What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2026-02-13 · 291 added, 136 removed, 584 unchanged (42% of the section changed)

18 unchanged sentences

Accrued expenses

Contract liability

Contract liabilities

Total current liabilities

5 unchanged sentences

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 December 31, 2025 and September 30, 2025

No shares issued and outstanding at March 31, 2026 and September 30, 2025

Common stock, $ .001 par value:

75,000,000 shares authorized, 18,110,874 and 17,970,453 issued at December 31, 2025 and September 30, 2025, respectively

75,000,000 shares authorized, 18,168,575 and 17,970,453 issued at March 31, 2026 and September 30, 2025, respectively

Additional paid-in capital

Retained earnings

Treasury stock, at cost, 339,644 shares at December 31, 2025 and at September 30, 2025, respectively

Treasury stock, at cost, 339,644 shares at March 31, 2026 and at September 30, 2025, respectively

( 3,460,972 )

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended December 31,

Three Months Ended March 31,

Six Months Ended March 31,

Total net sales

7 unchanged sentences

Interest expense

( 1,004,931 )

Interest income

10 unchanged sentences

Share-based compensation

Taxes paid related to settlement of equity awards

Issuance of common stock, net of shares withheld for taxes

Balance, December 31, 2025

( 3,460,972 )

Share-based compensation

Issuance of common stock, net of shares withheld for taxes

Balance, March 31, 2026

( 3,460,972 )

See accompanying notes to the unaudited condensed consolidated financial statements.

6 unchanged sentences

( 3,460,972 )

Share-based compensation

Balance, March 31, 2025

( 3,460,972 )

See accompanying notes to the unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended December 31,

For the Six Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

9 unchanged sentences

( 4,590,467 )

( 2,007,204 )

( 2,065,720 )

Prepaid expenses and other current assets

( 1,504,893 )

Other non-current assets

4 unchanged sentences

Income taxes payable

( 2,689,205 )

Contract liabilities

3 unchanged sentences

( 2,734,392 )

( 1,817,015 )

Acquisition of businesses

( 33,000,000 )

Net cash used in investing activities

( 35,734,392 )

( 1,817,015 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Debt payments

Delayed Draw Term Loan proceeds

Term Loan principal payments

( 1,250,000 )

Initial Term Loan principal payments

Taxes paid related to net share settlement of equity awards

Net cash (used in) financing activities

( 1,395,977 )

( 1,514,510 )

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents

7 unchanged sentences

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

Transfer from intangible assets to goodwill

Transfer from prepaid expenses to intangible assets

12 unchanged sentences

The condensed consolidated balance sheet as of September 30, 2025 is derived from the audited financial statements of the Company.

Operating results for the three months ended December 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026 which cannot be determined at this time.

Operating results for the three and six months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026 which cannot be determined at this time.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

5 unchanged sentences

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 are used in accounting for, among other items, valuation of tangible and intangible assets acquired, evaluation of allowances for credit loss 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.

3 unchanged sentences

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.

If this is the case, the acquired asset 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 asset 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 asset is a business.

The Company accounts for business acquisitions using the acquisition method of accounting.

10 unchanged sentences

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

10 unchanged sentences

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.

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.

10 unchanged sentences

Highly liquid investments, purchased with an original maturity of three months or less, are classified as cash equivalents.

Cash equivalents at December 31, 2025 and September 30, 2025 consist of cash on deposit and cash invested in money market funds with financial institutions.

Cash equivalents at March 31, 2026 and September 30, 2025 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.

5 unchanged sentences

Write-offs are recorded at the time a customer receivable is deemed uncollectible.

The Company had no allowance for credit losses as of fiscal periods ended December 31, 2025 and September 30, 2025, respectively.

The Company had no allowance for credit losses as of fiscal periods ended March 31, 2026 and September 30, 2025, respectively.

Property and Equipment

6 unchanged sentences

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

● Corporate R&D airplane is depreciated over an estimated life of twelve years .

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

2 unchanged sentences

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.

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.

13 unchanged sentences

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 December 31, 2025 and September 30, 2025, according to the valuation techniques the Company used to determine their fair values.

Fair Value Measurement on December 31, 2025

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 March 31, 2026 and September 30, 2025, according to the valuation techniques the Company used to determine their fair values.

Fair Value Measurement on March 31, 2026

Quoted Price in

11 unchanged sentences

Money market funds

The December 31, 2025 and September 30, 2025 money market funds balance differs from the cash and cash equivalents balance on the condensed consolidated balance sheet due to the timing of sweep transactions within the PNC cash investment accounts.

