Elmet Group quarterly earnings rise to $8.29M
The Department of War agreement permits up to $250.0 million in additional preferred-stock issuances, subject to specified terms and conditions.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Elmet Group Co. reported revenue of $79.560 million for the three months ended October 2, 2026, versus $51.124 million for the three months ended September 30, 2025; net income was $8.291 million versus $1.570 million. For the nine months ended October 2, 2026, revenue was $201.968 million and net income $3.465 million, compared with $146.641 million and $4.007 million, respectively. Net cash used in operating activities was $60.727 million for the nine-month period, compared with $1.395 million in 2025.
The U.S. Department of War purchased $200.0 million of Class A Redeemable Preferred Stock on September 14, 2026, providing gross cash proceeds; the agreement permits up to $250.0 million in additional issuances at Elmet’s election and subject to specified terms and conditions. Elmet agreed to acquire 55,138,174 Masan shares, or 4.99% of its voting shares, for approximately $124.7 million; it initiated a trade on October 1 to purchase the shares on October 5, and $124.710 million was restricted cash as of October 2. The company also committed C$35.0 million to Blue Moon, subject to TSXV approval and closing by October 29, while the OSRAM asset acquisition remained subject to closing conditions and was expected in the first quarter of fiscal 2027.
3 points · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue was $79.560 million, versus $51.124 million.
- Moderate pointQuarterly net income was $8.291 million, versus $1.570 million.
- Moderate pointNine-month revenue was $201.968 million, versus $146.641 million.
Negative
- Moderate pointNine-month net income was $3.465 million, versus $4.007 million.
- Moderate pointNine-month operating cash use was $60.727 million, versus $1.395 million.
Filing Explained
This quarter’s filing reports warrants issued to the Department of War for 7,567,341 common shares and to Blue Moon for 1,166,970 shares at an exercise price of
Key Figures
Revenue: $79.560 million
Net income: $8.291 million
Revenue: $201.968 million
+5 more
8 metrics
Revenue
$79.560 million
Three months ended October 2, 2026; $51.124 million for the three months ended September 30, 2025.
Net income
$8.291 million
Three months ended October 2, 2026; $1.570 million for the three months ended September 30, 2025.
Revenue
$201.968 million
Nine months ended October 2, 2026; $146.641 million for the comparable 2025 period.
Net income
$3.465 million
Nine months ended October 2, 2026; $4.007 million for the comparable 2025 period.
Net cash used in operating activities
$60.727 million
Nine months ended October 2, 2026; $1.395 million used in the comparable 2025 period.
Initial Department of War preferred-stock investment
$200.0 million
Aggregate gross cash proceeds at the September 14, 2026 initial closing.
Additional Class A Redeemable Preferred Stock financing
Up to $250.0 million
Additional issuances at Elmet’s election and subject to specified terms and conditions.
Masan share purchase
55,138,174 shares; 4.99% of voting shares
Agreed purchase price approximately $124.7 million.
Key Terms
Class A Redeemable Preferred Stock, tranche right, restricted cash, forward instrument, +1 more
5 terms
Class A Redeemable Preferred Stock financial
"purchased 200,000 shares of the Company’s Class A Redeemable Preferred Stock"
tranche right financial
"which is considered a tranche right"
restricted cash financial
"The restricted cash balance as of October 2, 2026"
Cash that a company holds but cannot use for day-to-day operations because it is set aside for a specific purpose—such as meeting loan covenants, serving as collateral, funding an escrow, or complying with regulations. Like money in a locked savings account earmarked for a bill, restricted cash reduces the cash available to run the business and pay dividends or debts, so investors treat it differently when assessing a company’s true short-term financial strength.
forward instrument financial
"recognized the binding commitment to purchase the Unit Shares as a forward instrument"
Level 1 financial
"measured within Level 1 at the UPCoM closing price"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ELMT’s revenue and net income for the three months ended October 2, 2026?
ELMT reported $79.560 million in revenue and $8.291 million in net income for the three months ended October 2, 2026. For the three months ended September 30, 2025, revenue was $51.124 million and net income was $1.570 million.
How much additional Department of War financing can ELMT receive?
The agreement provides for up to $250.0 million in additional Class A Redeemable Preferred Stock issuances, at Elmet’s election and subject to specified terms and conditions, in addition to the $200.0 million initial purchase.
What does ELMT’s Blue Moon investment commitment include?
Elmet is bound to subscribe for 3,500,000 units at C$10.00 per unit, or C$35.0 million in aggregate. Each unit consists of one Blue Moon common share and one warrant to purchase one common share. Closing was required by October 29, 2026, subject to TSX Venture Exchange approval.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | |||||||||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
For the quarterly period ended | |||||||||||
| OR | |||||||||||
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||
| For the transition period from ________ to _________ | |||||||||||
Commission file number: 001-43245
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
| ☒ | Smaller reporting company | ||||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 4, 2026, there were 30,660,942 shares of common stock outstanding.
Table of Contents
THE ELMET GROUP CO.
TABLE OF CONTENTS
| Page | ||||||||
PART I - FINANCIAL INFORMATION | 1 | |||||||
Item 1. | Financial Statements | 1 | ||||||
Unaudited Consolidated Balance Sheets | 1 | |||||||
Unaudited Consolidated Statements of Operations | 2 | |||||||
Unaudited Consolidated Statements of Comprehensive Income | 3 | |||||||
Unaudited Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity | 4 | |||||||
Unaudited Consolidated Statements of Cash Flows | 6 | |||||||
Notes to Unaudited Consolidated Financial Statements | 7 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 63 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 114 | ||||||
Item 4. | Controls and Procedures | 114 | ||||||
PART II - OTHER INFORMATION | 115 | |||||||
Item 1. | Legal Proceedings | 115 | ||||||
Item 1A. | Risk Factors | 115 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 119 | ||||||
Item 3. | Defaults upon Senior Securities | 119 | ||||||
Item 4. | Mine and Safety Disclosure | 119 | ||||||
Item 5. | Other Information | 119 | ||||||
Item 6. | Exhibits | 120 | ||||||
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Report”) contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Report, including, without limitation, statements regarding our future results of operations or financial condition, business strategy and plans, expansion plans and strategy, economic conditions, both generally and in particular in the regions in which we operate or plan to operate, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “consider,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Report, including, but not limited to, the following:
•our market opportunities and the potential growth of those markets;
•our strategy, expected outcomes, and growth prospects;
•trends in our operations, industry, and markets;
•our ability to execute our growth strategy and successfully acquire and integrate potential acquisition targets;
•our future profitability, indebtedness, liquidity, access to capital, and the terms of such capital, and financial condition;
•the amount of, and our ability to service, our current and future indebtedness;
•any inability to attract, train or retain employees with the requisite skills and experience;
•failure by us or our employees to obtain and maintain necessary security clearances or certifications;
•changes in U.S. government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us;
•the termination or nonrenewal of our government contracts and subcontracts, particularly those contracts with the U.S. government and the Department of War (“DoW”);
•our ability to execute on and achieve the anticipated benefits from the DoW Transactions, the Springer Transactions, the Masan Investment, the DLA Offtake Agreement, the formation of Elmet Refining & Trading and the OSRAM Acquisition (each as defined below);
•availability and volatility in the prices of raw materials and energy;
•our ability to remain in compliance with extensive laws and regulations that apply to our business and operations;
•the increased expenses associated with being a public company;
•changes in estimates used in recognizing revenue;
•internal system or service failures and security breaches, including cyber intrusions, ransom attacks or other information technology exposure;
•inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes;
•the ability to maintain the listing of our common stock on Nasdaq;
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•the future trading prices of our common stock; and
•other risks, uncertainties and factors set forth in this Report, including those set forth under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Report. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Report to reflect events or circumstances after the date of this Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.
OTHER PERTINENT INFORMATION
Unless specifically set forth to the contrary, “Company,” “we,” “us,” “our” and similar terms refer to The Elmet Group Co. and its subsidiaries, unless the context indicates otherwise.
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PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
THE ELMET GROUP CO.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)
| October 2, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current Assets: | |||||||||||
| Cash | $ | $ | |||||||||
Restricted cash | |||||||||||
| Marketable securities | |||||||||||
| Accounts receivable, net | |||||||||||
| Government grant receivables | |||||||||||
| Related party receivables | |||||||||||
| Unbilled revenue | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Deferred tax assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities, Redeemable Preferred Stock, and Stockholders’ Equity | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Related party payables | |||||||||||
| Operating lease liabilities, current portion | |||||||||||
| Current portion of long-term debt – related party | |||||||||||
| Current portion of long-term debt | |||||||||||
| Deferred government grants | |||||||||||
| Deferred revenue | |||||||||||
| Total current liabilities | |||||||||||
| Operating lease liabilities, net of current portion | |||||||||||
| Long-term debt, net of current portion | |||||||||||
| Long-term debt, net of current portion – related party | |||||||||||
| Deferred tax liabilities, net | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and Contingencies (Note 20) | |||||||||||
| Redeemable Preferred Stock: | |||||||||||
Class A Redeemable Preferred Stock - $ | |||||||||||
| Stockholders’ Equity: | |||||||||||
Preferred Stock - $ | |||||||||||
Class A Common Stock – $ | — | ||||||||||
Class B Common Stock – $ | — | ||||||||||
Common Stock - $ | — | ||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive (loss) income | ( | ||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities, redeemable preferred stock, and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are integral to the unaudited consolidated financial statements.
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THE ELMET GROUP CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 2, 2026 | September 30, 2025 | October 2, 2026 | September 30, 2025 | ||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other (income) expense, net: | |||||||||||||||||||||||
Interest (income) expense | ( | ||||||||||||||||||||||
| Interest expense - related party | |||||||||||||||||||||||
| Change in fair value of derivative asset | ( | ||||||||||||||||||||||
Change in fair value of forward instruments | |||||||||||||||||||||||
(Gain) loss on remeasurement of the fair value of marketable securities | ( | ( | |||||||||||||||||||||
Other income, net | ( | ( | ( | ( | |||||||||||||||||||
Total other (income) expense, net | ( | ( | |||||||||||||||||||||
Income from continuing operations before taxes | |||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Income from continuing operations | |||||||||||||||||||||||
| Loss from discontinued operations | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income per share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are integral to the unaudited consolidated financial statements.
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THE ELMET GROUP CO.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 2, 2026 | September 30, 2025 | October 2, 2026 | September 30, 2025 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
| Total other comprehensive (loss) income | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are integral to the unaudited consolidated financial statements.
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THE ELMET GROUP CO.
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except for share data)
| Redeemable Preferred Stock | Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Redeemable Preferred Stock | Class A Common Stock | Class B Common Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Spinoff of subsidiary in connection with Reorganization | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of April 3, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock awards | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of stock appreciation rights, net of shares withheld for taxes | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from initial public offering, net of issuance costs and underwriter fees | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Class A Common Stock to Common Stock in connection with initial public offering | — | — | ( | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and cancellation of Class B Common Stock | — | — | — | — | ( | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of July 3, 2026 | $ | — | $— | — | $— | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of TEG Warrants (Note 15) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A Redeemable Preferred Stock, net of issuance costs (Note 14) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued dividends on Class A Redeemable Preferred Stock | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion on Class A Redeemable Preferred Stock | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants, net of issuance costs (Note 14) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of equity commitment (Tranche Right), net of issuance costs (Note 14) | — | — | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of October 2, 2026 | $ | — | $ | — | — | $ | — | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Class A Common Stock | Class B Common Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss from discontinued operations | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholder distributions | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholder contribution – discontinued operations | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss from discontinued operations | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholder distributions | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income from continuing operations | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss from discontinued operations | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholder distributions | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are integral to the unaudited consolidated financial statements.
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THE ELMET GROUP CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Nine Months Ended | |||||||||||
| October 2, 2026 | September 30, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
| Loss from discontinued operations | ( | ||||||||||
Income from continuing operations | |||||||||||
Adjustments to reconcile income from continuing operations to net cash used in operating activities: | |||||||||||
| Deferred income taxes, net | |||||||||||
Unrealized gain on fair market value of derivative | ( | ||||||||||
Unrealized loss on forward instruments | |||||||||||
| Unrealized (gain) loss on marketable securities | ( | ||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation | |||||||||||
| Noncash operating lease expense | |||||||||||
| Noncash interest expense | |||||||||||
| Provision for excess and obsolete inventories | |||||||||||
Provision for credit losses | |||||||||||
| Change in fair value of interest rate collars | ( | ||||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Unbilled revenue | ( | ( | |||||||||
| Inventories | ( | ( | |||||||||
| Related party receivables | |||||||||||
| Prepaid expenses and other current assets | ( | ( | |||||||||
| Other assets | ( | ||||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other current liabilities | ( | ||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Related party payables | |||||||||||
| Deferred revenue | |||||||||||
| Other liabilities | ( | ||||||||||
| Net cash (used in) provided by operating activities from continuing operations | ( | ||||||||||
| Net cash used in operating activities from discontinued operations | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
| Cash flows from investing activities: | |||||||||||
Purchase of shares upon exercise of call option (See Note 2) | ( | ||||||||||
Purchases of property, plant and equipment, net of grant proceeds (see Note 7 – Government Grants) | ( | ( | |||||||||
| Net cash used in investing activities from continuing operations | ( | ( | |||||||||
| Net cash used in investing activities from discontinued operations | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
Proceeds from the issuance of Class A Redeemable Preferred Stock and warrants | |||||||||||
Payments of issuance costs on Class A Redeemable Preferred Stock and warrants | ( | ||||||||||
| Proceeds from initial public offering, net of underwriting discount and offering costs | |||||||||||
| Payments of principal on revolving credit facility | ( | ( | |||||||||
| Proceeds from revolving credit facility | |||||||||||
| Payments of principal on long-term debt | ( | ( | |||||||||
| Payments of principal on long-term debt – related party | ( | ||||||||||
| Cash distributions paid to stockholders | ( | ||||||||||
| Contributions from stockholders | |||||||||||
| Payments of deferred consideration | ( | ||||||||||
| Payments of contingent consideration | ( | ||||||||||
| Employee taxes paid on shares withheld for tax-withholding purposes | ( | ||||||||||
| Payments of principal on revolving credit facility – related party | ( | ( | |||||||||
| Payments of principal on finance leases | ( | ( | |||||||||
Repurchase of Class B common stock | ( | ||||||||||
Net cash provided by financing activities from continuing operations | |||||||||||
| Net cash provided by financing activities from discontinued operations | |||||||||||
Net cash provided by financing activities | |||||||||||
| Effects of exchange rate changes on cash | ( | ||||||||||
Net increase (decrease) in cash and restricted cash | $ | $ | ( | ||||||||
Cash and restricted cash at beginning of period | |||||||||||
Cash and restricted cash at end of period | $ | $ | |||||||||
Reconciliation of cash and restricted cash at beginning of period: | |||||||||||
| Cash at beginning of period – continuing operations | $ | $ | |||||||||
Restricted cash at beginning of period - continuing operations | |||||||||||
| Cash at beginning of period – discontinued operations | |||||||||||
Cash and restricted cash at beginning of period | $ | $ | |||||||||
Reconciliation of cash and restricted cash at end of period: | |||||||||||
| Cash at end of period – continuing operations | $ | $ | |||||||||
Restricted cash at end of period - continuing operations | |||||||||||
| Cash at end of period – discontinued operations | |||||||||||
Cash and restricted cash at end of period | $ | $ | |||||||||
Supplemental non-cash investing and financing information: | |||||||||||
| Purchases of property, plant and equipment included in accounts payable and accrued expenses | $ | $ | |||||||||
| Contracted government grants not yet received | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | |||||||||
Non-cash capitalized issuance costs | $ | $ | |||||||||
Issuance of TEG Warrants in exchange for a deferred asset | $ | $ | |||||||||
Accrued dividends and accretion on Class A Redeemable Preferred Stock | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | $ | $ | |||||||||
The accompanying notes are integral to the unaudited consolidated financial statements.
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THE ELMET GROUP CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BUSINESS AND ORGANIZATION
Description of the Business
The accompanying consolidated financial statements include the accounts of The Elmet Group Co. and its consolidated subsidiaries (collectively the “Company”). The Company operates the following business units:
The Company’s Critical Materials Components (“CMC”) division, which operates under the name Elmet Technologies, has manufacturing facilities in Lewiston, Maine, Euclid, Ohio and Coldwater, Michigan, was established in 1929 and is a United States owned and operated, fully integrated manufacturer of critical refractory materials specializing in tungsten, molybdenum, and specialized alloys such as heavy tungsten, titanium-zirconium-molybdenum, HCT (potassium doped) molybdenum and lanthanated molybdenum. The CMC division’s products are primarily used in high-temperature, high-stress industrial and technological applications such as satellites, missiles, hypersonic weapons, submarines, advanced missile and drone fragmentation, nuclear fission, nuclear fusion development, aircraft, medical imaging, advanced electronics, semiconductor equipment, heat treatment furnaces, vacuum processing, and glass manufacturing industries. The CMC division’s offerings also include specialized precision machining and fabrication services of its metals.
The Company’s Engineered Microwave Products (“EMP”) division, which operates under the name Microwave Techniques, has manufacturing facilities in Gorham, Maine, Nashua, New Hampshire, and Hamburg, Germany. The EMP division provides a mix of highly engineered radio frequency (“RF”) systems, components and engineering services. The EMP division’s products include a wide range of RF generators, waveguides and coaxial components, ultra-high vacuum components, and industrial microwave systems. The EMP division products are primarily used in missile tracking systems, directed energy systems, nuclear fusion development, aircraft, radar systems, medical imaging, semiconductor equipment, vacuum processing, synthetic diamond manufacturing and high temperature material and food processing industries. The EMP division also provides engineered components to multiple national, collegiate and international physics laboratories in support of high energy research.
Polymer Laboratories LLC (“Poly Labs”) was a consolidated subsidiary, majority-owned by the Company’s wholly-owned subsidiary, Anania & Associates, which operated a manufacturing facility in Lewiston, Maine and manufactured highly engineered and molded polyurethane, self-skinning polyurethane, and small precise-pour polyurethane. Anania & Associates divested its interest in Poly Labs to Anania & Associates’ individual stockholders on October 1, 2025 and is classified as discontinued operations within these consolidated financial statements. See Note 5 – Discontinued Operations for more details.
