalents, beginning of year

 538,977

 3,097,193

 17,250,546

 Cash and cash equivalents, end of year

 $

 2,693,595

 $

 538,977

 $

 3,097,193

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 Cash paid for income taxes

 $

 4,726,707

 $

 1,913,456

 $

 1,855,069

 Cash paid for interest

 1,536,956

 847,085

 260,889

 SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION

 Transfer from prepaid inventory to inventory

 $

 3,398,107

 4,254,492

 —

 Transfer from prepaid inventory to purchases of property and equipment

 —

 3,327,000

 —

 Transfer from prepaid inventory to goodwill

 —

 516,580

 —

 Transfer from prepaid inventory to intangible assets, net

 —

 800,000

 —

 Transfer from prepaid expenses and other current assets to PP&E

 119,647

 —

 —

 Transfer from other assets to PP&E

 318,534

 —

 —

 Transfer from intangible assets to goodwill

 1,490,000

 —

 —

 Transfer from prepaid expenses to intangible assets

 275,995

 —

 —

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

 INNOVATIVE SOLUTIONS AND SUPPORT, INC. DBA INNOVATIVE AEROSYSTEMS, INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 1. Background

 Innovative Solutions and Support, Inc. dba Innovative Aerosystems, Inc. (the "Company," "we" or "us") was incorporated in Pennsylvania on February 12, 1988. The Company operates in one business segment as a systems integrator that designs, develops, manufactures, sells and services avionics products and systems for retrofit applications and original equipment manufacturers ("OEMs").

 The Company has continued to position itself as a system integrator, which provides the Company with the capability and potential to generate more substantive orders over a broader product base. This strategy, as both a manufacturer and integrator, is designed to leverage the latest technologies developed for the computer and telecommunications industries into advanced and cost-effective solutions for the general aviation, commercial air transport, Department of Defense ("DoD"), governmental and foreign military markets. This approach, combined with the Company's industry experience, is designed to enable us to develop high-quality products and systems, to reduce product time to market and to achieve cost advantages over products offered by its competitors. Customers include various OEMs, commercial air transport carriers and corporate/general aviation companies, DoD and its commercial contractors, aircraft operators, aircraft modification centers, government agencies and foreign militaries.

 On September 27, 2024, the Company entered into and closed the transactions contemplated by that certain Asset Purchase and License Agreement (the "September 2024 Honeywell Agreement") with Honeywell International Inc. ("Honeywell"). Pursuant to the Agreement, Honeywell sold, assigned or licensed certain assets related to its various generations of military display generators and flight control computers, including a sale of certain inventory, equipment and customer-related documents an assignment of certain contracts and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its various generations of military display generators and flight control computers to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company. The September 2024 Honeywell Agreement allows the Company to diversify its product offerings in the aerospace industry. The Company determined that the September 2024 Honeywell Agreement met the definition of a business under ASC 805; therefore, the Company accounted for the transaction as a business combination and applied the acquisition method of accounting. See Footnote 4. Acquisition, for additional information.

 On July 22, 2024, the Company completed the acquisition of certain additional assets related to its communication and navigation product lines, including a sale of certain inventory and customer-related documents; an assignment of certain contracts; and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property (the "July 2024 Honeywell Asset Acquisition") related to its communication and navigation product lines to manufacture, upgrade and repair certain additional products for consideration of $ 4.2 million in cash. The Company accounted for the transaction as an asset acquisition. See Footnote 4. Acquisition, for additional information.

 On June 30, 2023, the Company entered into an Asset Purchase and License Agreement with Honeywell International, Inc. (the "June 2023 Honeywell Agreement") whereby Honeywell sold certain assets and granted perpetual license rights to manufacture and sell licensed products related to its inertial, communication and navigation product lines to the Company. The transaction involved a sale of certain inventory, equipment and customer-related documents; an assignment of certain customer contracts; and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its inertial, communication and navigation product lines to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company. See Note 4, "Acquisition " for more details. See Footnote 4. Acquisition, for additional information. The Company determined that the transaction met the definition of a business under ASC 805, therefore the Company accounted for the transaction as a business combination and applied the acquisition method of accounting.

 2. Concentrations

 Major Customers

 In fiscal years ended September 30, 2025, 2024 and 2023, the Company derived 57 %, 42 % and 54 %, respectively, of total sales from five customers, although not all the same customers in each year. Accounts receivable and contract assets related to the Company's

 top five customers were $ 8.7 million, $ 7.6 million and $ 3.5 million as of fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 Major Suppliers

 The Company buys several of its components from sole source suppliers. Although there are a limited number of suppliers of particular components, management believes other suppliers could provide similar components on comparable terms.

 During the fiscal year ended September 30, 2025, the Company had two suppliers that accounted for 51 % of the Company's total inventory related purchases. During the fiscal year ended September 30, 2024, the Company had four suppliers that accounted for 63.1 % of the Company's total inventory related purchases. During the fiscal year ended September 30, 2023, the Company had four suppliers that accounted for 49.0 % of the Company's total inventory related purchases.

 Concentration of Credit Risk

 Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash balances and accounts receivable. The Company invests its excess cash where preservation of principal is the major consideration. Cash balances are maintained with two major banks. Balances on deposit with certain money market accounts and operating accounts may exceed the Federal Deposit Insurance Corporation limits. The Company's customer base consists principally of companies within the aviation industry. The Company requests advance payments and/or letters of credit from customers that it considers to be significant credit risks.

 3. Summary of Significant Accounting Policies

 Principles of Consolidation

 The Company's consolidated financial statements include the accounts of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

 Reclassification

 Historically, the Company presented Customer service and Engineering and development contracts Net Sales and Cost of sales separately on the Consolidated Statements of Operations. For the fiscal year ended September 30, 2024, the Company has aggregated these items into one category, "Services" and reclassified all Customer service and Engineering and development contracts revenues as well as Cost of sales in order to conform the presentation of the consolidated Statements of Operations for fiscal year ended September 30, 2023.

 Customer service sales of $ 11.1 million and Engineering and development contracts Net Sales of $ 1.1 million were aggregated into Services sales, for the fiscal year ended September 30, 2023.

 Customer service Cost of sales of $ 3.4 million and Engineering and development contracts Cost of sales of $ 0.4 million were aggregated into Services Cost of sales, for the fiscal year ended September 30, 2023.

 Use of Estimates

 The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which require management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for, among other items, valuation of tangible and intangible assets acquired, evaluation of allowances for credit losses accounts, inventory obsolescence, product warranty cost liabilities, income taxes, engineering development contracts ("EDC") revenue recognition, the useful lives of long-lived assets for depreciation and amortization, the recoverability of long-lived assets, evaluation of goodwill and indefinite-lived intangible assets impairment and contingencies. Estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the consolidated statements of operations in the period they are determined.

 Business Combinations

 The Company evaluates each of its acquisitions in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805, Business Combinations ("ASC 805"), to determine whether the transaction is a business combination or an asset acquisition. In determining whether an acquisition should be accounted for as a business combination or an asset acquisition, the Company first performs a screening test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this is the case, the acquired set is not deemed to be a business and is instead accounted for as an asset acquisition. If this is not the case, the Company then further evaluates whether the acquired set includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. If so, the Company concludes that the acquired set is a business.

 The Company accounts for business acquisitions using the acquisition method of accounting. Under this method of accounting, assets acquired and liabilities assumed are recorded at their respective fair values at the date of the acquisition. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. The Company's estimates of fair value are based upon assumptions believed to be reasonable, but these assumptions are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Any excess of the purchase price over the fair value of the net assets acquired is recognized as goodwill.

 During the measurement period, which may be up to one year from the acquisition date, the Company adjusts the provisional amounts of assets acquired and liabilities assumed with the corresponding offset to goodwill to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded within the Company's consolidated statements of operations.

 We allocate the purchase price of acquired entities to the underlying tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, with any excess recorded as goodwill. The valuations of the acquired assets and liabilities will impact the determination of future operating results. Determining the fair value of assets we acquire and liabilities we assume requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. We determine the fair values of intangible assets acquired generally in consultation with third-party valuation advisors. Fair value adjustments to the assets and liabilities are recognized and the results of operations of the acquired business are included in our consolidated financial statements from the effective date of the acquisition.
 Asset Acquisitions

 Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions. The Company allocates the cost of the acquisition, including direct and incremental transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition.

 Intangible Assets

 The Company's identifiable intangible assets primarily consist of license agreements, customer relationships and backlog. Intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods deemed appropriate for the type of intangible asset acquired and are reported separately from any goodwill recognized.

 Intangible assets with a finite life are amortized over their estimated useful life and are reported net of accumulated amortization. They are assessed for impairment in accordance with the Company's policy on assessing long-lived assets for impairment described below.

 Indefinite-lived intangible assets are not amortized, but are subject to an annual impairment test, or when events or circumstances dictate, more frequently. The impairment review for indefinite-lived intangible assets can be performed using a qualitative or quantitative impairment assessment. The quantitative assessment consists of a comparison of the fair value of the indefinite-lived intangible asset with its carrying amount. The Company initially does a qualitative assessment for impairment of intangible assets and will utilize quantitative testing based on results from the qualitative assessment, if deemed necessary. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the fair value exceeds its carrying amount, the indefinite-lived intangible asset is not considered impaired.

 Goodwill

 Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The recorded amounts of goodwill from business combinations are based on management's best estimates of the fair values of assets acquired and liabilities assumed at the date of acquisition. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of the business combination that generated the goodwill. The Company's goodwill impairment test is performed at the reporting unit level. Reporting units are determined based on an evaluation of the Company's operating segments and the components making up those operating segments.

 Goodwill is tested for impairment annually, or in an interim period, if certain changes in circumstances indicate a possibility that an impairment may exist. Factors to consider that may indicate an impairment may exist are: the macroeconomic conditions, industry and market considerations such as a significant adverse change in the business climate, cost factors, overall financial performance such as current-period operating results or cash flow declines combined with a history of operating results or cash flow declines or a projection/forecast that demonstrates continuing declines in the cash flow or the inability to improve the operations to forecasted levels, and any entity-specific events.

 If the Company determines that it is more likely than not that the fair value of the reporting unit is below the carrying amount as part of its qualitative assessment, a quantitative assessment of goodwill is required. In the quantitative evaluation, the fair value of the reporting unit is determined and compared to the carrying value. If the fair value is greater than the carrying value, then the goodwill is deemed not to be impaired and no further action is required. If the fair value is less than the carrying value, goodwill is considered impaired and a charge is reported as impairment of goodwill in the consolidated statements of operations.

 Cash and Cash Equivalents

 Highly liquid investments, purchased with an original maturity of three months or less, are classified as cash equivalents. Cash equivalents at September 30, 2025 and 2024 consist of cash on deposit and cash invested in money market funds with financial institutions. Due to the short maturity of these instruments, the carrying values on our consolidated balance sheets approximate fair value.

 Accounts Receivable

 We record receivables derived from contracts with customers at net realizable value and they generally do not bear interest. An allowance for estimated uncollectible accounts is established if uncollectability is considered probable. This value may include an allowance for estimated uncollectible accounts to reflect any losses anticipated on the accounts receivable balances which is charged to the provision for doubtful accounts. When determining uncollectibility, we consider historical write-offs by customer, level of past due accounts and economic status of the customers. Write-offs are recorded at the time a customer receivable is deemed uncollectible. The Company had no allowance for credit losses as of the fiscal years ended September 30, 2025 and 2024, respectively.

 Inventory Valuation

 Inventories are stated at the lower of cost (first-in, first-out) or net realizable value, net of write-downs for excess and obsolete inventory, and consists of the following:

 2025

 2024

 Raw materials

 $

 22,445,837

 $

 9,862,591

 Work-in-process

 2,295,587

 1,357,504

 Finished goods

 1,060,757

 1,512,286

 $

 25,802,181

 $

 12,732,381

 Assets Held for Sale

 Asset to be disposed of by sale ("disposal groups") are reclassified into "assets held for sale" if their carrying amounts are principally expected to be recovered through a sale transaction rather than through continuing use. The reclassification occurs when the disposal group is available for immediate sale and the sale is probable. These criteria are generally met when an agreement to sell exists, or management has committed to a plan to sell the assets within one year. Disposal groups are measured at the lower of carrying amount or fair value less costs to sell and are not depreciated or amortized. When the net realizable value of a disposal group increases during

 a period, a gain can be recognized to the extent that it does not increase the value of the disposal group beyond its original carrying value when the disposal group was reclassified as held for sale. The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group. The Company had no assets held for sale for the fiscal years ended September, 30, 2025 and 2024.

 Property and Equipment

 Property, plant and equipment is recorded at cost. Depreciation and amortization is generally provided on the straight-line method over the estimated useful lives of the various assets. Major additions and improvements are capitalized, while maintenance and repairs that do not improve or extend the life of assets are charged to expense as incurred.

 The Company's property, plant and equipment is generally depreciated over the following estimated useful lives:

 Buildings and improvements are depreciated over estimated lives of ten to thirty nine years.

 Furniture and office equipment is depreciated over estimated lives of five to seven years.

 Computer equipment is depreciated over an estimated life of five years.

 Equipment other is depreciated over estimated lives of one to nineteen years.

