# Karman Holdings Inc. (KRMN) 10-Q SEC filing - Q2 FY2026 - Filed: Aug 10, 2026, 8:00 PM EDT - Fiscal quarter: Q2 FY2026 - Calendar quarter: Q2 2026 - Accession: 0002040127-26-000024 - OpenCapital page: https://www.opencapital.sh/filings/0002040127-26-000024 - Markdown URL: https://www.opencapital.sh/filings/0002040127-26-000024.md - Official SEC filing index: https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/0002040127-26-000024-index.htm ## Filing documents - [10-Q (krmn-20260630.htm)](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-20260630.htm) - [EX-31.1 (krmn-ex31_1.htm)](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex31_1.htm) - [EX-31.2 (krmn-ex31_2.htm)](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex31_2.htm) - [EX-32.1 (krmn-ex32_1.htm)](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex32_1.htm) - [EX-32.2 (krmn-ex32_2.htm)](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex32_2.htm) --- ## 10-Q SEC source: [krmn-20260630.htm](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-20260630.htm) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2026 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number: 001-42520 KARMAN HOLDINGS INC. (Exact name of Registrant as specified in Charter) | | | | --- | --- | | Delaware | 85-2660232 | | (State or jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | | 5351 Argosy Avenue, Huntington Beach, CA | 92649 | | (Address of principal executive offices) | (Zip Code) | (714) 898-9951 ### (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading
Symbol(s) Name of each exchange on which registered Common Stock, $0.001 Par Value KRMN New York Stock Exchange Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ NO ☒ Number of shares of registrant’s common shares outstanding as of August 3, 2026 was 132,533,708. Karman Holdings Inc. ### Table of Contents | | | Page | | --- | --- | --- | | | [PART I: FINANCIAL INFORMATION](#part_i_financial_information) | | | Item 1. | [Financial Statements (unaudited)](#item_1_financial_statements) | 3 | | | [Condensed Consolidated Balance Sheets](#consolidated_balance_sheets) | 3 | | | [Condensed Consolidated Statements of Income](#consolidated_statements_of_operations) | 4 | | | [Condensed Consolidated Statements of Equity](#consolidated_statements_of_members_equit) | 5 | | | [Condensed Consolidated Statements of Cash Flows](#consolidated_statements_of_cash_flows) | 6 | | | [Notes to Condensed Consolidated Financial Statements](#notes_to_consolidated_financial_stat) | 7 | | Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#item_2_managements_discussion_a) | 24 | | Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#item_3_quantitative_and_qualitative_disc) | 34 | | Item 4. | [Controls and Procedures](#item_4_controls_and_procedures) | 34 | | | [PART II: OTHER INFORMATION](#part_ii_other_information) | | | Item 1. | [Legal Proceedings](#item_1_legal_proceedings) | 37 | | Item 1A. | [Risk Factors](#item_1a_risk_factors) | 37 | | Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#item_2_unregistered_sales_of_equity) | 37 | | Item 3. | [Defaults Upon Senior Securities](#item_3_defaults_upon_senior_securities) | 37 | | Item 4. | [Mine Safety Disclosures](#item_4_mine_safety_disclosures) | 37 | | Item 5. | [Other Information](#item_5_other_information) | 37 | | Item 6. | [Exhibits, Financial Statement Schedules](#item_6_exhibits_financial_statement_s) | 38 | | [Signature](#signatures) | | 40 | 2 PART I. FINANCIAL INFORMATION ## Item 1. Financial Statements **Karman Holdings Inc.** ### Condensed Consolidated Balance Sheets _(in thousands, except par value and share data) · (unaudited)_ | Line item | June 30 / 2026 | December 31, 2025 | | --- | --- | --- | | ASSETS | | | | Current assets | | | | Cash and cash equivalents | $51,741 | $33,959 | | Accounts receivable, net | 114,960 | 78,716 | | Contract assets | 187,120 | 156,298 | | Inventory | 16,299 | 10,662 | | Prepaid and other current assets | 14,660 | 11,768 | | Total current assets | 384,780 | 291,403 | | Property, plant and equipment | 172,981 | 134,793 | | Less accumulated depreciation | (46,727) | (39,384) | | Net property, plant and equipment | 126,254 | 95,409 | | Other assets | | | | Goodwill | 498,148 | 352,513 | | Intangible assets, net | 326,758 | 285,888 | | Operating lease right-of-use assets | 15,466 | 6,021 | | Finance lease right-of-use assets | 85,181 | 66,193 | | Other assets | 7,390 | 6,669 | | Total other assets | 932,943 | 717,284 | | Total assets | $1,443,977 | $1,104,096 | | LIABILITIES AND EQUITY | | | | Current liabilities | | | | Accounts payable | $45,382 | $31,632 | | Accrued payroll and related expenses | 14,805 | 13,776 | | Contract liabilities | 26,154 | 22,814 | | Current portion of operating lease liabilities | 2,464 | 1,815 | | Current portion of finance lease liabilities | 5,009 | 4,401 | | Current portion of term note | 5,610 | 3,836 | | Income taxes payable | 2,077 | 5,299 | | Other current liabilities | 6,728 | 5,094 | | Total current liabilities | 108,229 | 88,667 | | Term note, net of current | 751,327 | 495,312 | | Operating lease liabilities, net of current | 13,725 | 4,949 | | Finance lease liabilities, net of current | 97,130 | 76,995 | | Other liabilities | 6,892 | 7,650 | | Deferred tax liabilities | 45,577 | 47,832 | | Total liabilities | 1,022,880 | 721,405 | | Commitments and contingencies (Note 15) | | | | Equity: | | | | Preferred stock, $0.001 par value; authorized — 100,000,000 shares; issued and outstanding — none | — | — | | Common stock; $0.001 par value; authorized — 1,000,000,000 shares; issued and outstanding — 132,533,486 and 132,322,435, respectively | 133 | 132 | | Additional paid in capital | 390,034 | 373,455 | | Accumulated other comprehensive income | 75 | 75 | | Retained earnings | 30,855 | 9,029 | | Stockholders' equity | 421,097 | 382,691 | | Total liabilities and stockholders' equity | $1,443,977 | $1,104,096 | The accompanying notes are an integral part of the condensed consolidated financial statements 3 **Karman Holdings Inc.** ### Condensed Consolidated Statements of Income _(in thousands, except per share amounts) · (unaudited)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Revenue | $182,063 | $115,097 | $333,273 | $215,221 | | Cost of goods sold | 103,829 | 68,076 | 191,174 | 128,749 | | Gross profit | 78,234 | 47,021 | 142,099 | 86,472 | | Operating expenses | | | | | | General and administrative expenses | 31,339 | 19,430 | 59,976 | 42,718 | | Depreciation and amortization expense | 12,066 | 7,487 | 25,842 | 13,687 | | Operating expenses | 43,405 | 26,917 | 85,818 | 56,405 | | Net operating income | 34,829 | 20,104 | 56,281 | 30,067 | | Interest expense, net | (15,284) | (11,893) | (27,930) | (23,266) | | Other income (expense) | (280) | 380 | (454) | 300 | | Income before provision for income taxes | 19,265 | 8,591 | 27,897 | 7,101 | | Provision for income taxes | (5,233) | (1,784) | (6,071) | (5,092) | | Net income | $14,032 | $6,807 | $21,826 | $2,009 | | Net income per common share, basic | $0.11 | $0.05 | $0.16 | $0.02 | | Net income per common share, diluted | $0.11 | $0.05 | $0.16 | $0.02 | | Weighted-average common shares, basic | 132,527 | 132,322 | 132,502 | 132,322 | | Weighted-average common shares, diluted | 132,531 | 132,322 | 132,514 | 132,322 | The accompanying notes are an integral part of the condensed consolidated financial statements 4 **Karman Holdings Inc.** ### Condensed Consolidated Statements of Equity _(in thousands) · (unaudited)_ | Line item | Common Stock / Shares | Common Stock / Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total | | --- | --- | --- | --- | --- | --- | --- | | Balance, January 1, 2026 | 132,391 | $132 | $373,455 | $9,029 | $75 | $382,691 | | Issuance of common stock upon acquisition of Seemann Composites and Materials Sciences | 135 | 1 | 15,205 | — | — | 15,206 | | Net income | — | — | — | 7,794 | — | 7,794 | | Balance, March 31, 2026 | 132,526 | $133 | $388,660 | $16,823 | $75 | $405,691 | | Share-based compensation | — | — | 1,444 | — | — | 1,444 | | Employee stock plans | 8 | — | (70) | — | — | (70) | | Net income | — | — | — | 14,032 | — | 14,032 | | Balance, June 30, 2026 | 132,534 | $133 | $390,034 | $30,855 | $75 | $421,097 | | Line item | Common Stock / Shares | Common Stock / Amount | Additional Paid-In Capital | Members' Equity | Accumulated Deficit | Accumulated Other Comprehensive Income | Total | | --- | --- | --- | --- | --- | --- | --- | --- | | Balance, January 1, 2025 | — | — | — | $204,258 | $(8,337) | $75 | $195,996 | | Share-based compensation | — | — | — | 1,410 | — | — | 1,410 | | Contributions | — | — | — | 1,474 | — | — | 1,474 | | Conversion of member's equity into common stock in initial public offering | 123,754 | 124 | 207,018 | (207,142) | — | — | — | | Issuance of common stock in initial public offering, net | 8,421 | 8 | 154,828 | — | — | — | 154,836 | | Net loss | — | — | — | — | (4,798) | — | (4,798) | | Balance, March 31, 2025 | 132,175 | $132 | $361,846 | — | $(13,135) | $75 | $348,918 | | Issuance of common stock upon acquisition of Industrial Solid Propulsion | 147 | | 5,752 | | | | 5,752 | | Net income | — | — | — | — | 6,807 | — | 6,807 | | Balance, June 30, 2025 | 132,322 | $132 | $367,598 | - | $(6,328) | $75 | $361,477 | The accompanying notes are an integral part of the condensed consolidated financial statements 5 **Karman Holdings Inc.** ### Condensed Consolidated Statements of Cash Flows _(in thousands) · (unaudited)_ | Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | | Cash flows from operating activities | | | | Net income | $21,826 | $2,009 | | Adjustments to reconcile net income to net cash used in operations: | | | | Depreciation and amortization | 31,808 | 19,176 | | Amortization of debt issuance costs | 947 | 789 | | Non-cash interest expense and other non-cash adjustments | 751 | 2,651 | | (Gain) / Loss from sale of property and equipment | (39) | — | | Deferred income taxes | (2,254) | (718) | | Share-based compensation expenses | 1,444 | 1,410 | | Changes in operating assets and liabilities, net of effects of acquisitions: | | | | Accounts receivable | (25,455) | 936 | | Contract assets | (24,851) | (26,369) | | Inventory | (4,651) | (397) | | Prepaids and other assets | (1,775) | 10,148 | | Contract liabilities | (258) | (10,066) | | Accounts payable, accruals and income taxes payable | (755) | (18,865) | | Acquisition related accrued expenses | — | (11,651) | | ROU assets and lease liabilities | 287 | (8) | | Net cash used in operating activities | (2,975) | (30,955) | | Cash flows from investing activities | | | | Purchases of property and equipment | (21,865) | (8,669) | | Proceeds from sale of property and equipment | 387 | — | | Investment in convertible note | — | (6,000) | | Acquisitions of businesses, net of cash acquired | (210,000) | (126,279) | | Net cash flows used in investing activities | (231,478) | (140,948) | | Cash flows from financing activities | | | | Net proceeds from issuance of common stock in initial public offering | — | 153,808 | | Finance lease payments | (2,148) | (1,896) | | Proceeds from notes payable | 265,000 | 375,000 | | Repayments of notes payable | (3,935) | (337,115) | | Payments of debt issuance costs | (4,870) | (6,541) | | Proceeds from revolving line of credit | — | 30,000 | | Repayments of revolving line of credit | — | (25,000) | | Repayment of debt assumed in ISP acquisition | — | (1,919) | | Taxes paid on vested stock awards | (1,812) | — | | Cash contributed from (distribution to) equity holders | — | 1,474 | | Net cash provided by financing activities | 252,235 | 187,811 | | Net increase in cash and cash equivalents | 17,782 | 15,908 | | Cash and cash equivalents, beginning | 33,959 | 11,530 | | Cash and cash equivalents, ending | 51,741 | 27,438 | | Supplemental Disclosures | | | | Cash paid during the period for interest | $28,424 | $20,103 | | Cash paid during the period for income taxes, net of refunds | $11,475 | $10,360 | | Supplemental Non-Cash Investing and Financing Activities | | | | Non-cash acquisition of operating lease right-of-use assets | $10,419 | $1,342 | | Offering expense included in liabilities | — | $1,028 | | Common stock issued in acquisition of business | $15,205 | $5,752 | | Acquisitions of property and equipment included in liabilities | $5,140 | $854 | | Acquisition of business included in liabilities | — | $3,899 | The accompanying notes are an integral part of the condensed consolidated financial statements 6 Karman Holdings Inc. ### NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Organization and Basis of Presentation #### Description of Business Karman Holdings Inc. (the “Company”) conducts business as Karman Space and Defense (“Karman”). Karman is headquartered in Huntington Beach, California. It currently operates multiple subsidiaries in California, Washington, Oregon, Utah, Mississippi, Pennsylvania, South Carolina and Alabama. Karman specializes in the rapid design, development and production of mission-critical, next-generation system solutions for launch vehicle, satellite, spacecraft, missile defense, hypersonic and Unmanned Aircraft Systems (“UAS”) customers. Karman’s integrated payload protection, propulsion, and hydro/aerodynamic interstage system solutions are deployed across a wide variety of existing and emerging programs supporting priority Department of War (“DoW”) and space sector initiatives. #### Initial Public Offering On February 12, 2025 the Company’s Registration Statement on Form S-1 for its initial public offering (the “IPO”) was declared effective. Prior to the effectiveness of the IPO, the Company was a Delaware limited liability company named TCFIII Spaceco Holdings LLC. On February 12, 2025,the Company converted into a Delaware corporation and changed its name to Karman Holdings Inc. Pursuant to the conversion, all outstanding equity interests and all outstanding P Units were converted into an aggregate of 123.8 million shares of common stock of Karman Holdings Inc. On February 14, 2025, the Company completed the IPO of 26.5 million shares of its common stock at a public offering price of $22.00 per share, of which, 8.4 million shares were sold by the Company. The aggregate net proceeds from the offering, after deducting underwriting discounts and commissions, payments to Phantom Unit holders and other offering expenses, were approximately $147.3 million. See Note 10 and Note 11 for details. #### Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to Quarterly Reports on Form 10-Q. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete annual financial statements. In the opinion of management, the Condensed Consolidated Financial Statements reflects all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair statement of the Company’s financial position, results of operations, and cash flows. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2025. The results of operations for interim periods are not necessarily indicative of results to be expected for the full fiscal year. For the three and six months ended June 30, 2026 and 2025, the Company had no components of other comprehensive income. Accordingly, net income equals comprehensive income for all periods presented. In preparing the condensed consolidated financial statements as of and for the three and six months ended June 30, 2026, the Company identified and recorded certain adjustments associated with the purchase accounting recorded for the acquisition of Seemann Composites, LLC and Materials Sciences LLC in the interim period ended March 31, 2026. The Company evaluated these adjustments in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC 250, Accounting Changes and Error Corrections (“ASC 250”) and Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” and determined that the related errors were immaterial to the condensed consolidated financial statements for the three and six months ended June 30, 2026 or any previously issued financial statements. As such, the prior period amounts presented in these financial statements were revised to reflect the related corrections of errors. Refer to Note 5 for additional details. 7 #### 2. Summary of Accounting Policies and Recent Accounting Pronouncements #### Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness. Appropriate adjustments, if any, to estimates are made prospectively based upon such periodic evaluations. It is reasonably possible that changes may occur in the near term that would affect managements’ estimates with respect to revenue recognition, estimates of cost to complete contracts, allowance for credit losses, share-based compensation, accrued expenses, realization of tax assets and estimates of tax liabilities, useful life of property and equipment and valuation of net assets acquired in business combinations, and the impairment assessment of goodwill and intangible assets. #### Recently Issued Accounting Pronouncements #### Recently Issued Accounting Pronouncements Adopted In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the application of the current expected credit loss model for current accounts receivable and current contract assets under ASC 606. The update is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company adopted ASU 2025-05 on January 1, 2026, and the adoption did not have a material impact on the Company's consolidated financial statements. #### Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures(Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure information about the types of expenses included in commonly presented expense captions, including tabular disaggregation of specified natural expense categories in relevant expense captions. The guidance also requires a qualitative description of amounts not separately disaggregated and disclosure of the total amount of selling expenses (and, in annual reporting periods, the definition of selling expenses). The standard is effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2026, which for the Company is the fiscal year ended December 31, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its financial statements and related disclosure. #### 3. Revenue The Company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good to a customer. In most cases, goods provided under the Company’s contracts are accounted for as a single performance obligation due to the complex and integrated nature of its products. These contracts generally require significant integration of a group of goods to deliver a combined output. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not considered to be a separate performance obligation. Assets recognized from costs to obtain or fulfill a contract are not material. Payment terms are typically forty-five days, but may vary. The Company generates revenue under a range of contract types including fixed-price, time and material and cost-plus fixed fee contracts. Substantially all revenue is recognized over time as control is transferred to the customer, measured with the input method based on costs incurred compared to estimated total costs at completion. In general, the Company’s contracts contain termination clauses that entitle the Company to payment for work performed to-date for goods that do not have an alternative use. Amounts recoverable in the event of terminations include reasonable profit margins. Control is effectively transferred as the Company performs its contractual obligations. #### Remaining Performance Obligations As of June 30, 2026, the Company had $703.9 million of remaining performance obligations. The Company expects to recognize approximately 49.6% of the remaining performance obligations as revenue in remaining 2026, 23.3% in 2027, and 27.1% thereafter. 8 #### Contract Estimates The Company generally recognizes revenue over time using the input method, measured by the percentage of total costs incurred to-date relative to estimated total anticipated costs for each contract. This method is used because the Company considers total costs to be the best available measure of progress toward satisfaction of its performance obligations. Use of the input method requires the Company to make reasonable estimates regarding the costs associated with the design, manufacture, and delivery of its products. The Company estimates profit on these contracts as the difference between total estimated revenue and total estimated costs at completion (EAC) and recognizes profit as costs are incurred. Significant judgment is used to estimate total costs at completion. Cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance and trends, and other economic conditions. Unforeseen events and circumstances can alter the estimate of the costs and potential benefits associated with a particular contract. The nature of Company’s business can give rise to significant contract modifications, which can impact performance obligations and transaction price. A contract modification exists when the parties to a contract agree to a change in the scope and/or price of a contract. Contracts are often modified for changes in contract specifications or requirements. Most of the Company’s contract modifications are for goods 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 catch-up adjustment in the period they are identified. Changes in contract estimate, including those arising from contract modifications, may result in the recognition of revenue in the current period for performance obligations satisfied or partially satisfied in prior periods or the reversal of previously recognized revenue when current estimates differ from prior estimates. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the condensed consolidated statements of income in the period in which it is identified. #### Contract Assets and Liabilities The timing of Company billings is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when products are provided. Billing can occur prior to revenue recognition, resulting in deferred revenue or subsequent to revenue recognition, resulting in unbilled revenue. The asset, “contract assets” represents revenue recognized in excess of amounts billed. These contract assets are not considered a significant financing component of the Company’s contracts as the payment terms are intended to protect the customer in the event the Company does not fulfill its obligations under the contract. The liability, “contract liabilities” represents amounts billed in excess of revenue recognized. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. The following table summarizes our contract assets and liabilities: _(in thousands)_ | Line item | June 30, 2026 | December 31, 2025 | | --- | --- | --- | | Contract assets | $187,120 | $156,298 | | Contract liabilities | $26,154 | $22,814 | Changes in contract assets and contract liabilities are primarily due to the timing of payments from customers and the Company satisfying performance obligations during the normal course of business. The amount of revenue recognized from changes in the transaction price associated with performance obligations satisfied in prior year during the period ended June 30, 2026 and December 31, 2025 was not material. The following table summarizes the changes in contract assets and contract liabilities for the six months ended June 30, 2026 and 2025: _(in thousands)_ | Line item | June 30, 2026 | June 30, 2025 | | --- | --- | --- | | Contract assets, beginning of period | $156,298 | $107,222 | | Contract assets recorded during the period | 151,880 | 100,777 | | Reclassified to accounts receivable during the period | (121,058) | (74,409) | | Contract assets, end of period | $187,120 | $133,590 | 9 _(in thousands)_ | Line item | June 30, 2026 | June 30, 2025 | | --- | --- | --- | | Contract liabilities, beginning of period | $22,814 | $29,868 | | Customer advances received | 24,602 | 14,505 | | Recognition of unearned revenue | (21,262) | (24,476) | | Contract liabilities, end of period | $26,154 | $19,897 | #### Disaggregation of Revenue The following table presents our disaggregated revenue by end-markets for the three and six months ended June 30, 2026 and 2025, respectively. Substantially all of the Company’s customers are government or commercial enterprises based in the United States. _(in thousands, except percent)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Hypersonics & Strategic Missile Defense | $43,417 | $34,960 | $79,105 | $65,016 | | Space & Launch | 42,072 | 39,597 | 85,926 | 73,468 | | Tactical Missiles & Integrated Defense Systems | 63,012 | 40,540 | 108,272 | 76,737 | | Maritime Defense Systems | 33,562 | — | 59,970 | — | | Total revenue | $182,063 | $115,097 | $333,273 | $215,221 | #### 4. Supplemental Financial Statement Data #### Inventory The Company determines the cost basis for inventory using the lower of cost or net realizable value. Cost is determined by using the weighted average method. The following table summarizes our inventory: | Line item | June 30, 2026 | December 31, 2025 | | --- | --- | --- | | Raw materials | $12,852 | $7,644 | | Work in progress | 1,618 | 1,974 | | Finished goods | 1,829 | 1,044 | | Inventory | $16,299 | $10,662 | #### Accounts Receivable and Credit Loss Reserves Accounts receivable are comprised of unsecured amounts due from customers and presented net of any allowance for credit losses. The Company recognizes its estimate of expected losses on accounts receivable within the scope of the current expected credit losses (“CECL”) model. The Company assesses the collectability of its outstanding receivables and estimates the need for an allowance by considering historical losses, the age of the receivable balance, credit quality of the Company’s customers, current economic conditions, and other factors that may affect the customers’ ability to pay. The following tables summarize the accounts receivable as of June 30, 2026 and December 31, 2025, and the change in allowance for credit losses for the six months ended June 30, 2026 and 2025: _(in thousands)_ | Line item | June 30, 2026 | December 31, 2025 | | --- | --- | --- | | Accounts receivable, gross | $116,226 | $79,599 | | Allowance for credit losses | (1,266) | (883) | | Accounts receivable, net of allowance for credit losses | $114,960 | $78,716 | 10 _(in thousands)_ | Line item | June 30, 2026 | June 30, 2025 | | --- | --- | --- | | Allowance for credit losses, beginning balance | $(883) | $(712) | | Credit loss recoveries (expenses) | (414) | (10) | | Write-offs | 31 | 46 | | Allowance for credit losses, ending balance | $(1,266) | $(676) | #### Concentration of Credit Risk For the six months ended June 30, 2026, the Company had two customers with greater than 10% of the Company’s revenue. These two customers accounted for 29.7% and 40.7% of accounts receivable, as of June 30, 2026 and December 31, 2025, respectively. #### Property and Equipment Property and equipment consisted of the following as of June 30, 2026 and December 31, 2025: _(in thousands)_ | Line item | June 30,2026 | December 31,2025 | | --- | --- | --- | | Land and buildings (30-year buildings) | $6,611 | $6,611 | | Machinery and equipment (7-10 year assets) | 94,168 | 85,729 | | Vehicles (5 year assets) | 395 | 265 | | Office furniture and equipment (5-7 year assets) | 1,855 | 1,435 | | Computer systems (3 year assets) | 3,731 | 2,941 | | Leasehold improvements (shorter of useful life or remaining lease term) | 22,781 | 18,840 | | Construction in process | 43,440 | 18,972 | | Total property and equipment | 172,981 | 134,793 | | Less accumulated depreciation | (46,727) | (39,384) | | Property and equipment, net | $126,254 | $95,409 | Depreciation expense for the three months ended June 30, 2026 and 2025 was $3.9 million and $3.0 million, respectively, of which, $3.1 million and $2.8 million was recorded in cost of goods sold, respectively, and the remainder in operating expenses in the accompanying condensed consolidated statements of income. Depreciation expense for the six months ended June 30, 2026 and 2025 was $7.3 million and $5.8 million, respectively, of which, $6.0 million and $5.5 million was recorded in cost of goods sold, respectively, and the remainder in operating expenses in the accompanying condensed consolidated statements of income. 5. Business Combinations #### MTI acquisition On April 2, 2025 (the “MTI Acquisition Date”), the Company, through its indirect wholly-owned subsidiary Karman Parent LLC (“Karman Parent”), acquired all the issued and outstanding membership interests and other equity interests of MTI Metal Technology Inc., pursuant to the terms of a Securities Purchase Agreement in exchange for cash consideration (the “ MTI Acquisition”). The acquisition of MTI expands the Company’s capabilities in advanced materials and is expected to strengthen its position in the strategic missile defense market through enhanced product offerings and customer relationships. The MTI Acquisition met the requirements to be considered a business combination under ASC 805. The assets and liabilities acquired, effected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the MTI Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805. 