Reorganization
Initial Public Offering
On April 24, 2026, the Company completed its initial public offering (“IPO”) of an aggregate of 9,857,142 shares of its common stock at a public offering price of $14.00 per share, which includes 1,285,714 sold by the Company pursuant to the exercise of the underwriters’ over-allotment option that was exercised in full. The IPO resulted in net proceeds to the Company of $128.2 million after deducting the underwriting discounts and commissions and before deducting offering
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costs of $2.8 million, which were charged to additional paid-in capital as a reduction of the net proceeds received from the IPO. In connection with the IPO, the Company also granted the representative of the underwriters, a warrant to purchase up to 147,857 shares of the Company’s common stock (the “Underwriter’s Warrant”) that has an exercise price equal to 125 % of the public offering price of $14.00 per share, or $17.50 per share. The Underwriter’s Warrant is not exercisable for a period of 180 days following the IPO date and expires four years from the date of issuance, or April 24, 2030. In connection with the IPO, the Company redeemed all issued and outstanding shares of Class B common stock for less than $0.1 million and consolidated its two classes of common stock, Class A and Class B, into a single class of $0.001
Strategic Agreements
During the three months ended October 2, 2026, the Company entered into several strategic financing, investment, acquisition, supply and offtake arrangements intended to expand its processing and manufacturing capabilities and strengthen its tungsten supply chain.
Department of War Agreement
On September 11, 2026, the Company entered into an investment agreement (the “Investment Agreement”) with the United States Department of War (“DoW”). The Investment Agreement became effective as of September 14, 2026 (the “Initial Closing Date”), upon which date the DoW purchased 200,000 shares of the Company’s Class A Redeemable Preferred Stock (“Class A Preferred Stock”) for aggregate gross cash proceeds of $200.0 million (the “Initial Closing”). In connection with the Initial Closing, the Company also issued warrants to the DoW to purchase an aggregate of 7,567,341 shares of the Company’s common stock. The Investment Agreement provides for up to $450.0 million of aggregate Class A Preferred Stock financing, consisting of the initial $200.0 million under the Initial Closing and up to $250.0 million of additional Class A Preferred Stock issuances that may be funded, at the Company’s election and subject to specified terms and conditions, during future commitment periods, which is considered a tranche right. See Note 14 – DoW Investment Agreement and Related Transactions for additional information.
Springer and Blue Moon Agreements
On September 11, 2026, the Company entered into a binding letter agreement (the “Binding Letter Agreement”) with Blue Moon Metals Inc. (“Blue Moon”), Blue Moon (Springer) Inc. (“BM US”) and EQ Resources Limited (“EQ”) relating to a series of proposed strategic transactions associated with the Springer Tungsten Complex in Pershing County, Nevada. The proposed transactions include, among other matters, the formation of a joint venture to restart, expand and operate the Springer ammonium paratungstate plant (“APT Plant”), an equity investment by the Company in Blue Moon, tungsten concentrate supply arrangements, a tungsten prepayment facility, board representation rights and related commercial arrangements.
Under the Binding Letter Agreement, the Company is bound to subscribe for 3,500,000 units of Blue Moon at a price of C$10.00 per unit, or C$35.0 million (approximately $24.7 million as of September 11, 2026) in the aggregate (the “Equity Subscription”), with closing required by October 29, 2026, subject to approval from the TSX Venture Exchange (“TSXV”). Each unit consists of one common share of Blue Moon (a “Unit Share”) and one warrant to purchase one common share of Blue Moon (a “Blue Moon Warrant(s)”). As of October 2, 2026, the Unit Shares and the Blue Moon Warrants had not been issued and the subscription price had not been funded. The Company recognized the binding commitment to purchase the Unit Shares as a forward instrument (the “Forward”) measured at fair value as of October 2, 2026. See Note 15 – Blue Moon Metals, Inc. Transactions for additional information.
In connection with the Binding Letter Agreement, on September 21, 2026, the Company entered into a Warrant Purchase Agreement (the “Warrant Purchase Agreement”) under which the Company issued to Blue Moon warrants to purchase up to 1,166,970 shares of the Company’s common stock at an exercise price of $21.42 per share (the “TEG Warrants”). See Note 15 – Blue Moon Metals, Inc. Transactions for additional information.
Masan Investment
On September 23, 2026, the Company agreed under a Share Purchase Agreement (the “SPA”) to acquire from Masan Horizon Company Limited 55,138,174 ordinary shares (the “Sale Shares”), or 4.99 % of the voting shares, of Masan High-Tech Materials Corporation (“Masan”) for approximately $124.7 million (the “Masan Purchase Price”), settled in Vietnamese Dong (“VND”) at VND 3,239,808,827,892 (VND 58,758 per share). On October 1, 2026 (the “Trade Date”) the Company initiated a trade on the Vietnam Unlisted Public Company Market (“UPCoM”) to purchase the Sale Shares
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on October 5, 2026. A shareholders’ agreement gives the Company one conditional Board nominee, information rights and protective rights, and prohibits transfer of the Sale Shares without the seller’s consent until 18 months after the Trade Date (the “Lock-up Period”).
OSRAM Acquisition
On September 3, 2026, the Company, through its wholly owned subsidiary Elmet Technologies LLC, entered into an asset purchase agreement with OSRAM GmbH to acquire substantially all assets and rights associated with OSRAM’s metal production operations in Schwabmünchen, Germany and assume specified liabilities. The purchase price will be determined at the closing of the transaction pursuant to the purchase price formula and adjustment provisions as set forth in the Purchase Agreement, which generally consists of the aggregate of (i) a fixed amount of negative €18 million, (ii) plus certain pension assets, (iii) minus the amount of the defined benefit obligation for certain pension liabilities, (iv) minus a restructuring prepayment in the amount of €1 million, (v) plus the amount, if any, by which the Working Capital (as defined in the Purchase Agreement) of the Business on the first day of the calendar month of the closing exceeds €3.875 million, (vi) minus the amount, if any, by which the Working Capital of the Business on the Effective Date falls below €3.875 million. The transaction remained subject to customary and specified closing conditions as of October 2, 2026. The Company expects the transaction to close in the first quarter of fiscal 2027.
Strategic Offtake and Supply Chain Arrangements
During September 2026, the Company entered into several strategic tungsten supply, processing and offtake arrangements, including an exclusive offtake agreement with the United States Defense Logistics Agency and a tungsten concentrate offtake agreement with Drakelands Restoration Limited and Tungsten West PLC. In addition, the Company established Elmet Refining & Trading LLC, a new operating division intended to coordinate sourcing, processing and delivery activities across its expanding tungsten supply chain network. There was no material activity related to these arrangements as of October 2, 2026.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated balance sheet as of October 2, 2026, the consolidated statements of operations, the consolidated statements of comprehensive income and the consolidated statements of changes in redeemable preferred stock and stockholders’ equity for the three and nine months ended October 2, 2026 and September 30, 2025, and the consolidated statements of cash flows for the nine months ended October 2, 2026 and September 30, 2025 are unaudited. The consolidated balance sheet as of December 31, 2025 included herein is unaudited as it was derived from the audited consolidated balance sheet of Anania & Associates and subsidiaries (a/k/a The Elmet Group Co.), after giving effect to the impact of the Reorganization.
The unaudited interim consolidated financial statements have been prepared on a basis consistent with the Anania & Associates and subsidiaries (a/k/a The Elmet Group Co.), except with respect to equity structure and taxes, audited annual consolidated financial statements as of and for the year ended December 31, 2025, and, in the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of October 2, 2026, the results of operations for the three and nine months ended October 2, 2026 and September 30, 2025, comprehensive income for the three and nine months ended October 2, 2026 and September 30, 2025, cash flows for the nine months ended October 2, 2026 and September 30, 2025, and changes in redeemable preferred stock and stockholders’ equity for the three and nine months ended October 2, 2026 and September 30, 2025. The financial data and other information disclosed in these notes related to the three and nine months ended October 2, 2026 and September 30, 2025 are also unaudited. The results for the three and nine months ended October 2, 2026 are not necessarily indicative of results to be expected for the year ending January 1, 2027 or any other period. The accounting policies followed for the unaudited interim consolidated financial statements are consistent with the annual consolidated financial statements.
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These unaudited consolidated financial statements should be read in conjunction with Anania & Associates and subsidiaries (a/k/a The Elmet Group Co.) audited consolidated financial statements and the notes thereto for the year ended December 31, 2025, which are included in the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”), as amended and supplemented, and declared effective on April 22, 2026.
Change in Fiscal Calendar
Beginning in fiscal 2026, the Company changed its fiscal calendar to adopt a 4-4-5 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into two four-week months and one five-week month. This change was implemented to better align the Company’s accounting operations with quarterly public reporting requirements and to improve comparability of financial performance. Under the new fiscal calendar, the Company’s fiscal year ends on the Friday closest to December 31st. The Company’s last fiscal year-end under the prior calendar-year convention was December 31, 2025, and fiscal periods beginning January 1, 2026 are reported under the new 4-4-5 fiscal calendar. As a result of this change, the Company’s third fiscal quarter, and the three and nine month periods presented in these unaudited consolidated financial statements ended October 2, 2026, include an additional number of days compared to the prior-year periods ended September 30, 2025. Accordingly, results for these periods may not be fully comparable to those of the prior year periods primarily due to the change in the number of days included in the periods. Subsidiaries that have a fiscal year-end different from that of the Company are consolidated using financial statements for periods that are within three months of the Company’s fiscal year-end, with adjustments for material transactions, if any.
Foreign Currency Translation
The financial statements of the Company’s foreign subsidiaries, where the local currency is the functional currency, are translated using exchange rates in effect at the end of the year for assets and liabilities and average exchange rates during the year for results of operations. The resulting foreign currency translation adjustment is included in stockholders’ equity as accumulated other comprehensive (loss) income.
Accounting Estimates
The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates. Significant items subject to estimates and assumptions include those related to over-time revenue recognition, the valuation of marketable securities, the valuation of forward instruments, the valuation of redeemable preferred stock and equity instruments, the valuation of stock-based compensation, the valuation of inventory and related reserves, and the assessment of recoverability of goodwill.
Some of these estimates can be subjective and complex and, consequently, actual results may differ from these estimates under different assumptions or conditions. While for any given estimate or assumption made by the Company’s management there may be other estimates or assumptions that are reasonable, the Company believes that, given the current facts and circumstances present as of the date of these consolidated financial statements, it is unlikely that applying any such other reasonable estimate or assumption would materially impact the consolidated financial statements herein.
Cash
Restricted Cash
Restricted cash is comprised of cash that is restricted as to withdrawal or use under the terms of certain contractual agreements. The restricted cash balance as of October 2, 2026 relates to cash encumbered for the purchase of marketable securities that was not settled as of the reporting date.
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Marketable Securities
Marketable securities are comprised of investments in equity securities. The Company records its marketable securities at fair value based on the quoted market prices of the securities. Gains and losses resulting from the change in fair value of marketable securities are included in (gain) loss on remeasurement of fair value of marketable securities, net in the consolidated statements of operations.
Accounts Receivable, net
Accounts receivable, net consists of amounts owed by commercial companies and government agencies. Accounts receivable is stated net of the allowance for credit losses.
Accounts receivable is carried at historical cost, less any write-offs and the allowance for credit losses. The Company records an allowance for credit losses for those accounts receivable balances considered to be uncollectible based upon management’s assessment of collectability, which considers historical write-off experience and any specific risks identified in customer collection matters. Bad debts are written off against the allowance. Additions to the allowance for credit losses are charged to bad debt expense within general and administrative expense in the accompanying consolidated statements of operations.
The following table summarizes the activity related to the Company’s allowance for credit losses during the three and nine months ended October 2, 2026 and September 30, 2025 (in thousands):
| Three Months Ended October 2, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended October 2, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Write-offs of receivables | ( | ( | |||||||||||||||||||||
| Increase in allowance for credit losses | |||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
The Company does not typically require collateral from its customers; however, certain customer contracts require milestone payments or prepayments. Although concentrations of credit risk exist with respect to certain customers, management believes this risk is mitigated through ongoing collection activity and credit evaluations performed on new and existing customers. Accounts receivable generally have contractual terms of 30 to 90 days and do not bear interest.
Concentrations of Credit Risk
Credit risk is the risk of loss from amounts owed by customers and financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash, accounts receivable and unbilled revenue.
The Company performs ongoing credit evaluations of its customers and maintains an allowance for credit losses. Unbilled revenue includes amounts due from customers for performance obligations that have been satisfied but for which amounts have not been billed. The Company has historically not experienced any significant losses related to the collection of its accounts receivable or unbilled revenue.
As of October 2, 2026, two customers accounted for more than 10% of the Company’s accounts receivable, net balance, who in aggregate represent approximately 27 % of the Company’s total balance. As of December 31, 2025, one customer accounted for more than 10% of the Company’s accounts receivable, net balance, representing approximately 15 % of the Company’s total balance. For the three and nine months ended October 2, 2026, there was one customer that accounted for more than 10% of the Company’s total revenue for the periods, accounting for approximately 11
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Concentrations of Significant Vendors
Inventories, net
Inventories include material, direct labor and related manufacturing overhead, and are stated at the lower of cost, determined on a first-in, first-out basis, and average cost, or net realizable value determined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company records inventory when it takes delivery and title to the product according to the terms of each supply contract.
The Company adjusts inventory carrying amount for the estimated difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and selling price. The Company also analyzes its inventory levels on each reporting date for excess and obsolete inventory. The Company’s analysis requires judgment and is based on factors including, but not limited to, recent historical activity, anticipated or forecasted demand for its products, competitiveness of product offerings, and market conditions. In doing so, the Company compares on-hand balances to anticipated usage using recent historical activity as well as judgments and estimates about anticipated or forecasted demand. If estimates of customer demand diminish further or market conditions become less favorable than those projected by the Company, additional inventory adjustments may be required, subject to judgment and estimation. At the point of a loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration of or increase in that newly established basis.
As of October 2, 2026 and December 31, 2025, inventory, net of reserves, consisted of the following (in thousands):
| October 2, 2026 | December 31, 2025 | ||||||||||
| Finished goods | $ | $ | |||||||||
| Work-in-progress | |||||||||||
| Raw materials | |||||||||||
| Inventory, net | $ | $ | |||||||||
As of October 2, 2026 and December 31, 2025, the Company had inventory reserves of approximately $8.4 million and $6.2 million, respectively, based on the evaluation of its ending inventory on hand for excess quantities and obsolescence.
Property, Plant and Equipment, net
Property, plant and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Repairs and maintenance costs are expensed as incurred, whereas major improvements are capitalized as additions to property, plant, and equipment.
The Company accounts for depreciation and amortization using the straight-line method to allocate the cost of property, plant and equipment over their estimated useful lives as follows:
| Estimated Useful Life (in Years) | |||||
| Buildings | |||||
| Building improvements | |||||
| Machinery and equipment | |||||
| Furniture, fixtures and vehicles | |||||
| Leasehold improvements | Shorter of the estimated useful life or the remaining lease term | ||||
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The Company reviews the estimated useful lives of its property, plant and equipment at the end of each reporting period, or whenever events or changes in circumstances indicate a review is warranted.
Government Grants
The Company has entered into multiple subcontract agreements with multiple contract administrators engaged by the U.S. Government, to perform prototype development, manufacturing process enhancements, and capital equipment build-outs in support of Department of War programs. Under the terms of these agreements, the Company is reimbursed for qualifying costs incurred, including equipment, labor, materials, and manufacturing expenses, plus a nominal contractual profit margin. The Company accounts for these agreements as government grants.
Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions of the grant and the Company will receive the grant. Generally, government grants fall into two categories: grants related to assets and grants related to income.
Grants related to assets are government grants for the purchase of long-lived assets. The Company accounts for grants related to assets by reducing the carrying amount of the asset by the amount of the grant. The Company recognizes the grant in profit or loss over the life of the depreciable asset as a reduction to depreciation expense.
Grants related to income are any grants that are not considered grants related to assets. Grants related to income are recognized in profit or loss within revenue upon meeting the recognition criteria, as the Company’s operations continuously support such grant programs.
Business Combinations
The purchase price for each acquisition is allocated to the assets acquired and liabilities assumed primarily based on their estimated fair values at the date of acquisition. The excess of (i) the total consideration transferred over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the consideration transferred is less than the fair value of the net assets of the acquiree, the difference is recognized directly in the consolidated statements of operations as a bargain purchase gain. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed. The consolidated financial statements include the results of operations of an acquired business after the completion of the acquisition.
Goodwill
Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. The Company’s goodwill is assigned entirely to one reporting unit: the Company’s EMP operating segment.
Goodwill is not amortized and must be tested for impairment at least annually, or more frequently if events or circumstances indicate that it may be impaired. Goodwill is tested for impairment annually on the first day of the fourth quarter of the Company’s fiscal year at the reporting unit level. The Company performs a qualitative assessment to determine whether further impairment testing is necessary. Factors considered include macroeconomic, industry and market conditions, cost factors that would have a negative effect on earnings and cash flows, legal and regulatory environment, historical financial performance and significant changes in the Company’s operations or brand. If the qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed. In the quantitative assessment for goodwill, an assessment is performed to determine the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recognized in an amount equal to that excess.
As quoted market prices are not available for the Company’s reporting unit, the fair value of the reporting unit is determined using a discounted cash flow model (income approach). This method uses various assumptions that are specific to a reporting unit in order to determine fair value. While the Company believes that estimates of future cash flows are reasonable, changes in assumptions could significantly affect valuations and result in impairments in the future. The most significant assumption involved in the Company’s determination of fair value is the cash flow projections of the reporting unit. If the estimates of future cash flows for the reporting unit may be insufficient to support the carrying amount of the reporting unit, the Company will reassess its conclusions related to fair value and the recoverability of goodwill.
The Company did not record any impairment of goodwill during the three and nine months ended October 2, 2026 and September 30, 2025.
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Intangible Assets
Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors considered when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have finite lives are amortized.
