What changed in M-tron Industries, Inc.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of M-tron Industries, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+146 added−110 removedSource: 10-K (2026-03-26) vs 10-K (2025-03-27)
Top changes in M-tron Industries, Inc.'s 2025 10-K
146 paragraphs added · 110 removed · 98 edited across 6 sections
- Item 1A. Risk Factors+82 / −55 · 48 edited
- Item 7. Management's Discussion & Analysis+30 / −26 · 22 edited
- Item 1. Business+24 / −25 · 24 edited
- Item 5. Market for Registrant's Common Equity+8 / −2 · 2 edited
- Item 1C. Cybersecurity+1 / −1 · 1 edited
Item 1. Business
Business — how the company describes what it does
24 edited+0 added−1 removed36 unchanged
Item 1. Business
Business — how the company describes what it does
24 edited+0 added−1 removed36 unchanged
2024 filing
2025 filing
Biggest changeWe maintain our executive offices at 2525 Shader Road, Orlando, Florida 32804. Our telephone number is (407) 298-2000. Our common stock is traded on the NYSE American ("NYSE") under the symbol "MPTI." Mtron ' s Separation On October 7, 2022, the separation of the Mtron business from The LGL Group, Inc.
Biggest changeMtron's production facility in India operates under a Manufacturing License Agreement ("MLA") issued by the United States Department of State. We maintain our executive offices at 2525 Shader Road, Orlando, Florida 32804. Our telephone number is (407) 298-2000.
General Originally founded in 1965, M-tron Industries, Inc. is engaged in the designing, manufacturing and marketing of highly engineered, high reliability frequency and spectrum control products used to control the frequency or timing of signals in electronic circuits in various applications. Mtron's primary markets are aerospace and defense, space, and avionics.
General Originally founded in 1965, M-tron Industries, Inc. is engaged in the designing, manufacturing and marketing of highly engineered, high reliability frequency and spectrum control products used to control the frequency or timing of signals in electronic circuits in various applications. Mtron's primary markets are aerospace and defense, avionics, industrials, and space.
As an engineered products and solutions company, a significant number of our workforce consists of degreed engineers providing expertise in product design and process development. Available Information The Company's internet address is www.mtronpti.com. Information on or accessible through our website is not deemed to be incorporated into this Report. Website references in this Report are merely textual references.
As an engineered products and solutions company, a significant number of our workforce consists of degreed engineers providing expertise in product design and process development. Available Information The Company's internet address is www.mtron.com. Information on or accessible through our website is not deemed to be incorporated into this Report. Website references in this Report are merely textual references.
We expect to fill the vast majority of our order backlog as of December 31, 2024 during 2025 and 2026, but cannot provide assurances as to what portion of the order backlog will be fulfilled in any given year.
We expect to fill the vast majority of our order backlog as of December 31, 2025 during 2026 and 2027, but cannot provide assurances as to what portion of the order backlog will be fulfilled in any given year.
Research and development expense was $2,809 and $2,216 for the years ended December 31, 2024 and 2023, respectively, and will remain a significant part of the Company's efforts to continually enhance its intellectual property position. 3 Table of Contents Marketing and Sales We have a highly skilled team of sales engineers who work in tandem with a worldwide network of independent external manufacturer representatives and franchised electronics distributors to market and sell our products.
Research and development expense was $3,161 and $2,809 for the years ended December 31, 2025 and 2024, respectively, and will remain a significant part of the Company's efforts to continually enhance its intellectual property position. 3 Table of Contents Marketing and Sales We have a highly skilled team of sales engineers who work in tandem with a worldwide network of independent external manufacturer representatives and franchised electronics distributors to market and sell our products.
We avoid significant currency exchange risk by transacting and settling substantially all of our international sales in United States dollars. Seasonality Our business is not seasonal, although shipment schedules may be affected by the production schedules of our customers, or their contract manufacturers based on regional practices or customs.
We avoid significant currency exchange risk by transacting and settling substantially all of our international sales in U.S. dollars. Seasonality Our business is not seasonal, although shipment schedules may be affected by the production schedules of our customers, or their contract manufacturers based on regional practices or customs.
These devices may be based on quartz, quartz micro-electromechanical systems ("MEMS") or advanced materials science designed to achieve higher performance levels than quartz. Mtron's products offer high reliability over a wide temperature range and are well-suited for harsh environments, including shock and vibration-resistant oscillators with low-g sensitivity.
These devices may be based on quartz, quartz micro-electromechanical systems ("MEMS") or advanced materials designed to achieve higher performance levels beyond what is achieved with quartz. Mtron's products offer high reliability over a wide temperature range and are well-suited for harsh environments, including shock and vibration-resistant oscillators with low-g sensitivity.
These products are employed in applications within the commercial and military aerospace and defense, space, avionics, and industrial markets. Integrated Microwave Assembly Mtron’s Integrated Microwave Assembly ("IMA") products brings over 60 years of expert crystal, filter and oscillator design experience to our Custom Multi-Functional Modules ("MFM") and Integrated Microwave Assemblies.
These products are employed in applications within the commercial and military aerospace and defense, space, avionics, and industrial markets. Radio Frequency Solutions Mtron’s RF Solutions products bring over 60 years of expert crystal, filter and oscillator design experience to our Custom Multi-Functional Modules ("MFM") and Integrated Microwave Assemblies ("IMA").
Rather, we believe that our technological position depends primarily on the technical competence and creative ability of our engineering and technical staff in areas of product design and manufacturing processes, including our staff’s ability to customize products to meet difficult specifications, as well as proprietary know-how and information. 4 Table of Contents Government Regulations As a supplier to certain U.S.
Rather, we believe that our technological position depends primarily on the technical competence and creative ability of our engineering and technical staff in areas of product design and manufacturing processes, including our staff’s ability to customize products to meet difficult specifications, as well as proprietary know-how and information. 4 Table of Contents Government Regulations As a supplier to certain U.S. government defense contractors, we must comply with significant procurement regulations and other requirements.
The IMA product group also reviews all build-to-print opportunities, utilizing all our in-house assembly and test capabilities to competitively support this service. 2 Table of Contents Major Markets The following table provides a breakdown of revenues by end-market as a percent of consolidated revenues: 2024 2023 Aerospace and Defense 67.3 % 55.5 % Avionics 21.7 % 24.9 % Industrial 6.6 % 14.3 % Space 4.4 % 5.3 % 100.0 % 100.0 % Customers We primarily work directly with original equipment manufacturers ("OEMs") to define the appropriate solutions for their unique applications, including the design of custom parts with unique part numbers.
The RF Solutions group also reviews all build-to-print opportunities, utilizing all our in-house assembly and test capabilities to competitively support this service. 2 Table of Contents Major Markets The following table provides a breakdown of revenues by end-market as a percent of consolidated revenues: 2025 2024 Aerospace and Defense 65.2 % 67.3 % Avionics 22.7 % 21.7 % Industrial 8.1 % 6.6 % Space 4.0 % 4.4 % 100.0 % 100.0 % Customers We primarily work directly with original equipment manufacturers ("OEMs") to define the appropriate solutions for their unique applications, including the design of custom parts with unique part numbers.
International Revenues Our international revenues were $11,029 in 2024, or 22.5% of total consolidated revenues, compared to $11,064, or 26.9% of total consolidated revenues, in 2023. In both 2024 and 2023, these revenues were derived mainly from contract manufacturer customers in Asia, with significant sales in Malaysia.
International Revenues Our international revenues were $12,635 in 2025, or 23.2% of total consolidated revenues, compared to $11,029, or 22.5% of total consolidated revenues, in 2024. In both 2025 and 2024, these revenues were derived mainly from contract manufacturer customers in Asia, with significant sales in Malaysia.
Human Capital Management As of December 31, 2024, we employed 396 people, including 226 full-time and 20 part-time employees, along with 150 contractors.
Human Capital Management As of December 31, 2025, we employed 415 people, including 239 full-time and 20 part-time employees, along with 156 contractors.
The table below presents the concentration of accounts receivable of the Company's customers as of December 31, 2024 and 2023: December 31, 2024 2023 (in thousands) $ % $ % Customer 1 $ 2,100 29.9 % $ 2,128 43.1 % Customer 2 1,360 19.4 % 852 17.2 % Customer 3 795 11.3 % 483 9.8 % Customer 4 393 5.6 % 311 6.3 % Top 4 largest customers 4,648 66.2 % 3,774 76.4 % All other (a) 2,376 33.8 % 1,169 23.6 % Total accounts receivable, gross $ 7,024 100.0 % $ 4,943 100.0 % (a) Comprised of approximately 54 and 47 customers as of December 31, 2024 and 2023, respectively The insolvency of any of these customers could have a material adverse impact on our liquidity.