 Long-Lived Assets

 The Company assesses the impairment of long-lived assets in accordance with FASB ASC Topic 360-10, " Property, Plant and Equipment." This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In addition, long-lived assets to be disposed of should be reported at the lower of the carrying amount or fair value less cost to sell. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to estimated future cash flows expected to result from use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows.

 Revenue Recognition

 The Company enters into sales arrangements with customers that, in general, provide for the Company to design, develop, manufacture and deliver large flat-panel display systems, flight information computers, autothrottles and advanced monitoring systems that measure and display critical flight information, including data relative to aircraft separation, airspeed, altitude and engine and fuel data measurements.

 Revenue from Contracts with Customers
 The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). The core principle of ASC 606 is that an entity recognizes revenue when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. To achieve this core principle, the Company applies the following five steps:

 1) Identify the contract with a customer

 The Company's contract with its customers typically is in the form of a purchase order issued to the Company by its customers and, to a lesser degree, in the form of a purchase order issued in connection with a formal contract executed with a customer. In addition, the Company enters fixed-price contracts, in which the Company agrees to perform the specified work for a pre-determined price. The contractual terms of the fixed price contracts are usually long-term, however they often contain a termination for convenience clause that results in us treating these contracts as day-to-day under ASC 606. To the extent our actual costs vary from the estimates upon which the price was negotiated, the Company will generate more or less profit or could incur a loss. For the purpose of accounting for revenue under ASC 606, a contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable based on the customer's intent and ability to pay the promised

 consideration. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.

 2) Identify the performance obligations in the contract

 Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. Most of our revenue is derived from purchases under which we provide a specific product or service and, as a result, there is only one performance obligation. In the event that a contract includes multiple promised goods or services, such as an EDC contract which includes both engineering services and a resulting product shipment, the Company must apply judgment to determine whether promised goods or services are capable of being distinct in the context of the contract. In these cases, the Company considers whether the customer could, on its own, or together with other resources that are readily available from third parties, produce the physical product using only the output resulting from the Company's completion of engineering services. If the customer cannot produce the physical product, then the promised goods or services are accounted for as a combined performance obligation.

 3) Determine the transaction price

 The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

 4) Allocate the transaction price to performance obligations in the contract

 If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price by taking into account available information such as market conditions as well as the cost of the goods or services and the Company's normal margins for similar performance obligations.

 5) Recognize revenue when or as the Company satisfies a performance obligation

 The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Product sales revenue is recognized point-in-time when the product is sold and shipped to the customer. Services revenues are recognized over-time upon the completion of the identified performance obligations. Historically, the Company has also recognized revenue from EDC contracts and is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Contract costs include material, components and third-party avionics purchased from suppliers, direct labor and overhead costs.

 Bill-and-hold Arrangements

 In certain situations, the Company recognizes revenue under bill-and-hold arrangements with its customers. Revenue for bill-and-hold arrangements is recognized when product control transfers to the customer, even though the customer does not have physical possession of the product. Control transfers when the bill-and-hold arrangement has been determined to have substantive reason, the product is identified as belonging to the customer, the product is ready for physical transfer to the customer and the product cannot be used or directed to another customer.

 Contract Estimates

 Accounting for performance obligations in long-term contracts that are satisfied over time involves the use of various techniques to estimate progress towards satisfaction of the performance obligation. The Company typically measures progress based on costs incurred compared to estimated total contract costs. Contract cost estimates are based on various assumptions to project the outcome

 of future events that often span more than a single year. These assumptions include the amount of labor and labor costs, the quantity and cost of raw materials used in the completion of the performance obligation and the complexity of the work to be performed.

 As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the quarter it is identified.

 The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. Therefore, no adjustment on any contract was material to our consolidated financial statements for the fiscal years ended September 30, 2025 and 2024.

 Contract Balances

 Contract assets consist of the right to consideration in exchange for product offerings that we have transferred to a customer under the contract. Contract liabilities primarily relate to consideration received in advance of performance under the contract. The following table reflects the Company's contract assets and liabilities:

 Contract

 Contract

 Assets

 Liabilities

 September 30, 2023

 $

 487,139

 $

 143,359

 Amount transferred to receivables from contract assets

 ( 373,139)

 —

 Contract asset additions

 1,566,060

 —

 Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period

 —

 ( 122,541)

 Increases due to invoicing prior to satisfaction of performance obligations

 —

 319,663

 September 30, 2024

 $

 1,680,060

 $

 340,481

 Amount transferred to receivables from contract assets

 ( 1,285,317)

 —

 Contract asset additions

 4,925,610

 —

 Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period

 —

 ( 291,380)

 Increases due to invoicing prior to satisfaction of performance obligations

 —

 2,432,828

 September 30, 2025

 $

 5,320,353

 $

 2,481,929

 * Due to the fact that our fixed price contracts are treated as day-to-day contracts due to the inclusion of termination for convenience clauses, there are no remaining unsatisfied performance obligations at period end to disclose under ASC 606.

 The balances for Account receivable were $ 12,956,476, $ 12,612,482 and $ 9,743,714 for the fiscal periods ended September 30, 2025, 2024 and 2023, respectively.

 Lease Recognition

 The Company accounts for leases in accordance with ASU 2016-02, Leases (Topic 842). At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company does not have any financing leases that are material.

 Income Taxes

 Income taxes are recorded in accordance with ASC Topic 740, " Income Taxes " ("ASC Topic 740"), which utilizes a balance sheet approach to provide for income taxes. Under this method, the Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company's assets, liabilities and expected benefits of utilizing net operating losses ("NOL") and tax credit carry-forwards. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidated financial statements in the period of enactment. At the end of each interim reporting period, the Company prepares an estimate of the annual effective income tax rate and applies that annual effective income tax rate to ordinary year-to-date pre-tax income for the

 interim period. Specific tax items discrete to a particular quarter are recorded in income tax expense for that quarter. The estimated annual effective tax rate used in providing for income taxes on a year-to-date basis may change in subsequent periods.

 Deferred tax assets are reduced by a valuation allowance if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be verified objectively, and significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if a valuation allowance is required by considering available evidence. Deferred tax assets are recognized when expected future taxable income is sufficient to allow the related tax benefits to reduce taxes that would otherwise be payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and credit carryforwards, taxable income in carry-back years and tax planning strategies which are both prudent and feasible.

 The accounting for uncertainty in income taxes requires a more likely than not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the (i) benefit recognized and measured for financial statement purposes and (ii) the tax position taken or expected to be taken on the Company's tax return. To the extent that the Company's assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company has elected to record any interest or penalties associated with uncertain tax positions as income tax expense.

 The Company files a consolidated U.S. federal income tax return. The Company prepares and files tax returns based on the interpretation of tax laws and regulations and records estimates based on these judgments and interpretations. In the normal course of business, the tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities, and the Company records a liability when it is probable that there will be an assessment. The Company adjusts the estimates periodically as a result of ongoing examinations by and settlements with the various taxing authorities, and changes in tax laws, regulations and precedent. The consolidated tax provision of any given year includes adjustments to prior years' income tax accruals that are considered appropriate and any related estimated interest. Management believes that it has made adequate accruals for income taxes. Differences between estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material effect on the Company's consolidated financial position but could possibly be material to its consolidated results of operations or cash flow of any one period.

 Research and Development

 Total research and development expense comprises both internally funded research and development ("R&D"), which is expensed in research and development in the consolidated statements of operations, and product development and design charges related to specific customer contracts. Engineering development expense consists primarily of payroll-related expenses of employees engaged in EDC projects, engineering related product materials and equipment, and subcontracting costs. R&D charges incurred for product design, product enhancements and future product development are expensed as incurred. Product development and design charges related to specific customer contracts are charged to Cost of sales - Services based on the method of contract accounting (either percentage-of-completion or completed contract) applicable to such contracts.

 Fair Value of Financial Instruments

 The net carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value because of the short-term nature of these instruments. The carrying value of our debt approximates fair value as the interest rate is variable and approximates current market levels. For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value as follows:

 Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

 Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:

 Quoted prices for similar assets or liabilities in active markets;

 Quoted prices for identical or similar assets in non-active markets;

 Inputs other than quoted prices that are observable for the asset or liability; and

 Inputs that are derived principally from or corroborated by other observable market data.

 Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions.

 The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025 and 2024, according to the valuation techniques the Company used to determine their fair values.

 Fair Value Measurement on September 30, 2025

 Quoted Price in

 Significant Other

 Significant

 Active Markets for

 Observable

 Unobservable

 Identical Assets

 Inputs

 Inputs

 (Level 1)

 (Level 2)

 (Level 3)

 Assets

 Cash and cash equivalents:

 Money market funds

 $

 484,973

 $

 —

 $

 —

 Fair Value Measurement on September 30, 2024

 Quoted Price in

 Significant Other

 Significant

 Active Markets for

 Observable

 Unobservable

 Identical Assets

 Inputs

 Inputs

 (Level 1)

 (Level 2)

 (Level 3)

 Assets

 Cash and cash equivalents:

 Money market funds

 $

 504,104

 $

 —

 $

 —

 The fiscal years ended September 30, 2025 and 2024 money market funds balance differs from the cash and cash equivalents balance on the consolidated balance sheet due to the timing of sweep transactions within the PNC cash investment accounts. The remainder of cash and cash equivalents not held in money market funds are held in checking deposit accounts and equivalents. The carrying value of Money market funds approximates fair value.

 Share-Based Compensation

 The Company accounts for share-based compensation under ASC Topic 718, which requires the Company to measure the cost of employee or non-employee director services received in exchange for an award of equity instruments based on the grant-date fair value of the award using an option pricing model. The Company recognizes such cost over the period during which an employee or non-employee director is required to provide service in exchange for the award.

 Accordingly, adoption of ASC Topic 718's fair value method results in recording compensation costs under the Company's stock-based compensation plans. Time vested RSU's are valued as of the closing price of the Company's stock on date of grant. The Company determines the fair value of its stock option awards at the date of grant using the Black-Scholes option pricing model. The Company determines the fair value of its Market Stock Unit Awards ("MSU's") and Market Stock Option Awards ("MSO") using Monte Carlo Simulation Option pricing models and generally accepted valuation techniques require management to make assumptions and to apply judgment to determine the fair value of its awards. These assumptions and judgments include estimating future volatility of the Company's stock price, expected dividend yield, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can materially affect fair value estimates. The Company does not believe that a reasonable likelihood exists that there will be a material change in future estimates or assumptions used to determine share-based compensation expense. However, if actual results are not consistent with the Company's estimates or assumptions, the Company would adjust its estimates. Such adjustments could have a material impact on the Company's financial position.

 Debt Issuance Costs

 Debt issuance costs are capitalized as contra-liabilities and amortized as interest expense on a basis that approximates the effective interest method over the term for Initial Term Loan debt. Contra-liabilities are netted against and presented as a direct deduction from the carrying amount of the Initial Term Loan debt.

 Revolving Facility and the Delayed Draw Term Loan debt issuance costs are capitalized as assets and amortized using straight-line amortization to interest expense over the terms of the respective debt. The capitalized assets related to the Revolving Facility and the Delayed Draw Term Loan are presented as Current Other Assets and Non-Current Other Assets on the Consolidated Balance Sheet.

 Warranty Reserves

 The Company offers warranties on some products of various lengths, however the standard warranty period is twenty-four months. At the time of shipment, the Company establishes a reserve for estimated costs of warranties based on its best estimate of the amounts necessary to settle future and existing claims using historical data on products sold as of the balance sheet date. The length of the warranty period, the product's failure rates and the customer's usage affect warranty cost. If actual warranty costs differ from the Company's estimated amounts, future results of operations could be affected adversely. Warranty cost is recorded as Cost of sales, and the reserve balance recorded as an accrued expense. While the Company maintains product quality programs and processes, its warranty obligation is affected by product failure rates and the related corrective costs. If actual product failure rates and/or corrective costs differ from the estimates, the Company revises the estimated warranty liability accordingly.

 Self-Insurance Reserves

 Since January 1, 2014, the Company has self-insured a significant portion of its employee medical insurance. The Company maintains a stop-loss insurance policy that limits its losses both on a per employee basis and an aggregate basis. Liabilities associated with the risks that are retained by the Company are estimated based upon actuarial assumptions such as historical claims experience and demographic factors. The Company estimated the total medical claims incurred but not reported, and the Company believes that it has adequate reserves for these claims at September 30, 2025 and 2024. However, the actual value of such claims could be significantly affected if future occurrences and claims differ from these assumptions. At September 30, 2025 and 2024, the estimated liability for medical claims incurred but not reported was $ 153,000 and $ 98,300, respectively. The Company has recorded the deficit of funded premiums over estimated claims incurred but not reported of 153,000 as a current liability in the accompanying consolidated balance sheet.

 Treasury Stock

 We account for treasury stock purchased under the cost method and include treasury stock as a component of shareholders' equity. Treasury stock purchased with intent to retire (whether or not the retirement is actually accomplished) is charged to common stock.