Intangible assets consist primarily of patents, customer relationships, and trademarks, all of which are finite lived assets. See Note 9 – Goodwill and Intangible Assets for further information surrounding the useful lives of identified intangible assets.
Impairment of Long-Lived Assets
Long-lived assets consist primarily of property, plant and equipment, right-of-use assets and finite-lived intangible assets. The Company reviews the carrying amount of a long-lived asset or asset group when there is an indication of impairment. Impairment indicators include a significant decrease in the market price, a significant adverse change in the manner in which an asset or asset group is being used, a significant adverse change in legal factors or in the business climate, an accumulation of costs in excess of the amount originally expected for the acquisition or development of an asset or asset group, a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of an asset or asset group, and/or a current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
Debt Issuance Costs
Deferred Offering Costs
Leases
The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset for a period of time in exchange for consideration. The Company has control of the asset if it has the right to direct the use of the asset and obtains substantially all of the economic benefits from the use of the asset throughout the period of use. As a practical expedient, the Company does not recognize a right-of-use (“ROU”) asset or lease obligation for leases with a lease term of 12 months or less.
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ROU assets represent the Company’s right to use the underlying leased assets over the lease term, while lease liabilities represent the Company’s obligation to make lease payments under the lease arrangements. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments. Corresponding ROU assets are initially measured at the amount of the lease liability, adjusted for any lease payments made at or before lease commencement, less any lease incentives received and plus any initial direct costs incurred.
The Company classifies a lease as a finance lease when it meets any of the following criteria at the lease commencement date: (1) the lease transfers ownership of the underlying asset to the Company by the end of the lease term; (2) the lease grants the Company an option to purchase the underlying asset that the Company is reasonably certain to exercise; (3) the lease term is for the major part of the remaining economic life of the underlying asset (the Company considers a major part to be 75 % or more of the remaining economic life of the underlying asset); (4) the present value of the sum of the lease payments and any residual value guaranteed by the Company equals or exceeds substantially all of the fair value of the underlying asset (the Company considers substantially all the fair value to be 90 % or more of the fair value of the underlying asset amount); or (5) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. When none of the criteria above are met, the Company classifies the lease as an operating lease.
As the implicit rate in the Company’s lease arrangements is generally not readily determinable, the Company uses its incremental borrowing rate at the lease commencement date to calculate the present value of lease payments. For any operating or finance leases, where the lease’s implicit rates were not readily available, the Company determined the incremental borrowing rate, which is based on the United States treasury rate that aligns with the applicable lease term plus a credit spread associated with the Company’s credit rating.
The lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise any such options. Lease contracts may include lease components and non-lease components. The Company has elected the practical expedient to combine lease and non-lease components. Lease payments can also include fixed payments, variable payments that depend on an index or rate known at the commencement date, and extension option payments or purchase options which the Company is reasonably certain to exercise.
Operating lease costs are recognized on a straight-line basis over the lease term as general and administrative expense within consolidated statements of operations. Finance lease ROU assets are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the underlying asset and are included in general and administrative expense within the consolidated statements of operations, with the exception of interest expense related to finance leases, which is recognized using the effective interest method over the lease term, and is included in interest expense within the consolidated statements of operations.
Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current portion, and operating lease liabilities, net of current portion in the Company’s consolidated balance sheets. Finance leases are not material and are included in other assets, accrued expenses and other current liabilities, and other liabilities in the Company’s consolidated balance sheets.
Revenue Recognition
The Company typically generates revenue from contracts with customers related to manufactured products, as described in Note 1 – Business and Organization. Revenue is recognized when control of the goods and services provided is transferred to the Company’s customers and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods and services. The Company applies the following five-step framework:
Step 1: Identify the contract(s) with a customer:
A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products to be transferred and identifies the payment terms related to those products, (ii) the contract has commercial substance and (iii) the Company determines that collection of substantially all consideration for products that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company’s contracts are typically in the form of a purchase order and/or a statement of work. For certain large customers, the Company may also enter into master service agreements that define general terms but are not customer commitments to purchase until coupled with a purchase order and/or statement of work. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or published credit and financial information pertaining to the customer.
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Step 2: Identify the performance obligations in the contract:
Performance obligations promised in a contract are identified based on the products and services that will be transferred. A product or service is distinct if both a) the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and b) is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised products or services, the Company must apply judgment to determine whether the products or services meet the criteria to be distinct.
If these criteria are not met the promised products or services are accounted for as a combined performance obligation. Substantially all of the Company’s revenue is derived from the sale of manufactured products. The Company’s revenue contracts typically include one performance obligation: the delivery of a manufactured product.
The Company provides an assurance-based warranty on certain products that is not accounted for as a separate performance obligation. Warranty expense was not material for the three and nine months ended October 2, 2026 and September 30, 2025.
Step 3: Determine the transaction price:
The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products to the customer. The Company’s contracts are fixed-fee arrangements, agreed to at contract inception. The Company’s contracts may include variable consideration related to early pay discounts, sales returns or certain development-related contracts, which result in pricing based on actual hours incurred. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Variable consideration in the Company’s revenue contracts was not material during the three and nine months ended October 2, 2026 and September 30, 2025.
In most instances, payments are due net 30 to 90 days from the customer’s receipt of the invoice. This payment schedule aligns with standard commercial payment terms and does not significantly advance or delay payment in a way that would provide either party a significant financing benefit. Payments are neither explicitly nor implicitly structured to function as financing for the goods or services supplied under the contract. Based on these factors, there is no significant financing component in the Company’s contracts.
The Company has elected to record taxes collected from customers on a net basis and as a result sales taxes are excluded from the transaction price and therefore are not included in revenue or costs of revenue.
The Company has elected to account for shipping and handling activities as a fulfillment cost and includes any fees received for shipping and handling as part of the transaction price and recognizes revenue when the related performance obligation is satisfied.
Step 4: Allocate the transaction price to the performance obligations in the contract:
The Company allocates the transaction price to each performance obligation based on its relative standalone selling price (“SSP”), which represents the price the Company would charge to sell the promised good or service separately to a customer. The Company’s contracts typically include one performance obligation, and the allocation of transaction price is not necessary.
Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation:
The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised product or service to a customer.
Revenue is recognized over time as work progresses when the Company is entitled to the reimbursement of costs plus a reasonable profit for work performed for which the Company has no alternative use. For these performance obligations that are satisfied over time, the Company generally recognizes revenue using an input method with revenue amounts being recognized proportionately as costs are incurred relative to the total expected costs to satisfy the performance obligation.
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The Company believes that costs incurred as a portion of total estimated costs is an appropriate measure of progress towards satisfaction of the performance obligation since this measure reasonably depicts the progress of the work effort.
Revenue for performance obligations that are not recognized over time are recognized at the point in time when control transfers to the customer. For performance obligations that are satisfied at a point in time, the Company evaluates the point in time when the customer can direct the use of, and obtain the benefits from, the products and services.
Contract Assets and Contract Liabilities
The Company’s contract assets and liabilities primarily relate to the timing differences between cash received from a customer in connection with contractual rights to invoicing and the timing of revenue recognition following completion of performance obligations. The Company’s accounts receivable balance is made up entirely of customer contract-related balances. Contract assets and contract liabilities are included in unbilled revenue and deferred revenue, respectively, on the consolidated balance sheets.
Shipping and Handling Costs
Amounts billed to customers related to shipping and handling are classified as revenue, and the Company’s shipping and handling costs are included in cost of goods sold within the consolidated statements of operations.
Cost of Goods Sold
Cost of goods sold includes the cost of materials, direct labor, and manufacturing overhead costs used in the manufacture of products sold to customers. Cost of goods sold also consists of personnel, facility costs associated with operating our laboratory testing on behalf of the customers, costs related to maintenance, servicing equipment, training customers at customer sites, freight, other direct costs, and overhead.
Research and Development Costs
Advertising Expense
Derivative Instruments
Interest Rate Collars
The Company uses derivative instruments to manage its interest rate risk related to variable rate debt facilities. The Company’s derivative instruments are recorded at fair value. The accounting for changes in fair value of derivatives depends upon whether or not the Company has elected to designate the derivative in a hedging relationship, and the derivative qualifies for hedge accounting. Under hedge accounting, changes in fair value for derivatives are recorded
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through accumulated other comprehensive (loss) income. When hedge accounting is not elected, changes in fair value for derivatives are recorded through the consolidated statements of operations.
The Company has two interest rate collars that have not been designated for hedge accounting. The interest rate collars have an original notional value of principal of approximately $10.0 0.1 million and approximately $0.1 million, respectively, which were included in accrued expenses and other current liabilities as of October 2, 2026 and other liabilities as of December 31, 2025 on the consolidated balance sheets. Changes in the fair value of derivatives totaled less than $0.1
Derivative Assets
In connection with a long-term supply agreement entered into during 2024, the Company was granted options to purchase 20,000,000 shares of common stock in a publicly traded company at an exercise price of $0.10 per share, denominated in Australian Dollar. The options were scheduled to expire on November 22, 2026. The Company accounted for the options as a derivative asset at fair value with changes recognized in earnings, within changes in fair value of the derivative asset in the consolidated statements of operations.
During the Company’s fiscal year 2026, but prior to the three months ended October 2, 2026, the Company fully exercised the option to purchase the 20,000,000 shares, paying a cash exercise price of approximately $1.4 million for the 20,000,000 shares. Immediately prior to the exercise date, the derivative asset was remeasured to its intrinsic value of approximately $2.2 million. The intrinsic value of $2.2 million as of the exercise date, plus the cash paid upon exercise, was reclassified to marketable securities. During the three and nine months ended October 2, 2026, the Company recognized $0.0 million and approximately $2.2 million of a net gain on the derivative assets, which was included within change in fair value of derivative asset in the consolidated statement of operations.
Following the exercise date, the shares are subsequently accounted for as an equity security recognized at fair value with changes recognized in earnings. See the subparagraph ‘Fair Value Measurement’ for further information.
Equity Investments
The Company first evaluates whether an investee must be consolidated under either the voting interest and variable interest entity models and then whether the equity method applies. Equity securities that are neither consolidated nor accounted under the equity method are measured at fair value, with changes in fair value recognized in net income. The Company recognizes the impact of purchases or sales of equity securities within the consolidated financial statements based on the settlement date.
Equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in earnings. Equity securities without readily determinable fair values may be measured under the measurement alternative at cost, less impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.
For each investee, the Company evaluates its ownership percentage, board representation, governance rights and other relevant facts (including participation in policy-making processes, material intra-entity transactions, interchange of managerial personnel and technological dependency) to determine whether it has the ability to exercise significant influence over an investee.
Forward instruments
The Company evaluates forward instruments to determine whether they meet the definition of a derivative. Forward instruments that meet the definition of a derivative and do not qualify for a scope exception are recognized at fair value when the Company becomes party to the contract and are remeasured to fair value at each reporting date. Changes in fair value are recognized in change in fair value of forward instruments within the consolidated statement of operations. The Company accounts for a forward instrument as a single unit of account, measured on a net basis, and does not separately recognize the rights and obligations under the contract before settlement. The Company has not designated any forward instruments as a hedging instrument. A forward instrument is derecognized upon settlement or expiration.
Masan Investment
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On September 23, 2026, the Company agreed under the SPA to acquire the 55,138,174 Sale Shares, or 4.99 % of the voting shares, of Masan for approximately $124.7 million. Trades on the UPCoM are settled three business days after the Trade Date, with delivery of the shares and payment made through the facilities of the Vietnam Securities Depository and Clearing Corporation, the independent clearing house for the Vietnamese market.
As of October 2, 2026, the Company recognized $124.7 million within restricted cash on the consolidated balance sheet. The restricted cash was reserved to fund the Sale Shares and remains the Company’s asset until settlement. The cash is not eligible to be irrevocably transferred outside of the Company’s control prior to settlement and is presented as restricted cash on the consolidated balance sheet. The effect of VND/USD changes on the Sale Shares is included in the change in fair value recognized in the consolidated statements of operations.
As of October 2, 2026, the SPA was recognized as a forward instrument to purchase the Sale Shares (the “Masan Forward”) that was not a derivative. As of October 2, 2026, the fair value of the Masan Forward was approximately $3.3 million, recognized within prepaid expenses and other current assets within the consolidated balance sheet. In connection, the Company recognized a gain on change in its fair value of the Masan Forward from September 23, 2026 to October 2, 2026, which is included within change in fair value of forward instruments.
The Masan Forward is measured as the excess of the fair value of the Sale Shares over the Masan Purchase Price. The Sale Shares are measured within Level 1 at the UPCoM closing price of VND 60,300 per share at October 2, 2026, multiplied by shares held and translated at VND 25,980.77 per U.S. dollar, with no adjustment for position size or the Lock-up Period.
Fair Value Measurement
Financial instruments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy:
Level 1 — quoted prices are available in active markets for identical financial instruments as of the measurement date. The Company does not adjust the quoted price for these financial instruments.
Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.
Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the financial instrument. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these financial instruments existed.
Under normal market conditions, the fair value of a financial instrument is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). Additionally, there is a hierarchical framework that prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is impacted by a number of factors, including the type of financial instrument and the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
For certain financial instruments, including accounts receivable, unbilled receivables, accounts payable, accrued expenses, deferred consideration, deferred revenue, deferred government grants, current portion of long-term debt, and other current liabilities, the carrying amounts approximate their fair values as of October 2, 2026 and December 31, 2025. These assessments reflect the short-term nature of the instruments and market conditions as of the reporting date.
The Company’s equity marketable securities are classified as a Level 1 fair value measurement, as its valuation is based on quoted prices in active markets for identical instruments, and is remeasured at each reporting date.
The Company’s investment in the Sale Shares is measured at fair value on a recurring basis using the quoted closing price on the UPCoM (Level 1), without adjustment for position size or the Lock-up Period. The Masan Forward associated with the Masan investment is measured as the excess of the fair value of the Sale Shares over the Masan Purchase Price.
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The fair value of the Company’s interest rate collars is determined by using widely accepted valuation techniques based on their maturity and observable market-based inputs, including interest rate curves. This measurement is considered a Level 2 measurement.
During the nine months ended October 2, 2026, the Company recognized a forward instrument related to the binding commitment to purchase units in Blue Moon (see Note 15 – Blue Moon Metals Inc. Transactions for further details), which is measured at fair value on a recurring basis. The Forward was measured as a single instrument comprising of common shares and warrants, net of the aggregate subscription price payable at closing, and was classified within Level 2 of the fair value hierarchy. Fair value for the underlying Blue Moon common shares was determined using the quoted closing price of third-party common shares in an active market multiplied by the quantity to be received, less the aggregate subscription price. The fair value of the underlying Blue Moon Warrants is estimated using a Black-Scholes option pricing model with observable inputs, including the quoted price and volatility of third-party common shares and the risk-free rate. See Note 15 – Blue Moon Metals Inc. Transactions for further details.
During the nine months ended October 2, 2026, the Company fully exercised the option to purchase the 20,000,000 shares related to the previously recognized derivative instrument. Following the exercise date, the shares are subsequently accounted for as an equity security recognized at fair value with changes recognized in earnings.
The following table summarizes the activity related to the Company's change in fair value of marketable securities related to the 20,000,000 shares during the three and nine months ended October 2, 2026 and September 30, 2025 (in thousands):
| Three Months Ended October 2, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended October 2, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| (Gain) loss on remeasurement of marketable securities | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
As of October 2, 2026, the 20,000,000 shares, together with the gain on the Company's pre-existing holding in the same company, were included within marketable securities in the consolidated balance sheets at a combined fair value of approximately $6.6 million. As of December 31, 2025, the value of these options was immaterial.
Contingent consideration related to acquisitions is recorded at fair value as a liability on the acquisition date and is remeasured at each reporting date, based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions management believes would be made by a market participant. Management assesses these estimates on an ongoing basis as additional data impacting the assumptions becomes available. Changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within other (income) expense, net in the consolidated statements of operations.
Fair value of the Company’s long-term debt is based on quoted market prices or on rates available for debt with similar terms and maturities. Based upon interest rates currently available to the Company, the carrying amount of the Company’s long-term debt approximates fair value.
Certain assets and liabilities are recognized or disclosed at fair value on a non-recurring basis, such as property, plant, and equipment, ROU assets, goodwill, and intangible assets. These assets are required to be assessed for impairment when events or circumstances indicate that the carrying amount may not be recoverable, and at least annually for goodwill and identified-lived intangible assets. If an impairment charge is required, the asset is adjusted to fair value using Level 3 inputs.
The following table summarizes the classification between the three levels of the fair value hierarchy of the Company’s financial instruments measured/disclosed at fair value on a recurring basis as of October 2, 2026 (in thousands):
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| Financial Statement Classification | Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
Equity securities | Marketable securities | $ | $ | $ | $ | ||||||||||||||||||||||||
| Equity subscription forward instrument | Prepaid expenses and other current assets | ||||||||||||||||||||||||||||
| Total Assets | $ | $ | $ | $ | |||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Interest rate collar derivatives | Accrued expenses and other current liabilities | $ | $ | $ | $ | ||||||||||||||||||||||||
Equity subscription forward instrument | Accrued expenses and other current liabilities | ||||||||||||||||||||||||||||
| Contingent consideration | Other liabilities | ||||||||||||||||||||||||||||
| Total Liabilities | $ | $ | $ | $ | |||||||||||||||||||||||||
The following table summarizes the classification between the three levels of the fair value hierarchy of the Company’s financial instruments measured/disclosed at fair value on a recurring basis as of December 31, 2025 (in thousands):
| Financial Statement Classification | Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Equity securities | Marketable securities | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total Assets | $ | $ | $ | $ | |||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Interest rate collar derivatives | Other liabilities | $ | $ | $ | $ | ||||||||||||||||||||||||
| Contingent consideration | Other liabilities | ||||||||||||||||||||||||||||
| Total Liabilities | $ | $ | $ | $ | |||||||||||||||||||||||||
There were no changes in valuation techniques, nor were there any transfers among the fair value hierarchy levels during the nine months ended October 2, 2026 and September 30, 2025.
