- Production Order for Pods and Air Management System valued at up to $42.3 Million – EDGEWOOD, N.Y., Nov. 20, 2025 (GLOBE NEWSWIRE) -- CPI Aerostructures, Inc. (“CPI Aero®” or the “Company”) (NYSE American: CVU) announced today that Raytheon, an RTX business, authorized CPI Aero to begin manufacturing of Pods and Air Management System (AMS) for the follow-on Lot 5 Production phase of the Next Generation Jammer Mid-Band (NGJ-MB) program. Initial funding is set at $21.1 million with a not-to-exceed of $42.3 ...

Revenue Performance - Third quarter 2025 revenue was $19.3 million, slightly down from $19.4 million in Q3 2024, while nine-month revenue decreased to $49.8 million from $59.3 million[8]. - Net income for Q3 2025 increased by 49% to $1.1 million compared to $0.7 million in Q3 2024, while the nine-month period showed a net loss of $1.5 million compared to a net income of $2.3 million in the same period last year[4][8]. - The company reported a basic earnings per share of $0.09 for Q3 2025, compared to $0.06 in Q3 2024, while the nine-month period showed a loss per share of $(0.12) compared to earnings of $0.19[8][16]. Profitability Metrics - Gross profit for Q3 2025 was $4.3 million, with a gross margin of 22.3%, up from 21.7% in Q3 2024; however, nine-month gross profit fell to $6.6 million, with a gross margin of 13.3%[8]. - Adjusted EBITDA for Q3 2025 was $1.9 million, a 17% increase from $1.7 million in Q3 2024; however, nine-month adjusted EBITDA was $(0.6) million, significantly down from $5.5 million[4][8]. - The termination of the Boeing A-10 Program significantly impacted financial results, with a nine-month adjusted EBITDA of $3.9 million when excluding this impact[8][22]. Financial Position - Total debt as of September 30, 2025, decreased to $15.9 million from $18.2 million a year earlier, achieving a Debt-to-Adjusted EBITDA ratio of 2.6[5][8]. - Cash and cash equivalents decreased to $546,591 from $5.49 million as of September 30, 2024[14]. - Accounts receivable increased to $6.4 million from $3.7 million year-over-year, indicating improved collection efforts[14]. Business Developments - The company secured a new contract from Raytheon to manufacture structural missile wing assemblies, contributing to a backlog of $509 million as of September 30, 2025[6].

Core Insights - CPI Aerostructures, Inc. reported stronger performance in Q3 2025 compared to Q3 2024, with a 60 basis points increase in gross profit margin and a 49% increase in net income [4] - The company achieved an adjusted EBITDA of $1.9 million, which is 17% higher than the same period last year [4] - The nine-month results were impacted by the termination of the Boeing A-10 Program, affecting overall revenue and profitability [4] Financial Performance - For Q3 2025, revenue was $19.3 million, slightly down from $19.4 million in Q3 2024 [9] - Gross profit for Q3 2025 was $4.3 million, compared to $4.2 million in Q3 2024, resulting in a gross margin of 22.3% versus 21.7% [9] - Net income for Q3 2025 was $1.1 million, up from $0.7 million in Q3 2024, with earnings per share increasing to $0.09 from $0.06 [9] - For the nine months ended September 30, 2025, revenue was $49.8 million, down from $59.3 million in the same period of 2024 [9] - The nine-month gross profit was $6.6 million, significantly lower than $12.9 million in 2024, leading to a gross margin of 13.3% [9] Balance Sheet and Debt Management - The company reduced its total debt to an all-time low of $15.9 million as of September 30, 2025, down from $18.2 million a year earlier [5][9] - The Debt-to-Adjusted EBITDA Ratio stood at 2.6, excluding the impact of the A-10 Program termination [5] Strategic Developments - CPI Aero received a significant award from Raytheon to manufacture structural missile wing assemblies, which will start deliveries in 2026, contributing to a backlog of $509 million as of September 30, 2025 [6] - This award reflects the company's ongoing success in securing new development programs and the confidence placed in it by leading aerospace and defense firms [6] Company Overview - CPI Aerostructures is a prime contractor to the U.S. Department of Defense and a Tier 1 subcontractor to major aerospace and defense contractors, providing a range of services including engineering and program management [7]