 ATM Sales Agreement

 On September 22, 2023, the Company entered into an at-the-market equity offering Sales Agreement (the "ATM Sales Agreement") with Stifel, Nicolaus & Company, Incorporated (the "Sales Agent"), pursuant to which the Company may offer and sell from time to time through the Sales Agent up to $ 40 million of shares of its common stock. The shares will be offered and sold pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-267595), which was declared effective by the SEC on October 14, 2022. The Company filed a prospectus supplement, dated September 22, 2023, with the SEC in connection with the offer and sale of the shares. Subject to the terms and conditions of the ATM Sales Agreement, the Sales Agent will use commercially reasonable efforts to sell shares of the Company's common stock from time to time, based upon the Company's instructions. The Company is not obligated to sell any shares under the ATM Sales Agreement, and the Company or the Sales Agent may at any time suspend solicitation and offers under the ATM Sales Agreement or terminate the ATM Sales Agreement. The Company has provided the Sales Agent with customary indemnification rights, and the Sales Agent will be entitled to compensation for its services of up to 3.0 % of the gross sales price per share of the shares of the Company's common stock sold through the Sales Agent. Sales of the shares of the Company's common stock, if any, under the ATM Sales Agreement may be made in transactions that are deemed to be "at the market offerings" as defined in Rule 415 under the Securities Act, including sales made directly on or through Nasdaq or any other existing trading market for the Company's common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices and/or any other method permitted by law.

 During fiscal years ended September 30, 2025 and 2024, we did no t sell any shares of common stock under the ATM Sales Agreement.

 New Accounting Pronouncements

 The Company considers the applicability and impact of all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's Consolidated Financial Statements.

 In November 2024, the FASB issued ASU No. 2024-03 ("ASU 2024-03"), Disaggregation of Income Statement Expenses. The guidance primarily will require enhanced disclosures about certain types of expenses. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 and may be applied either on a prospective or retrospective basis. We are evaluating the impact of the standard on our disclosures.

 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impacts of this guidance on the Company's Consolidated Financial Statements.

 Recently Adopted Accounting Pronouncements

 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company's Chief Operating Decision Maker (CODM), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. For all public business entities, ASU 2023-07 was effective for annual periods beginning after December 31, 2023 and interim periods with fiscal years beginning after December 15, 2024; early adoption is permitted. The Company evaluated and adopted this guidance in the fiscal year ended September 30, 2025. The Adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements.

 4. Acquisition

 September 2024 Honeywell Agreement

 On September 27, 2024, the Company entered into the September 2024 Honeywell Agreement with Honeywell, pursuant to which Honeywell sold, assigned or licensed certain assets related to its various generations of military display generators and flight control computers, including a sale of certain inventory, equipment and customer-related documents; an assignment of certain contracts; and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its various generations of military display generators and flight control computers to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company for consideration of $ 14.2 million in cash. The Company determined that the transaction met the definition of a business under ASC 805; therefore, the Company accounted for the transaction as a business combination and applied the acquisition method of accounting. The Company financed the September 2024 Honeywell Agreement with borrowings against the Company's revolving line of credit. Please see Note 20, " Loan Agreement " for more details.

 The allocation of the purchase price was based upon certain preliminary valuations and other analyses. During the fiscal year ended September 30, 2025 and within one year of the purchase date, the Company finalized the allocation of the purchase price.

 The allocation of the purchase consideration as of the acquisition date is as follows:

 Amounts Recognized as of

 Acquisition Date

 Measurement

 Purchase Price

 (as previously reported)

 Period Adjustments

 Allocation

 Total consideration

 $

 14,060,000

 $

 —

 $

 14,060,000

 Prepaid inventory (a)

 $

 3,191,000

 $

 —

 $

 3,191,000

 Prepaid equipment and other current assets

 160,000

 —

 160,000

 Intangible assets (b), (d)

 9,570,000

 ( 1,490,000)

 8,080,000

 Goodwill (c),(d)

 1,139,000

 1,490,000

 2,629,000

 Net assets acquired

 $

 14,060,000

 $

 —

 $

 14,060,000

 (a)
 Prepaid inventory consists primarily of raw materials acquired by the Company but not in the Company's physical possession as of the acquisition date. The fair value of raw materials was estimated to equal the replacement cost.

 (b)
 Intangible assets consists of backlog, customer relationships, and license agreements related to the license rights to use certain Honeywell intellectual property and are recorded at estimated fair values. The estimated fair value of these license agreements are based on a variation of the income valuation approach and are determined using the relief from royalty method. The estimated fair value of the backlog and customer relationships are based on a variation of the income valuation approach known as the multi-period excess earnings method. Refer to Note 5, "Intangible assets" for further details.

 (c)
 Goodwill represents the excess of the purchase consideration over the preliminary fair value of the net assets acquired. The goodwill recognized is primarily attributable to the expected synergies from the September 2024 Honeywell Agreement. Goodwill resulting from the September 2024 Honeywell Agreement has been assigned to the Company's one reporting unit and is fully deductible for U.S. income tax purposes.

 (d)
 For the three months ended March 31, 2025, the fair market value of Intangible Assets, mostly related to Acquired Backlog was revised down to reflect lower forecasted margin.

 Transition services agreement

 Concurrent with the September 2024 Honeywell Agreement, the Company entered into a transition services agreement (the "2024 TSA") with Honeywell, at no additional cost, to receive certain transitional services and technical support during the transition service period. The Company accounted for the 2024 TSA separate from business combination and has recognized $ 140,000 in prepaid expenses and other current assets within the consolidated balance sheets for the services to be received in the future from Honeywell. The prepaid expense related to the 2024 TSA was determined using the with and without method. For the fiscal year ended September 30, 2025, the Company recognized no additional adjustments to prepaid expenses and other current assets within the consolidated balance sheets for services received from Honeywell. As of September 30, 2025, the TSA has been fully amortized.

 Acquisition and related costs

 For the fiscal year ended September 30, 2024, the Company incurred acquisition costs of $ 244,543 which were expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of operations.

 Unaudited actual and pro forma information

 The following unaudited pro forma summary presents consolidated information of the Company, including the product lines, as if the transaction had occurred on October 1, 2023:

 Fiscal Year Ended September 30,

 2024

 Net sales

 $

 54,883,092

 $

 5,488,174

 These pro forma results are for illustrative purposes and are not indicative of the actual results of operations that would have been achieved, nor are they indicative of future results of operations. The unaudited pro forma information for all periods presented was adjusted to give effect to pro forma events that are directly attributable to the transaction and are factually supportable. The adjustments are based on information available to the Company at this time. Accordingly, the adjustments are subject to change, and the impact of such changes may be material. The unaudited pro forma results do not include any incremental cost savings that may result from the integration.

 On June 30, 2023, the Company entered into the June 2023 Honeywell Agreement. The June 2023 Honeywell Agreement involves a sale of certain inventory, equipment and customer-related documents; an assignment of certain customer contracts; and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its inertial, communication and navigation product lines to repair, overhaul, manufacture sell, import, export and distribute certain products to the Company. The June 2023 Honeywell Agreement allows the Company to diversify its product offerings in the aerospace industry. The Company determined that the June 2023 Honeywell Agreement met the definition of a business under ASC 805; therefore, the Company accounted for the transaction as a business combination and applied the acquisition method of accounting.

 In connection with the June 2023 Honeywell Agreement, the Company entered into a term loan with PNC Bank, National Association for $ 20.0 million to fund a portion of the June 2023 Honeywell Agreement. Refer to Note 20, " Loan Agreement " for further details. The purchase consideration transferred at the acquisition date was $ 35.9 million, which was entirely cash.

 In the quarter ended June 30, 2024, the Company finalized its accounting of the June 2023 Honeywell Agreement. The following purchase price allocation table presents the Company's estimates of the fair value of assets acquired and liabilities assumed as of the acquisition date, and subsequent measurement period adjustments recorded during the one-year period ended June 30, 2024:

 Amounts Recognized as of

 Acquisition Date

 Measurement

 Purchase Price

 (as previously reported)

 Period Adjustments

 Allocation

 Cash consideration

 $

 $

 —

 $

 Total consideration

 $

 $

 —

 $

 —

 Prepaid inventory (a)

 $

 10,036,160

 $

 ( 3,012,626)

 (d)

 $

 7,023,534

 Equipment

 2,609,000

 3,675,000

 (d)

 6,284,000

 Construction in progress

 1,238,000

 —

 1,238,000

 Intangible assets (b)

 20,900,000

 ( 3,660,000)

 (d)

 17,240,000

 Goodwill (c)

 4,608,041

 ( 533,575)

 (d)(e)

 4,074,466

 Assets acquired

 39,391,201

 ( 3,531,201)

 Accrued expenses

 ( 3,531,201)

 3,531,201

 (e)

 —

 Liabilities assumed

 ( 3,531,201)

 3,531,201

 —

 Net assets acquired

 $

 $

 —

 $

 (a)
 Prepaid inventory consists of primarily raw materials acquired by the Company but not in the Company's physical possession as of the acquisition date. The fair value of raw materials was estimated to equal the replacement cost. The fair value of finished goods was determined based on the estimated selling price, net of selling costs and a margin on the selling activities, which resulted in a step-up in the value of the finished goods.

 (b)
 Intangible assets consist of license agreements related to the license rights to use certain Honeywell intellectual property and customer relationships and are recorded at estimated fair values. The estimated fair value of the license agreement is based on a variation of the income valuation approach and is determined using the relief from royalty method. The estimated fair value of the customer relationships is based on a variation of the income valuation approach known as the multi-period excess earnings method. Refer to Note 5, "Intangible assets" for further details.

 (c)
 Goodwill represents the excess of the purchase consideration over the preliminary fair value of the net assets acquired. The goodwill recognized is primarily attributable to the expected synergies from the June 2023 Honeywell Agreement. Goodwill resulting from the June 2023 Honeywell Agreement has been assigned to the Company's one reporting unit and is fully deductible for U.S. income tax purposes.

 (d)
 In the third quarter of fiscal year ended September 30, 2024, and within one year from the acquisition date, the Company identified measurement period adjustments related to fair value estimates. The measurement period

 adjustments were due to the refinement of inputs used to calculate the fair value of the prepaid inventory, equipment, license agreement and customer relationships based on facts and circumstances that existed as of the acquisition date. One of the refinements of inputs used was a change in classification of prepaid inventory to equipment of $ 3.7 million. The adjustments resulted in an overall increase to goodwill of $ 3.0 million. As a result of the measurement period adjustments to the estimated fair values of equipment and customer relationships, during the third quarter of 2024, the Company recognized $ 218,623 in additional depreciation expense in cost of sales and $ 67,500 in additional amortization expense in selling, general and administrative respectively, related to the effects that would have been recognized in previous quarters if the measurement period adjustments were recognized as of the acquisition date. For the remaining measurement period adjustments, the change to the preliminary fair value estimates did not have a material impact to the condensed consolidated statement of operations.

 (e)
 During the fourth quarter of fiscal year ended September 30, 2023, the Company identified measurement period adjustments related to the fair value estimates for accrued expenses. While the Asset Purchase and License Agreement indicated an amount of liabilities related to open supplier purchase orders to be assumed by the Company as of the acquisition date, it was determined that there were no actual liabilities outstanding related to these open supplier purchase orders as of the acquisition date; therefore, the $ 3.5 million assumed liabilities preliminarily recorded were reversed. The adjustments resulted in an overall decrease to goodwill of $ 3.5 million; the adjustments have no impact to the condensed consolidated statement of operations.

 Transition services agreement

 Concurrent with the June 2023 Honeywell Agreement, the Company entered into a transition services agreement (the "2023 TSA") with Honeywell, at no additional cost, to receive certain transitional services and technical support during the transition service period. The Company accounted for the 2023 TSA separate from the business combination and has recognized $ 140,000 in prepaid expenses and other current assets within the consolidated balance sheet as of the acquisition date for the services to be received in the future from Honeywell. The prepaid expense related to the 2023 TSA was determined using the with and without method. As of the three months ended June 30, 2025, the 2023 TSA has been fully amortized.

 Acquisition and related costs

 For the fiscal year ended September 30, 2023, the Company incurred acquisition costs of $ 408,961, which were expensed as incurred and included in selling, general and administrative expenses in the consolidated statement of operations. The debt issuance costs related to the Term Loan were not material.

 Unaudited actual and pro forma information

 For the fiscal year ended September 30, 2023, the Company recognized $ 5.8 million of revenues and $ 3.0 million of net income related to the June 2023 Honeywell Agreement in the consolidated statements of operations.

 The following unaudited pro forma summary presents consolidated information of the Company, including the product lines, as if the transaction had occurred on October 1, 2021:

 Fiscal Year Ended September 30,

 2023

 Net sales

 $

 43,757,196

 $

 8,542,330

 These pro forma results are for illustrative purposes and are not indicative of the actual results of operations that would have been achieved, nor are they indicative of future results of operations. The unaudited pro forma information for all periods presented was adjusted to give effect to pro forma events that are directly attributable to the transaction and are factually supportable. The adjustments are based on information available to the Company at this time. Accordingly, the adjustments are subject to change, and

 the impact of such changes may be material. The unaudited pro forma results do not include any incremental cost savings that may result from the integration.