The table below presents the concentration of accounts receivable of the Company's customers as of December 31, 2025 and 2024: December 31, 2025 2024 (in thousands) $ % $ % Customer 1 $ 2,778 40.5 % $ 2,100 29.9 % Customer 2 1,333 19.4 % 1,360 19.4 % Customer 3 510 7.4 % 795 11.3 % Customer 4 277 4.0 % 393 5.6 % Top 4 largest customers 4,898 71.4 % 4,648 66.2 % All other (a) 1,962 28.6 % 2,376 33.8 % Total accounts receivable, gross $ 6,860 100.0 % $ 7,024 100.0 % (a) Comprised of approximately 37 and 54 customers as of December 31, 2025 and 2024, respectively The insolvency of any of these customers could have a material adverse impact on our liquidity.
Government investigations relating to our or our customers' operations and products and are expected to perform in compliance with a vast array of federal laws, including the Truth in Negotiations Act, the False Claims Act, the International Traffic in Arms Regulations promulgated under the Arms Export Control Act, and the Foreign Corrupt Practices Act.
From time to time, we may also be subject to U.S. government investigations relating to our or our customers' operations and products and are expected to perform in compliance with a vast array of federal laws, including the Truth in Negotiations Act, the False Claims Act, the International Traffic in Arms Regulations promulgated under the Arms Export Control Act, the Foreign Corrupt Practices Act, and other federal statutes and regulations, including those established by the Office of Foreign Assets Control ("OFAC").
Order Backlog Our order backlog was $47,239 and $47,831 as of December 31, 2024 and 2023, respectively. The backlog of unfilled orders includes amounts based on signed contracts and purchase orders.
Order Backlog Our order backlog was $76,425 and $47,239 as of December 31, 2025 and 2024, respectively. The backlog of unfilled orders includes amounts based on signed contracts and purchase orders, including contracts that include multi-year orders.
The table below presents the concentration of revenue of the Company's customers for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in thousands) $ % $ % Customer 1 $ 18,145 37.0 % $ 12,921 31.4 % Customer 2 8,522 17.4 % 7,822 19.0 % Customer 3 2,977 6.1 % 2,510 6.1 % Customer 4 2,542 5.2 % 2,267 5.5 % Top 4 largest customers 32,186 65.7 % 25,520 62.0 % All other (a) 16,826 34.3 % 15,648 38.0 % Total revenues $ 49,012 100.0 % $ 41,168 100.0 % (a) Comprised of approximately 113 and 118 customers for the years ended December 31, 2024 and 2023, respectively The loss of any of these customers, or a decrease in their demand for our products, could have a material adverse effect on our results.
The table below presents the concentration of revenue of the Company's customers for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) $ % $ % Customer 1 $ 19,586 36.0 % $ 18,145 37.0 % Customer 2 8,129 14.9 % 8,522 17.4 % Customer 3 3,163 5.8 % 2,977 6.1 % Customer 4 2,295 4.2 % 2,542 5.2 % Top 4 largest customers 33,173 61.0 % 32,186 65.7 % All other (a) 21,244 39.0 % 16,826 34.3 % Total revenues $ 54,417 100.0 % $ 49,012 100.0 % (a) Comprised of approximately 96 and 113 customers for the years ended December 31, 2025 and 2024, respectively The loss of any of these customers, or a decrease in their demand for our products, could have a material adverse effect on our results.
("LGL" or "LGL Group") was completed (the "Separation") and the Company became an independent, publicly traded company trading on the NYSE American under the stock symbol "MPTI." 1 Table of Contents Business Strategy Our objective is to deliver long-term growth to our stockholders and maximize stockholder value.
Our common stock is traded on the NYSE American ("NYSE") under the symbol "MPTI." 1 Table of Contents Business Strategy Our objective is to deliver long-term growth to our stockholders and maximize stockholder value.
In addition, its U.S. production facilities in Orlando and Yankton are International Traffic in Arms Regulations ("ITAR") registered and International Aerospace Quality Group AS9100 Rev D certified and our Yankton, South Dakota production facility is Military Standard ("MIL-STD") 790 certified. Mtron's production facility in India operates under a Manufacturing License Agreement ("MLA") issued by the U.S. Department of State.
In addition, the Company's U.S. production facilities in Orlando and Yankton are International Traffic in Arms Regulations ("ITAR") registered and International Aerospace Quality Group AS9100 Rev D certified and our Yankton, South Dakota production facility is Military Standard ("MIL-STD") 790 certified.
Government defense contractors, we must comply with significant procurement regulations and other requirements. Maintaining registration under ITAR for all of our related production facilities is also required. One of those production facilities must comply with additional requirements for its production processes and for selected personnel in order to maintain the security of classified information.
Maintaining registration under ITAR for all of our related production facilities is also required. One of those production facilities must comply with additional requirements for its production processes and for selected personnel in order to maintain the security of classified information. These requirements, although customary within these markets, increase our performance and compliance costs.
The following table summarizes our employees by employment type and geographic location: Full-Time Part-Time Contractors Total United States: Orlando, Florida 186 16 2 204 Yankton, South Dakota 28 4 — 32 Total United States 214 20 2 236 International: Hong Kong 3 — — 3 Noida, India 9 — 148 157 Total International 12 — 148 160 Total 226 20 150 396 None of the Company's employees are represented by a labor union and the Company considers its relationships with employees to be good.
The following table summarizes our employees by employment type and geographic location: Full-Time Part-Time Contractors Total United States: Orlando, Florida 196 15 3 214 Yankton, South Dakota 31 5 1 37 Total United States 227 20 4 251 International: Hong Kong 3 — — 3 Noida, India 9 — 152 161 Total International 12 — 152 164 Total 239 20 156 415 None of the Company's employees are represented by a labor union and the Company considers its relationships with employees to be good.
Our competitive strategy begins with our focus on niche markets where highly engineered performance and reliability are the major requirements. Research and Development Utilizing our understanding of market requirements, we employ a disciplined approach to capital allocation when selecting new product development projects.
Our competitive strategy begins with our focus on identifying long-term programs which require products and solutions that are highly differentiated with high performance and reliability. Research and Development Utilizing our understanding of market requirements, we employ a disciplined approach to capital allocation when selecting new product development projects.
The IMA product group designs and develops solutions using the same circuit, electromagnetic, mechanical, thermal, and stress analysis tools as our customers, which allows Mtron’s MFM and IMA design synthesis to be effortlessly integrated into the customer’s system synthesis at early stages in the development process.
The RF Solutions product group designs and develops solutions using the same circuit, electromagnetic, mechanical, thermal, and stress analysis tools as our customers, which allows seamless integration of Mtron’s solutions into the customer’s systems in the early stages of development.
If an audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions. From time to time, we may also be subject to U.S.
Any cost found to be improperly allocated to a specific contract will not be reimbursed. If an audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions.
These requirements, although customary within these markets, increase our performance and compliance costs. We are routinely audited and reviewed by the U.S. Government and its agencies such as the Defense Contract Audit Agency and Defense Contract Management Agency.
We are routinely audited and reviewed by the U.S. government and its agencies such as the Defense Contract Audit Agency and Defense Contract Management Agency. These agencies review our performance under our contracts, our cost structure and our compliance with applicable laws, regulations and standards, as well as the adequacy of our internal control systems and policies.
Removed
These agencies review our performance under our contracts, our cost structure and our compliance with applicable laws, regulations and standards, as well as the adequacy of our internal control systems and policies. Any cost found to be improperly allocated to a specific contract will not be reimbursed.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
48 edited+34 added−7 removed64 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
48 edited+34 added−7 removed64 unchanged
2024 filing
2025 filing
Biggest changeSummary Risk Factors Risks Related to our Business and Industry • Macroeconomic fluctuations may harm our business, results of operations and stock price • Our variable rate indebtedness subjects us to interest rate risk and could cause our debt service obligations to increase significantly. • We are dependent on a single line of business. • Our operating results may vary significantly from period to period. • A relatively small number of customers account for a significant portion of our revenues and accounts receivable, and the loss of any of these customers, a decrease in their demand for our products, or their insolvency could have a material effect on our results of operations or liquidity. • Our order backlog may not be indicative of future revenues and may fluctuate from period to period. • Our future rate of growth and profitability are highly dependent on the development and growth of the aerospace and defense, space, avionics, instrumentation and industrial markets, which can be cyclical. • The market share of our customers in the aerospace and defense, space, avionics, instrumentation and industrial markets may change over time, reducing the potential value of our relationships with our existing customer base. • We may make acquisitions that are not successful, or we may fail to integrate acquired business into our operations properly. • If we are unable to introduce innovative products, demand for our products may decrease. • Our markets are highly competitive, and we may lose business to larger and better-financed competitors. • Our success depends on our ability to retain key management and technical personnel and attracting, retaining, and training new technical personnel. • We purchase certain key components and raw materials from single or limited sources and could lose sales if these sources fail to fulfill our needs for any reason. • As a supplier to United States government defense contractors, we are subject to a number of procurement regulations and other requirements and could be adversely affected by changes in regulations or any negative findings from a U.S. government audit or investigation. • Our products are complex and may contain errors or design flaws, which could be costly to correct. • Future changes in our environmental liability and compliance obligations may increase costs and decrease profitability. • We have significant international operations and sales to customers outside of the United States that subject us to certain business, economic and political risks. • We rely on information technology systems to conduct our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of operations. • Cybersecurity risks and cybersecurity incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results • If we fail to correct any material weakness that we identify in our internal control over financial reporting or otherwise fail to maintain effective internal control over financial reporting, we may not be able to report our financial results accurately and timely, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports and the price of our common stock may decline.