The March 31, 2026 and September 30, 2025 money market funds balance differs from the cash and cash equivalents balance on the condensed consolidated balance sheet due to the timing of sweep transactions within the PNC cash investment accounts.

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.

that measure and display critical flight information, including data relative to aircraft separation, airspeed, altitude and engine and fuel data measurements.

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

17 unchanged sentences

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.

2 unchanged sentences

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.

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

3 unchanged sentences

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.

Historically, the Company has also recognized revenue from EDC contracts 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.

15 unchanged sentences

The impact of adjustments in contract estimates on our operating earnings is typically reflected in consolidated revenues.

There were no material contract estimate adjustments to our condensed consolidated financial statements for the three months ended December 31, 2025.

There were no material contract estimate adjustments to our condensed consolidated financial statements for the three and six months ended March 31, 2026 and March 31, 2025, respectively.

Contract Balances

6 unchanged sentences

Contract asset additions

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

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

( 2,212,695 )

Increases due to invoicing prior to satisfaction of performance obligations

December 31, 2024

March 31, 2026

September 30, 2024

Amount transferred to receivables from contract assets

( 4,334,945 )

Contract asset additions

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

( 1,169,751 )

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

Increases due to invoicing prior to satisfaction of performance obligations

December 31, 2025

The balances for Account receivable were $ 14,500,225 and $ 12,956,476 for the fiscal periods ended December 31, 2025 and September 30, 2025, respectively.

The balances for Account receivable were $ 7,716,632 and $ 12,612,482 for the fiscal periods ended December 31, 2024 and September 30,2024, respectively.

March 31, 2025

* 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 Accounts receivable were $ 13,188,080 and $ 12,956,476 for the fiscal periods ended March 31, 2026 and September 30, 2025, respectively.

The balances for Accounts receivable were $ 13,823,088 and $ 12,612,482 for the fiscal periods ended March 31, 2025 and September 30, 2024, respectively.

Lease Recognition

12 unchanged sentences

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.

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.

23 unchanged sentences

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 (“MSUs”) 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.

The Company determines the fair value of its Market Stock Unit Awards (“MSUs”) and Market Stock Option Awards (“MSO”) using Monte Carlo Simulation Option pricing models and generally accepted valuation techniques, which 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.

23 unchanged sentences

However, the actual value of such claims could be significantly affected if future occurrences and claims differ from these assumptions.

At December 31, 2025 and September 30, 2025, the estimated liability for medical claims incurred but not reported was $ 300,000 and $ 153,000 , respectively.

At March 31, 2026 and September 30, 2025, the estimated liability for medical claims incurred but not reported was $ 103,000 and $ 153,000 , respectively.

The Company has recorded the deficit of funded premiums over estimated claims incurred but not reported of $ 103,000 as a current liability in the accompanying consolidated balance sheet.

4 unchanged sentences

Major Customers and Products

In the three months ended December 31, 2025, four customers accounted for 22 %, 17 %, 11 % and 10 % of net sales, respectively, although not all the same customers in each year.

In the three months ended December 31, 2024, three customers accounted for 38 %, 9 % and 8 % of net sales, respectively.

In the three months ended March 31, 2026, four customers accounted for 20 %, 16 %, 5 % and 4 % of net sales, respectively.

In the six months ended March 31, 2026, four customers accounted for 19 %, 10 %, 10 % and 7 % of net sales, respectively.

In the three months ended March 31, 2025, five customers accounted for 48 %, 9 %, 5 %, 5 % and 5 % of net sales, respectively.

In the six months ended March 31, 2025, five customers accounted for 44 %, 7 %, 6 %, 5 %, and 4 % of net sales, respectively.

Major Suppliers

1 unchanged sentence

Although there are a limited number of suppliers of particular components, management believes other suppliers could provide similar components on comparable terms.

For the three months ended December 31, 2025, the Company had two suppliers that were individually responsible for greater than 10% of the Company’s total inventory-related purchases.

For the three months ended December 31, 2024, the Company had one supplier that was individually responsible for greater than 10% of the Company’s total inventory-related purchases.

For the three months ended March 31, 2026, the Company had two suppliers that were individually responsible for greater than 10% of the Company’s total inventory-related purchases.

For the six months ended March 31, 2026, the Company had two suppliers that were individually responsible for greater than 10% of the Company’s total inventory-related purchases.

For the three and six months ended March 31, 2025, the Company had one supplier that was individually responsible for greater than 10% of the Company’s total inventory related purchases.

Concentration of Credit Risk

2 unchanged sentences

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.

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.