Discontinued Operations
The Company categorizes the assets and liabilities of a disposal group, or business component, as discontinued operations once management commits to a plan to sell, the business segment is available for immediate sale, management has initiated a plan to sell at a price that is reasonable in relation to its fair value, management anticipates the sale will occur within one year, and it is unlikely that significant changes will be made to the plan to sell. For disposals other than by sale, such as abandonment or distribution, the results of operations of a business would not be recorded as a discontinued operation until the period in which the business is actually abandoned or distributed. The Company classifies such disposal group or business component as discontinued operations, if the divested disposal group or business represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. In addition, the disposal group or business component must be comprised of operations and cash flows that are clearly distinguished from the rest of the entity. The results of discontinued operations are aggregated and presented separately in the consolidated balance sheets, consolidated statements of operations, and consolidated statements of cash flows. Unless otherwise noted, the disclosures in these footnotes relate solely to continuing operations. Information regarding discontinued operations, including results of operations, assets, and liabilities held for sale, is presented separately in Note 5 – Discontinued Operations.
Income Taxes
Prior to the Reorganization, the Company was an S-corporation and the Company’s income and losses were passed through to its stockholders and reported on their individual tax returns. Following the Reorganization, the Company is a C-
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corporation that is subject to corporate income taxes. The Company included certain pro forma information related to the Reorganization within Note 18 – Net Income Per Share.
The Company accounts for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company accounts for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors, including, but not limited to, changes in the law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company does not have any uncertain tax positions that are more likely than not of not being recognized for any periods presented.
Interest and penalty charges, if any, related to income taxes would be classified as a component of the income tax provision within the consolidated statement of operations.
Stock-based Compensation
The Company issues certain stock-based awards to employees in the form of restricted stock, settled in Common Stock of the Company, to employees as compensation for services rendered. The Company recognizes the stock-based compensation expense related to these stock-based awards within the consolidated financial statements based on their respective grant date fair values. For stock-based awards that include a service-based vesting condition, the Company recognizes the expense ratably over the requisite service period, which ranges from to three years , subject to acceleration upon the occurrence of a qualifying liquidity event for certain awards. For stock-based awards that include a performance-based vesting condition, the Company recognizes the expense when it is probable that the performance-based condition will be satisfied and the award has satisfied other vesting conditions, if any.
Because there has been no public market for the Company’s equity prior to the initial public offering and in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately- Held-Company Equity Securities Issued as Compensation, the Company has determined the fair value of the stock-based awards at the time of grant by considering a number of objective and subjective factors, including valuations performed by an independent third-party valuation specialist, comparable companies, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook.
Net Income Per Share
Prior to the Company's IPO and the related reclassification described in Note 1 – Business and Organization, the Company had two classes of common stock, Class A common stock and Class B common stock, the rights of which — including liquidation and dividend rights and sharing of income — were identical, other than voting rights. Net income per share for periods prior to the IPO was computed using the two-class method required for multiple classes of common stock and participating securities. Because the liquidation and dividend rights and sharing of income of Class A common stock and Class B common stock were identical, undistributed earnings were allocated between the two classes on a proportionate basis, and the resulting net income per share was the same for Class A common stock and Class B common stock, individually and combined.
In connection with the IPO, the Company's outstanding Class A common stock and Class B common stock were reclassified into a single class of common stock (see Note 1 – Business and Organization and Note 13 – Common Stock). Following the IPO, the Company has a single class of common stock outstanding, however, certain warrants are participating securities because they are entitled to share in dividends declared on common stock on a non-fortifiable, as-exercised basis. Accordingly, net income per share for periods following the IPO continues to be computed using the two-class method, under which undistributed earnings are allocated between common stock and the participating securities. The Company’s Class A Redeemable Preferred Stock, restricted stock awards, restricted stock units, and stock appreciation rights are not participating securities because they do not carry non-forfeitable dividend rights.
The Company computes net income per share of common stock using the two-class method required for participating securities. Net income is first reduced by cumulative dividends on, and accretion of, the Class A Redeemable Preferred Stock, whether or not declared. The remaining undistributed earnings are then allocated between common stockholders and
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participating securities based on their respective rights to share in dividends. Basic net income per share is then computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Shares issuable for little or no cash consideration, including the DoW Penny Warrants (as defined in Note 14 – DoW Investment Agreement and Related Transactions), are included in basic weighted-average shares from the date that all necessary conditions for their issuance have been satisfied.
The Company determines diluted net income per share by applying the most dilutive method to each class of potentially dilutive securities. The treasury stock method is applied to restricted stock awards, restricted stock units, stock options, stock appreciation rights, and certain equity instruments. The two-class method is applied to participating securities. For instruments subject to the two-class method, the Company applies a hybrid approach in which income is allocated after giving effect to adjustments from other dilutive securities. In periods of net income, a portion of undistributed earnings is allocated to participating securities and deducted in determining income attributable to common stockholders. In periods of net loss, losses are only allocated to participating securities to the extent that the holders have the contractual obligation to share in losses. See Note 18 – Net Income per Share for further information.
Commitments and Contingencies
The Company is subject to various commitments and contingencies arising in the normal course of business, including, but not limited to legal and contractual matters. Liabilities are recorded when it is probable that a loss has been incurred, and the amount can be reasonably estimated. Matters that do not meet these criteria are disclosed if the likelihood of loss is reasonably possible and the potential impact could be material. The Company also discloses significant contractual obligations, including leases and purchase commitments, with information regarding their nature and timing of future cash flows. Management continuously evaluates these matters and updates the financial statements as appropriate.
Risks and Uncertainties
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates and would impact future results of operations and cash flows.
The Company’s business, industry and the economy are influenced by a number of general macroeconomic factors, including, but not limited to, inflationary pressures impacting the Company’s supply chain, reduced demand for the Company’s products related to unfavorable macroeconomic conditions triggered by developments beyond the Company’s control, including geopolitical dynamics and other events that trigger economic volatility. The Company actively monitors the impacts of the evolving macroeconomic and geopolitical landscape, including rapidly evolving tariff and global trade policies, on all aspects of its business. Sustained macroeconomic challenges could adversely impact the Company’s operations.
The Company invests in foreign markets in Australia where it holds equity securities of foreign-listed issuers with an aggregate fair value of $6.6 million, as of October 2, 2026, representing approximately approximately 1.0 % of total assets, respectively.
The Company also holds equity securities of a publicly traded company listed on the Australian Securities Exchange and denominated in Australian dollars (“AUD”), with an aggregate fair value of approximately $6.6 million at October 2, 2026, representing approximately 1.3 % of the Company’s total assets. These holdings are subject to changes in market prices and in the AUD/USD exchange rate. The potential adverse impact of these risks on the Company’s operations is not material.
The Company conducts operations in Germany with total assets domiciled in Germany of $3.7 million as of October 2, 2026, representing less than 1.0 % of the Company’s total assets. The Company’s operations in Germany are subject to risks including currency fluctuations, local regulation, and political or economic instability. The potential adverse impact of these risks on the Company’s operations is not material.
Several of the Company’s government contracts are being funded incrementally, and as such, are subject to future authorization, appropriation, and availability of government funding. The Company has a history of successfully obtaining financing under incrementally funded contracts with the United States government and it expects to continue to obtain additional funding in the year ending January 1, 2027 and beyond as incremental funding is authorized and appropriated by the government.
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Redeemable Preferred Stock
The Company’s Class A Preferred Stock that is redeemable at the option of the holder or upon the occurrence of events not solely within the Company’s control is presented outside permanent equity, as temporary (mezzanine) equity, between liabilities and stockholders' equity. The Company also evaluates the conversion, redemption and other features of the Class A Preferred Stock for bifurcation as embedded derivatives.
The initial carrying amount of the Class A Preferred Stock issued with other freestanding financial instruments is the amount of proceeds allocated to it on a relative fair value basis, net of allocated costs.
If the Class A Preferred Stock is currently redeemable, the Company adjusts the carrying amount to the redemption value at each reporting date. If the Class A Preferred Stock is not currently redeemable but it is probable that it will become redeemable, the Company accretes the carrying amount of the Class A Preferred Stock to its projected redemption value using the interest method, with the offsetting entry recorded to retained earnings or, in the absence of retained earnings, additional paid-in capital. The Company has elected to accrete changes in the redemption value over the period from the date of issuance (or, if later, the date it becomes probable that the Class A Preferred Stock will become redeemable) to the earliest redemption date and applies this election consistently. Redemption value includes accrued and unpaid paid-in-kind dividends (see Paid-in-Kind Dividends below), and the Company does not accrete amounts already recognized as paid-in-kind dividends.
Increases in the carrying amount for paid-in-kind dividends and redemption-value accretion are recorded as deductions from net income (or additions to net loss) to arrive at income available to common stockholders in the computation of basic and diluted net loss or income per share.
Paid-in-Kind Dividends
Paid-in-kind dividends on the Class A Preferred Stock are measured using the stated dividend rate applied to the contractual dividend base, are recognized as they accrue under the cumulative dividend terms, whether or not declared, and increase the carrying amount of the Class A Preferred Stock. The offsetting charge is recorded to retained earnings or, in the absence of retained earnings, additional paid-in capital.
Warrants and Other Freestanding Equity Instruments
The Company evaluates freestanding warrants and other contracts on its own equity at issuance and at each reporting date to determine whether they are classified as equity or as assets or liabilities, considering whether the instrument is a liability, and if not, whether the instrument is indexed to the Company’s own stock and whether its settlement provisions permit equity classification. Classification is reassessed at each reporting date. Equity-classified instruments are recorded within stockholders’ equity at the amount of proceeds allocated to them (on a relative fair value basis when issued together) and are not subsequently remeasured. Instruments classified as assets or liabilities are recorded at fair value and remeasured at each reporting date, with changes in fair value recognized in other income (expense), net.
The Company determines fair value using models suited to the terms of each instrument (Black-Scholes-Merton, lattice or Monte Carlo simulation), with inputs such as the stock price, strike price, expected term, expected volatility and risk-free rate. Expected volatility and other unobservable inputs are Level 3 inputs.
Foreign Currency Transactions
Transactions denominated in a currency other than an entity’s functional currency are remeasured using the applicable exchange rate. Foreign-currency transaction gains and losses arising from remeasurement and settlement are recognized in earnings.
3. RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. The Company is considered to be an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “Jobs Act”). The Jobs Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of this extended
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transition period and, as a result, the Company will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
Recently Adopted Accounting Pronouncements
In April 2026, the FASB issued Accounting Standards Update ("ASU") 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock (“ASU 2026-01”). ASU 2026-01 requires an issuer to initially measure paid-in-kind dividends on equity-classified preferred stock, including preferred stock presented in temporary equity, using the paid-in-kind dividend rate stated in the governing agreement. The amendments do not change when a paid-in-kind dividend is recognized. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods, and early adoption is permitted. The Company early adopted ASU 2026-01 during the interim period ended October 2, 2026 using the prospective transition method, and the adoption did not have a material effect on its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”) to address challenges encountered when applying the guidance in Topic 326, Financial Instruments—Credit Losses, to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. The Company adopted this new accounting standard effective January 1, 2026 and the adoption did not have a material impact on its consolidated financial statements.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregated disclosure of income statement expenses. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”), which provides guidance on the recognition, measurement, presentation, and disclosure of government grants received by for-profit entities. The ASU defines government grants as transfers of monetary or nonmonetary assets from a government, excluding exchange transactions, and clarifies scope exclusions such as tax credits, below-market loans, and nonfinancial asset transactions. Under the guidance, grants related to asset acquisition are generally recognized as a reduction of the asset’s cost, while grants related to income are recognized in earnings once conditions are met, with appropriate classification in the statement of cash flows. Entities are required to disclose the nature of grants, significant terms and conditions, accounting policies adopted, and amounts recognized in the financial statements. ASU 2025-10 is effective for annual periods beginning after December 15, 2028, including interim periods, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements ("ASU 2025-11"), which clarifies the applicability of interim reporting guidance, provides a comprehensive listing of interim disclosure requirements, and establishes a disclosure principle requiring entities to disclose events and changes occurring since the end of the most recent annual reporting period that have a material impact on the entity. The guidance is effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standards on its consolidated financial statements.
4. ACQUISITIONS
On November 14, 2025, the Company acquired 100 % of the voting interests in Symphony Microwave Technologies, LLC (“Symphony”), a United States based company focused on the design and production of high-power microwave and RF components and subsystems, in exchange for total consideration of approximately $0.8 million. Total consideration consisted of (i) cash of approximately $0.2 million, (ii) the fair value of common stock issued of approximately $0.1
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million, (iii) the fair value of contingent consideration of approximately $0.3 million and (iv) the fair value of deferred consideration of approximately $0.2 million.
The acquisition has been accounted for as a business combination. The Company allocated the purchase price to the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. The excess of the purchase price paid by the Company over the estimated fair value of net assets acquired has been recorded as goodwill.
The following table summarizes the allocation of the purchase price based on the estimated fair values of the assets acquired and liabilities assumed in connection with the acquisition of Symphony (in thousands):
| Amount | |||||
| Cash | $ | ||||
| Accounts receivable | |||||
| Inventories | |||||
| Customer relationships | |||||
| Accounts payable and accrued expenses | ( | ||||
| Current portion of long-term debt | ( | ||||
| Long-term debt, net of current portion | ( | ||||
| Total identifiable net assets acquired | |||||
| Goodwill | |||||
| Total net assets acquired | $ | ||||
Transaction-related costs incurred related to the acquisition were immaterial and were expensed as incurred in general and administrative within the consolidated statement of operations.
The fair value of contingent consideration included in consideration transferred was $0.3 million, which is related to an earnout arrangement with the sellers of Symphony, as estimated by a third-party valuation specialist. The contingent consideration is payable in quarterly installments through the third anniversary of the acquisition date based on the post-acquisition sales to a customer of Symphony and does not include any continuing employment conditions. There is no cap on the amount payable under the earnout. The fair value of the instrument was based on the discounted cash flows of expected future payments to this customer based on forecasted revenue during the earnout period. The Company paid less than $0.1
The deferred consideration of $0.2 3.75 eighteen months 0.0 million and $0.1 million of the deferred consideration during the three and nine months ended October 2, 2026, respectively, which was included within payments of deferred consideration in the consolidated statements of cash flows.
The Company recognized customer-related intangible assets of approximately $0.3 million, which primarily consisted of contractual and non-contractual relationships with customers. The valuation method used to determine the estimated fair value of the intangible asset was based on the multi-period excess earnings approach. The customer relationship was assigned a useful life of ten years based on historical and forecasted customer attrition.
Goodwill resulting from the acquisition is attributable to the value of the acquired workforce and expected synergies. Goodwill resulting from the acquisition was assigned to the Company’s EMP segment. The goodwill recognized is not deductible for tax purposes.
5. DISCONTINUED OPERATIONS
On October 1, 2025, the Company’s ownership interest in Poly Labs was distributed pro rata to the individual stockholders of the Company to focus financial and managerial efforts on the CMC and EMP divisions. The Company concluded that
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Poly Labs met the criteria to be classified as discontinued operations as of December 31, 2025, as the divestiture represented a strategic shift, had a major impact on the Company’s consolidated results and the Company disposed of Poly Labs during the period. The results of Poly Labs have been classified as discontinued operations in the consolidated financial statements, and the results for all periods presented have been recast to exclude Poly Labs from continuing operations.
Activity related to Poly Labs for the three and nine months ended September 30, 2025 was as follows (in thousands):
| Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | ||||||||||
| Revenue | $ | $ | |||||||||
| Cost of goods sold | |||||||||||
| Gross loss | ( | ( | |||||||||
| Operating expenses: | |||||||||||
| General and administrative | |||||||||||
| Research and development | |||||||||||
| Sales and marketing | |||||||||||
| Total operating expenses | |||||||||||
| Operating loss | ( | ( | |||||||||
| Other income, net: | |||||||||||
Other income, net | ( | ( | |||||||||
| Interest expense | |||||||||||
| Interest income – related party | ( | ( | |||||||||
| Total other income, net | ( | ( | |||||||||
| Loss from discontinued operations | $ | ( | $ | ( | |||||||
There was no activity related to Poly Labs for the three and nine months ended October 2, 2026.
Following the Company’s distribution of Poly Labs on October 1, 2025, a note payable owed by the Company to Poly Labs remained outstanding. As of December 31, 2025, the amount owed to Poly Labs was approximately $0.5 million, which was repaid in full on January 19, 2026, see Note 12 – Debt and Note 16 – Related Party for further information.
Additionally, as of October 2, 2026 and December 31, 2025, Poly Labs owed the Company approximately $0.1 million and $0.2 million, respectively, related to various management fees and other services provided by the Company to Poly Labs following the distribution date, which is included within related party receivables within the consolidated balance sheets. See Note 16 – Related Party for further information.
As the Company distributed its ownership interest in Poly Labs on October 1, 2025, there were no assets or liabilities, other than those noted above, related to Poly Labs that were included within the consolidated balance sheet as of October 2, 2026 or December 31, 2025.
6. REVENUE RECOGNITION
In general, the Company recognizes revenue at the point in time control transfers to its customer based on predetermined shipping terms. Revenue is recognized over time under certain contracts for highly customized products that have no alternative use and in which the contract specifies the Company has enforceable right to payment for its costs, plus a reasonable margin. For products recognized over time, the transfer of control is measured using the input method, which measures progress toward completion as costs are incurred based upon estimates of costs to complete such contracts. Losses on contracts are fully recognized in the period in which the losses become determinable. Revisions in profit estimates are reflected on a cumulative basis in the period in which the basis for such revision becomes known.
