SYPRIS SOLUTIONS INC 10-K

Item 2. Properties Our principal manufacturing operations are engaged in electronics manufacturing for our aerospace and defense customers and industrial manufacturing for our truck components and assemblies and oil and gas pipeline component customers. The following chart indicates the significant facilities that we own or lease, the location and size of each such facility and the manufacturing certifications that each facility possesses. The facilities listed below (other than the corporate office) are used principally as manufacturing facilities. Location Segment (Market Served) Own or Lease (Expiration) Approximate Square Feet Certifications Corporate Office: Louisville, Kentucky Lease (2034) 11,111 Manufacturing Facilities: Louisville, Kentucky Sypris Technologies (Oil & Gas Pipeline Components) Lease (2045) 57,000 ISO 9001 ASME Certified Tampa, Florida Sypris Electronics (Aerospace & Defense Electronics) Lease (2027) 50,000 ISO 9001 AS 9100 NASA-STD-8739 IPC-A-610, Class 3 J-STD-001, Class 3 NADCAP accredited Toluca, Mexico Sypris Technologies (Truck Components and Oil & Gas Pipeline Components) Lease (2031) 215,000 ISO 14001 TS 16949 ASME Certified Clean Industry Certified PED Certified Below is a listing and description of the various manufacturing certifications or specifications that we utilize at various of our facilities. Certification/Specification Description AS 9100 A quality management system developed by the aerospace industry to measure supplier conformance with basic common acceptable aerospace quality requirements. ASME Certified Performance criteria determined by the American Society of Mechanical Engineers. Clean Industry Certified Mexican Environmental Protection Agency sponsored voluntary regulatory program for pollution control. PED Certified The Pressure Equipment Directive (PED) is a product directive issued by the European Community that sets the standards for the design, fabrication, installation, and use of pressure equipment. IPC-A-610 A certification process for electronics assembly manufacturing which describes materials, methods and verification criteria for producing high quality electronic products. Class 3 specifically includes high performance or performance-on-demand products where equipment downtime cannot be tolerated, end-use environment may be uncommonly harsh, and the equipment must function when required. J-STD-001 A family of voluntary standards of industry-accepted workmanship criteria for electronic assemblies. ISO 14001 A set of standards and procedures relating to environmental compliance management. 20 Certification/Specification Description ISO 9001 A certification process comprised of quality system requirements to ensure quality in the areas of design, development, production, installation and servicing of products. NADCAP accredited The National Aerospace and Defense Contractors Accreditation Program is a global cooperative accreditation program for aerospace engineering, defense and related industries. NASA-STD-8739 A specification for space programs designated by the National Aeronautics and Space Administration. TS 16949 A quality certification system developed within the automotive sector. Using ISO 9001:2000 as its foundation, ISO/TS 16949:2002 specifies the quality management system (QMS) requirements for the design, development, production, installation and servicing of automotive related products. Item 3. Legal Proceedings Groundwater and other contamination has occurred at certain of our current and former facilities during the operation of those facilities by their former owners, and this contamination may occur at future facilities we operate or acquire. There is no assurance that environmental indemnification agreements we have secured from the former owners of certain of these properties will be adequate to protect us from liability. No administrative or judicial proceedings with respect to these or any other environmental regulations or conditions are pending against the Company or known by the Company to be contemplated by Government authorities. The Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. In the opinion of management, the final disposition of such matters will not have a material adverse effect on our consolidated financial position, cash flows or results of operations. The information set forth in Note 15 to the consolidated financial statements in this Annual Report on Form 10-K is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures Not applicable. 21 PART II Item 5. Market for the Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K and thus are not required to provide the performance graph required in paragraph (e) of Item 201 of Regulation S-K. Our common stock is traded on the Nasdaq Global Market under the symbol “SYPR.” As of March 20, 2026, there were 434 holders of record of our common stock. No cash dividends were declared during 2025 or 2024. Dividends may be paid on common stock only when, as and if declared by our Board of Directors in its sole discretion. We do not anticipate paying dividends in 2026. There were no shares of common stock repurchased during the three months ended December 31, 2025. Item 6. [Reserved] 22 Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations The following discussion of our consolidated results of operations and financial condition should be read together with the other financial information and consolidated financial statements included in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results anticipated in the forward-looking statements as a result of a variety of factors, including those discussed in “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. Overview We provide products and engineering, design, and manufacturing services for a variety of critical infrastructure sectors, including energy, space, communications, defense, transport, chemical, and water. Sypris serves its customers globally through its operations located in North America. We produce a wide range of manufactured products, often under multi-year, sole-source contracts. We are organized into two business segments, Sypris Technologies and Sypris Electronics. Sypris Technologies, which is comprised of Sypris Technologies, Inc. and its subsidiaries, generates revenue primarily from the sale of forged, machined, welded and heat-treated steel components primarily for the heavy commercial vehicle and high-pressure energy pipeline applications. Sypris Electronics, which is comprised of Sypris Electronics, LLC, generates revenue primarily through circuit card and full “box build” manufacturing, high reliability manufacturing, systems assembly and integration, design for manufacturability and design to specification work. We focus on those markets where we believe we have the expertise, qualifications and leadership position to sustain a competitive advantage. We target our resources to support the needs of industry participants that embrace technological innovation and flexibility, coupled with multi-year contractual relationships, as a strategic component of their supply chain management. These contracts, many of which are sole-source by part number, have historically created opportunities to invest in leading-edge processes or technologies to help our customers remain competitive. The productivity and innovation that can result from such investments helps to differentiate us from our competition when it comes to cost, quality, reliability and customer service. Economic Conditions Our operations are impacted by global economic conditions, including inflationary increases of certain raw materials, as well as logistics, tariffs, transportation, utilities and labor costs, supply chain constraints and increased interest rates. While we have taken pricing actions and implemented transformation initiatives that we expect to improve productivity and offset these cost increases, we expect supply chain pressures and inflationary cost increases to continue throughout 2026, which may continue thereafter and could negatively impact our results of operations. Sypris Technologies Outlook The North American Class 8 commercial vehicle market experienced a downturn in 2025, in addition to the automotive and sport utility vehicle markets also served by Sypris Technologies. New heavy-duty truck demand has historically been cyclical and is particularly sensitive to the industrial sector of the economy, which generates a significant portion of the freight tonnage hauled by commercial vehicles. During 2025, production of Class 8 trucks in North America decreased 24% from 2024. According to industry publications, the outlook for 2026 and 2027 is forecasting a slight increase in production over 2025, before increasing 27% in 2028. We believe that the market diversification Sypris Technologies has accomplished over recent years by adding new programs in the automotive, sport-utility and off-highway markets has benefited and will continue to benefit the Company as the demand cycles for our products in these markets differs from the Class 8 commercial vehicle market, thereby reducing volatility in our revenue profile. The oil and gas markets served by our Tube Turns® brand of engineered products continues to be shaped largely by geopolitical factors, macroeconomic variables such as high interest rates and rising material costs, evolving policies and regulations and the emergence of new technologies. Sales in this market are dependent on, among other things, the level of worldwide oil and natural gas demand, the price of crude oil and natural gas and capital spending by exploration and production companies and drilling contractors. The conflicts in the Middle East, including military hostilities between Israel and Hamas and the U.S., Israel and Iran, the war between Russia and Ukraine and inflationary pressures have also led to disruption, instability and volatility in global markets and industries that could negatively impact our operations. 23 We will continue to pursue new business in a wide variety of markets from light automotive to new pressure vessel and pipeline applications to achieve a more balanced portfolio across our customers, markets and products. Sypris Electronics Outlook Ongoing demand in the electronic circuit card assembly industry across multiple manufacturing sectors continues to create shortages and extended lead times. In some instances, waiting times for certain components approach a year or more. We factor supplier-provided lead times into internal planning schedules and new customer quotations. From time to time, we encounter part obsolescence which requires us to identify an alternate part suitable for use. We continue to work with our customers on strategies to mitigate any adverse impact upon our ability to service their requirements. Factors which arise after the placement of the customer’s order may cause us to miss projected delivery dates. Inflationary costs are expected to continue through 2026. The electronic circuit card assembly industry is highly competitive, and demand can be volatile from period to period. Increasing demand for advanced technologies, supply chain diversification, and continued strong government defense spending along with geopolitical factors, including ongoing U.S.-China trade tensions and regulatory shifts, are prompting companies to adopt supply chain resilience strategies, such as "friendshoring", nearshoring and onshoring that benefit domestic suppliers. Additionally, OEMs are expected to continue the trend of outsourcing lower-level electronic assemblies, while focusing on their core competencies of design and system integration. However, challenges such as labor cost fluctuations, raw material constraints, and evolving trade policies may impact operational efficiency and cost structures. Overall, the sector is positioned for growth, with companies focusing on technological innovation, strategic partnerships, and supply chain optimization to maintain competitiveness in a rapidly evolving defense and aerospace market. During 2024 and 2025, we announced new program awards and releases for Sypris Electronics, with certain programs continuing into 2026. In addition to contract awards from DoW prime contractors related to weapons systems, electronic warfare and infrared countermeasures in our traditional aerospace and defense markets, we have also been awarded subcontracts for manufacturing services to the communication and navigation markets, which require our advanced capabilities for delivering products for complex, high cost of failure platforms. While we do not serve as a prime contractor to the U.S. government, we serve as a subcontractor on various U.S. government programs. Funding for U.S. Government programs is subject to a variety of factors that can affect our business, including the U.S. presidential administration’s budget requests and procurement priorities and policies, annual congressional budget authorization and appropriation processes, and other U.S. government domestic and international priorities. U.S. government spending levels, particularly defense spending, and timely funding thereof can affect our financial performance over the short and long term. The U.S. presidential administration published its FY 2026 budget request in June 2025. The budget request includes $848.3 billion in the base budget (discretionary) funding, and $113.3 billion in reconciliation (mandatory) funding for the DoW. The One Big Beautiful Bill Act passed the Senate and House and was signed by the President on July 4, 2025. The bill provides more than $150 billion in mandatory funding (inclusive of the $113.3 billion) for DoW available until September 30, 2029. The National Defense Authorization Act (NDAA) for FY2026 was signed into law on December 18, 2025. This legislation authorizes $901 billion for defense spending which includes an $8 billion increase over the President’s DoW budget request. On November 12, 2025, the President signed into law a continuing resolution funding the DoW through January 30, 2026. On January 20, 2026, Congress unveiled its final appropriations package, which includes the Defense Appropriations Act conference report. This legislation provides $839.2 billion in funding for the DoW representing an $8.4 billion increase over the topline in the President’s DoW budget request. On February 3, 2026, the Consolidated Appropriations Act of 2026 was passed, which further extended government funding through September 30, 2026. 24 While the U.S. presidential administration has announced their proposal for a significant increase in defense spending in FY 2027, we anticipate the federal budget, debt ceiling and regulatory environment will continue to be subject to debate and compromise shaped by, among other things, the U.S. presidential administration and Congress, heightened political tensions, the global security environment, inflationary pressures, and macroeconomic conditions. The result may be shifting funding priorities, which could have material impacts on defense spending broadly, and the effect on individual programs or our results cannot be predicted at this time. Additionally, the U.S. presidential 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. The impact on demand for our products and services and our business are difficult to predict. We expect to compete for follow-on business opportunities as a subcontractor on future builds of several existing government programs. However, the federal budget and debt ceiling are expected to continue to be the subject of considerable uncertainty and the impact on demand for our products and services and our business are difficult to predict. Critical Accounting Policies and Estimates The preparation of the consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires that we make estimates and assumptions that affect the amounts reported. Changes in facts and circumstances could have a significant impact on the resulting estimated amounts included in our consolidated financial statements. We believe the following critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We also have other policies that we consider to be key accounting policies, such as our policies for revenue recognition for Sypris Technologies, including cost of sales; however, these policies do not meet the definition of critical accounting estimates because they do not generally require us to make estimates or judgments that involve a significant level of estimation uncertainty. The following discussion of accounting estimates is intended to supplement the Summary of Significant Accounting Policies presented as Note 1 to our consolidated financial statements in Item 8. Net Revenue and Cost of Sales.  The Company recognizes revenue when it satisfies a performance obligation by transferring control of a promised product or rendering a service to a customer. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for the product or service (the “transaction price”). The Company’s transaction price in its contracts with customers is generally fixed; no payment discounts, rebates or refunds are included within its contracts. The Company does not provide service-type warranties, nor does it allow customer returns. In connection with the sale of various parts to customers, the Company is subject to typical assurance warranty obligations covering the compliance of the electronics parts produced to agreed-upon specifications (See Note 1 to the consolidated financial statements in this Annual Report on Form 10-K). Customer returns, when they occur, relate to quality rework issues and are not connected to any repurchase obligation of the Company. A performance obligation is a promise in a contract to transfer a distinct product or render a service to a customer and is the unit of account to which the transaction price is allocated under ASC 606, Revenue from Contracts with Customers . When a contract contains multiple performance obligations, we allocate the transaction price to the individual performance obligations using the price at which the promised goods or services would be sold to customers on a standalone basis. For most sales within our Sypris Technologies segment and a portion of sales within Sypris Electronics, control transfers to the customer at a point in time. Indicators that control has transferred to the customer include the Company having a present right to payment, the customer obtaining legal title and the customer having the significant risks and rewards of ownership. The Company’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. For contracts where Sypris Electronics serves as a subcontractor for aerospace and defense companies under federally funded programs, we generally recognize revenue over time as we perform due to the continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contracts that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. Because control is transferred over time, revenue and gross profit is recognized based on the extent of progress towards completion of the performance obligation. We use labor hours incurred as a measure of progress for these contracts because it best depicts the Company’s performance of the obligation to the customer, which occurs as we incur labor on our contracts. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of labor hours incurred to date to the total estimated labor hours at completion of the performance obligation. 25 Long-lived asset impairment.  We perform periodic impairment analysis on our long-lived amortizable assets whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. When indicators are present, we compare the estimated future undiscounted net cash flows of the operations to which the assets relate to their carrying amount. If the operations are unable to recover the carrying amount of their assets, the long-lived assets are written down to their estimated fair value. Fair value is determined based on discounted cash flows, third party appraisals or other methods that provide appropriate estimates of value. A considerable amount of management judgment and assumptions are required in performing the impairment test, principally in determining whether an adverse event or circumstance has triggered the need for an impairment review. The Company did not have any long-lived assets measured at fair value on a nonrecurring basis as of December 31, 2025 or 2024. Pension Plan Funded Status.  Our U.S. defined benefit pension plans are closed to new entrants and there were no participants still accruing benefits under any of the plans in 2025. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets. Pension obligations are valued using discount rates established annually in consultation with our outside actuarial advisers using a theoretical bond portfolio, adjusted according to the timing of expected cash flows for our future obligations. Plan liabilities at December 31, 2025 are based upon a discount rate of 5.20% which reflects the Above Mean Mercer Yield Curve rate as of December 31, 2025 rounded to the nearest 5th basis point. Declining discount rates increase the present value of future pension obligations; a 25 basis point decrease in the discount rate would increase our U.S. pension liability by about $0.4 million. As indicated above, when establishing the expected long-term rate of return on our U.S. pension plan assets, we consider historical performance and forward-looking return estimates reflective of our portfolio mix and investment strategy. Based on the most recent analysis of projected portfolio returns, we concluded that the use of 3.95% for the Louisville Hourly Plan, 4.65% for the Marion Plan and 4.45% for the Louisville Salaried Plan as the expected return on our U.S. pension plan assets for 2025 was appropriate. A change in the assumed rate of return on plan assets of 100 basis points would result in a $0.2 million change in the estimated 2026 pension expense. At December 31, 2025, we have $6.2 million of unrecognized losses relating to our U.S. pension plans. Actuarial gains and losses, which are primarily the result of changes in the discount rate and other assumptions and differences between actual and expected asset returns, are deferred in Accumulated Other Comprehensive Loss and amortized to expense following the corridor approach. We use the average remaining service period of active participants unless almost all of the plan’s participants are inactive, in which case we use the average remaining life expectancy for all active and inactive participants. Based on the current funded status of our U.S. plans, we expect to contribute $0.3 million during 2026, which represents the minimum funding amounts required by federal law. Reserve for Excess, Obsolete and Scrap Inventory.  We record inventory at the lower of cost, determined under the first-in, first-out method, or net realizable value, and we reserve for excess, obsolete or scrap inventory. These reserves are primarily based upon management’s assessment of the salability of the inventory, historical usage of raw materials, historical demand for finished goods and estimated future usage and demand. An improper assessment of salability or improper estimate of future usage or demand, or significant changes in usage or demand could result in significant changes in the reserves and a positive or a negative impact on our consolidated results of operations in the period the change occurs. Stock-based Compensation.  We account for stock option based compensation in accordance with the fair value recognition provisions using the Black-Scholes option-pricing method, which requires the input of several subjective assumptions. The Company uses historical Company and industry data to estimate the expected price volatility. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, the Company uses the simplified method to estimate the expected term. Under the simplified method, the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The dividend yield is assumed to be zero as we have not paid dividends nor do we anticipate paying any dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. Forfeitures are recorded as they occur. Changes in the subjective assumptions can materially affect the fair value estimate of stock-based compensation and consequently, the related expense recognized in the consolidated statements of operations. Income Taxes.  We account for income taxes as required by the provisions of ASC 740, Income Taxes , under which deferred tax assets and liabilities are recognized for the tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities measured using enacted tax rates. 26 Management judgment is required in determining income tax expense and the related balance sheet amounts. In addition, under ASC 740-10, Accounting for Uncertainty in Income Taxes, judgments are required concerning the ultimate outcome of uncertain income tax positions. Actual income taxes paid may vary from estimates, depending upon changes in income tax laws, actual results of operations and the final audit of tax returns by taxing authorities. Tax assessments may arise several years after tax returns have been filed. We believe that our recorded income tax liabilities adequately provide for the probable outcome of these assessments. Deferred tax assets are also recorded for operating losses and tax credit carryforwards. However, ASC 740 requires that a valuation allowance be recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. This assessment is largely dependent upon projected near-term profitability including the effects of tax planning. Deferred tax assets and liabilities are determined separately for each tax jurisdiction in which we conduct our operations or otherwise incur taxable income or losses. The Company evaluates its deferred tax position on a quarterly basis and valuation allowances are provided as necessary. During this evaluation, the Company reviews its forecast of income in conjunction with other positive and negative evidence surrounding the realizability of its deferred tax assets to determine if a valuation allowance is needed. Based on its current forecast, the Company believes it will have sufficient future taxable income to realize the deferred tax assets recorded by its Mexican subsidiary. Based on its current forecast, the Company has established a valuation allowance against all U.S. deferred tax assets. Until an appropriate level and characterization of profitability is attained, the Company expects to continue to maintain a valuation allowance on its net deferred tax assets related to future U.S. tax benefits. If we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to reduce the valuation allowance would increase net income in the period that such determination is made. 27 Results of Operations We operate in two segments, Sypris Technologies and Sypris Electronics. The table presented below compares our segment and consolidated results of operations from 2025 to 2024. The table presents the results for each year, the change in those results from one year to another in both dollars and percentage change and the results for each year as a percentage of net revenue. ● The first two columns in each table show the absolute results for each period presented. ● The columns entitled “Year-Over-Year Change” and “Year-Over-Year Percentage Change” show the change in results, both in dollars and percentages. These two columns show favorable changes as positive and unfavorable changes as negative. For example, when our net revenue increases from one period to the next, that change is shown as a positive number in both columns. Conversely, when expenses increase from one period to the next, that change is shown as a negative number in both columns. ● The last two columns in each table show the results for each period as a percentage of net revenue. In these two columns, the cost of sales and gross profit for each are given as a percentage of each segment’s net revenue. These amounts are shown in italics. In addition, as used in the table, “NM” means “not meaningful.” Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Year Over Results as Percentage of Year Over Year Net Revenue for the Year Ended Year Percentage Year Ended December 31, Change Change December 31, Favorable Favorable 2025 2024 (Unfavorable) (Unfavorable) 2025 2024 (in thousands, except percentage data) Net revenue: Sypris Technologies $ 51,746 $ 75,207 $ (23,461 ) (31.2 )% 43.2 % 53.7 % Sypris Electronics 68,141 64,973 3,168 4.9 56.8 46.3 Total net revenue 119,887 140,180 (20,293 ) (14.5 ) 100.0 100.0 Cost of sales: Sypris Technologies 45,343 62,383 17,040 27.3 87.6 82.9 Sypris Electronics 65,146 57,907 (7,239 ) (12.5 ) 95.6 89.1 Total cost of sales 110,489 120,290 9,801 8.1 92.2 85.8 Gross profit: Sypris Technologies 6,403 12,824 (6,421 ) (50.1 ) 12.4 17.1 Sypris Electronics 2,995 7,066 (4,071 ) (57.6 ) 4.4 10.9 Total gross profit 9,398 19,890 (10,492 ) (52.8 ) 7.8 14.2 Selling, general and administrative 16,004 16,963 959 5.7 13.3 12.1 Operating (loss) income (6,606 ) 2,927 (9,533 ) NM (5.5 ) 2.1 Interest expense, net 1,631 1,684 53 3.1 1.4 1.2 Other (income) expense, net (1,960 ) 1,217 3,177 NM (1.6 ) 0.9 (Loss) income before income taxes (6,277 ) 26 (6,303 ) NM (5.2 ) 0.0 Income tax expense, net 61 1,706 1,645 96.4 0.1 1.2 Net loss $ (6,338 ) $ (1,680 ) $ (4,658 ) (274.1 ) (5.3 )% (1.2 )% Net Revenue . Sypris Technologies derives its revenue from the sale of forged and finished steel components and subassemblies and high-pressure closures and other fabricated products. Net revenue for Sypris Technologies decreased $23.5 million from the prior year to $51.7 million in 2025. The net revenue decrease was primarily attributable to the cyclical decline in the commercial vehicle market. During 2025, production of Class 8 trucks in North America decreased 24% from 2024. Additionally, during the first quarter of 2025, Sypris Technologies began operating under a sub-maquiladora services agreement with one of its customers in Mexico. As a result, the customer retains ownership of the inventory, and revenue is recognized on the value-add portion only, resulting in a decrease of $4.8 million for the year ended December 31, 2025 as compared to the prior year. Energy product sales decreased $1.9 million as compared to the prior year due to the impact of tariffs on sales volumes. Revenue for Sypris Technologies is expected to decrease slightly in 2026, due to the anticipated decline in the commercial vehicle market during the first half of 2026, partially offset by higher energy component sales and new program expansion with existing customers in the commercial vehicle market. 28 Sypris Electronics derives its revenue primarily from circuit card and full “box build” manufacturing, high reliability manufacturing and systems assembly and integration. Net revenue for Sypris Electronics increased $3.2 million to $68.1 million in 2025. The increase in revenue for the year ended December 31, 2025 was primarily related to the ramping of production during the year on several new programs. This was partially offset by the completion of shipments under one of its long-term contracts. The order backlog for Sypris Electronics is expected to support an increase in revenue during 2026. Gross Profit.  Sypris Technologies’ gross profit decreased $6.4 million to $6.4 million in 2025 as compared to $12.8 million in the prior year due to the significant decrease in volumes and lower absorption of fixed overhead costs as a result of lower production. Sypris Electronics’ gross profit decreased $4.1 million to $3.0 million as compared to $7.1 million in the prior year. The decrease in gross profit for the year ended December 31, 2025 was primarily a result of an unfavorable mix of programs and delays of certain customer deliveries, which has limited our ability to ramp up production to the levels anticipated and resulted in increased costs and decreased operational efficiency. Additionally, Sypris Electronics incurred additional engineering costs for scope modifications on new contracts during 2025. Furthermore, Sypris Electronics recorded charges of $1.2 million related to excess and obsolete inventory during the year as a result of changes in estimated future demand on various programs. The expected increase in revenue during 2026 attributable to order backlog is expected to favorably impact overhead absorption, and the contribution margin from higher volumes is further expected to generate gross profit expansion. Selling, General and Administrative.  Selling, general and administrative expense decreased $1.0 million to $16.0 million in 2025 as compared to $17.0 million in 2024. The decrease in selling, general and administrative expense for the year ended December 31, 2025 was primarily as a result of lower consulting costs, reduced headcount and favorable medical claims. Selling, general and administrative expense increased as a percentage of revenue to 13.3% for the year ended December 31, 2025 from 12.1% for the year ended December 31, 2024. Interest Expense, Net.  Interest expense for the year ended December 31, 2025 decreased $0.1 million due to the reduction in interest incurred on extended terms on certain accounts payable for Sypris Electronics, partially offset by an increase in the weighted average debt outstanding. The weighted average debt outstanding under the Note increased to $11.4 million during 2025 from $8.7 million in 2024. Other (Income) Expense, Net.  Other (income) expense, net, was income of $2.0 million in 2025 as compared to expense of $1.2 million for 2024. During the year ended December 31, 2025, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold its facility located in Louisville, Kentucky, with a net book value of $0.4 million for net cash proceeds of approximately $2.9 million. The Company recognized a gain of $2.5 million on this transaction, which is included in other income (expense), net in the consolidated statements of operations. This gain was partially offset by pension expense of $0.6 million. Foreign currency related expenses were not material for the year ended December 31, 2025. During the year ended December 31, 2024, the Company recognized pension related expense of $0.8 million. Foreign currency related expenses were not material for the year ended December 31, 2024. Income Taxes.  The 2025 income tax provision consists of a current tax benefit of $0.1 million and deferred tax expense of $0.1 million. The 2024 income tax provision consists of current tax expense of $1.5 million and deferred tax expense of $0.2 million. The current tax expense in 2025 and 2024 includes taxes accrued by our Mexican subsidiary and domestic state income taxes and adjustments. The 2025 and 2024 deferred tax expense includes net changes in the foreign deferred tax assets during the year. Deferred tax assets and liabilities are determined separately for each tax jurisdiction in which we conduct our operations or otherwise incur taxable income or losses. The Company evaluates its deferred tax position on a quarterly basis and valuation allowances are provided as necessary. During this evaluation, the Company reviews its forecast of income in conjunction with other positive and negative evidence surrounding the realizability of its deferred tax assets to determine if a valuation allowance is needed. Based on its current forecast, the Company believes it will have sufficient future taxable income to realize the deferred tax assets recorded by its Mexican subsidiary. 