Revenue Performance - Revenue for the three months ended September 30, 2025, was $19,269,102, a decrease of 0.77% compared to $19,419,879 for the same period in 2024[8] - For the three months ended September 30, 2025, total revenue was $19,269,102, a decrease of 0.8% compared to $19,419,879 for the same period in 2024[20] - For the nine months ended September 30, 2025, total revenue was $49,848,818, down 15.9% from $59,311,356 in 2024[20] - For the nine months ended September 30, 2025, revenue was $49,848,818, down 16% from $59,311,356 in 2024[8] Profitability - Gross profit for the nine months ended September 30, 2025, was $6,619,171, down 48.6% from $12,888,842 in 2024[8] - Gross profit for the three months ended September 30, 2025, was $4,306,314, compared to $4,219,669 in 2024, reflecting a slight increase[8] - The net loss for the nine months ended September 30, 2025, was $(1,535,191), compared to a net income of $2,327,861 for the same period in 2024[10] - The Company’s income (loss) from operations for the three months ended September 30, 2025, was $1,754,959, compared to $1,477,633 in 2024[8] Cash Flow and Liquidity - Cash at the end of the period on September 30, 2025, was $546,591, a decrease from $1,708,987 at the end of September 30, 2024[10] - The company experienced a decrease in cash, with a net decrease of $4,944,372 for the nine months ended September 30, 2025, compared to a decrease of $3,385,807 in 2024[10] - Operating cash flow for the nine months ended September 30, 2025, was $(3,105,825), compared to $(837,077) for the same period in 2024[10] Shareholders' Equity - Total shareholders' equity as of September 30, 2025, was $24,989,069, compared to $24,939,360 as of September 30, 2024[9] - The balance of shareholders' equity as of September 30, 2025, was $24,989,069, a decrease from $25,933,242 at the beginning of the year[9] Stock-Based Compensation - Stock-based compensation expense for the nine months ended September 30, 2025, was $591,018, compared to $529,771 in 2024[10] - Stock-based compensation for the nine months ended September 30, 2025, was $591,018, an increase from $529,771 in the same period of 2024[10] - Stock-based compensation expense for the three months ended September 30, 2025, was $102,206, compared to $72,713 in the same period of 2024, reflecting an increase of approximately 40.4%[32] Debt and Credit Facilities - As of September 30, 2025, the Company had $15,890,000 outstanding under the Revolving Credit Loans, with a maturity date extended to November 30, 2026[52] - The Company was not in compliance with the Credit Agreement's financial covenants as of June 30, 2025, and obtained waivers from lenders[45] - The Company entered into a Sixteenth Amendment to its Credit Agreement on November 13, 2025, extending the maturity of the revolving credit facility to November 30, 2026[71] Customer Concentration - The Company’s four largest customers accounted for 37%, 19%, 13%, and 13% of revenue for the nine months ended September 30, 2025[54] - The Company’s three largest customers accounted for 46%, 13%, and 12% of revenue for the three months ended September 30, 2025[54] Taxation - The effective income tax rate for the nine months ended September 30, 2025, was 40.5%, primarily due to estimated R&D credits and state income taxes[61] - The Company recognized a provision for income tax of $(1,043,373) for the nine months ended September 30, 2025, compared to a provision of $535,634 in 2024[60] Contracts and Obligations - As of September 30, 2025, the aggregate amount of transaction price allocated to remaining performance obligations was approximately $100.1 million[25] - Contract assets as of September 30, 2025, were $33,695,994, compared to $32,832,290 as of December 31, 2024[27] - Contract liabilities as of September 30, 2025, were $1,992,910, down from $2,430,663 as of December 31, 