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Disaggregation of Revenue
The following tables disaggregate the Company’s revenue by timing and by geographic location for the three and nine months ended October 2, 2026 and September 30, 2025 (in thousands):
| Three Months Ended October 2, 2026 | Nine Months Ended October 2, 2026 | ||||||||||||||||||||||||||||||||||
| United States | Europe | Total | United States | Europe | Total | ||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Revenue – Point in time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Revenue – Over time | |||||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| United States | Europe | Total | United States | Europe | Total | ||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Revenue – Point in time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Revenue – Over time | |||||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Contract Balances from Contracts with Customers
The Company records contract assets or contract liabilities on a contract-by-contract basis. The Company’s accounts receivable, contract assets and contract liabilities are summarized below (in thousands):
| October 2, 2026 | December 31, 2025 | December 31, 2024 | |||||||||||||||
| Accounts receivable, net | $ | $ | $ | ||||||||||||||
| Unbilled revenue | $ | $ | $ | ||||||||||||||
| Deferred revenue | $ | $ | $ | ||||||||||||||
The increase in deferred revenue during the nine months ended October 2, 2026 reflects the impact of billings in excess of revenue recognized in the period. The increase in unbilled revenue for the nine months ended October 2, 2026 reflects the net effect of revenue recognized on a subset of over time revenue customers and the timing of the billings on those contracts during the period.
During the nine months ended October 2, 2026 and September 30, 2025, the Company recognized revenue of approximately $4.6 million and $7.1 million that was included in the contract liabilities as of December 31, 2025 and December 31, 2024, respectively. During the three months ended October 2, 2026 and September 30, 2025, the Company recognized revenue of approximately $2.2 million and $0.8 million that was included in the contract liabilities as of July 3, 2026 and June 30, 2025, respectively. There was no revenue recognized during the three and nine months ended October 2, 2026 and September 30, 2025 for performance obligations satisfied in prior periods.
The Company did not recognize impairment losses on its contract assets during the three and nine months ended October 2, 2026 and September 30, 2025.
7. GOVERNMENT GRANTS
The Company has entered into multiple subcontract agreements with multiple contract administrators engaged by the United States Government, to perform prototype development, manufacturing process enhancements, and capital equipment build-outs in support of government programs. Under the terms of these agreements, the Company is reimbursed for qualifying costs incurred, including equipment, labor, materials, and manufacturing expenses, plus a nominal contractual profit margin. The Company accounts for these contracts as government grants.
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The following table summarizes a roll forward of the deferred government grants for the nine months ended October 2, 2026 (in thousands):
| Amount | |||||
| Balance as of December 31, 2025 | $ | ||||
| Cash received from government grants | |||||
| Grant receivable for capital expenditures | |||||
| Capital expenditures related to government grants | ( | ||||
| Balance as of October 2, 2026 | $ | ||||
The deferred government grant liability as of October 2, 2026 will be recognized in future periods as an offset to property, plant and equipment, net or as other revenue, subject to the conditions of the grant agreement being met.
8. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net as of October 2, 2026 and December 31, 2025 consists of the following (in thousands):
| October 2, 2026 | December 31, 2025 | ||||||||||
| Machinery and equipment | $ | $ | |||||||||
| Buildings and building improvements | |||||||||||
| Land | |||||||||||
| Furniture, fixtures and vehicles | |||||||||||
| Leasehold improvements | |||||||||||
| Property and equipment, gross | |||||||||||
| Less: Accumulated depreciation | ( | ( | |||||||||
| Plus: Construction in-progress | |||||||||||
| Property and equipment, net | $ | $ | |||||||||
During the three months ended October 2, 2026 and September 30, 2025, depreciation expense for continuing operations associated with property, plant and equipment, net was approximately $1.6 million and $1.3 million, respectively, of which approximately $1.5 million and $1.2 million, respectively, were included within cost of goods sold, and $0.1 0.5 million and $0.1 million, respectively, of contra depreciation expense recognized related to government grants. See Note 7 – Government Grants for additional details.
During the nine months ended October 2, 2026 and September 30, 2025, depreciation expense for continuing operations associated with property, plant and equipment, net was approximately $4.7 million and $3.9 million, respectively, of which approximately $4.4 million and $3.6 million, respectively, were included within cost of goods sold, and $0.3 million and $0.3 million, respectively, were included in general and administrative expense. Depreciation expense for the nine months ended October 2, 2026 and September 30, 2025 was net of approximately $1.3 million and $0.5 million, respectively, of contra depreciation expense recognized related to government grants. See Note 7 – Government Grants for additional details.
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9. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill, which is assigned entirely to the Company’s EMP segment (see Note 21 – Segments), during the nine months ended October 2, 2026 were as follows (in thousands):
| Amount | |||||
| Balance as of December 31, 2025 | $ | ||||
| Foreign currency translation adjustment | ( | ||||
| Balance as of October 2, 2026 | $ | ||||
The Company had no
Intangible Assets
The gross carrying amount and accumulated amortization of the Company’s intangible assets consisted of the following as of October 2, 2026 (in thousands):
| Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net Carrying Amount | Weighted Average Remaining Amortization Period | |||||||||||||||||||||||||
| Intangible assets: | |||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Trademarks and patents | ( | ||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
The gross carrying amount and accumulated amortization of the Company’s intangible assets consisted of the following as of December 31, 2025 (in thousands):
| Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net Carrying Amount | Weighted Average Remaining Amortization Period | |||||||||||||||||||||||||
| Intangible assets: | |||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Trademarks and patents | ( | ||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
During the three months ended October 2, 2026 and September 30, 2025, the Company recognized aggregate amortization expense of approximately $0.3 0.2 0.1
During the nine months ended October 2, 2026 and September 30, 2025, the Company recognized aggregate amortization expense of approximately $0.9 0.6 0.3
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As of October 2, 2026, estimated future amortization expense of finite-lived intangible assets is as follows (in thousands):
| Fiscal Year | Amount | |||||||
| Remaining 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
10. LEASES
The Company enters into a variety of operating lease agreements through the normal course of its business, but primarily real estate leases to support its operations. The Company leases properties located in Portland, Maine, Lewiston, Maine, Gorham, Maine, Nashua, New Hampshire and Hamburg, Germany. The real estate lease agreements generally provide for fixed minimum rental payments and the payment of real estate taxes and insurance. The Company has lease terms that expire between November 2026 through February 2037.
Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional to five years . These optional periods have not been considered in the determination of the right-of-use assets or lease liabilities associated with these leases as the Company did not consider it reasonably certain it would exercise the options.
The Company also enters into leases for equipment and service agreements, and other leases related to its manufacturing operations that are classified as finance leases that are not material.
The following table summarizes supplemental balance sheet information related to the Company’s operating leases (in thousands):
| October 2, 2026 | December 31, 2025 | ||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| Operating lease liabilities, current | $ | $ | |||||||||
| Operating lease liabilities, non-current | |||||||||||
| Total operating lease liabilities | $ | $ | |||||||||
| Weighted-average remaining term | |||||||||||
| Weighted-average discount rate | % | % | |||||||||
For the three months ended October 2, 2026 and September 30, 2025, the Company recognized approximately $0.6 million and $0.5 million, respectively, of lease expense. For the nine months ended October 2, 2026 and September 30, 2025, the Company recognized approximately $1.6 not
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As of October 2, 2026, maturities of operating lease liabilities were as follows (in thousands):
| Fiscal Year | Amount | |||||||
| Remaining 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total operating lease payments | ||||||||
| Less: Imputed interest | ( | |||||||
| Present value of future lease payments | $ | |||||||
Supplemental cash flow related to the Company’s operating leases were as follows (in thousands):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 2, 2026 | September 30, 2025 | October 2, 2026 | September 30, 2025 | ||||||||||||||||||||
| Lease expense recognized for operating leases | $ | $ | $ | $ | |||||||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | $ | $ | |||||||||||||||||||
As of October 2, 2026 and December 31, 2025, the Company did not have any leases that had not yet commenced.
11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
A summary of accrued expenses and other current liabilities as of October 2, 2026 and December 31, 2025 is as follows (in thousands):
| October 2, 2026 | December 31, 2025 | ||||||||||
| Accrued compensation and employee benefits | $ | $ | |||||||||
| Accrued accounts payable | |||||||||||
| Accrued interest | |||||||||||
| Accrued sales returns and allowances | |||||||||||
| Forward liability | |||||||||||
Accrued income tax payable | |||||||||||
| Other | |||||||||||
| Total accrued expenses and other current liabilities | $ | $ | |||||||||
Within accrued interest as of October 2, 2026 and December 31, 2025, there was approximately $0.0 million and $0.2 million of accrued interest owed to related parties, respectively. See Note 12 – Debt and Note 16 – Related Party Transactions for further information.
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12. DEBT
The following table summarizes the components of long-term debt as of October 2, 2026 and December 31, 2025 (in thousands):
| October 2, 2026 | December 31, 2025 | ||||||||||
| Term Loans: | |||||||||||
| Wells Fargo Term Loan | $ | $ | |||||||||
| First BankProv Term Note | |||||||||||
| United Federal Credit Union Term Note | |||||||||||
| October 2023 Term Loans | |||||||||||
| Other Equipment Loans | |||||||||||
| FAME 2023 Loan | |||||||||||
| Symphony Term Loans | |||||||||||
| Line of Credit Facilities: | |||||||||||
| Wells Fargo Line of Credit | |||||||||||
| Domestic March 2020 Line of Credit | |||||||||||
| Auburn Savings Loan | |||||||||||
| Foreign March 2020 Line of Credit | |||||||||||
| Auburn Savings LOC | |||||||||||
| Symphony Line of Credit | |||||||||||
| Total debt | |||||||||||
| Current portion of long-term debt | ( | ( | |||||||||
| Deferred issuance costs | ( | ( | |||||||||
| Total long-term debt, net of current portion | $ | $ | |||||||||
The following table summarizes the components of long-term debt – related party as of October 2, 2026 and December 31, 2025 (in thousands):
| October 2, 2026 | December 31, 2025 | ||||||||||
| Related Party: | |||||||||||
| Great Falls Term Loan | $ | $ | |||||||||
| CEO Line of Credit | |||||||||||
| Poly Labs Note Payable (Due to Poly Labs) | |||||||||||
| Total related party debt | |||||||||||
| Current portion of long-term debt – related party | ( | ||||||||||
| Total long-term debt, net of current portion – related party | $ | $ | |||||||||
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The following table presents the future principal payments due under the Company’s debt amounts, excluding forgivable loans and unamortized debt issuance costs, as of October 2, 2026 (in thousands):
| Fiscal Year | Amount | |||||||
| Remaining 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total principal payments | $ | |||||||
Term Loans
As of October 2, 2026 and December 31, 2025, the Company has borrowings under multiple term loans. The term loans contain certain restrictive and financial covenants. As of October 2, 2026 and December 31, 2025, the Company was in compliance with these covenants.
Wells Fargo Term Loan
On November 6, 2023, the Company entered into a secured $8.7 million term note with Wells Fargo Bank (the “Wells Fargo Term Loan”). Amounts under the Wells Fargo Term Loan are secured by substantially all of the assets of a consolidated subsidiary. During the year ended December 31, 2024, the Company modified the Wells Fargo Term Loan and borrowed an additional $2.0 million.
The Wells Fargo Term Loan accrues interest monthly based on a floating rate, as defined by the lender, and is subject to periodic adjustments based on prevailing market conditions. During the three and nine months ended October 2, 2026, the Company recognized approximately $0.2 million and $0.4 million of interest expense, respectively. During the three months and nine months ended September 30, 2025, the Company recognized approximately $0.5 million and $0.9 million of interest expense, respectively. As of October 2, 2026 and December 31, 2025, the applicable interest rates were 6.44 % and 6.62 %, respectively, on the portion of outstanding principal entered into during November 2023 and 8.75 % and 8.50 %, respectively, on the incremental borrowings entered into during December 2024.
Under the Wells Fargo Term Loan, the Company makes monthly principal payments of approximately $0.1 million per month. During the nine months ended October 2, 2026 and September 30, 2025, the Company paid aggregate principal payments of approximately $1.4 million and $1.2 million, respectively, and aggregate interest payments of approximately $0.4 million and $0.4 million, respectively, during the respective periods related to the Wells Fargo Term Loan. The Wells Fargo Term Loan has a maturity date of November 6, 2028.
As of October 2, 2026 and December 31, 2025, the outstanding balance related to the Wells Fargo Term Loan was approximately $6.3 million and $7.7 million, respectively, of which approximately $1.6 million and $1.6 million, respectively, were included within current portion of long-term debt and $4.7 million and $6.1 million, respectively, which were included within long-term debt, net of current portion, on the consolidated balance sheets. The Wells Fargo Term Loan contains financial covenants, including leverage ratio requirements.
First BankProv Term Note
On March 2, 2020, the Company entered into a secured $6.5 million term note with BankProv (formerly the Provident Bank, now Needham Bank after its merger in November 2025) (the “First BankProv Term Note”). Amounts under the First BankProv Term Note are secured by certain assets of a consolidated subsidiary.
The First BankProv Term Note accrued monthly interest at 4.79 % until March 31, 2026, and accrues at a fixed 6.50 % thereafter. During each of the three and nine months ended October 2, 2026 and September 30, 2025, the Company recognized less than $0.1
During the nine months ended October 2, 2026 and September 30, 2025, the Company paid aggregate principal payments of approximately $0.3 million and $0.9 million, respectively, and aggregate interest payments of less than $0.1 million and approximately $0.1 million, respectively, related to the First BankProv Term Note.
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On March 31, 2026, the Company amended the First BankProv Term Note to extend the maturity date from March 2, 2027 to March 1, 2033. In connection with the amendment, the interest rate increased to a fixed rate of 6.50 % and the repayment schedule was amended, whereby the Company is required to make interest-only payments for a period of twelve months commencing April 1, 2026, followed by principal payments over a six-year amortization period.
As of October 2, 2026 and December 31, 2025, the outstanding balance of the First BankProv Term Note was approximately $1.4 million and $1.7 million, respectively, of which $0.1 million and $1.4 million were included within current portion of long-term debt, respectively, and $1.3 million and $0.3 million were included in long-term debt, net of current portion, respectively, on the consolidated balance sheets. The First BankProv Term Note contains financial covenants, including leverage ratio requirements.
United Federal Credit Union Term Note
On September 23, 2024, the Company entered into a secured $1.6 million term note with United Federal Credit Union (the “United Federal Credit Union Note”). Amounts under the United Federal Credit Union Note are secured by the related solar project managed by one of the Company’s consolidated subsidiaries.
The United Federal Credit Union Note accrues interest monthly based on a stated interest rate of 9.00 % with monthly principal payments commencing in March 2025. During the three and nine months ended October 2, 2026, the Company recognized less than $0.1 0.1
During the nine months ended October 2, 2026 and September 30, 2025, the Company paid aggregate principal payments of approximately $0.5 million and $0.3 million, respectively, and aggregate interest payments of less than $0.1
As of October 2, 2026 and December 31, 2025, the outstanding balance related to the United Federal Credit Union Note was approximately $0.7 million and $1.1 million, respectively, of which approximately $0.7 million and $0.6 million were included within current portion of long-term debt and $0.0 million and $0.5 million were included within long-term debt, net of current portion, respectively, on the consolidated balance sheets.
October 2023 Term Loans
On October 6, 2023, the Company entered into two separate term loans with investors of a consolidated subsidiary, with aggregate gross proceeds of approximately $0.5 million (the “October 2023 Term Loans”).
The October 2023 Term Loans accrued interest monthly based on a stated fixed interest rate of 8.00 %. During the three and nine months ended October 2, 2026, the Company recognized approximately $0.0 0.1
During the nine months ended October 2, 2026 and September 30, 2025, the Company paid $0.5 million (which paid the loan in full) and $0.0 million of principal, respectively, and less than $0.1
The maturity dates of the October 2023 Term Loans ranged from October 2026 to October 2027, however, the October 2023 Term Loans were terminated and replaced by the AAI Note (defined below) as part of the Reorganization.
As of October 2, 2026 and December 31, 2025, the outstanding balance related to the October 2023 Term Loans was $0.0 million and $0.5 million, of which approximately $0.0 million and $0.3 million were included within current portion of long-term debt and $0.0 million and $0.2 million were included within long-term debt, net of current portion, respectively, on the consolidated balance sheets.
In April 2025, the Company amended one of the October 2023 Term Loans to add a conversion feature to enable the holder to convert the outstanding principal and accrued interest into membership units of one of the Company’s consolidated subsidiaries upon certain liquidity events, including an initial public offering. The conversion option did not require separate accounting as a derivative, and the holder waived the conversion right on December 29, 2025.
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Other Equipment Loans
From March 2020 to December 2022, the Company entered into numerous agreements to borrow an aggregate amount of approximately $0.8 million related to secured equipment loans from various lenders (the “Other Equipment Loans”). The Other Equipment Loans are secured by certain assets owned by a consolidated subsidiary.
The Other Equipment Loans accrue monthly interest, with interest rates ranging from 0.00 7.25 0.1 0.1 million and approximately $0.1 million of interest expense, respectively.
During the nine months ended October 2, 2026 and September 30, 2025, the Company made aggregate principal payments of less than $0.1 million and approximately $0.1 million, respectively, and aggregate interest payments of less than $0.1
The Other Equipment Loans have maturity dates ranging from October 2026 through November 2028.
As of October 2, 2026 and December 31, 2025, the outstanding balance related to the Other Equipment Loans was less than $0.1 million and approximately $0.2 million, respectively, of which less than $0.1 million and approximately $0.1 million, respectively, and $0.0 million and approximately $0.1 million, respectively were included within current portion of long-term debt and long-term debt, net of current potion, respectively, on the consolidated balance sheets.
FAME 2023 Loan
On September 1, 2023, the Company entered into an unsecured and forgivable $0.3 million loan agreement with the Finance Authority of Maine COVID Relief Program (the “FAME 2023 Loan”).
The FAME 2023 Loan was borrowed with no stated interest rate. The amount borrowed under the FAME 2023 Loan is forgiven annually, 30 days following each anniversary date, at 25 % increments.
As of October 2, 2026 and December 31, 2025, the outstanding balance of the FAME 2023 Loan was approximately $0.1
The maturity date of the FAME 2023 Loan is October 1, 2027.
As of October 2, 2026 and December 31, 2025, approximately $0.1 million and $0.0 million, respectively were included within current portion of long-term debt, and $0.0 million and approximately $0.1 million, respectively were included within long-term debt, net of current portion, respectively on the consolidated balance sheets.