29 Based on its current forecast, the Company has established a valuation allowance against all U.S. deferred tax assets. Until an appropriate level and characterization of profitability is attained, the Company expects to continue to maintain a valuation allowance on its net deferred tax assets related to future U.S. tax benefits. If we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to reduce the valuation allowance would increase net income in the period that such determination is made. Liquidity and Capital Resources As reflected in the consolidated financial statements, the Company reported a net loss of $6.3 million and $1.7 million for the year ended December 31, 2025 and 2024, respectively, and cash used in operating activities of $5.7 million for the year ended December 31, 2025. The Company’s net inventory increased significantly in 2023, primarily related to contracts with Sypris Electronics’ aerospace and defense customers. Shipments to customers on certain of these contracts were delayed beyond the initial delivery dates, which negatively impacted the cycle time to convert inventory to cash. Additionally, the Company experienced a significant drop in volumes within the Sypris Technologies business attributable to the cyclical decline in the commercial vehicle market in 2025, which led to a corresponding decrease in gross profit. As a result, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023 and at various times during 2024, 2025 and into 2026. The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and 2024, The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships. The Company received the benefit of additional loans of $3.0 million and $2.5 million during the years ended December 31, 2025 and 2024, respectively from Gill Family Capital Management, Inc. (“GFCM”) to help the Company manage its liquidity during those periods. This additional $5.5 million loaned to the Company by GFCM in 2024 and 2025 was approved by the Audit Committee and provided the Company with necessary liquidity. Additionally, during the first quarter of 2026, the Company and GFCM amended the Note to extend the maturity dates for $2.0 million of the obligation to April 1, 2027, $2.0 million to April 1, 2028, $5.0 million to April 1, 2029 and $3.0 million to April 1, 2030 (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K). Our ability to service our current liabilities will require a significant amount of cash. Management has evaluated our ability to generate this cash to meet our obligations for the next twelve months. Our primary sources of funds to meet our liquidity and capital requirements include cash on hand, funds generated through revenue growth from the Company’s consolidated operations and reductions in the Company’s investment in working capital. Based upon our current forecast, we believe that we will have sufficient liquidity to finance our operations for the next twelve months. Although we believe the assumptions underlying our current forecast are reasonable, management is also prepared to implement contingency plans that include other cost reduction initiatives to improve profitability and cash flow, or management can take additional steps such as adjusting the timing and amount of certain operating expenses as well as capital expenditures or the issuance of new debt. If we are unable to achieve our forecasted revenue, or if our costs are higher than expected, we may be required to revise our plans to provide for additional cost-cutting measures, seek additional financing or to consider other strategic alternatives. We may not be able to secure additional financing on favorable terms, if at all. Cash Balance. At December 31, 2025, we had approximately $6.8 million of cash and cash equivalents, of which $1.8 million was held in jurisdictions outside of the U.S. that, if repatriated, could result in withholding taxes. We expect existing cash and cash flows from operations to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as capital expenditures, for at least the next twelve months. Significant changes from our current forecasts, including, but not limited to: (i) meaningful shortfalls in our projected revenues, (ii) unexpected costs or expenses, and/or (iii) operating difficulties which cause unexpected delays in scheduled shipments, could require us to seek additional financing or force us to make further reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned programs. Any of these actions could materially harm our business, results of operations and future prospects. And as noted above, additional financing may not be available to us. 30 Material Cash Requirements Gill Family Capital Management Note . The Company has received the benefit of loans from GFCM in the form of secured promissory note obligations totaling $12.0 million in principal as of December 31, 2025 and $9.0 million as of December 31, 2024. GFCM is an entity controlled by the Company’s Chairman, President and Chief Executive Officer, Jeffrey T. Gill and one of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company. During the year ended December 31, 2025, the Company and GFCM amended the Note to, among other things: (i) increase the principal amount by $3.0 million to $12.0 million, (ii) extend the maturity dates for $2.0 million of the obligation to April 1, 2026, $2.0 million to April 1, 2027, $5.0 million on April 1, 2028 and the balance of $3.0 million on April 1, 2029, and (iii) allow for the deferral of payment for up to 100% of the interest due on the Note to April 1, 2026. During the first quarter of 2026, the Company further amended the Note to extend the maturity dates on all tranches by one year and allow for the continued deferral of payment for up to 100% of the interest due on the Note to April 1, 2027. Interest on the Note is payable quarterly, unless the deferral option is elected, and the rate is reset on April 1 of each year at the greater of 8% or 500 basis points above the five-year Treasury note average during the previous 90-day period. The additional amounts loaned to the Company in 2024 and 2025 and the Note modification in 2026, were approved by the Audit Committee and provided the Company with necessary liquidity. The Note provides for a first security interest in substantially all of the Company’s assets, including those in Mexico (see Note 12 to the consolidated financial statements in this Annual Report on Form 10-K). Finance Lease Obligations. As of December 31, 2025, the Company had $4.6 million outstanding under finance lease obligations for both property and machinery and equipment with maturities through 2031 and a weighted average interest rate of 13.1%. Equipment Financing Obligations. As of December 31, 2025, the Company had $1.4 million outstanding under equipment financing facilities, with payments due through 2030, and a weighted average interest rate of 6.9%. Purchase Commitments. We had purchase commitments totaling approximately $25.2 million at December 31, 2025, primarily for inventory. Cash Flows from Operating, Investing and Financing Activities Operating Activities. Net cash used in operating activities was $5.7 million in 2025, as compared to cash provided of $2.0 million in 2024. The aggregate decrease in accounts receivable in 2025 resulted in a source of cash of cash of $0.7 million as a result of the timing of shipments during the period. The decrease in inventory in 2025 resulted in a source of cash of $13.3 million. The decrease in inventory was primarily as a result of a ramp up of shipments within Sypris Electronics and the reflection of our strategic inventory management efforts. A significant portion of the inventory had been purchased in previous periods and was funded through prepayments from customers, which was recorded as contract liabilities. As shipments have increased with Sypris Electronics during the year, these contract liabilities have also decreased, which is the primary component of the $10.0 million change in accrued and other liabilities during 2025. Accounts payable decreased during 2025, resulting in a use of cash of $8.2 million. This change in accounts payable was driven by an effort within Sypris Electronics to pay down past due payables and reduce inventory purchases during the period. Prepaid expenses and other assets decreased during 2025 resulting in cash provided of $0.6 million primarily as a result of decreased contract assets and capitalized costs associated with programs in the startup phase of production at Sypris Electronics. Investing Activities. Net cash provided by investing activities was $2.2 million during the year ended December 31, 2025. During 2025, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold its facility located in Louisville, Kentucky, with a net book value of $0.4 million for net cash proceeds of approximately $2.9 million. Partially offsetting this was capital expenditures during the same period of $0.8 million. Net cash used in investing activities for the year ended December 31, 2024 was comprised of capital expenditures of $1.1 million. Financing Activities. Net cash provided by financing activities was $0.8 million in 2025 and was comprised of proceeds from the Note of $3.0 million, partially offset by payments on finance leases and equipment financing obligation of $2.1 million and $0.1 million for minimum statutory tax withholdings on stock-based compensation. Net cash used in financing activities in 2024 was comprised of proceeds from the Note of $2.5 million and proceeds from equipment financing obligations of $0.4 million, partially offset by payments on finance leases and equipment financing obligations of $2.0 million and payments of $0.1 million for minimum statutory tax withholdings on stock-based compensation. Recent Accounting Pronouncements See Note 1 to our consolidated financial statements for a full description of recent accounting pronouncements, including the respective dates of adoption and effects on our results of operations and financial condition. Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K and thus are not required to provide the quantitative and qualitative disclosures about market risk specified in Item 305 of Regulation S-K. 31 Item 8. Financial Statements and Supplementary Data SYPRIS SOLUTIONS, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID 173 ) 33 Consolidated Statements of Operations 35 Consolidated Statements of Comprehensive Loss 36 Consolidated Balance Sheets 37 Consolidated Statements of Cash Flows 38 Consolidated Statements of Stockholders’ Equity 39 Notes to Consolidated Financial Statements 40 32 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Stockholders and the Board of Directors of Sypris Solutions, Inc. Louisville, Kentucky Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Sypris Solutions, Inc. (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the years then ended, 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 December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, 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 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was 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. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Net revenue and gross profit recognized over time As more fully described in Notes 1 and 3 to the financial statements, for contracts where the Company serves as a contractor for aerospace and defense companies under federally funded programs, revenue and gross profit is recognized over time due to the continuous transfer of control to the customer based upon the extent of progress towards completion of the performance obligation. The Company uses labor hours incurred as the measure of progress as it best depicts the Company’s performance of the obligation to the customer. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of labor hours incurred to date to the total estimated labor hours to complete the performance obligation. Revenue and gross profit are recognized based on the extent of progress towards completion of the performance obligation. We identified auditing the revenue and gross profit recognized over time as a critical audit matter due to the significant audit effort involved in auditing the percentage of completion calculation. Our audit procedures related to revenue and gross profit recognized over time included the following substantive testing procedures: - Evaluated whether the recognition of revenue and gross profit over time was appropriate based on the terms and conditions of each tested contract. - Tested management’s determination of the performance obligation transaction price and gross profit in management’s calculation by comparing items to revenue and gross profit recognized on similar items that were sold during the year. 33 - Tested completeness of the inventory on contracts for which revenue and gross profit is being recognized over time by agreeing the inventory in management’s calculation to the underlying inventory listing. - Evaluated the percentage of completion based upon labor hours incurred to the ratio of total estimated labor hours at completion by: o Assessing, during our physical inventory observation, the stage of completion and recalculating the labor hours incurred to date by comparing inventory items throughout the stages of completion and agreeing those items back to the inventory listing. o Performing manufactured inventory cost testing to test the total labor hours incurred on a finished good product. o Testing the mathematical accuracy of management’s calculation of revenue and gross profit recognized during the period for the performance obligations. /s/ Crowe LLP We have served as the Company’s auditor since 2014. San Francisco, California March 26, 2026 34 SYPRIS SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) Year ended December 31, 2025 2024 Net revenue $ 119,887 $ 140,180 Cost of sales 110,489 120,290 Gross profit 9,398 19,890 Selling, general and administrative 16,004 16,963 Operating (loss) income ( 6,606 ) 2,927 Interest expense, net 1,631 1,684 Other (income) expense, net ( 1,960 ) 1,217 (Loss) income before income taxes ( 6,277 ) 26 Income tax expense, net 61 1,706 Net loss $ ( 6,338 ) $ ( 1,680 ) Loss per common share: Basic $ ( 0.28 ) $ ( 0.08 ) Diluted $ ( 0.28 ) $ ( 0.08 ) Cash dividends per common share $ 0.00 $ 0.00 Weighted average shares outstanding: Basic 22,270 22,043 Diluted 22,270 22,043 The accompanying notes are an integral part of the consolidated financial statements. 35 SYPRIS SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Year ended December 31, 2025 2024 Net loss $ ( 6,338 ) $ ( 1,680 ) Other comprehensive income (loss): Foreign currency translation adjustments, net of tax 2,800 ( 3,588 ) Employee benefit related, net of tax 731 1,638 Other comprehensive income (loss) 3,531 ( 1,950 ) Comprehensive loss $ ( 2,807 ) $ ( 3,630 ) The accompanying notes are an integral part of the consolidated financial statements. 36 SYPRIS SOLUTIONS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for share data) December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 6,770 $ 9,675 Accounts receivable, net 9,846 10,593 Inventory, net 52,463 66,680 Other current assets 10,808 11,070 Total current assets 79,887 98,018 Property, plant and equipment, net 16,004 13,299 Operating lease right-of-use assets 7,333 3,749 Other assets 4,587 4,310 Total assets $ 107,811 $ 119,376 LIABILITIES AND STOCKHOLDERS ’ EQUITY Current liabilities: Accounts payable $ 10,270 $ 18,428 Accrued liabilities 49,428 57,639 Operating lease liabilities, current portion 1,019 906 Finance lease obligations, current portion 622 1,507 Equipment financing obligations, current portion 526 481 Working capital line of credit 500 500 Total current liabilities 62,365 79,461 Operating lease obligations, net of current portion 6,673 3,251 Finance lease obligations, net of current portion 4,021 735 Equipment financing obligations, net of current portion 846 852 Note payable – related party 11,993 8,986 Other liabilities 4,123 6,510 Total liabilities 90,021 99,795 Stockholders’ equity: Preferred stock, par value $ 0.01 per share, 975,150 shares authorized; no shares issued — — Series A preferred stock, par value $ 0.01 per share, 24,850 shares authorized; no shares issued — — Common stock, non-voting, par value $ 0.01 per share, 10,000,000 shares authorized; no shares issued — — Common stock, par value $ 0.01 per share, 30,000,000 shares authorized; 23,051,483 shares issued and 23,029,970 outstanding in 2025 and 23,041,523 shares issued and 23,020,010 outstanding in 2024 230 230 Additional paid-in capital 157,996 156,980 Accumulated deficit ( 124,950 ) ( 118,612 ) Accumulated other comprehensive loss ( 15,486 ) ( 19,017 ) Treasury stock, 21,513 in 2025 and 2024 0 0 Total stockholders’ equity 17,790 19,581 Total liabilities and stockholders’ equity $ 107,811 $ 119,376 The accompanying notes are an integral part of the consolidated financial statements. 