30 unchanged sentences

September 30,

A/P Pre-payments

Prepaid rotables

Dues, Services and pre-paid insurance

Supplier deposits

Prepaid insurance

Prepaid income tax

Deferred engineering

Unamortized debt issuance costs

1 unchanged sentence

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

As of December 31, 2025

As of March 31, 2026

Gross Carrying

License agreement (a)

License agreements (a)

Customer relationships (a)

1 unchanged sentence

( 1,418,051 )

Licensing and certification rights (c)

Trade name (c)

Licensing and certification rights (d)

( 5,382,383 )

1 unchanged sentence

Gross Carrying

License agreement (a)

License agreements (a)

Customer relationships (a)

( 2,705,533 )

Licensing and certification rights (c)

Licensing and certification rights (d)

( 4,313,818 )

2 unchanged sentences

(b) Backlog assets are amortized according to the timing of order fulfillment.

Intangible asset amortization expense is amortized as a component of selling, general and administrative expense and was $ 629,751 and $ 744,276 for the fiscal quarters ended December 31, 2025 and 2024, respectively.

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

Intangible asset amortization expense is amortized as a component of selling, general and administrative expense and was $ 438,814 and $ 480,407 for the three months ended March 31, 2026 and 2025, respectively.

Intangible asset amortization expense was $ 1,068,565 and $ 1,110,158 for the six months ended March 31, 2026 and 2025, 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.

The expected future amortization expense related to the customer relationships as of December 31, 2025 is as follows:

The expected future amortization expense related to the customer relationships, backlog and trade name as of March 31, 2026 is as follows:

Amortization Expense

2026 (nine months remaining)

2026 (six months remaining)

Goodwill activity

Balance at September 30, 2025

Fiscal 2026 Activity:

Business Combination - Honeywell Autopilot Agreement

Business Combination - Honeywell Generators Agreement

Business Combination - Other

Balance at March 31, 2026

Property and equipment

2 unchanged sentences

Computer equipment

Corporate R&D airplane

Furniture and office equipment

4 unchanged sentences

( 13,927,910 )

Depreciation and amortization related to property and equipment was $ 395,624 and $ 622,799 for the three months ended December 31, 2025 and 2024, respectively.

Depreciation and amortization related to property and equipment was $ 420,927 and $ 272,390 for the three months ended March 31, 2026 and 2025, respectively.

Depreciation and amortization related to property and equipment was $ 816,551 and $ 894,483 for the six months ended March 31, 2026 and 2025, respectively.

Other assets consist of the following:

September 30,

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

Unamortized debt issuance costs

Other non-current assets

Other non-current assets as of December 31, 2025 and September 30, 2025 consists primarily of deposits for medical claims required under the Company’s medical plan.

Other non-current assets as of March 31, 2026 and September 30, 2025 consists primarily of deposits for medical claims required under the Company’s medical plan.

Accrued expenses

3 unchanged sentences

Inventory in transit

Royalties and ERC related expenses

Income tax payable

ERC related expenses

Bonus accruals

Income tax payable and other

Warranty cost and accrual information for the three months ended December 31, 2025 is highlighted below:

Warranty cost and accrual information for the three and six months ended March 31, 2026 is highlighted below:

Three Months Ending

December 31, 2025

Six Months Ending

March 31, 2026

Warranty accrual, beginning of period

2 unchanged sentences

Warranty accrual, end of period

Honeywell Autopilot Agreement

On March 27, 2026, the Company entered into the Honeywell Autopilot Agreement with Honeywell, pursuant to which Honeywell sold, assigned or licensed certain assets related to its general aviation autopilots and nav/com, multifunction display and transponder radios, granted exclusive and non-exclusive licenses to use certain Honeywell intellectual property related to its general aviation autopilots and nav/com, multifunction display and transponder radios to repair, overhaul, manufacture, sell, import, export and distribute certain products and granted certain other intellectual property rights to the Company for consideration of $ 22.0 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 Honeywell Autopilot Agreement with borrowings against the Company’s delayed draw term loan.

Please see Note 9, “Loan Agreement” for more details.

The allocation of the purchase price was based upon certain preliminary valuations and other analyses.

The allocation of the purchase price has not been finalized as of the date of this filing due to the fact that while legal control has occurred, the Company has not yet received physical possession of the prepaid inventory, equipment and intellectual property, and thus these assets will be subject to settlement adjustments upon transfer, which is expected to occur during the transition period, as outlined in the Honeywell Autopilot Agreement.

During the measurement period, there may be value ascribed to the fair market value of any inventory and equipment expected to be received which will reduce goodwill.

As a result, the purchase price amount for the transaction and the allocation of the preliminary purchase consideration are preliminary estimates, which may be subject to change within the measurement period.