Symphony Term Loans
On November 14, 2025, as a result of the Company’s acquisition of Symphony, the Company assumed certain liabilities related to approximately $0.1 million of promissory notes (the “Symphony Term Loans”) with Rockland Trust Bank (“Rockland Trust”). The Symphony Term Loans were secured by substantially all the assets of a consolidated subsidiary.
The Symphony Term Loans accrued monthly interest, with interest rates ranging from 4.25 % to 7.49 %. During the three and nine months ended October 2, 2026, the Company recognized less than $0.1
During the nine months ended October 2, 2026, the Company made payments of less than $0.1 million of principal and interest, related to the Symphony Term Loans.
The Symphony Term Loans had maturity dates ranging from March 2026 through August 2029. On May 5, 2026, the Company repaid the Symphony Term Loans, and the Symphony Term Loans were terminated.
As of December 31, 2025, the outstanding balance related to the Symphony Term Loans was less than $0.1 million, of which less than $0.1 million and less than $0.1 million were included within current portion of long-term debt and long-term debt, net of current portion, respectively, on the consolidated balance sheets.
March 2022 Promissory Note
On March 1, 2022, the Company entered into a promissory note with a principal amount of $3.4 million owed to a former employee of the Company (the “March 2022 Promissory Note”).
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The March 2022 Promissory Note accrued interest monthly based on a floating rate equal to the Wall Street Journal prime rate plus a spread of 2.00 %. In August 2025, the Company paid the remaining principal amount owed of approximately $2.6 million and the March 2022 Promissory Note was terminated. As of October 2, 2026 and December 31, 2025, there was no
During the three and nine months ended September 30, 2025, the Company recognized less than $0.1 million and approximately $0.2 million of interest expense, respectively, related to the March 2022 Promissory Note.
During the nine months ended September 30, 2025, the Company made aggregate principal and interest payments of approximately $2.1 million and $0.1 million, respectively, related to the March 2022 Promissory Note.
Second BankProv Term Note
On March 2, 2020, the Company entered into a secured $1.5 million term note with Provident Bank (the “Second BankProv Term Note”). Amounts under the Second BankProv Term Note were secured by certain assets of a consolidated subsidiary.
The Second BankProv Term Note accrued monthly interest based on a stated interest rate of 4.08 %. The Second BankProv Term Note had a maturity date of March 2, 2025. In March 2025, the Company paid the remaining principal amount owed of approximately $0.1 million and the Second BankProv Term Note was terminated.
During the three and nine months ended September 30, 2025, the Company recognized $0.0 million and less than $0.1 million of interest expense, respectively, related to the Second BankProv Term Note.
During the nine months ended September 30, 2025, the Company paid aggregate principal payments of approximately $0.1 million and aggregate interest payments of less than $0.1 million related to the Second BankProv Term Note.
The Second BankProv Term Note contained financial covenants, including leverage ratio requirements.
Line of Credit Facilities
As of October 2, 2026 and December 31, 2025, the Company has borrowings under revolving line of credit facilities. The lines of credit contain certain restrictive and financial covenants. As of October 2, 2026 and December 31, 2025, the Company was in compliance with these covenants.
Wells Fargo Line of Credit
On November 6, 2023, the Company entered into a $40.0 million revolving credit facility with Wells Fargo Bank (the “Wells Fargo LOC”). Amounts under the Wells Fargo LOC are secured by substantially all of the assets of certain consolidated subsidiaries.
The Wells Fargo LOC accrues interest monthly based on a floating rate, as defined by the lender, and is subject to periodic adjustments based on prevailing market conditions. During the three and nine months ended October 2, 2026, the Company recognized approximately $0.2 million and $0.8 million of interest expense, respectively, related to the Wells Fargo LOC. During the three and nine months ended September 30, 2025, the Company recognized approximately $0.4 million and $0.9 million of interest expense, respectively, related to the Wells Fargo LOC.
During the nine months ended October 2, 2026 and September 30, 2025, the Company borrowed, net of repayments, approximately $6.9 million and $12.8 million, respectively, related to the Wells Fargo LOC. During the nine months ended October 2, 2026 and September 30, 2025, the Company paid aggregate interest payments of approximately $1.0 million and $0.9 million, respectively, related to the Wells Fargo LOC.
The Wells Fargo LOC expires in November 2028.
As of October 2, 2026 and December 31, 2025, outstanding borrowings under the Wells Fargo LOC totaled approximately $27.4 million and $20.5 million, respectively. As of October 2, 2026, availability to borrow under the Wells Fargo LOC was approximately $12.5 million, which is out of the total principal sum of up to $39.9 million. As of October 2, 2026 and December 31, 2025, the applicable interest rates were 7.75 % and 5.92 %, respectively, on the $27.4 million and $10.0 million outstanding as of each period, respectively, 0.0 % and 7.75 % on the remaining outstanding amount of $0.0 million and $10.5 million, as of October 2, 2026 and December 31, 2025, respectively. The Wells Fargo LOC consists of two different borrowing tranches with different applicable rates, and therefore there may be multiple rates for the same period,
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depending on the overall outstanding balance. As of October 2, 2026 and December 31, 2025, the Wells Fargo LOC was included within long-term debt, net of current portion on the consolidated balance sheets.
The Company is required to pay customary fees associated with the credit facility, including commitment and administrative fees. The Wells Fargo LOC contains financial covenants, including leverage ratio requirements.
Domestic March 2020 Line of Credit
On March 2, 2020, the Company entered into a $3.0 million demand line of credit with BankProv (formerly the Provident Bank, now Needham Bank after its merger in November 2025) (the “Domestic March 2020 Line of Credit”) to finance domestic receivables and inventory. Amounts under the Domestic March 2020 Line of Credit are secured by certain assets of a consolidated subsidiary.
On January 30, 2025, the Company entered into an amendment to the Domestic March 2020 Line of Credit increasing its availability to borrow under the Domestic March 2020 Line of Credit from $3.0 million to $4.0 million. With the execution of the amendment, the Company and the lender also agreed to extend the maturity date from February 2025 to February 2026, which was subsequently extended to April 2026, as part of a second amendment to the Domestic March 2020 Line of Credit that was entered into on January 30, 2026. On March 31, 2026, the Company entered into a third amendment of the Domestic March 2020 Line of Credit to remove the stated maturity. Following the third amendment, the Domestic March 2020 Line of Credit is due on demand.
The Domestic March 2020 Line of Credit accrues interest monthly based on a floating rate equal to the Wall Street Journal prime rate which was 7.00 % as of October 2, 2026 and December 31, 2025. During the nine months ended October 2, 2026, the Company recognized less than $0.1 million of interest expense related to the Domestic March 2020 Line of Credit. During the three and nine months ended September 30, 2025, the Company recognized approximately $0.1 million and approximately $0.2 million, respectively, of interest expense related to the Domestic March 2020 Line of Credit.
During the nine months ended October 2, 2026 and September 30, 2025, the Company repaid amounts, net of borrowings, approximately $3.3 million and $0.3 million, respectively, related to the Domestic March 2020 Line of Credit. During the nine months ended October 2, 2026 and September 30, 2025, the Company paid aggregate interest payments of less than $0.1 million and approximately $0.1 million, respectively, related to the Domestic March 2020 Line of Credit.
As of October 2, 2026, the entire balance was repaid and there was no outstanding balance.
As of December 31, 2025, outstanding borrowings were approximately $3.3 million including $3.3 million of principal and less than $0.1 million of accrued interest.
As of December 31, 2025, the Domestic March 2020 Line of Credit was included within current portion of long-term debt on the consolidated balance sheets.
The Company is required to pay customary fees associated with the credit facility, including commitment and administrative fees. The Domestic March 2020 Line of Credit contains financial covenants, including leverage ratio requirements.
Auburn Savings Loan
On December 26, 2024, the Company entered into a $0.8 million construction loan with Auburn Savings Bank, FSB (“Auburn Savings Bank”) pursuant to a Commercial Note Agreement (the “Auburn Savings Loan”).
The Auburn Savings Loan accrues interest monthly based on a stated interest rate of 7.00 % for the first five years , which will be adjusted every fifth anniversary of January 25, 2026 to the Federal Home Loan Bank's 5/20 amortizing advance rate plus 3.00 %. During each of the three and nine months ended October 2, 2026 and September 30, 2025, the Company incurred interest expense of less than $0.1
During the nine months ended October 2, 2026 and September 30, 2025, the Company drew principal amounts of $0.0 million and $0.4 million, respectively, and paid interest of less than $0.1
As of October 2, 2026, the outstanding balance on the Auburn Savings Loan was approximately $0.8 million. There was no availability to borrow under the Auburn Savings Loan, as the principal sum of up to $0.8 million was borrowed as of October 2, 2026. The maturity date of the Auburn Savings Loan is December 25, 2046.
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As of October 2, 2026, the total outstanding balance on the Auburn Savings Loan of approximately $0.8 million was included in long-term debt, net of current portion on the consolidated balance sheets. As of December 31, 2025, out of the total outstanding balance of $0.8 million, $0.1 million was included within current portion of long-term debt.
The obligations under the Auburn Savings Loan are secured by a lien on certain real estate assets and guaranteed by a consolidated subsidiary. In addition, the Auburn Savings Loan is subject to customary conditions, including events of default.
Foreign March 2020 Line of Credit
On March 2, 2020, the Company entered into a $1.0 million demand line of credit with Provident Bank (the “Foreign March 2020 Line of Credit”) to finance foreign receivables denominated in euros. Amounts under the Foreign March 2020 Line of Credit are secured by certain assets of the Company and are insured by accounts receivable credit insurance.
On January 30, 2025 and on January 30, 2026, the Company entered into two separate amendments to the Foreign March 2020 Line of Credit. The first amendment entered into during January 2025 extended the maturity date from February 2025 to February 2026, which was subsequently extended to April 2026 as executed under the second amendment entered into during January 2026. On March 31, 2026, the Company entered into a third amendment of the Foreign March 2020 Line of Credit to remove the stated maturity. Following the third amendment, the Foreign March 2020 Line of Credit is due on demand.
The Foreign March 2020 Line of Credit accrues interest monthly based on a floating rate equal to the Wall Street Journal prime rate which was equal to 7.00 % as of October 2, 2026 and December 31, 2025. During each of the three and nine months ended October 2, 2026 and September 30, 2025, the Company recognized less than $0.1
During the nine months ended October 2, 2026 and September 30, 2025, the Company made aggregate repayments, net of borrowings, of $0.2 million and approximately $0.1 million, respectively, related to the Foreign March 2020 Line of Credit. During both the nine months ended October 2, 2026 and September 30, 2025, the Company paid less than $0.1
As of December 31, 2025, outstanding borrowings were approximately $0.2 million. As of October 2, 2026, availability to borrow under the Foreign March 2020 Line of Credit was the full principal of $1.0 million.
As of October 2, 2026, the entire balance was repaid and there was no outstanding balance.
As of December 31, 2025, the Foreign March 2020 Line of Credit was included within current portion of long-term debt on the consolidated balance sheets.
The Company is required to pay customary fees associated with the credit facility, including commitment and administrative fees. The Foreign March 2020 Line of Credit contains financial covenants, including leverage ratio requirements.
Auburn Savings LOC
On April 14, 2025, the Company entered into a $0.6 million line of credit facility with Auburn Savings Bank pursuant to a Demand Commercial Line of Credit Agreement (the “Auburn Savings LOC”).
The Auburn Savings LOC accrues interest monthly based on a floating rate equal to the Wall Street Journal prime rate plus 0.50 %. The effective interest on the Auburn Savings LOC as of October 2, 2026 and December 31, 2025 was 7.50 0.1 million related to the Auburn Savings LOC.
As of October 2, 2026, there was no outstanding balance owed and the amount available to borrow under the Auburn Savings LOC was the full principal of $0.6 million.
The Auburn Savings LOC does not have a maturity date but is due on demand at Auburn Savings Bank’s discretion or upon an event of default as defined in the Auburn Savings LOC.
As of December 31, 2025, the outstanding balance on the Auburn Savings LOC of approximately $0.1 million was included within current portion of long-term debt, in the consolidated balance sheets.
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The obligations under the Auburn Savings LOC are secured by a lien on certain real estate assets and guaranteed by a consolidated subsidiary. In addition, the Auburn Savings LOC is subject to customary conditions, including events of default.
Symphony Line of Credit
On November 14, 2025, as a result of the Company’s acquisition of Symphony, the Company assumed certain liabilities related to a $0.1 million line of credit (the “Symphony Line of Credit”) with Rockland Trust. Amounts under the Symphony Line of Credit were secured by certain assets of a consolidated subsidiary.
The Symphony Line of Credit accrued interest monthly based on a floating rate equal to the Wall Street Journal prime rate which was 7.00 %, as of December 31, 2025. During the nine months ended October 2, 2026, the Company recognized less than $0.1 million of interest expense related to the Symphony Line of Credit.
During the nine months ended October 2, 2026, the Company paid less than $0.1 million of interest related to the Symphony Line of Credit.
The Symphony Line of Credit did not have a maturity date but was due on demand at Rockland Trust’s discretion or upon an event of default as defined in the Symphony Line of Credit. On May 5, 2026, the Company repaid the Symphony Line of Credit, and the Symphony Line of Credit was terminated.
As of December 31, 2025, the outstanding balance related to the Symphony Line of Credit was included within current portion of long-term debt on the consolidated balance sheets.
The Symphony Line of Credit was subject to customary conditions, including events of default.
Related Party Debt
Great Falls Term Loan
On November 6, 2023, the Company entered into a secured $20.0 million term note with Great Falls Property, LLC (the “Great Falls Term Loan”), which is owned by a principal stockholder. The Great Falls Term Loan was secured by real estate held by a consolidated subsidiary.
The Great Falls Term Loan accrued interest monthly based on a floating rate equal to the Wall Street Journal prime rate plus a spread of 1.00 %, with a floor of 9.50 %. As of December 31, 2025, the effective interest rate on the Great Falls Term Loan was 9.50 0.0 million and $0.5 million of interest expense, respectively, and during the three months and nine months ended September 30, 2025, the Company recognized approximately $0.4 million and $1.2 million of interest expense during each period, respectively, related to the Great Falls Term Loan, included within interest expense – related party within the consolidated statements of operations.
During the nine months ended October 2, 2026 and September 30, 2025, the Company paid aggregate principal payments of $15.0 million and $0.0 million, respectively, and aggregate interest payments of approximately $0.6 million and $1.2 million, respectively, related to the Great Falls Term Loan. As of December 31, 2025, the Company accrued interest expense of approximately $0.1 million, which was included within accrued expenses and other current liabilities within the consolidated balance sheets. The maturity date of the Great Falls Term Loan was November 6, 2028. On April 28, 2026, the Company repaid the Great Falls Term Loan with IPO proceeds, and the Great Falls Term Loan was terminated.
As of December 31, 2025, the total amount outstanding related to the Great Falls Term Loan was approximately $15.0 million, of which $0.0 million were included within current portion of long-term debt – related party and $15.0 million, were included within long-term debt, net of current portion – related party, respectively, on the consolidated balance sheets.
CEO Line of Credit
On January 1, 2023, the Company entered into a $2.0 million line of credit note with the Company’s CEO (the “CEO Line of Credit”).
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On October 1, 2025, the Company entered into an amendment to the CEO Line of Credit, increasing the total amount available to borrow from $2.0 million to $2.5 million. All other key terms of the CEO Line of Credit agreement remained consistent.
The CEO Line of Credit accrued interest monthly based on a stated interest rate of 9.00 %. During the nine months ended October 2, 2026, the Company recognized approximately $0.4 million of interest expense, and during the three and nine months ended September 30, 2025, the Company recognized less than $0.1 million of interest expense and approximately $0.1 million of interest expense, respectively, included within interest expense – related party within the consolidated statements of operations.
During the nine months ended October 2, 2026 and September 30, 2025, the Company made aggregate repayments, net of borrowings, of approximately $1.7 million and $0.0 million, respectively, related to the CEO Line of Credit. During the nine months ended October 2, 2026 and September 30, 2025, the Company paid aggregate interest payments of $0.3 million and less than $0.1 million, respectively, related to the CEO Line of Credit. As of December 31, 2025, the Company accrued interest expense of approximately $0.4 million, which was included within accrued expenses and other current liabilities within the consolidated balance sheets.
The original maturity date of the CEO Line of Credit was January 1, 2026. On January 1, 2026, the Company amended the CEO Line of Credit to extend the maturity date from January 1, 2026 to the earlier of: (i) the closing of an initial public offering, or (ii) July 1, 2026. In connection with the amendment, the Company agreed to pay an extension fee of $0.2 million at maturity in addition to the outstanding principal and accrued, unpaid interest. On May 1, 2026, the Company repaid the CEO Line of Credit with IPO proceeds, and the CEO Line of Credit was terminated.
As of December 31, 2025, the CEO Line of Credit was included within current portion of long-term debt — related party on the consolidated balance sheets.
AAI Note
On January 2, 2026, in connection with the Reorganization, the Company entered into a $2.4 million promissory note (the “AAI Note”) with Anania & Associates Investment Company LLC (“AAI”), which is controlled by the Company’s CEO and a shareholder, related to outstanding obligations between the Company and AAI.
The AAI Note was due and payable on the earlier of demand or January 1, 2027, and accrued interest at a rate of 6.00 % per annum. During the three and nine months ended October 2, 2026, the Company repaid the full $2.4 0.1
Poly Labs Note Payable (Due to Poly Labs)
Following the Company’s distribution of Poly Labs on October 1, 2025, see Note 5 – Discontinued Operations for further information, the Company had an outstanding note payable owed to Poly Labs of approximately $1.7 million (the “Poly Labs Note Payable”). Prior to the distribution of Poly Labs, the Poly Labs Note Payable was eliminated in consolidation.
The Poly Labs Note Payable accrued interest monthly based on a stated interest rate of 10.00 % and had a maturity date of January 31, 2026. During the three months ended October 2, 2026, there was no interest recognized as the loan was terminated during the first quarter of 2026. During the nine months ended October 2, 2026, the Company recognized less than $0.1 million of interest expense included within interest expense – related party within the consolidated statements of operations.