2024[27] Inventory and Accounts Receivable - Total inventory as of September 30, 2025, was $593,605, a decrease from $918,288 as of December 31, 2024, representing a decline of about 35.4%[28] - The company reported a decrease in accounts receivable by $(2,596,402) for the nine months ended September 30, 2025[10] - The company had an increase in accounts receivable of $2,596,402 for the nine months ended September 30, 2025[10] Economic and Regulatory Environment - Economic and trade sanctions, including tariffs, may adversely affect the cost of raw materials and profitability, despite a predominantly US-based supply chain[67] - The federal government shutdown on October 1, 2025, could impact the defense industry, including the Company, due to potential slowdowns in funding and delays in contract payments[68] - The Company received a Termination Notice from Boeing regarding the A-10 program, requiring the scrapping and return of materials by August 15, 2025[69] - An adjustment was recognized in the quarter ended June 30, 2025, to address risks associated with the Boeing A-10 program termination, with further evaluations ongoing[70] Lease Obligations - The Company’s operating lease expense for the nine months ended September 30, 2025, was $1,784,937, compared to $1,611,487 for the same period in 2024[57] - The total undiscounted operating lease payments as of September 30, 2025, amounted to $13,127,968, with a present value of $10,125,234[58] - The Company’s weighted average remaining lease term for its operating leases is 5.5 years, with a weighted average discount rate of 9.5% as of September 30, 2025[58]

Core Points - CPI Aerostructures, Inc. confirmed that it is not aware of any material, undisclosed corporate developments that would explain the unusual trading activity in its common stock [1] - The company received an order from Raytheon to manufacture structural missile wing assemblies for an undisclosed platform, consistent with previous orders [2] - CPI Aero will continue to monitor trading activity and comply with disclosure obligations under applicable law and NYSE American listing standards [3] Company Overview - CPI Aero is a U.S. manufacturer of structural assemblies for fixed wing aircraft, helicopters, and airborne Intelligence Surveillance and Reconnaissance pod systems, serving both commercial aerospace and national security markets [4] - Within the global aerostructure supply chain, CPI Aero operates as either a Tier 1 supplier to aircraft OEMs or a Tier 2 subcontractor to major Tier 1 manufacturers [4] - The company is also a prime contractor to the U.S. Department of Defense, primarily the Air Force, and provides engineering, program management, supply chain management, and MRO services [4]

Core Insights - CPI Aerostructures, Inc. has received a firm fixed price order from Raytheon to manufacture structural missile wing assemblies, with deliveries set to begin in 2026 [1][2] - The order signifies a strategic win for CPI Aero, highlighting its role as a key supplier in the growing sectors of missiles, drones, and autonomous systems [2] - CPI Aero operates as a Tier 1 supplier to aircraft OEMs and a prime contractor to the U.S. Department of Defense, providing a range of services including engineering and program management [3] Company Overview - CPI Aero specializes in manufacturing structural assemblies for fixed wing aircraft, helicopters, and airborne Intelligence Surveillance and Reconnaissance pod systems [3] - The company is positioned within the global aerostructure supply chain, either as a Tier 1 supplier or a Tier 2 subcontractor [3] - CPI Aero's services extend beyond manufacturing to include supply chain management and maintenance, repair, and overhaul (MRO) services [3]