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

Purchase Price

Total consideration

Intangible assets (a)

Net assets acquired

(a) Intangible assets consists of backlog ( $ 1,420,000 ), customer relationships ( $ 8,360,000 ), and license agreements ( $ 8,410,000 ) related to the license rights to use certain Honeywell intellectual property and are recorded at estimated fair values.

Backlog assets are amortized according to the timing of order fulfillment.

The customer relationships are amortized over 10 years .

The license agreements have an indefinite life and is not subject to amortization.

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 2, “Supplemental Balance Sheet Disclosures” for further details.

(b) Goodwill represents the excess of the purchase consideration over the preliminary fair value of the net assets acquired.

During the measurement period, there may be value ascribed to the fair market value of any inventory and equipment expected to be received which will reduce goodwill.

The goodwill recognized is primarily attributable to the expected synergies from the Honeywell Autopilot Agreement.

Goodwill resulting from the Honeywell Autopilot Agreement has been assigned to the Company’s one reporting unit and is fully deductible for U.S.

income tax purposes.

Transition services agreement

Concurrent with the Honeywell Autopilot Agreement, the Company entered into a transition services agreement with Honeywell, at no additional cost, to receive certain transitional services and technical support during the transition service period.

Honeywell Generators Agreement

On March 28, 2026, the Company entered into the Honeywell Generators Agreement with Honeywell, pursuant to which Honeywell sold, assigned or licensed certain assets related to its electronic generator and generator control unit for the F-15 and 767 tanker/freight platforms, 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 electronic generator and generator control unit for the F-15 and 767 tanker/freight platforms to repair, overhaul, manufacture, sell, import, export and distribute certain products to the Company for consideration of $ 8.0 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 Honeywell Generators Agreement with borrowings against the Company’s delayed draw term loan.

Please see Note 9, “Loan Agreement” for more details.

The allocation of the purchase price was based upon certain preliminary valuations and other analyses.

During the measurement period, there may be value ascribed to the fair market value of any inventory and equipment expected to be received which will reduce goodwill.

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

Purchase Price

Total consideration

Intangible assets (a)

Net assets acquired

(a) Intangible assets consists of backlog ( $ 1,890,000 ), customer relationships ( $ 800,000 ), and license agreements ( $ 1,660,000 ) related to the license rights to use certain Honeywell intellectual property and are recorded at estimated fair values.

Backlog assets are amortized according to the timing of order fulfillment.

The customer relationships are amortized over 8 years .

The license agreements have an indefinite life and is not subject to amortization.

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 2, “Supplemental Balance Sheet Disclosures” for further details.

(b) Goodwill represents the excess of the purchase consideration over the preliminary fair value of the net assets acquired.

During the measurement period, there may be value ascribed to the fair market value of any inventory and equipment expected to be received which will reduce goodwill.

The goodwill recognized is primarily attributable to the expected synergies from the Honeywell Generators Agreement.

Goodwill resulting from the Honeywell Generators Agreement has been assigned to the Company’s one reporting unit and is fully deductible for U.S.

income tax purposes.

Transition services agreement

Concurrent with the Honeywell Generators Agreement, the Company entered into a transition services agreement with Honeywell, at no additional cost, to receive certain transitional services and technical support during the transition service period.

In February 2026, the Company acquired the S-TEC® Model 3100 general aviation fixed wing autopilot product line from Moog (NYSE:

MOG.A) for a total purchase consideration of $ 3.5 million in cash.

The purchase price of this acquisition was paid 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 allocation of the purchase price was based upon certain preliminary valuations and other analyses.

The allocation of the purchase price has not been finalized as of the date of this filing due to the fact that while transfer of legal control has occurred, the Company has not yet received physical possession of the intellectual property, and thus these assets will be subject to settlement adjustments upon transfer, which is expected to occur later this year.

As a result, the allocation of the preliminary purchase consideration are preliminary estimates, which may be subject to change within the measurement period.

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

Purchase Price

Total consideration

Intangible assets (a)

Net assets acquired

(a) Intangible assets consists of backlog ( $ 30,000 ), customer relationships ( $ 170,000 ), trade name ( $ 260,000 ) and license agreements ( $ 1,430,000 ) related to the license rights to use certain intellectual property and are recorded at estimated fair values.

Backlog assets are amortized according to the timing of order fulfillment.

The customer relationships are amortized over 3 years .

The trade name is amortized over 15 years .

The license agreements have an indefinite life and is not subject to amortization.

The estimated fair value of these license agreements and trade name 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 2, “Supplemental Balance Sheet Disclosures” for further details.

(b) Goodwill represents the excess of the purchase consideration over the preliminary fair value of the net assets acquired.

During the measurement period, there may be value ascribed to the fair market value of any equipment expected to be received which will reduce goodwill.