Biggest changeSummary Risk Factors Risks Related to our Business and Industry • Macroeconomic fluctuations may harm our business, results of operations and stock price • Our variable rate indebtedness subjects us to interest rate risk and could cause our debt service obligations to increase significantly. • We are dependent on a single line of business. • Our operating results may vary significantly from period to period. • A relatively small number of customers account for a significant portion of our revenues and accounts receivable, and the loss of any of these customers, a decrease in their demand for our products, or their insolvency could have a material effect on our results of operations or liquidity. • Our order backlog may not be indicative of future revenues and may fluctuate from period to period. • Our future rate of growth and profitability are highly dependent on the development and growth of the aerospace and defense, space, avionics, instrumentation and industrial markets, which can be cyclical. • The market share of our customers in the aerospace and defense, space, avionics, instrumentation and industrial markets may change over time, reducing the potential value of our relationships with our existing customer base. • A significant portion of our revenue is derived from customers in the aerospace and defense industry, and our business could be adversely affected by changes in government spending or procurement policies. • We may make acquisitions that are not successful, or we may fail to integrate acquired business into our operations properly. • If we are unable to introduce innovative products, demand for our products may decrease. • Our markets are highly competitive, and we may lose business to larger and better-financed competitors. • Our success depends on our ability to retain key management and technical personnel and attracting, retaining, and training new technical personnel. • We purchase certain key components and raw materials from single or limited sources and could lose sales if these sources fail to fulfill our needs for any reason. • As a supplier to U.S. government defense contractors, we are subject to a number of procurement regulations and other requirements and could be adversely affected by changes in regulations or any negative findings from a U.S. government audit or investigation. • Our products are complex and may contain errors or design flaws, which could be costly to correct. • Future changes in our environmental liability and compliance obligations may increase costs and decrease profitability. • We have significant international operations and sales to customers outside of the United States that subject us to certain business, economic and political risks. • Changes in the U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations. • We rely on information technology systems to conduct our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of operations. • Cybersecurity risks and cybersecurity incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results • If we fail to correct any material weakness that we identify in our internal control over financial reporting or otherwise fail to maintain effective internal control over financial reporting, we may not be able to report our financial results accurately and timely, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports and the price of our common stock may decline.
Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, levels of consumer and business confidence, commodity prices and availability, inflationary pressure, exchange rates, levels of government spending and deficits, political conditions, and other challenges that could affect the global economy including impacts associated with the continuing developments in the war against Ukraine and sanctions which have been announced by the United States and other countries against Russia, which have caused significant uncertainty, adding to continuing concerns about supply chain disruptions, inflation and increases in interest rates in the markets in which we operate.
Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, tariffs, levels of consumer and business confidence, commodity prices and availability, inflationary pressure, exchange rates, levels of government spending and deficits, social or political conditions, and other challenges that could affect the global economy including impacts associated with the continuing developments in the war against Ukraine and sanctions which have been announced by the United States and other countries against Russia, which have caused significant uncertainty, adding to continuing concerns about supply chain disruptions, inflation and increases in interest rates in the markets in which we operate.
During 2025, we expect a significant portion of our revenues to continue to be derived from sales to these manufacturers. Often OEMs and other service providers within these markets have experienced periods of capacity shortage and periods of excess capacity, as well as periods of either high or low demand for their products.
During 2026, we expect a significant portion of our revenues to continue to be derived from sales to these manufacturers. Often OEMs and other service providers within these markets have experienced periods of capacity shortage and periods of excess capacity, as well as periods of either high or low demand for their products.
If any of these various requirements change, our costs of complying with them could increase and reduce our operating margins. To the extent that we are unable to comply with the CMMC or other requirements, our business with the Department of Defense or its prime customers could be at risk.
If any of these various requirements change, our costs of complying with them could increase and reduce our operating margins. To the extent that we are unable to comply with the CMMC or other requirements, our business with the Department of War or its prime customers could be at risk.
In 2024 and 2023, the majority of our revenues were derived from sales to manufacturers of equipment for the aerospace and defense, space, avionics, instrumentation and industrial markets for frequency and spectrum control devices, including indirect sales through distributors and contract manufacturers.
In 2025 and 2024, the majority of our revenues were derived from sales to manufacturers of equipment for the aerospace and defense, space, avionics, instrumentation and industrial markets for frequency and spectrum control devices, including indirect sales through distributors and contract manufacturers.
Risks Related to Our Securities • The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock. • Our officers and directors have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders. • Provisions in our corporate charter documents and under Delaware law could make an acquisition of the Company more difficult, which acquisition may be beneficial to our stockholders. 6 Table of Contents Risks Related to the Separation • As a result of the Separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with LGL Group. • LGL Group continues to perform functions for us, and we continue to perform functions for LGL Group, on a transitional basis, and as a result, we may experience operational disruptions and incur significant costs to perform these functions ourselves following the transition period or be subject to claims and liability. • We are subject to significant restriction on our actions in order to avoid triggering significant tax-related liabilities. • If the Separation does not qualify as tax-free United States federal income tax purposes as a result of a breach by us of any covenant or representation made by us in the Tax Agreement, we could be subject to significant liability.
Risks Related to Our Securities • The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock. • Our officers and directors have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders. • Provisions in our corporate charter documents and under Delaware law could make an acquisition of the Company more difficult, which acquisition may be beneficial to our stockholders. 6 Table of Contents Risks Related to the Separation • As a result of the Separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with The LGL Group, Inc. • The LGL Group, Inc. continues to perform functions for us, and we continue to perform functions for The LGL Group, Inc., on a transitional basis, and as a result, we may experience operational disruptions and incur significant costs to perform these functions ourselves following the transition period or be subject to claims and liability. • If the Separation does not qualify as tax-free United States federal income tax purposes as a result of a breach by us of any covenant or representation made by us in the Tax Agreement, we could be subject to significant liability.
We have not opted out of the restrictions under Section 203, as permitted under DGCL. Risks Related to the Separation As a result of the Separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with LGL Group . As a result of the Separation, Marc J.
We have not opted out of the restrictions under Section 203, as permitted under DGCL. Risks Related to the Separation As a result of the Separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with The LGL Group, Inc. .
Systems that are subject to review include our purchasing systems, billing systems, property management and control systems, cost estimating systems, compensation systems and management information systems. Any costs found to be improperly allocated to a specific contract will not be reimbursed or must be refunded if already reimbursed.
Systems that are subject to review include our purchasing systems, billing systems, property management and control systems, cost estimating systems, compensation systems and management information systems. 9 Table of Contents Any costs found to be improperly allocated to a specific contract will not be reimbursed or must be refunded if already reimbursed.
Additionally, to date, very few of our international revenue and cost obligations have been denominated in foreign currencies. As a result, changes in the value of the United States dollar relative to foreign currencies may affect our competitiveness in foreign markets.
Additionally, to date, very few of our international revenue and cost obligations have been denominated in foreign currencies. As a result, changes in the value of the U.S. dollar relative to foreign currencies may affect our competitiveness in foreign markets.
We have significant international operations and sales to customers outside of the United States that subject us to certain business, economic and political risks. We have office and manufacturing space in Noida, India, and a sales office in Hong Kong. Additionally, foreign revenues for 2024 (primarily to Malaysia) accounted for 22.5% of our 2024 consolidated revenues.
We have significant international operations and sales to customers outside of the United States that subject us to certain business, economic and political risks. We have office and manufacturing space in Noida, India, and a sales office in Hong Kong. Additionally, foreign revenues for 2025 (primarily to Malaysia) accounted for 23.2% of our 2025 consolidated revenues.
Virtually all of our 2024 and 2023 revenues came from sales of electronic components, which consist of packaged quartz crystals, oscillator modules, electronic filters and integrated modules.
Virtually all of our 2025 and 2024 revenues came from sales of electronic components, which consist of packaged quartz crystals, oscillator modules, electronic filters and RF solutions.
We rely on information technology ("IT") systems in order to achieve our business objectives. We also rely upon industry accepted security measures and technology to securely maintain confidential information maintained on our IT systems.
We also rely upon industry accepted security measures and technology to securely maintain confidential information maintained on our IT systems.
Additionally, the market price of our common stock may continue to fluctuate significantly in response to a number of factors, some of which are beyond our control, including the following: • General economic conditions affecting the availability of long-term or short-term credit facilities, the purchasing and payment patterns of our customers, or the requirements imposed by our suppliers; • Economic conditions in our industry and in the industries of our customers and suppliers; • Changes in financial estimates or investment recommendations by securities analysts relating to our common stock; • Market reaction to our reported financial results; • Loss of a major customer; • Announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; and • Changes in key personnel.