Core Points - CPI Aerostructures, Inc. has received multiple purchase orders totaling $10.2 million under an IDIQ contract from the U.S. Air Force, increasing the total funded value of the contract to $61.1 million [1] - The contract supports the T-38C Pacer Classic III Fuselage Structural Modification Kit Integration program and the Talon Repair Inspection and Maintenance program, extending the service life of the T-38 aircraft beyond 2030 [2] - CPI Aero has been providing Kitting and Supply Chain Management services to the U.S. Air Force for seven years, emphasizing its commitment to supporting the T-38 program [3] Company Overview - CPI Aero is a U.S. manufacturer specializing in structural assemblies for fixed-wing aircraft, helicopters, and airborne Intelligence Surveillance and Reconnaissance systems, serving both commercial aerospace and national security markets [4] - The company operates as a Tier 1 supplier to aircraft OEMs or a Tier 2 subcontractor to major Tier 1 manufacturers and is a prime contractor to the U.S. Department of Defense, primarily the Air Force [4]

Core Viewpoint - CPI Aerostructures, Inc. reported financial results for Q2 and the first half of 2025, highlighting a significant impact from the termination of the A-10 Program, which led to write-offs and losses, but also noted progress in transitioning to new programs and maintaining a strong backlog of orders [3][4][5]. Financial Performance - For Q2 2025, revenue was $15.2 million, down from $20.8 million in Q2 2024, with a gross profit of $0.7 million compared to $5.1 million, resulting in a gross margin of 4.4% (17.1% excluding A-10 impact) [8][17]. - The net loss for Q2 2025 was $(1.3) million, compared to a net income of $1.4 million in Q2 2024, leading to a loss per share of $(0.10) versus earnings per share of $0.11 [8][17]. - For the first half of 2025, revenue was $30.6 million, down from $39.9 million in the same period of 2024, with a net loss of $(2.6) million compared to a net income of $1.6 million in 2024 [8][17]. Debt and Financial Health - The company reduced its total debt to an all-time low of $16.2 million as of June 30, 2025, down from $18.9 million a year earlier, with a Debt-to-Adjusted EBITDA Ratio of 2.7 excluding the A-10 Program impact [4][8]. - Management identified a material weakness in internal control over financial reporting related to debt classification but believes it does not affect the financial results for Q2 [5]. Operational Developments - CPI Aero achieved key development milestones, including the first delivery of the Advanced Tactical Flight Pod to Raytheon, and ended the quarter with a strong backlog of $506 million, including new program awards from major clients [4][5]. - The company is focused on optimizing its portfolio and transitioning from legacy programs to future-oriented programs [5].

[Executive Summary](index=1&type=section&id=Executive%20Summary) This section provides a high-level overview of CPI Aerostructures' Q2 and six-month 2025 financial performance, strategic outlook, and key operational highlights [Second Quarter and Six Months 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%20and%20Six%20Months%202025%20Financial%20Highlights) CPI Aerostructures reported significant Q2 and H1 2025 revenue and gross profit declines, primarily due to the A-10 Program termination impact Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :---------- | :---------- | :----- | | Revenue | $15.2 million | $20.8 million | -26.9% | | Gross Profit | $0.7 million | $5.1 million | -86.3% | | Gross Margin | 4.4% | 24.6% | -20.2 pp | | Net (Loss) Income | $(1.3) million | $1.4 million | N/A | | (Loss) Earnings per share | $(0.10) | $0.11 | N/A | | Adjusted EBITDA | $(1.7) million | $2.6 million | N/A | | Adjusted EBITDA (excl. A-10) | $0.6 million | $2.6 million | N/A | Six Months 2025 vs Six Months 2024 Financial Performance | Metric | 6M 2025 | 6M 2024 | Change | | :-------------------------- | :---------- | :---------- | :----- | | Revenue | $30.6 million | $39.9 million | -23.3% | | Gross Profit | $2.3 million | $8.7 million | -73.5% | | Gross Margin | 7.6% | 21.7% | -14.1 pp | | Net (Loss) Income | $(2.6) million | $1.6 million | N/A | | (Loss) Earnings per share | $(0.21) | $0.13 | N/A | | Adjusted EBITDA | $(2.5) million | $3.8 million | N/A | | Adjusted EBITDA (excl. A-10) | $2.0 million | $3.8 million | N/A | - The A-10 Program termination resulted in a **$2.3 