The goodwill recognized is primarily attributable to the expected synergies from the Moog S-TEC® Agreement.

Goodwill resulting from the Moog S-TEC® Agreement has been assigned to the Company’s one reporting unit and is fully deductible for U.S.

income tax purposes.

Transition services agreement

Concurrent with the Moog S-TEC® Agreement, the Company entered into a transition services agreement with Moog, at no additional cost, to receive certain transitional services and technical support during the transition service period.

Acquisition and related costs

For the three and six months ended March 31, 2026, the Company incurred acquisition costs of approximately $ 0.7 million 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

Since the acquisition date of the transactions, there were insignificant amounts of revenues and net income related to the acquired businesses in the consolidated statements of operations.

The following unaudited pro forma summary presents consolidated information of the Company, including the acquisitions, as if the transaction had occurred on October 1, 2024:

Six Months Ended March 31,

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 currently.

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.

The Company will continue to assess all available evidence during future periods to evaluate any changes to the realization of its deferred tax assets.

1 unchanged sentence

On July 4, 2025, the One Big Beautiful Bill Act (OBBB) was signed into law, which includes a broad range of tax reform provisions that may affect the Company's financial results.

The OBBB allows an elective deduction for domestic Research and Development (R&D), and a reinstatement of elective 100% first-year bonus depreciation, among other provisions.

The Company is currently evaluating the impact of these provisions which could affect the Company's effective tax rate and deferred tax assets in fiscal year 2026 and future periods.

The OBBB allows an elective deduction for domestic research and development, and a reinstatement of elective 100% first-year bonus depreciation, among other provisions.

The Company is currently evaluating the impact of these provisions and thus far the impact to the Company’s effective tax rate in fiscal year 2025 and forward has not been material.

As a result of the 2017 Tax Cuts and Jobs Act, the Company must amortize amounts paid or incurred for specified research and development expenditures, including software development expenses, ratably over 60 months, beginning at the mid-point of the tax year in which the expenditures are paid or incurred.

The effective tax rate for the three months ended December 31, 2025 was 30.8 % and differs from the statutory tax rate primarily due to the effect of state income taxes, tax credits, temporary and permanent tax differences related to stock-based compensation and certain non-deductible expenses.

The effective tax rate for the three months ended December 31, 2024 was 20.1 % and differs from the statutory tax rate primarily due to the effect of state income taxes, tax credits and certain non-deductible expenses.

The effective tax rate for the three months ended March 31, 2026 was 22.6 % and differs from the statutory tax rate primarily due to the effect of state income taxes, tax credits, temporary and permanent tax differences related to stock-based compensation and certain non-deductible expenses.

The effective tax rate for the six months ended March 31, 2026 was 27.3 % and differs from the statutory tax rate primarily due to the effect of state income taxes, tax credits, temporary and permanent tax differences related to stock-based compensation and certain non-deductible expenses.

The effective tax rate for the three months ended March 31, 2025 was 19.2 % and differs from the statutory tax rate primarily due to the effect of state income taxes, tax credits and certain non-deductible expenses.

The effective tax rate for the six months ended March 31, 2025 was 19.3 % and differs from the statutory tax rate primarily due to the effect of state income taxes, tax credits and certain non-deductible expenses.

Shareholders’ Equity and Share-Based Payments

At December 31, 2025, 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.

At March 31, 2026, 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.

Share-Based Compensation

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 and stock awards.

Total share-based compensation expense was approximately $ 915,924 and $ 396,661 for the fiscal quarters ended December 31, 2025 and 2024, respectively.

Total share-based compensation expense was approximately $ 496,294 and $ 405,042 for the three months ended March 31, 2026 and 2025, respectively.

Total share-based compensation expense was approximately $ 1,412,218 and $ 801,703 for the six months ended March 31, 2026 and 2025, respectively.

Compensation expense related to share-based awards is recorded as a component of cost of sales, research and development expenses and selling, general and administrative expenses.

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

Three Months Ended March 31,

Cost of sales

Research and development

Selling, general and administrative

Six Months Ended March 31,

Cost of sales

Research and development

Selling, general and administrative

As of March 31, 2026, unrecognized compensation expense of approximately $ 3,821,832 , net of forfeitures, related to non-vested RSU’s, stock options and market based investment instruments under the 2019 Plan, will be recognized in future periods.

As of March 31, 2026, there were 262,264 unvested restricted stock units, 412,085 unvested non-qualified stock options and 145,753 unvested market based instruments outstanding under the 2019 Plan.

Amended and Restated 2019 Stock-Based Incentive Compensation Plan

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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.

Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified 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 December 31, 2025, there were 1,376,079 shares of common stock available for awards under the 2019 Plan.

As of March 31, 2026, there were 1,188,674 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.

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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 non-recurring 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.

New shares are typically issued upon option exercise, MSO exercise, MSU vesting or RSU vesting.

The 2019 Plan will terminate on April 2, 2029, unless earlier terminated by the Company’s Board of Directors (the “Board”).

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or (iii) would require shareholder approval by law, regulation, or the rules of any stock exchange or automated quotation system.

Fiscal 2025 and 2024 RSU Bonus Grants

Restricted Stock Units and Stock Options

On February 17, 2026, the Board authorized grants of 39,763 in RSUs 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 RSUs 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

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 with 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.

The RSUs vest 50 % on the one-year anniversary from date of grant and 50 % on the twenty second month from date of grant, subject to the terms of the 2019 Plan.

On February 18, 2025, the Board authorized grants of 71,754 in RSUs 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 RSUs vest 50 % on the one-year anniversary from date of grant and 50 % on the twenty second month from date of grant, subject to the terms of the 2019 Plan.

During the fiscal years ended September 30, 2026 and September 30, 2025, 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.

During the fiscal year ended September 30, 2024, the Board approved grants of RSUs to both our Chief Executive Officer, Chief Financial Officer and the former Chief Financial Officer.

Certain RSUs awarded to our Chief Executive Officer vested immediately, with the remainder vesting quarterly over a three-year period.

The RSUs awarded to our Chief Financial Officer will vest over a four-year period.

The approved grants of the RSUs to our former Chief Financial Officer would have vested over a four-year period.

On November 8, 2023, our former Chief Financial Officer, notified the Company of his resignation from all of his positions with the Company, which resulted in the forfeiture of 11,503 RSUs.

As of December 31, 2025, there were 272,392 unvested restricted stock units outstanding under the 2019 Plan.

During the fiscal year ended September 30, 2026, and 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 with the remainder vesting quarterly over a three-year period.

During the fiscal year ended September 30, 2026, the Board approved grants of non-qualified stock options to both the Chief Executive Officer and the Chief Financial Officer that vest 25 % after one year with the remainder vesting quarterly over a three-year period.

The compensation expense related to stock options, and restricted stock awards issued to employees under the 2019 Plan was $ 271,709 and $ 207,126 for the three months ended March 31, 2026 and 2025, respectively.

The compensation expense related to stock options, and restricted stock awards issued to employees under the 2019 Plan was $ 574,249 and $ 413,651 for the six months ended March 31, 2026 and 2025, respectively.

The compensation expense under the 2019 Plan related to restricted stock awards issued to non-employee members of the Board was $ 108,294 and $ 71,438 for the three months ended March 31, 2026 and 2025, respectively.

The compensation expense under the 2019 Plan related to restricted stock awards issued to non-employee members of the Board was $ 227,689 and $ 144,464 for the six months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, unrecognized compensation expense of approximately $ 2,261,940 , net of forfeitures, related to non-vested restricted stock under the 2019 Plan, will be recognized in future periods.

As of March 31, 2026, unrecognized compensation expense of approximately $ 850,853 , net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized in future periods.

Market-Based Restricted Stock Units

On February 18, 2026, in a continuing effort to more closely correlate executive compensation with the Company’s Total Shareholder Return, the Board approved a grant of 45,455 MSUs to the Company’s Chief Executive Officer and 21,307 MSUs to the Company’s Chief Financial Officer under the terms and conditions of the 2019 Plan.

The MSUs are restricted stock units 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 stock price performance during 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, 1/3rd of the MSUs will vest on each of the first, second and third anniversaries of the date of grant (each, a “Time Vesting Date”), provided that no MSUs will vest until and unless the shares of the Company’s common stock have traded at a price equal to or greater than twenty five dollars ($25.00) per share for an average of sixty (60) trading days (the “Stock Price Threshold”).

If a MSU would have vested upon a Time Vesting Date, but the Stock Price Threshold was not achieved prior to such Time Vesting Date, the MSU will subsequently vest upon achievement of the Stock Price Threshold.

Any MSUs that have not vested on or before the third anniversary of the grant date are immediately forfeited.

Compensation expense for MSUs is recognized on a straight-line basis over the requisite service.

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:

Grant Date Stock Price

Expected Dividend Rate

Expected Volatility

Weighted average risk-free interest rate

Contractual Term

Utilizing Monte Carlo simulation, the MSUs grant date fair value was estimated to be $ 587,500 with a $ 8.80 grant date fair value per award and the derived vesting periods were estimated to be 1.5 years.

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 MSUs to the Company’s Chief Executive Officer under the terms and conditions of the 2019 Plan.