11 The MTI Acquisition was funded with borrowings from the Company’s term note under its Citibank credit agreement and was accounted for using the acquisition method of accounting. The fair value of the total purchase consideration transferred was $82.3 million. The MTI Acquisition does not have any contingent consideration arrangements. The Company also incurred $1.4 million of direct acquisition-related expenses, recognized as general and administrative expenses on the condensed consolidated statements of income for the three and six months ended June 30, 2025. No acquisition-related expenses were recorded for the three and six months ended June 30, 2026. The accounting for the MTI Acquisition was completed during the quarter ended March 31, 2026. The following table sets forth the allocation of the fair value of the assets acquired and liabilities assumed. No material adjustments were recognized during the measurement period. | Assets Acquired | Total Amount / (in thousands) | | --- | --- | | Cash and cash equivalents | $2,230 | | Accounts receivable | 2,734 | | Inventory | 2,435 | | Prepaid and other current assets | 173 | | Property, plant and equipment | 10,672 | | Intangible assets | 30,700 | | Right of use lease assets | 715 | | Total assets acquired | $49,659 | | Accounts payable | 374 | | Accrued payroll and related expenses | 10,815 | | Lease liabilities, current | 113 | | Lease liabilities, non-current | 602 | | Other current liabilities | 461 | | Total liabilities assumed | $12,365 | | Goodwill | $45,019 | | Fair Value of Consideration | $82,313 | The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill and is fully deductible for tax purposes. The components of goodwill do not qualify as a separately recognized intangible asset. Below is a summary of the intangible assets acquired in the MTI Acquisition: | Intangible Asset | Acquisition Date Fair Value(in thousands) | Estimated Life(Years) | | --- | --- | --- | | Customer Relationships | $19,700 | 14.0 | | Backlog | 3,600 | 2.7 | | Know-How | 7,400 | 7.0 | | Total Intangible Assets Acquired | $30,700 | | The fair value for know-how was determined using the relief from royalty method and the fair values of customer relationships and backlog was determined using the multi-period excess earnings method (“MPEEM”). In total, the intangible assets acquired subject to amortization have a weighted average useful life of 11.0 years. Supplemental pro forma results of operations have not been presented because they were not material to the condensed consolidated results of operations. #### ISP acquisition On May 28, 2025 (the “ISP Acquisition Date”), the Company completed its acquisition of Industrial Solid Propulsion (“ISP”) pursuant to a Securities Purchase Agreement (the “ISP Agreement”), under which the Company purchased all issued and outstanding equity interests in ISP and related real estate of ISP, for approximately $50 million in cash and 147,842 shares of common stock of the Company and a $5.0 million potential earnout (the “Earnout”), subject to satisfaction or waiver of certain customary closing adjustments. The ISP Agreement contains customary representations, warranties and covenants of the parties. The acquisition of ISP 12 expands the Company’s capabilities in small-diameter solid propellant and energetic propulsion systems, strengthening its position in the UAS and missile defense markets through proprietary technologies and integrated manufacturing expertise. The ISP Acquisition met the requirements to be considered a business combination under ASC 805. The assets and liabilities acquired, effected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the ISP Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805. The ISP Acquisition was funded with incremental borrowings from the Company’s term note under its Citibank credit agreement and was accounted for using the acquisition method of accounting. The fair value of the total purchase consideration transferred was $58.6 million, of which $49.0 million represents cash consideration, $5.7 million represents the fair value of the equity consideration as of the ISP Acquisition Date and $3.9 million represents the fair value of the Earnout, which was recorded in other current liabilities on the condensed consolidated balance sheets. The earnout liability was estimated using a Monte Carlo simulation under a risk-neutral framework, based on the average present value of the simulated earnout payments. The Earnout provides for a cash payment equal to $5.0 million to the seller of ISP, contingent upon the achievement of specified Adjusted EBITDA threshold for the twelve months ended December 31, 2025, as defined in the ISP Agreement. As of December 31, 2025, the Company determined that the Adjusted EBITDA target was not achieved and therefore will not be paid. Accordingly, the Earnout no longer had any value, and the related contingent consideration liability was reduced to zero as of December 31, 2025, with the change in fair value recognized as other income on the consolidated statements of operations. The Company also incurred $1.2 million of direct acquisition-related expenses, recognized as general and administrative expenses on the condensed consolidated statements of income for the three and six months ended June 30, 2025. No acquisition-related expenses were recorded for the three and six months ended June 30, 2026. The following table sets forth the allocation, as of June 30, 2026, of the fair value of the assets acquired and liabilities assumed in connection with the ISP Acquisition: | Assets Acquired | Total Amount / (in thousands) | | --- | --- | | Cash and cash equivalents | $2,791 | | Accounts receivable | 597 | | Inventory | 1,202 | | Prepaid and other current assets | 39 | | Property, plant and equipment | 4,239 | | Intangible assets | 21,400 | | Deferred tax assets | 941 | | Total assets acquired | $31,209 | | Accounts payable | 279 | | Accrued payroll and related expenses | 2,122 | | Contract liabilities | 95 | | Long-term notes payable | 1,919 | | Total liabilities assumed | $4,415 | | Goodwill | $31,843 | | Fair Value of Consideration | $58,637 | The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill and is fully deductible for tax purposes. The components of goodwill do not qualify as a separately recognized intangible asset. Below is a summary of the intangible assets acquired in the ISP Acquisition: | Intangible Asset | Acquisition Date Fair Value(in thousands) | Estimated Life(Years) | | --- | --- | --- | | Customer Relationships | $13,500 | 10.0 | | Backlog | 1,900 | 1.6 | | Know-How | 6,000 | 15.0 | | Total Intangible Assets Acquired | $21,400 | | 13 The fair value for developed technology was determined using the relief from royalty method and the fair values of customer relationships and backlog was determined using the MPEEM. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 10.7 years. Supplemental pro forma results of operations have not been presented because they were not material to the condensed consolidated results of operations. #### Five Axis Acquisition On October 28, 2025 (the “Five Axis Acquisition Date”), the Company, through its wholly owned subsidiary, Karman Space & Defense LLC, completed the acquisition of all of the issued and outstanding capital stock of Five Axis Industries, Inc. (“Five Axis”) pursuant to a Securities Purchase Agreement, under which the Company purchased all issued and outstanding equity interests in Five Axis, for approximately $90.7 million in cash and 68,625 shares of common stock (the “Five Axis Acquisition”). Five Axis designs and manufactures specialized nozzle and fuel systems for launch vehicle engines. Its products support the performance and operation of both current and next-generation propulsion systems. The acquisition of Five Axis strengthens the Company’s core competency in the engineering and manufacturing of mission critical subsystems for the space and launch end market. The Five Axis Acquisition met the requirements to be accounted for as a business combination under ASC 805. Five Axis’ assets and liabilities have been adjusted for preliminary estimates of fair value, and its results of operations have been included in the Company’s condensed consolidated financial statements from the Five Axis Acquisition Date. The purchase price was allocated to tangible and identifiable intangible assets based on their estimated fair values at the Five Axis Acquisition Date. The Five Axis Acquisition was funded with incremental borrowings from the Company’s term note under its Citibank credit agreement and was accounted for using the acquisition method of accounting. The Five Axis Acquisition does not have any contingent consideration arrangements. Acquisition-related costs have been expensed as incurred and are included in the general and administrative expenses in the condensed consolidated statements of income. No acquisition-related expenses were recorded for the three or six months ended June 30, 2026 or 2025. The following table sets forth the acquisition date fair value of the assets acquired, and liabilities assumed in connection with the acquisition: | Assets Acquired | Total Amount / (in thousands) | | --- | --- | | Cash and cash equivalents | $5,055 | | Accounts receivable | 1,807 | | Property, plant and equipment | 4,466 | | Intangible assets | 48,000 | | Total assets acquired | $59,328 | | Accounts payable | 156 | | Accrued payroll and related expenses | 70 | | Other current liabilities | 153 | | Deferred tax liabilities | 12,886 | | Total liabilities assumed | $13,265 | | Goodwill | $50,505 | | Fair Value of Consideration | $96,568 | The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill, which is not deductible for tax purposes. Goodwill reflects expected synergies from the combined operations, specialized processes and procedures, and the assembled workforce. The components of goodwill do not qualify as a separately recognized intangible asset. Below is a summary of the intangible assets acquired in the Five Axis Acquisition: 14 | Intangible Asset | Acquisition Date Fair Value(in thousands) | Estimated Life(Years) | | --- | --- | --- | | Customer Relationships | $44,500 | 14.0 | | Backlog | 3,500 | 0.8 | | Total Intangible Assets Acquired | $48,000 | | The fair value for the customer relationships and backlog was determined using the MPEEM. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 13.0 years. Supplemental pro forma results of operations have not been presented because they were not material to the condensed consolidated results of operations. #### Seemann acquisition On February 3, 2026 (the “Seemann Acquisition Date”), the Company, through a wholly owned subsidiary, completed the acquisition of all of the issued and outstanding membership interests of Seemann Composites, LLC and Materials Sciences LLC (together, the “Company Group”) pursuant to a Securities Purchase Agreement dated December 31, 2025 (the “Seemann Acquisition”), for approximately (i) $215.9 million in cash and (ii) shares of common stock of the Company with an aggregate value equal to $17.0 million, of which $1.7 million was withheld to cover the Company Group’s income tax liability. The Company Group provides advanced composite systems and materials solutions for maritime defense applications. The Company believes the acquisition of Seemann and MSC expands its capabilities in the maritime defense end market and strengthens its portfolio supporting high-priority, funded U.S. Navy programs. The Seemann Acquisition met the requirements to be accounted for as a business combination under ASC 805. The Company Group’s assets and liabilities have been adjusted for preliminary estimates of fair value, and its results of operations have been included in the Company’s condensed consolidated financial statements from the Seemann Acquisition Date. The purchase price was allocated to tangible and identifiable intangible assets based on their estimated fair values at the Seemann Acquisition Date. The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired was recorded as goodwill, which is expected to be deductible for tax purposes. The Seemann Acquisition was accounted for using the acquisition method of accounting. The Seemann Acquisition was funded with the incremental borrowing from the Company’s term note under its Citibank credit agreement. Total consideration transferred was $232.9 million. The Seemann Acquisition does not have any contingent consideration arrangements. The Company incurred $4.0 million of direct acquisition-related expenses, of which $2.0 million was recognized in the prior year and the remaining $2.0 million was recognized as general and administrative expenses on the condensed consolidated statements of income for the three and six months ended June 30, 2026. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). The following table reflects the revised preliminary acquisition date fair value of the assets acquired and liabilities assumed in connection with the Seemann Acquisition: 15 | Assets Acquired | Total Amount / (in thousands) | | --- | --- | | Cash and cash equivalents | $5,909 | | Accounts receivable | 10,789 | | Contract assets | 5,971 | | Inventory | 1,158 | | Prepaid and other current assets | 1,106 | | Property, plant and equipment | 12,227 | | Intangible assets | 61,000 | | Operating lease right-of-use assets | 22,506 | | Other assets | 732 | | Total assets acquired | $121,398 | | Accounts payable | 6,169 | | Accrued payroll and related expenses | 1,469 | | Contract liabilities | 3,597 | | Short term operating lease liabilities | 476 | | Other current liabilities | 506 | | Non current operating lease liabilities, net of current portion | 21,906 | | Total liabilities assumed | $34,123 | | Goodwill | $145,635 | | Fair Value of Consideration | $232,910 | The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill and is fully deductible for tax purposes. Goodwill reflects expected synergies from the combined operations, specialized processes and procedures, and the assembled workforce. The components of goodwill do not qualify as a separately recognized intangible asset. Goodwill is allocated to the Company’s single reporting segment. Below is a summary of the intangible assets acquired in the Seemann Acquisition: | Intangible Asset | Acquisition Date Fair Value(in thousands) | Estimated Life(Years) | | --- | --- | --- | | Trade Name | $2,000 | 3.0 | | Know-How | 18,000 | 10.0 | | Customer Contracts | 17,500 | 8.0 | | Backlog | 23,500 | 5.1 | | Total Intangible Assets Acquired | $61,000 | | The fair values of the acquired trade names and know-how were determined using the relief-from-royalty method, and the fair value for the customer contracts and customer backlog was determined using the MPEEM. All intangible assets are subject to amortization. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 7.3 years. Since the Seemann Acquisition Date through June 30, 2026, revenues attributable to the Seemann Acquisition included in the Company’s condensed consolidated financial statements were $37.8 million and $63.0 million for the three and six months ended June 30, 2026, respectively. Supplemental pro forma information has not been included as it is impracticable to obtain the information due to the lack of availability of historical GAAP financial data. As discussed in Note 1 above, the Company identified certain adjustments associated with the purchase accounting recorded for the Seemann Acquisition in the interim period ended March 31, 2026. The Company determined that these errors were immaterial to the condensed consolidated financial statements for the three and six months ended June 30, 2026 or any previously issued financial statements. The Company has determined that it is appropriate to revise the following financial statement line items in the condensed consolidated financial statements as of and for the three months ended March 31, 2026: 16 _For the three months ended March 31, 2026 · (in thousands)_ | Line item | As reported | Adjustments | As revised | | --- | --- | --- | --- | | Intangible assets, net (Customer contracts) | $400,459 | $(61,000) | $339,459 | | Property, plant and equipment | $150,149 | $5,951 | $156,100 | | Goodwill | $439,210 | $55,438 | $494,648 | | Total Assets | $1,417,738 | $389 | $1,418,127 | | Contract liabilities | $25,752 | $389 | $26,141 | | Total current liabilities | $104,796 | $389 | $105,185 | | Total liabilities | $1,012,047 | $389 | $1,012,436 | | Net cash provided by operating activities | $209 | $1,742 | $1,951 | | Net cash flows provided by financing activities | $257,155 | $(1,742) | $255,413 | 6. Goodwill and Intangible Assets The table below summarizes the changes in the Company’s goodwill balances: _(in thousands)_ | Line item | Total Goodwill | | --- | --- | | Balance at January 1, 2025 | $225,146 | | Acquisitions | 127,367 | | Impairments | — | | Balance at December 31, 2025 | 352,513 | | Acquisitions | 145,635 | | Impairments | — | | Balance at June 30, 2026 | $498,148 | The table below summarizes the carrying amounts of the Company’s identifiable intangible assets as of June 30, 2026 and December 31, 2025, respectively: _(in years) - (in thousands) - (in thousands)_ | Line item | Weighted Average Amortization Period | As of June 30, 2026 / Gross Carrying Amount | As of June 30, 2026 / Accumulated Amortization | As of June 30, 2026 / Net Carrying Amount | As of December 31, 2025 / Gross Carrying Amount | As of December 31, 2025 / Accumulated Amortization | As of December 31, 2025 / Net Carrying Amount | | --- | --- | --- | --- | --- | --- | --- | --- | | Trade Name (3.0 years) | 3.0 | $2,000 | $(278) | $1,722 | — | — | — | | Patents (9 years) | 9.0 | 2,722 | (1,227) | 1,495 | 2,722 | (1,076) | 1,646 | | Know-How (7.0 - 15.0 years) | 10.2 | 33,686 | (3,433) | 30,253 | 15,686 | (1,841) | 13,845 | | Customer Backlogs (0.8 - 7.5 years) | 3.2 | 71,250 | (46,669) | 24,581 | 47,750 | (39,782) | 7,968 | | Customer Relationships (10.0 - 19.0 years) | 16.6 | 333,300 | (81,182) | 252,118 | 333,300 | (70,871) | 262,429 | | Customer Contracts (8.0 years) | 8.0 | 17,500 | (911) | 16,589 | — | — | — | | Total Intangible Assets | | $460,458 | $(133,700) | $326,758 | $399,458 | $(113,570) | $285,888 | Amortization expense was $9.2 million and $5.5 million for the three months ended June 30, 2026 and 2025, respectively, which was recorded in general and administrative expenses in the accompanying condensed consolidated statements of income. Amortization expense was $20.1 million and $9.9 million for the six months ended June 30, 2026 and 2025, respectively, which was recorded in general and administrative expenses in the accompanying condensed consolidated statements of income. 7. Debt The Company’s notes payable consisted of the following as of June 30, 2026 and December 31, 2025: 17 _(in thousands)_ | Line item | June 30, 2026 | December 31, 2025 | | --- | --- | --- | | Term note | $763,962 | $502,800 | | Other notes payable | 4,516 | 3,967 | | Total notes payable | 768,478 | 506,767 | | Issuance costs | (11,541) | (7,619) | | Subtotal | 756,937 | 499,148 | | Less: current portion of notes payable | (5,610) | (3,836) | | Long-term notes payable | 751,327 | 495,312 | On February 2, 2026, the Company entered into a Third Amendment to its Credit Agreement (the “Third Amendment”), which amends the Credit Agreement, dated as of April 1, 2025 (as amended by the First Amendment to Credit Agreement, dated as of May 27, 2025 and Second Amendment to Credit Agreement, dated as of October 24, 2025) by and among the Company, Citibank, N.A., as Administrative Agent and Collateral Agent (“Citibank”), and the other parties thereto (as amended from time to time, the “Credit Agreement”). Under the terms of the Third Amendment, the Company (i) refinanced its existing term loans in an aggregate principal amount of $502.8 million to reduce the interest rate applicable thereto by 75 basis points to SOFR plus 2.75% and (ii) reduced the interest rate applicable to its revolving credit facility by 75 basis points for each level of its leverage-based pricing grid, the highest of such levels being set at SOFR plus 2.50%. In addition, following the refinancing of the existing term loans, the Company increased the principal amount of its term loans by $265.0 million, for a total principal amount of $772 million. As of June 30, 2026, the principal of the term note outstanding was $764.0 million. Interest rates were 6.46% and 7.50% as of June 30, 2026 and December 31, 2025, respectively. No accrued interest was recorded under the Credit Agreement as of June 30, 2026 and December 31, 2025. On March 9, 2026, the Company entered into a Fourth Amendment to its Credit Agreement. Under the terms of the Fourth Amendment, the Company (i) increased the revolving credit commitments by $100.0 million such that the total revolving credit commitments are now $150.0 million and (ii) removed the cap on incremental revolving credit commitments, which was previously $50.0 million. The Company did not draw from the revolving credit facility during the six months ended June 30, 2026. There was no outstanding balance on the revolving credit facility as of June 30, 2026. All other terms and conditions of the Credit Agreement remain unchanged. The aforementioned amendments are accounted for as debt modifications. The company incurred debt issuance costs of $4.9 million associated with these amendments. The Credit Agreement governing the revolving credit facility and term note requires the Company to comply with a springing financial covenant that is tested on the last day of any testing fiscal quarter if and when the outstanding principal amount of revolving credit loans exceeds an applicable threshold. If the financial covenant is then in effect, the Company is required to maintain a Consolidated First Lien Net Leverage Ratio of less than or equal to 6.50 to 1.00. The financial covenant is also conditioned upon the Company’s requirement to deliver quarterly financial statements to the lender under the credit agreement. As there was no outstanding balance on the revolving credit facility as of June 30, 2026, the springing financial covenant was not required. The Company was in compliance with its debt covenant as of June 30, 2026. On August 3, 2026, the Company entered into a Fifth Amendment to its Credit Agreement, which amends the Credit Agreement, dated April 1, 2025, by and among the Company, Citibank, N.A. as Administrative Agent and Collateral Agent (“Citibank”), and the other parties there to. The Fifth Amendment reduced (i) the applicable interest rate margin on its term loans from SOFR plus 2.75% to SOFR plus 2.25% and (ii) the interest rate applicable to its revolving credit facility by 50 basis points for each level of our leverage-based pricing grid, the highest of such levels being set at SOFR plus 2.00%. No other material terms of the Credit Agreement were amended. 8. Lease Obligations The Company has certain property leases for facilities of the Company’s subsidiaries. Most of these leases are accounted for as finance leases except for facilities leased by AEC and a plane hangar leased by Systima, which are accounted for as operating leases. Total lease payments amounted to $3.8 million and $2.2 million for the three months ended June 30, 2026 and 2025 respectively. Total lease payments amounted to $7.2 million and $6.4 million for the six months ended June 30, 2026 and 2025 respectively. 18 #### Consolidated Lease Summary On a consolidated basis, lease activity for the three and six months ended June 30, 2026 and 2025 were as follows: _(in thousands)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Finance lease expense | | | | | | Amortization of ROU assets | $1,914 | $1,131 | $3,743 | $3,424 | | Interest on lease liabilities | 1,893 | 1,095 | 3,731 | 3,363 | | Operating lease expense | 828 | 386 | 1,512 | 1,065 | | Total | $4,635 | $2,612 | $8,986 | $7,852 | Amortization of ROU assets are included in the depreciation and amortization expense line of the accompanying condensed consolidated statements of income. On a consolidated basis, supplemental cash flow information for the six months ended June 30, 2026 and 2025 were as follows: | Cash paid for amounts included in the measurement of lease liabilities | Six Months Ended June 30, 2026 / (in thousands except percent and year) | Six Months Ended June 30, 2025 / (in thousands except percent and year) | | --- | --- | --- | | Operating cash flows from finance leases | $3,583 | $3,371 | | Financing cash flows from finance leases | $2,148 | $1,896 | | Operating cash flows from operating leases | $1,454 | $1,083 | | ROU assets obtained in exchange for new operating lease liabilities | $10,419 | $1,342 | | Weighted-average remaining lease term in years for finance leases | 15.23 | 13.47 | | Weighted-average remaining lease term in years for operating leases | 10.77 | 5.64 | | Weighted-average discount rate for finance leases | 7.29% | 8.37% | | Weighted-average discount rate for operating leases | 7.24% | 9.60% | 9. Retirement Plans #### Employee Benefit Plan The Company maintains a 401(k) plan for all employees who have completed three months of service and have reached age 18. Qualified employees may contribute up to 90% of their pre-tax annual compensation to this plan, not to exceed the dollar limit set by law. The Company may make discretionary matching contributions and discretionary non-elective contributions to this plan. For the three months ended June 30, 2026 and 2025, there were contributions of $1.3 million and $0.8 million made to the plan respectively. For the six months ended June 30, 2026 and 2025, there were contributions of $2.8 million and $1.8 million made to the plan respectively. Retirement plan contribution expense is included within either Cost of Goods Sold or General and Administrative expenses on the condensed consolidated statements of income, depending on the nature of the employee’s work. 10. Stockholders’ Equity and Membership Units Prior to the IPO, the Company issued membership units both in conjunction with purchases of subsidiaries and to reflect further investment in the Company’s operations. The Company issued Class A, Class B, and Class C units with substantially identical rights, privileges and liquidation preferences. No member shall be liable for the debts, liabilities or obligations of the Company beyond the member’s contributions. Pursuant to the Third Amended and Restated Limited Liability Company Agreement of TCFIII Spaceco Holdings LLC, such membership units entitled unitholders to share in the proceeds from capital transactions, including a sale of the Company, and granted them voting rights on matters requiring the consent of the members. As of December 31, 2024, a total of 166,737,325 membership units were outstanding. In connection with the IPO in February 2025, all of the outstanding membership units were converted on a 0.68-for-1 basis into 112,566,039 shares of common stock of the Company. On July 23, 2025, the Company priced the underwritten public offering (the “Offering”) of its common stock, par value $0.001 per share (the “Common Stock”), at a public offering price of $49.00 per share (the “Offering Price”), pursuant to the Company’s registration statement on Form S-1 (File No. 333-288809), as amended (the “Registration Statement”). On July 23, 2025, in connection with the pricing of the Offering, certain of the Company’s existing stockholders (the “Selling Stockholders”) agreed to sell 21,000,000 19 shares of their Common Stock, in each case at the Offering Price, less underwriting discounts and commissions. The underwriters in the Offering were granted a 30-day option to purchase up to an additional 3,150,000 shares of Common Stock from a certain Selling Stockholder, which was fully exercised on July 24, 2025. The Offering and the shares were delivered on July 25, 2025. No shares were sold by the Company in the Offering and the Company did not receive any proceeds from the Offering. On May 28, 2026, the Company priced the underwritten public offering (the “Secondary Offering”) of its common stock, par value $0.001 per share (the “Common Stock”), at a public offering price of $61.00 per share (the “Secondary Offering Price”), pursuant to the Company’s registration statement on Form S-3 (File No. 333-296304). In connection with the pricing of the Secondary Offering, certain of the Company’s existing stockholders (the “Selling Stockholders”) agreed to sell 14,000,000 shares of their Common Stock, in each case at the Offering Price, less underwriting discounts and commissions. The underwriters in the Offering were granted a 30-day option to purchase up to an additional 2,100,000 shares of Common Stock from the Selling Stockholders. The Offering and the shares were delivered on June 1, 2026. No shares were sold by the Company in the Secondary Offering and the Company did not receive any proceeds from the Secondary Offering. 11. Share-Based Compensation #### 2025 Stock Incentive Plan The 2025 Stock Incentive Plan (the “2025 Plan”) was adopted by the Board of Directors on February 12, 2025 and approved by our shareholders on February 12, 2025. The 2025 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, other stock-based awards, or any combination thereof. Employees, directors or consultants or any of our subsidiaries or affiliates are eligible to receive an award under the 2025 Plan, to the extent that an offer of such award is permitted by applicable law, stock market or exchange rules, and regulations or accounting or tax rules and regulations. Each award will be set forth in a separate grant notice or agreement and will indicate the type and terms and conditions of the award. The following tables present the Company’s stock-based compensation for equity-settled awards by type, (i.e., restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”)), and by financial statement line as well as the related tax benefit included in the Company’s condensed consolidated statements of income: _(in thousands)_ | Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 | | --- | --- | --- | --- | --- | | RSUs and PSUs | 1,444 | — | 1,444 | — | | P Units and Phantom Units | — | — | — | 8,084 | | Total | $1,444 | — | $1,444 | $8,084 | _(in thousands)_ | Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 | | --- | --- | --- | --- | --- | | General and administrative | 1,444 | — | 1,444 | 8,084 | | Tax benefit | (169) | — | (169) | — | | Total | $1,275 | — | $1,275 | $8,084 | Compensation cost related to RSUs and PSUs will generally be amortized on a straight-line basis over the remaining average service period. The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of June 30, 2026: _(in thousands) · (years)_ | Line item | Unamortized Compensation Costs | Weighted Average Service Period | | --- | --- | --- | | RSUs and PSUs(1) | 17,065 | 2.49 | | Total unamortized compensation costs | $17,065 | | (1) Weighted average service period assumes the performance metrics are met for the PSUs. 20 The following table summarizes RSU and PSU activity under the Company’s incentive plans: _(in thousands) · (in thousands)_ | RSUs and PSUs outstanding at January 1, 2026 | Number of Shares / — | Weighted Average Grant Date Fair Value / — | | --- | --- | --- | | Granted | 281 | 65.2 | | Vested | (9) | 65.3 | | Forfeited | (11) | 66.4 | | RSUs and PSUs outstanding at June 30, 2026 | 261 | $65.2 | RSUs and PSUs are generally settled in an equal number of shares of the Company’s common stock at the time of vesting of the units. #### P Units and Phantom Units The Company historically, through Spaceco Management Equity LLC (the “Management Company”) under the Spaceco Management Equity LLC Equity Incentive Plan (the “Equity Incentive Plan”) and the Transaction Bonuses plan (the “Phantom Plan”) , granted P Units and Phantom Units to certain employees of the Company and its subsidiaries, in exchange for their services to the Company. These Units were fully vested in connection with the completion of the Company’s IPO in February 2025. During the six months ended June 30, 2025, $8.1 million share-based compensation was recognized in general and administrative expenses in the condensed consolidated statements of income. 