Additionally, the market price of our common stock may continue to fluctuate significantly in response to a number of factors, some of which are beyond our control, including the following: • General economic conditions affecting the availability of long-term or short-term credit facilities, the purchasing and payment patterns of our customers, or the requirements imposed by our suppliers; • Economic conditions in our industry and in the industries of our customers and suppliers; • Changes in financial estimates or investment recommendations by securities analysts relating to our common stock; • Market reaction to our reported financial results; • Loss of a major customer; • Announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; and • Changes in key personnel. 12 Table of Contents Our officers and directors have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders.
The majority of our products are custom designed for requirements of specific OEM systems. The expected business life of these products ranges from less than one year to more than 10 years depending on the application. Some of the customizations are modest changes to existing product designs while others are major product redesigns or new product platforms.
The expected business life of these products ranges from less than one year to more than 10 years depending on the application. Some of the customizations are modest changes to existing product designs while others are major product redesigns or new product platforms.
Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions; • Sanctions, tariffs or restrictions on trade imposed or proposed by the United States Government; • Export license requirements; • Trade restrictions; • Currency controls or fluctuations in exchange rates; • High levels of inflation or deflation; • Difficulty in staffing and managing non-U.S. operations; • Greater difficulty in collecting accounts receivable and longer payment cycles; • Changes in labor conditions and difficulties in staffing and managing international operations; and • Limitations on insurance coverage against geopolitical risks, natural disasters and business operations.
Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions; • Sanctions, tariffs or restrictions on trade imposed or proposed by the U.S. government; • Export license requirements; • Local, regional or national laws or regulations, particularly those affecting our customers, suppliers, manufacturing facilities, and/or significant portions of our workforce; • Currency controls or fluctuations in exchange rates; • High levels of inflation or deflation; • Difficulty in staffing and managing non-U.S. operations; • Greater difficulty in collecting accounts receivable and longer payment cycles; • Changes in labor conditions and difficulties in staffing and managing international operations; and • Limitations on insurance coverage against geopolitical risks, natural disasters and business operations.
This concentration of ownership may not be in the best interests of all of our stockholders. Provisions in our corporate charter documents and under Delaware law could make an acquisition of the Company more difficult, which acquisition may be beneficial to our stockholders.
Provisions in our corporate charter documents and under Delaware law could make an acquisition of the Company more difficult, which acquisition may be beneficial to our stockholders.
Any transactions that we are able to identify and complete may involve a number of risks, including: • The diversion of our management's attention from the management of our existing business to the integration of the operations and personnel of the acquired or combined business or joint venture; • Material business risks not identified in due diligence; • Possible adverse effects on our operating results during the integration process; • Substantial acquisition-related expenses, which would reduce our net income, if any, in future years; • The loss of key employees and customers as a result of changes in management; and • Our possible inability to achieve the intended objectives of the transaction.
Any transactions that we are able to identify and complete may involve a number of risks, including: • The diversion of our management's attention from the management of our existing business to the integration of the operations and personnel of the acquired or combined business or joint venture; • Material business risks not identified in due diligence; • Exposure to potential unknown liabilities of the acquired or combined business; • Possible adverse effects on our operating results during the integration process; • Substantial acquisition-related expenses, which would reduce our net income, if any, in future years; • The occurrence of significant goodwill impairment charges; • The loss of key employees and customers as a result of changes in management; and • Our possible inability to achieve the intended objectives of the transaction. 8 Table of Contents In addition, we may not be able to integrate, operate, maintain or manage, successfully or profitably, our newly acquired operations or employees.
Our international operations and sales to customers outside of the United States subject our operating results and financial condition to certain business, economic, political, health, regulatory and other risks, including but not limited to: • Political and economic instability in countries in which our products are manufactured and sold; • Expropriation or the imposition of government controls; • Responsibility to comply with anti-bribery laws such as the U.S.
Our international operations and sales to customers outside of the United States subject our operating results and financial condition to certain business, economic, political, health, regulatory and other risks, including but not limited to: • Political and economic conflict, weakness, or instability in countries in which our products are manufactured and sold, as well as in neighboring countries; • Business interruptions due to natural disasters, outbreak of disease, extreme weather, climate change and other events beyond our control; • Expropriation or the imposition of government controls; • Responsibility to comply with anti-bribery laws such as the U.S.
Such convictions or actions could also result in suspension or debarment from serving as a supplier to government contractors for some period of time. Such convictions or actions could have a material adverse effect on us and our operating results.
Such convictions or actions could also result in suspension or debarment from serving as a supplier to government contractors for some period of time. Such convictions or actions could have a material adverse effect on us and our operating results. The costs of cooperating or complying with such audits or investigations may also adversely impact our financial results.
As of December 31, 2024 and 2023, we had no outstanding balances under the line of credit. We are dependent on a single line of business. We are engaged only in the design, manufacture and marketing of standard and custom-engineered electronic components that are used primarily for the control of frequency and spectrum of signals in electronic circuits.
We are dependent on a single line of business. We are engaged only in the design, manufacture and marketing of standard and custom-engineered electronic components that are used primarily for the control of frequency and spectrum of signals in electronic circuits.
There is a labor shortage in the markets in which we operate which are highly competitive, and some of our operations are not located in highly populated areas. As a result, we may not be able to recruit and retain key personnel. Our failure to hire, retain or adequately train key personnel could have a negative impact on our performance.
Further, there is a labor shortage in the markets in which we operate which are highly competitive, and some of our operations are not located in highly populated areas. As a result, we may not be able to recruit and retain key personnel.
For the year ended December 31, 2024, our largest and second largest customers accounted for 37.0% and 17.4% of the Company's total revenues, respectively. Additionally, as of December 31, 2024, four of our largest customers accounted for approximately 66.2% of our gross accounts receivable balance.
For the year ended December 31, 2025, our largest and second largest customers accounted for 36.0% and 14.9% of the Company's total revenues, respectively. Additionally, as of December 31, 2025, four customers accounted for approximately 71.4% of our gross accounts receivable balance.
Government investigations relating to our or our customers' operations and products and are expected to perform in compliance with a vast array of federal laws, including the Truth in Negotiations Act, the False Claims Act, the International Traffic in Arms Regulations promulgated under the Arms Export Control Act, and the Foreign Corrupt Practices Act.
From time to time, we may also be subject to U.S. government investigations relating to our or our customers' operations and products and are expected to perform in compliance with a vast array of federal laws, including the Truth in Negotiations Act, the False Claims Act, the International Traffic in Arms Regulations promulgated under the Arms Export Control Act, the Foreign Corrupt Practices Act, and other federal statutes and regulations, including those established by OFAC.
There are numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market new products and applications in a timely or cost-effective manner to satisfy customer demand. 8 Table of Contents Our markets are highly competitive, and we may lose business to larger and better-financed competitors.
There are numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market new products and applications in a timely or cost-effective manner to satisfy customer demand.
Any of these difficulties could have a material adverse effect on our business, financial condition, results of operations and cash flows. If we are unable to introduce innovative products, demand for our products may decrease.
We may not be able to maintain uniform standards, controls, policies and procedures, and this may lead to operational inefficiencies. Any of these difficulties could have a material adverse effect on our business, financial condition, results of operations and cash flows. If we are unable to introduce innovative products, demand for our products may decrease.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption.
These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption.
We purchase certain key components and raw materials from single or limited sources and could lose sales if these sources fail to fulfill our needs for any reason.
Our failure to hire, retain or adequately train key personnel could have a negative impact on our performance. We purchase certain key components and raw materials from single or limited sources and could lose sales if these sources fail to fulfill our needs for any reason.
A significant disruption or failure could have a material adverse effect on our business operations, financial performance and financial condition. Cybersecurity risks and cybersecurity incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
Cybersecurity risks and cybersecurity incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results. Our business could be negatively impacted by cybersecurity events and other disruptions.
Gabelli serves as special advisor to our Chairman of the Board of Directors and also serves as Chairman of the Board of Directors and co-Chief Executive Officer of LGL Group.
As a result of the Separation, Marc Gabelli serves as special advisor to our Chairman of the Board of Directors and also serves as Executive Chairman of the Board of Directors of The LGL Group, Inc. ("LGL Group").
However, there can be no assurance that any such actions, including the timeliness of our efforts to review, update or implement policies, procedures and practices in light of evolving threats, or the safeguards put in place by our customers, suppliers and other parties on which we rely, will be sufficient to detect, prevent and mitigate cybersecurity breaches or disruptions, or the unauthorized release of sensitive information or corruption of data.
However, there can be no assurance that any such actions, including the timeliness of our efforts to review, update or implement policies, procedures and practices in light of evolving threats, or the safeguards put in place by our customers, suppliers and other parties on which we rely, will be sufficient to detect, prevent and mitigate cybersecurity breaches or disruptions, or the unauthorized release of sensitive information or corruption of data. 11 Table of Contents Privacy, data protection, and AI laws at the local, state, federal, and international levels impose obligations on us to protect the confidentiality of personal information and create additional compliance and liability risks, including in connection with cybersecurity incidents.
In addition, we could become subject to investigations by the stock exchange on which our securities are listed, the Securities and Exchange Commission (the “SEC”) or other regulatory authorities, which could require additional financial and management resources.
In addition, we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources. These events could have a material and adverse effect on our business, operating results, financial condition and prospects.
In addition, our reputation could be adversely affected if allegations of impropriety were made against us. From time to time, we may also be subject to U.S.
In addition, our reputation could be adversely affected if allegations of impropriety were made against us.
Our markets are highly competitive worldwide, with low transportation costs and few import barriers. We compete principally on the basis of product quality and reliability, availability, customer service, technological innovation, timely delivery and price. Within the industries in which we compete, competition has become increasingly concentrated and global in recent years.
Our markets are highly competitive, and we may lose business to larger and better-financed competitors. Our markets are highly competitive worldwide, with low transportation costs and few import barriers. We compete principally on the basis of product quality and reliability, availability, customer service, technological innovation, timely delivery and price.
Our internal control over financial reporting is a process designed 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 ("GAAP"). We are required to comply with the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), and other rules that govern public companies.
Our internal control over financial reporting is a process designed 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 in the United States ("U.S. GAAP").
Similar geopolitical tensions and political and/or armed conflicts, including tensions between the U.S. and China, China and Taiwan, and the conflict between Israel and Palestine could adversely impact our financial performance and global operations. Such conditions could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations.
Similar geopolitical tensions and political and/or armed conflicts, including tensions between the U.S. and China, China and Taiwan, and the conflicts between the U.S. and Iran and Israel and Palestine could adversely impact our financial performance and global operations.
From January 1, 2024 through December 31, 2024, the high and low closing prices for our common stock were $69.98 and $23.79, respectively. There is a limited public market for our common stock, and we cannot provide assurances that a more active trading market will develop or be sustained.
There is a limited public market for our common stock, and we cannot provide assurances that a more active trading market will develop or be sustained.
We do not currently engage in foreign currency hedging activities, but may do so in the future to the extent that we incur a significant amount of foreign-currency denominated liabilities. 10 Table of Contents We rely on information technology systems to conduct our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of operations.
We do not currently engage in foreign currency hedging activities, but may do so in the future to the extent that we incur a significant amount of foreign-currency denominated liabilities. 10 Table of Contents Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations.
The costs of cooperating or complying with such audits or investigations may also adversely impact our financial results. 9 Table of Contents Our products are complex and may contain errors or design flaws, which could be costly to correct. When we release new products, or new versions of existing products, they may contain undetected or unresolved errors or defects.
Our products are complex and may contain errors or design flaws, which could be costly to correct. When we release new products, or new versions of existing products, they may contain undetected or unresolved errors or defects. The majority of our products are custom designed for requirements of specific OEM systems.
In addition, restrictions on credit availability could adversely affect the ability of our customers to make payments. Similarly, credit restrictions may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress.
Similarly, credit restrictions may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress. Our variable rate indebtedness subjects us to interest rate risk and could cause our debt service obligations to increase significantly.
Variable rate borrowings expose us to potential increased interest expense in a rising interest rate environment, if we utilize the line of credit. If interest rates were to increase, our debt service obligations on variable rate indebtedness would increase even though the amount borrowed remained the same, which could adversely affect our cash flows.
If interest rates were to increase, our debt service obligations on variable rate indebtedness would increase even though the amount borrowed remained the same, which could adversely affect our cash flows. As of December 31, 2025 and 2024, we had no outstanding balances under the Credit Agreement or the Previous Credit Agreement.
If these stockholders act together, they may be able to exert significant control over our management and affairs requiring stockholder approval, including approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock.
This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock. This concentration of ownership may not be in the best interests of all of our stockholders.
Many of our major competitors, some of which are larger than us, and potential competitors have substantially greater financial resources and more extensive engineering, manufacturing, marketing and customer support capabilities. If we are unable to successfully compete against current and future competitors, our operating results will be adversely affected.
Within the industries in which we compete, competition has become increasingly concentrated and global in recent years. Many of our major competitors, some of which are larger than us, and potential competitors have substantially greater financial resources and more extensive engineering, manufacturing, marketing and customer support capabilities.
Our success depends on our ability to retain key management and technical personnel and attracting, retaining, and training new technical personnel. Our future growth and success will depend in large part upon our ability to recruit highly skilled technical personnel, including engineers, and to retain our existing management and technical personnel.
Our future growth and success will depend in large part upon our ability to recruit highly skilled technical personnel, including engineers, and to retain our existing management and technical personnel. In addition, the loss or retirement of key employees presents particular challenges to the extent the departing employee had particularly valuable knowledge or experiences.
Our variable rate indebtedness subjects us to interest rate risk and could cause our debt service obligations to increase significantly. Amounts outstanding under our Loan Agreement would bear interest at the Secured Overnight Financing Rate ("SOFR") plus a margin of 2.25%, with a SOFR floor of 0.00%.
Amounts outstanding under our Credit Agreement would bear interest at the Secured Overnight Financing Rate ("SOFR") plus a margin ranging from 2.00% to 3.00%, with a SOFR floor of 0.00%. Variable rate borrowings expose us to potential increased interest expense in a rising interest rate environment, if we utilize the line of credit.
In addition, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between LGL Group and us regarding the terms of the agreements governing the Separation and the relationship thereafter between the companies. 12 Table of Contents LGL Group continues to perform functions for us, and we continue to perform functions for LGL Group, on a transitional basis, and as a result we may experience operational disruptions and incur significant costs to perform these functions ourselves following the transition period or be subject to claims and liability.
In addition, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between LGL Group and us regarding the terms of the agreements governing the Separation and the relationship thereafter between the companies.
Our business could be negatively impacted by cybersecurity events and other disruptions. We face various cybersecurity threats, including threats to our IT infrastructure and attempts to gain unauthorized access to our proprietary or classified information, denial-of-service attacks, as well as threats to the physical security of our facilities and employees, and threats from terrorist acts.
We face various cybersecurity threats, including attacks using malware, ransomware, distributed denial of service attacks, credential stuffing, supply-chain compromises of software updates, managed service providers, or widely used tools, or phishing incidents resulting in unauthorized access, theft, use, destruction, or other compromises of our systems, as well as threats to the physical security of our facilities and employees, and threats from terrorist acts.
These events could have a material and adverse effect on our business, operating results, financial condition and prospects. 11 Table of Contents Risks Related to Our Securities The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock.
Risks Related to Our Securities The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock. From January 1, 2025 through December 31, 2025, the high and low closing prices for our common stock were $59.64 and $35.00, respectively.
Our officers and directors have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders. Our officers and directors control approximately 6.5% of the voting power represented by our outstanding shares of common stock as of March 14, 2025.
Our officers and directors control approximately 5.6% of the voting power represented by our outstanding shares of common stock as of March 16, 2026. If these stockholders act together, they may be able to exert significant control over our management and affairs requiring stockholder approval, including approval of significant corporate transactions.
Removed
In addition, we may not be able to integrate, operate, maintain or manage, successfully or profitably, our newly acquired operations or employees. We may not be able to maintain uniform standards, controls, policies and procedures, and this may lead to operational inefficiencies.
Added
Such conditions could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations. In addition, restrictions on credit availability could adversely affect the ability of our customers to make payments.
Removed
Prior to the Separation, LGL Group performed many important corporate functions for us, including information technology, shared services, insurance, logistics, human resources, finance and internal audit.
Added
A significant portion of our revenue is derived from customers in the aerospace and defense industry, and our business could be adversely affected by changes in government spending or procurement policies. We derive a significant portion of our revenue from sales to customers in the aerospace and defense markets. These customers in turn generally contract with government agencies.
Removed
In connection with the Separation, we entered into certain arrangements with LGL Group pursuant to which we and LGL Group will continue to provide to each other, on an ongoing basis, certain functions and services that the companies have historically shared.
Added
The funding of government programs is subject to Congressional appropriation and national budget deficit reduction initiatives. Future spending levels are difficult to predict, and the termination or curtailment of individual programs could adversely affect our business.
Removed
LGL Group may not successfully execute its obligations to us under these arrangements, and any interruption in the functions or services that will be provided to us by LGL Group following the Separation could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Added
Most governmental programs are subject to funding approval through congressional appropriations which can be modified or terminated without warning upon the determination of a legislative or administrative body. Appropriations can also be affected by legislation that addresses larger budgetary issues of the U.S. government which could reduce available funding for most federal agencies, including the United States Department of War.
Removed
In addition, at the end of this transition period, we will need to perform these functions ourselves or hire third parties to perform these functions on our behalf. The costs associated with performing or outsourcing these functions may exceed the amounts reflected in our historical combined financial statements that were incurred as a subsidiary of LGL Group.
Added
Government contracts are also subject to specific regulations, and failure to comply with applicable requirements could result in contract termination, suspension, or debarment from future government contracting. It is difficult to assess how this may impact our defense industry customers and the business we do with them in the future.
Removed
A significant increase in the costs of performing or outsourcing these functions could materially and adversely affect our business, results of operations, financial condition and cash flows. We are subject to significant restrictions on our actions in order to avoid triggering significant tax-related liabilities.
Added
If we are unable to successfully compete against current and future competitors, our operating results will be adversely affected. Our success depends on our ability to retain key management and technical personnel and attracting, retaining, and training new technical personnel.
Removed
The Amended and Restated Tax Indemnity and Sharing Agreement ("Tax Agreement") by and between the Company and LGL Group generally prohibits us from taking certain actions that could cause the Separation to fail to qualify as a tax-free transaction, including but not limited to, within two (2) years of the Separation date not entering into any agreement, understanding or arrangement involving the substantial acquisition of stock of the Company or a substantial shift in ownership (by vote or value) of the Company.
Added
This requires us to identify and train existing or new employees to perform necessary functions, which we may be unable to do, or which could result in unexpected costs, reduced productivity, or difficulties with respect to internal processes and controls.
Added
If we fail to have succession plans in place or our succession plans do not operate effectively, we may not be able to maintain continuity and our business could be adversely affected.
Added
Our supply chain is also subject to increasing regulatory requirements, including rules aimed at extinguishing forced labor that require extensive efforts to map supply chains effectively and efficiently beyond tier 1 suppliers for any involvement in human rights abuses.
Added
Goods suspected of being manufactured with forced labor could be blocked from importation into the United States, which could impact our ability to obtain necessary components and materials and adversely affect our revenue.
Added
Additionally, foreign governments may restrict our access to supply; for example, if China were to further restrict export of rare earth minerals, our suppliers’ ability to obtain such supply may be constrained and we may be unable to obtain sufficient quantities, or obtain supply in a timely manner, or at a commercially reasonable cost.
Added
Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections and product field monitoring. If any inspection reveals noncompliance with these regulations, it could adversely affect our operations. Our international operations are, and will continue to be, subject to risks relating to changes in foreign legal and regulatory requirements.
Added
We are subject to the trade policies, export/import controls, and other rules and regulations, including tariffs, trade sanctions, and license requirements of the U.S. and other government authorities. During the first Trump Administration from 2017 to 2021, certain tariffs and retaliatory tariffs, as well as other trade restrictions, were imposed on various products and materials.
Added
In 2025, President Trump again imposed tariffs and retaliatory tariffs against U.S. trading partners, some countries responded with new or increased tariffs of their own, and the amount of the import tariff and the number of products subject to tariffs changed multiple times based on actions by the U.S. government .However, there is currently significant uncertainty about the future relationship between the United States and various other countries with respect to trade policies, treaties, tariffs and customs duties.
Added
On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Following the Supreme Court’s decision, the Trump Administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs.
Added
There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business.
Added
Future tariffs and trade restrictions may cause the prices of our vendors’ products to increase, which could reduce demand for such products, or reduce our vendors’ margins, and adversely impact their revenues, financial results, and ability to service debt. This in turn could adversely affect our financial condition and results of operations.
Added
In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future.
Added
Given our manufacturing operations in India and sales office in Hong Kong, any expansion of tariffs to additional countries or retaliatory measures by foreign governments could directly impact our cost structure and competitive position.
Added
At this time, the situation remains dynamic and it remains unclear what the U.S. government or foreign governments will or will not do with respect to additional tariffs that may be imposed or international trade agreements and policies.
Added
We rely on information technology systems to conduct our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of operations. We rely on information technology ("IT") systems in order to achieve our business objectives.
Added
A significant disruption or failure could have a material adverse effect on our business operations, financial performance and financial condition. We rely on third-party providers for cloud infrastructure, hosting, content delivery, telecommunications, and other critical services.
Added
Disruptions, outages, performance degradations, cybersecurity incidents, or other failures at these providers, or at their subcontractors and subprocessors, could impair our operations, internal processes, and ability to serve customers.
Added
Certain events, including prolonged cloud service disruptions, domain name system failures, payment processor outages, or the insolvency or other failure of a key vendor, may exceed the scope of our business continuity and disaster recovery assumptions and could result in material operational disruption, data loss, reputational harm, and increased costs.
Added
Our reliance on a limited number of providers for certain services may increase the severity of these risks, including the potential impact of outages, security incidents, or adverse changes to service levels, terms of use, or pricing.
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
1 edited+0 added−0 removed1 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
1 edited+0 added−0 removed1 unchanged
2024 filing
2025 filing
Biggest changeQuantitative and Qualitative Disclosures About Market Risk 21 Item 8. Financial Statements and Supplementary Data 22 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 43 Item 9A. Controls and Procedures 43
Biggest changeQuantitative and Qualitative Disclosures About Market Risk 21 Item 8. Financial Statements and Supplementary Data 22 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 46 Item 9A. Controls and Procedures 46
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
1 edited+0 added−0 removed0 unchanged
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
1 edited+0 added−0 removed0 unchanged
2024 filing
2025 filing
Biggest changeItem 3. Legal Proceedings The information required for this Part I, Item 3 is incorporated by reference to the discussion under Note 12 – Contingencies to the Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this Report.
Biggest changeItem 3. Legal Proceedings The information required for this Part I, Item 3 is incorporated by reference to the discussion under Note 13 – Contingencies to the Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this Report.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
2 edited+6 added−0 removed3 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
2 edited+6 added−0 removed3 unchanged
2024 filing
2025 filing
Biggest changeMarket for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Unless otherwise stated, all dollar amounts are in thousands Market for Common Equity Our common stock are listed on the NYSE American, under the symbol "MPTI." Holders of Common Stock As of March 14, 2025, we had approximately 6,900 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Unless otherwise stated, all dollar amounts are in thousands.
Recent Sales of Unregistered Securities The Company did not sell any equity securities during the three months and year ended December 31, 2024 that were not registered under the Securities Act. Purchases of Equity Securities by the Issuer or Affiliated Purchaser The Company did not repurchase any shares of its common stock during the three months ended December 31, 2024.
Recent Sales of Unregistered Securities The Company did not sell any equity securities during the three months and year ended December 31, 2025 that were not registered under the Securities Act. Purchases of Equity Securities by the Issuer or Affiliated Purchaser The Company did not repurchase any shares of its common stock during the three months ended December 31, 2025.
Added
Market for Common Equity Our common stock is listed on the NYSE American under the symbol "MPTI." Holders of Common Stock As of March 16, 2026, we had approximately 5,100 holders of record of our common stock.
Added
Warrants On April 25, 2025, the Company issued 2,911,165 warrants (the "Warrants") to holders of record of outstanding shares of the Company's common stock as of March 10, 2025. Five (5) Warrants entitled their holder to purchase one (1) share of Mtron common stock par value $0.01 per share (the "Common Stock") at an exercise price of $47.50 per share.
Added
The Warrants were exercisable on the date that was the earlier of (i) thirty (30) days prior to April 25, 2028 and (ii) such date that the average volume weighted-average price ("VWAP") of the Common Stock was greater than or equal to $52.00 per share for the prior thirty (30) consecutive trading day period (the "Trigger"); provided however, that should the Trigger occur, the Warrants must be exercised within thirty (30) days of the Company's notification pursuant to the Warrant Agreement that the Trigger occurred.
Added
On October 23, 2025, the Company announced the average VWAP of the Common Stock exceeded the Trigger on October 20, 2025, which resulted in the Warrants becoming immediately exercisable through December 23, 2025. As of December 31, 2025, Warrant holders exercised 2,351,025, or 80.8%, of the Warrants, in a net share settlement of 470,205 shares of Common Stock.
Added
The remaining 560,140 Warrants expired unexercised in accordance with their terms. However, on January 7, 2026, the Company distributed 112,028 unallocated shares of Common Stock to Warrant holders who elected to participate in the over-subscription privilege. The gross proceeds to the Company were $27.7 million, of which $22.3 million was receivable as of December 31, 2025.
Added
As of December 31, 2025, no Warrants remained outstanding.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
22 edited+8 added−4 removed24 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
22 edited+8 added−4 removed24 unchanged
2024 filing
2025 filing
Biggest changeCash Flow Activity The following table presents the cash flow activity for the period indicated: As of December 31, (in thousands) 2024 2023 Cash and cash equivalents, beginning of year $ 3,913 $ 926 Cash provided by operating activities 7,521 4,405 Cash used in investing activities (1,898 ) (1,281 ) Cash provided by (used in) financing activities 3,105 (137 ) Net change in cash and cash equivalents 8,728 2,987 Cash and cash equivalents, end of year $ 12,641 $ 3,913 Operating Activities Cash provided by operating activities was $7,521 in 2024 compared to $4,405 in 2023, an increase of $3,116 primarily due to the following: • Net income increased $4,147 from $3,489 in 2023 to $7,636 in 2024; and • Deferred income tax provision increased $996 from ($784) in 2023 to $212 in 2024.
Biggest changeCash Flow Activity The following table presents the cash flow activity for the period indicated: As of December 31, (in thousands) 2025 2024 Cash and cash equivalents, beginning of year $ 12,641 $ 3,913 Cash provided by operating activities 10,659 7,521 Cash used in investing activities (2,551 ) (1,898 ) Cash provided by financing activities 142 3,105 Net change in cash and cash equivalents 8,250 8,728 Cash and cash equivalents, end of year $ 20,891 $ 12,641 Operating Activities Cash provided by operating activities was $10,659 in 2025 compared to $7,521 in 2024, an increase of $3,138 primarily due to the following: • Higher net income; • Higher non-cash adjustments, including: ◦ Stock-based compensation expense, which increased $445 from $636 in 2024 to $1,081 in 2025; ◦ Deferred income tax provision, which decreased $1,268 from $212 in 2024 to $1,480 in 2025; • Working capital movements, including: ◦ Accounts receivable, which decreased $186 in 2025 compared to an increase of $2,040 in 2024, reflecting shorter customer payment cycles; ◦ Inventories, net, which increased $164 in 2025 compared to $625 in 2024; ◦ Prepaid expenses and other assets, which increased $1,156 in 2025 compared to $165 in 2024, primarily due to higher income taxes receivable; and ◦ Accounts payable, accrued compensation and other expenses, and other liabilities, which increased $328 in 2025 compared to $889 in 2024, primarily due to the timing of goods received and services performed prior to period end and reflects normal fluctuations in operating activity.
The decrease in backlog from December 31, 2023 reflects the nature of a program centric business model, which can materially affect backlog based on the timing and size of these orders. The backlog of unfilled orders includes amounts based on signed contracts and purchase orders, which are likely to be fulfilled substantially within the next 12 to 24 months.
The increase in backlog from December 31, 2024 reflects the nature of a program centric business model, which can materially affect backlog based on the timing and size of these orders. The backlog of unfilled orders includes amounts based on signed contracts and purchase orders, which are likely to be fulfilled substantially within the next 12 to 24 months.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 25, 2024, which is available free of charge on the SEC's website at https://www.sec.gov and on our website at ir.mtronpti.com.
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 27, 2025, which is available free of charge on the SEC's website at https://www.sec.gov and on our website at ir.mtron.com.
Financing Activities Cash provided by (used in) financing activities was $3,105 in 2024 compared to ($137) in 2023, an increase of $3,242 primarily due to the exercise of stock options awarded in December 2023. 19 Table of Contents Capital Resources We believe that existing cash and cash equivalents, marketable securities and cash generated from operations will provide sufficient liquidity to meet our ongoing working capital and capital expenditure requirements for the next 12 months from the date of this filing and for the foreseeable future.
Financing Activities Cash provided by financing activities was $142 in 2025 compared to $3,105 in 2024, a decrease of $2,963 primarily due to lower exercises of stock options awarded in December 2023. 19 Table of Contents Capital Resources We believe that existing cash and cash equivalents, marketable securities and cash generated from operations will provide sufficient liquidity to meet our ongoing working capital and capital expenditure requirements for the next 12 months from the date of this filing and for the foreseeable future.
Our Board has adhered to a practice of not paying cash dividends. This policy takes into account our long-term growth objectives, including our anticipated investments for organic growth, potential acquisitions or other strategic ventures and stockholders' desire for capital appreciation of their holdings.
The Company’s management continues to strive for profitability both internally and through acquisition. Our Board has adhered to a practice of not paying cash dividends. This policy takes into account our long-term growth objectives, including our anticipated investments for organic growth, potential acquisitions or other strategic ventures and stockholders' desire for capital appreciation of their holdings.
Investing Activities Cash used in investing activities was $1,898 in 2024 compared to $1,281 in 2023, an increase of $617 primarily due to the purchase of equipment to support growth and next generation product development.
Investing Activities Cash used in investing activities was $2,551 in 2025 compared to $1,898 in 2024, an increase of $653 primarily due to the purchase of equipment to support growth and next generation product development.
Our working capital metrics were as follows: As of December 31, (in thousands) 2024 2023 Current assets $ 29,752 $ 18,187 Less: Current liabilities 5,216 4,384 Working capital $ 24,536 $ 13,803 Current ratio 5.7 4.1 Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.
Our working capital metrics were as follows: As of December 31, (in thousands) 2025 2024 Current assets $ 61,217 $ 29,752 Less: Current liabilities 4,891 5,216 Working capital $ 56,326 $ 24,536 Current ratio 12.5 5.7 Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.
We expect to fill the vast majority of our order backlog as of December 31, 2024 during 2025 and 2026, but cannot provide assurances as to what portion of the order backlog will be fulfilled in any given year. 17 Table of Contents Non-GAAP Financial Measures To supplement our Consolidated Financial Statements presented on a GAAP basis, the Company presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results.
We expect to fill the vast majority of our order backlog as of December 31, 2025 during 2026 and 2027, but cannot provide assurances as to what portion of the order backlog will be fulfilled in any given year. 17 Table of Contents Non-GAAP Financial Measures To supplement our Consolidated Financial Statements presented on a U.S.
As of December 31, 2024 and 2023, Cash and cash equivalents were $12,641 and $3,913, respectively.
As of December 31, 2025 and 2024, Cash and cash equivalents were $20,891 and $12,641, respectively.
Trends and Uncertainties We are not aware of any material trends or uncertainties, other than the global economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than those listed in Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K. 16 Table of Contents Results of Operations The following table presents our Consolidated Statements of Operations for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Revenues $ 49,012 $ 41,168 $ 7,844 19.1 % Costs and expenses: Manufacturing cost of sales 26,372 24,402 1,970 8.1 % Engineering, selling and administrative 13,246 12,467 779 6.2 % Total costs and expenses 39,618 36,869 2,749 7.5 % Operating income 9,394 4,299 5,095 118.5 % Other income: Interest income, net 243 7 236 3,371.4 % Other income, net 138 94 44 46.8 % Total other income, net 381 101 280 277.2 % Income before income taxes 9,775 4,400 5,375 122.2 % Income tax expense 2,139 911 1,228 134.8 % Net income $ 7,636 $ 3,489 $ 4,147 118.9 % 2024 compared to 2023 Total Revenues Total revenues increased $7,844, or 19.1%, from $41,168 in 2023 to $49,012 in 2024 primarily due to strong defense program product and solution shipments.
Trends and Uncertainties We are not aware of any material trends or uncertainties, other than the global economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than those listed in Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K. 16 Table of Contents Results of Operations The following table presents our Consolidated Statements of Operations for the periods indicated: Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Revenues $ 54,417 $ 49,012 $ 5,405 11.0 % Costs and expenses: Manufacturing cost of sales 30,269 26,372 3,897 14.8 % Engineering, selling and administrative 13,857 13,246 611 4.6 % Total costs and expenses 44,126 39,618 4,508 11.4 % Operating income 10,291 9,394 897 9.5 % Other income: Interest income, net 539 243 296 121.8 % Other income, net 124 138 (14 ) -10.1 % Total other income, net 663 381 282 74.0 % Income before income taxes 10,954 9,775 1,179 12.1 % Income tax expense 2,507 2,139 368 17.2 % Net income $ 8,447 $ 7,636 $ 811 10.6 % 2025 compared to 2024 Total Revenues Total revenues increased $5,405, or 11.0%, from $49,012 in 2024 to $54,417 in 2025 primarily due to strong defense program product and solution shipments, as well as an increase in shipments in the avionics and industrials sectors.
Reconciliation of GAAP Income Before Income Taxes to EBITDA and Non-GAAP Adjusted EBITDA The following table presents a reconciliation of income before income taxes to Adjusted EBITDA, a non-GAAP measure: Three Months Ended December 31, Year Ended December 31, (in thousands, except share data) 2024 2023 2024 2023 Income before income taxes $ 2,758 $ 53 $ 9,775 $ 4,400 Adjustments: Interest income, net (104 ) (13 ) (243 ) (7 ) Depreciation 251 220 968 797 Amortization — 13 5 53 Total adjustments 147 220 730 843 EBITDA 2,905 273 10,505 5,243 Non-cash stock compensation 151 2,124 636 2,421 Excess Separation costs — — — 28 Adjusted EBITDA $ 3,056 $ 2,397 $ 11,141 $ 7,692 Three months ended December 31, 2024 compared to three months ended December 31, 2023 Adjusted EBITDA increased $659 from $2,397 for the three months ended December 31, 2023 to $3,056 for the three months ended December 31, 2024.