37 SYPRIS SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 6,338 ) $ ( 1,680 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 2,844 3,181 Deferred income taxes 105 232 Non-cash compensation 1,118 868 Deferred loan costs amortized 7 8 Provision for excess and obsolete inventory 1,322 593 Non-cash lease expense 1,105 1,160 Net gain on the sale of assets ( 2,370 ) 0 Other noncash items 451 414 Contributions to pension plans ( 335 ) ( 712 ) Changes in operating assets and liabilities: Accounts receivable 692 ( 1,826 ) Inventory 13,265 9,129 Prepaid expenses and other assets 626 ( 1,934 ) Accounts payable ( 8,239 ) ( 8,163 ) Accrued and other liabilities ( 9,984 ) 734 Net cash (used in) provided by operating activities ( 5,731 ) 2,004 Cash flows from investing activities: Capital expenditures ( 756 ) ( 1,083 ) Proceeds from sale of assets 2,924 24 Net cash provided by (used in) investing activities 2,168 ( 1,059 ) Cash flows from financing activities: Proceeds from equipment financing obligations 0 430 Proceeds from Note Payable – related party 3,000 2,500 Principal payments on finance lease obligations ( 1,556 ) ( 1,366 ) Principal payments on equipment financing obligations ( 505 ) ( 618 ) Indirect repurchase of shares for minimum statutory tax withholdings ( 102 ) ( 126 ) Net cash provided by financing activities 837 820 Effect of exchange rate changes on cash balances ( 179 ) 29 Net (decrease) increase in cash and cash equivalents ( 2,905 ) 1,794 Cash and cash equivalents at beginning of year 9,675 7,881 Cash and cash equivalents at end of year $ 6,770 $ 9,675 Supplemental disclosure of cash flow information: Non-cash investing and financing activities: Capital expenditures purchased through equipment financing obligations $ 317 $ 0 Right-of-use asset arising from operating lease liabilities 4,691 1,592 Assets arising from financing lease liabilities 4,033 0 The accompanying notes are an integral part of the consolidated financial statements. 38 SYPRIS SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY (in thousands, except for share data) Accumulated Additional Other Common Stock Paid-In Accumulated Comprehensive Treasury Shares Amount Capital Deficit Loss Stock January 1, 2024 balance 22,459,649 $ 224 $ 156,242 $ ( 116,932 ) $ ( 17,067 ) $ 0 Net loss 0 0 0 ( 1,680 ) 0 0 Employee benefit related, net of tax 0 0 0 0 1,638 0 Foreign currency translation adjustment, net of tax 0 0 0 0 ( 3,588 ) 0 Restricted common stock grant 602,500 5 ( 5 ) 0 0 0 Noncash compensation 15,000 0 868 0 0 0 Exercise of stock options 75,126 1 ( 34 ) 0 0 0 Treasury stock ( 132,265 ) 0 ( 91 ) 0 0 0 December 31, 2024 balance 23,020,010 $ 230 $ 156,980 $ ( 118,612 ) $ ( 19,017 ) $ 0 Net loss 0 0 0 ( 6,338 ) 0 0 Employee benefit related, net of tax 0 0 0 0 731 0 Foreign currency translation adjustment, net of tax 0 0 0 0 2,800 0 Noncash compensation 0 0 1,118 0 0 0 Exercise of stock options 72,006 1 ( 1 ) 0 0 0 Treasury stock ( 62,046 ) ( 1 ) ( 101 ) 0 0 0 December 31, 2025 balance 23,029,970 $ 230 $ 157,996 $ ( 124,950 ) $ ( 15,486 ) $ 0 The accompanying notes are an integral part of the consolidated financial statements. 39 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 (1) Organization and Significant Accounting Policies Consolidation Policy The accompanying consolidated financial statements include the accounts of Sypris Solutions, Inc. and its wholly-owned subsidiaries (collectively, “Sypris” or the “Company”) and have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission. The Company’s operations are domiciled in the United States (U.S.) and Mexico and serve a wide variety of domestic and international customers. All intercompany accounts and transactions have been eliminated. Nature of Business Sypris is a diversified provider of truck components, oil and gas pipeline components and aerospace and defense electronics. The Company produces a wide range of manufactured products, often under multi-year, sole-source contracts with corporations and government agencies. The Company offers such products through its two business segments, Sypris Technologies, Inc. (“Sypris Technologies”) and Sypris Electronics, LLC (“Sypris Electronics”). Sypris Technologies derives its revenue primarily from the sale of forged, machined, welded and heat-treated steel components primarily for heavy commercial vehicle and high-pressure energy pipeline applications. Sypris Electronics derives its revenue primarily from circuit card and box build manufacturing, high reliability manufacturing and systems assembly and integration, primarily for aerospace and defense, communications and space applications. Most products are built to the customer’s design specifications. The Company also provides engineering design services and repair or inspection services. See Note 21 for additional information regarding our segments. Use of Estimates The preparation of the consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Changes in facts and circumstances could have a significant impact on the resulting estimated amounts included in our consolidated financial statements. Actual results could differ from these estimates. Fair Value Estimates The Company estimates fair value of its financial instruments utilizing an established three-level hierarchy. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows: Level 1 – Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value measurements. Cash Equivalents Cash equivalents include all highly liquid investments with a maturity of three months or less when purchased. Inventory Inventory is stated at the lower of cost or estimated net realizable value. Costs for raw materials, work in process and finished goods is determined under the first-in, first-out method. Indirect inventories, which include perishable tooling, repair parts and other materials consumed in the manufacturing process but not incorporated into finished products are classified as raw materials. The Company’s reserve for excess and obsolete inventory is primarily based upon forecasted demand for its product sales, and any change to the reserve arising from forecast revisions is reflected in cost of sales in the period the revision is made. Property, Plant and Equipment Property, plant and equipment is stated at cost. Depreciation of property, plant and equipment is generally computed using the straight-line method over their estimated economic lives. For land improvements, buildings and building improvements, the estimated economic life is generally 40 years. Estimated economic lives range from three to fifteen years for machinery, equipment, furniture and fixtures. Leasehold improvements are amortized over the shorter of their economic life or the respective lease term using the straight-line method. Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Major rebuilds and improvements are capitalized. Also included in plant and equipment are assets under finance lease, which are stated at the present value of minimum lease payments. 40 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Long-lived Assets The Company reviews the carrying value of amortizable long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held for sale and held for use is measured by a comparison of the carrying amount of the asset to the undiscounted future net cash flows expected to be generated by the asset. If facts and circumstances indicate that the carrying value of an asset or groups of assets, as applicable, is impaired, the long-lived asset or groups of long-lived assets are written down to their estimated fair value. Leases Our lease portfolio represents leases of real estate, including manufacturing, assembly and office facilities, while the remainder represents leases of personal property, including manufacturing and information technology equipment. We have lease agreements with lease and non-lease components, which are accounted for as a single lease component. Leases with an initial term of twelve months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term. Generally, we use our incremental borrowing rate in determining the present value of lease payments, unless the implicit rate is readily available. Stock-based Compensation The Company accounts for stock-based compensation in accordance with the fair value recognition provisions using the Black-Scholes option-pricing method, which requires the input of several subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (expected term) and the estimated volatility of our common stock price over the expected term. Changes in the subjective assumptions can materially affect the fair value estimate of stock-based compensation and consequently, the related expense is recognized in the consolidated statements of operations. Income Taxes The Company uses the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, using the statutory tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such assets will be realized. In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax positions. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting dates. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest has also been recognized. The Company recognizes liabilities or assets for the deferred tax consequences of temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements in accordance with ASC 740, Income Taxes . The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. Net Revenue and Cost of Sales The Company recognizes revenue when it satisfies a performance obligation by transferring control of a promised product or rendering a service to a customer. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for the product or service (the “transaction price”). The Company’s transaction price in its contracts with customers is generally fixed; no payment discounts, rebates or refunds are included within its contracts. The Company does not provide service-type warranties nor does it allow customer returns. In connection with the sale of various parts to customers, the Company is subject to typical assurance warranty obligations covering the compliance of the electronics parts produced to agreed-upon specifications. Customer returns, when they occur, relate to quality rework issues and are not connected to any repurchase obligation of the Company. 41 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED A performance obligation is a promise in a contract to transfer a distinct product or render a service to a customer and is the unit of account to which the transaction price is allocated under ASC 606, Revenue from Contracts with Customers (“ASC 606”). When a contract contains multiple performance obligations, we allocate the transaction price to the individual performance obligations using the price at which the promised goods or services would be sold to customers on a standalone basis. For most sales within our Sypris Technologies segment and a portion of sales within Sypris Electronics, control transfers to the customer at a point in time. Indicators that control has transferred to the customer include the Company having a present right to payment, the customer obtaining legal title and the customer having the significant risks and rewards of ownership. The Company’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. For contracts where Sypris Electronics serves as a contractor for aerospace and defense companies under federally funded programs, we generally recognize revenue over time as we perform due to the continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contracts that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. Because control is transferred over time, revenue and gross profit is recognized based on the extent of progress towards completion of the performance obligation. We use labor hours incurred as a measure of progress for these contracts because it best depicts the Company’s performance of the obligation to the customer, which occurs as we incur labor on our contracts. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of labor hours incurred to date to the total estimated labor hours at completion of the performance obligation. Allowance for Credit Losses Trade accounts receivable are reported net of the allowance for credit losses in the consolidated balance sheets. We provide an allowance for credit losses on trade receivables based on historical loss experience, aging analysis, and any specific, known troubled accounts. Accounts deemed uncollectible are written off against the allowance after management deems the account to be uncollectible. The allowance for credit losses as a percentage of gross trade receivables was less than 1% as of December 31, 2025 and 2024. Recoveries of trade receivables previously written off are recorded when received and are immaterial for the year ended December 31, 2025 and 2024. Product Warranty Costs The provision for estimated warranty costs is recorded at the time of sale and is periodically adjusted to reflect actual experience. The Company’s warranty liability, which is included in accrued liabilities in the accompanying balance sheets, as of December 31, 2025 and 2024, was $ 738,000 and $ 850,000 , respectively. The Company’s warranty expense for the years ended December 31, 2025 and 2024 was $ 272,000 and $ 435,000 , respectively. Concentrations of Credit Risk Financial instruments which potentially expose the Company to concentrations of credit risk consist of accounts receivable. The Company’s customer base consists of a number of customers in diverse industries across geographic areas, primarily in North America, and aerospace and defense companies under contract with the U.S. Government. The Company performs periodic credit evaluations of its customers’ financial condition and does not require collateral on its commercial accounts receivable. Credit losses are provided for in the consolidated financial statements and consistently have been within management’s expectations. Approximately 31 % of accounts receivable outstanding at December 31, 2025 was due from two customers. More specifically, ADI and SubCom, comprise 16 % and 15 %, respectively, of December 31, 2025 outstanding accounts receivable. Approximately 37 % of accounts receivable outstanding at December 31, 2024 was due from three customers. More specifically, Sisamex, SubCom and Detroit Diesel comprise 14 %, 12 % and 11 %, of December 31, 2024 outstanding accounts receivable. No other single customer accounted for more than 10% of the Company’s total accounts receivable as of December 31, 2025 or 2024. 42 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED The Company’s largest customers for the year ended December 31, 2025 were Northrop Grumman, Detroit Diesel, and SubCom, which represented approximately 23 %, 13 %, and 11 %, respectively, of the Company’s total net revenue. Detroit Diesel is a customer within the Sypris Technologies segment and Northrop Grumman and SubCom are customers within the Sypris Electronics segment. The Company’s largest customers for the year ended December 31, 2024 were Northrop Grumman, Sistemas, and Detroit Diesel, which represented approximately 23 %, 21 %, and 11 %, respectively, of the Company’s total net revenue. No other single customer accounted for more than 10% of the Company’s total net revenue for the years ended December 31, 2025 or 2024. Foreign Currency Translation The functional currency for the Company’s Mexican subsidiary is the Mexican peso. Assets and liabilities are translated at the period end exchange rate, and income and expense items are translated at the weighted average exchange rate. The resulting translation adjustments are recorded in comprehensive loss as a separate component of stockholders’ equity. Remeasurement gains or losses for U.S. dollar denominated accounts of the Company’s Mexican subsidiary are included in other (income) expense, net. Collective Bargaining Agreements Approximately 224 , or 41 % of the Company’s employees, all within Sypris Technologies, were covered by collective bargaining agreements as of December 31, 2025. Excluding certain Mexico employees covered under an annually ratified agreement, there are no collective bargaining agreements expiring within the next twelve months. Certain Mexico employees are covered by an annually ratified collective bargaining agreement. These employees represented approximately 36 % of the Company’s workforce, or 200 employees as of December 31, 2025. Recently Issued Accounting Standards In July 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company does not expect this amended guidance will have a material impact on its financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires public entities to disclose detailed components of income statement expenses, such as inventory purchases, employee compensation, depreciation and amortization within relevant expense captions. Companies are also required to explain amounts not disaggregated and define and disclose total selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are currently evaluating the impact of the guidance on our financial statement disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The guidance requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. We adopted the new standard effective December 31, 2024. As a result, we have enhanced our segment disclosures to include the disclosure of our CODM. The adoption of this ASU affects only our disclosures, with no impacts to our financial condition and results of operations. On December 31, 2025, we adopted ASU 2023-09, Improvements to Income Tax Disclosures. This guidance requires disaggregated income tax disclosures on the rate reconciliation and income taxes paid. The Company adopted this ASU using the prospective method, and the adoption did not have an impact on the Company’s consolidated financial statements other than additional information that is provided in the footnote disclosure. See Note 18 for more information. 