12. Net Income Per Common Share Net income per common share was computed as follows: _(in thousands except per share data)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Net income | $14,032 | $6,807 | $21,826 | $2,009 | | Weighted average shares outstanding: | | | | | | Basic | 132,527 | 132,322 | 132,502 | 132,322 | | RSUs and PSUs | 4 | — | 12 | — | | Basic and diluted | 132,531 | 132,322 | 132,514 | 132,322 | | Income per common share | | | | | | Basic | $0.11 | $0.05 | $0.16 | $0.02 | | Diluted | $0.11 | $0.05 | $0.16 | $0.02 | | Anti-dilutive potential common shares excluded | 3 | — | 1 | — | 13. Segment Reporting ASC Subtopic 280-10, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available. This information is regularly evaluated by the chief operating decision maker (“CODM”) to allocate resources and assess performance. The Company’s 21 Chief Executive Officer (“CEO”) serves as the CODM, and reviews financial information on a single-segment basis to make operational decisions and assess financial performance. On March 23, 2026, the Company appointed a new CEO who serves as the CODM. The CODM continues to evaluate the Company’s performance on a single-segment basis, using consolidated net income. Segment assets continued to be measured as total consolidated assets, as reported on the condensed consolidated balance sheet. The following table summarizes the Company’s revenue, net income and significant expenses: _(in thousands)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Revenue | $182,063 | $115,097 | $333,273 | $215,221 | | Expenses and other items: | | | | | | Cost of goods sold | (103,829) | (68,076) | (191,174) | (128,749) | | General and administrative expenses | (31,339) | (19,430) | (59,976) | (42,718) | | Depreciation and amortization not included in cost of goods sold | (12,066) | (7,487) | (25,842) | (13,687) | | Other income (expense) | (280) | 380 | (454) | 300 | | Interest expense, net | (15,284) | (11,893) | (27,930) | (23,266) | | Income tax provision | (5,233) | (1,784) | (6,071) | (5,092) | | Net income | $14,032 | $6,807 | $21,826 | $2,009 | General and administrative expenses include employee compensation and benefits of $13.9 million and $7.8 million for the three months ended June 30, 2026 and 2025, respectively, and $26.4 million and $14.4 million for the six months ended June 30, 2026 and 2025 respectively. Capital expenditures, which include purchases of property, plant, and equipment, are assessed and managed at the enterprise level. Refer to “Investing Activities” in the condensed consolidated statement of cash flows for the amount of cash paid for capital expenditures. 14. Provision for Income Tax The following table summarizes the Company’s income tax expense and effective tax rate for the three and six months ended June 30, 2026 and 2025: _(in thousands, except percent)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Income before provision for income taxes | $19,265 | $8,591 | $27,897 | $7,101 | | Provision for income taxes | 5,233 | 1,784 | 6,071 | 5,092 | | Effective tax rate | 27.2% | 20.8% | 21.8% | 71.7% | The Company’s effective income tax rate of 27.2% for the three months ended June 30, 2026 was higher than the U.S. federal statutory rate of 21.0%, primarily due to state income taxes net of federal benefit, uncertain tax positions, non-deductible executive compensation under Section 162(m) of the Internal Revenue Code, and other non-deductible expenses. The Company’s effective income tax rate of 21.8% for the six months ended June 30, 2026 was higher than the U.S. federal statutory rate of 21.0%, primarily due to state income taxes net of federal benefit, uncertain tax positions, non-deductible executive compensation under Section 162(m) of the Internal Revenue Code and other non-deductible expenses, partially offset by a favorable discrete tax benefit related to the revaluation of the Company’s state deferred tax liabilities arising from the changes in the combined state tax rate following the Seemann Acquisition. 15. Commitments and Contingencies In the course of doing business, the Company enters into various agreements. These agreements typically include commitments and indemnifications, which could create a liability for the Company in the event of damages or injuries related to providing these 22 services. Management believes the Company is adequately insured. However, future claims related to these agreements could significantly affect the Company’s financial results if a loss is incurred as a result of these agreements. The Company is subject from time to time to various claims and legal proceedings incident to its business. The Company accrues a liability for legal contingencies when it is both probable that a liability has been incurred and the amount of loss is reasonably estimable. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. For certain matters, the liability is not probable, or the amount cannot be reasonably estimated, and therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for any matters in which the likelihood of a material loss is at least reasonably possible, the Company will provide disclosure of the possible loss or range of loss. If a reasonable estimate cannot be made, however, the Company will provide disclosure to that effect. As of June 30, 2026 and December 31, 2025, the Company has no material reserves for legal contingencies and does not believe that the resolution of any known legal matters will have a material adverse effect on the Company’s financial position, cash flows or results of operations; however, it is possible that unexpected further developments on these or similar matters could result in a charge that might be material to the Company’s financial position, cash flows, or results of operations. #### 16. Subsequent Events On August 3, 2026, the Company entered into a Fifth Amendment to its Credit Agreement, which amends the Credit Agreement, dated April 1, 2025, by and among the Company, Citibank, N.A. as Administrative Agent and Collateral Agent (“Citibank”), and the other parties there to. The Fifth Amendment reduced (i) the applicable interest rate margin on its term loans from SOFR plus 2.75% to SOFR plus 2.25% and (ii) the interest rate applicable to its revolving credit facility by 50 basis points for each level of our leverage-based pricing grid, the highest of such levels being set at SOFR plus 2.00%. No other material terms of the Credit Agreement were amended. 23 ## ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. You should read the following discussion in conjunction with our unaudited interim condensed consolidated financial statements, including the related notes thereto, contained within this Item 1 of this Quarterly Report. In addition to historical information, this discussion contains forward-looking statements that involve risks and uncertainties. You should read the sections of this Quarterly Report on Form 10-Q titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For purposes of this section, references to the “Company,” “Karman,” “we,” “us,” and “our” refer to TCFIII Spaceco Holdings and its other subsidiaries prior to the Corporate Conversion and to Karman Holdings Inc. or Karman Holdco and its consolidated subsidiaries for all periods following the Corporate Conversion. ### Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that are not historical facts including those that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements are included throughout this Quarterly Report on Form 10-Q and relate to matters such as our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, and other financial and operating information. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words or similar terms and phrases to identify forward-looking statements in this Quarterly Report on Form 10-Q. The forward-looking statements are based on management’s current expectations and are not guarantees of future performance. Our expectations and beliefs are expressed in management’s good faith, and we believe there is a reasonable basis for them, however, the forward-looking statements are subject to various known and unknown risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory, and other factors, many of which are beyond our control. We believe that these factors include but are not limited to the following: - we rely heavily on certain customers for a significant portion of our sales; - a significant deferment of orders by customers could have a material adverse effect on our business, results of operations, prospects, and financial condition; - the loss of our U.S. General Services Administration contracts or government-wide acquisition contracts could impair our ability to attract new business; - if we are unable to manage the increasing technological complexity of our business, or achieve or manage our expected growth, our business could be adversely affected; - we have in the past consummated acquisitions and intend to continue to pursue acquisitions, and our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms, or if we cannot effectively integrate acquired operations; - we depend on our executive officers, senior management team and highly trained employees and any work stoppage, difficulty hiring similar employees, or ineffective succession planning could adversely affect our business; - if critical components or raw materials used to manufacture our products or used in our development programs become scarce or unavailable, then we may incur delays in manufacturing and delivery of our products and in completing our development programs, which could damage our business; - our operations depend on our manufacturing facilities, which are subject to physical and other risks that could disrupt production; - our leases may be terminated or we may be unable to renew our leases on acceptable terms and if we wish to relocate, we may incur additional costs if we terminate a lease; - technology failures or cybersecurity breaches or other unauthorized access to or use of our information technology systems or sensitive or proprietary information could have a material adverse effect on the Company’s business and operations; - U.S. military spending is dependent upon the U.S. defense budget; - U.S. government contracts are subject to a competitive bidding process that can consume significant resources without generating any revenue; - we could incur substantial costs as a result of violations of or liabilities under environmental laws and regulations; 24 - we may be subject to periodic litigation and regulatory proceedings, which may materially adversely affect our business, results of operations, prospects and financial condition; - our failure to comply with applicable economic and trade sanctions could materially adversely affect our reputation and results of operations; - our business and operations expose us to numerous legal and regulatory requirements, and any violation of these requirements could materially adversely affect our business, results of operations, prospects and financial condition; - our inability to adequately enforce and protect our intellectual property or defend against assertions of infringement could prevent or restrict our ability to compete; - our indebtedness, which is subject to variable interest rates, could adversely affect our financial health and could harm our ability to react to changes to our business; - servicing our indebtedness requires a significant amount of cash. Our ability to generate cash depends on many factors, and any failure to meet our debt service obligations could materially adversely affect our business, results of operations, prospects and financial condition; - the increased expenses associated with being a public company; - our stock price may be volatile, and an investment in our common stock could suffer a decline in value; - the impact of escalating tariff and non-tariff trade measures imposed by the U.S. and other countries, any U.S. federal government shutdown, the COVID-19 pandemic, or a similar public health threat, or the ongoing conflicts and the potential for new or unforeseen conflicts, on global capital and financial markets, political events, general economic conditions in the United States, and our business and operations; - our ability to remediate the identified material weaknesses in our internal control over financial reporting; and - the other risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as amended, supplemented or superseded in our other reports filed with the Security and Exchange Commission (“SEC”), including under “Risk Factors” in Item 1A of our subsequent Quarterly Reports on Form 10-Q. ### Our Company We specialize in the rapid design, development and production of mission-critical, next-generation systems solutions that align with the U.S. Department of War’s core mission priorities and the nation’s accelerating demand for access to space. We deliver payload protection, propulsion and launch, and hydro/aerodynamic interstage systems to more than 150 prime contractors and programs. We estimate that no single program accounted for more than 11% of sales in the three and six months ended June 30, 2026 or in the three and six months ended June 30, 2025. ### Recent Developments On July 20, 2026, we entered into a definitive agreement to acquire Walker Precision Engineering (“Walker”), a Glasgow, Scotland-based manufacturer of precision engineered components and integrated manufacturing solutions supporting missile seekers, guidance systems and control systems, for aggregate consideration of approximately $94.0 million, subject to customary purchase price adjustments. The acquisition is intended to expand our manufacturing footprint into Europe and enhance our capabilities supporting European and allied defense programs through Walker’s complementary engineering and manufacturing capabilities. The transaction is expected to close during the third quarter of 2026, subject to the satisfaction of customary closing conditions, including required regulatory approvals. On August 3, 2026, we entered into a Fifth Amendment to our Credit Agreement with Citibank, which reduced (i) the applicable interest rate on our term loan by 50 basis points from SOFR plus 2.75% to SOFR plus 2.25% and (ii) the interest rate applicable to our revolving credit facility by 50 basis points for each level of our leverage-based pricing grid, the highest of such levels being set at SOFR plus 2.00%. No other material terms of the Credit Agreement were amended. ### Components of Operations ### Revenue We generate our revenue primarily from the design, development and deployment of systems and subsystems (Propulsion Systems, Aerodynamic Interstage Systems, and Payload Protection and Deployment Systems) across four end markets (Hypersonic and Strategic Missile Defense, Missile and Integrated Defense Systems, Space and Launch and Maritime Defense Systems). We do not believe our revenue is subject to significant seasonal variations. 