During the nine months ended October 2, 2026, the Company paid approximately $0.5 million of principal and less than $0.1 million of interest related to the Poly Labs Note Payable. The Poly Labs Note Payable was repaid on January 19, 2026 and the Poly Labs Note Payable was terminated.
As of December 31, 2025 approximately $0.5 million was outstanding related to the Poly Labs Note Payable, which was included within current portion of long-term debt - related party on the consolidated balance sheet.
13. COMMON STOCK
As of October 2, 2026, the Company had 540,000,000 shares of common stock, par value $0.001 per share, authorized, of which 30,459,498 500,000,000 shares of
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Class A common stock, par value $0.001 per share, authorized, of which 20,122,721 40,000,000 shares of Class B common stock, par value $0.001 per share authorized, of which 466
In connection with the IPO, on April 22, 2026, the Company redeemed and cancelled all outstanding shares of the Class B common stock and filed a second amended and restated certificate of incorporation, which, among other things, consolidated and reclassified all Class A common stock and Class B common stock into a single class of common stock. See Note 1 – Business and Organization – Initial Public Offering for further information.
As of October 2, 2026, holders of the Company's common stock are entitled to one vote per share. As of December 31, 2025, holders of the Company’s Class A common stock were entitled to one vote per share while holders of the Company’s Class B common stock were entitled to 10,000 votes per share. In the event of a liquidation, dissolution, winding-up, or deemed liquidation event of the Company, proceeds available for distribution or allocation will be distributed or allocated among the common stockholders on a pro rata basis. In addition, holders of common stock are entitled to receive dividends, if and when declared by the Company’s board of directors. As of October 2, 2026 and December 31, 2025, the Company has not declared dividends. Prior to the Reorganization, the Company was previously an S Corporation and treated as a pass-through entity for tax purposes. During the nine months ended September 30, 2025, stockholder distributions for taxes totaled approximately $1.8 million, which is included within stockholder distributions in the consolidated statements of changes of stockholders’ equity.
14. DoW INVESTMENT AGREEMENT AND RELATED TRANSACTIONS
Under the Investment Agreement, on September 11, 2026, the DoW agreed to invest up to $450.0 million in the Company through the purchase of shares of the Company’s Class A Preferred Stock, consisting of 1) the Initial Closing under which DoW purchased 200,000 shares of Class A Preferred shares in exchange for an aggregate $200.0 million in gross proceeds and 2) an equity commitment made by the DoW, under which DoW held a legally binding equity commitment to purchase additional tranches of Class A Preferred Stock, capped at an additional 250,000 shares of Class A Preferred Stock or the equivalent of an additional $250.0 million investment (the “Tranche Right”). The Tranche Right is subject to the Company’s election during a commitment period beginning six months and ending no later than thirty months after the Initial Closing Date.
As contemplated under the Investment Agreement, in connection with the execution of the Initial Closing, the Company entered into warrant purchase agreements whereby the Company issued to DoW a warrant package, which granted DoW the right, but not the obligation, to purchase an aggregate of 7,567,341 shares of the Company’s common stock, consisting of (i) warrants to purchase 5,675,506 shares exercisable at a nominal exercise price of $0.001 per share, representing 75 % of the warrant package (the “DoW Penny Warrants”), and (ii) warrants to purchase 1,891,835 shares exercisable at an exercise price $15.92 , representing 25 % of the warrant package (the “DoW Strike Price Warrants” and, together with the DoW Penny Warrants, the “DoW Warrants”).
Terms of the Class A Preferred Stock
The Class A Preferred Stock accrues cumulative dividends at a fixed annual rate of 5.5 % (the “Dividend Rate”), compounding quarterly, whether or not declared and whether or not funds are legally available for payment, and is payable in preference to any dividend on common stock. The Company defines the sum of (a) the total outstanding principal amount of the Class A Preferred Stock and (b) any previously accrued and unpaid dividends thereon (i.e., compounded dividends) (together, the “Accumulated Stated Value”). Upon a “Liquidation Event” (defined to include an insolvency event, a sale of substantially all of the Company’s assets, a consolidation or merger, or a change of control event) holders of the Class A Preferred Stock are entitled to receive, in preference to the common stock, an amount in cash per share equal to the Accumulated Stated Value plus any accrued and uncompounded dividends (the “Liquidation Preference”). DoW may elect, at its sole discretion, require the Company to redeem all or any portion of the outstanding Class A Preferred Stock (i) upon a Liquidation Event, (ii) upon the occurrence and continuance of an event of default (an “Event of Default”) as defined in the Investor Rights Agreement, dated as of September 14, 2026, by and among the Company, DoW, and the other parties thereto (the “Investor Rights Agreement”), or (iii) at any time after the tenth anniversary of the Initial Closing Date, in each case at a redemption price equal to the then-applicable Liquidation Preference. The Company separately holds a redemption right, exercisable at any time in whole or in part, at the same redemption price. The Class A Preferred Stock votes together with the common stock as a single class on all matters, with an aggregate voting power fixed at 19.9 % of total voting power as of the Initial Closing Date and carries no right to convert into common stock or any other security.
Classification and Subsequent Measurement
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The Company has classified the Class A Preferred Stock in temporary equity, outside of permanent equity, as the Class A Preferred Stock is redeemable at DoW’s option, at a fixed and determinable date, and upon the occurrence of events not solely within the Company’s control. The DoW’s right to require redemption at any time after the tenth anniversary of the Initial Closing Date depends solely on the passage of time and therefore is classified within temporary equity. The Company evaluated the Class A Preferred for embedded derivatives and determined that none require bifurcation. The Company initially recognized the Class A Preferred Stock at its relative fair value, net of allocated issuance costs. See the subparagraph below ‘Fair Value of Initial Closing Consideration for additional information.
At each reporting period, the Company reassesses whether the Class A Preferred Stock is (i) currently redeemable or (ii) probable of becoming redeemable in the future. If the instrument meets either criterion, the Company will adjust the carrying amount to the estimated maximum redemption value (i.e., the redemption price).
The Company accretes the carrying amount of the Class A Preferred Stock to its projected redemption value, using the interest method through the tenth anniversary of the Initial Closing Date.
DoW Warrants
The DoW Penny Warrants and DoW Strike Price Warrants are exercisable for common stock at any time after September 14, 2027, through the tenth anniversary of that date (the “Expiration Time”). The DoW Warrants may be settled by the holder through cash exercise or cashless (net share) exercise, and any in-the-money warrants remaining unexercised at the Expiration Time are automatically exercised on a cashless basis. The number of shares issuable under each warrant, and the exercise price of the DoW Strike Price Warrants, are subject to customary adjustments for stock splits, stock dividends and distributions. The DoW Warrants do not contain an aggregate ownership limitation on the Company’s obligation to deliver shares upon exercise. The DoW Warrants do not carry any right to receive dividends or to vote as a stockholder prior to exercise and are not convertible into any other class or series of security.
The Company analyzed the DoW Warrants and determined that the DoW Penny Warrants and the DoW Strike Price Warrants were both freestanding financial instruments. The Company next evaluated the DoW Warrants classification as of the date of issuance and as of October 2, 2026, and determined that each such instrument met the criteria for equity classification and thus were recognized as part of the Initial Closing and not subsequently remeasured at fair value as of each reporting period thereafter. The Company will continue to reassess classification to ensure appropriateness. See the subparagraph below ‘Fair Value of Initial Closing Consideration for additional information.
Tranche Right
Under the Tranche Right, the Company holds the right, but not the obligation, to require DoW to fund up to an additional $250.0 million of additional Class A Preferred Stock purchases during the commitment period described above, at a fixed price per share for each subsequent closing. The Tranche Right is a freestanding financial instrument that is classified in permanent equity and is not subsequently remeasured at fair value. The Company will continue to reassess classification to ensure appropriateness. See the subparagraph below ‘Fair Value of Initial Closing Consideration for additional information.
Shared Upside Penny Warrant Recognition Mechanism
Upon exercise of a Penny Warrant, the Liquidation Preference of the Class A Preferred Stock is reduced through a tiered formula (the “Shared Upside Penny Warrant Recognition Mechanism”) based on a 30-trading-day volume-weighted average price of the common stock and the Penny Warrant’s intrinsic value at exercise, with the percentage reduction increasing from 45 % to 65 % of intrinsic value as share price appreciation increases. The holder of the DoW Penny Warrant retains the shares of common stock received upon exercise in all cases. The Company accounts for each such reduction as a decrease in the redemption value to which the Class A Preferred Stock is accreted under the interest method described above, resulting in a prospective reduction of the Company’s periodic accretion charge against income available to common stockholders, subject to a limitation that the cumulative benefit recognized may not exceed the cumulative accretion previously charged against income available to common stockholders.
Fair Value of Initial Closing Consideration
The Company allocated the $200.0 million of Initial Closing proceeds among the Class A Preferred Stock, the DoW Penny Warrants, the DoW Strike Price Warrants, and the Tranche Right based on the fair value of each instrument as of the Initial
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Closing date, using a Monte-Carlo simulation model for the DoW Warrants and an implied (back-solve) approach for the Class A Preferred Stock and the Tranche Right, under which the fair values of the Class A Preferred Stock and the Tranche Right were solved so that the fair value of the instruments issued, net of the fair value of the Tranche Right, equals the $200.0 million of proceeds. The fair value of the DoW Warrants was estimated using a Monte-Carlo simulation model as of September 14, 2026, using the following significant inputs: stock price of $21.50 ; exercise price of $0.001 (DoW Penny Warrants) and $15.92 (DoW Strike Price Warrants); expected term of 10.0 years; expected volatility of 45 %; risk-free interest rate of 4.97 %; and expected dividend yield of 0 %. The valuation model for the Class A Preferred Stock, the DoW Penny Warrants, the DoW Strike Price Warrants, and the Tranche Right also included a discount rate of 6.47 % to estimate the fair value of each instrument. The simulation reflects the reduction of the Class A Preferred Stock liquidation preference upon exercise of the DoW Penny Warrants and the mandatory exercise feature of the DoW Strike Price Warrants.
After allocated issuance costs of approximately $8.8 million (of which approximately $6.9 million was paid in cash, and recognized within payments of capitalized issuance costs in the statement of cash flows for the period ended October 2, 2026, and approximately $1.9 million was accrued as of October 2, 2026), the Company recognized the Class A Preferred Stock at an initial carrying amount of approximately $119.7 million, the DoW Warrants within additional paid-in capital at approximately $143.2 million, and the Tranche Right as a reduction of additional paid-in capital of approximately $71.8 million.
Shareholder Rights Plan
On September 14, 2026, the Board of Directors of the Company declared a dividend of one right (a “Right”) for each outstanding share of common stock to stockholders of record as of that date, pursuant to a Rights Agreement, dated as of September 14, 2026 (the “Rights Agreement”), between the Company and Continental Stock Transfer & Trust Company, as rights agent. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of the Company’s Class B Junior Participating Preferred Stock at a purchase price of $86.00 per one one-thousandth of a share, subject to adjustment. The Rights are not exercisable, and are evidenced only by the certificates for shares of common stock (or by book-entry shares of common stock), until the earlier of the tenth business day after a person or group becomes an or commences a tender or exchange offer that would result in such person or group becoming an “Acquiring Person”, in each case as defined in the Rights Agreement. The Rights are redeemable by the Company at a price of $0.001 per Right at any time prior to the earlier of such events. As the Rights are not presently separable from the common stock and are not currently exercisable, the Company has not assigned any value to the Rights and has not recorded any related asset, liability, or equity in its consolidated financial statements.
15. BLUE MOON METALS INC. TRANSACTIONS
On September 11, 2026, the Company entered into the Binding Letter Agreement with Blue Moon, BM US and EQ. Blue Moon is a British Columbia company listed on the TSXV and the Nasdaq. The Binding Letter Agreement contemplates a joint venture to restart and operate the APT Plant at Blue Moon’s Springer tungsten project in Pershing County, Nevada (the “Springer Project”), and a total investment by the Company of up to $150.0 million, consisting of (i) an investment in Blue Moon (the “Blue Moon Investment”) and (ii) a contribution to a joint venture entity (the “JV Entity”) to be formed by the Company, Blue Moon and EQ. The Company expects to fund these investments with a portion of the proceeds of the investment by DoW described in Note 14 – DoW Investment Agreement and Related Transactions. As of October 2, 2026, neither the Blue Moon Investment nor the contribution to the JV Entity had closed.
As of October 2, 2026, the Company had executed (i) the Binding Letter Agreement, (ii) entered into the Warrant Purchase Agreement under which the TEG Warrants were issued (together, the “Executed Agreements”). The Company’s obligations under the Executed Agreements consist of the Equity Subscription and the TEG Warrants described below.
The remaining elements of the transaction, including a secured prepayment facility for the purchase of tungsten concentrate from Blue Moon (the “Tungsten Prepayment Facility”), the formation of and the Company’s equity contribution to the JV Entity, and the related governance, offtake, site-sharing and 99-year license and operating agreements for the APT Plant (the “APT Plant License”) (collectively, the “Contemplated Agreements”), are subject to due diligence, regulatory approvals and the negotiation and execution of definitive agreements. The Binding Letter Agreement sets out the principal terms of the Contemplated Agreements, which the parties expect to complete within twelve months of September 11, 2026. The Company has recognized the deferred asset described under “TEG Warrants” below for its entry into the Binding Letter Agreement and the rights anticipated by the Contemplated Agreements. See Note 20 – Commitments and Contingencies.
Equity Subscription
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Under the Binding Letter Agreement, the Company is bound to subscribe for 3,500,000 units of Blue Moon at a price of C$10.00 per unit, or C$35.0 million (approximately $24.7 million as of September 11, 2026) in the aggregate referred to as the Equity Subscription, with closing required within 45 days of the September 14, 2026 announcement date, or by October 29, 2026, subject to TSXV approval. Each unit consists represents a Unit Share(s), which includes 1) one common share of Blue Moon and 2) one Blue Moon Warrant to purchase one common share of Blue Moon. Each Blue Moon Warrant has a three-year term from the closing date and an exercise price equal to the greater of C$10.00 and C$10.00 multiplied by the ratio of two five-day volume-weighted average prices of Blue Moon common shares, subject to a C$12.00 ceiling condition and TSXV approval. The Equity Subscription requires physical settlement. As of October 2, 2026, the common shares underlying the Unit Shares and the Blue Moon Warrants had not been issued and the subscription price had not been funded.
The Company’s binding commitment to purchase the Unit Shares was recognized as a forward equity subscription. The Forward is accounted for as an investment in equity securities. The Company has measured the Forward at fair value from September 21, 2026 (the “Blue Moon Initial Accounting Date”) and remeasures it to fair value at each reporting date, with changes in fair value recognized in the consolidated statements of operations. The Equity Subscription is denominated in Canadian dollars and is translated at the spot exchange rate at each reporting date.
As of October 2, 2026 the Company remeasured the fair value of the Forward, recognizing the change in fair value from the Blue Moon Initial Accounting Date to October 2, 2026 in the amount of $3.5 million as an unrealized loss on the Forward, which is included in change in fair value of forward instruments in the condensed consolidated statement of operations. As of October 2, 2026, the fair value of the Forward of $(3.5 million) was included within accrued expenses and other current liabilities within the consolidated balance sheet. The fair value measurement of the Forward is described in Note 2 – Summary of Significant Accounting Policies.
TEG Warrants
On September 21, 2026, the Company issued to Blue Moon the TEG Warrants, which granted Blue Moon the right, but not obligation, to purchase up to 1,166,970 shares of the Company’s common stock, par value $0.001 per share, at an exercise price of $21.42 per share, or $25.0 million in the aggregate. The exercise price was determined by reference to the five-day volume-weighted average price of the Company’s common stock ended September 21, 2026, subject to the Nasdaq minimum price. The TEG Warrants were issued as consideration for Blue Moon’s entry into the Contemplated Agreements, most notably the expected license associated with the use of the APT plant (i.e., prepaid rent as the license does not contain recurring cash payments for the Company’s use of the plant and its related assets and its investment in the Company). Therefore, no separate cash purchase price was paid for the TEG Warrants. The fair value of the TEG Warrants is not part of the cost of the Forward.
The TEG Warrants are exercisable at any time on or after March 21, 2027 through September 21, 2029. The holder may exercise by paying the exercise price in cash or, only if no resale registration statement covering the underlying shares is effective, on a cashless (net share) basis. In no event is the Company required to net cash settle an exercise of the TEG Warrants. The exercise price and number of shares are subject to customary adjustments for stock dividends, splits, combinations and reclassifications, and the holder is entitled to participate in distributions to common stockholders as if the TEG Warrants had been exercised in full. Upon a fundamental transaction, the holder is entitled to receive, upon exercise, the same amount and kind of consideration (and the same choice of consideration) as holders of common stock. The holder may not exercise the TEG Warrants to the extent it and its affiliates would beneficially own more than 4.99 % of the Company’s outstanding common stock, a limit the holder may increase to up to 19.99 % upon 61 days’ notice. The holder has no voting or other stockholder rights before exercise.
The TEG Warrants are classified in stockholders’ equity, were initially measured at fair value on September 21, 2026 and are not subsequently remeasured while they remain equity-classified. Classification is reassessed at each reporting date.
As of September 21, 2026, the Company recognized the fair value of the TEG Warrants of approximately $9.3 million, which was included within other assets on the consolidated balance sheet and within issuance of TEG Warrants in connection with the Binding Letter Agreement in the consolidated statements of changes in redeemable preferred stock and stockholders’ equity. The Company estimated the fair value of the TEG Warrants at issuance of $9.3 million using an option pricing model with the following assumptions:
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| Assumption | September 21, 2026 | ||||
| Closing price of the Company’s common stock | $ | ||||
| Exercise price | $ | ||||
| Expected volatility | |||||
| Expected term (years) | |||||
| Risk-free interest rate | |||||
| Expected dividend yield | |||||
The fair value of the TEG Warrants represents consideration paid to Blue Moon for its entry into the Binding Letter Agreement, under which the TEG Warrants were issued in connection with the Tungsten Prepayment Facility, and for the rights contemplated by the other Contemplated Agreements, including the expected APT Plant License. The Company recorded the fair value of the TEG Warrants as a deferred asset of $9.3 million, presented in Other assets with an offsetting credit to additional paid-in capital.