million** write-off in Q2 2025 and a **$4.5 million** impact for the six months ended June 30, 2025[4](index=4&type=chunk)[6](index=6&type=chunk) - Excluding this impact, Q2 2025 gross margin was **17.1%** and six-month gross margin was **19.3%**[4](index=4&type=chunk)[6](index=6&type=chunk) [CEO Commentary and Strategic Outlook](index=1&type=section&id=CEO%20Commentary%20and%20Strategic%20Outlook) CEO commentary highlighted A-10 impact, new program milestones, reduced debt, a strong backlog, and remediation of a material weakness in financial reporting - The company continued its transition to new programs, achieving key development milestones like the first Advanced Tactical Flight Pod delivery to Raytheon[5](index=5&type=chunk) - Total debt was reduced to an all-time low of **$16.2 million** as of June 30, 2025, and the Debt-to-Adjusted EBITDA Ratio (excluding A-10 impact) improved to **2.7**[5](index=5&type=chunk)[6](index=6&type=chunk) - CPI Aero ended the quarter with a strong backlog of **$506 million**, including multiple new program awards from Raytheon, Sikorsky, Lockheed, the US Air Force, and Embraer[7](index=7&type=chunk) - Management identified a material weakness in internal control over financial reporting related to the classification of debt, which is currently being remediated[7](index=7&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section details CPI Aerostructures' business, forward-looking statement disclaimers, and investor relations contact information [About CPI Aerostructures](index=2&type=section&id=About%20CPI%20Aero) CPI Aero manufactures structural assemblies for fixed-wing aircraft, helicopters, and ISR pod systems, serving commercial and national security markets - CPI Aero is a U.S. manufacturer of structural assemblies for fixed-wing aircraft, helicopters, and airborne Intelligence Surveillance and Reconnaissance (ISR) pod systems[8](index=8&type=chunk) - The company serves both the commercial aerospace and national security markets[8](index=8&type=chunk) - CPI Aero acts as a Tier 1 supplier to aircraft OEMs, a Tier 2 subcontractor to major Tier 1 manufacturers, and a prime contractor to the U.S. Department of Defense (primarily the Air Force)[8](index=8&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This disclaimer indicates forward-looking statements involve risks and uncertainties, with no guarantee of future performance or obligation to update - The press release contains forward-looking statements, which are not guarantees of future performance and involve risks and uncertainties[9](index=9&type=chunk)[10](index=10&type=chunk) - Actual results could vary materially from forward-looking statements due to important factors, including those outlined in the Company's Annual Report on Form 10-K[10](index=10&type=chunk) - The Company disclaims any intention or obligation to update or revise any forward-looking statement[10](index=10&type=chunk) [Investor Relations](index=2&type=section&id=Investor%20Relations) This section provides investor relations contact details for Alliance Advisors IR and CPI Aerostructures' Interim Chief Financial Officer - Investor Relations Counsel: Alliance Advisors IR, (212) 838-3777, cpiaero@allianceadvisors.com[12](index=12&type=chunk) - Company Contact: Pamela Levesque, Interim Chief Financial Officer, (631) 586-5200, plevesque@cpiaero.com[12](index=12&type=chunk) - Company website: www.cpiaero.com[11](index=11&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents CPI Aerostructures' balance sheets and statements of operations for the periods ended June 30, 2025 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows total assets increased to **$72.3 million** and total liabilities to **$48.5 million** by June 30, 2025, with shareholders' equity decreasing Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :-------------- | :---------------- | :----- | | **ASSETS** | | | | | Total Current Assets | $39,321,774 | $43,592,453 | -9.9% | | Operating lease right-of-use assets | $10,220,405 | $2,856,200 | +257.8% | | Deferred tax asset, net | $20,153,104 | $18,837,576 | +6.9% | | Total Assets | $72,255,967 | $67,982,002 | +6.3% | | **LIABILITIES** | | | | | Total Current Liabilities | $26,255,391 | $26,470,342 | -0.8% | | Line of credit, net of current portion | $13,140,000 | $14,640,000 | -10.3% | | Long-term operating lease liabilities | $9,087,405 | $938,418 | +868.4% | | Total Liabilities | $48,482,796 | $42,048,760 | +15.3% | | **SHAREHOLDERS' EQUITY** | | | | | Total Shareholders' Equity | $23,773,171 | $25,933,242 | -8.3% | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 reported a net loss of **$(1.3) million** and **26.9%** revenue decline, while H1 2025 saw a net loss of **$(2.6) million** and **23.3%** revenue decrease Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :----------- | :----------- | :----- | | Revenue | $15,179,108 | $20,810,334 | -26.9% | | Cost of sales | $14,515,726 | $15,694,910 | -7.5% | | Gross profit | $663,382 | $5,115,424 | -86.3% | | (Loss) income from operations | $(1,990,642) | $2,339,489 | N/A | | Net (Loss) income | $(1,324,959) | $1,409,946 | N/A | | Income per common share, basic | $(0.10) | $0.11 | N/A | Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :----------- | :----------- | :----- | | Revenue | $30,579,716 | $39,891,477 | -23.3% | | Cost of sales | $28,266,859 | $31,222,304 | -9.5% | | Gross profit | $2,312,857 | $8,669,173 | -73.5% | | (Loss) income from operations | $(3,176,944) | $3,179,334 | N/A | | Net (Loss) income | $(2,648,883) | $1,578,184 | N/A | | Income per common share, basic | $(0.21) | $0.13 | N/A | [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section provides a reconciliation of non-GAAP Adjusted EBITDA, highlighting its calculation and purpose for financial analysis [Adjusted EBITDA Reconciliation](index=5&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section reconciles Adjusted EBITDA, a non-GAAP measure, showing Q2 2025 at **$(1.7) million** (or **$0.6 million** excluding A-10) and H1 2025 at **$(2.5) million** (or **$2.0 million** excluding A-10) - Adjusted EBITDA is a non-GAAP measure defined as GAAP income from operations plus depreciation, amortization, and stock-compensation expense[17](index=17&type=chunk) - The company provides Adjusted EBITDA to help investors evaluate financial performance on a consistent basis and enhance understanding of operating results, but it should not be construed as an alternative to GAAP measures[18](index=18&type=chunk)[21](index=21&type=chunk) Reconciliation of Income From Operations to Adjusted EBITDA | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income From Operations | $(1,990,642) | $2,339,489 | $(3,176,944) | $3,179,334 | | Depreciation | $88,598 | $102,846 | $187,365 | $202,413 | | Stock Based Compensation | $168,583 | $175,535 | $488,812 | $457,058 | | **Adjusted EBITDA** | **$(1,733,461)** | **$2,617,870** | **$(2,500,767)** | **$3,838,805** | | A-10 Termination Adjustment | $2,322,831 | - | $4,468,528 | - | | **Adjusted EBITDA Excluding A-10 adjustment** | **$589,370** | **$2,617,870** | **$1,967,761** | **$3,838,805** |

Revenue and Profitability - Revenue for Q2 2025 was $15.18 million, a decrease of 27.3% compared to $20.81 million in Q2 2024[9] - Gross profit for the first half of 2025 was $2.31 million, down 73.3% from $8.67 million in the same period of 2024[9] - Net loss for the six months ended June 30, 2025, was $2.65 million, compared to a net income of $1.58 million for the same period in 2024[9] - Basic income per share for Q2 2025 was $(0.10), compared to $0.11 in Q2 2024[9] - For the three months ended June 30, 2025, total revenue was $15,179,108, a decrease of 27.1% compared to $20,810,334 for the same period in 2024[21] - For the six months ended June 30, 2025, total revenue was $30,579,716, down 23.4% from $39,891,477 in 2024[21] - Gross profit for the three months ended June 30, 2025, was $663,382, down 87.0% from $5,115,424 in the prior year[9] - The net loss for the three months ended June 30, 2025, was $(1,324,959), compared to net income of $1,409,946 for the same period in 2024[9] Cash Flow and Financial Position - Cash at the end of Q2 2025 was $674,481, a decrease from $1.94 million at the end of Q2 2024[11] - Operating cash flow for the first half of 2025 was $(3.32) million, compared to $(1.55) million in the same period of 2024[11] - The net cash used in operating activities for the six months ended June 30, 2025 was $3,317,875, compared to $1,552,224 in 2024, indicating a significant increase in cash outflow[11] - Total shareholders' equity as of June 30, 2025, was $23.77 million, down from $24.12 million at the end of Q2 2024[10] - Cash at the end of the period was $674,481, a significant decrease from $1,936,697 at the end of the same period in 2024[11] Debt and Interest Expenses - The company incurred $2.65 million in interest expense for the first half of 2025, compared to $1.22 million in the same period of 2024[9] - The company had $16,140,000 outstanding under the Revolving Loan as of June 30, 2025, compared to $17,390,000 as of December 31, 2024[46] - The company’s interest rate on the Revolving Loan was 9.5% as of June 30, 2025, based on a Prime Rate of 7.5%[45] - The company incurred $864,820 in interest expenses during the period, compared to $1,218,775 in the previous year[11] Compliance and Regulatory Matters - The Company has a civil monetary penalty of $400,000 due to the SEC by June 30, 2025, if it fails to comply with various undertakings related to internal controls[58] - The Company is required to fully remediate its material weaknesses in Internal Controls over Financial Reporting by December 31, 2024[58] - The Company was not in compliance with financial covenants as of June 30, 2025, and obtained a waiver from lenders for non-compliance[43] - On August 14, 2025, the Lenders issued a waiver for the Company's Financial Covenant non-compliance for the quarter ended June 30, 2025[63] Contractual Obligations and Assets - As of June 30, 2025, the aggregate amount of transaction price allocated to remaining performance obligations was approximately $86.8 million[26] - Contract assets as of June 30, 2025, were $31,027,022, a decrease from $32,832,290 as of December 31, 2024[28] - Contract liabilities as of June 30, 2025, were $1,896,936, down from $2,430,663 as of December 31, 2024[28] - Inventory as of June 30, 2025, totaled $1,025,172, an increase from $918,288 as of December 31, 2024[29] Stock-Based Compensation - Stock-based compensation expense for the three months ended June 30, 2025, was $168,583, compared to $175,536 for the same period in 2024[33] - The Company has 308,818 shares available for grant under the 2016 Long Term Incentive Plan as of June 30, 2025[31] - As of June 30, 2025, the company had unamortized stock-based compensation costs related to restricted share arrangements amounting to $271,967[38] - Stock-based compensation expense for the six months ended June 30, 2025, totaled $488,812, compared to $457,058 for the same period in 2024, reflecting a 6.5% increase[33] Customer Concentration - The company’s four largest customers accounted for 31%, 24%, 15%, and 14% of revenue for the six months ended June 30, 2025[48] - For the six months ended June 30, 2025, the four largest customers accounted for 31%, 24%, 15%, and 14% of revenue, compared to 32%, 25%, 13%, and 12% for the same period in 2024[48] - As of June 30, 2025, 41%, 26%, and 17% of contract assets were from three of the largest customers, up from 27%, 20%, 16%, and 15% from the four largest customers as of December 31, 2024[49] Lease Obligations - The company’s operating lease expense for the six months ended June 30, 2025, was $1,189,958, an increase from $1,059,249 for the same period in 2024[51] - Future minimum lease payments under non-cancellable operating leases total $13,704,101 as of June 30, 2025[52] - The company’s right-of-use assets increased to $10,220,405 as of June 30, 2025, from $2,856,200 as of December 31, 2024[52] Tax Matters - The effective income tax rate for the six months ended June 30, 2025, was 34.2%, primarily due to estimated R&D credits[55] - The company adopted ASU No. 2023-09 in 2025, which requires expanded income tax disclosures[17]