25 ### Cost of Goods Sold Cost of goods sold consists of direct costs and allocated indirect costs. Direct costs include labor, materials, subcontracts and other costs directly related to the execution of a specific contract. Indirect costs include overhead expenses, fringe benefits and depreciation. ### General and Administrative Expenses Our general and administrative (“G&A”) expenses include salaries, fringe benefits (such as health insurance, retirement plans, vacation and sick days), and other expenses related to selling, marketing and proposal activities, certain administrative costs, operational overhead expenses, share-based compensation expenses and amortization of acquired intangible assets. Some G&A expenses relate to marketing and business development activities that support both ongoing business areas as well as new and emerging market areas. These activities can be directly associated with developing requirements for applications of capabilities created in our business development activities as well as managing human capital. G&A expenses are an important financial metric that we analyze to help us evaluate the contribution of our selling, marketing and proposal activities to revenue generation. ### Results of Operations ### Comparison of the Three and Six Months Ended June 30, 2026 and 2025 The following table sets forth, for the periods presented, certain operating data of the Company, including presentation of the changes in amounts between reporting periods: _(in thousands, except percent)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Change / Dollar | Change / Percent | | --- | --- | --- | --- | --- | | Revenue | $182,063 | $115,097 | $66,966 | 58.2% | | Cost of goods sold | 103,829 | 68,076 | 35,753 | 52.5% | | Gross profit | 78,234 | 47,021 | 31,213 | 66.4% | | General and administrative expenses | 31,339 | 19,430 | 11,909 | 61.3% | | Depreciation and amortization expense | 12,066 | 7,487 | 4,579 | 61.2% | | Total operating expenses | 43,405 | 26,917 | 16,488 | 61.3% | | Net operating income | 34,829 | 20,104 | 14,725 | 73.2% | | Interest expense, net | (15,284) | (11,893) | (3,391) | 28.5% | | Other income (expense) | (280) | 380 | (660) | (173.7%) | | Provision for income taxes | (5,233) | (1,784) | (3,449) | 193.3% | | Net income | 14,032 | 6,807 | 7,225 | 106.1% | | Net income margin | 7.7% | 5.9% | | | | Operating margin | 19.1% | 17.5% | | 1.7% | | Gross profit margin | 43.0% | 40.9% | | 2.1% | _(in thousands, except percent)_ | Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change / Dollar | Change / Percent | | --- | --- | --- | --- | --- | | Revenue | $333,273 | $215,221 | $118,052 | 54.9% | | Cost of goods sold | 191,174 | 128,749 | 62,425 | 48.5% | | Gross profit | 142,099 | 86,472 | 55,627 | 64.3% | | General and administrative expenses | 59,976 | 42,718 | 17,258 | 40.4% | | Depreciation and amortization expense | 25,842 | 13,687 | 12,155 | 88.8% | | Total operating expenses | 85,818 | 56,405 | 29,413 | 52.1% | | Net operating income | 56,281 | 30,067 | 26,214 | 87.2% | | Interest expense, net | (27,930) | (23,266) | (4,664) | 20.0% | | Other income (expense) | (454) | 300 | (754) | (251.3%) | | Provision for income taxes | (6,071) | (5,092) | (979) | 19.2% | | Net income | 21,826 | 2,009 | 19,817 | 986.4% | | Net income margin | 6.5% | 0.9% | | | | Operating margin | 16.9% | 14.0% | | 2.9% | | Gross profit margin | 42.6% | 40.2% | | 2.4% | 26 ### Revenue Revenue for the three months ended June 30, 2026 increased $67.0 million, or 58.2%, to $182.1 million, as compared to $115.1 million for the three months ended June 30, 2025. Revenue for the six months ended June 30, 2026 increased $118.1 million, or 54.9%, to $333.3 million, as compared to$215.2 million for the six months ended June 30, 2025. The increase in revenue for the three and six months ended June 30, 2026 as compared to the same period in the prior year, was primarily attributable to growth across all end-markets as additional detail below. The results of operations include the following disaggregation of revenue by end market: _(in thousands, except percent)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Change / Dollar | Change / Percent | | --- | --- | --- | --- | --- | | Hypersonics and Strategic Missile Defense | $43,417 | $34,960 | $8,457 | 24.2% | | Space and Launch | 42,072 | 39,597 | 2,475 | 6.3% | | Tactical Missiles and Integrated Defense Systems | 63,012 | 40,540 | 22,472 | 55.4% | | Maritime Defense Systems1 | 33,562 | — | 33,562 | * | | Total Revenue | $182,063 | $115,097 | $66,966 | 58.2% | _(in thousands, except percent)_ | Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change / Dollar | Change / Percent | | --- | --- | --- | --- | --- | | Hypersonics and Strategic Missile Defense | $79,105 | $65,016 | $14,089 | 21.7% | | Space and Launch | 85,926 | 73,468 | 12,458 | 17.0% | | Tactical Missiles and Integrated Defense Systems | 108,272 | 76,737 | 31,535 | 41.1% | | Maritime Defense Systems1 | 59,970 | — | 59,970 | * | | Total Revenue | $333,273 | $215,221 | $118,052 | 54.9% | 1. Revenue in Maritime Defense Systems for the three and six months ended June 30, 2025 was previously included within other end markets. * Not a meaningful figure. Growth in Hypersonics and Strategic Missile Defense revenue for the three and six months ended June 30, 2026 from the comparable period in the prior year, was primarily driven by growth in key interceptor program production and increased production associated with a new surface-to-surface missile system. Growth in Space and Launch revenue for the three and six months ended June 30, 2026 from the comparable periods in the prior year, was primarily driven by content supporting both legacy and emerging launch providers, partially offset by customer order timing associated with shifting launch schedules. Growth in Tactical Missiles and Integrated Defense Systems for the three and six months ended June 30, 2026 from the comparable period in the prior year, was primarily driven by strength in core production programs, including unmanned aircraft systems and counter-UAS, and emerging programs transitioning to production. Growth in Maritime Defense Systems for the three and six months ended June 30, 2026 from the comparable period in the prior year was primarily driven by legacy and next generation submarine programs.. ### Cost of Goods Sold and Gross Profit Cost of goods sold increased by $35.8 million or 52.5%, and $62.4 million, or 48.5%, for the three and six months ended June 30, 2026 and 2025, from the comparable period in the prior year. The increase was primarily driven by increased spending on materials and labor to support production growth. 27 _(in thousands, except percent)_ | Line item | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Change / Dollar | Change / Percent | | --- | --- | --- | --- | --- | | Labor | $40,889 | $28,463 | $12,426 | 43.7% | | Materials | 52,269 | 31,741 | 20,528 | 64.7% | | Overhead | 7,561 | 5,052 | 2,509 | 49.7% | | Depreciation | 3,110 | 2,820 | 290 | 10.3% | | Total cost of goods sold | $103,829 | $68,076 | $35,753 | 52.5% | _(in thousands, except percent)_ | Line item | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change / Dollar | Change / Percent | | --- | --- | --- | --- | --- | | Labor | $80,322 | $56,140 | $24,182 | 43.1% | | Materials | 91,727 | 57,977 | 33,750 | 58.2% | | Overhead | 13,159 | 9,143 | 4,016 | 43.9% | | Depreciation | 5,966 | 5,489 | 477 | 8.7% | | Total cost of goods sold | $191,174 | $128,749 | $62,425 | 48.5% | Gross margin increased by 2.1% and 2.4% for the three and six months ended June 30, 2026 and 2025 from the comparative period of the prior year. The increase was primarily driven by operating leverage and improved operating efficiency. ### Operating Expenses ### General and Administrative Expenses General and administrative expenses increased by $11.9 million, or 61.3% for the three months ended June 30, 2026 from the comparable period of the prior year, was primarily driven by higher employee compensation of approximately $7.5 million due to acquisitions and workforce expansion, as well as higher operating costs incurred to support continued growth of our business. General and administrative expenses increased by $17.3 million, or 40.4%, for the six months ended June 30, 2026 from the comparative period of the prior year. The increase was primarily driven by an increase in payroll of approximately $12.0 million and increased professional fees primarily related to transaction expenses and integration efforts. The increase was partially offset by the decrease of approximately $6.6 million in share-based compensation expenses resulting from P units and Phantom Units that fully vested in connection with the completion of the Company’s IPO in February 2025. ### Depreciation and Amortization Depreciation and amortization expense increased by $4.6 million, or 61.2%, and $12.2 million, or 88.8%, for the three and six months ended June 30, 2026, respectively, as compared to the corresponding periods of the prior year. The increase was primarily due to amortization of intangible assets acquired in the Seemann Acquisition, completed in the first quarter of 2026, and incremental depreciation and amortization on intangible assets and fixed assets acquired in the second quarter of 2025, which resulted in a full quarter and two full quarters of additional expenses in the three months and six months ended June 30, 2026, respectively. ### Interest Expense, net Interest expense, net increased by $3.4 million, or 28.5%, and $4.7 million, or 20.0%, for the three and six months ended June 30, 2026 from the comparative period of the prior year, which was primarily driven by higher principal balance, partially offset by lower interest rate. For additional information related to debt, see Note 7, Debt, in the Notes to the conndensed consolidated financial statements. ### Other (Income) Expense Other (income) expense for each of the three and six months ended June 30, 2026 and 2025 was immaterial. 28 ### Provision for Income Taxes The provision for income taxes was $5.2 million and $1.8 million for the three months ended June 30, 2026 and 2025, respectively. The effective tax rate was 27.2% and 20.8% for the three months ended June 30, 2026 and 2025, respectively. The increase in effective tax rate was attributed to non-deductible executive compensation under Section 162(m) of the Internal Revenue Code, while the prior-year effective rate benefited from a change in the blended state tax rate related to the MTI and ISP acquisitions, which resulted in a remeasurement of deferred taxes. The provision for income taxes was $6.1 million and $5.1 million for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate was 21.8% and 71.7% for the six months ended June 30, 2026 and 2025, respectively. The higher effective tax rate in the prior-year period was attributable to discrete items, including the change in entity classification, non-deductible executive compensation, and interest and penalties related to prior year tax returns and uncertain tax positions. ### Key Financial and Non-GAAP Operating Measures We measure our business using both key financial and operating data including key performance indicators (“KPIs”) and non-GAAP financial measures and use the following metrics to manage our business, monitor results of operations and ensure proper allocation of capital: (i) Revenue, (ii) Backlog, (iii) EBITDA, (iv) Adjusted EBITDA and (v) Adjusted EBITDA Margin. We believe that these financial performance metrics represent the primary drivers of value enhancement, balancing both short and long-term indicators of increased shareholder value. These are the metrics we use to measure our results and evaluate our business and related contract performance. ### Financial and Operating Data | (unaudited, in thousands, except percent) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Revenue | $182,063 | $115,097 | $333,273 | $215,221 | | Backlog1 | $1,322,124 | $719,300 | $1,322,124 | $719,300 | | Net income | $14,032 | $6,807 | $21,826 | $2,009 | | EBITDA2 | $49,725 | $30,791 | $87,635 | $49,543 | | Adjusted EBITDA2 | $54,580 | $35,281 | $99,366 | $65,600 | | Net income margin | 7.7% | 5.9% | 6.5% | 0.9% | | Adjusted EBITDA Margin2 | 30.0% | 30.7% | 29.8% | 30.5% | 1. Backlog - Represents the total value or current estimated value of existing contracts, less amounts previously invoiced. Contract types include but are not limited to purchase orders, long term agreements and contractual authorization to proceed. (Backlog was previously referred to as funded backlog. No changes were made to the historical dollar amounts presented in the table above.) 