York Space Systems Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS York Space Systems Inc. Page Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm PCAOB No. 248 81 Consolidated Balance Sheets 82 Consolidated Statements of Operations and Comprehensive Loss 83 Consolidated Statements of Changes in Member’s Capital and Temporary Equity 84 Consolidated Statements of Cash Flows 86 Notes to Consolidated Financial Statements 87 80 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders York Space Systems Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of York Space Systems Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in member’s capital and temporary equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated 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 each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2025. Denver, Colorado March 19, 2026 81 Table of Contents York Space Systems Inc. Consolidated Balance Sheets (Dollars in thousands, except units and per unit amounts) As of December 31, 2025 As of December 31, 2024 Assets Current assets Cash and cash equivalents $ 162,573 $ 104,656 Accounts receivable, net 11,539 2,135 Inventories 18,747 34,602 Prepaid expenses and other current assets 31,478 51,645 Contract assets 76,809 21,558 Capitalized commissions, net 6,661 12,661 Total current assets 307,807 227,257 Fixed assets, net 46,293 35,112 Right of use assets, net 24,683 21,612 Goodwill 674,262 610,832 Other intangibles, net 407,925 423,995 Other assets 14,415 1,457 Total assets $ 1,475,385 $ 1,320,265 Liabilities, Temporary Equity and Member's Capital Current liabilities Contract liabilities $ 110,275 $ 165,636 Accounts payable and accrued expenses 68,358 50,599 Operating lease liabilities, current 3,260 2,572 Income taxes payable 672 — Long-term debt, current 3,750 — Deferred commissions, current 5,038 6,730 Total current liabilities 191,353 225,537 Operating lease liabilities, less current portion 23,161 20,519 Deferred commissions, less current portion 2,110 4,132 Long-term debt, net 144,962 182,249 Related party long-term debt, net — 14,784 Derivative liability associated with Class P Units 93,411 — Other liabilities 3,353 3,071 Related party payables — 3,683 Deferred income tax liability 6,096 19,959 Total liabilities $ 464,446 $ 473,934 Commitments and contingencies (See Note 12) Temporary Equity Redeemable preferred units (0 and 56,619,831 units authorized, issued and outstanding at December 31, 2025 and 2024, respectively; $0 and $68,413 liquidation preference as of December 31, 2025 and 2024, respectively) – Yellowstone Midco Holdings, LLC — 68,413 Class P Units (240,956,348 and 0 units authorized, issued and outstanding at December 31, 2025 and 2024, respectively; $241,498 and $0 liquidation preference as of December 31, 2025 and 2024, respectively) – Yellowstone Midco Holdings II, LLC 143,115 — Member's Capital Common units (0 and 1,078,929,080 authorized, issued and outstanding at December 31, 2025 and 2024, respectively) – Yellowstone Midco Holdings, LLC — 963,213 Common units (50,000,000 and 0 authorized, issued and outstanding at December 31, 2025 and 2024, respectively) – Yellowstone Midco Holdings II, LLC 1,135,910 — Accumulated other comprehensive income (loss) 936 (810) Accumulated deficit (269,022) (184,485) Total member's capital 867,824 777,918 Total liabilities, temporary equity, and member's capital $ 1,475,385 $ 1,320,265 The accompanying notes are an integral part of these consolidated financial statements. 82 Table of Contents York Space Systems Inc. Consolidated Statements of Operations and Comprehensive Loss (Dollars in thousands, except units and per unit amounts) For the year ended December 31, 2025 2024 2023 Revenue $ 386,203 $ 253,531 $ 238,103 Cost of revenues 310,743 221,110 183,199 Gross profit 75,460 32,421 54,904 Operating expenses Selling, general and administrative expenses 115,649 103,776 90,819 Research and development expenses 18,362 20,440 6,973 Transaction costs 12,113 171 3,254 Total operating expenses 146,124 124,387 101,046 Loss from operations (70,664) (91,966) (46,142) Other (expense) income Interest expense (26,619) (29,923) (26,175) Interest income 2,981 1,201 2,328 Loss on debt extinguishment (2,201) — — Other income (expense), net 1,263 (3,600) 1,227 Total other expense (24,576) (32,322) (22,620) Loss before provision for income taxes (95,240) (124,288) (68,762) Income tax benefit 10,703 25,377 39,106 Net loss $ (84,537) $ (98,911) $ (29,656) Foreign currency translation adjustment 1,746 (436) (797) Comprehensive loss $ (82,791) $ (99,347) $ (30,453) Net loss per common share Net loss $ (84,537) $ (98,911) $ (29,656) Less: Accretion of Class P Units $ 542 $ — $ — Net loss available to common shareholders $ (85,079) $ (98,911) $ (29,656) Basic and diluted $ (0.89) $ (1.04) $ (0.31) Weighted average common shares outstanding Basic and diluted 95,141,928 95,141,928 94,819,400 The accompanying notes are an integral part of these consolidated financial statements. 83 Table of Contents York Space Systems Inc. Consolidated Statements of Changes in Member’s Capital and Temporary Equity (Dollars in thousands, except units and per unit amounts) Redeemable Preferred Units Class P Units Common Units Accumulated deficit Accumulated other comprehensive income (loss) Total Member’s Capital Units Amount Units Amount Units Amount Balance at December 31, 2022 — $ — — $ — 772,013,564 $ 963,592 $ (55,918) $ 423 908,097 Issuance of Redeemable preferred units 46,619,831 46,620 — — — — — — — Issuance of Common units for acquisition of Emergent — — — — 15,000,000 10,842 — — 10,842 Non-cash member's contribution — — — — — 572 — — 572 Recapitalization — — — — 291,915,516 — — — — Foreign currency translation adjustment — — — — — — — (797) (797) Accretion of Redeemable preferred units — 4,391 — — — (4,391) — — (4,391) Net loss — — — — — — (29,656) — (29,656) Balance at December 31, 2023 46,619,831 $ 51,011 — $ — 1,078,929,080 $ 970,615 $ (85,574) $ (374) 884,667 Issuance of Redeemable preferred units 10,000,000 10,000 — — — — — — — Accretion of Redeemable preferred units — 7,402 — — — (7,402) — — (7,402) Foreign currency translation adjustment — — — — — — — (436) (436) Net loss — — — — — — (98,911) — (98,911) Balance at December 31, 2024 56,619,831 $ 68,413 — $ — 1,078,929,080 $ 963,213 $ (184,485) $ (810) $ 777,918 Issuance of Redeemable preferred units 25,000,000 25,000 — — — — — — — Non-cash member's contribution for acquisition of ATLAS — — — — — 78,588 — — 78,588 Retention bonus equity awards 1,238,460 1,238 — — — — — — — Accretion of Redeemable preferred units — 7,418 — — — (7,418) — — (7,418) Common Control Reorganization (82,858,291) (102,069) — — (1,028,929,080) 102,069 — — 102,069 84 Table of Contents Issuance of Class P Units, net issuance costs and derivative liability — — 240,956,348 142,573 — — — — — Accretion of Class P Units — — — 542 — (542) — — (542) Foreign currency translation adjustment — — — — — — — 1,746 1,746 Net loss — — — — — — (84,537) — (84,537) Balance at December 31, 2025 — $ — 240,956,348 $ 143,115 50,000,000 $ 1,135,910 $ (269,022) $ 936 $ 867,824 The accompanying notes are an integral part of these consolidated financial statements. 85 Table of Contents York Space Systems Inc. Consolidated Statements of Cash Flows (Dollars in thousands, except units and per unit amounts) For the year ended December 31, 2025 2024 2023 Cash flows from operating activities Net loss (84,537) $ (98,911) $ (29,656) Adjustments to reconcile net loss to net cash (used in)/provided by operating activities: Depreciation and amortization 50,340 48,072 44,395 Amortization of debt issuance costs 880 773 834 Non-cash lease expense 2,829 2,555 2,107 Amortization of capitalized commissions 5,748 5,770 6,629 Non-cash compensation 1,238 — — Deferred taxes (9,632) (18,376) (54,382) Gain on equity investment (750) — — Loss on debt extinguishment 2,201 — — Other 316 904 (987) Changes in assets and liabilities, net of the effect acquisitions: Accounts receivable, net (8,149) (23) 5,135 Inventories 9,751 (11,461) (17,093) Prepaid expenses and other current assets 25,814 (8,250) (7,532) Contract assets (55,251) 51,731 (10,174) Capitalized commissions, net 252 (1,247) (4,825) Other long-term assets (131) (28) (178) Contract liabilities (56,396) 72,302 61,282 Accounts payable and accrued expenses 3,223 13,393 16,475 Deferred commissions (3,714) (4,501) 189 Income taxes payable 709 (7,838) 7,058 Related party payables (3,683) (11,996) (3,781) Other long-term liabilities 182 770 1,737 Right-of-use assets and operating lease liabilities, net (2,570) (2,025) (1,532) Net cash (used in)/provided by operating activities (121,330) 31,614 15,701 Cash flows from investing activities Capital expenditures and capitalized software development costs (8,855) (18,048) (18,496) Equity investments (10,305) — — Acquisition of business, net of cash acquired (1,097) — (44,358) Issuance of notes receivable (5,000) — — Net cash (used in) investing activities (25,257) (18,048) (62,854) Cash flows from financing activities Proceeds from issuance of Redeemable preferred units 25,000 10,000 46,619 Proceeds from issuance of Class P Units, net of issuance costs 235,700 — — Proceeds from Term Loan Facility, net of issuance costs 147,382 — — Repayment of notes payable (3,732) — — Repayment of Original Term Loan Facility (185,059) — — Proceeds from First Amendment Loans — — 34,146 (Repayment of)/proceeds from related party long-term debt (15,000) — 14,700 Net cash provided by financing activities 204,291 10,000 95,465 Net increase in cash 57,704 23,566 48,312 Effect of exchange rate changes on cash 213 (59) (130) Cash and cash equivalents, beginning of period 104,656 81,149 32,967 Cash at end of period $ 162,573 $ 104,656 $ 81,149 Supplemental disclosures of cash flow information Cash payments for interest $ 26,055 $ 27,093 $ 25,098 Cash (refunded)/paid for taxes (2,703) 50 4,509 Noncash operating, investing, and financing Non-cash member's contribution 78,588 — 572 Non-cash allocation to derivative liability associated with Class P Units 93,127 — — Deferred offering costs in accounts payable and accrued expenses (6,226) — — Changes in accounts payable and accruals for purchases of capitalized expenditures and capitalized software development costs 915 279 (1,530) Issuance of Common units for acquisition of Emergent — — 10,842 The accompanying notes are an integral part of these consolidated financial statements. 86 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Note 1. Description of Business and Basis of Presentation Description of Business York Space Systems Inc. (the “Company,” “we,” “our” or “ours”) is a leading, U.S.-based, space and defense prime providing a comprehensive suite of mission-critical solutions for national security, government and commercial customers. The Company is one of the only space and defense primes with proprietary hardware and software capabilities designed to address its customers’ complex mission requirements across the critical elements of the entire space ecosystem throughout the entire mission lifecycle. The Company is purpose built to address evolving national security space challenges and to adapt to the ongoing shift in the U.S. government’s mission needs and procurement processes, where economics, agility, rapid capabilities, and heritage drive customer decision making. The Company delivers mission critical solutions in a zero-tolerance for error environment where systems must work. The Company believes it is uniquely positioned to capture an outsized share of growth in its core markets. The Company provides customers a vertically integrated, full technology stack of solutions including design, production, integration, and operation of spacecraft with turnkey offerings to manage spacecraft and constellations throughout their entire mission lifecycle. The Company’s primary operating subsidiary, York Space Systems, LLC (“York LLC”) was founded in 2012 to create an innovative space technology mission prime, with a goal of meeting the evolving national security threats from space by providing mission-critical spacecraft at scale, faster, and at lower cost. For the years ending December 31, 2025, 2024 and 2023, 97%, 98% and 97%, respectively, of the Company’s revenue was derived based in the U.S. market. Common Control Reorganization and Corporate Conversion Prior to January 28, 2026, the Company operated as a Delaware limited liability company under the name Yellowstone Midco Holdings II, LLC (“Midco II”). On January 28, 2026, prior to the effectiveness of the registration statement relating to the Company's initial public offering (“IPO”), Midco II converted into a Delaware corporation pursuant to a statutory conversion and changed its name to York Space Systems Inc. (the “Corporate Conversion”). Prior to October 3, 2025, the