 Other

 On July 22, 2024, the Company completed the July 2024 Honeywell Asset Acquisition of certain additional assets related to its communication and navigation product lines, including a sale of certain inventory and customer-related documents; an assignment of certain contracts; and a grant of exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its communication and navigation product lines to manufacture, upgrade and repair certain additional products for consideration of $ 4.2 million in cash. The Company accounted for the transaction as an asset acquisition and allocated the cost of the acquisition, including direct and incremental transaction costs, to the tangible and intangible assets based on their relative fair value as detailed under ASC 805. Definite lived assets were recorded to the relative fair value of $ 2,601,000 to property and equipment and $ 430,000 to customer relationships and backlog. Since license agreements are indefinite lived assets, they were recorded at fair value in the amount of $ 1,240,000 in accordance with ASC 805.
 5. Intangible assets and Goodwill

 The Company's intangible assets other than goodwill are as follows:

 As of September 30, 2025

 Gross Carrying

 Accumulated

 Accumulated

 Net Carrying

 Value

 Impairment

 Amortization

 Value

 License agreement (a)

 $

 9,790,000

 $

 —

 $

 —

 $

 9,790,000

 Customer relationships (a)

 12,604,327

 —

 ( 2,705,533)

 9,898,794

 Backlog (b)

 4,850,000

 —

 ( 970,000)

 3,880,000

 Licensing and certification rights (c)

 696,506

 ( 44,400)

 ( 638,285)

 13,821

 Total

 $

 27,940,833

 $

 ( 44,400)

 $

 ( 4,313,818)

 $

 23,582,615

 As of September 30, 2024

 Gross Carrying

 Accumulated

 Accumulated

 Net Carrying

 Value

 Impairment

 Amortization

 Value

 License agreement (a)

 $

 9,140,000

 $

 —

 $

 —

 $

 9,140,000

 Customer relationships (a)

 13,008,332

 —

 ( 1,459,861)

 11,548,471

 Backlog (b)

 6,310,000

 —

 —

 6,310,000

 Licensing and certification rights (c)

 696,506

 ( 44,400)

 ( 638,285)

 13,821

 Total

 $

 29,154,838

 $

 ( 44,400)

 $

 ( 2,098,146)

 $

 27,012,292

 (a) As part of the September 2024 Honeywell Agreement, the July 2024 Honeywell Asset Acquisition, and the June 2023 Honeywell Agreement transactions, the Company acquired intangible assets related to the license agreements for the license rights to use certain Honeywell intellectual property, backlog and customer relationships. The license agreements have an indefinite life and are not subject to amortization; the customer relationships have an estimated weighted average life of ten years. The company determined that the intangible assets were not impaired as of September 30, 2025 and September 30, 2024, respectively. As such, no impairment charges have been recorded for the fiscal years ended September 30, 2025 and 2024.

 (b) As part of the September 2024 Honeywell Agreement, the Company acquired intangible assets related to backlog with a useful life of five years.

 (c) The licensing, and certification rights are amortized over a defined number of units.

 For the fiscal year ended September 30, 2024, license agreement intangible assets included $ 3.5 million related to the July 2024 Honeywell Asset Acquisition and the September 2024 Honeywell Agreement as well as $ 0.1 million related to the June 2023 Honeywell Agreement post-acquisition adjustments.

 Intangible asset amortization expense is amortized as a component of selling, general and administrative expense and was $ 2,215,672, $ 1,191,361 and $ 270,627 for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 The timing of future amortization expense is not determinable for the licensing and certification rights because they are amortized over a defined number of units. As of fiscal year ended September 30, 2025, the weighted average amortization period for amortized intangibles is 6.9 years. The expected future amortization expense related to the customer relationships and backlog as of September 30, 2025 is as follows:

 Year

 Amortization Expense

 2026

 $

 2,211,027

 2027

 2,211,027

 2028

 2,211,027

 2029

 2,211,027

 2030

 1,241,027

 Thereafter

 3,693,659

 Total

 $

 13,778,794

 The Company's goodwill activity is as follows:

 Goodwill

 Balance at September 30, 2023

 $

 3,557,886.00

 Fiscal 2024 Activity:

 Business Combination - September 2024 Honeywell Agreement

 1,139,000.00

 Measurement period adjustments

 516,218.00

 Balance at September 30, 2024

 $

 5,213,104.00

 Fiscal 2025 Activity:

 Measurement period adjustments

 1,490,000.00

 Balance at September 30, 2025

 $

 6,703,104.00

 6. Net Income Per Share

 2025

 2024

 2023

 Numerator:

 $

 $

 $

 6,027,755

 Denominator:

 Basic weighted average shares

 17,572,980

 17,459,823

 17,411,684

 Dilutive effect of share-based awards

 256,053

 20,424

 7,501

 Diluted weighted average shares

 17,829,033

 17,480,247

 17,419,185

 Net income per common share:

 Basic

 $

 0.89

 $

 0.40

 $

 0.35

 Diluted

 $

 0.88

 $

 0.40

 $

 0.35

 Net income per share is calculated pursuant to ASC Topic 260, " Earnings per Share" ("ASC Topic 260"). Basic earnings per share ("EPS") excludes potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed assuming the conversion or exercise of all dilutive securities such as employee stock options ("Options"), Market Stock Options ("MSO's"), Market Stock Units ("MSU's") and restricted stock units ("RSUs").

 The number of incremental shares from the assumed exercise, or vesting of stock options, MSO's and RSUs is calculated by using the treasury stock method. The number of incremental shares from assumed conversions of MSU's is calculated by using the 'if-converted method.' As of September 30, 2025, 2024 and 2023, there were 361,613, 361,613 and 224,374 options to purchase common stock outstanding, respectively. As of September 30, 2025, 2024 and 2023, there were 105,321, 0 and 0 shares subject to vesting of MSO'S outstanding, respectively. As of September 30, 2025, 2024 and 2023, there were 201,000, 0 and 0 units subject to vesting of MSU'S,

 respectively. As of September 30, 2025, 2024 and 2023, there were 337,749, 242,080 and 101,968 units subject to vesting of RSU's outstanding, respectively. The average outstanding diluted shares calculation excludes options, RSU's and MSO's with an exercise price that exceeds the average market price of shares during the period. For fiscal years ended September 30, 2025, 2024 and 2023, 78,991, 0 and 0 MSO's and 212,001, 362,000 and 203,000 options to purchase common stock were excluded from the computation of diluted earnings per share because the effect would be anti-dilutive.

 7. Employee Retention Tax Credit

 The Employee Retention Tax Credit ("ERTC"), created in the March 2020 CARES Act and then subsequently amended by the Consolidated Appropriation Act ("CAA") of 2021, the American Rescue Plan Act ("ARPA") of 2021 and the Infrastructure Investment and Jobs Act ("IIJA") of 2021, is a refundable payroll credit for qualifying businesses keeping employees on their payroll during the COVID-19 pandemic. Under CAA, ARPA and IIJA amendments, employers can claim a refundable tax credit against the employer share of social security tax equal to 70% of the qualified wages (including certain health care expenses) paid to employees after December 31, 2020 through September 30, 2021. The Company was deemed an eligible small employer under ERTC and thus applied for benefits under the ERTC for tax quarters ended June 30, 2020, September 30, 2020, and December 31, 2020 and for the tax quarters ended March 31, 2021 and June 30, 2021. Refunds received by the Company and refunds obtained in any future periods are subject to IRS audit under the applicable statutes of limitations.

 The One Big Beautiful Bill Act ("OBBBA") included provisions impacting the ERC including imposing an extended statute of limitations for the IRS to audit ERC filings for the quarter ended September 30, 2021. The OBBBA did not include any provisions extending the statute of limitations for auditing ERC filings for quarters ending March 31, 2020 through June 30, 2021. Following the passing of the OBBBA, the Company determined that the statute of limitations had expired for filings for quarters ending June 30, 2020 through June 30, 2021 and that the Company obtained reasonable assurance over receipt of, and compliance with, the terms of the ERC for refunds received from the IRS for those periods.

 Because there is no direct applicable U.S. GAAP guidance that addresses the recognition and measurement of government assistance received by a business entity, U.S. GAAP allows for the adoption of other analogous accounting guidance and subsequently adopted guidance found under International Accounting Standards 20, ("IAS-20"), Accounting for Government Grants and Disclosure of Government Assistance. Under IAS-20, Government grants that become a receivable as compensation for expenses or losses already incurred, or for the purpose of giving immediate financial support to the entity with no tie to future related costs, are recognized in income in the period they become a receivable and there is reasonable assurance that the receipt of the credits are in compliance with the terms of the ERTC.

 During the quarter ended September 30, 2025, the Company was awarded $ 1,894,000 under the ERTC program for the aforementioned tax periods. To aid in the application of the ERTC program, The Company retained consulting services from a third-party consulting firm. The incremental ERTC consulting services fees incurred related to the ERTC totaled approximately $ 379,000. The awards and the fees, totaling a net $ 1,515,000, are recorded within the "Other income" on the Consolidated Statements of Operations for the fiscal year ended September 30, 2025.

 8. Prepaid Expenses and Other Current Assets

 Prepaid expenses and other current assets consist of the following:

 2025

 2024

 A/P Pre-payments

 $

 486,763

 $

 29,154

 Prepaid rotables

 204,950

 600,051

 Dues, Services and pre-paid insurance

 418,407

 46,084

 Unamortized debt issuance costs

 147,527

 —

 Other

 134,751

 486,105

 $

 1,392,398

 $

 1,161,394

 9. Property and Equipment

 Property and equipment, net consists of the following balances:

 2025

 2024

 Computer equipment

 $

 3,169,835

 $

 2,416,795

 Furniture and office equipment

 984,205

 984,205

 Buildings and improvements

 11,598,890

 6,198,690

 Equipment other

 15,958,271

 15,161,225

 Land

 1,021,245

 1,021,245

 32,732,446

 25,782,160

 Less accumulated depreciation and amortization

 ( 13,927,910)

 ( 12,409,862)

 $

 18,804,536

 $

 13,372,298

 Depreciation related to property and equipment was $ 1,518,048, $ 906,581 and $ 427,317 in fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 Non-cash investing activities involving property, plant and equipment comprise the abandonment of fully depreciated assets with an original cost and accumulated amortization of $ 0, $ 420,544 and $ 94,954 in fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 In connection with June 2023 Honeywell Agreement, during the 18- month period following closing, which ended December 31, 2024, the Company received various inventory and PP&E, which was accounted for as of the acquisition date as prepaid inventory. Rotables comprised a significant portion of the PP&E received during that 18-month period. Rotables are parts that are not designed to be discarded after a certain period of use but rather are intended to be restored to a serviceable condition and reused. The Company had historically depreciated rotables inventory on a straightline basis, over 5 years. During the quarter ended March 31, 2025, the Company updated its analysis of the economic lives of various owned rotable assets. As a result of this update, to better reflect the revised estimate of physical lives of rotable assets, the Company changed its useful lives estimate of rotable assets from 5 years to 10 years, effective as of January 1, 2025.

 ASC Topic 250, "Accounting Changes and Error Corrections" ("ASC 250"), specifically ASC 250-10-45-17 states that, "changes in accounting estimates should not be accounted for by restating or retrospectively adjusting the amounts reported in prior period financial statements or by reporting pro forma amounts. Instead, a change in accounting estimate should be accounted for in the period of change and prospective periods."

 Adhering to the guidance found in ASC 250, the Company recognized the change in depreciation expense of rotable assets prospectively as of January 1, 2025. The change in accounting estimate decreased depreciation expense $ 1.1 million, or $ 0.06 per diluted share for the fiscal year ended September 30, 2025.

 10. Other Assets

 Other assets consist of the following:

 2025

 2024

 Unamortized debt issuance costs and operating lease right-of-use assets

 $

 560,603

 $

 2,100

 Other non-current assets

 157,863

 471,625

 $

 718,466

 $

 473,725

 Other non-current assets as of fiscal years ended September 30, 2025 and 2024 include a deposit for medical claims required under the Company's medical plan.

 11. Accrued Expenses

 Accrued expenses consist of the following:

 2025

 2024

 Warranty

 $

 730,498

 596,538

 Salary, benefits and payroll taxes

 1,234,246

 704,974

 Professional fees

 —

 133,174

 Inventory in transit

 1,097,222

 235,713

 Royalties and ERC related expenses

 697,611

 7,800

 Bonus Accruals

 1,972,221

 964,181

 Income tax payable

 2,045,123

 1,194,185

 Other

 385,046

 772,729

 $

 8,161,967

 4,609,294

 12. Warranty

 The Company provides for the estimated cost of product warranties at the time revenue is recognized. Warranty cost is recorded as Cost of sales, and the reserve balance is recorded as an accrued expense in the financial statements. While the Company engages in extensive product quality programs and processes, the Company's warranty obligation is affected by product failure rates and by the related material, labor and delivery costs incurred in correcting a product failure. If actual product failure rates, material, or labor costs differ from the Company's estimates, further revisions to the estimated warranty liability would be recorded.

 Warranty cost and accrual information for fiscal years ended September 30, 2025 and 2024:

 2025

 2024

 Warranty accrual, beginning of period

 $

 596,538

 $

 562,645

 Accrued expense (Adjustment)

 449,000

 149,441

 Warranty cost

 ( 315,040)

 ( 115,548)

 Warranty accrual, end of period

 $

 730,498

 $

 596,538

 13. Income Taxes

 The components of income taxes are as follows:

 2025

 2024

 2023

 Current provision

 Federal

 $

 4,830,246

 $

 2,617,951

 $

 1,541,726

 State

 747,399

 371,701

 56,288

 Total current provision

 5,577,645

 2,989,652

 1,598,014

 Deferred provision (benefit)

 Federal

 ( 770,018)

 ( 881,495)

 28,994

 State

 ( 483,824)

 ( 254,977)

 ( 19,491)

 Total deferred provision (benefit)

 ( 1,253,842)

 ( 1,136,472)

 9,503

 Total current and deferred provision

 $

 4,323,803

 $

 1,853,180

 $

 1,607,517

 Following is a reconciliation of the statutory federal rate to the Company's effective income tax rate:

 2025

 2024

 2023

 U.S. Federal statutory tax rate

 21.0

 %

 21.0

 %

 21.0

 %

 State income taxes, net of federal benefit

 2.2

 %

 1.1

 %

 0.4

 %

 Permanent items

 0.4

 %

 0.1

 %

 —

 %

 Research and development tax credits

 —

 %

 ( 1.6)

 %

 ( 0.8)

 %

 Valuation allowance

 ( 1.5)

 %

 ( 0.1)

 %

 ( 0.1)

 %

 Change in unrecognized tax benefits

 ( 0.3)

 %

 0.4

 %

 0.1

 %

 Stock based compensation awards cancellations and forfeitures

 ( 0.1)

 %

 0.0

 %

 0.4

 %

 Other

 —

 %

 0.0

 %

 0.1

 %

 Effective income tax rate

 21.7

 %

 20.9

 %

 21.1

 %

 The deferred tax effect of temporary differences giving rise to the Company's deferred tax assets and liabilities consists of the components below:

 As of September 30,

 2025

 2024

 Non Current

 Non Current

 Deferred tax assets:

 Reserves and accruals

 $

 1,772,377

 $

 1,233,261

 NOL carryforwards -fed/state

 920,919

 971,825

 Stock based compensation awards

 705,841

 375,224

 Amortization

 1,736,177

 1,302,165

 5,135,314

 3,882,475

 Less: Valuation allowance

 ( 669,883)

 ( 969,784)

 Total deferred tax assets

 4,465,431

 2,912,691

 Deferred tax liabilities:

 Depreciation

 ( 1,641,299)

 ( 1,287,547)

 Total deferred tax liabilities

 ( 1,641,299)

 ( 1,287,547)

 Net deferred tax asset

 $

 2,824,132

 $

 1,625,144

 At September 30, 2025 and 2024, the Company had state NOL carryforwards of approximately $ 17.7 million and $ 19.2 million, respectively, which begin to expire in varying amounts after the fiscal year ending September 30, 2026. The Company does not have federal R&D Tax Credit carryforwards in fiscal year 2025 and 2024.

 Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be verified objectively, and significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if valuation allowances are required by considering available evidence, including historical and projected taxable income and tax planning strategies which are both prudent and feasible. ASC Topic 740 requires the consideration of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. As a result of positive evidence that the Company's deferred tax assets are more likely than not to be realized in future years, the Company reduced its valuation allowance of deferred tax assets by $ 299,908, $ 7,963 and $ 4,069 for fiscal years ended September 30, 2025, 2024 and 2023, respectively, reducing the Company's provision for income taxes in each fiscal year.

 Following is a reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits:

 2025

 2024

 Balance at beginning of year

 $

 484,000

 $

 460,000

 Unrecognized tax benefits related to prior years

 —

 8,000

 Unrecognized tax benefits related to current year

 7,000

 28,000

 Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations

 ( 72,000)

 ( 12,000)

 Balance at end of year

 $

 419,000

 $

 484,000

 It is anticipated that the balance of unrecognized tax benefits at September 30, 2025 will change significantly over the next twelve months as the majority of the positions will have statue lapses in September 30, 2026 and 2027. The balance of unrecognized tax benefits are recorded within the valuation allowance in the table above at fiscal years ended September 30, 2025 and 2024.

 The Company's policy is to recognize interest accrued and, if applicable, penalties related to unrecognized tax benefits in income tax expense for all periods presented. At September 30, 2025, the Company currently has no unrecognized tax benefits against which interest has been accrued, and there is no accrual recorded for penalties.

 For the fiscal years ended September 30, 2025, 2024 and 2023, the Company did not recognize any expense for interest (net of federal impact) within income tax expense.

 The Company is subject to income taxes in the U.S. federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of related tax laws and regulations and require significant judgment to apply. The Company's federal income tax returns for the fiscal years ended September 30, 2021 and thereafter are open years subject to examination by the Internal Revenue Service. The Company files income tax returns in various state jurisdictions, as appropriate, with varying statutes of limitation. There are no state income tax examinations in process at this time.

 On July 4, 2025, the United States government enacted into law the OBBBA. The OBBBA includes a broad range of tax reform provisions affecting businesses, including: restores bonus depreciation to 100% for all qualified assets placed in service after January 19, 2025, allows for the option to expense all domestic research and experimental expenditures for tax years beginning after December 31, 2024, allows for the option to recaptures all unamortized domestic research and experimental expenditures from prior years, changes the adjusted taxable income formula for interest expense limitation to include depreciation and amortization expense. These changes predominantly apply to tax years beginning after December 31, 2024. This legislation did not have a material impact on the Company's consolidated financial statements.

 14. Savings Plan

 The Company sponsors a voluntary defined contribution savings plan covering all employees. The Company made contributions of approximately $ 490,000, $ 344,000 and $ 242,000 for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 15. Share-Based Compensation

 At June 30, 2024, the Company's Amended and Restated Articles of Incorporation provides the Company authority to issue 75,000,000 shares of common stock and 10,000,000 shares of preferred stock.

 The Company accounts for share-based compensation under the provisions of ASC Topic 718, "Compensation – Stock Compensation", by using the fair value method for expensing stock options, performance-based equity awards, market-based equity awards and stock awards.

 Total share-based compensation expense was approximately $ 2,336,227, $ 1,003,292, and $ 1,450,428 for the fiscal years ended September 30, 2025, 2024 and 2023, respectively. Compensation expense related to share-based awards is recorded as a component of Cost of sales and selling, general and administrative expenses.

 Amended and Restated 2019 Stock-Based Incentive Compensation Plan

 The Company's 2019 Stock-Based Incentive Compensation Plan (as amended, the "2019 Plan") was approved by the Company's shareholders at the Company's Annual Meeting of Shareholders held on April 2, 2019. The 2019 Plan authorizes the grant of stock appreciation rights, restricted stock, options, performance-based equity awards, and other equity-based awards. Options granted under the 2019 Plan may be either "incentive stock options" as defined in Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified stock options, as determined by the Compensation Committee.

 Subject to an adjustment necessary upon a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution, or similar corporate transaction or event, the maximum number of shares of common stock available for awards under the 2019 Plan is 750,000, plus 139,691 shares of common stock that were authorized but unissued under the Company's 2009 Stock-Based Incentive Compensation Plan as of April 2, 2019, the effective date of the 2019 Plan, all of which may be issued pursuant to awards of incentive stock options. On April 18, 2024, the Company amended the 2019 Plan to include an additional 1,950,000 authorized shares available for issuance. As of September 30, 2025, there were 1,375,682 shares of common stock available for awards under the 2019 Plan.

 If any award is forfeited, terminates or otherwise is settled for any reason without an actual distribution of shares to the participant, the related shares of common stock subject to such award will again be available for future grant. Any shares tendered by a participant in payment of the exercise price of an option or the tax liability with respect to an award (including, in any case, shares withheld from any such award) will not be available for future grant under the 2019 Plan. If there is any change in the Company's corporate capitalization, the Compensation Committee must proportionately and equitably adjust the number and kind of shares of common stock which may be issued in connection with future awards, the number and kind of shares of common stock covered by awards then outstanding under the 2019 Plan, the aggregate number and kind of shares of common stock available under the 2019 Plan, any applicable individual limits on the number of shares of common stock available for awards under the 2019 Plan, the exercise or grant price of any award, or if deemed appropriate, make provision for a cash payment with respect to any outstanding award. In addition, the Compensation Committee may make adjustments in the terms and conditions of any awards, including any performance goals, in recognition of unusual or nonrecurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations, or accounting principles. New shares are typically issued upon option exercise, MSO exercise, MSU or RSU vesting.

 The 2019 Plan will terminate on April 2, 2029, unless earlier terminated by the Company's Board of Directors (the "Board"). Termination will not affect awards outstanding at the time of termination. The Board may amend, alter, suspend, discontinue, or terminate the 2019 Plan without shareholder approval, provided that shareholder approval is required for any amendment which (i) would increase the number of shares subject to the 2019 Plan; (ii) would decrease the price at which awards may be granted; or (iii) would require shareholder approval by law, regulation, or the rules of any stock exchange or automated quotation system.

 Following is a summary of option activity under the 2019 Plan for the fiscal year ended September 30, 2025, and changes during the periods then ended:

 Weighted

 Average

 Aggregate

 Exercise

 Intrinsic

 Options

 Price

 Value

 Outstanding at September 30, 2023

 224,374

 $

 8.19

 $

 —

 Granted

 161,613

 7.70

 —

 Exercised

 —

 —

 —

 Cancelled

 ( 24,374)

 8.21

 —

 Outstanding at September 30, 2024

 361,613

 $

 7.97

 $

 —

 Granted

 —

 —

 —

 Exercised

 —

 —

 —

 Cancelled

 —

 —

 —

 Outstanding at September 30, 2025

 361,613

 $

 7.97

 $

 1,634,724

 Options exercisable at September 30, 2025

 263,190

 $

 8.09

 $

 1,157,539

 * No options were granted, exercised or cancelled during fiscal year 2025.
 ** Table excludes MSOs activity, which is disclosed separately.

 The following table summarizes information about stock options under the 2019 Plan at September 30, 2025:

 Options Outstanding

 Options Exercisable

 Outstanding

 Weighted-

 As of

 Average

 Weighted-

 As of

 Weighted-

 Range of Exercise

 Remaining

 Average

 Average

 Prices

 2025

 Contractual Life

 Exercise Price

 2025

 Exercise Price

 $ 7.06 - $ 8.19

 361,613

 7.8

 $

 7.97

 263,190

 $

 8.09

 Fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options are exercisable over a maximum term of ten years from date of grant and vest typically over periods of three to five years from the grant date. The expected term of options represents the period of time that options granted are expected to be outstanding and is based on historical experience and the expected turnover rate of the employees receiving the options. Expected volatility is based on historical volatility of the Company's stock. The risk free interest rate is based on U.S. Treasuries with maturities consistent with the expected life of the options in effect at the time of grant. Compensation expense for employee stock options is recognized ratably over the vesting term. Forfeitures are recognized when incurred.

 Below are the fair value assumptions used to record stock option compensation expense, related to the 2019 Plan, for the following periods identified:

 Fiscal Year Ended September 30,

 2025

 2024

 2023

 Expected dividend rate

 —

 —

 —

 Expected volatility

 —

 %

 52.5

 %

 55.1

 %

 Weighted average risk-free interest rate

 —

 %

 4.3

 %

 3.7

 %

 Expected lives (years)

 —

 6.0

 5.3

 * No options were granted, exercised or cancelled during the fiscal year ended September 30, 2025

 The Company granted 0, 161,613 and 224,374 options in fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 Total compensation expense associated with stock option awards to employees under the 2019 Plan was approximately $ 143,511, $ 301,000, and $ 756,000 for fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 As of September 30, 2025, unrecognized compensation expense of $ 409,527, net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized.

 Restricted Stock Units

 2024 RSU Bonus Grants

 On February 19, 2025, the Board authorized grants of 71,754 in Restricted Stock Units (" 2024 RSU Bonus Grants ") to key employees under the terms and conditions of the 2019 Plan as part of the Company's initiatives to align employee compensation with Total Shareholder Return. The Restricted Stock awards vest 50 % on the one-year anniversary from date of grant and 50 % on the two-year anniversary from date of grant, subject to the terms of the 2019 Plan.
 During the fiscal year ended September 30, 2025, the Board approved grants of RSUs to the non-employee directors on the Board as compensation for their services from the beginning of calendar year 2025 to vest on the date of the Company's 2025 Annual Meeting of Shareholders. After the 2025 Annual Meeting of Shareholders, the Board approved grants of RSUs to the non-employee directors on the Board as compensation for their services. Under the terms of the awards, the RSUs will vest on the first anniversary of the grant date. At the time of vesting, the RSUs will be settled in shares of the Company's common stock at a rate of one share of stock for each unit, provided that, if a director resigns from the Board prior to the vesting date, such director shall only receive a pro rata portion of such award for time served.

 During the fiscal year ended September 30, 2025, the Board approved grants of RSUs to both the Chief Executive Officer and the Chief Financial Officer that vest 25 % after one year and the remainder vesting quarterly over a three-year period.

 During the fiscal year ended September 30, 2024, the Board approved grants of RSUs to the non-employee directors on the Board as compensation for their services from the beginning of calendar year 2024 to vest on the date of the Company's 2024 Annual Meeting of Shareholders. After the 2024 Annual Meeting of Shareholders, the Board approved grants of RSUs to the non-employee directors on the Board as compensation for their services. Under the terms of the awards, the RSUs will vest on the first anniversary of the grant date. At the time of vesting, the RSUs will be settled in shares of the Company's common stock at a rate of one share of stock for each unit, provided that, if a director resigns from the Board prior to the vesting date, such director shall only receive a pro rata portion of such award for time served.

 During the fiscal year ended September 30, 2024, the Board approved grants of RSUs to both the Chief Executive Officer, Chief Financial Officer and the former Chief Financial Officer. Certain RSUs to the Chief Executive Officer vested immediately, and the remainder will vest quarterly over a three-year period. The approved grants of the RSUs to the Chief Financial Officer will vest over a four-year period. The approved grants of the RSUs to the former Chief Financial Officer would have vested over a four-year period. On November 8, 2023, the Chief Financial Officer of Innovative Solutions and Support, Inc., notified the Company of his resignation from all of his positions with the Company, effective immediately, which resulted in the forfeiture of 11,503 RSUs.

 As of September 30, 2025, there were 311,094 restricted stock units outstanding under the 2019 Plan. As of September 30, 2024, and September 30, 2023 there were 242,080 and 101,968 respectively, unvested restricted stock units outstanding under the 2019 Plan.

 Non-vested

 Weighted Average

 Stock Awards

 Share Price

 Balance at September 30, 2023

 101,968

 $

 7.84

 Granted

 207,226

 7.34

 Issued

 ( 55,611)

 7.63

 Cancelled

 ( 11,503)

 7.33

 Balance at September 30, 2024

 242,080

 $

 7.49

 Granted

 201,512

 7.77

 Issued

 ( 128,208)

 7.38

 Cancelled

 ( 4,290)

 8.45

 Balance at September 30, 2025

 311,094

 $

 7.70

 Total share-based compensation expense associated with the annual grant of restricted stock awards under the 2019 Plan was approximately $ 1,340,197, $ 702,000 and $ 694,000 for the fiscal years ended September 30, 2025, 2024 and 2023, respectively. Compensation expense for restricted stock units is recognized ratably over the vesting term. Forfeitures are recognized when incurred

 As of September 30, 2025, unrecognized compensation expense of $ 1,524,952, net of forfeitures, related to non-vested stock awards under the 2019 Plan, will be recognized.

 Market-Based Restricted Stock Units

 During the quarter ended December 31, 2024, to better align executive compensation with the Company's Total Shareholder Return, the Board approved a special one-time grant of 201,000 market-based restricted stock units ("MSUs") to the Company's Chief Executive Officer under the terms and conditions of the 2019 Plan. The MSU is a restricted stock unit containing vesting terms conditional upon the attainment of both 1) continued service to vesting and 2) stock price appreciation targets indexed against the Company's actual stock price performance over a specified measurement period. Under the terms of the 2019 Plan, no MSUs are eligible for vesting prior to the first anniversary of the date of grant of the award, with the exception of accelerated vesting permitted under certain conditions subject to the plan provisions. Subject to the terms of the 2019 Plan, under the terms of the grant, the MSU will vest as follows:

 1) an initial one -third (1/3rd) of the MSUs shall vest on the first trading date after the shares of the Company's common stock have traded at a price equal to or greater than ten dollars ($ 10.00) per share for twenty ( 20) consecutive trading days or as provided in the provisions of the second succeeding paragraph below;

 2) an additional one -third (1/3rd) of the MSUs shall vest on the first trading date after shares of the Company's common stock have traded at a price equal to or greater than twelve dollars ($ 12.00) per share for twenty ( 20) consecutive trading days; and

 3) the remaining MSUs shall vest on the first trading date after the shares of the Company's common stock have traded at a price equal to or greater than fourteen dollars ($ 14.00) per share for twenty ( 20) consecutive trading days.

 Additionally, if the tranche of MSUs subject to vesting pursuant to (1) above does not vest on or before November 20, 2027, then, with respect to such MSUs, the target trading price for the Company's common stock will be increased to twelve dollars ($ 12.00) per share, such that the MSUs subject to (1) above will vest on the first trading date after shares of the Company's common stock have traded at a price equal to or greater than twelve dollars ($ 12.00) per share for twenty ( 20) consecutive trading days.

 Any MSUs that have not vested on or before the fourth anniversary of the grant date are immediately forfeited. Compensation expense for MSUs is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards using the graded vesting attribution method. Forfeitures are recognized when incurred

 With respect to each MSU that becomes vested in accordance with the terms of the award agreement, the Grantee will be entitled to receive one share of common stock upon the settlement of the MSUs.

 The Company estimated both the grant-date fair value of the MSUs and the derived vesting periods using a Monte Carlo simulation with the following input assumptions:

 Number of MSUs Granted

 201,000

 Grant Date

 11/20/24

 Grant Date Stock Price

 $ 7.72

 Expected Dividend Rate

 0 %

 Expected Volatility

 48 %

 Weighted average risk-free interest rate

 4.27 %

 Contractual Term

 4 years

 Utilizing Monte Carlo simulation, the MSUs grant date fair value was estimated to be $ 1,109,340 with a $ 5.52 weighted average grant date fair value per award and the derived vesting periods were estimated to be between 1.2 years and 1.7 years.

 For the fiscal years ended September 30, 2025, 2024 and 2023 the Company recognized $ 684,183, $ 0 and $ 0, respectively, of compensation expense related to MSU awards.

 As of September 30, 2025, unrecognized compensation expense of $ 425,157 associated with non-vested MSUs will be recognized in future periods under the 2019 Plan. During the fiscal year ended September 30, 2025, no MSUs vested or were forfeited.

 On February 13, 2025, the market performance condition for 67,000 units of MSUs granted November 20, 2024 to the Company's Chief Executive Officer was met, these shares will vest according to the Company's Amended and Restated 2019 Stock-Based Incentive Compensation Plan.

 On July 10, 2025, the market performance condition for an additional 67,000 units of MSUs granted November 20, 2024 to the Company's Chief Executive Officer was met, these shares will vest according to the Company's Amended and Restated 2019 Stock-Based Incentive Compensation Plan.

 On August 8, 2025, the market performance condition for the final 67,000 units of MSUs granted November 20, 2024 to the Company's Chief Executive Officer was met, these shares will vest according to the Company's Amended and Restated 2019 Stock-Based Incentive Compensation Plan.

 On November 20, 2025, the service condition for all 201,000 units of MSUs granted November 20, 2024 to the Company's Chief Executive Officer was met. The market condition for all 201,000 units of MSU's was met during fiscal year ended September 30, 2025. Consequently, on November 20, 2025, all 201,000 MSU's vested according to the Company's Amended and Restated 2019 Stock-Based Incentive Compensation Plan. The unvested compensation expense as of the one-year anniversary date of grant will be immediately expensed and recorded as compensation expense in the first fiscal 2026 quarter ended December 31, 2025.

 Time Based Stock Options with market-based exercisability conditions

 During the quarter ended March 31, 2025, in a continuing effort to more closely correlate executive compensation with the Company's Total Shareholder Return, the Board approved a grant of 72,062 time vested stock options with a market based exercise price condition ("MSOs") to the Company's Chief Executive Officer and 33,259 MSOs to the Company's Chief Financial Officer under the terms and conditions of the Amended and Restated 2019 Stock-Based Incentive Compensation Plan.

 The MSOs are similar to traditional time vested stock options and vest over four years, with 25 % vesting on the first anniversary of the grant date (February 19, 2026) and the remaining shares vesting quarterly at 6.25 % on the last business day of May, August, November and February of calendar years two, three and four from the date of grant. However, the MSOs only become exercisable if the Company's share price reaches or exceeds the date of grant closing stock price of $ 8.59 plus a targeted market threshold of 15 %, or $ 9.88 for 20 consecutive trading days at any time during the four-year vesting period. Once this market threshold is met, the vested shares can be exercised according to the vesting schedule and the terms and conditions set forth in the 2019 Plan.

 No MSOs are eligible for vesting or exercise prior to the first anniversary of the date of grant of the award, with the exception of accelerated vesting permitted under certain conditions subject to the plan provisions. Compensation expense for MSOs is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards using the graded vesting attribution method. Forfeitures are recognized when incurred

 With respect to each MSO that becomes exercised in accordance with the terms of the award agreement, the Grantee will be entitled to receive one share of common stock upon the settlement of the MSOs.

 The Company estimated the grant-date fair value of the MSOs awards using a Monte Carlo simulation with the following input assumptions:

 Number of MSOs granted

 105,321

 Grant Date

 02/18/25

 Grant Date Stock Price

 $ 8.27

 Expected Dividend Rate

 0 %

 Expected Volatility

 47 %

 Weighted average risk-free interest rate

 4.29 %

 Exercise price

 $ 8.59

 Contractual Term

 10 years

 Utilizing Monte Carlo simulation, the aggregate MSOs grant date fair value was estimated to be $ 474,998 with a $ 4.51 weighted average grant date fair value per option and vesting periods were estimated to be between 1 years and 4 years with a 10 year contractual term.

 For the fiscal years ended September 30, 2025, 2024 and 2023 the Company recognized $ 168,336, $ 0 and $ 0 of compensation expense, respectively, related to the MSO awards.

 As of September 30, 2025, unrecognized compensation expense of $ 306,664 associated with non-vested MSOs will be recognized in future periods under the 2019 Plan. During the fiscal year ended September 30, 2025, no MSOs vested or were forfeited.

 On June 16, 2025, the Company's closing share price exceeded the $ 9.88 MSOs targeted market threshold condition for 20 consecutive trading days for the MSOs granted February 18, 2025, thus meeting the market condition for exercisability subject to the vesting schedule and terms and conditions set forth in the Company's Amended and Restated 2019 Stock-Based Incentive Compensation Plan.

 The following table shows share-based compensation expense by line item within our Consolidated Statement of Operations:

 For the fiscal year ended September 30,

 2025

 2024

 2023

 Cost of sales

 $

 134,448

 $

 56,280

 $

 -

 Research and development

 180,607

 63,859

 -

 Selling, general and administrative

 2,021,172

 883,153

 1,450,428

 Total

 $

 2,336,227

 $

 1,003,292

 $

 1,450,428

 16. Commitments and Contingencies

 Purchase Obligations

 A "purchase obligation" is defined as an agreement to purchase goods or services that is enforceable and legally binding on the Company and that specifies all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. These amounts primarily comprise open purchase order commitments entered in the ordinary course of business with vendors and subcontractors pertaining to fulfillment of the Company's current order backlog. The purchase obligations on open purchase orders were $ 20.9 million, $ 9.8 million and $ 2.4 million as of September 30, 2025, 2024 and 2023, respectively.

 Product Liability

 The Company has product liability insurance of $ 50,000,000. The Company has not experienced any material product liability claims.

 Legal Proceedings

 In the ordinary course of business, the Company is at times subject to various legal proceedings and claims. The Company does not believe any such matters that are currently pending will, individually or in the aggregate, have a material effect on the results of operations or financial position.

 17. Related Party Transactions

 In recent years, the Company has had sales to AML Global Eclipse, LLC, ("Eclipse"), whose principal shareholder is also a principal shareholder in the Company. Eclipse became a new related party for fiscal year 2023 due to their president acquiring more than 10 % in shares on the Company. Prior balances are disclosed below for comparability. As of July 2025, the principal shareholder no longer owns any shares of the Company.

 Sales to Eclipse amounted to $ 0.2 million, $ 0.2 million and $ 0.3 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.

 On October 18, 2024, the Company entered into a consulting agreement with Peduzzi Associated, ltd. ("PAL"), an entity in which board member Maj. General Dean serves as President. PAL will provide consulting services in support of the Company's business development growth into the DoD. The term of the agreement is for one year and in consideration for services the Company will pay PAL a retainer of $ 9,500 per month. For fiscal year 2025, the Company paid PAL $ 114,000.

 18. Business Segments

 The Company operates in one business segment as a systems integrator that designs, develops, manufactures, sells and services, air data equipment, engine display systems, standby equipment, primary flight guidance, autothrottles and cockpit display systems to

 OEMs, the DoD, the Department of Interior, other government agencies, commercial air transport carriers and corporate/general aviation markets.

 The individual responsible for key decisions within the Company's business segment is defined as the Chief Operating Decision Maker ("CODM"). The Company's CODM is the Chief Executive Officer ("CEO"), Shahram Askarpour. The CODM is the ultimate decision maker as he is responsible for final decisions in allocating resources to achieve the Company's strategic objectives and assessing the Company's performance. The CEO uses consolidated net income and related expense categories as included in the consolidated statement of operations to assess the performance of the segment and make key strategic and operational decisions, such as capital expenditures allocations, new business acquisitions, operating budget review and approval. While input is received from other executive management team members, no other individual approves key operating decisions without the approval of the CEO. There is no management committee or executive committee.

 Geographic Data

 Most of the Company's sales, operating results and identifiable assets are generated in the United States. All long-lived assets are held in the United States. In fiscal years 2025, 2024 and 2023, net sales outside the United States amounted to $ 16.4 million, $ 22.8 million and $ 15.5 million, respectively.

 19. Lease Recognition

 The Company accounts for leases in accordance with ASU 2016-02 and records "right-of-use" assets and corresponding lease liabilities on the balance sheet for most leases with an initial term of greater than one year. We recognize payments for leases with a term of less than one year in the statements of operations on a straight-line basis over the lease term.

 We lease real estate and equipment under various operating leases. A lease exists when a contract or part of a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining whether a lease exists, we consider whether a contract provides us with both: (a) the right to obtain substantially all of the economic benefits from the use of the identified asset and (b) the right to direct the use of the identified asset.

 Some of our leases include base rental periods coupled with options to renew or terminate the lease, generally at our discretion. In evaluating the lease term, we consider whether we are reasonably certain to exercise such options. To the extent a significant economic incentive exists to exercise an option, that option is included within the lease term. However, based on the nature of our lease arrangements, options generally do not provide us with a significant economic incentive and are therefore excluded from the lease term for the majority of our arrangements.

 Our leases typically include a combination of fixed and variable payments. Fixed payments are generally included when measuring the right-of-use asset and lease liability. Variable payments, which primarily represent payments based on usage of the underlying asset, are generally excluded from such measurement and expensed as incurred. In addition, certain of our lease arrangements may contain a lease coupled with an arrangement to provide other services, such as maintenance, or may require us to make other payments on behalf of the lessor related to the leased asset, such as payments for taxes or insurance. As permitted by ASU 2016-02, we have elected to account for these non-lease components together with the associated lease component if included in the lease payments. This election has been made for each of our asset classes.

 The measurement of "right-of-use" assets and lease liabilities requires us to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for our leases, the rate implicit in the lease is not known. In these instances, we utilize an incremental borrowing rate, which represents the rate of interest that we would pay to borrow on a collateralized basis over a similar term.

 Related assets and liabilities resulting from lease obligations are deemed to be immaterial.

 20. Loan Agreement

 On June 28, 2023, the Company and one of its subsidiaries entered into an Amendment to Loan Documents (the "Loan Amendment") with PNC Bank, National Association (the "PNC"), which amends certain terms of that certain Loan Agreement entered into by the parties on May 11, 2023 (the "Loan Agreement" and, as amended, the "Amended Loan Agreement") and (ii) a corresponding Term Note in favor of PNC (the "Term Note"), which together provide for a senior secured term loan in an aggregate principal amount of

 $ 20.0 million, with a maturity date of June 28, 2028. Availability of funds under the Term Loan was conditioned upon the closing of the transactions contemplated by the Amended Loan Agreement and was used to fund a portion of the 2023 Transaction. Under the agreement, the Company has the right to prepay any amounts outstanding at any time and from time to time, whole or in part; subject to payment of any break funding indemnification amounts.

 The interest rate applicable to loans outstanding under the Term Loan is a floating interest rate equal to the sum of (A) the Term SOFR Rate (as defined in the Term Note) plus (B) an unadjusted spread of the Applicable SOFR Margin plus (C) a SOFR adjustment of ten basis points. The Applicable SOFR Margin ranges from 1.5 % to 2.5 % depending on the Company's funded debt to EBITDA ratio. Commencing on June 30, 2023, the Term Loan consists of sixty equal monthly principal installments, over a period of ten years, with the balance payable on the maturity date of the Term Loan.

 In addition to providing for the Term Loan, the Loan Agreement, together with a corresponding Revolving Line of Credit Note in favor of PNC, executed May 11, 2023, provided for a senior secured revolving line of credit in an aggregate principal amount of $ 10,000,000, with an expiration date of May 11, 2028 (the "Revolving Line of Credit").

 On December 19, 2023, the Company and PNC entered into an Amendment to the Loan (the "Restated Loan Amendment") and a corresponding Amended and Restated Revolving Line of Credit Note ("Restated Line of Credit Note") and Amended and Restated Line of Credit and Investment Sweep Rider (the "Restated Rider"), to increase the aggregate principal amount available under the Company's senior secured revolving line of credit from $ 10,000,000 to $ 30,000,000 and extend the maturity date until December 19, 2028.

 On September 30, 2024, the Company and one of its subsidiaries, Innovative Solutions and Support, LLC ("ISSL") entered into an Amendment to Loan Documents (the "Loan 2024 Amendment") with PNC, which amends certain terms of the Loan Agreement to increase the line of credit with PNC. Concurrently with the Loan 2024 Amendment, the Company entered into (i) an Amended and Restated Revolving Line of Credit in favor of PNC (the "A&R Revolving Line of Credit"), and (ii) an Amended and Restated Line of Credit and Investment Sweep Rider with PNC (the "A&R Rider").

 The A&R Revolving Line of Credit Note provides for a senior secured revolving line of credit in an aggregate principal amount of $ 35,000,000, with an expiration date of December 19, 2028. The interest rate applicable to loans outstanding under the A&R Revolving Line of Credit is a rate per annum equal to the sum of (A) Daily SOFR (as defined in the A&R Revolving Line of Credit Note) plus (B) an unadjusted spread of the Applicable SOFR Margin plus (C) a SOFR adjustment of ten basis points. The applicable SOFR Margin ranges from 1.5 % to 2.5 % depending on the Company's funded debt to EBITDA ratio as defined in the A&R Revolving Line of Credit Note. The A&R Rider provides for how PNC will make advances to the Company under the AR Revolving Line of Credit.

 The Company was in compliance with all applicable covenants throughout and at September 30, 2024. As of fiscal year ended September 30, 2024, the outstanding balance drawn on the A&R Revolving Line of Credit was $ 28,027,002 with an effective interest rate of 6.4 percent. As of September 30, 2024, the Company had availability of $ 6,972,998 under the A&R Revolving Line of Credit.

 On July 18 th, 2025, the outstanding balance drawn on the A&R Revolving Line of Credit of $ 25,342,529 was fully paid. The payoff is considered a debt extinguishment and no gain or loss was recorded upon settlement. For fiscal year 2025 the A&R Revolving Line of Credit had an effective interest rate of 3.6 percent.

 On July 18, 2025, Innovative Solutions and Support, Inc. (the "Company"), its wholly-owned subsidiary Innovative Solutions and Support, LLC ("Borrower") and certain domestic subsidiaries entered into a Credit Agreement (the "2025 Credit Agreement") with J.P. Morgan Chase Bank, N.A. (the "Bank") and the other lender parties thereto, which Credit Agreement provides for the Bank to extend to the Borrower credit facilities in an aggregate principal amount of up to USD $ 100.0 million (the "New Credit Facilities"), consisting of the following:

 1)
 a USD $ 25,000,000 initial term loan facility (the "Initial Term Loan"),

 2)
 a USD $ 30,000,000 revolving credit facility (the "Revolving Facility") and a;

 3)
 a USD $ 45,000,000 delayed draw term loan facility (the "Delayed Draw Term Loan").

 The New Credit Facilities replaced the Company's existing $ 35 million Amended and Restated Revolving Line of Credit Note, dated as of September 30, 2024 in favor of PNC Bank, National Association (the "PNC Facility").

 The New Credit Facilities provide expanded liquidity and improved flexibility, better enabling the Company to execute on its long-term growth strategy and capital allocation priorities, consistent with the Company's focus on driving long-term value creation for its shareholders.

 Loans under the New Credit Facilities bear interest at the Borrower's option at either:

 (i)
 the Alternate Base Rate plus an applicable margin, or

 (ii)
 the Adjusted Term Secured Overnight Financing Rate ("SOFR") plus an applicable margin.

 The Alternate Base Rate is defined as the highest of (a) the Prime Rate, (b) the Federal Reserve Bank of New York rate for overnight funds plus 0.50 %, and (c) the Adjusted Term SOFR Rate for a one-month period plus 1.00 %, with a minimum rate of 1.00 % per annum.

 The Adjusted Term SOFR Rate is the Term SOFR Rate plus 0.10 %.

 An applicable margin is determined based on the Company's Total Net Leverage Ratio and ranges from 0.75 % to 1.75 % for Alternate Base Rate loans and from 1.75 % to 2.75 % for Adjusted Term SOFR Rate loans.

 The New Credit Facilities mature five years (i.e. July 18, 2030) following the date of the initial advance (the "Maturity Date") All outstanding balances are due on the Maturity Date.

 For the fiscal year ended September 30, 2025, the Initial Term Loan had an effective interest rate of 7.0 % and the Revolving Facility had an effective interest rate of 8.0 %. No borrowings were drawn on the Delayed Draw Term Loan.

 Initial Term Loan

 The Initial Term Loan requires quarterly principal payments of $ 625,000 commencing September 30, 2025, with the remaining balance due on the Maturity Date.

 Revolving Facility Loan

 The Revolving Facility matures five years (i.e. July 18, 2030) following the date of the initial advance (the "Maturity Date") with all outstanding balances due on the Maturity Date.

 The Revolving Facility principal is due on the Maturity Date. All amounts outstanding under the Credit Facilities will be due and payable upon the earlier of the Maturity Date, or the acceleration of the Credit Facilities upon an event of default.

 On August 18, 2025, the balance of $ 2,000,000 on the Revolving Facility was paid off. There were no additional borrowings on the Revolving facility as of September 30, 2025.

 Delayed Draw Term Loan

 The Delayed Draw Term Loan requires quarterly principal payments equal to 2.50 % of the original aggregate principal amount commencing with the first scheduled payment date after January 18, 2026, with the remaining balance due on the Maturity Date.

 Under the New Term Loan and Revolving Facility, $ 25,000,000 and $ 2,000,000, respectively were immediately drawn and used to pay $ 25,342,529 as payoff for the A&R Revolving Line of Credit and to pay $ 631,700 in transaction fees and expenses. The remaining $ 1,026,237.50 balance was deposited by the Company to the PNC Checking account.

 Debt Issuance Costs

 For the Initial Term loan, debt issuance costs of $ 246,148 were capitalized as contra-liabilities and are amortized as interest expense on a basis that approximates the effective interest method over the term of the Initial Term Loan debt. Contra-liabilities are netted against and presented as a direct deduction from the carrying amount of debt. The unamortized balance of the Initial Term loan contra-liabilities as of September 30, 2025 was $ 236,193.

 For the Revolving Facility and the Delayed Draw Term Loan, debt issuance costs of $ 295,378 and $ 443,066, respectively were capitalized as assets and are amortized using straight straight-line amortization to interest expense over the terms of the respective debt. The current and non-current capitalized assets related to the Revolving Facility and the Delayed Draw Term Loan are aggregated to Current Other Assets and Non-Current Other Assets on the Consolidated Balance Sheet. The unamortized balances of the Revolving Facility and the Delayed Draw Term Loan included in current and non-current other assets as of September 30, 2025 were $ 283,252 and 424,878, respectively

 Future borrowings under the Initial Term Loan and Revolving Facility may be used for working capital and general corporate purposes, including permitted acquisitions. The Delayed Draw Term Loan may only be used for permitted acquisitions.

 Debt Collateral and Covenants

 The Company's obligations under the 2025 Credit Agreement are secured by substantially all of the assets of the Company and certain of its subsidiaries, including a first priority lien on the Company's Exton facility.

 The Company's Initial Term Loan Facility, Revolving Facility and Delayed Term Loan facility contain affirmative and negative covenants that, among other things, may limit or restrict the Company's ability to: create liens and encumbrances; incur debt; merge, dissolve, liquidate or consolidate; make acquisitions and investments; dispose of or transfer assets; change the nature of our business; engage in certain transactions with affiliates; and enter into hedging transactions, in each case, subject to certain qualifications and exceptions. In addition, we are required to maintain a maximum net leverage ratio and a minimum fixed charge coverage ratio.

 The Company was in compliance with all debt covenants as of September 30, 2025.

 Commitment Fees

 The 2025 Credit Agreement terms include Revolving Facility and Delayed Draw Term Loan Facility commitment fees. For the fiscal ended September 30, 2025, unused line of credit fees of $ 15,194 under the Revolving Facility and $ 23,438 under the Delayed Draw Term Loan were included in interest expense. There were no unused line of credit fees for the fiscal year ended September 30, 2024 and 2023.

 Long term debt, excluding contra-liabilities, consisted of the following:

 2025

 2024

 Initial Term Loan

 $

 24,375,000

 $

 —

 Revolving Facility

 —

 —

 Delayed Draw Term Loan

 —

 —

 A&R Revolving Line of Credit

 —

 28,027,002

 Subtotal

 $

 24,375,000

 $

 28,027,002

 Less current maturities

 2,500,000

 —

 Total Long Term Debt

 $

 21,875,000

 $

 28,027,002

 As of September 30, 2025, scheduled annual payments based on the maturities of debt are expected to be as follows:

 Fiscal year

 Annual payments

 2026

 $ 2,500,000

 2027

 2,500,000

 2028

 2,500,000

 2029

 2,500,000

 2030

 14,375,000

 Total

 $ 24,375,000

 * Excludes interest payments payable at each debt reset date

 Loan Facilities Availability

 As of September 30, 2025, the Company had availability of $ 30,000,000 under the Revolving Facility and $ 45,000,000 under the Delayed Draw Term Loan facility.