43 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Liquidity As reflected in the consolidated financial statements, the Company reported a net loss of $ 6,338,000 and $ 1,680,000 for the year ended December 31, 2025 and 2024, respectively, and cash used in operating activities of $ 5,731,000 for the year ended December 31, 2025. The Company’s net inventory increased significantly in 2023, primarily related to contracts with Sypris Electronics’ aerospace and defense customers. Shipments to customers on certain of these contracts were delayed beyond the initial delivery dates, which negatively impacted the cycle time to convert inventory to cash. Additionally, the Company experienced a significant drop in volumes within the Sypris Technologies business attributable to the anticipated cyclical decline in the commercial vehicle market in 2025, which led to a corresponding decrease in gross profit. As a result, the Company experienced a liquidity shortfall beginning in the fourth quarter of 2023 and at various times during 2024, 2025 and into 2026. The shipment delays also contributed to an increase in trade payable balances with certain suppliers during 2023 and 2024, The Company successfully negotiated amended payment and other terms on the past due balances with certain suppliers and is continuing to work with suppliers to improve terms and maintain consistency in its supply chain relationships. The Company received the benefit of additional loans of $ 3,000,000 during the year ended December 31, 2025 and $ 2,500,000 during the year ended December 31, 2024 from GFCM to help the Company manage its liquidity during those periods. This additional $ 5,500,000 loaned to the Company by GFCM in 2025 and 2024 was approved by the Audit Committee and provided the Company necessary liquidity. Additionally, during the first quarter of 2026, the Company further amended the Note to extend the maturity dates on all tranches by one year and allow for the continued deferral of payment for up to 100% of the interest due on the Note to April 1, 2027 (see Note 22). Our ability to service our current liabilities will require a significant amount of cash. Management has evaluated our ability to generate this cash to meet our obligations for the next twelve months. Our primary sources of funds to meet our liquidity and capital requirements include cash on hand funds generated through revenue growth from the Company’s consolidated operations and reductions in the Company’s investment in working capital. Based upon our current forecast, we believe that we will have sufficient liquidity to finance our operations for the next twelve months. Although we believe the assumptions underlying our current forecast are reasonable, management is also prepared to implement contingency plans that include other cost reduction initiatives to improve profitability and cash flow, or management can take additional steps such as adjusting the timing and amount of certain operating expenses as well as capital expenditures or the issuance of new debt. If we are unable to achieve our forecasted revenue, or if our costs are higher than expected, we may be required to revise our plans to provide for additional cost-cutting measures, seek additional financing or to consider other strategic alternatives. (2) Leases The Company determines if an arrangement is a lease at its inception. The Company has entered into operating leases for real estate. These leases have initial terms which range from 10 years to 20 years, and often include one or more options to renew. These renewal terms can extend the lease term by 5 years and will be included in the lease term when it is reasonably certain that the Company will exercise the option. The Company’s existing leases do not contain significant restrictive provisions; however, certain leases contain provisions for payment of real estate taxes, insurance and maintenance costs by the Company. The lease agreements do not contain any residual value guarantees. Some of the real estate lease agreements include periods of rent holidays and payments that escalate over the lease term by specified amounts. All operating lease expenses are recognized on a straight-line basis over the lease term. For finance leases, interest expense is recognized on the lease liability and the right-of-use asset is amortized over the lease term. Some leases may require variable lease payments based on factors specific to the individual agreements. Variable lease payments for which we are typically responsible include real estate taxes, insurance and common area maintenance expenses based on the Company’s pro-rata share, which are excluded from the measurement of the lease liability. Additionally, one of the Company’s real estate leases has lease payments that adjust based on annual changes in the Consumer Price Index (“CPI”). The leases that are dependent upon CPI are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Incremental payments due to changes in the index are treated as variable lease costs and expensed as incurred. During the year ended December 31, 2025, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold its facility located in Louisville, Kentucky, with a net book value of $ 414,000 for gross proceeds of $ 3,200,000 , which was reduced by transaction costs of $ 280,000 for net cash proceeds of approximately $ 2,920,000 . The lease agreement has a term of 20 years, and our initial annual cash payments to the buyer-lessor are approximately $ 280,000 , and the payments will escalate three percent annually. The Company recognized a gain of $ 2,506,000 on this transaction, which is included in other (income) expense, net in the consolidated statements of operations. Right-of-use assets and lease liabilities recognized related to this sale leaseback transaction were $ 2,205,000 . 44 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED During the year ended December 31, 2025, the Company entered into a five -year extension of its land and building in Toluca, Mexico and reassessed its expectations to exercise one additional extension. As a result, an increase in the operating right-of-use assets and operating lease liabilities recognized related to this were $ 2,486,000 , and the Company recognized an increase of its finance lease of $ 3,645,000 . These operating leases are included in “Operating lease right-of-use assets” on the Company’s consolidated balance sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in “Operating lease liabilities, current portion” and “Operating lease liabilities, net of current portion” on the Company’s consolidated balance sheets. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As of December 31, 2025, total right-of-use assets and operating lease liabilities were approximately $ 7,333,000 and $ 7,692,000 , respectively. As of December 31, 2024, total right-of-use assets and operating lease liabilities were approximately $ 3,749,000 and $ 4,157,000 , respectively. We primarily use our incremental borrowing rate, which is updated quarterly, based on the information available at commencement date, in determining the present value of lease payments. If readily available, we would use the implicit rate in a new lease to determine the present value of lease payments. The Company has certain contracts for real estate which may contain lease and non-lease components which it has elected to treat as a single lease component. The Company has entered into various short-term operating leases, primarily for office equipment with an initial term of twelve months or less. Lease payments associated with short-term leases are expensed as incurred and are not recorded on the Company’s balance sheet. The related lease expense for short-term leases was not material for the year ended December 31, 2025 and 2024. The following table presents information related to lease expense for the year ended December 31, 2025 and 2024 (in thousands): December 31, 2025 2024 Finance lease expense Amortization expense $ 741 $ 648 Interest expense 277 244 Operating lease expense 1,459 1,295 Variable lease expense 293 348 Total lease expense $ 2,770 $ 2,535 The following table presents supplemental cash flow information related to leases (in thousands): December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,811 $ 1,666 Operating cash flows from finance leases 277 244 Financing cash flows from finance leases 1,556 1,366 45 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED The annual future minimum lease payments as of December 31, 2025 are as follows (in thousands): Operating Finance Leases Leases Next 12 months $ 1,796 $ 1,203 12 to 24 months 1,868 926 24 to 36 months 1,041 862 36 to 48 months 1,056 816 48 to 60 months 1,072 695 Thereafter 9,337 3,589 Total lease payments 16,170 8,091 Less imputed interest ( 8,478 ) ( 3,448 ) Total $ 7,692 $ 4,643 The following table presents certain information related to lease terms and discount rates for leases as of December 31, 2025 and 2024: December 31, 2025 2024 Weighted-average remaining lease term (years): Operating leases 11.0 5.2 Finance leases 8.5 1.7 Weighted-average discount rate (percentage): Operating leases 11.9 8.4 Finance leases 13.1 8.7 (3) Revenue from Contracts with Customers The Company recognizes revenue when it satisfies a performance obligation by transferring control of a promised product or rendering a service to a customer. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for the product or service (the “transaction price”). The Company’s transaction price in its contracts with customers is generally fixed; no payment discounts, rebates or refunds are included within its contracts. The Company also does not provide service-type warranties, nor does it allow customer returns. In connection with the sale of various parts to customers, the Company is subject to typical assurance warranty obligations covering the compliance of the electronics parts produced to agreed-upon specifications. Customer returns, when they occur, relate to quality rework issues and are not connected to any repurchase obligation of the Company. A performance obligation is a promise in a contract to transfer a distinct product or render a service to a customer and is the unit of account to which the transaction price is allocated under ASC 606. When a contract contains multiple performance obligations, we allocate the transaction price to the individual performance obligations using the price at which the promised goods or services would be sold to customers on a standalone basis. For most sales within our Sypris Technologies segment and a portion of sales within Sypris Electronics, control transfers to the customer at a point in time. Indicators that control has transferred to the customer include the Company having a present right to payment, the customer obtaining legal title and the customer having the significant risks and rewards of ownership. The Company’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. For contracts where Sypris Electronics serves as a contractor for aerospace and defense companies under federally funded programs, we generally recognize revenue over time as we perform because of continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contracts that allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. Because control is transferred over time, revenue and gross profit is recognized based on the extent of progress towards completion of the performance obligation. We use labor hours incurred as a measure of progress for these contracts because it best depicts the Company’s performance of the obligation to the customer, which occurs as we incur labor on our contracts. Under this measure of progress, the extent of progress towards completion is measured based on the ratio of labor hours incurred to date to the total estimated labor hours at completion of the performance obligation. 46 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Some of Sypris Electronics’ contractual arrangements with customers are for one year or less. For the remaining population of contracts greater than one year we had $ 66,431,000 of remaining performance obligations as of December 31, 2025, all of which were long-term Sypris Electronics’ contracts. We expect to recognize the remaining performance obligations as revenue in 2026. We estimate our remaining performance obligations at a point in time. Actual amounts and timing of revenue recognition may differ from these estimates due to contract modifications, program schedule changes and material availability delays. Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the years ended December 31, 2025 and 2024: December 31, 2025 2024 Sypris Technologies – transferred point in time $ 51,746 $ 75,207 Sypris Electronics – transferred point in time 13,657 13,878 Sypris Electronics – transferred over time 54,484 51,095 Net revenue $ 119,887 $ 140,180 Contract Balances Differences in the timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the consolidated balance sheets. Contract assets – Contract assets include unbilled amounts typically resulting from sales under contracts where revenue is recognized over time and revenue recognized exceeds the amount billed to the customer, and the right to payment is subject to conditions other than the passage of time. Contract assets are generally classified as current assets in the consolidated balance sheet. The balance of contract assets as of December 31, 2025 and 2024 were $ 3,798,000 and $ 4,663,000 , respectively, and are included within other current assets in the accompanying consolidated balance sheets. Contract liabilities – Some of the Company’s contracts within Sypris Electronics are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Often this results in billing occurring prior to revenue recognition resulting in contract liabilities. Additionally, the Company occasionally receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the consolidated balance sheet based on the timing of when the Company expects to recognize revenue. As of December 31, 2025, the contract liabilities balance was $ 44,242,000 , of which $ 42,256,000 was included within accrued liabilities and $ 1,986,000 was included within other liabilities in the accompanying consolidated balance sheets. As of December 31, 2024, the contract liabilities balance was $ 54,375,000 , of which $ 50,430,000 was included within accrued liabilities and $ 3,945,000 was included within other liabilities in the accompanying consolidated balance sheets. Payments received from customers in advance of revenue recognition are not considered to be significant financing components because they are used to meet working capital demands that can be higher in the early stages of a contract. The change in contract liabilities in fiscal 2025 is a result of an increase in shipments for Sypris Electronics during the year. The Company recognized revenue from contract liabilities of $ 32,889,000 and $ 25,327,000 during the years ended December 31, 2025 and 2024, respectively. Practical expedients and exemptions Sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded in selling, general and administrative expense in the consolidated statements of operations. We do not disclose the value of unsatisfied performance obligations for contracts with original expected lengths of one year or less. 47 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (4) Other (Income) Expense, Net The Company recognized other income of $ 1,960,000 during the year ended December 31, 2025. During the year ended December 31, 2025, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold its facility located in Louisville, Kentucky, with a net book value of $ 414,000 for net cash proceeds of approximately $ 2,920,000 . The Company recognized a gain of $ 2,506,000 on this transaction, which is included in other (income) expense, net in the consolidated statements of operations. This gain was partially offset by pension expense of $ 571,000 . Foreign currency related expenses were not material for the year ended December 31, 2025. The Company recognized other expense of $ 1,217,000 during the year ended December 31, 2024, which included pension expense of $ 795,000 and foreign currency related expenses of $ 300,000 . (5) Accounts Receivable Accounts receivable consists of the following (in thousands): December 31, 2025 2024 Commercial $ 9,884 $ 10,679 Allowance for credit losses ( 38 ) ( 86 ) Accounts receivable, net $ 9,846 $ 10,593 (6) Inventory Inventory consists of the following (in thousands): December 31, 2025 2024 Raw materials $ 46,347 $ 58,733 Work in process 7,442 8,629 Finished goods 1,839 1,562 Reserve for excess and obsolete inventory ( 3,165 ) ( 2,244 ) Inventory, net $ 52,463 $ 66,680 (7) Other Current Assets Other current assets consist of the following (in thousands): December 31, 2025 2024 Prepaid expenses $ 5,348 $ 3,947 Contract assets 3,798 4,663 Other 1,662 2,460 Other current assets $ 10,808 $ 11,070 Included in other current assets are income and VAT taxes refundable, tools, spare parts and other items, none of which exceed 5 % of total current assets. 