Company operated through Yellowstone Midco Holdings, LLC (“Midco I”). On October 3, 2025, all of the outstanding equity of Midco I, including both redeemable preferred and common units, was contributed to Midco II in exchange for 50 million common units of Midco II (the “Common Control Reorganization”) and, as a result, Midco I became a wholly owned subsidiary of Midco II. Immediately prior to the Common Control Reorganization, both Midco I and Midco II were wholly-owned subsidiaries of Yellowstone Ultimate Holdings, LP, ("Holdings") a limited partnership that was controlled by investments funds managed by AE Industrial Partners, LP (”AE Industrial Partners”). Additionally, on October 3, 2025, Midco II and Holdings entered into an amendment to the Limited Liability Company Agreement (the “Amended and Restated LLC Agreement”), pursuant to which (i) Midco II was authorized to issue from time to time, subject to approval of its Board of Directors, additional common units and Class P units (the "Class P Units"), (ii) Midco II issued 50 million common units to Holdings and (iii) all authorized and outstanding common units issued prior to O ctober 3, 2025 and owned by Holdings were cancelled and forfeited for no consideration. At the time of the Corporate Conversion, all Class P Units of Midco II converted into 8,885,674 shares of our common stock which was calculated as an amount of shares equal to (i) the outstanding aggregate total preference amount of such Class P unit, divided by (ii) the IPO price discounted by a discount of 20% and all outstanding common units of Midco II converted into an aggregate of 99,558,713 shares of common stock, including 2,269,470 shares of unrestricted common stock distributed in respect of vested Class B units (the “Incentive Units”) in Holdings and 2,147,315 shares of restricted stock distributed in respect of unvested Incentive Units, in each case, in connection with the Incentive Unit Distributions (as defined below). 87 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Immediately following the Corporate Conversion, Holdings distributed all common stock received upon conversion of the common units of Midco II to its limited partners and liquidated (the “Holdings Liquidation”). In connection with that action, the Holdings’ board of supervisors (the “Partnership Board”) approved distributions in respect of vested and unvested Incentive Units (the “Incentive Unit Distributions”). Certain shares of common stock distributed in respect of unvested Incentive Units are subject to time vesting and the recipients of such shares have entered into restricted stock agreements with us in connection with the receipt of such shares. As a result of the Holdings Liquidation, all partners of Holdings, including investment funds managed by AE Industrial Partners, became direct holders of the Company's common stock. The Common Control Reorganization is considered a reorganization of entities under common control. Amounts for the period from January 1, 2024 through December 31, 2024 and from January 1, 2025 through October 2, 2025 presented in the consolidated financial statements and accompanying notes herein represent the historical operations of Midco I. The amounts as of December 31, 2025 and for the period from October 3, 2025 through December 31, 2025 reflect the consolidated operations of the Company. The conversion of common units into common stock which occurred as part of the Corporate Conversion is considered akin to a split-like situation. For calculation of net loss per share, shares outstanding for all historical periods before our IPO have been retrospectively adjusted to 95,141,928 to reflect the shares of common stock converted from common units. As discussed above, the conversion of all outstanding common units of Midco II on January 28, 2026, resulted in 99,558,713 shares of common stock. However, this amount includes 2,269,470 shares of unrestricted common stock distributed in respect of vested Incentive Units and 2,147,315 shares of restricted stock distributed in respect of unvested Incentive Units pursuant to the Incentive Unit Distributions. As the Incentive Unit Distributions are not considered akin to a split-like situation, these shares were excluded from shares outstanding in the calculation of net loss per share for the years ended December 31, 2025, 2024 and 2023. Initial Public Offering On January 30, 2026, the Company completed its IPO of 18.5 million shares of its common stock at a public offering price of $34 per share, for an aggregate offering price of $629,000. The Company received net proceeds of $582,616, net of $36,168 of underwriting discounts and commissions and $10,216 of offering costs. The proceeds from the IPO will be used for general corporate and working capital purposes. The Company granted a thirty-day over-allotment option to the underwriters in the IPO to purchase an aggregate of 2.8 million shares of common stock at the public offering price. The option was not exercised. The Company’s common stock began trading on the New York Stock Exchange (the “NYSE”) under the ticker symbol “YSS”. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The consolidated financial statements include the Company’s accounts and the accounts of the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. To enhance comparability, the Company reclassified certain prior-year amounts in the accompanying consolidated statements of operations and comprehensive loss and statements of cash flows to conform to the current-year presentation. These reclassifications have no effect on prior-year results of operations. Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosures of contingencies at the 88 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) reporting date, as well as the reported amounts of revenue and expenses during the reporting periods. Estimates have been prepared using the most recent and best available information. Although management believes the estimates that have been used are reasonable, actual results could materially differ from the estimates that were used. Adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Balance Sheet Classifications The Company classifies certain assets and liabilities as current utilizing the duration of the related contract or program as the Company’s operating cycle, which is generally longer than one year. This primarily impacts receivables, contract assets, inventories, and contract liabilities under construction contracts which may extend beyond one year. All other assets and liabilities are classified based on whether the asset will be realized or the liability will be paid within one year. Cash and Cash Equivalents Cash and cash equivalents is comprised of cash on hand and short-term deposits with an original maturity at the date of purchase for three months or less. The Company maintains its cash with high credit quality financial institutions. U.S. cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) to $250 per bank. The Company maintains cash and cash equivalents in excess of FDIC limits. The Company has not experienced any losses in such accounts. Accounts Receivable, net Accounts receivable are based on amounts billed to customers. The Company bills customers as work progresses in accordance with agreed upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries. The carrying amount of accounts receivable are stated at cost, net of allowance for credit losses. The Company continually evaluates the need for an allowance for credit losses for estimated losses resulting from the inability of its customers to make required payments, which results in bad debt expense. The Company periodically determines the adequacy of this allowance by evaluating the comprehensive risk profiles of all individual customer receivable balances including, but not limited to, the customer’s financial condition, credit agency reports, financial statements, credit limit and overall current economic conditions. Normally accounts receivable are due 30 days after issuance of the invoice. Delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. The provision for expected credit losses is recorded in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive loss. Inventories Inventory consists primarily of parts and sub-assemblies used in the manufacturing of satellites. Inventory is stated at the lower of cost or net realizable value. Cost is calculated on a first-in, first-out (“FIFO”) basis. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in earnings in the period in which it occurs. Changes in these estimates are included in cost of revenues in the consolidated statements of operations and comprehensive loss. The Company periodically assesses and adjusts the value of inventory for estimated excess and obsolete inventory based upon estimates of future demand and market conditions, as well as damaged or otherwise impaired goods. The Company may be required to write down the value of inventory if estimates of future demand and market conditions indicate excess and/or obsolete inventory. Inventory write-downs are included in cost of revenues in the consolidated statements of operations and comprehensive loss. Contract Assets and Liabilities Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. When costs incurred plus recognized profit (less recognized losses) on a contract exceeds progress billings, the net amount is recorded as a contract asset. Contract assets are classified as current based on the Company’s operating cycle and include amounts that may be billed and collected beyond one year due to the long-cycle nature of the Company’s contracts. 89 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Contract liabilities include advance payments and billings in excess of revenue recognized. When progress billings exceed costs incurred plus recognized profit (less recognized losses), the net amount is recorded as a contract liability. Contract liabilities are classified as current based on the Company’s contract operating cycle and reported on a contract-by-contract basis, net of revenue recognized, at the end of each reporting period. Deferred Contract Costs Sales commissions earned by the Company’s employees are considered incremental costs of obtaining a contract. An asset is recognized for sales commissions if the Company expects the period of benefit from these costs to be more than one year. The Company amortizes the deferred contract costs over the period of expected benefit, which is typically three to four years, consistent with the pattern of revenue recognition of the related performance obligation. The amortized costs are recorded in selling, general, and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss. The Company expenses sales commissions as incurred when the period of benefit is less than one year. Deferred contract costs are included in capitalized commissions, net, for the current portion, and other long-term assets, for the non-current portion, on the Company’s consolidated balance sheets. Fixed assets Fixed assets are measured at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using a straight-line method over the estimated useful lives of the assets, which range from 3 to 7 years. Leasehold improvements are amortized over the shorter of the useful lives of the related assets or the lease term. Additions, renewals, and betterments that significantly extend the life of an asset are capitalized. Expenditures for repairs and maintenance are charged to operations, as incurred. The Company occasionally designs and builds its own machinery. The cost of these projects, including direct material and labor, and other indirect costs directly attributable to the construction, are capitalized as construction in progress. No provision for depreciation is made on construction in progress until the related assets are completed and placed in service. Expected useful lives for fixed assets are reviewed at least annually. Estimated useful lives are as follows: Asset Estimated useful life in years Leasehold improvements Shorter of estimated useful life or lease term Orbiting satellites 5 Machinery and equipment 5 - 7 Computer Equipment 3 Software 3 - 5 Furniture and Fixtures 5 - 7 For assets sold or otherwise disposed of, the cost and related accumulated depreciation and amortization are derecognized and removed from the consolidated balance sheets, and any related gain or loss is reflected in operations in the period realized. Finite-lived Intangible Assets Finite-lived intangible assets consist of customer relationships, developed technology, trade names and licenses. These finite-lived intangible assets are reported at cost, net of accumulated amortization, and are either amortized on a straight-line basis over their estimated useful lives or over the period the economic benefits of the intangible asset are consumed. 