2. Note on non-GAAP financial measures: Throughout the discussion of our results of operations we use non-GAAP financial measures including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, as measures of our overall performance. Definitions and reconciliations of these measures to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP are included below. ### Non-GAAP Financial Measures We believe the non-GAAP financial measures will help investors understand our financial condition and operating results and assess our future prospects. We believe these non-GAAP financial measures, each of which is discussed in greater detail below, are important supplemental measures because they exclude unusual or non-recurring items as well as non-cash items that are unrelated to or may not be indicative of our ongoing operating results. Further, when read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as a tool to help make financial, operational and planning decisions. We may use non-GAAP financial metrics in certain Management compensation plans, debt covenants, internal budgetary decision making, and other resource allocation decisions. These measures are often used by analysts and other interested parties to evaluate companies in our industry by providing more comparable measures that are less affected by factors such as capital structure. We recognize that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from 29 company to company. In order to compensate for these and the other limitations discussed below, management does not, and readers should not, consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business. We define these non-GAAP financial measures as follows: EBITDA refers to net income before income taxes, depreciation and amortization and interest expense. Adjusted EBITDA refers to EBITDA plus, as applicable for each period, adjustments for certain items management believes are not indicative of ongoing operations. Adjusted EBITDA excludes non-cash share-based compensation expenses. Additionally, Adjusted EBITDA excludes certain nonrecurring costs that management excludes in contemplation of budget decisions and are not costs of operating the business, such as entity wide re-branding initiatives or acquisition integration costs, and lender and administrative agent fees associated with discrete amendments. Lastly, Adjusted EBITDA excludes other non-recurring costs including gains or losses from disposition of assets, non-cash impairment losses, non-recurring transaction expenses and other charges or gains that the Company believes are not part of the ongoing operations of its business. The resulting expense or benefit from these other non-recurring costs is inconsistent in amount and frequency. Adjusted EBITDA Margin - Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue. Adjusted EBITDA and Adjusted EBITDA Margin are not measures calculated in accordance with U.S. GAAP, and they should not be considered an alternative to any financial measures that were calculated under U.S. GAAP. Adjusted EBITDA and Adjusted EBITDA Margin are used to facilitate a comparison of the ordinary, ongoing and customary course of our operations on a consistent basis from period to period and provide an additional understanding of factors and trends affecting our business. Adjusted EBITDA and Adjusted EBITDA Margin are driven by changes in volume, performance, contract mix and general and administrative expenses and investment levels. Performance, as used in this definition, refers to changes in profitability and is primarily based on adjustments to estimates at completion on individual contracts. These adjustments result from increases or decreases to the estimated value of the contract, the estimated costs to complete the contract, or both. These measures therefore assist management and our board and may be useful to investors in comparing our operating performance consistently over time as they remove the impact of our capital structure, asset base and items outside the control of the management team and expenses that do not relate to our core operations. Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly titled non-GAAP measures used by other companies as other companies may have calculated the measures differently. Adjusted EPS represents GAAP net income per fully diluted share, excluding transaction related expenses, integration expenses and non-recurring costs, lender and administrative agent fees and share-based compensation as they are not representative of our operating performance. The reconciliation of GAAP to non-GAAP financial measures is provided below. 30 Reconciliation of GAAP to Non-GAAP Financial Measures: | (unaudited, in thousands, except percent) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | Net income | $14,032 | $6,807 | $21,826 | $2,009 | | Income tax provision | 5,233 | 1,784 | 6,071 | 5,092 | | Depreciation and amortization1 | 15,176 | 10,307 | 31,808 | 19,176 | | Interest expense, net | 15,284 | 11,893 | 27,930 | 23,266 | | EBITDA | 49,725 | 30,791 | 87,635 | 49,543 | | Transaction related expenses2 | 1,392 | 3,904 | 3,655 | 5,866 | | Integration expenses and non-recurring restructuring costs3 | 1,940 | 380 | 3,350 | 641 | | Lender and administrative agent fees4 | 45 | 206 | 780 | 1,466 | | Share-based Compensation5 | 1,444 | — | 1,444 | 8,084 | | Other non-recurring costs6 | 34 | — | 2,502 | — | | Adjusted EBITDA | $54,580 | $35,281 | $99,366 | $65,600 | | Revenue | $182,063 | $115,097 | $333,273 | $215,221 | | Net income margin | 7.7% | 5.9% | 6.5% | 0.9% | | Adjusted EBITDA Margin | 30.0% | 30.7% | 29.8% | 30.5% | | (unaudited) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | | --- | --- | --- | --- | --- | | GAAP net income per share | $0.11 | $0.05 | $0.16 | $0.02 | | Transaction-related expenses2 | 0.01 | 0.03 | 0.03 | 0.04 | | Integration expenses and non-recurring restructuring costs3 | 0.01 | — | 0.03 | — | | Lender and administrative agent fees4 | 0.00 | — | 0.01 | 0.01 | | Share-based compensation5 | 0.01 | — | 0.01 | 0.06 | | Other non-recurring costs6 | 0.00 | 0.02 | 0.02 | 0.02 | | Adjusted EPS7 | $0.14 | $0.10 | $0.25 | $0.16 | 1. Includes depreciation of property, plant and equipment, amortization of intangible assets and right-of-use assets. Depreciation expense includes allocated depreciation from cost of goods sold of $3.1 million and $2.8 million for the three months ended June 30, 2026 and 2025, respectively, and $6.0 million and $5.5 million for the six months ended June 30, 2026 and 2025, respectively. 2. Represents legal and due diligence fees incurred in connection with planned and completed acquisitions, which are required to be expensed as incurred. For the three and six months ended June 30, 2026, these expenses are primarily related to the Seemann acquisition. For the three and six months ended June 30, 2025, these expenses are primarily related to the MTI and ISP acquisitions. Additionally, the Company incurred certain professional service fees related to its IPO that did not meet the requirements to be deferred issuance costs. These costs are considered non-recurring and outside the ordinary course of business, and therefore are not indicative of ongoing operating performance, which was reflected in the six months ended June 30, 2025. 3. Includes company-wide system implementation expenses company re-branding costs and compliance efforts. This category also includes post-acquisition integration costs, and employee expenses related to acquisitions or restructuring activities. 4. Reflects non-recurring lender fees associated with discrete amendments to the Company’s credit agreement, separate from ongoing administrative fees. 5. Reflects share-based compensation expenses. For the three and six months ended June 30, 2026, these expenses related to the Company’s RSUs and PSUs. For the six months ended June 30, 2025, these expenses related to the Company’s P Units and Phantom Units. These Units were fully vested in connection with the completion of the Company’s IPO in February 2025. 6. Represents items management believes are not indicative of ongoing operating performance, including estimated legal settlements and related professional fees, as well as professional fees associated with other non-recurring events. Other non-recurring costs for the three and six months ended June 30, 2025 represent the write-off of unamortized debt issuance costs associated with our previous refinanced term loan. 7. Total may not sum due to rounding. 31 Although we use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS as measures to assess the performance of our business and for the other purposes set forth above, the use of non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are: - EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin do not reflect the significant interest expense, or the cash requirements, necessary to service interest payments on our indebtedness; - although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and the cash requirements for such replacements are not reflected in EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin; - EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS exclude the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions; - the omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin; and - EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin do not include the payment of taxes, which is a necessary element of our operations. Because of these limitations, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS should not be considered as measures of cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS in isolation and specifically by using other U.S. GAAP measures, such as net sales and operating profit, to measure our operating performance. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS are not measurements of financial performance under U.S. GAAP, and they should not be considered as alternatives to net income/(loss) or cash flow from operations determined in accordance with U.S. GAAP. Our calculations of EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS may not be comparable to the calculations of similarly titled measures reported by other companies. ### Critical Accounting Estimates We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements presented in the Annual Report on Form 10-K for the year ended December 31, 2025. We discuss our critical accounting estimates in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in the Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes in our significant accounting policies or critical accounting estimates since the end of fiscal 2025. ### Liquidity and Capital Resources Our principal historical liquidity requirements have been for organic growth, acquisitions, capital expenditures, servicing indebtedness, including finance lease liability payments, and working capital needs. We do not expect there to be substantial changes in our future capital requirements. We anticipate that over the next 12 months, we will meet our liquidity needs, including debt servicing, through cash generated from operations, available cash balances, and, if necessary, sales of accounts receivable and borrowings from our revolving credit facility. We fund our investing activities primarily from cash provided by our operating and financing activities. We believe that our cash and cash equivalents as of June 30, 2026, together with available borrowings under the Citibank Credit Agreement and expected net cash provided by operating activities will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to grow our business, including by any acquisitions we may make, we may in the future require additional working capital. 32 ### Summary of Statement of Cash Flows The following table summarizes the primary sources and uses of our cash flow: _(in thousands)_ | Line item | For the six months ended June 30, 2026 | For the six months ended June 30, 2025 | | --- | --- | --- | | Net cash provided by (used in): | | | | Operating activities | $(2,975) | $(30,955) | | Investing activities | (231,478) | (140,948) | | Financing activities | 252,235 | 187,811 | | Net increase in cash and cash equivalents | $17,782 | $15,908 | ### Operating Activities Net cash used in operating activities for the six months ended June 30, 2026 was $3.0 million , primarily consisting of net income of $21.8 million, non-cash item of $32.7 million and a net change in our operating assets and liabilities of $57.5 million. Change in our operating assets and liabilities was primarily driven by an increase in contract assets of $24.9 million, a decrease in contract liabilities of $0.3 million, which was mainly due to initial and subsequent measurement of contracts with customers, changes in business volume, and progress of existing contracts. Change in our operating assets and liabilities was also driven by an increase in accounts receivable of $25.5 million , partially offset by a decrease in accounts payable, accruals and income tax payable of $0.8 million, which was mainly driven by timing of other payments. Net cash used in operating activities for the six months ended June 30, 2025 was $31.0 million, primarily consisting of net income of $2.0 million, non-cash items of $23.3 million and a net change in our operating assets and liabilities of $56.3 million. Change in our operating assets and liabilities was primarily driven by an increase in contract assets of $26.4 million, a decrease in contract liabilities of $10.1 million, which was mainly due to initial and subsequent measurement of contracts with customers, changes in business volume, and progress of existing contracts. Change in our operating assets and liabilities was also driven by a decrease in accounts payable, accruals and income tax payable of $18.9 million, which was mainly due to timing of payments. ### Investing Activities Net cash used in investing activities for the six months ended June 30, 2026 was $231.5 million, which was primarily driven by the Seemann Acquisition of $210.0 million and purchase of property and equipment. Net cash used in investing activities for the six months ended June 30, 2025 was $140.9 million, as a result of MTI and ISP acquisitions of $126.3 million in total and investment in convertible note of $6.0 million. ### Financing Activities Net cash provided by financing activities for the six months ended June 30, 2026 was $252.2 million, which was primarily driven by proceeds from our term note of $260.1 million (net of payment of debt issuance costs), partially offset by repayment of our Citibank credit facilities of $3.9 million. Net cash provided by financing activities for the six months ended June 30, 2025 was $187.8 million, which was primarily driven by net proceeds from our IPO of $153.8 million, proceeds from our new Citibank credit facilities of $398.5 million (net of debt issuance costs), partially offset by repayment of our old TCW credit facilities of $337.1 million. ### Other Obligations and Commitments See Note 7 through Note 9, of the Notes to the condensed consolidated financial statements for information regarding our other obligations and commitments. ### Leases See Note 8, Leases, of the Notes to the condensed consolidated financial statements for information pertaining to lease payments relating to our operating and finance lease obligations. 