Reconciliation of GAAP Income Before Income Taxes to EBITDA and Non-GAAP Adjusted EBITDA The following table presents a reconciliation of income before income taxes to Adjusted EBITDA, a non-GAAP measure: Three Months Ended December 31, Year Ended December 31, (in thousands, except share data) 2025 2024 2025 2024 Income before income taxes $ 4,082 $ 2,758 $ 10,954 $ 9,775 Adjustments: Interest income, net (161 ) (104 ) (539 ) (243 ) Depreciation 286 251 1,086 968 Amortization — — — 5 Total adjustments 125 147 547 730 EBITDA 4,207 2,905 11,501 10,505 Non-cash stock compensation 278 151 1,081 636 Adjusted EBITDA $ 4,485 $ 3,056 $ 12,582 $ 11,141 Three months ended December 31, 2025 compared to three months ended December 31, 2024 Adjusted EBITDA increased $1,429 from $3,056 for the three months ended December 31, 2024 to $4,485 for the three months ended December 31, 2025.
Contractual Obligations The following table summarizes contractual obligations, in total, and by remaining maturity: Payments due by Period (in thousands) Total Payments 2025 Leases $ 10 $ 10 Revolving credit line — — Total $ 10 $ 10 Leases Leases represent the future minimum lease payments under our operating leases.
Contractual Obligations The following table summarizes contractual obligations, in total, and by remaining maturity: Payments due by Period (in thousands) Total Payments 2026 2027 2028 2029 2030 Leases $ 256 $ 74 $ 74 $ 48 $ 48 $ 12 Revolving credit facility — — — — — — Delayed draw facility — — — — — — Total $ 256 $ 74 $ 74 $ 48 $ 48 $ 12 Leases Leases represent the future minimum lease payments under our operating leases.
The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with GAAP.
The non-GAAP financial measures the Company presents are listed below and may not be comparable to similarly-named measures reported by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with U.S. GAAP.
Total Other Income, Net Total other income, net increased $280, or 277.2%, from $101 in 2023 to $381 in 2024 primarily due to a $236 increase in Interest income, net from $7 in 2023 to $243 in 2024 driven by higher interest income earned related to an increase in balances invested in money market mutual funds.
Total Other Income, Net Total other income, net increased $282, or 74.0%, from $381 in 2024 to $663 in 2025 primarily due to a $296 increase in Interest income, net from $243 in 2024 to $539 in 2025 driven by higher average balances invested in money market mutual funds.
Income Tax Expense Income tax expense increased $1,228, or 134.8%, from $911 in 2023 to $2,139 in 2024 primarily due to the increase in Income before income taxes driven by the increase in revenues discussed above. Backlog As of December 31, 2024, our order backlog was $47,239, a decrease of $592, or 1.2%, from $47,831 as of December 31, 2023.
Income Tax Expense Income tax expense increased $368, or 17.2%, from $2,139 in 2024 to $2,507 in 2025 primarily due to the increase in Income before income taxes discussed above. Backlog As of December 31, 2025, our order backlog was $76,425, an increase of $29,186, or 61.8%, from $47,239 as of December 31, 2024.
No cash dividends are expected to be paid for the foreseeable future. 20 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").
See Note 7 – Revolving Credit Agreement to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for details of the Credit Agreement. 20 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").
Total Costs and Expenses Total costs and expenses increased $2,749, or 7.5%, from $36,869 in 2023 to $39,618 in 2024 primarily due to: • a $1,970, or 8.1%, increase in Manufacturing cost of sales from $24,402 in 2023 to $26,372 in 2024 driven by higher revenues partially offset by manufacturing efficiencies and sales of higher margin products; and • a $779, or 6.2%, increase in Engineering, selling and administrative from $12,467 in 2023 to $13,246 in 2024 driven by increased investment in research and development, increased sales commissions consistent with the growth in revenues, and an increase in administrative and corporate expenses to support the growth in revenues.
Total Costs and Expenses Total costs and expenses increased $4,508, or 11.4%, from $39,618 in 2024 to $44,126 in 2025 primarily due to: • a $3,897, or 14.8%, increase in Manufacturing cost of sales from $26,372 in 2024 to $30,269 in 2025 driven by the increase in production of several new products, which result in higher initial manufacturing costs, as well as the impact of tariffs; and • a $611, or 4.6%, increase in Engineering, selling and administrative from $13,246 in 2024 to $13,857 in 2025 driven by continued investment in research and development; higher sales commissions consistent with the growth in revenues; higher stock-based compensation; higher sales and marketing costs; and an increase in administrative and corporate expenses consistent with the overall growth in the business.
The increase was primarily due to improved gross margins and continued containment of expenses, a higher margin product mix, and a decrease in non-cash stock compensation. 18 Table of Contents Liquidity and Capital Resources Overview Liquidity refers to our ability to access sufficient sources of cash to meet the requirements of our operating, investing and financing activities.
Adjusted EBITDA in 2024 included bonus expense of approximately 3.0% of revenues, which was not incurred in 2025. 18 Table of Contents Liquidity and Capital Resources Overview Liquidity refers to our ability to access sufficient sources of cash to meet the requirements of our operating, investing and financing activities.
Gross Margin Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) increased 550 basis points from 40.7% in 2023 to 46.2% in 2024 reflecting higher revenues, improved manufacturing efficiencies, and a higher margin product mix.
The Company's total costs and expenses for 2024 included bonus expense of approximately $1.5 million, or 3.0% of revenues, which was not incurred in 2025. Gross Margin Gross margin (Revenues less Manufacturing cost of sales as a percentage of Revenues) decreased 180 basis points from 46.2% in 2024 to 44.4% in 2025 reflecting product mix and higher tariff-related costs.
Some of the measurements the Company uses are "Non-GAAP financial measures" under SEC rules and regulations. The non-GAAP financial measures the Company presents are listed below and may not be comparable to similarly-named measures reported by other companies.
GAAP basis, the Company presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results. Some of the measurements the Company uses are "Non-GAAP financial measures" under SEC rules and regulations.
The increase was primarily due to improved gross margins, continued containment of expenses, a higher margin product mix, and decrease in non-cash stock compensation. Year ended 2024 compared to Year ended 2023 Adjusted EBITDA increased $3,449 from $7,692 in 2023 to $11,141 in 2024.
The increase was primarily due to higher revenues and lower engineering, selling and administrative expenses partially offset by lower gross margin discussed above. Year ended 2025 compared to Year ended 2024 Adjusted EBITDA increased $1,441 from $11,141 in 2024 to $12,582 in 2025.
The Loan Agreement has a maturity date of June 15, 2025 and contains certain financial covenants based on the following criteria: (a) Minimum Fixed Charge Coverage Ratio; (b) Minimum Current Ratio; and (c) Minimum Tangible Net Worth (each as defined in the Loan Agreement).
The Credit Agreement also imposes certain financial covenants based on the following criteria: (a) Leverage Ratio and (b) Fixed Charge Coverage Ratio (each as defined in the Credit Agreement). All loans pursuant to the Credit Agreement are secured by a first-priority lien on substantially all of the personal property of the Company.
Removed
The increase was partially offset by the following: • Stock-based compensation expense decreased $1,785 from $2,421 in 2023 to $636 in 2024; and • Net change in operating assets/liabilities decreased $365 from ($1,571) in 2023 to ($1,936) in 2024.
Added
The increase was primarily due to higher revenues discussed above, continued operating leverage, and lower incentive compensation partially offset by lower gross margin discussed above.
Removed
The Company’s management continues to strive for profitability both internally and through acquisition.
Added
No cash dividends are expected to be paid for the foreseeable future.
Removed
Revolving Line of Credit On June 15, 2022, we entered into a loan agreement (the "Loan Agreement") for a revolving line of credit with Fifth Third Bank, National Association, for up to $5.0 million bearing interest at SOFR plus a margin of 2.25%, with a SOFR floor of 0.00%.
Added
Revolving Credit Facility and Delayed Draw Facility On December 31, 2025, we entered into an amended and restated credit agreement (the "Credit Agreement") with Fifth Third Bank, National Association ("Fifth Third Bank"), replacing our prior credit facility with Fifth Third Bank (the "Previous Credit Agreement").
Removed
All loans pursuant to the Loan Agreement will be secured by a continuing and unconditional first priority security interest in and to any and all property of the Company. See Note 5 – Revolving Credit Agreement to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for details of the Loan Agreement.
Added
The Credit Agreement provides for a $10.0 million revolving credit facility (the "Revolving Facility") and a $10.0 million delayed draw term loan facility (the "Delayed Draw Facility").
Added
Borrowings under the Revolving Facility and the Delayed Draw Facility bear interest at a rate based on the Secured Overnight Financing Rate ("SOFR") plus a margin ranging from 2.00% to 3.00%, determined by the Company's leverage ratio, with a SOFR floor of 0.00%.
Added
The Company will pay a fee on the average unused daily amount of the facilities at a rate ranging from 0.20% and 0.30%, determined by the Company's leverage ratio.
Added
Amounts outstanding under the Revolving Facility are due at maturity on December 31, 2028, and advances under the Delayed Draw Facility are available for a period of 36 months from the date of the Credit Agreement, with each advance maturing 36 months after funding and subject to quarterly amortization requirements.
Added
The Credit Agreement contains various affirmative and negative covenants that are customary for transactions of this type, including limitations on the incurrence of debt and liabilities, as well as financial reporting requirements.