90 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Impairment of Long-lived Assets The carrying values of long-lived assets, which include equipment and other assets, and all finite-lived intangible assets, are evaluated periodically for impairment when circumstances indicate the carrying value of an asset may not be recoverable. Recoverability is measured by comparing the undiscounted future cash flows expected to be generated from the asset group to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured, using valuation techniques such as discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. An impairment loss is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value and is recognized as an expense in the period it is determined. No impairment losses have been recognized for the years ended December 31, 2025, 2024 and 2023. Goodwill Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. The Company evaluates goodwill for impairment annually at October 1 and whenever events or circumstances make it more likely than not that impairment may have occurred. The Company has determined that its business comprises one reporting unit. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company considers factors in performing a qualitative assessment including, but not limited to, general macroeconomic conditions, industry and market conditions, Company financial performance, changes in strategy, and other relevant entity-specific events. If the Company elects to bypass the qualitative assessment or does not pass the qualitative assessment, a quantitative assessment is performed. When a quantitative assessment is performed, the Company utilizes a discounted cash flow approach, which incorporates key assumptions such as future growth rates, terminal values, and discount rates. This process compares the estimated fair value of the reporting unit to the reporting unit’s carrying value, including goodwill. The Company recognizes a goodwill impairment charge for the amount by which the reporting unit’s carrying amount exceeds its fair value up to the amount of goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not to be impaired. For the years ended December 31, 2025 and 2024, the Company elected to perform a qualitative assessment for its annual review of goodwill to determine whether or not indicators of impairment exist. As a result of the qualitative assessment, no indicators of impairment were identified that would require further testing for impairment. Redeemable Preferred Units The Company’s Redeemable preferred units represent legal form of equity, are not mandatorily redeemable, and do not constitute unconditional obligations that may require issuance of a variable number of the Company’s units. The Redeemable preferred units are classified as mezzanine (or temporary) equity as the Redeemable preferred units are in-substance currently redeemable through the distribution waterfall since the holder of the Redeemable preferred units controls the Company and can make such distribution at any time and in the form of cash or other assets. Subsequent remeasurement of the carrying value of the Redeemable preferred units is required as they are currently redeemable. The Company records Redeemable preferred units at an amount equal to the then current maximum redemption value at the end of each reporting period. In connection with the Common Control Reorganization on October 3, 2025, all of the outstanding Redeemable preferred units were contributed to the Company in exchange for common units. As a result, there were no Redeemable preferred units outstanding as of December 31, 2025. Fair Value Measurements The Company measures certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Under the fair value standards, fair value is based on the exit price in the principal or most advantageous market for the asset or liability. The fair value measurement hierarchy is based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable 91 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) inputs reflect internal market assumptions. The following hierarchy classifies the inputs used to determine fair value into three levels: • Level 1 – Quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 – Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets and liabilities. Valuation techniques that maximize the use of observable inputs are favored. Assets and liabilities are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. The assessment of the significance of an input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Reclassifications of fair value between Level 1, Level 2 and Level 3 of the fair value hierarchy, if applicable, are made at the end of each reporting period. See Note 16 – Fair Value Measurements for further details. Concentration of Credit Risk The Company’s operating results are closely correlated with economic and budgetary actions of the U.S. Federal Government. Changes in any of these factors may significantly affect management’s estimates and the Company’s performance. The Company has a proven set of supply chain partners; however, it is subject to the same general delays and shortages that impact the global supply chain. The Company’s supply chain team works closely with these vendors to ensure that production timelines are met per customer requirements. Approximately 96%, 93% and 90% of revenues for the years ended December 31, 2025, 2024 and 2023, respectively, were derived from one customer. Revenue Recognition The Company recognizes revenue in accordance with the five-step model under the Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”) which involves (i) identification of the contract(s), (ii) identification of performance obligations in the contract, (iii) determination of the transaction price, (iv) allocation of the transaction price to the previously identified performance obligations and (v) recognition of revenue as the performance obligations are satisfied. The Company’s revenues are primarily derived from firm-fixed-price (“FFP”) contracts with both domestic U.S. Federal Government-controlled agencies as well as commercial customers and recognizes revenue for these arrangements over time. These contracts generally span several years in duration. Revenue arrangements where revenue is recognized at a point in time are immaterial as a percentage of total revenues to the consolidated financial statements. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when the performance obligation is satisfied. The Company’s contracts with customers generally do not include a right of return relative to delivered products. In certain cases, contracts are modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are accounted for as part of the existing contract as modifications take place when the Company is in process of completing a performance obligation. The Company’s typical contracts include two performance obligations. The first performance obligation consists of the combined design, development, and integration of a specified number of satellites on payloads constituting a fully functional constellation of satellites once successfully launched in space, as well as the design, development, and delivery of the hardware and software components constituting a ground system missions control to strategically operate the satellites to obtain mission critical data. While acknowledging the assessment required significant judgment, the Company ultimately determined that the various promises constitute a single combined performance obligation because the Company deemed each promise to not be individually distinct within the context of the contract since the Company performs a 92 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) significant service of integrating the inputs into a combined output for which the customer has contracted: that is, a fully functional constellation of satellites that reports real-time information to the customer for strategic operations of the customer. Further, the Company concluded that the hardware and software developed for the customer and installed at the customer’s ground missions control are highly interdependent and highly interrelated with the satellites. The hardware and software serve as an interface to obtain the desired data from the constellation. The software enables the satellites to maneuver in space and communicate with each other and the ground systems in order to perform their intended function. The second performance obligation consists of operations and maintenance services that operate the ground systems by sending instructions and commands to the satellites, obtaining data from the satellites, as well as maintenance and updates to the software. The Company concluded that these services constitute a series of daily time increments that are satisfied over time. The customer’s contracts also typically include customer options to acquire additional operations and maintenance services. The pricing of these options is reflective of the standalone selling price for these services and therefore, does not provide the customer with a material right that would constitute a separate performance obligation. Instead, the options are accounted for only when the customer exercises the option to purchase the additional services. For some contracts, the Company arranges for launch services from a third-party provider. As the Company does not obtain control of the services before they are provided to the customer, the Company concluded it is acting as an agent when arranging for launch services. Upon reviewing the indicators in ASC 606, the Company does not establish pricing for the services, rather, it is entitled to a fee for its arranging services. The Company also is not primarily responsible for the launch services and does not have inventory risk or procure the services without a customer lined up. Once the Company identifies the performance obligations, it determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. Typical contracts include variable consideration in the form of contingent milestone payments. The milestones are established at contract inception and outline the specifications and criteria that must be met for the Company to invoice the customer for the corresponding milestone payment. The Company utilizes the most likely approach to estimate variable consideration as most of the milestones have only two possible outcomes. The Company continuously considers the constraint guidance and typically does not constrain variable consideration as it deems it not probable that inclusion of the variable payments in the transaction price would result in a significant revenue reversal of cumulative revenue recognized to date for any single contract. The Company carefully establishes project milestones with consultation of its engineers and experts that have significant experience in achieving such milestones. The Company allocates the transaction price to its identified performance obligation based upon their stand-alone-selling-price (“SASP”). Because the Company does not have observable SASP, it estimates SASP using a cost-plus-margin approach. The Company recognizes revenue for its performance obligations over time as the Company’s performance creates an asset with no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date (for the design and build of the satellites and ground systems performance obligation) and as the customer benefits as the Company performs (for the operations and maintenance services performance obligation). For the design and build of the satellites and ground systems performance obligation, the Company recognizes revenue using the percentage-of-completion method (“POC”), based on the proportion of total costs incurred relative to total estimated costs at completion (“EAC”). An EAC includes all direct costs and indirect costs directly attributable to a contract or allocable based on the Company’s project cost pooling arrangements. The Company believes that this method represents the most faithful depiction of the Company’s performance because it directly measures value transferred to the customer. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include, but are not limited to, the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed; the cost and availability of materials; the availability of subcontractor services and materials; and the availability and timing of funding from the customer. The Company bears the risk of changes in estimates to complete on FFP contracts, which may cause profit levels to vary from period to period. 