33 ### Off-Balance Sheet Arrangements As of June 30, 2026 and 2025, we did not have any off-balance sheet arrangements, as defined in Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, results of operations, or cash flows. ### Recent Accounting Pronouncements See Note 2, Summary of Accounting Policies and Recent Accounting Pronouncements, of the Notes to the condensed consolidated financial statements for additional information. ### JOBS Act Election We are currently an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. ## Item 3. Quantitative and Qualitative Disclosures About Market Risk. ### Interest Rate Risk Our primary exposure to interest rate risk results from outstanding borrowings under the revolving credit facility and term note under the Citibank Credit Facility, both of which have a floating interest rate component. We estimate that a 1% increase in interest rates for the three and six months ended June 30, 2026 and 2025 would have resulted in approximately a $6.8 million and $0.8 million increase in interest expense, respectively. We had cash of $51.7 million and $34.0 million as of June 30, 2026 and December 31, 2025, respectively, which is held for working capital and general corporate purposes. We do not have a significant amount of cash equivalents or restricted cash and we do not enter into investments for trading or speculative purposes. Our cash holdings in interest bearing accounts are exposed to market risk due to fluctuations in interest rates, which may affect our interest income. We will continue to monitor market risk due to fluctuations in interest rates and potential impacts to the fair value of our holdings and operating cash flows. ### Inflation Risk We have generally experienced increases in our costs of labor, materials and services consistent with overall rates of inflation, but we do not believe that inflation has had a material effect on our business, results of operations, or financial condition. We expect the impact of such increases will be mitigated by efforts to lower costs through manufacturing efficiencies, look for alternative sourcing and reevaluate pricing, as we did in the prior periods. However, continued cost inflation and supply chain disruptions during 2026 may continue to require similar efforts to mitigate the impact of continued cost inflation and supply chain disruptions on our results of operations. Our inability or failure to offset cost increases could adversely affect our business, results of operations, or financial condition. ## Item 4. Controls and Procedures ### Limitations on Effectiveness of Controls and Procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. ### Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed by us in our Exchange Act reports is recorded, 34 processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of June 30, 2026, the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026 due to the material weaknesses in our internal control over financial reporting described below. ### Material Weaknesses in Internal Control over Financial Reporting We identified material weaknesses in our internal control over financial reporting. The following entity-level material weaknesses existed as of December 31, 2025: - We did not fully maintain components of the COSO framework, including elements of the control environment, risk assessment, control activities, information and communication, and monitoring activities. Specifically, deficiencies existed relating to (i) the sufficiency of resources with an appropriate degree of accounting, reporting and control knowledge, experience, and training commensurate with our financial reporting requirements, (ii) the sufficiency of processes for identifying and analyzing risks to the achievement of objectives, including technology-related risks, across the entity; (iii) the development of general control activities over technology to support the achievement of objectives across the entity; (iv) the sufficiency of selecting and developing control activities that mitigate risks to the achievement of objectives to acceptable levels; (v) the sufficiency of monitoring activities to ascertain whether the components of internal control were present and functioning. The entity-level material weaknesses contributed to the following additional material weaknesses within our system of internal control over financial reporting: - We did not design and maintain effective process-level controls for all significant business process cycles. These material weaknesses resulted in material adjustments related to share-based compensation as of and for the year ended December 31, 2023, and immaterial adjustments as of and for the year ended December 31, 2025, and in the interim period ended June 30, 2026. - We did not design and maintain effective information technology general controls for information systems supporting our key financial reporting processes. Specifically, we did not design and maintain sufficient controls over change management, logical access, IT operations, and system development for management-identified in-scope on-premise and vendor-supported applications. This material weakness did not result in any adjustments to the consolidated financial statements. Additionally, each of the material weaknesses described above could result in a misstatement of one or more account balances or disclosures that would result in a material misstatement to the interim or annual consolidated financial statements that would not be prevented or detected. ### Remediation Plan We are committed to strengthening our control environment and addressing the identified material weaknesses. We continue to execute our remediation plan and have made meaningful progress across multiple remediation workstreams. Certain remediation activities, including the design and implementation of Information Technology General Controls (ITGCs), have been completed. The remaining initiatives, primarily related to certain entity-level and business process controls, have substantially completed the design phase and are currently progressing through implementation, with controls primarily operating on quarterly and annual cycles advancing through their respective operating periods. Remediation efforts remain on track, and we continue to make progress toward remediating the material weaknesses. While meaningful progress has been made, the remediation plan must be fully implemented and tested before its operating effectiveness can be confirmed. During this period, we continue to monitor our internal control environment and address any emerging control considerations. Our objective is to enhance the accuracy and timeliness of our financial reporting and to meet all applicable regulatory requirements. We are prioritizing these efforts and allocating appropriate resources to support timely execution. Although the remediation process requires significant time and investment, we remain focused on achieving sustainable improvements that reinforce confidence in our financial reporting. We are continuing to execute the following measures designed to improve our internal control over financial reporting and during the quarter ended June 30, 2026: 35 - Implemented our formal risk assessment process and continued to enhance processes and controls to support an effective control environment, including further progress in the remediation of identified entity-level controls. - Completed the design and implementation of our information technology general control framework, including controls over change management, logical access, IT operations, and system development for in-scope applications. - Substantially completed the design of process-level controls across our significant business processes and continued implementing those controls. We continue to enhance control documentation, management review controls, evidence retention, and monitoring activities with the assistance of external consultants with subject matter expertise. - Further clarified and formalized roles and responsibilities throughout the organization to support accountability and accelerate remediation efforts. - Continued to provide training and development to existing personnel to enhance their knowledge of internal controls, accounting principles, financial reporting, and internal control requirements. - Continued to engage a leading advisory firm with extensive public company experience to assist in the design, documentation, implementation, and evaluation of our internal controls in response to the identified material weaknesses. - Continued to strengthen our accounting and internal audit organization with appropriate knowledge and expertise in internal control over financial reporting and SEC financial reporting requirements. As we continue to evaluate and enhance our internal control over financial reporting, we may take additional measures to address the identified material weaknesses or adjust the remediation steps described above. While we believe these actions have strengthened our internal control environment, the material weaknesses will not be considered remediated until the applicable controls have operated for a sufficient period and management has concluded, through testing, that they are designed and operating effectively. ### Changes in Internal Control Over Financial Reporting As described in the “Remediation plan” section above, there were changes in our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 36 Karman Holdings Inc. PART II: OTHER INFORMATION ## Item 1. Legal Proceedings We are subject to various claims and legal actions that arise in the ordinary course of our business, including claims resulting from employment-related matters. We do not believe that the ultimate resolution of any existing claim would have a material effect on our business, financial condition, results of operations or cash flows. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims could materially and adversely affect our business, financial condition, results of operations, or cash flows. ## ITEM 1A. RISK FACTORS We have described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 risks and uncertainties that could cause our actual results of operations and financial condition to vary materially from past, or from anticipated future, results of operations and financial condition. These risks and uncertainties are not the only risks facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also adversely affect our business, financial condition, results of operations or the market price of our common stock. There have been no material changes to the risk factors previously described in our 2025 Annual Report on Form 10-K. ## ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the three and six months ended June 30, 2026. ## ITEM 3. Defaults Upon Senior Securities None. ## Item 4. Mine Safety Disclosures Not applicable. ## Item 5. Other Information During the quarter ended June 30, 2026, none of our directors or executive officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Rule 408 of Regulation S-K. 37 ## ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES ### (a) The following documents are filed as part of this report: (1) Financial Statement Schedules: All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the condensed consolidated financial statements or the notes thereto. ### (b) Exhibits The following documents are included as exhibits to this report. | Exhibit No. | Title of Document | | --- | --- | | 2.1 | Plan of Conversion of TCFIII Spaceco Holdings LLC (d/b/a Karman Space and Defense, LLC) (Incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on February 10, 2025) | | 3.1 | Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on February 10, 2025) | | 3.2 | Bylaws (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on February 10, 2025) | | 4.1 | Stockholder Rights Agreement among Karman Holdings Inc. and certain investors (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed with the SEC on February 19, 2025) | | 4.2 | Registration Rights Agreement among Karman Holdings Inc. and certain investors (Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed with the SEC on February 19, 2025) | | 10.1+ | Karman Holdings, Inc. 2025 Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed with the SEC on February 13, 2025) | | 10.2 | Credit Agreement, dated as of April 1, 2025, by and among Karman, the lenders from time to time party thereto and Citibank, N.A., as the administrative agent for the lenders (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on April 7, 2025) | | 10.3 | First Amendment to Credit Agreement, dated as of May 27, 2025, by and among the Company, Citibank, N.A. and the parties thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on June 2, 2025) | | 10.4 | Second Amendment to Credit Agreement, dated as of October 24, 2025, by and among the Company, CitiBank, N.A. and the parties thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on October 30, 2025) | | 10.5 | Third Amendment to Credit Agreement, dated as of February 2, 2026, by and among the Company, Citibank, N.A., and the parties thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on February 6, 2026) | | 10.6 | Fourth Amendment to Credit Agreement, dated as of March 9, 2026, by and among the Company, Citibank, N.A. and the parties thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on March 13, 2026) | | 10.7 | Employment Agreement, dated March 6, 2026, by and between Karman Space & Defense, LLC and Jonathan P. Rambeau (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on March 12, 2026) | | 10.8 | Restrictive Covenant Agreement, dated March 6, 2026, by and between Karman Space & Defense, LLC and Jonathan P. Rambeau (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on March 12, 2026) | | 10.9 | Indemnification Agreement, dated March 6, 2026, by and between Karman Holdings Inc. and Jonathan P. Rambeau (Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on March 12, 2026) | | 10.10 | Fifth Amendment to Credit Agreement, dated as of August 3, 2026, by and among the Company, Citibank, N.A., and the parties thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on August 6, 2026) | | 31.1* | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2* | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1* | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | | 32.2* | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 | | 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | | 101.SCH* | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents | | 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) | 38 * Filed herewith. + Management contract or compensatory plan or arrangement. 39 SIGNATURES Pursuant to the requirements the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized. KARMAN HOLDINGS INC. By: /s/ Mike Willis Mike Willis Date: August 10, 2026 Chief Financial Officer (Principal Financial and Principal Accounting Officer) Date: August 10, 2026 By: /s/ Jon Rambeau Jon Rambeau Chief Executive Officer (Principal Executive Officer) 40 --- ## EX-31.1 SEC source: [krmn-ex31_1.htm](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex31_1.htm) EXHIBIT 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Jon Rambeau, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Karman Holdings Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. /s/ Jon Rambeau Jon Rambeau Chief Executive Officer (Principal Executive Officer) Date: August 10, 2026 --- ## EX-31.2 SEC source: [krmn-ex31_2.htm](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex31_2.htm) EXHIBIT 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Mike Willis, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Karman Holdings Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. /s/ Mike Willis Mike Willis Chief Financial Officer (Principal Financial and Accounting Officer) Date: August 10, 2026 --- ## EX-32.1 SEC source: [krmn-ex32_1.htm](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex32_1.htm) EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Karman Holdings Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Jon Rambeau, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Jon Rambeau Jon Rambeau Chief Executive Officer (Principal Executive Officer) Dated: August 10, 2026 --- ## EX-32.2 SEC source: [krmn-ex32_2.htm](https://www.sec.gov/Archives/edgar/data/2040127/000204012726000024/krmn-ex32_2.htm) Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Karman Holdings Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Mike Willis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Mike Willis Mike Willis Chief Financial Officer (Principal Financial and Accounting Officer) Dated: August 10, 2026