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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 three months ended December 31, 2025 and 2024, the Company recognized $ 425,157 and $ 117,108 , respectively of compensation expense related to MSU awards.

On each of February 13, 2025, July 10, 2025 and August 8, 2025, the market performance condition for the first, second and third tranches of 67,000 units of MSUs granted November 20, 2024 to the Company’s Chief Executive Officer were met.

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Consequently, on November 20, 2025, all 201,000 MSUs vested according to the terms of the 2019 Plan.

The unvested compensation expense of $ 425,157 as of the one-year anniversary date of grant was immediately expensed and recorded as compensation expense in the first fiscal 2026 quarter ended December 31, 2025.

The unvested compensation expense of $ 425,157 as of the one-year anniversary date of grant was immediately expensed and recorded as compensation expense for the three months ended December 31, 2025.

Of the 201,000 vested MSUs, 87,917 MSUs were withheld by the Company to cover the recipient’s tax obligations resulting in a net settlement of 113,083 MSU’s converting into Common Stock.

For the three months ended March 31, 2026 and 2025, the Company recognized $ 48,958 and $ 112,834 , respectively, of compensation expense related to MSU awards.

For the six months ended March 31, 2026 and 2025, the Company recognized $ 474,116 and $ 229,942 , respectively, of compensation expense related to MSU awards.

Time Based Stock Options with market-based exercisability conditions

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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.

On June 16 th , 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 for in the 2019 Plan.

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 for in the 2019 Plan.

During the three and six months ended March 31, 2026, 26,330 MSOs vested and no MSOs were forfeited.

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.

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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 year and 4 years with a 10 year contractual term.

For the three months ended December 31, 2025 and 2024, the Company recognized $ 68,831 and $ 0 , respectively of compensation expense related to the MSO awards.

As of December 31, 2025, unrecognized compensation expense of $ 237,834 associated with non-vested MSOs will be recognized in future periods under the 2019 Plan.

During the three months ended December 31, 2025, no MSOs vested or were forfeited.

The compensation expense related to stock options, and restricted stock awards issued to employees under the 2019 Plan was $ 302,540 and $ 206,527 for the three months ended December 31, 2025 and 2024, respectively.

The compensation expense under the 2019 Plan related to restricted stock awards issued to non-employee members of the Board was $ 119,395 and $ 73,026 for the three months ended December 31, 2025 and 2024, respectively.

Total compensation expense associated with the 2019 Plan was $ 915,924 and $ 396,661 for the three months ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, unrecognized compensation expense of approximately $ 1,186,845 , net of forfeitures, related to non-vested restricted stock under the 2019 Plan, will be recognized in future periods.

As of December 31, 2025, unrecognized compensation expense of approximately $ 322,289 , net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized in future periods.

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

Three Months Ended December 31,

Cost of sales

Research and development

Selling, general and administrative

For the three months ended March 31, 2026 and 2025, the Company recognized $ 67,334 and $ 13,646 , respectively, of compensation expense related to the MSO awards.

For the six months ended March 31, 2026 and 2025, the Company recognized $ 136,165 and $ 13,646 , respectively, of compensation expense related to the MSO awards.

As of March 31, 2026, unrecognized compensation expense of $ 170,499 associated with non-vested MSOs will be recognized in future periods under the 2019 Plan.

Earnings Per Share

Three Months Ended December 31,

Three Months Ended March 31,

Six Months Ended March 31,

Basic weighted average shares

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The number of incremental shares from the assumed vesting of MSUs is calculated using the “if-converted” method.

As of December 31, 2025 and 2024, 109,239 and 0 weighted average outstanding MSUs were included in the three months ended December 31, 2025 and 2024 weighted-average diluted shares calculation, respectively using the if converted method.

As of December 31, 2025 and 2024, there were 361,613 and 361,613 options to purchase common stock outstanding, respectively, and 0 and 201,000 MSUs subject to vesting outstanding, respectively.

As of December 31, 2025 and 2024, there were 272,392 and 204,707 shares of restricted stock units subject to vesting outstanding, respectively.

As of March 31, 2026 and 2025, 31,897 and 0 weighted average outstanding MSUs were included in the three months ended March 31, 2026 and 2025 weighted-average diluted shares calculation, respectively, using the if converted method.

As of March 31, 2026 and 2025, 125,188 and 0 weighted average outstanding MSUs were included in the six months ended March 31, 2026 and 2025 weighted-average diluted shares calculation, respectively, using the if converted method.

As of March 31, 2026 and 2025, there were 412,085 and 433,655 options to purchase common stock outstanding, respectively, and 66,762 and 201,000 MSUs subject to vesting outstanding, respectively.