93 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) For the operations and maintenance services performance obligation, the Company recognizes revenue on a straight-line basis over time. Contracts are often modified for changes in contract value, specifications or requirements, which may result in scope and/or price changes. Most of the Company’s contract modifications are for goods or services that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative EAC adjustment. Accounting for long-term contracts requires significant judgment relative to estimating total contract revenues and costs, in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel, who review each long-term contract quarterly to assess the contract’s schedule, performance, technical matters and estimated cost at completion. If, at the time of the contract award or at any time during the life of a contract it becomes probable that total contract costs will exceed total contract revenue, the expected loss is recognized immediately in the consolidated statements of operations and comprehensive loss. A cumulative catch-up adjustment is recorded for changes in transaction price or estimate at completion during the period when such revisions occur. For long-term contracts, the portion of the payments retained by the customer is not considered a significant financing component. At contract inception, the Company also expects that the lag period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will not constitute a significant financing component. Many of the Company’s long-term contracts have milestone payments, which align the payment schedule with the progress towards completion on the performance obligation. On some contracts, the Company may be entitled to receive an advance payment, which is not considered a significant financing component because it is used to facilitate inventory demands at the onset of a contract and to safeguard the Company from the failure of the other party to abide by some or all of their obligations under the contract. U.S. Federal Government Contracts The Company has engineering and construction contracts with the U.S. Federal Government, which typically provide the customer with the unilateral right to cancel the contract whenever the federal buying agency deems the cancelation is in the public interest. Under a termination for convenience clause, the Company is entitled to recover all costs incurred to the termination date, plus other costs not recovered at termination (such as ongoing costs not able to be discontinued, for example, rental costs), as well as an allowance for profit or fee. The U.S. Federal Government also typically has the right to the goods produced and in process under the contract at the time of a termination. Approximately 97%, 95% and 94% of revenues for the years ended December 31, 2025, 2024 and 2023, respectively, were derived from projects contracted by the U.S. Federal Government. Cost of Revenues Cost of revenues consists primarily of direct material, subcontractor costs and labor costs, which include salaries, bonuses, and benefits directly attributable to fulfilling the Company’s obligations under customer contracts, and related overhead. Overhead costs primarily include allocable amounts of utilities, rent, depreciation and amortization expense on assets used directly in revenue-producing activities, indirect materials, and production and test administrative expenses. Selling, General, and Administrative Expenses Selling, general and administrative expenses consist of employee-related expenses for personnel in the Company’s executive, finance and accounting, facilities, legal, human resources, and information technology and securities functions, as well as other administrative employees. In addition, selling, general and administrative expenses include fees for legal, accounting, tax and audit services, software subscriptions, facilities, sales commissions, other corporate costs, depreciation and amortization, and marketing and advertising. The Company expenses advertising costs as incurred. Advertising costs 94 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) for the year ended December 31, 2025 were $3,418. Advertising costs for the year ended December 31, 2024 and 2023 were not material. Research and Development Expenses Research and development costs consist primarily of employee-related labor costs, software subscriptions, and supplies and materials for new product development. Research and development costs are expensed in the period incurred. Transaction Costs Transaction costs include finders fees, legal, accounting and other professional costs related to potential and closed acquisition activity, as well as non-recurring costs related to the Company's IPO that are not eligible to be deferred IPO costs. Costs related to the revision or issuance of new debt are recorded as deferred financing costs. Income Taxes The Company is taxed as a C-corporation under the provisions of the Internal Revenue Code. Under those provisions, the Company pays federal income taxes on its taxable income. Income taxes and uncertain tax positions are accounted for in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. All deferred tax assets and liabilities as presented as noncurrent. Valuation allowances on deferred tax assets are established when necessary to reduce deferred tax assets to the amount expected to be realized. The tax benefits related to uncertain positions are recognized when the Company believes it is more likely than not that the position would be sustained if challenged. Tax positions meeting the more-likely-than-not recognition threshold are measured pursuant to the guidance set forth in ASC 740. Interest and penalties that may be incurred are recorded as a component of the Company’s income tax expense. Management’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of tax laws, regulations and interpretations thereof as well as other factors. Foreign Currency Translation The Company’s consolidated financial statements are presented in U.S. dollars (“USD”). The operations of each of the Company’s entities are measured using the currency of the primary economic environment in which the subsidiary operates (“functional currency”). Assets and liabilities of foreign subsidiaries whose functional currency is the local currency are translated into U.S. dollars using period-end exchange rates. Revenues and expenses are translated at the average exchange rate in effect during each fiscal month during the year. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets. Accumulated Other Comprehensive Income (Loss) Adjustments resulting from unrealized gains and losses on foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets and consolidated statements of changes in redeemable preferred units and member’s capital. Leases The Company enters into lease arrangements for its operations and administrative offices in the normal course of business. The Company determines if an arrangement is or contains a lease at inception of the arrangement. An arrangement is determined to be a lease if it conveys the right to control the use of identified property and equipment for a period of time in exchange for consideration. Operating lease right-of-use assets are recognized as the present value of future lease payments over the lease term as of the commencement date, plus any lease payments made prior to commencement, and 95 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) less any lease incentives received. Operating lease liabilities are recognized as the present value of the future lease payments over the lease term as of the commencement date and are recorded in current and noncurrent liabilities in the consolidated balance sheets based on their contractual due dates. Operating lease expense is recognized based on the undiscounted future lease payments over the remaining lease term on a straight-line basis and is included in cost of revenues, selling, general, and administrative expenses, and research and development on the consolidated statements of operations and comprehensive loss. Determinations with respect to lease terms (including any renewals and terminations), incremental borrowing rate used to discount lease payments, variable lease expense and future lease payments require the use of judgment based on the facts and circumstances related to each lease. As the Company’s leases do not provide an implicit rate, it uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company considers various factors, including economic incentives, intent, past history and business need, to determine the likelihood that a renewal option will be exercised. Lease and non-lease related components (maintenance, return of underlying asset, or costs to dismantle/remove the asset) are accounted for separately. Right-of-use assets are evaluated for impairment in accordance with the Company’s policy for impairment of long-lived assets. Derivative Financial Instruments The Company enters into foreign currency forward exchange contracts to economically hedge against the effects of foreign currency fluctuations on payables denominated in foreign currencies. These derivative instruments are accounted for at fair value and included in other assets or liabilities in the accompanying consolidated balance sheets. The Company does not designate its forward exchange contracts as hedges and, as a result, changes in their fair value are reported currently as other income (expense), net in the consolidated statement of operations and comprehensive loss. The Company evaluates all of its financial instruments, including convertible notes and Class P Units, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company applies significant judgement to identify and evaluate complex terms and conditions in these contracts and agreements to determine whether embedded derivatives exist. Embedded derivatives must be separately measured from the host contracts if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss at each reporting period end. Bifurcated derivatives are classified as a separate liability in the consolidated balance sheets. The Company’s derivative liability is related to the conversion features embedded in the Class P Units. See Note 14 – Member’s Capital and Temporary Equity for more information. Equity-Based Compensation The Company follows the guidelines of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 718, Stock Compensation (“ASC 718”), for the accounting of share-based compensation. Effective May 2023, Holdings adopted a written compensatory benefit plan (“the Plan”) to provide incentives to existing or new employees, officers, managers, directors, and other service providers of the Company or its subsidiaries in the form of Incentive Units. The value of the Incentive Units is considered a capital contribution and is recognized by the Company in the same income statement line item as the cash compensation paid to employees receiving the Incentive Units. For the years ended December 31, 2025, 2024 and 2023, no expense was recognized. Defined Contribution Plans Employees participate in various defined contribution savings plans that provide for Company-matching contributions. Costs for future employee benefits are accrued over the periods in which employees earn the benefits. Total expense related to defined contribution plans was $1,704, $1,511 and $808 for the years ended December 31, 2025, 2024 and 2023, respectively, which approximates the cash outlays related to the plans. 96 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Acquisitions The Company utilizes the acquisition method of accounting in accordance with ASC 805, Business Combinations ("ASC 805"), for all transactions and events in which it obtains control over one or more other businesses (even if less than 100% ownership is acquired), to recognize the fair value of all assets acquired and liabilities assumed and to establish the acquisition date fair value as of the measurement date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business combination date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. For changes in the valuation of intangible assets between the preliminary and final purchase price allocation, the related amortization is adjusted in the period it occurs. Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in operating results in the period in which the adjustment is identified. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. Recently Adopted Accounting Standards In September 2025, the FASB issued Accounting Standard Update ("ASU") 2025-07, “Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract” (“ASU 2025-07”). This ASU expands the scope of contracts that are excluded from derivative accounting (i.e., measured at fair value through earnings) and clarifies the accounting by an entity that receives share-based noncash considerations (such as warrants or shares) from a customer that is consideration for the transfer of goods or services in a revenue contract. The Company adopted this ASU for the year-ended December 31, 2025 and applied it on a prospective basis to new contracts entered into during the annual period. The Company elected to early adopt this ASU. There was no impact to the consolidated financial statements as a result of this adoption. In July 2025, the FASB issued ASU 2025-05, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”), which provides a practical expedient and an accounting policy election for estimating expected credit losses on current accounts receivable and contract assets arising from revenue transactions under ASC 606. ASU 2025-05 intends to simplify the application of the current expected credit loss (CECL) model for these financial assets. The practical expedient allows entities to assume that current conditions as of the balance sheet date will persist through the forecast period. The new guidance is effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods, with early adoption permitted. There was no impact to the consolidated financial statements as a result of this adoption. In March 2024, the FASB issued ASU 2024-01, “Compensation - Stock Compensation" (Topic 718) - Scope Application of Profits Interest and Similar Awards” (“ASU 2024-01”), which intends to improve clarity and operability without changing the existing guidance. ASU 2024-01 provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. The new guidance is effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Entities can apply the guidance either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. There was no impact to the consolidated financial statements as a result of this adoption. In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). The ASU requires qualitative disclosures for rate reconciliation about specific categories of reconciling items and individual jurisdictions that result in a significant difference between the statutory tax rate and the effective tax rate. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign, as well as by jurisdiction, if the amount is at least 5% of total income tax payments, net of refunds received. The new guidance is effective for annual periods beginning after December 15, 2025, with early 97 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods or may apply the amendments retrospectively by providing the revised disclosures for all periods presented. As a result of this adoption, the Company has incorporated additional disclosures in Note 11 - Accounting for Income Taxes. Note 3. Revenues The table below presents revenues disaggregated by type for the following periods: Year ended December 31, 2025 December 31, 2024 December 31, 2023 Government $ 372,836 $ 239,986 $ 224,478 Commercial and other 13,367 13,545 13,625 Total revenues $ 386,203 $ 253,531 $ 238,103 Contract balances As of December 31, 2025 December 31, 2024 Contract assets $ 76,809 $ 21,558 Contract liabilities $ 110,275 $ 165,636 The increase in contract assets during 2025 was primarily driven by recognized revenue for services rendered that had not yet been billed to the customer during the year-ended December 31, 2025. The decrease in contract liabilities during 2025 was primarily driven by the satisfaction of large performance obligations for services previously billed to the customer during the year ended December 31, 2025. Revenue recognized in the year ended December 31, 2025 that was included in the contract liability balance as of December 31, 2024 was $165,501. Revenue recognized in the year ended December 31, 2024 that was included in the contract liability balance as of December 31, 2023 was $93,119. Revenue recognized in the year ended December 31, 2023 that was included in the contract liability balance as of December 31, 2022 was $29,847. The Company evaluates the contract value and EAC for performance obligations at least quarterly and more frequently when circumstances significantly change. Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimate of total revenue and cost at completion is complex, subject to many variables and requires significant judgment by management on a contract-by-contract basis. As part of this process, management reviews information including, but not limited to, labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, volume assumptions, inflationary trends, and schedule and performance delays. When the Company’s estimate of total costs to be incurred to satisfy a performance obligation exceeds the expected revenue, the Company recognizes the loss immediately. When the Company determines that a change in estimate has an impact on the associated profit of a performance obligation, the Company records the cumulative positive or negative adjustment to the statement of operations and comprehensive loss. Changes in estimates and assumptions related to the status of certain long-term contracts may have a material effect on the Company’s operating results. 98 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) The below table summarizes the favorable (unfavorable) impact of the net EAC adjustments for the following periods: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Net EAC adjustments, before income taxes $ (11,120) $ (22,916) $ (824) Net EAC adjustments, net of income taxes (9,870) (18,237) (355) Net EAC adjustments, net of income taxes, per basic and diluted share $ (0.10) $ (0.19) $ 0.00 The net unfavorable EAC adjustments in 2025 were primarily due to additional unplanned labor, materials and subcontractor costs required to meet customer requirements in the Company’s sale of satellites, launch procurement services and ground segment services. The net unfavorable EAC adjustments in 2024 were primarily due to changes in estimated total transaction price resulting from contract modifications and additional unplanned labor, materials and subcontractor costs. The net EAC adjustments in 2023 were primarily due to unplanned labor, materials and overhead costs. Remaining Performance Obligations As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $542,557. The Company expects to recognize over 70% of its remaining performance obligations as revenue within the next 12 months and the balance thereafter. Deferred Contract Costs The following table provides information about capitalized contract costs: December 31, 2025 December 31, 2024 Capitalized commissions, net $ 6,661 $ 12,661 Sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract. These costs are capitalized and amortized over the life of the contract consistent with the pattern of transferring the goods to the customer. Amortization of sales commissions is included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss and totaled $5,748, $5,274 and $6,629 for the years ended December 31, 2025, 2024 and 2023, respectively. Unpaid sales commissions expected to be paid within the next twelve months are deferred and recorded as deferred commissions, current on the accompanying consolidated balance sheets. Unpaid sales commissions expected to be paid greater than a period of twelve months are classified as deferred commissions, less current portion on the accompanying consolidated balance sheets. Loss Contracts The Company recognizes a contract loss when the current estimate of the consideration expected to be received is less than the current estimate of total estimated costs to complete the contract. For purposes of determining the existence or amount of a contract loss, the Company considers total contract consideration, including any variable consideration constrained for revenue recognition purposes. The Company may experience favorable or unfavorable changes to contract losses from time to time due to changes in estimated contract costs and modifications that result in changes to contract prices. The Company recorded losses of $2,554, $12,036 and $2,187 for the years ended December 31, 2025, 2024 and 2023, respectively, within cost of revenues in the accompanying consolidated statements of operations and comprehensive loss. Note 4. Acquisition ATLAS Space Operations Acquisition 99 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) On June 9, 2025, the Company invested in preferred equity of ATLAS Space Operations, Inc. (“ATLAS”), representing an approximate 5% equity interest. ATLAS is a leading provider of Ground Software-as-a-Service (GSaaS) solutions for space-based communication and global connectivity headquartered in Traverse City, MI. Through a series of common control transactions contemplated in the Agreement and Plan of Merger and effected on August 29, 2025, ownership of ATLAS was transferred to the Company. Consideration for this acquisition was $85,839, which consisted of $1,501 in cash (including $1,251 in seller transaction expenses, and $250 escrow holdback) and $78,588 in equity consideration in the form of Holdings common units. The fair value of these units was determined by the Company with the assistance of a third-party valuation. The fair value of preferred equity held by the Company from the initial investment in ATLAS was $5,750 which was included in the total consideration. The fair value of this investment was determined using a 1.15x liquidation preference and the resulting gain of $750 is included in other income (expense), net on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2025. The Company incurred $7,084 of acquisition-related expenses, which are recorded in transaction costs on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2025. These expenses include legal and advisory fees paid at closing, deal fees, and other related expenses. Additionally, the expenses included $1,238 of retention equity awards issued in connection with the acquisition. The acquisition was accounted for as a business combination under the acquisition method of accounting. Accordingly, the assets and liabilities acquired were recorded at their estimated fair values. The determination of fair value was based on management’s analysis with the assistance of an independent third-party valuation firm. The excess purchase price resulting in goodwill is primarily attributable to ATLAS’s acquired workforce and expected synergies. None of the goodwill is expected to be deductible for income tax purposes. The results of operations from the ATLAS Acquisition were included in the consolidated financial statements from the date of acquisition. The following table summarizes the provisional fair values of the assets acquired and liabilities assumed. Provisional fair value measurements were made for assets acquired and liabilities assumed. Adjustments to those measurements may be made in subsequent periods, up to one year from the date of acquisition, as the Company continues to evaluate the information necessary to complete the analysis. 100 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Allocation of Purchase Price Amount Cash and cash equivalents $ 404 Accounts receivable 833 Prepaid expenses and other current assets 55 Fixed assets 3,995 Right of use assets 2,252 Trademark 600 Technology 12,300 Customer relationships 11,300 Deferred income tax asset 4,601 Total identifiable assets acquired $ 36,340 Accounts payable and accrued expenses $ (7,208) Notes payable - short term (1,500) Contract Liabilities (570) Operating lease liabilities, current (830) Operating lease liabilities, less current portion (1,415) Notes Payable - long term (2,232) Other liabilities (7) Total liabilities assumed (13,762) Net identifiable assets acquired 22,578 Goodwill 63,261 Fair value of net assets acquired $ 85,839 The acquired intangible assets are expected to have useful lives ranging from 5 to 20 years. Their provisional fair values were determined using income-based valuation methodologies, including the multi-period excess earnings method (“MPEEM”) and the relief-from-royalty method, applying discount rates between 9% and 12%. These models reflect management’s estimates of future cash flows, operating performance, and economic conditions. Note 5. Prepaid expenses and other current assets The components of prepaid expenses and other current assets consist of the following: December 31, 2025 December 31, 2024 Prepaid expenses 25,342 51,350 Income tax receivable — 177 Notes receivable 5,386 — Other 750 118 Prepaid expenses and other current assets $ 31,478 $ 51,645 101 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Note 6. Fixed Assets, net Fixed assets, net consists of the following: December 31, 2025 December 31, 2024 Leasehold improvements $ 17,417 $ 16,386 Orbiting satellites 5,793 5,793 Machinery and equipment 17,407 6,648 Computer equipment 5,609 4,826 Software 2,701 2,516 Furniture and fixtures 3,907 3,665 Construction in process 12,559 5,097 Total fixed assets, at cost 65,393 44,931 Less: Total accumulated depreciation (19,100) (9,819) Total fixed assets, net $ 46,293 $ 35,112 Depreciation and amortization expense was $9,045, $7,772 and $4,509 for the years ended December 31, 2025, 2024 and 2023, respectively. There was no impairment recognized related to fixed assets during the years ended December 31, 2025, 2024 or 2023. Note 7. Goodwill and Intangible Assets The changes in the carrying amount of goodwill are as follows: Amount Balance at December 31, 2023 $ 610,873 Additions — Effect of foreign currency translation (41) Balance at December 31, 2024 $ 610,832 Goodwill acquired in connection with the ATLAS acquisition 63,261 Effect of foreign currency translation 169 Balance at December 31, 2025 $ 674,262 There was no impairment recognized related to goodwill during the years ended December 31, 2025, 2024 and 2023. 102 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Intangible assets, net consist of the following: December 31, 2025 Weighted Average Useful Life Gross carrying amount Accumulated Amortization Net carrying amount Finite-lived intangible assets Developed technology 9.9 $ 265,031 $ (81,571) $ 183,460 Customer relationships 20 253,635 (38,525) 215,110 Trade names 5.2 12,328 (7,331) 4,997 Licenses 9.8 5,254 (896) 4,358 Total finite-lived intangible assets $ 536,248 $ (128,323) $ 407,925 December 31, 2024 Weighted Average Useful Life Gross carrying amount Accumulated amortization Net carrying amount Finite-lived intangible assets Developed technology 9.9 $ 251,477 $ (55,207) $ 196,270 Customer relationships 20 242,270 (26,134) 216,136 Trade names 5.2 11,676 (4,977) 6,699 Licenses 9.8 5,232 (342) 4,890 Total finite-lived intangible assets $ 510,655 $ (86,660) $ 423,995 There was no impairment recognized related to intangible assets during the years ended December 31, 2025, 2024 and 2023, respectively. Amortization expense of intangible assets for the years ended December 31, 2025, 2024 and 2023, is $41,295, $40,300 and $39,885, respectively, and is recorded in cost of revenues and selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss. Estimated future amortization expense for finite-lived intangibles is as follows: Years ending December 31 Amount 2026 $ 42,408 2027 42,038 2028 39,742 2029 39,533 2030 39,024 Thereafter 205,180 Total future amortization expense on intangible assets $ 407,925 Note 8. Financing Arrangements Term Loan Facility On October 22, 2022, the Company entered into a $150,000 secured credit facility (the “Original Term Loan Facility”) with CO Finance LVS XXIII LLC (“Lender”). The Original Term Loan Facility had a maturity date of November 10, 2027, and bore interest at a rate of Secured Overnight Financing Rate (“SOFR”), plus a margin of 9.00%. There was no scheduled amortization on the Original Term Loan Facility, with the entire amount payable at maturity. On June 15, 2023, the Company entered into Amendment #1 of the Original Term Loan Facility (the “First Amendment”). The First Amendment provided an incremental $50,000 to the initial $150,000 Original Term Loan Facility, collectively (the “Original Term Loan Facility”). Of the incremental amount, $35,000 (“First Amendment Loans”) was funded by the Lender, while $15,000 (“Last Out Loans”) was funded by two related parties (refer to Note 13 - Related Parties). The First 103 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Amendment Loans had the same terms and conditions as the Original Term Loan Facility. The Last Out Loans also had the same terms and conditions as the Original Term Loan Facility, with two exceptions – (i) the Last Out Loans were not repaid until the Original Term Loan Facility and First Amendment Loans had been fully repaid, and (ii) the Last Out Loans had paid-in-kind (“PIK”) interest. All obligations under the Original Term Loan Facility were guaranteed by certain subsidiaries of the Company and were secured by substantially all of the Company's assets. In November 2025, the Company entered into a new credit agreement with various lenders and used the proceeds to pay off and terminate the Original Term Loan Facility, First Amendment Loans and Last Out Loans in full prior to their scheduled maturity. The Company recognized a loss on extinguishment of debt of approximately $2,201, which consisted of the write-off of unamortized debt issuance costs. Credit Agreement In November 2025, the Company entered into a credit agreement with various lenders (the “Lenders”) and Wells Fargo Bank, National Association (“Wells Fargo”), which was amended on November 21, 2025 (as amended, the “Credit Agreement”). Pursuant to the Credit Agreement the Lenders agreed to extend term loan commitments in an aggregate principal amount of $150,000 (the “Term Loan Facility”) and revolving loan commitments in an aggregate principal amount of $150,000 (the “Revolving Facility”). The Credit Agreement is set to mature on November 14, 2028. The Company used cash on hand and the net proceeds from the Credit Agreement to repay the Original Term Loan Facility, First Amendment Loans and Last Out Loans and for working capital needs. The Company incurred issuance costs of approximately $2,618, consisting of lender and third-party fees, which were allocated between the Term Loan Facility and Revolving Facility in proportion to their commitment amounts. Issuance costs related to the Term Loan Facility are presented as a direct reduction from the carrying amount of the Term Loan Facility and will amortize using the effective interest method over the expected life of the Term Loan Facility. Issuance costs related to the Revolving Facility are presented as deferred assets on the face of the financial statements and will amortize on a straight-line basis over the term of the Revolving Facility. The Term Loan Facility requires principal payments equal to 0.625% of the aggregate principal amount on the last day of each fiscal quarter until December 31, 2026 and at 1.250% of the aggregate principal amount on the last day of each fiscal quarter until September 30, 2028. Borrowings under the Credit Agreement bear interest at a floating rate on the unpaid principal amount thereof equal to (i) initially, (x) 3.50% per annum (or 3.00% per annum following a qualified IPO), in the case of Term SOFR Loans and (y) 2.50% per annum (or 2.00% per annum following a qualified IPO), in the case of ABR Loans, (ii) on and after the Leverage Covenant Toggle Date (as defined in the Credit Agreement) but prior to the consummation of any qualified IPO, the applicable rate per annum set forth in the pricing grid below under the caption “Term SOFR Margin” or “ABR Margin,” as the case may be, based upon the Total Net Leverage Ratio (as defined in the Credit Agreement) as of the end of the fiscal quarter: Level Total Net Leverage Ratio Term SOFR Margin ABR Margin I If the Total Net Leverage Ratio is greater than 3.00:1.00 2.75% 1.75% II If the Total Net Leverage Ratio is less than or equal to 3.00:1.00 and greater than 2.00:1.00 2.50% 1.50% III If the Total Net Leverage Ratio is less than or equal to 2.00:1.00 2.25% 1.25% 104 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) The Credit Agreement contains financial covenants, such as a minimum revenue covenant and a minimum liquidity covenant. All obligations under the Credit Agreement are secured by substantially all of the Company’s assets and guaranteed by certain subsidiaries. As of December 31, 2025, the Company had outstanding borrowings of $150,000 under the Term Loan Facility and no outstanding borrowings under the Revolving Credit Facility, with $150,000 available capacity. The following table presents the Company's outstanding debt: As of December 31, 2025 December 31, 2024 Term Loan Facility $ 150,000 $ — Original Term Loan Facility — 200,000 Total debt 150,000 200,000 Less: unamortized discounts and issuance costs (1,288) (2,967) Total debt, net 148,712 197,033 Less: current portion of long-term debt 3,750 — Total long-term debt, net $ 144,962 $ 197,033 The following table presents interest expense and amortization of debt issuance costs recognized for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Contractual interest expense $ 25,739 $ 29,122 $ 25,320 Amortization of debt issuance costs 880 773 834 Total interest expense $ 26,619 $ 29,895 $ 26,154 The Company was in compliance with all financial debt covenants as of December 31, 2025. Aggregate Maturities The aggregate maturities of all debt at December 31, 2025 are as follows: Years ending December 31 Amount 2026 $ 3,750 2027 7,500 2028 138,750 $ 150,000 105 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Note 9. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses were comprised of the following: December 31, 2025 December 31, 2024 Accounts payable $ 30,959 $ 29,465 Accrued project costs 35,085 14,239 Accrued interest 561 3,334 Payroll and benefits accrual 1,563 2,387 Other 190 1,174 Total accounts payable and accrued expenses $ 68,358 $ 50,599 Note 10. Leases The Company has several noncancellable operating leases primarily for warehouses and office space that expire at various dates through July 2036. The Company leases all of its real estate under non-cancelable operating lease agreements. All of the Company’s leases are classified as operating for the years ended December 31, 2025, and 2024. These leases contain renewal options for periods ranging from two to ten years. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term and associated potential option payments are excluded from lease payments. The Company’s leases generally do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contract include fixed payments plus, for many of the Company’s leases, variable payments. For office space leases that include variable payments, those include payments for the Company’s proportionate share of the building’s property taxes, insurance, and common area maintenance. The following table presents lease expense recognized during the years ended December 31, 2025, 2024 and 2023, respectively: Year ended December 31, 2025 December 31, 2024 December 31, 2023 Operating lease costs $ 5,981 $ 5,610 $ 4,884 Variable lease costs 2,128 2,006 1,816 Short-term lease costs 838 220 143 Total lease costs $ 8,947 $ 7,836 $ 6,843 Total lease costs are included in selling, general and administrative expenses, cost of revenues, and research and development on the consolidated statements operations and comprehensive loss. 106 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) The following table presents other supplemental information related to the Company’s leases: Year Ended December 31, 2025 December 31, 2024 Cash paid for lease liabilities $ 7,960 $ 7,130 Right of use assets obtained in exchange for new lease liabilities 6,113 842 Weighted average remaining lease term (in years) 6.2 6.9 Weighted average discount rate 12.4 % 13.2 % The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheet at December 31, 2025. Years Ending December 31, Amount 2026 6,335 2027 6,412 2028 5,945 2029 5,833 2030 5,841 Thereafter 8,390 Total undiscounted lease payments $ 38,756 Less: Imputed Interest (12,335) Total Lease liabilities $ 26,421 Note 11. Accounting for Income Taxes Loss Before Income Taxes The provision for income taxes was computed based on loss from continuing operations before income taxes for the years ended December 31, 2025, 2024 and 2023, respectively. The sources of income (loss) from continuing operations before income taxes are: Year Ended December 31, 2025 December 31, 2024 December 31, 2023 United States $ (101,745) $ (124,124) $ (74,253) Foreign 6,505 (164) 5,491 Loss from continuing operations before income taxes $ (95,240) $ (124,288) $ (68,762) 107 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) The components of the Company’s income tax benefit were as follows: Year ended December 31, 2025 December 31, 2024 December 31, 2023 Current Federal $ — $ (4,914) $ 7,650 State and local (2,679) (2,810) 6,678 Foreign 1,608 723 948 Total current (benefit) expense (1,071) (7,001) 15,276 Deferred Federal (3,612) (18,299) (46,423) State and local (6,991) 826 (8,276) Foreign 971 (903) 317 Total deferred (benefit) expense (9,632) (18,376) (54,382) Total income tax (benefit) expense $ (10,703) $ (25,377) $ (39,106) A reconciliation of the provision for income taxes computed by applying the 21% statutory U.S. income tax rate to the income before income taxes after the adoption of ASU 2023-09 is as follows: Year ended December 31, 2025 Tax Effect Rate Effect Federal statutory income tax rate (20,000) 21.00 % State and local income taxes, net of Federal income tax effects (1)(2) (9,126) 9.57 % Foreign tax effects 924 (0.97 %) Tax credits (14,269) 14.98 % Changes in valuation allowances 30,206 (31.72 %) Non-taxable or non-deductible items Non-deductible expenses - US 992 (1.04 %) Non-taxable income - US (158) 0.17 % Changes in unrecognized tax benefits — — % Other 728 (0.76 %) Effective tax rate (10,703) 11.23 % (1) State taxes in Colorado and Florida made up the majority (greater than 50%) of the tax effect in this category. (2) State and local income taxes includes the cumulative effects of changes in U.S. state apportionment. The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 is as follows: 108 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Year ended December 31, 2024 December 31, 2023 Income tax rates Federal statutory income tax rate 21.00 % 21.00 % State, net of federal benefit 1.26 % 1.84 % Foreign rate differential 0.12 % (0.16 %) Research credits 18.80 % 44.39 % Uncertain tax positions (6.11 %) (23.95 %) Non-deductible transaction related expenses — % 14.05 % Other (0.82 %) (0.30 %) Valuation allowance (13.84 %) — % Effective tax rate 20.41 % 56.87 % The deferred tax liability is comprised of the following: Year ended December 31, 2025 December 31, 2024 Capitalized research costs 80,026 53,959 Accruals and other 415 2,107 Credits 43,085 29,892 Lease liability 5,640 6,291 163(j) limitation 29,272 36,823 Net operating losses and other carryforwards 62,042 39,410 Valuation allowance (51,033) (18,071) Deferred tax assets 169,447 150,411 Basis difference in intangibles (85,054) (111,797) Basis difference in fixed assets (764) (1,290) ROU asset (5,268) (5,888) Contract revenue (83,001) (51,395) Other Reserves (1,456) — Deferred tax liabilities (175,543) (170,370) Net deferred tax liability $ (6,096) $ (19,959) As of December 31, 2025, the Company has federal and state research and development credit carryforwards of $42,269 and $816, respectively. As of December 31, 2024, the Company had federal and state research and development credit carryforwards of $29,099 and $1,034, respectively. The federal credits begin to expire in 2042 and state credits begin to expire in 2026. As of December 31, 2025, the Company has federal and state net operating losses of $291,148 and $16,392, respectively, which carryforward indefinitely for federal purposes and are subject to varying expiration for state purposes. The federal NOLs are subject to the 80% taxable income utilization limitation under current tax law. The deferred income tax assets have been offset by a valuation allowance, as realization is dependent on future earnings, if any, the timing and amount of which are uncertain. The net valuation allowance increased by $32,962 from December 31, 2024 to December 31, 2025. 109 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company’s deferred tax assets, and the timing, likelihood, and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that a portion of the deferred tax assets will be realized; accordingly, a valuation allowance has been established. The changes in the Company's valuation allowance for deferred tax assets were as follows: December 31, 2023 $ — Charged to income tax expense 18,071 Charged to other accounts — December 31, 2024 $ 18,071 Charged to income tax expense 30,022 Charged to other accounts 2,940 December 31, 2025 $ 51,033 The cash income tax payments, net of refunds, were as follows: December 31, 2025 Federal $ — State Colorado (2,702) Other 7 South Africa 1,102 Worldwide $ (1,593) Cash taxes paid, net of refunds received, for the years ended December 31, 2024 and 2023 were $50 and $4,509, respectively. The Company recognizes a tax benefit from uncertain tax positions when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. A reconciliation of the change in the unrecognized tax benefits balance for the years ended 2025 and 2024 is as follows: Year ended December 31, 2025 December 31, 2024 Unrecognized tax benefits, beginning of period $ 25,529 $ 17,073 Increase (decrease) for tax positions taken related to a prior period 291 4,429 Increase (decrease) for tax positions taken related to current period 7,620 4,027 Settlements with tax authorities — — Reductions due to statute of limitations — — Unrecognized tax benefits, end of period $ 33,440 $ 25,529 The Company does not expect a significant change in its uncertain tax positions over the next twelve months. 110 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) The Company is subject to tax and files returns in the U.S. and various state and foreign jurisdictions. The tax returns filed in previous years are subject to audit by various federal, foreign, and state taxing authorities. As of December 31, 2025, tax years prior to 2020 are no longer subject to audit. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax (benefit) expense in the consolidated statements of operations. As of December 31, 2025, the Company had accrued no interest or penalties. Note 12. Commitments and Contingencies The Company may be involved in legal proceedings from time to time. The Company has assessed its positions and is of the opinion that, currently, the ultimate resolution of such matters will not have a material adverse effect on the results of operations, cash flows or the financial position of the Company. Note 13. Related Parties The related party transactions for the Company are as follows: AEI Transaction In November 2022, AE Industrial Partners and certain co-investors, through their ownership of Holdings acquired the Company’s primary operating entity, York LLC (this transaction hereafter referred to as the “AEI Transaction”). AE Industrial Partners was the controlling shareholder of Holdings, prior to the Holdings Liquidation. Following the AEI Transaction, AE Industrial Partners provided $8,581, $2,051 and $1,000 of consulting to the Company for the years ended December 31, 2025, 2024 and 2023, respectively. An amended agreement was executed in connection with the Company's IPO which provides for the Company to pay a consulting fee of $2,400 per year. The amended agreement expires the earlier of January 2028 or when AE Industrial Partners beneficially owns less than 10% of the outstanding shares of the Company's common stock. These consulting fees are recorded in selling, general and administrative expenses on the consolidated statements of operations and comprehensive loss. Vendor Purchases The Company contracted with a vendor in which one of the Company’s employees is a shareholder to provide software engineering services to the Company. During the years ended December 31, 2025, 2024 and 2023, the Company paid approximately $1,100, $1,167 and $2,100, respectively, to this vendor for these services. The Company contracted with a design studio owned by one of the Company's officers and his spouse and managed by the spouse to design, furnish and build out the offices and manufacturing areas for its new facilities. During the years ended December 31, 2025, 2024 and 2023, the Company paid approximately $296, $273 and $2,072, respectively, for these services. Lending As part of the First Amendment, $5,000 and $10,000 of the $15,000 Last Out Loans borrowed were provided by two Company officers, respectively. In November 2025, the Company paid off the $15,000 Last Out Loans in full. 111 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) Note 14. Member’s Capital and Temporary Equity As of December 31, 2025 and 2024, the common units of Midco II, Class P Units of Midco II, common units of Midco I and Redeemable preferred units of Midco I outstanding are as follows: Authorized as of December 31, Held by Member as of December 31, 2025 2024 2025 2024 Common units - Yellowstone Midco Holdings II, LLC 50,000,000 — 50,000,000 — Class P units - Yellowstone Midco Holdings II, LLC 240,956,348 — 240,956,348 — Common units - Yellowstone Midco Holdings, LLC — 1,078,929,080 — 1,078,929,080 Redeemable preferred units - Yellowstone Midco Holdings, LLC — 56,619,831 — 56,619,831 Structure Prior to the Common Control Reorganization On March 31, 2023, the Company entered into the Second Amended and Restated LLC Agreement (the "Midco I LLC Agreement"). The Midco I LLC Agreement authorized Midco I to issue both common units and Redeemable preferred units. Pursuant to the Midco I LLC Agreement, Midco I issued an additional 291.9 million common units to Holdings pursuant to a recapitalization and an additional 15.0 million common units were issued for the purchase of Emergent. The Holders of common units were entitled to dividends when and if declared by the Board. There have been no distributions declared to date. In 2025, Holdings also subscribed to an additional 25.0 million Redeemable preferred unit at a price of $1.00 per unit. The Redeemable preferred units entitled holders to certain voting rights, preferred yield at the rate of 12.5% per annum and distribution rights. Prior to the Common Control Reorganization, Holdings owned all of the common units and Redeemable preferred units authorized and outstanding. All of the common units and Redeemable preferred units were converted to common shares of the Company in connection with the Company's IPO in January 2026. Structure Subsequent to the Common Control Reorganization Common units Upon formation on September 4, 2025, Midco II entered into a Limited Liability Company Agreement (the “LLC Agreement”), pursuant to which Midco II issued 100 common units to Holdings for no consideration. From formation until October 3, 2025, Holdings owned 100 common units of Midco II, representing 100% of the common units authorized and outstanding of Midco II. In connection with the Common Control Reorganization on October 3, 2025, all of the outstanding equity of Midco I, including both Redeemable preferred and common units, was contributed to Midco II in exchange for 50 million common units of Midco II and, as a result, Midco I became a wholly owned subsidiary of Midco II. Additionally, Midco II entered into an “Amended and Restated LLC Agreement” with Holdings, pursuant to which (i) the Company was authorized to issue from time to time, subject to Board approval, additional common units and Class P Units (as defined below), (ii) the Company issued 50 million common units to Holdings and (iii) all authorized and outstanding common units issued prior to October 3, 2025 and owned by Holdings were cancelled and forfeited for no consideration. As of December 31, 2025, Holdings owned all authorized and outstanding common units of the Company. Class P Units 112 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) In the fourth quarter of 2025, Midco II issued and sold an aggregate of approximately 241.0 million Class P Units (the “Class P Units”) to investors, including funds affiliated with AE Industrial Partners. The Class P Units contained redemption features that were not solely within the control of the Company. As a result, the Class P Units were classified as temporary equity. The Class P Units were automatically convertible (in substance share-settled redemption) upon a Qualified IPO, which requires bifurcation. The Company recorded the Class P Units initially at its issuance price of $241,019, net of issuance costs of $5,319 and net of the initial value of the bifurcated derivative liability of $93,127. The Class P Units were subsequently remeasured by accreting the changes in the redemption value over the period from the date of issuance to the earliest date that the instrument would become redeemable (i.e., the fifth anniversary of the issuance date) using the interest method including the accrued and cumulative unpaid dividends. The bifurcated derivative was initially recorded at fair value upon issuance of the Class P Units and subsequently remeasured with changes in fair value through earnings. Refer to Note 16 – Fair Value Measurement for more information on the estimate of fair value of the derivative liability. All of the Class P Units converted into shares of the Company's common stock in connection with the IPO. Note 15. Incentive Unit Employee Equity Plan Under the Plan, Incentive Units were divided into three tranches (“Tranche I,” “Tranche II,” and “Tranche III”): Tranche I, Tranche II, and Tranche III Incentive Units were subject to performance-based, service-based, and market-based conditions, including related to the sale of the Company, continued employment provisions and internal targeted rates of return. The Incentive Units were measured at their grant date fair value. Share-based compensation for awards with performance conditions was based on the probable outcome of the related performance condition. The vesting for each tranche of the Incentive Units was contingent on the sale of the Parent. As such events were not considered probable, no compensation expense was recognized for the years ended December 31, 2025, 2024 or 2023 respectively. The table below presents the activity of Incentive Units: Incentive Units Outstanding Weighted Average Grant Date Fair Value Nonvested as of December 31, 2023 61,529,875 $ 0.32 Granted 12,261,389 0.50 Vested — — Forfeited — — Nonvested as of December 31, 2024 73,791,264 $ 0.35 Granted 15,382,470 0.59 Vested — — Forfeited — — Nonvested as of December 31, 2025 89,173,734 $ 0.39 In connection with our IPO, the Incentive Units were canceled and were replaced with shares of common stock that are subject to time based vesting provisions. Refer to Note 19 – Subsequent Events for additional information. Note 16. Fair Value Measurements The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses, are reflected on the consolidated balance sheets at amounts that 113 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) approximate fair value because of their short-term maturities. The carrying amount of the debt is reflected on the consolidated balance sheets at an amount that approximates fair value as interest incurred is variable based on market rates. Derivatives Financial Instruments The following tables represent the fair value hierarchy for the financial assets and liabilities measured at fair value as of December 31, 2025. Description Level 1 Level 2 Level 3 Assets Foreign exchange derivative instruments $ — $ 643 $ — Total financial assets $ — $ 643 $ — Liabilities Derivative liability associated with Class P units $ — $ — $ 93,411 Total financial liabilities $ — $ — $ 93,411 Foreign exchange derivative instruments The Company economically hedges certain portions of exposure to foreign currency exchange risk by entering into derivative transactions. The derivative instruments are recognized as either prepaid expenses and other current assets or accounts payable and accrued expenses on the consolidated balance sheet at estimated fair value. The Company recognizes amounts subject to master netting arrangements on a gross basis in the consolidated balance sheet. The Company did not enter into any derivative arrangements and did not have any recurring fair value measurements as of December 31, 2024. The Company’s derivative financial instruments are valued based on an income approach (discounted cash flow) using market observable inputs, including swap curves and both forward and spot exchange rates for currencies. The aggregate notional value of these contracts was $8,800 at December 31, 2025 and $0 at December 31, 2024. Class P Units As discussed in Note 14 – Member’s Capital and Temporary Equity, the automatic conversion (in substance share-settled redemption) feature of the Class P Units upon a Qualified IPO require bifurcation pursuant to ASC 815. As a result, the Company bifurcated the Class P Units between (i) the host contract, and (ii) the bifurcated derivative liability. The proceeds from issuance were first allocated to the fair value of the bifurcated derivative with the residual being allocated to the host contract. The bifurcated derivative is remeasured to fair value at each reporting period with changes in fair value recorded in the consolidated statement of operations and comprehensive loss. As of December 31, 2025, the derivative liability for the Class P Units was remeasured to fair value of $93,411. The Company recognized a loss of $284 for the year ended December 31, 2025 in other income (expense), net in the consolidated statements of operations and comprehensive loss. The Company estimated the fair value of the derivative liability using the “with” or “without” approach. As the fair value of the derivative liability was determined using a valuation model that incorporates significant unobservable inputs, the derivative liability is classified as a Level 3 fair value measurement. The Level 3 fair value inputs used in determining the fair value of the derivative liability associated with the Class P Units include time to Qualified IPO or unit redemption, probability of each event, risk-free rate, and discount rate. Unrealized and realized gains, net related to derivative instruments was $105 and $502, respectively, for the year ended December 31, 2025. Unrealized and realized losses, net related to derivative instruments was $904 and $2,981, respectively, for the year ended December 31, 2024. Realized losses and unrealized gains are recorded in other income 114 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) (expense), net in the consolidated statement of operations and comprehensive loss. Cash flows from the foreign currency forward contracts are included in operating activities. Note 17. Net Loss per Share Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during each period. As discussed in Note 1 – Description of Business and Basis of Presentation, as the conversion of common units into common stock which occurred as part of the Corporate Conversion is considered akin to a split-like situation, shares outstanding for the calculation of net loss per share for all historical periods before the IPO have been retrospectively adjusted to 95,141,928 shares of common stock, which represent shares issued for the conversion of the 50,000,000 common units outstanding. As discussed in Note 1 - Description of Business and Basis of Presentation, the Corporate Conversion resulted in the issuance of 99,558,713 shares of the Company's common stock. However, this amount includes 2,269,470 shares of unrestricted common stock distributed in respect of vested Incentive Units and 2,147,315 shares of restricted stock distributed in respect of unvested incentive Units. As the distribution of common stock in respect of vested and unvested Incentive Units is not considered akin to a split-like situation, these shares were excluded from shares outstanding in the calculation of net loss per share for the periods presented. Diluted net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of fully dilutive common shares outstanding for the period using the treasury-stock method, the if-converted method, or two-class method for participating securities, whichever is more dilutive. The Incentive Units described in Note 15 – Incentive Unit Employee Equity Plan were granted by and settled in the equity of Holdings and therefore are not included in the Company’s net loss per share calculations. During the periods presented, the Company did not have any dilutive equity instruments outstanding or any antidilutive equity instruments that could potentially be dilutive in future periods. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The following table summarizes the computation of basic and diluted net loss per unit attributable to common shareholders of the Company: Year ended December 31, 2025 December 31, 2024 December 31, 2023 Numerator: Net loss as reported $ (84,537) $ (98,911) $ (29,656) Less: Accretion of Class P Units 542 — — Net loss attributable to common shareholders $ (85,079) $ (98,911) $ (29,656) Denominator: Weighted average common shares outstanding - basic and diluted 95,141,928 95,141,928 94,819,400 Net loss per share – basic and diluted: $ (0.89) $ (1.04) $ (0.31) Note 18. Segment Reporting The Company operates in one operating segment and one reportable segment, and as a result, manages its operations and allocates resources as a single operating segment. space infrastructure, which comprises all of its operations. The Company’s Chief Operating Decision Maker ("CODM") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. The CODM uses consolidated net income or loss that is also reported on the consolidated statements of operations and comprehensive income (loss) to evaluate the return on assets and determine strategic initiatives related to product development and new technologies to meet the growing demands of the Company’s unique customers. Consolidated net income (loss) is used to monitor budget versus actual results. The measure of segment assets is reported on the consolidated balance sheets as total assets. There are no other significant segment assets that would require disclosure or are regularly provided to the CODM. The Company has no intra-segment 115 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) sales or transfers as it operates in one operating segment and one reportable segment. Information related to the geographical distribution of the Company’s revenues is disclosed in Note 2—Summary of Significant Accounting Policies. At December 31, 2025 and December 31, 2024, $40,443 and $32,830 of the Company’s fixed assets, net are located in the United States. There were no other material tangible long-lived assets located outside of the U.S., individually or in the aggregate. In accordance with ASU 2023-07, Improvements to Reportable Segment Disclosures , significant expenses included within consolidated net loss have been assessed and disclosed in the table below: Year ended December 31, 2025 December 31, 2024 December 31, 2023 Revenue $ 386,203 $ 253,531 $ 238,103 Less: Direct materials 264,007 178,341 148,574 Selling, general and administrative expenses 115,649 103,776 90,819 Research and development 18,362 20,440 6,973 Transaction costs 12,113 171 3,254 Interest expense 26,619 29,923 26,175 Interest income (2,981) (1,201) (2,328) Loss on debt extinguishment 2,201 — — Other income (expense), net (1,263) 3,600 (1,227) Income tax benefit (10,703) (25,377) (39,106) Other segment items (a) 46,736 42,769 34,625 Net loss $ (84,537) $ (98,911) $ (29,656) (a) Other segment items is comprised of other costs of revenue excluding direct materials, including direct labor, overhead costs and depreciation and amortization Note 19. Subsequent Events Distribution and Conversion of Incentive Units In connection with the IPO, the Company issued shares of common stock related to the Incentive Unit Plan which have time based vesting conditions. These shares vest over a one or two year vesting schedule. Unvested shares are forfeited if the employee resigns voluntarily or is terminated for cause. Common shares issued to all non-management entities regardless of go-forward employment or Board involvement vested immediately at the date of the IPO. Omnibus Incentive Plan On January 30, 2026, in connection with the IPO, the Company adopted the York Space Systems Inc. 2026 Omnibus Incentive Plan (the “Omnibus Plan”). Pursuant to the Omnibus Plan, employees, consultants and directors of the Company and its affiliates performing services for us, including our executive officers, will be eligible to receive awards. The Omnibus Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, other stock-based awards, other cash-based awards, substitute awards, and performance awards intended to align the interests of participants with those of our stockholders. Initially, the aggregate number of shares of common stock that may be issued pursuant to the Omnibus Plan shall not exceed 12.7 million shares. Beginning in 2026, the number of shares that may be issued pursuant to the Omnibus Plan is subject to an annual increase on January 1 of each 116 Table of Contents York Space Systems Inc. Notes to Consolidated Financial Statements (Dollars in thousands, except units and per unit amounts) calendar year ending and including 2036, equal to the lesser of (a) 5% of the aggregate number of shares outstanding on December 31 of the immediately preceding calendar year and (b) such smaller number of shares as is determined by our Board of Directors. Tax Receivable Agreement Prior to the consummation of the IPO, the Company entered into the TRA with the TRA Holders. The TRA requires the Company to make payments to the TRA Holders (or their transferees or successors) in an amount equal to 85% of certain tax savings (or expected tax savings) in respect of certain tax attributes of the Company. Such tax benefits consist primarily of net operating loss carryforwards and research and development credit carryforwards. As of the date of the IPO, the realization of those benefits is uncertain, and as such, the Company does not believe payment of TRA benefits is probable. Accordingly, the Company does not anticipate recording the TRA liability until such time as payments become probable. As of the IPO date, the Company estimates the TRA attributes were approximately $346 million. In the event of a change in control, material breach or the Company’s election to terminate the TRA early, the Company would be required to make an immediate cash payment equal to the anticipated future tax benefits that are the subject of the TRA discounted in accordance with the TRA. The early termination liability is calculated based on a discounted calculation of tax attributes using an interest rate equal to 100 basis points above SOFR. The Company estimates the early termination liability to be approximately $262 million as of the date of February 28, 2026. Acquisition of Orbion On March 6, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Orbion Space Technology, Inc., a Delaware corporation (“Orbion”) and certain other parties. Pursuant to the Merger Agreement, the Company acquired all of the issued and outstanding equity interests of Orbion in exchange for consideration consisting of cash totaling $8.9 million and 2,812,141 shares of common stock of the Company. 117 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.