 The Company has the right to request up to $ 25,000,000 in additional revolving commitments or incremental term loans, subject to lender approval and satisfaction of certain conditions.

 21. Subsequent Events

 None.

 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
 None.
 Item 9A. Controls and Procedures
 (a)
 We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a 15(e) promulgated under the Exchange Act of 1934. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these controls and procedures were effective as of September 30, 2025 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the rules and forms of the SEC and accumulated and communicated to our management including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 (b)
 Management's annual report on internal control over financial reporting is set forth below on this Annual Report on Form 10-K.

 (c)
 There were no changes in the Company's internal control over financial reporting identified in connection with the evaluation of such controls that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

 Management's Report on Internal Control over Financial Reporting
 The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is a process designed under the supervision of the Company's principal executive officer and principal financial officer and intended to provide reasonable assurance regarding the reliability of financial reporting and preparation of the Company's financial statements for external purposes in accordance with U.S. GAAP.
 The Company's internal control over financial reporting includes policies and procedures that are intended to (1) pertain to maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Company assets that could have a material effect on financial statements.
 Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and, even when determined to be effective, can only provide reasonable, not absolute, assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate as a result of changes in conditions or deterioration in the degree of compliance.
 Management assessed the effectiveness of the Company's internal control over financial reporting as of September 30, 2025. This assessment was based on criteria for effective internal control over financial reporting described in "Internal Control-Integrated Framework (2013)," issued by the Committee on Sponsoring Organizations of the Treadway Commission. Based on this assessment,

 management believes that, as of September 30, 2025, internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP.
 Item 9B. Other Information
 None.
 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
 None.
 Item 10. Directors, Executive Officers and Corporate Governance.
 This information (other than information relating to executive officers included in Part I, Item 1 of this Annual Report on Form 10-K) will be included in the Company's Proxy Statement relating to its Annual Meeting of Shareholders, which will be filed within 120 days after the close of the Company's fiscal year covered by this Annual Report on Form 10-K, and is hereby incorporated by reference to such Proxy Statement.
 The Company has adopted a written code of business conduct and ethics, known as the Company's code of conduct, which applies to all of its directors, officers, and employees, including its Chief Executive Officer, its President, and its Chief Financial Officer. The Company's code of conduct is available on its website, www.iascorp.com (under the "Company Corporate Governance" tab). The code of conduct may also be obtained by contacting investor relations at (610) 646 9800. Any amendments to the Company's code of conduct or waivers from provisions of the code for its directors and officers will be disclosed on the Company's website promptly following the date of such amendment or waiver.
 We also have a disclosure and insider trading policy which governs the purchase, sale and/or other dispositions of our securities by our directors, executive officers and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us. A copy of our disclosure and insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
 Item 11. Executive Compensation.
 This information will be included in the Company's Proxy Statement relating to its Annual Meeting of Shareholders, which will be filed within 120 days after close of the Company's fiscal year covered by this Annual Report on Form 10-K, and is hereby incorporated by reference to such Proxy Statement.
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
 This information will be included in the Company's Proxy Statement relating to its Annual Meeting of Shareholders, which will be filed within 120 days after close of the Company's fiscal year covered by this Annual Report on Form 10-K and is hereby incorporated by reference to such Proxy Statement.

 Item 13. Certain Relationships and Related Transactions and Director Independence.
 Related Party Transactions
 This information will be included in the Company's Proxy Statement relating to its Annual Meeting of Shareholders, which will be filed within 120 days after close of the Company's fiscal year covered by this Annual Report on Form 10-K, and is hereby incorporated by reference to such Proxy Statement.
 Item 14. Principal Accounting Fees and Services
 This information will be included in the Company's Proxy Statement relating to its Annual Meeting of Shareholders, which will be filed within 120 days after close of the Company's fiscal year covered by this Annual Report on Form 10-K, and is hereby incorporated by reference to such Proxy Statement.

 Item 15. Exhibits and Financial Statement Schedules.
 (a)
 The following documents are filed as part of this Annual Report on Form 10-K:

 1.
 Financial Statements

 See index to Financial Statements at Item 8 of this Annual Report on Form 10-K.
 2.
 Financial Statement Schedules

 Schedules have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the financial statements or notes thereto.
 (b)
 The following exhibits are filed as part of, or incorporated by reference into this Annual Report on Form 10-K:

 Exhibit
Number

 Exhibit Title

 2.1

 Asset Purchase and License Agreement, dated June 30, 2023, by and between Innovative Solutions & Support, Inc. and Honeywell International Inc. (1)

 2.2

 Amendment No. 1, dated October 12, 2023, to Asset Purchase and License Agreement by and between Innovative Solutions and Support, Inc. and Honeywell International Inc., dated June 30, 2023 (2)

 2.3

 Amendment No. 2, dated March 23, 2024, to Asset Purchase and License Agreement by and between Innovative Solutions and Support, Inc. and Honeywell International Inc., dated June 30, 2023 (3)

 2.4

 Amendment No. 3, dated July 22, 2024, to Asset Purchase and License Agreement by and between Innovative Solutions and Support, Inc. and Honeywell International Inc., dated June 30, 2023 (4)

 2.5

 Asset Purchase and License Agreement, dated September 27, 2024, by and between Innovative Solutions and Support, Inc., and Honeywell International Inc. (5)

 3.1

 Articles of Incorporation of Innovative Solutions and Support, Inc. (6)

 3.2

 Articles of Amendment, filed April 17, 2023, to the Articles of Incorporation of Innovative Solutions and Support, Inc. (7)

 3.3

 Amended and Restated Bylaws of Innovative Solutions and Support, Inc. (8)

 4.1

 Description of Capital Stock (filed herewith)

 4.2

 Rights Agreement, dated September 12, 2022, between Innovative Solutions and Support, Inc. and Broadridge Corporate Issuer Solutions, Inc. (9)

 4.3

 Amendment to Rights Agreement, dated September 1, 2023, between Innovative Solutions and Support, Inc. and Broadridge Corporate Issuer Solutions, Inc. (10)

 4.4

 Amendment to Rights Agreement, dated September 9, 2024, between Innovative Solutions & Support, Inc. and Broadridge Corporate Issuer Solutions, Inc. (11)

 10.1

 Employment Agreement, dated February 14, 2012, between Innovative Solutions & Support, Inc. and Shahram Askarpour (12)

 10.2

 First Amendment to Employment Agreement between Innovative Solutions and Support, Inc. and Shahram Askarpour dated September 6, 2024 (13)

 10.3

 Innovative Solutions & Support, Inc. Amended and Restated 2019 Stock-Based Incentive Compensation Plan (14)

 10.4

 Offer Letter with Jeffrey DiGiovanni, dated March 18, 2024 (14)

 10.5

 Restricted Stock Unit Award Agreement, dated June 19, 2024, by and between Jeffrey DiGiovanni and Innovative Solutions and Support, Inc. (16)

 10.6

 Change in Control Agreement, dated as of June 20, 2024, by and between Jeffrey DiGiovanni and Innovative Solutions and Support, Inc. (17)

 10.7

 Performance Stock Unit Award Agreement dated November 20, 2024 by and between Shahram Askarpour and Innovative Solutions and Support, Inc. (18)

 10.8

 Form of Non-Qualified Stock Option Agreement (19)

 10.9

 Form of Restricted Stock Unit Award Agreement (20)

 10.10

 Amendment to Loan Documents, dated June 28, 2023, by and among Innovative Solutions and Support, Inc., Innovative Solutions and Support, LLC, and PNC Bank, National Association (21)

 10.11

 Term Note, dated as of June 28, 2023, by Innovative Solutions and Support, Inc. and Innovative Solutions and Support, LLC (22)

 10.12

 Revolving Line of Credit Note, dated as of May 11, 2023, by Innovative Solutions and Support, Inc. and Innovative Solutions and Support, LLC (23)

 10.13

 Amendment to Loan Documents, dated December 19, 2023, by and among Innovative Solutions and Support, Inc., Innovative Solutions and Support, LLC, and PNC Bank, National Association (24)

 10.14

 Amended and Restated Revolving Line of Credit, dated December 19, 2023, executed by Innovative Solutions and Support, Inc. and Innovative Solutions and Support, LLC (25)

 10.15

 Amended and Restated Line of Credit and Investment Sweep Rider, dated December 19, 2023, by and among Innovative Solutions and Support, Inc., Innovative Solutions and Support, LLC, and PNC Bank, National Association (26)

 10.16

 Amendment to Loan Documents, dated September 30, 2024, by and among Innovative Solutions and Support, Inc., Innovative Solutions and Support, LLC, and PNC Bank, National Association (27)

 10.17

 Amended and Restated Revolving Line of Credit Note, dated September 30, 2024, by and among Innovative Solutions and Support, Inc., Innovative Solutions and Support, LLC, and PNC Bank, National Association (28)

 10.18

 Amended and Restated Line of Credit and Investment Sweep Rider, dated September 30, 2024, by and among Innovative Solutions and Support, Inc., Innovative Solutions and Support, LLC, and PNC Bank, National Association (29)

 10.19

 Sales Agreement, dated September 22, 2023, by and between Innovative Solutions and Support, Inc. and Stifel, Nicolaus & Company, Incorporated (30)

 10.20

 Credit Agreement, dated as of July 18, 2025, among Innovative Solutions and Support, Inc., Innovative Solutions and Support, LLC, the other loan parties party thereto, the lenders party thereto, and JP Morgan Chase Bank, N.A., as administrative agent (31)

 19.1

 Insider Trading Policy (32)

 Subsidiaries of Innovative Solutions and Support, Inc. (filed herewith)

 23.1

 Consent of Grant Thornton LLP (filed herewith)

 31.1

 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) (filed herewith)

 31.2

 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) (filed herewith)

 32.1

 Certification Pursuant to U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

 Clawback Policy (33)

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

 (1)
 Incorporated by reference to Exhibit 2.1 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024.

 (2)
 Incorporated by reference to Exhibit 2.2 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024.

 (3)
 Incorporated by reference to Exhibit 2.3 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024.

 (4)
 Incorporated by reference to Exhibit 2.4 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024.

 (5)
 Incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed with the SEC on October 3, 2024.

 (6)
 Incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the SEC on September 19, 2007.

 (7)
 Incorporated by reference to Exhibit 3.3 to the Registrant's Current Report on Form 8-K filed with the SEC on April 18, 2023.

 (8)
 Incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the SEC on May 1, 2018.

 (9)
 Incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the SEC on September 12, 2022.

 (10)
 Incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the SEC on September 1, 2023.

 (11)
 Incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the SEC on September 10, 2024.

 (12)
 Incorporated by reference to Exhibit 5.2 to the Registrant's Current Report on Form 8-K filed with the SEC on April 2, 2012.

 (13)
 Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on September 12, 2024.

 (14)
 Incorporated by reference to Exhibit 10,1 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024.

 (15)
 Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on March 21, 2024.

 (16)
 Incorporated by reference to Exhibit 10,2 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024.

 (17)
 Incorporated by reference to Exhibit 10,3 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024.

 (18)
 Incorporated by reference to Exhibit 5.2 to the Registrant's Current Report on Form 8-K filed with the SEC on November 22, 2024.

 (19)
 Incorporated by reference to Exhibit 10,3 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 14, 2024.

 (20)
 Incorporated by reference to Exhibit 10,4 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 14, 2024.

 (21)
 Incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the SEC on July 7, 2023.

 (22)
 Incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the SEC on July 7, 2023.

 (23)
 Incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed with the SEC on July 7, 2023.

 (24)
 Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on December 22, 2023.

 (25)
 Incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the SEC on December 22, 2023.

 (26)
 Incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K filed with the SEC on December 22, 2023.

 (27)
 Incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on October 3, 2024.

 (28)
 Incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on October 3, 2024.

 (29)
 Incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on October 3, 2024.

 (30)
 Incorporated by reference to Exhibit 1.1 to the Registrant's Current Report on Form 8-K filed with the SEC on September 22, 2023.

 (31)
 Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on July 22, 2025.

 (32)
 Incorporated by reference to Exhibit 19.1 to the Registrant's Annual Report on Form 10-K filed with the SEC on December 30, 2024.

 (33)
 Incorporated by reference to Exhibit 97 to the Registrant's Annual Report on Form 10-K filed with the SEC on December 30, 2024.

 Item 16. Form 10-K Summary
 None.

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 By:

 /s/ Shahram Askarpour

 Shahram Askarpour

 Director & Chief Executive Officer

 Dated: December 22, 2025

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Shahram Askarpour

 Director & Chief Executive Officer

 Shahram Askarpour

 (Principal Executive Officer)

 /s/ Jeffrey DiGiovanni

 Chief Financial Officer

 Jeffrey DiGiovanni

 (Principal Financial and Accounting Officer)

 /s/ Glen R. Bressner

 Director & Chairman of the Board

 Glen R. Bressner

 /s/ Stephen L. Belland

 Stephen L. Belland

 /s/ Roger A. Carolin

 Roger A. Carolin

 /s/ Garry Dean

 Garry Dean

 /s/ Denise Devine

 Denise Devine

 /s/ Richard Silfen

 Richard Silfen