As of March 31, 2026 and 2025, there were 262,264 and 194,914 shares of restricted stock units subject to vesting outstanding, respectively.

The weighted average outstanding diluted shares calculation excludes time vested options and MSOs with an exercise price that exceeds the average market price of shares during the period.

Additionally, the weighted-average diluted shares calculation excludes RSUs that are deemed anti-dilutive when applying the treasury stock method.

For the three months ended December 31, 2025 and 2024, respectively, 0 and 361,613 diluted weighted-average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

For the three months ended March 31, 2026 and 2025, respectively, 24,114 and 136,613 diluted weighted-average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

For the six months ended March 31, 2026 and 2025, respectively, 12,057 and 249,113 diluted weighted-average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

Commitments and Contingencies

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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 $ 33.8 million as of December 31, 2025.

The purchase obligations on open purchase orders were $ 33.6 million as of March 31, 2026.

Product Liability

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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 the three months ended December 31, 2025 and 2024, the Company paid PAL $ 30,000 and $ 28,500 , respectively.

This retainer was subsequently increased to $ 10,000 per month in October 2025.

For the three months ended March 31, 2026 and 2025, the Company paid PAL $ 30,000 and $ 28,500 , respectively.

For the six months ended March 31, 2026 and 2025, the Company paid PAL $ 60,000 and $ 57,000 , respectively.

Loan Agreement

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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;

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

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

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All outstanding balances are due on the Maturity Date.

For the fiscal quarter ended December 31, 2025, the Initial Term Loan had an effective interest rate of 6.8 % and no borrowings were drawn on the Revolving Facility and the Delayed Draw Term Loan.

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.

On August 18, 2025, the balance of $ 2,000,000 on the Revolving Facility was paid off.

For the three and six months ended March 31, 2026, the Initial Term Loan had an effective interest rate of 6.0 %, and 6.3 %, respectively.

Initial Term Loan

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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 December 31, 2025.

There were no borrowings drawn on the Revolving Facility during the three and six months ending March 31, 2026.

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.

The remaining $ 1,026,237.50 balance was deposited by the Company to the PNC Checking account.

In March 2026, the Company borrowed $ 32.0 million of the available Delayed Draw Term Loan facility to finance the Honeywell Autopilot Agreement and the Honeywell Generators Agreement acquisitions.

Debt Issuance Costs

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The unamortized balance of the Initial Term Loan contra-liabilities as of December 31, 2025 was $ 220,143 .

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.

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-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 December 31, 2025 were $ 268,378 and $ 402,567 , respectively.

The unamortized balances of the Revolving Facility and the Delayed Draw Term Loan included in current and non-current other assets as of March 31, 2026 were $ 253,504 and $ 380,256 , respectively.

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

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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 December 31, 2025.

The Company was in compliance with all debt covenants as of March 31, 2026.

Commitment Fees

The 2025 Credit Agreement terms include Revolving Facility and Delayed Draw Term Loan Facility commitment fees.

For the three months ended December 31, 2025, unused line of credit fees of $ 19,167 under the Revolving Facility and $ 28,750 under the Delayed Draw Term Loan were included in interest expense.

For the fiscal year 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.

For the three months ended March 31, 2026, unused line of credit fees of $ 17,541 under the Revolving Facility and $ 24,985 under the Delayed Draw Term Loan were included in interest expense.

For the six months ended March 31, 2026, unused line of credit fees of $ 36,708 under the Revolving Facility and $ 53,735 under the Delayed Draw Term Loan were included in interest expense.

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

September 30,

Initial Term Loan

Less current maturities

Total Long Term Debt

As of December 31, 2025, scheduled annual payments based on the maturities of debt are expected to be as follows:

Less current maturities (b)

Total Long Term Debt (a)

(a) As of March 31, 2026, Total Long Term Debt comprised $ 23.1 million of Initial Term Loan and $ 32.0 million of Delayed Draw Term Loan, respectively

(b) As of March 31, 2026, Current Maturities of Debt comprised $ 2.5 million of Initial Term Loan and $ 3.2 million of Delayed Draw Term Loan, respectively.

As of March 31, 2026, scheduled annual payments based on the maturities of debt are expected to be as follows:

Annual payments

2026 (Nine months remaining)

2026 (Six months remaining)

* Excludes interest payments payable at each debt reset date

Loan Facilities Availability

As of December 31, 2025, the Company had availability of $ 30,000,000 under the Revolving Facility and $ 45,000,000 under the Delayed Draw Term Loan facility.

As of March 31, 2026, the Company had availability of $ 30,000,000 under the Revolving Facility and $ 13,000,000 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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements