Financial Performance and Risks - During fiscal year 2023, approximately 3.3% of the Company's total sales were from fixed-price EDC arrangements, which carry the risk of potential cost overruns [121]. - As of September 30, 2023, 8% of the Company's backlog was expected to be filled beyond fiscal 2024, indicating lower revenue visibility compared to historical expectations [128]. - The Company derived 54% of its revenue from the top five customers during fiscal year 2023, highlighting a concentrated customer base [125]. - The Company's revenue and operating results may vary significantly from quarter to quarter due to factors such as demand changes and delays in product approvals [137]. - The Company is subject to credit risk due to the concentration of accounts receivable from key customers, which could lead to significant write-offs if any key customer defaults [126]. - The Company may encounter risks related to product liability claims, which could exceed the coverage of its insurance [143]. - The Company faces risks from potential declines in revenues and profitability due to economic issues affecting customers [169]. Competition and Market Position - The Company faces intense competition from larger firms like Honeywell and Collins Aerospace, which may impact its market share and pricing strategies [132]. - The Company plans to increase revenues from international sales, particularly in Europe and Asia, but faces risks such as regulatory differences and economic instability [129]. - The Company’s growth strategy includes evaluating acquisition opportunities and strategic partnerships to enhance its market position [145]. Research and Development - The Company spends a large portion of its R&D efforts on developing products like FPDS, FMS, and ThrustSense® Autothrottle, which are crucial for future growth [117]. - The Company holds 32 U.S. patents and 85 international patents as of September 30, 2023, with three U.S. and six international patent applications pending [153]. Regulatory and Compliance - The Company's products must receive regulatory approval from the FAA and EASA, and failure to meet evolving standards could render its products obsolete [138]. - The Company is subject to various laws and regulations, and failure to comply could result in significant costs and operational impacts [160]. Financial Management and Debt - As of September 30, 2023, the balance of the Term Loan was $19.5 million, with no balance drawn on the Revolving Line of Credit [168]. - The company entered into a Restated Loan Amendment on December 19, 2023, increasing the revolving line of credit from $10 million to $30 million, maturing on December 19, 2028 [171]. - The interest rate for the Restated Line of Credit ranges from 1.5% to 2.5% based on the company's funded debt to EBITDA ratio [172]. - A hypothetical 1% increase in variable interest rates would have impacted interest income by approximately $99,000 for fiscal 2023 [251]. - The company is subject to compliance with financial and negative covenants related to its indebtedness, remaining compliant as of September 30, 2023 [170]. - Future financing costs may be adversely affected by volatility in capital markets, impacting credit availability [168]. - The company may incur additional indebtedness under existing credit facilities or new financing arrangements, which could harm its financial condition [169]. - The proceeds from the Restated Line of Credit will be used for working capital, acquisitions, and to pay off the previous term loan [171]. Internal Control and Investor Confidence - The Company’s ability to maintain effective internal control over financial reporting is crucial, as any material weaknesses could lead to loss of investor confidence and affect stock value [161]. - The Company’s common stock has experienced significant price fluctuations, influenced by external factors such as geopolitical events and economic sanctions [166]. Cybersecurity and Operational Risks - The Company faces cybersecurity threats that could disrupt operations and damage its reputation [154].

Financial Data and Key Metrics Changes - In Q4 2023, revenue increased by 79% year-over-year, with net income rising by 63% from the previous year [49][50] - The fourth quarter net income was $2.6 million or $0.15 per share, compared to $1.7 million or $0.09 per share in Q4 2022 [42] - Cash flow from operations for the year was $2.1 million, with cash at September 30, 2023, amounting to $3.1 million, an increase of approximately $500,000 from June 30, 2023 [51] Business Line Data and Key Metrics Changes - The company was awarded a development contract for the second generation of UMS for Pilatus, which is expected to enhance capabilities including AI [3] - The autothrottle OEM business has continued to perform well, particularly with Textron, and the company is pursuing additional platforms in military and regional airline markets [3] Market Data and Key Metrics Changes - Backlog at September 30, 2023, was $13.5 million, with new orders in Q4 2023 approximately $12.7 million [42][50] - The company anticipates that the integration of Honeywell products will lead to annualized top-line growth of 40% once fully completed [8] Company Strategy and Development Direction - The company aims to leverage momentum from recent growth to sustain both organic and acquisition-driven growth [7] - Plans include further product innovation and maintaining high investment levels in R&D, particularly in cockpit automation [7] - The integration of Honeywell products is expected to enhance product offerings and accelerate technology development towards autonomous flight [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the strong fourth quarter results were achieved despite operational burdens, and they expect results in the current and next quarters to be weaker due to integration challenges [8][50] - The company is optimistic about future growth opportunities and plans to evaluate additional acquisitions [8] Other Important Information - The company converted its $20 million term loan into a $30 million revolving line of credit, reducing total debt from $20 million to less than $12 million [2] - The fourth quarter saw onetime expenses related to the Honeywell transaction, including legal and professional fees [42] Q&A Session Summary Question: What impact will the Honeywell acquisition have on R&D expenses? - Initially, the impact on R&D will be minimal, but modifications to designs will require some R&D investment going forward [44] Question: How will customer concentration change with the acquisition? - Customer concentration is expected to change as new channel partners are integrated [56] Question: Can the company provide more detail on revenue contributions from legacy versus Honeywell products? - Detailed breakdowns will be available in the upcoming 10-K filing [62] Question: What has been the experience with the integration of Honeywell products? - The integration has been smoother than expected, with no significant negative surprises reported [73] Question: Is the company prepared for another acquisition in the near future? - The company is confident in its management's ability to pursue additional acquisitions as opportunities arise [76]

Table of Contents 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, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [For the transition period from to ] Commission File No. 000-31157 INNOVATIVE SOLUTIONS AND SUPPORT, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-250740 ...

Innovative Solutions and Support, Inc. (NASDAQ:ISSC) Q3 2023 Earnings Conference Call August 10, 2023 10:00 AM ET Company Participants Shahram Askarpour - Chief Executive Officer Mike Linacre - Chief Financial Officer Conference Call Participants Tim Moore - EF Hutton Operator Good day and welcome to Innovative Solutions & Support Third Quarter Fiscal 2023 Financial Results Call. [Operator Instructions] Please note that this event is being recorded. I’d now like to turn the conference over to Mr. Shahram As ...

Innovative Solutions and Support, Inc. (NASDAQ:ISSC) Q2 2023 Earnings Conference Call May 8, 2023 6:00 AM ET Company Participants Michael Linacre - CFO Shahram Askarpour - CEO Conference Call Participants Tim Moore - EF Hutton Operator Greetings, and welcome to the Innovative Solutions and Support, Inc. Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a r ...

Table of Contents 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 March 31, 2023 OR [For the transition period from to ] ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-31157 INNOVATIVE SOLUTIONS AND SUPPORT, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-25074 ...

Financial Data and Key Metrics Changes - Revenues for Q1 2023 were $6.5 million, a decrease of 2.7% from $6.7 million in Q1 2022, primarily due to lower commercial aftermarket revenue [31] - Gross profit was $3.7 million compared to $4 million in the prior year, with a gross margin of 57.1% versus 59.3% in the previous year [22][35] - Net income for Q1 was $0.7 million or $0.04 per share, down from $1.1 million or $0.07 per share in Q1 2022 [40] Business Line Data and Key Metrics Changes - The decrease in commercial sales was attributed to fluctuations in sales orders for the aftermarket retrofit business [32] - Demand from the OEM business remained strong, with engineering development contracts improving due to two R&D projects [31] - New orders in Q1 were approximately $3.3 million, with a backlog of $8.5 million as of December 31, 2022, up from $6.2 million a year prior [33] Market Data and Key Metrics Changes - The company received FAA supplemental type certificate for King Airs, opening up 700 potential aircraft for their Autothrottle product [20] - The aftermarket for 757 and 767 remains cyclic, with expected revenue ranging between $5 million to $7 million annually [13] Company Strategy and Development Direction - The company is focused on expanding margins through better facility utilization and plans to achieve this via organic growth and strategic acquisitions [24] - R&D expenses are targeted to increase to 13% of sales in fiscal 2023, up from 10% in fiscal 2022 [25] - Cockpit automation is a key focus area, with ongoing development of Autothrottle for various aircraft models [26] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong cash flows and improving operating leverage as sales growth returns [42] - The company is well-positioned to capitalize on both organic and inorganic opportunities due to its debt-free balance sheet and significant liquidity [40] Other Important Information - Total operating expenses were $2.9 million in Q1, up from $2.5 million in the prior year, primarily due to non-cash long-term employee stock compensation and legal fees [37] - Cash on hand increased to $19.4 million as of December 31, 2022, up from $17.3 million at the end of fiscal 2022 [41] Q&A Session Summary Question: General and administrative expenses - The increase in G&A expenses to $2.9 million was partly due to the creation of a team for additional opportunities and the passing of the founder, with expectations for some temporary costs [45][46] Question: Future G&A expenses - Future G&A expenses are expected to be lower than Q1 but higher than historical run rates due to new compensation plans and investments in the team [48] Question: Impact of interest income - Interest income increased due to higher cash balances and interest rates, with funds reallocated to higher-yielding accounts [51] Question: Airbus cargo conversion impact - The management noted no significant impact from Airbus converting their cargo, but acknowledged the cyclic nature of the aftermarket for their products [13]

Table of Contents 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 December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [For the transition period from to ] Commission File No. 000-31157 INNOVATIVE SOLUTIONS AND SUPPORT, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-25 ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2022 OR Commission File No. 000-31157 INNOVATIVE SOLUTIONS AND SUPPORT, INC. (Exact name of registrant as specified in its charter) Pennsylvania (State or oth ...

Innovative Solutions and Support, Inc. (NASDAQ:ISSC) Q4 2022 Earnings Conference Call December 14, 2022 4:30 PM ET Company Participants Michael Linacre - Chief Financial Officer Shahram Askarpour - Chief Executive Officer Conference Call Participants Operator Greetings and welcome to the Innovative Solutions and Support, Inc. Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being ...