48 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (8) Property, Plant and Equipment Property, plant and equipment consists of the following (in thousands): December 31, 2025 2024 Land and land improvements $ 0 $ 43 Buildings and building improvements 6,498 7,781 Machinery, equipment, furniture and fixtures 71,999 67,636 Construction in progress 460 870 78,957 76,330 Accumulated depreciation ( 62,953 ) ( 63,031 ) Property plant and equipment, net $ 16,004 $ 13,299 Depreciation expense, including amortization of assets recorded under finance leases, totaled approximately $ 2,844,000 and $ 3,181,000 for the years ended December 31, 2025 and 2024, respectively. Capital expenditures included in accounts payable or accrued liabilities were not material as of December 31, 2025 and 2024, respectively. Included within property, plant and equipment were assets under finance leases as follows (in thousands): December 31, 2025 2024 Buildings and building improvements $ 3,725 $ 2,908 Machinery, equipment, furniture and fixtures 1,850 4,002 5,575 6,910 Accumulated depreciation ( 612 ) ( 3,610 ) Net $ 4,963 $ 3,300 (9) Other Assets Other assets consist of the following (in thousands): December 31, 2025 2024 Long-term spare parts $ 441 $ 399 Long-term deposits 280 280 Pension asset 1,084 994 Deferred tax asset, net 2,188 2,047 Other 594 590 Other assets $ 4,587 $ 4,310 (10) Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, 2025 2024 Salaries, wages, employment taxes and withholdings $ 1,213 $ 1,885 Employee benefit plans 2,195 1,523 Accrued professional fees 833 793 Income, property and other taxes 221 875 Contract liabilities – short term 42,256 50,430 Deferred gain from sale-leaseback 0 291 Interest payable – related party 1,709 647 Other 1,001 1,195 Accrued liabilities $ 49,428 $ 57,639 Included in other accrued liabilities are accrued operating expenses, accrued warranty expenses, and other items, none of which exceed 5 % of total current liabilities. 49 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (11) Other Liabilities Other liabilities consist of the following (in thousands): December 31, 2025 2024 Noncurrent pension liability $ 2,137 $ 2,517 Deferred gain from sale leaseback 0 48 Contract liabilities – long-term 1,986 3,945 Other liabilities $ 4,123 $ 6,510 (12) Debt Long-term obligations consists of the following (in thousands): December 31, 2025 2024 Current: Finance lease obligation, current portion $ 622 $ 1,507 Equipment financing obligations, current portion 526 481 Working capital line of credit 500 500 Current portion of long-term debt and finance lease obligations $ 1,648 $ 2,488 Long-Term: Finance lease obligations $ 4,021 $ 735 Equipment financing obligations 846 852 Note payable – related party 12,000 9,000 Less unamortized debt issuance and modification costs ( 7 ) ( 14 ) Long-term debt and finance lease obligations, net of unamortized debt costs $ 16,860 $ 10,573 The Company had no capitalized interest in 2025 or 2024. Note Payable – Related Party The Company has received the benefit of loans from GFCM in the form of secured promissory note obligations totaling $ 12,000,000 in principal as of December 31, 2025 and $ 9,000,000 as of December 31, 2024 (the “Note”). GFCM is an entity controlled by the Company’s Chairman, President and Chief Executive Officer, Jeffrey T. Gill and one of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company. During the year ended December 31, 2025, the Company and GFCM amended the Note to, among other things: (i) increase the principal amount by $ 3,000,000 to $ 12,000,000 , (ii) extend the maturity dates for $ 2,000,000 of the obligation to April 1, 2026, $ 2,000,000 to April 1, 2027, $ 5,000,000 on April 1, 2028, and the balance of $ 3,000,000 due on April 1, 2029, and (iii) allow for the deferral of payment for up to 100 % of the interest due on the Note to April 1, 2026. During the first quarter of 2026, the Company further amended the Note to extend the maturity dates on all tranches by one year and allow for the continued deferral of payment for up to 100 % of the interest due on the Note to April 1, 2027. Interest on the Note is payable quarterly, unless the deferral option is elected, and the rate is reset on April 1 of each year at the greater of 8 % or 500 basis points above the five-year Treasury note average during the previous 90-day period. This additional $ 3,000,000 loaned to the Company during 2025 and the modification during the first quarter of 2026 was approved by the Audit Committee and provided the Company necessary liquidity (see Note 22). The weighted average interest rate for the Note as of December 31, 2025 and 2024 was 9.2 %. As permitted under the Note, all interest was deferred during 2025. Interest paid on the Note during the year ended December 31, 2024 totaled approximately $ 283,000 . The total interest accrued and unpaid as of December 31, 2025 was $ 1,709,000 . Obligations under the promissory note are guaranteed by all of the subsidiaries and are secured by a first priority lien on substantially all assets of the Company, including those in Mexico. 50 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Finance Lease Obligations As of December 31, 2025, the Company had $ 4,643,000 outstanding under finance lease obligations for both property and machinery and equipment with maturities through 2031 and a weighted average interest rate of 13.1 %. Equipment Financing Obligations As of December 31, 2025, the Company had $ 1,372,000 outstanding under equipment financing facilities, with a weighted average interest rate of 6.9 % and payments due through 2030. Payments on the Company’s equipment financing obligations are due as follows as of December 31, 2025 (in thousands): Next 12 months $ 605 12 to 24 months 494 24 to 36 months 234 36 to 48 months 108 48 to 60 months 90 Thereafter 0 Total payments 1,531 Less imputed interest ( 159 ) Total equipment financing obligations $ 1,372 (13) Fair Value of Financial Instruments Cash, accounts receivable, accounts payable and accrued liabilities are reflected in the consolidated financial statements at their carrying amount which approximates fair value because of the short-term maturity of those instruments. The carrying amount of debt outstanding at December 31, 2025 approximates fair value, and is based upon a market approach (Level 2). (14) Employee Benefit Plans Sypris Technologies sponsors noncontributory defined benefit pension plans (the “Pension Plans”) covering certain of its employees. The Pension Plans covering salaried and management employees provide pension benefits that are based on the employees’ highest five-year average compensation within ten years before retirement. The Pension Plans covering hourly employees and union members generally provide benefits at stated amounts for each year of service. All of the Company’s pension plans are frozen to new participants and certain plans are frozen to additional benefit accruals. The Company’s funding policy is to make the minimum annual contributions required by the applicable regulations. The Pension Plans’ assets are primarily invested in equity securities and fixed income securities. The following table details the components of pension (income) expense (in thousands): Year ended December 31, 2025 2024 Interest cost on projected benefit obligation $ 1,069 $ 1,095 Net amortization of actuarial loss 366 440 Expected return on plan assets ( 864 ) ( 740 ) Net periodic benefit cost $ 571 $ 795 51 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED The net periodic cost of the defined benefit pension plans incurred during the years ended December 31, 2025 and 2024 is included in other (income) expense, net in the accompanying consolidated statements of operations. The following are summaries of the changes in the benefit obligations and plan assets and of the funded status of the Pension Plans (in thousands): December 31, 2025 2024 Change in benefit obligation Benefit obligation at beginning of year $ 20,894 $ 23,588 Interest cost 1,069 1,095 Actuarial loss (gain) 23 ( 1,541 ) Benefits paid ( 2,162 ) ( 2,248 ) Benefit obligation at end of year $ 19,824 $ 20,894 Change in plan assets: Fair value of plan assets at beginning of year $ 20,700 $ 21,808 Actual return on plan assets 1,385 428 Company contributions 336 712 Benefits paid ( 2,162 ) ( 2,248 ) Fair value of plan assets at end of year $ 20,259 $ 20,700 Surplus (underfunded) status of the plans $ 435 $ ( 194 ) Balance sheet assets (liabilities): Other assets $ 1,084 $ 994 Accrued liabilities ( 341 ) ( 396 ) Other liabilities ( 308 ) ( 792 ) Net amount recognized $ 435 $ ( 194 ) Pension plans with accumulated benefit obligation in excess of plan assets: Projected benefit obligation $ 11,229 $ 14,778 Accumulated benefit obligation 11,229 14,778 Fair value of plan assets 10,581 13,591 Projected benefit obligation and net periodic pension cost assumptions: Discount rate – projected benefit obligation 5.20 % 5.55 % Discount rate – net periodic pension cost 5.55 5.10 Rate of compensation increase N/A N/A Expected long-term rate of return on plan assets 3.95 – 4.65 3.15 – 3.75 December 31, 2025 2024 Weighted average asset allocation: Equity securities 13 % 16 % Debt securities 87 84 Total 100 % 100 % 52 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED The fair values of our pension plan assets as of December 31, 2025 are as follows (in thousands): Quoted Prices In Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Asset categories Cash and cash equivalents $ 2,153 $ 0 Equity securities: 0 U.S. Large Cap 1,203 0 U.S. Mid Cap 378 0 U.S. Small Cap 156 0 World Equity 842 0 Fixed income securities 5,108 10,419 Total Plan Assets $ 9,840 $ 10,419 The fair values of our pension plan assets as of December 31, 2024 are as follows (in thousands): Quoted Prices In Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Asset categories Cash and cash equivalents $ 2,245 $ 0 Equity securities: 0 U.S. Large Cap 2,171 0 U.S. Mid Cap 337 0 U.S. Small Cap 124 0 World Equity 739 0 Fixed income securities 4,765 10,319 Total Plan Assets $ 10,381 $ 10,319 Investments in our defined benefit plans are stated at fair value. The following valuation methods were used to value our pension assets: Equity securities The fair value of equity securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. Fixed income securities The fair value of fixed income securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges. Cash and cash equivalents The fair value of cash and cash equivalents is set equal to its cost. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The Company uses December 31 as the measurement date for the Pension Plans. Total estimated contributions expected to be paid to the plans during 2026 is $ 341,000 , which represents the minimum funding amounts required by federal law. The expected long-term rates of return on plan assets for determining net periodic pension cost for 2025 and 2024 were chosen by the Company from a best estimate range determined by applying anticipated long-term returns and long-term volatility for various assets categories to the target asset allocation of the plan. The target asset allocation of plan assets is equity securities ranging 0 - 55 %, fixed income securities ranging 35 - 100 % and non-traditional/other of 0 - 10 % of total investments. 53 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED When establishing the expected long-term rate of return on our U.S. pension plan assets, the Company considered historical performance and forward-looking return estimates reflective of our portfolio mix and investment strategy. Based on the most recent analysis of projected portfolio returns, the Company concluded that the use of 3.95 % for the Louisville Hourly Plan, 4.65 % for the Marion Plan and 4.45 % for the Louisville Salaried Plan as the expected return on our U.S. pension plan assets for 2025 was appropriate. Actuarial gains and losses, which are primarily the result of changes in the discount rate and other assumptions and differences between actual and expected asset returns, are deferred in Accumulated other comprehensive loss and amortized to expense following the corridor approach. We use the average remaining service period of active participants unless almost all of the plan’s participants are inactive, in which case we use the average remaining life expectancy for all active and inactive participants. Accumulated other comprehensive loss at December 31, 2025 includes $ 6,228,000 of unrecognized actuarial losses that have not yet been recognized in net periodic pension cost. The actual loss reclassified from accumulated other comprehensive loss for 2025 and 2024 was $ 366,000 and $ 440,000 , respectively. At December 31, 2025, the benefits expected to be paid in each of the next five fiscal years, and in aggregate for the five fiscal years thereafter are as follows (in thousands): 2026 $ 2,098 2027 2,033 2028 1,960 2029 1,897 2030 1,833 2031-2035 7,924 Total $ 17,745 The Company sponsors a defined contribution plan (the “Defined Contribution Plan”) for substantially all domestic employees of the Company. The Defined Contribution Plan is intended to meet the requirements of Section 401(k) of the Internal Revenue Code. The Defined Contribution Plan allows the Company to match participant contributions up to 3 % and provide discretionary contributions. In connection with the matching contributions, the Company recognized compensation expense of approximately $ 512,000 and $ 570,000 in 2025 and 2024, respectively. In addition, certain of the Company’s non-U.S. employees are covered by various defined benefit and defined contribution plans. The Company’s expenses for these plans totaled approximately $ 358,000 and $ 364,000 in 2025 and 2024, respectively. The aggregate benefit plan obligations of these plans, which are unfunded, were $ 1,829,000 and $ 1,725,000 as of December 31, 2025 and 2024 were included within other liabilities in the accompanying consolidated balance sheets. (15) Commitments and Contingencies In order to reduce manufacturing lead times, the Company enters into agreements with certain suppliers to purchase inventory based on the Company’s requirements. A significant portion of the Company’s purchase commitments arising from these agreements consists of firm and non-cancelable commitments. These purchase commitments totaled $ 25,208,000 as of December 31, 2025, of which $ 23,906,000 is for purchases to be made in 2026 and the balance thereafter. The Company bears insurance risk as a member of a group captive insurance entity for certain general liability, automobile and workers’ compensation insurance programs, a self-insured worker’s compensation program and a self-insured employee health program. The Company records estimated liabilities for its insurance programs based on information provided by the third-party plan administrators, historical claims experience, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company monitors its estimated insurance-related liabilities on a quarterly basis. As facts change, it may become necessary to make adjustments that could be material to the Company’s consolidated results of operations and financial condition. 54 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED The Company is involved in certain litigation and contract issues arising in the normal course of business. While the outcome of these matters cannot, at this time, be predicted in light of the uncertainties inherent therein, management does not expect that these matters will have a material adverse effect on the consolidated financial position or results of operations of the Company. Additionally, the Company believes its product liability insurance is adequate to cover all potential liability claims. The Company accounts for loss contingencies in accordance with U.S. GAAP. Estimated loss contingencies are accrued only if the loss is probable and the amount of the loss can be reasonably estimated. With respect to a particular loss contingency, it may be probable that a loss has occurred but the estimate of the loss is within a wide range or undeterminable. If the Company deems an amount within the range to be a better estimate than any other amount within the range, that amount will be accrued. However, if no amount within the range is a better estimate than any other amount, the minimum amount of the range is accrued. The Company has various current and previously owned facilities subject to a variety of environmental regulations. The Company has received certain indemnifications from either companies previously owning these facilities or from purchasers of those facilities. Additionally, certain property previously sold by the Company has been designated as a Brownfield Site and is under development by the purchaser. As of December 31, 2025 and 2024, no amounts were accrued for any environmental matters. See “Legal Proceedings” in Part I, Item 3 of this Annual Report on Form 10-K. (16) Stock Option and Purchase Plans The Company’s stock compensation program provides for the grant of restricted stock and restricted stock units (including performance-based restricted stock), unrestricted stock, stock options and stock appreciation rights. A total of 4,596,271 shares were registered for issuance under the 2020 Omnibus Plan. On May 21, 2025, the 2020 Omnibus Plan was replaced with the 2025 Omnibus Plan. A total of 4,849,021 shares were registered for issuance under the 2025 Omnibus Plan. Additionally, awards under the 2020 Omnibus Plan that are cancelled without having been fully exercised or vested are available again for new awards under the 2025 Omnibus Plan. The aggregate number of shares available for future grant as of December 31, 2025 and 2024 was 4,536,521 and 1,849,021 , respectively. The 2025 Omnibus Plan provides for restrictions which lapse after two or three years. Generally, if a recipient leaves the Company before the end of the restricted period or if performance requirements, if any, are not met, the shares will be forfeited. Under the plans, the Company may grant options to purchase common stock to officers, key employees and non-employee directors. Options may be granted at not less than the market price on the date of grant. Stock option grants under the 2020 Omnibus Plan include a five -year life along with vesting after three years of service. There have been no stock option grants under the 2025 Omnibus Plan. Compensation expense is measured based on the fair value at the date of grant and is recognized on a straight-line basis over the vesting period. Fair value for restricted stock and restricted stock units is equal to the stock price on the date of grant, while the fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing method. The Company uses historical Company and industry data to estimate the expected price volatility. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, the Company uses the simplified method to estimate the expected term. Under the simplified method, the expected term of an option is presumed to be the midpoint between the vesting date and the end of the contractual term. The dividend yield is assumed to be zero as we have not paid dividends nor do we anticipate paying any dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the estimated life of the option. Forfeitures are recorded as they occur. Stock based compensation expense of $ 1,118,000 and $ 868,000 has been recorded in selling, general and administrative expense in the consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively. 55 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED There were no option grants during the year ended December 31, 2025. The following weighted average assumptions were used to estimate the fair value of options granted during the year ended December 31, 2024 using the Black-Scholes option-pricing model: Expected life (years) 4.0 Expected volatility 81.7 % Risk-free interest rates 4.76 % Expected dividend yield 0 % A summary of the restricted stock activity is as follows: Number of Shares Weighted Average Grant Date Fair Valu e Per Share Weighted Average Remaining Term Aggregate Intrinsic Value Nonvested shares at January 1, 2024 512,000 $ 2.64 Granted 617,500 1.66 Vested ( 165,000 ) 3.03 Forfeited ( 82,000 ) 2.71 Nonvested shares at December 31, 2024 883,000 1.87 Granted 717,500 1.90 Vested ( 178,000 ) 2.57 Forfeited 0 0 Nonvested shares at December 31, 2025 1,422,500 $ 1.80 2.0 $ 3,470,900 The total fair value of shares vested during 2025 and 2024 was $ 293,000 and $ 304,000 respectively. The following table summarizes option activity for the year ended December 31, 2025 and 2024: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Term Aggregate Intrinsic Value Outstanding at January 1, 2024 1,824,250 $ 1.41 Granted 394,000 1.64 Exercised ( 226,500 ) 0.90 Forfeited 0 0 Expired ( 402,500 ) 1.06 Outstanding at December 31, 2024 1,589,250 1.63 Granted 0 0 Exercised ( 127,500 ) 0.82 Forfeited 0 0 Expired ( 405,000 ) 0.82 Outstanding at December 31, 2025 1,056,750 $ 2.04 2.56 $ 489,473 Exercisable at December 31, 2025 282,400 $ 2.48 1.74 $ 44,000 The weighted average grant date fair value based on the Black-Scholes option pricing model for options granted in the year ended December 31, 2024 was $ 1.02 per share. There were no options granted during 2025. There were 127,500 options exercised in 2025 with an intrinsic value of $ 138,000 . There were 226,500 options exercised in 2024 with an intrinsic value of $ 153,000 . As of December 31, 2025, there was $ 1,684,000 of total unrecognized compensation cost related to unvested share-based compensation granted under the plans. That cost is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of option shares vested during the years ended December 31, 2025 and 2024 was $ 376,000 and $ 60,000 , respectively. 56 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (17) Stockholders ’ Equity As of December 31, 2025 and 2024, 24,850 shares of the Company’s preferred stock were designated as Series A Preferred Stock in accordance with the terms of our stockholder rights plan, which expired in October 2011. There are no shares of Series A Preferred Stock currently outstanding, and there are no current plans to issue any such shares. The holders of our common stock were not entitled to any payment as a result of the expiration of the rights plan and the rights issued thereunder. The Company’s accumulated other comprehensive loss consists of employee benefit related adjustments and foreign currency translation adjustments. Accumulated other comprehensive loss consisted of the following (in thousands): December 31, 2025 2024 Foreign currency translation adjustments, net of tax $ ( 8,657 ) $ ( 11,457 ) Employee benefit related adjustments – U.S, net of tax ( 6,747 ) ( 7,612 ) Employee benefit related adjustments – Mexico, net of tax ( 82 ) 52 Accumulated other comprehensive loss $ ( 15,486 ) $ ( 19,017 ) Changes in each component of accumulated other comprehensive loss consisted of the following: Foreign Currency Translation Defined Benefit Plans Accumulated Other Comprehensive Loss Balance at January 1, 2024 $ ( 7,869 ) $ ( 9,198 ) $ ( 17,067 ) Currency translation adjustments, net of tax ( 3,588 ) 0 ( 3,588 ) Net actuarial gain for the year, net of tax 0 1,198 1,198 Amortization for the year, net of tax 0 440 440 Balance at December 31, 2024 $ ( 11,457 ) $ ( 7,560 ) $ ( 19,017 ) Currency translation adjustments, net of tax 2,800 0 2,800 Net actuarial gain for the year, net of tax 0 365 365 Amortization for the year, net of tax 0 366 366 Balance at December 31, 2025 $ ( 8,657 ) $ ( 6,829 ) $ ( 15,486 ) (18) Income Taxes The Company accounts for income taxes under the liability method. Accordingly, deferred income taxes have been provided for temporary differences between the recognition of revenue and expenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. The components of (loss) income before taxes are as follows (in thousands): Year ended December 31, 2025 2024 Domestic $ ( 6,246 ) $ ( 4,286 ) Foreign ( 31 ) 4,312 Total $ ( 6,277 ) $ 26 57 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED The components of income tax expense, net are as follows (in thousands): Year ended December 31, 2025 2024 Current: Federal $ 0 $ 0 State 9 9 Foreign ( 53 ) 1,465 Total current income tax expense ( 44 ) 1,474 Deferred: Federal 0 0 State 0 0 Foreign 105 232 Total deferred income tax expense 105 232 Income tax expense, net $ 61 $ 1,706 The Company recognizes liabilities or assets for the deferred tax consequences of temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements in accordance with Income Taxes, Topic 740 (ASC 740). These temporary differences will result in taxable or deductible amounts in future years when the reported amounts of assets or liabilities are recovered or settled. ASC 740 requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The Company evaluates its deferred tax position on a quarterly basis and valuation allowances are provided as necessary. During this evaluation, the Company reviews its forecast of income in conjunction with other positive and negative evidence surrounding the realizability of its deferred tax assets to determine if a valuation allowance is needed. Based on its current forecast, the Company believes it will have sufficient future taxable income to realize the deferred tax assets recorded by its Mexican subsidiary. Based on the Company’s consideration of all positive and negative evidence, including the future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations, the Company has established a valuation allowance against all U.S. deferred tax assets. Until an appropriate level and characterization of profitability is attained, the Company expects to continue to maintain a valuation allowance on its net deferred tax assets related to future U.S. tax benefits. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Cuts and Jobs Act (the “Tax Act”) require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company is subject to incremental U.S. tax on GILTI income due to expense allocations required by the U.S. foreign tax credit rules. The Company has elected to account for the GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements. The Company files a consolidated federal income tax return which includes all domestic subsidiaries. State income taxes paid in the U.S. during 2025 and 2024 totaled $ 9,000 and $ 9,000 , respectively. There were no state income tax refunds received in the U.S. during 2025 or 2024. No state jurisdiction exceeded the 5 percent threshold of income taxes paid (net of refunds) in 2025 or 2024. Foreign income taxes paid during 2025 and 2024 totaled $ 1,398,000 and $ 395,000 . There were no foreign refunds received in 2025 and 2024. Mexico is the only foreign tax jurisdiction for both 2025 and 2024. There were no federal taxes paid in 2025 and 2024. There were no federal refunds received in 2025 or 2024. At December 31, 2025, the Company had $ 154,515,000 of federal net operating loss carryforwards available to offset future federal taxable income. The pre-2018 federal net operating loss carryforwards of $ 135,108,000 expire in various amounts from 2026 to 2037. Federal net operating loss carryforwards generated in 2018 and forward will have an unlimited carryforward period as part of the Tax Act. The indefinite lived net operating loss carryforwards as of December 31, 2025 are approximately $ 19,406,000 . At December 31, 2025, the Company had $ 111,387,000 of state net operating loss carryforwards available to offset future state taxable income, the majority of which relates to Florida ($ 63,223,000 ) and Kentucky ($ 48,163,000 ). The pre-2018 state net operating loss carryforwards totaling approximately $ 106,387,000 expire in various amounts from 2026 to 2037. State net operating loss carryforwards generated in 2018 and forward will have an unlimited carryforward. The indefinite lived state net operating loss carryforwards as of December 31, 2025 are approximately $ 5,000,000 . 58 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED At December 31, 2025, the Company had $ 1,346,000 of net operating loss carryforwards available to offset future taxable income in Mexico. These operating losses expire in 2035. The following is a reconciliation of income tax (benefit) expense to that computed by applying the federal statutory rate to income (loss) before income taxes (in thousands): Year ended December 31, 2025 Amount Percent of Pre-tax Income Federal tax expense at the statutory rate $ ( 1,318 ) 21.0 % State income taxes, net of federal income tax effect 9 ( 0.2 ) Foreign tax effects 59 ( 0.9 ) Changes in valuation allowance 1,223 ( 19.5 ) Other Return-to-provision adjustments 118 ( 1.9 ) Other adjustments ( 30 ) 0.5 Income tax expense (benefit), net $ 61 ( 1.0 )% The states that contribute to the majority of the state income taxes, net of federal tax impact include Florida, Kentucky and Texas. The following is presented in accordance with the guidance prior to the adoption of the new income tax disclosures: Year ended December 31, 2024 Federal tax expense at the statutory rate $ 5 Current year permanent differences 326 State income taxes, net of federal income tax impact ( 90 ) Effect of tax rates of foreign subsidiary 400 Return-to-provision adjustments 150 Changes in valuation allowance 915 Income tax expense (benefit), net $ 1,706 The gross deferred tax asset for the Company’s Mexican subsidiary was $ 2,188,000 and $ 2,047,000 as of December 31, 2025 and 2024, respectively. 59 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Deferred income tax assets and liabilities are as follows (in thousands): Year ended December 31, 2025 2024 Deferred tax assets: Compensation and benefit accruals $ 840 $ 554 Inventory valuation 1,013 945 Federal and state net operating loss carryforwards 37,098 36,463 Deferred revenue 129 23 Interest limitation carryover 1,261 873 Defined benefit pension plan 0 21 Lease liabilities 1,217 864 Foreign deferred revenue and other provisions 2,188 2,047 Capitalized research and experimental costs 211 201 Other 314 350 Total 44,271 42,341 Domestic valuation allowance ( 39,905 ) ( 38,748 ) Total deferred tax assets 4,366 3,593 Deferred tax liabilities: Defined benefit pension plan ( 124 ) 0 Prepaid and other assets ( 936 ) ( 787 ) Right-of-use assets, net ( 1,118 ) ( 759 ) Total deferred tax liabilities ( 2,178 ) ( 1,546 ) Net deferred tax asset $ 2,188 $ 2,047 The ASC Income Tax Topic 740 includes guidance for the accounting for uncertainty in income taxes recognized in an enterprise’s financials. Specifically, the guidance prescribes a two-step process, which is the recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The total amount of gross unrecognized tax benefits as of December 31, 2025 and 2024 was $ 200,000 . There were no changes to the unrecognized tax benefit balance during the years ended December 31, 2025 and 2024. If the Company’s positions are sustained by the taxing authority, the entire balance at December 31, 2025 would impact the Company’s effective tax rate. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025 and 2024, the Company does not have an accrual for the payment of tax-related interest and penalties. The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. During July 2024, the Company was notified by the Internal Revenue Service (“IRS”) that it is examining the Company’s 2021 federal income tax return. On April 1, 2025, the Company received notification that the examination was complete with no changes to the reported tax amount. To the Company’s knowledge, the Internal Revenue Service (IRS) is not currently examining the Company’s U.S. income tax returns for 2022 through 2024, for which the statute has yet to expire. During the first quarter of 2023, the Company’s wholly-owned subsidiary in Mexico received a formal tax assessment notice from Mexico’s Federal Tax Administration Service, Servicio de Administracion Tributaria’s (the “SAT”) pertaining to revenue variances and disallowed deductions related to an audit by the SAT of the 2016 tax year. The tax liability for the variances approximated $ 1,150,000 , which includes annual adjustments for inflation, interest and penalties. The Company made a payment in June 2024 of $ 191,000 to settle the matter, of which $ 124,000 was recorded in income tax expense, net, and the remainder was recorded in other expense, net in the consolidated statements of operations for the year ended December 31, 2024. To the Company’s knowledge, the SAT is not currently examining the Company’s Mexican income tax returns for 2021 through 2025, for which the statute has yet to expire. In addition, open tax years related to state jurisdictions remain subject to examination. 60 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (19) Derivative Financial Instruments During the year ended December 31, 2024, the Company’s Sypris Technologies segment entered into Mexican Peso (“MXP”) put option contracts to manage a portion of the foreign currency exchange risk on forecasted expenses denominated in MXP. The contracts meet the definition of a derivate subject to the guidance of ASC 815, do not qualify for hedge accounting, and accordingly are recognized at fair value, with changes in fair value recognized in earnings in other income (expense). There were no contracts outstanding as of December 31, 2025. The contracts had a notional amount of $ 18,700,000 as of December 31, 2024. The Company does not use hedging arrangements for speculative purposes. There can be no assurance the hedges will fully offset the financial impact resulting from movements in foreign currency exchange rates. The fair value of these derivative financial instruments are determined using level 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange and interest rates at each financial reporting date. The fair value of the non-designated foreign exchange contracts as of December 31, 2024 was $ 157,000 and is included in other current assets in the Consolidated Balance Sheet. There were no foreign exchange contracts as of December 31, 2025. (20) Loss Per Common Share The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and participating securities. Restricted stock granted by the Company is considered a participating security since it contains a non-forfeitable right to dividends. Our potentially dilutive securities include potential common shares related to our stock options and restricted stock. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Diluted earnings per share excludes the impact of common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period. All potential common shares were excluded from diluted earnings per share for the year ended December 31, 2025 and 2024 because the effect of inclusion would be anti-dilutive. A reconciliation of the weighted average shares outstanding used in the calculation of basic and diluted (loss) income per common share is as follows (in thousands): Year ended December 31, 2025 2024 Loss attributable to stockholders: Net loss as reported $ ( 6,338 ) $ ( 1,680 ) Less distributed and undistributed earnings allocable to restricted award holders 0 0 Net loss allocable to common stockholders $ ( 6,338 ) $ ( 1,680 ) Loss per common share attributable to stockholders: Basic $ ( 0.28 ) $ ( 0.08 ) Diluted $ ( 0.28 ) $ ( 0.08 ) Weighted average shares outstanding – basic 22,270 22,043 Weighted average additional shares assuming conversion of potential common shares 0 0 Weighted average shares outstanding – diluted 22,270 22,043 61 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (21) Segment Information The Company is organized into two business segments, Sypris Technologies and Sypris Electronics. Our Chief Executive Officer (CEO) serves as our Chief Operating Decision Maker (CODM) and is responsible for reviewing segment performance and making decisions regarding resource allocation. Our CODM evaluates each segment’s performance based on metrics such as net revenue, gross profit, operating (loss) income and other key financial indicators, guiding strategic decisions to align with company-wide goals. On a monthly basis, the CODM considers budget-to-actual variances for gross profit and operating (loss) income when making decisions about allocating capital to the segments. The segments are each managed separately because of the distinctions between the products, markets, customers, technologies, and workforce skills of the segments. Sypris Technologies generates revenue primarily from the sale of forged, machined, welded and heat-treated steel components primarily for the heavy commercial vehicle and high-pressure energy pipeline applications. Sypris Electronics provides circuit card and box build manufacturing, high reliability manufacturing, systems assembly and integration, design for manufacturability and design to specification work to customers in the market for aerospace and defense, communications and space electronics. There was no intersegment net revenue recognized for any year presented. The Company includes the unallocated costs of its corporate office, including the employment costs of its senior management team and other corporate personnel, administrative costs and net corporate interest expense incurred at the corporate level under the caption “General, corporate and other” in the table below. Such unallocated costs include those for centralized information technology, finance, legal and human resources support teams, certain professional fees, director fees, corporate office rent, certain self-insurance costs and recoveries, software license fees and various other administrative expenses that are not allocated to our reportable segments. The unallocated assets include cash and cash equivalents maintained in its domestic treasury accounts and the net book value of corporate facilities and related information systems. The unallocated liabilities consist primarily of the related party notes payable. Domestic income taxes are calculated at an entity level and are not allocated to our reportable segments. Corporate capital expenditures and depreciation and amortization include items attributable to the unallocated fixed assets of the corporate office and related information systems. The following table presents financial information for the reportable segments of the Company (in thousands): Year ended December 31, 2025 2024 Net revenue from unaffiliated customers: Sypris Technologies $ 51,746 $ 75,207 Sypris Electronics 68,141 64,973 Total net revenue $ 119,887 $ 140,180 Gross profit: Sypris Technologies $ 6,403 $ 12,824 Sypris Electronics 2,995 7,066 Total gross profit $ 9,398 $ 19,890 Operating (loss) income: Sypris Technologies $ 439 $ 7,245 Sypris Electronics ( 1,522 ) 2,119 General, corporate and other ( 5,523 ) ( 6,437 ) Total operating (loss) income $ ( 6,606 ) $ 2,927 Interest expense, net: Sypris Technologies $ 318 $ 243 Sypris Electronics 227 711 General, corporate and other 1,086 730 Total interest expense, net $ 1,631 $ 1,684 62 SYPRIS SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED Year ended December 31, 2025 2024 Other (income) expense, net: Sypris Technologies $ ( 1,957 ) $ 1,240 Sypris Electronics 3 ( 16 ) General, corporate and other ( 6 ) ( 7 ) Total other (income) expense, net $ ( 1,960 ) $ 1,217 (Loss) income before income taxes: Sypris Technologies $ 2,423 $ 6,005 Sypris Electronics ( 1,754 ) 1,423 General, corporate and other ( 6,946 ) ( 7,402 ) Total (loss) income before income taxes $ ( 6,277 ) $ 26 Depreciation and amortization: Sypris Technologies $ 1,889 $ 2,257 Sypris Electronics 955 921 General, corporate and other 0 3 Total depreciation and amortization $ 2,844 $ 3,181 Capital expenditures: Sypris Technologies $ 678 $ 697 Sypris Electronics 11 375 General, corporate and other 67 11 Total capital expenditures $ 756 $ 1,083 December 31, 2025 2024 Total assets: Sypris Technologies $ 37,095 $ 35,013 Sypris Electronics 63,469 76,405 General, corporate and other 7,247 7,958 Total assets $ 107,811 $ 119,376 Total liabilities: Sypris Technologies $ 20,214 $ 18,104 Sypris Electronics 52,139 68,780 General, corporate and other 17,668 12,911 Total liabilities $ 90,021 $ 99,795 The Company’s export sales from the U.S. totaled $ 3,426,000 and $ 7,354,000 in 2025 and 2024, respectively. Approximately $ 31,722,000 and $ 53,301,000 of net revenue in 2025 and 2024, respectively, and $ 10,502,000 and $ 6,956,000 of long lived assets at December 31, 2025 and 2024, respectively, and net assets of $ 23,076,000 and $ 20,419,000 at December 31, 2025 and 2024, respectively, relate to the Company’s international operations. (22) Subsequent Event As described in Note 12 above, subsequent to the year ended December 31, 2025, the Company amended the Note to, among other things (i) extend the maturity dates for $ 2,000,000 of the obligation to April 1, 2027, $ 2,000,000 to April 1, 2028, $ 5,000,000 to April 1, 2029 and $ 3,000,000 to April 1, 2030, and (ii) allow for the continued deferral of payment for up to 100 % of the interest due on the Note to April 1, 2027. All other terms of the previously amended Note remain in place. Obligations under the Note are guaranteed by all of the subsidiaries and are secured by a first priority lien on substantially all assets of the Company including those in Mexico. On February 11, 2026, the Company, through its Mexican operations, entered into an unsecured loan agreement with Banco del Bajio (the “Mexico Bajio Loan”) in the amount of approximately $ 1,161,000 to fund working capital needs. The loan is to be paid in monthly installments over a five-year period and bears a fixed interest rate of 10.5 % per annum. 63 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures An evaluation was performed under the supervision and with the participation of the Company’s management, including the President and Chief Executive Officer (the CEO) and the Chief Accounting Officer (the CAO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on that evaluation, the Company’s management, including the CEO and CAO, concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management ’ s Report on Internal Control over Financial Reporting The management of Sypris Solutions, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our internal control system was designed to provide reasonable assurance to Sypris management and its Board of Directors regarding the preparation and fair presentation of published consolidated financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to the accuracy of consolidated financial statement preparation and presentation. Under the supervision and with participation of our management, including the Chief Executive Officer and Chief Accounting Officer, we assessed the effectiveness of Sypris Solutions, Inc.’s internal control over financial reporting as of December 31, 2025. In making our assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on our assessment, we concluded that as of December 31, 2025, Sypris’ internal control over financial reporting is effective based on these criteria. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company (non-accelerated filer) to provide only management’s report in this annual report. Item 9B. Other Information During the quarter ended December 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 64 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required herein is incorporated by reference from sections of the Company’s Proxy Statement titled “Governance of the Company –Committees of the Board of Directors,” “Governance of the Company – Audit and Finance Committee,” “Proposal One, Election of Directors,” and “Executive Officers,” which Proxy Statement will be filed with the Securities and Exchange Commission pursuant to instruction G(3) of the General Instructions to Form 10‑K. The Company has adopted a Code of Conduct that applies to all of its directors, officers (including its chief executive officer, chief financial officer, chief accounting officer and any person performing similar functions) and employees. The Company has made the Code of Conduct, and will make any amendments and waivers thereto, available on its website at www.sypris.com. Item 11. Executive Compensation The information required herein is incorporated by reference from sections of the Company’s Proxy Statement titled “2025 Director Compensation,” “Governance of the Company,” “Summary Compensation Table,” and “Outstanding Equity Awards at Fiscal Year-End 2025,” which Proxy Statement will be filed with the Securities and Exchange Commission pursuant to instruction G(3) of the General Instructions to Form 10‑K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required herein is incorporated by reference from the section of the Company’s Proxy Statement titled “Stock Ownership of Certain Beneficial Owners and Management,” which Proxy Statement will be filed with the Securities and Exchange Commission pursuant to instruction G(3) of the General Instructions to Form 10‑K. Equity Compensation Plan Information The following table provides information as of December 31, 2025 with respect to shares of Sypris common stock that may be issued under our equity compensation plans. Plan Category Number of Securities To be Issued Upon Exercise of Outstanding Options (a) Weighted Average Exercise Price of Outstanding Options (b) Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) Equity Compensation Plans Approved by Stockholders 2,479,250 (1) $ 2.04 4,536,521 (2) Equity Compensation Plans Not Approved by Stockholders — — — (1) Consists of 1,761,750 shares of common stock subject to outstanding awards under the 2020 Omnibus Plan and 717,500 under the 2025 Omnibus Plan. The weighted average price shown in column (b) does not take restricted stock awards or restricted stock units into account, which have no exercise price and are included in column (a). (2) Shares remaining available for issuance under the 2025 Omnibus Plan. 65 Item 13. Certain Relationships and Related Transactions, and Director Independence The information required herein is incorporated by reference from the sections of the Company’s Proxy Statement titled “Governance of the Company – Transactions with Related Persons” and “Governance of the Company – Independence,” which Proxy Statement will be filed with the Securities and Exchange Commission pursuant to instruction G(3) of the General Instructions to Form 10-K. Item 14. Principal Accounting Fees and Services The information required herein is incorporated by reference from the section of the Company’s Proxy Statement titled “Relationship with Independent Public Accountants,” which Proxy Statement will be filed with the Securities and Exchange Commission pursuant to instruction G(3) of the General Instructions to Form 10-K. 66 PART IV 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 The financial statements as set forth under Item 8 of this Annual Report on Form 10-K are included. 2. Exhibits Exhibit Number Description 3.1 Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q for the quarterly period ended June 30, 2004 filed on August 3, 2004 (Commission File No. 000-24020)). 3.2 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed November 9, 2023 (Commission File No. 000-24020)). 4.1 Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to the Company’s Form 10-K for the fiscal year ended December 31, 1998 filed on March 5, 1999 (Commission File No. 000-24020)). 4.2 Description of the Company’s Securities Registered under Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2 to the Company’s Form 10-K filed on March 19, 2020 (Commission File No. 000-24020)). 10.1 Amended and Restated Promissory Note between Gill Family Capital Management, Inc., Sypris Solutions, Inc., Sypris Technologies, Inc., Sypris Electronics, LLC, Sypris Technologies Marion, LLC, Sypris Technologies Mexican Holdings, LLC, Sypris Technologies Northern, Inc., Sypris Technologies Southern, Inc. and Sypris Technologies International, Inc. dated as of, dated January 12, 2026 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on January 14, 2026 (Commission File No. 000-24020)). 10.1.1 Security Agreement between Sypris Solutions, Inc., Sypris Technologies, Inc., Sypris Electronics, LLC, Sypris Data Systems, Inc., Sypris Technologies Marion, LLC, Sypris Technologies Kenton, Inc., Sypris Technologies Mexican Holdings, LLC, Sypris Technologies Northern, Inc., Sypris Technologies Southern, Inc. and Sypris Technologies International, Inc. and Gill Family Capital Management, Inc., dated as of March 12, 2015 (incorporated by reference to Exhibit 10.2.1 to the Company’s Form 10-K filed on March, 31, 2015 (Commission File No. 000-24020)). 10.2 Promissory Note between BMO Harris Bank N.A. and Sypris Solutions, Inc., dated as of April 30, 2020, executed by Sypris Solutions, Inc. on May 1, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on May 6, 2020 (Commission File No. 000-24020)). 10.3 Lease agreement between Promotora y Desarrolladora Pulso Inmobiliario, S.C. and Sypris Technologies Mexico, S. de R.L. de C.V dated January 29, 2016 (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on May 18, 2016 (Commission File No. 000-24020)). 10.4 Lease between Sypris Electronics, LLC and University Business Center I, LLC dated May 3, 2016 regarding 10421 University Center Drive, Tampa, FL property (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on August 17, 2016 (Commission File No. 000-24020)). 10.5* Sypris Solutions, Inc., Directors Compensation Program adopted on September 1, 1995 Amended and Restated effective May 21, 2025 (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on August 12, 2025 (Commission File No. 000-24020)). 10.6* Form of Directors Compensation Two Year Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on May 15, 2024 (Commission File No. 000-24020)). 10.7* Form of Directors Compensation Two Year Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on August 12, 2025 (Commission File No. 000-24020)). 67 Exhibit Number Description 10.8* The 2020 Sypris Omnibus Plan (incorporated by reference to Exhibit A to the Company’s Proxy Statement filed on April 3, 2020 (Commission File No. 000-24020)). 10.9* The 2025 Sypris Omnibus Plan (incorporated by reference to Exhibit A to the Company’s Proxy Statement filed on April 21, 2025 (Commission File No. 000-24020)). 10.10* Form of Five-Year Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on August 13, 2020 (Commission File No. 000-24020)). 10.11* Form of Executive Long-Term Incentive Award Agreement for Grants of Non-Qualified Stock Options to Executive Officers (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on August 13, 2020 (Commission File No. 000-24020)). 10.12* Form of Five Year Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on August 12, 2021 (Commission File No. 000-24020)). 10.13* Form of Executive Long-Term Incentive Award Agreement for Grants of Restricted Stock to Executive Officers (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on August 12, 2021 (Commission File No. 000-24020)). 10.14* Form of Special Retirement Award Agreement for Grants of Non-Qualified Stock Options (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on August 12, 2021 (Commission File No. 000-24020)). 10.15* Form of Six-Year Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.21 to the Company’s Form 10-K filed on March 17, 2022 (Commission File No. 000-24020)). 10.16* Form of Six-Year Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on August 13, 2024 (Commission File No. 000-24020)). 10.17* Form of Executive Long-Term Incentive Award Agreement for Grants of Restricted Stock Units to Executive Officers (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on August 12, 2025 (Commission File No. 000-24020)). 19 Insider Trading Policy (incorporated by reference to Exhibit 19 to the Company’s Form 10-K filed on March 27, 2025 (Commission File No. 000-24020)). 21 Subsidiaries of the Company 23 Consent of Crowe LLP 31.1 Principal Executive Officer certification pursuant to Section 302 of Sarbanes - Oxley Act of 2002. 31.2 Principal Financial Officer certification pursuant to Section 302 of Sarbanes - Oxley Act of 2002. 32 Principal Executive Officer and Principal Financial Officer certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002. 97.1 Sypris Solutions, Inc. Incentive Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Company’s Form 10-K filed on April 1, 2024 (Commission File No. 000-24020)). 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 68 Exhibit Number Description 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) *  Management contract or compensatory plan or arrangement. Item 16. Form 10 – K Summary None. 69 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 26, 2026. SYPRIS SOLUTIONS, INC. (Registrant) /s/ Jeffrey T. Gill (Jeffrey T. Gill) President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 26, 2026: /s/ Jeffrey T. Gill Chairman, President and Chief Executive Officer (Jeffrey T. Gill) (Principal Executive Officer) /s/ Rebecca R. Eckert Vice President, Chief Accounting Officer and Controller (Rebecca R. Eckert) (Principal Financial Officer and Principal Accounting Officer) /s/ Gary L. Convis Director (Gary L. Convis) /s/ William G. Ferko Director (William G. Ferko) /s/ R. Scott Gill Director (R. Scott Gill) /s/ William L. Healey Director (William L. Healey) /s/ Robert Sroka Director (Robert Sroka) 70