The effect of the TEG Warrants on net income per share is described in Note 18 – Net Income per Share.
16. RELATED PARTY TRANSACTIONS
On September 14, 2026, pursuant to the Investment Agreement, DoW purchased 200,000 shares of the Company’s Class A Preferred Stock for aggregate cash proceeds of $200.0 million and received the DoW Warrants. The Class A Preferred Stock carries aggregate voting power fixed at 19.9 % of the Company’s total voting power as of the Initial Closing Date, and DoW is therefore considered a related party of the Company. In connection with the Initial Closing, the Company also entered into the Investor Rights Agreement with DoW, and the Company holds the Tranche Right to require DoW to purchase up to $250.0 million of additional Class A Preferred Stock. See Note 14 – DoW Investment Agreement and Related Transactions for additional information.
In connection with the Reorganization, the Company issued 466 shares of Class B common stock to the Company’s CEO for cash proceeds of less than $0.1 million. Following the completion of the IPO, the Company redeemed the 466 shares of Class B common stock held by the Company’s CEO for less than $0.1 million of cash.
As of October 2, 2026 and December 31, 2025, Poly Labs, which is majority owned by the Company's CEO, owed the Company approximately $0.1 million and $0.2 million, respectively, related to various management fees and other services provided by the Company to Poly Labs following the October 1, 2025 distribution date, which is included within related party receivables within the consolidated balance sheets. The related party receivable was non-interest bearing and contained no stated maturity date.
During the nine months ended October 2, 2026, in connection with the Reorganization, the Company entered into a $2.4 million note payable with AAI. The AAI Note was repaid during the nine months ended October 2, 2026. Refer to Note 12 – Debt for further information.
During the year ended December 31, 2025, the Company entered into a $1.7 million note payable with Poly Labs, which is majority owned by the Company’s CEO. The Poly Labs Note Payable was repaid on January 19, 2026. Refer to Note 12 – Debt for further information.
During the year ended December 31, 2023, the Company and an employee of the Company entered into a note receivable, which consisted of a note bearing interest at 1.5 % with an initial maturity date of August 31, 2025. In November 2025, the parties agreed to extend the maturity date of the note to March 1, 2026. In May 2026, the parties agreed to extend the maturity date of the note to June 1, 2026. The note receivable was repaid during the nine months ended October 2, 2026. As of December 31, 2025, the outstanding balance on the note receivable was approximately $0.2 million and was included in related party receivables on the consolidated balance sheet.
During the year ended December 31, 2023, the Company entered into a $20.0 million term note with Great Falls Property, LLC, which is owned by a principal stockholder. The loan proceeds were used to fund a portion of one of the Company’s 2023 acquisitions. On April 23, 2026, the Company repaid the Great Falls Term Loan, and the loan was terminated. Refer to Note 12 – Debt for further information.
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During the year ended December 31, 2023, the Company entered into a $2.0 million line of credit with the Company’s CEO, which was further increased to $2.5 million as a result of an amendment entered into during the year ended December 31, 2025. The loan proceeds were used to fund working capital needs. On January 1, 2026, the Company amended the maturity date of the CEO Line of Credit. On May 1, 2026, the Company repaid the CEO Line of Credit, and the CEO Line of Credit was terminated. Refer to Note 12 – Debt for further information.
17. STOCK – BASED COMPENSATION
Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant).
The Company has issued stock-based awards through several plans that are described in detail below. Stock-based compensation recognized under these plans was included within the following consolidated statements of operations line items for the three and nine months ended October 2, 2026: approximately $1.6 million and $12.5 million in general and administrative expenses, respectively, $0.0 million and $3.6 million in research and development expenses, respectively, and $0.5 million and $0.8 million in cost of goods sold, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2025 was included in general and administrative expenses. Stock-based compensation by award type is as follows (in thousands):
| Stock-based compensation related to: | Three Months Ended October 2, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended October 2, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||||||||
| Stock-settled awards: | |||||||||||||||||||||||
| Restricted stock awards | $ | $ | $ | $ | |||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Stock appreciation rights settled in shares | |||||||||||||||||||||||
| Total stock-settled awards | |||||||||||||||||||||||
| Stock appreciation rights settled in cash | |||||||||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
Restricted Stock Awards
The Company granted restricted stock awards to employees under the 2025 Equity Incentive Plan, which was adopted on April 1, 2025, and assumed by the Company's 2026 Equity Incentive Plan on April 17, 2026. During the year ended December 31, 2025, the Company granted 530,890 shares of restricted stock to employees that included service-based vesting conditions and vest over a period of to three years , subject to a cliff and potential acceleration upon a qualifying liquidity event, which in some circumstances included an initial public offering. The aggregate grant date fair value of restricted stock granted during the year ended December 31, 2025 with service-based vesting conditions was $4.6 million. In connection with the IPO, the vesting of 73,500 shares of restricted stock accelerated. During the year ended December 31, 2025, the Company granted 80,000 shares of restricted stock to employees that vest solely based on a performance-based vesting condition tied to a liquidity event, which in some circumstances included an initial public offering, which is not probable until it occurs.
In connection with the IPO, the 80,000 shares of restricted stock with performance-based vesting conditions accelerated and the Company recognized $0.9 million of stock-based compensation expense during the nine months ended October 2, 2026. In total, during the three and nine months ended October 2, 2026, the Company recognized approximately $1.6 million and $4.3 million of stock-based compensation expense, respectively, related to restricted stock awards. During the three and nine months ended September 30, 2025, the Company recognized approximately $0.4 million and $0.8 million of stock-based compensation expense, respectively, related to restricted stock awards. The following table
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summarizes changes in restricted stock activity, excluding awards with performance-based vesting conditions, during the nine months ended October 2, 2026:
| Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
| Unvested as of December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Cancelled | |||||||||||
| Unvested as of October 2, 2026 | $ | ||||||||||
The total fair value of 73,500 restricted stock awards that vested during the nine months ended October 2, 2026 was $0.8 million. As of October 2, 2026, there was approximately $0.8 million of total unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over a weighted-average period of 0.8 years.
Restricted Stock Units
In connection with the IPO, the Company adopted the 2026 Equity Incentive Plan, which permits the Company to issue stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other types of awards (collectively, “awards”) to employees, consultants, or directors as compensation for services. The Company is permitted to issue up to a maximum number of shares of common stock underlying the awards of (A) 3,616,003 shares, plus (B) an increase commencing on January 1, 2027 and continuing annually on each anniversary thereof through and including January 1, 2036, equal to the lesser of (i) 3.0 % of the shares of common stock outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by the board of directors. Restricted stock units generally vest over a period ranging from to five years of service, and restricted stock units and stock appreciation rights granted under the Plan have a maximum contractual term of 10 years from the date of grant. Shares issued upon the exercise of stock options or stock appreciation rights, or upon the vesting of restricted stock units, are issued from authorized but unissued shares of common stock. The Company accounts for forfeitures of awards as they occur, which is applied on an entity-wide basis to all awards outstanding under the 2026 Equity Incentive Plan. The Company measures the fair value of stock options and stock appreciation rights using the Black-Scholes option-pricing model. Restricted stock units are measured at the closing price of the Company’s common stock on the date of
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grant. For the three and nine months ended October 2, 2026, the Company recognized approximately $0.5 million and $1.3 million, respectively, of stock-based compensation related to restricted stock units.
The following table summarizes changes in restricted stock unit activity, during the nine months ended October 2, 2026:
| Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
| Unvested as of December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | |||||||||||
| Cancelled | ( | ||||||||||
| Unvested as of October 2, 2026 | $ | ||||||||||
As of October 2, 2026, there was approximately $6.8 million of total unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.1 years.
Stock Appreciation Rights
The Company previously granted unit appreciation rights (“UARs”) in a consolidated subsidiary to certain employees which entitle the employees to cash payments upon the occurrence of a qualifying liquidity event. The Company accounted for these awards as a cash-settled profit-sharing bonus arrangement. For the three and nine months ended September 30, 2025, no
During the nine months ended October 2, 2026, in connection with the Reorganization, the Company modified the UARs and issued replacement awards in the form of 987,700 stock appreciation rights (“SARs”) with an exercise price of $0.91 per SAR. Because the UARs were not probable of vesting and no compensation cost had been recognized prior to the modification, the Company measured the incremental compensation cost of the modification as the entire modification-date fair value of the replacement SARs. The SARs are accounted for as stock-based compensation and vest based upon a performance-based vesting condition tied to a qualifying liquidity event, including an initial public offering, which is not probable until it occurs. Upon the occurrence of the initial public offering, 677,280 SARs were settled with common stock (“equity-settled SARs”) and the remaining 310,420 SARs were settled in cash (“cash settled SARs’).
The equity-settled SARs had a modification date fair value was approximately $7.2 million. The fair value of the equity-settled SARs was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: expected term of 0.58 years, expected volatility of 44.7 %, expected dividend yield of 0 %, and a risk-free interest rate of 3.77 %. Expected volatility was based on the implied volatility of a group of guideline public companies, as the Company does not have sufficient trading history in its own common stock. The cash settled SARs are classified as liability awards and the associated compensation cost is recognized based upon the fair value of the SARs when the performance-based vesting condition is probable of being met. In connection with the IPO, all outstanding SARs vested and the Company recognized approximately $11.2 million of stock-based compensation expense related to stock appreciation rights during the nine months ended October 2, 2026, of which $4.1 million was settled in cash. As all outstanding SARs vested in connection with the IPO, there was no unrecognized compensation cost related to the SARs as of October 2, 2026.
Market-Capitalization Bonus
During the three months ended October 2, 2026, the Company granted a cash-settled award to an employee that vests upon certain market capitalization thresholds being met (“cash settled market award”). The cash-settled market award is liability-classified. The Company did not recognize any stock-based compensation expense related to the cash-settled market award during the three and nine months ended October 2, 2026, as the fair value of the cash-settled market award related to service provided during the periods was not material based on the probability of achievement.
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18. NET INCOME PER SHARE
The Company computes net income per share of common stock using the two-class method required for participating securities. Under the two-class method, net income is reduced by cumulative dividends on, and accretion of, the Company's Class A Preferred Stock, and the remaining undistributed earnings are allocated between common stockholders and participating securities in proportion to their rights to share in dividends. The Class A Preferred Stock is not a participating security. The TEG Warrants are participating securities because the holder is entitled to receive dividends declared on common stock. Under the two-class method, in periods of net losses, any such loss is not allocated to the holders of the TEG Warrants, because the holders have no contractual obligation to share in losses.
Basic net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The DoW Penny Warrants issued to the DoW on September 14, 2026 to purchase up to 5,675,506 shares of common stock at an exercise price of $0.001 per share are exercisable for nominal consideration and are included in basic weighted-average shares from the date of issuance.
Diluted net income per share reflects the potential dilution from unvested restricted stock awards, restricted stock units, stock options, stock appreciation rights, and the DoW Strike Price Warrants, each determined using the treasury stock method. For the periods presented, diluted net income per share was calculated under the two-class method, which was more dilutive than the method that assumes exercise of the TEG Warrants. The DoW Strike Price Warrants were dilutive for the three months ended October 2, 2026 because the average market price of $17.15 exceeded the exercise price and were antidilutive for the nine months ended October 2, 2026 because the average market price of $14.98 was below the exercise price.
The following table presents the computation of basic and diluted net income per share of common stock (in thousands, except share and per share amounts):
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| Three Months Ended October 2, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended October 2, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
| Loss from discontinued operations, net of tax | ( | ( | |||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
Less: cumulative dividend on Class A Preferred Stock | ( | ( | |||||||||||||||||||||
Less: accretion of Class A Preferred Stock to redemption value | ( | ( | |||||||||||||||||||||
Net income available to common stockholders | |||||||||||||||||||||||
Less: undistributed earnings allocated to participating securities | ( | ( | |||||||||||||||||||||
Net income attributable to common stockholders – basic | |||||||||||||||||||||||
Add: reallocation of undistributed earnings to participating securities | |||||||||||||||||||||||
Net income attributable to common stockholders – diluted | |||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
Weighted average Dow Penny Warrant shares | |||||||||||||||||||||||
| Weighted average shares outstanding – basic | — | ||||||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Weighted average shares outstanding – diluted | |||||||||||||||||||||||
| Net income per share of common stock: | |||||||||||||||||||||||
Continuing operations: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Net income: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
The following securities were excluded from the computation of diluted net income per share because their inclusion would have been antidilutive:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(shares underlying outstanding securities) | October 2, 2026 | September 30, 2025 | October 2, 2026 | September 30, 2025 | |||||||||||||||||||
DoW Strike Price Warrants(a) | |||||||||||||||||||||||
TEG Warrants(b) | |||||||||||||||||||||||
Other Warrants(c) | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
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(a)Excluded for the nine months ended October 2, 2026 because the $15.92 exercise price exceeded the average market price of $14.98 ; included under the treasury stock method for the three months ended October 2, 2026.
(b)Exercise price of $21.423 exceeded the average market price for both periods. The TEG Warrants remain participating securities in periods of net income.
(c)Warrants to purchase 147,857 shares of common stock at $17.50 per share issued April 22, 2026; exercise price exceeded the average market price of $17.15 and $14.98 for the three and nine months, respectively.
Restricted stock awards, restricted stock units, stock options, and stock appreciation rights were dilutive in each period presented and are included in the effect of dilutive securities. The DoW Penny Warrants are included in basic and diluted weighted-average shares and are therefore not antidilutive.
For the three months ended October 2, 2026, weighted-average shares outstanding – basic reflects 30,459,498 shares of common stock that were outstanding for the entire three-month period, plus a weighted average of 1,184,996 shares underlying the DoW Penny Warrants, which are included in basic shares from their issuance on September 14, 2026. The Company reported net income for the period; therefore, weighted-average shares outstanding – diluted includes 656,303 incremental shares calculated under the treasury stock method, consisting of 398,227 restricted stock awards, 229,747 restricted stock units and 28,329 DoW Strike Price Warrants. Potential dilutive shares excluded from the computation of weighted-average shares outstanding – diluted because their effect was antidilutive consisted of 1,166,970 TEG Warrants and 147,857 Other Warrants.
For the three months ended September 30, 2025, weighted-average shares outstanding – basic includes 20,122,721 shares of Class A common stock and 466 shares of Class B common stock. For the three months ended September 30, 2025, weighted-average shares outstanding – diluted included 179,202 incremental shares calculated under the treasury stock method, which reflects a weighted-average unrecognized compensation expense of $2.2 million associated with outstanding share-based payment awards.
For the nine months ended October 2, 2026, weighted-average shares outstanding – basic reflects 20,122,721 shares of common stock that were outstanding for the entire nine-month period, plus a weighted average of 6,164,478 shares, representing 9,857,142 shares issued upon execution of the IPO and 479,635 additional shares of common stock issued during the nine months ended October 2, 2026, each weighted for the portion of the period such shares were outstanding, plus a weighted average of 392,126 shares underlying the DoW Penny Warrants from their issuance on September 14, 2026. The Company reported net income for the period; therefore, weighted-average shares outstanding – diluted includes 540,263 incremental shares calculated under the treasury stock method, consisting of 328,321 restricted stock awards, 70,518 restricted stock units and 141,424 stock options and stock appreciation rights. Potential dilutive shares excluded from the computation of weighted-average shares outstanding – diluted because their effect was antidilutive consisted of 1,891,835 DoW Strike Price Warrants (the average market price of $14.98 was below the $15.92 exercise price), 1,166,970 TEG Warrants and 147,857 Other Warrants.
For the nine months ended September 30, 2025, weighted-average shares outstanding – basic includes 20,122,721 shares of Class A common stock and 466 shares of Class B common stock. For the nine months ended September 30, 2025, weighted-average shares outstanding – diluted included 108,725 incremental shares calculated under the treasury stock method, which reflects a weighted-average unrecognized compensation expense of $1.4 million associated with outstanding share-based payment awards.
Pro Forma Net Income Per Share
The following pro forma net income per share information is presented for comparative purposes only and does not purport to be indicative of the results that would have been achieved had the Reorganization occurred at an earlier date, nor of future results.
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The following table sets forth a reconciliation of the numerators and denominators used to compute pro forma basic and diluted net income per share, which is calculated under the two-class method consistent with the Net Income Per Share notes (in thousands, except share and per share amounts):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 2, 2026 | September 30, 2025 | October 2, 2026 | September 30, 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Income tax effects of Reorganization(a) | ( | ( | |||||||||||||||||||||
Pro forma net income | |||||||||||||||||||||||
| Less: cumulative dividend on Class A Preferred Stock | ( | ( | |||||||||||||||||||||
| Less: accretion of Class A Preferred Stock to redemption value | ( | ( | |||||||||||||||||||||
| Pro forma net income available to common stockholders | |||||||||||||||||||||||
| Less: undistributed earnings allocated to participating securities | ( | ( | |||||||||||||||||||||
| Pro forma net income attributable to common stockholders – basic | $ | $ | $ | $ | |||||||||||||||||||
| Add: reallocation of undistributed earnings to participating securities | |||||||||||||||||||||||
| Pro forma net income attributable to common stockholders – diluted | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
Pro forma weighted average common stock outstanding – basic(b) | |||||||||||||||||||||||
Pro forma weighted average common stock outstanding – diluted(b,c) | |||||||||||||||||||||||
Pro forma net income per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
_______________________________________________________________________
(a)Following the Reorganization, the Company is subject to U.S. federal and applicable state income taxes. The adjustment for income taxes reflects the estimated income tax expense that would have been recognized had the Reorganization occurred on January 1, 2025, based on an effective tax rate of 6.95 3.5 million, which was recognized in the period of the Reorganization and does not reflect ongoing income tax expense, and other discrete tax impacts of $0.3 million related to the Reorganization Since the Reorganization occurred during the three months ended April 3, 2026, these amounts are fully reflected within the nine-month period and no incremental adjustment relates to the three months ended October 2, 2026. For the three and nine months ended September 30, 2025, the difference between the U.S. federal statutory rate of 21.0 6.95 15.45 1.4
(b)Pro forma weighted-average common stock outstanding (basic and diluted) for the three and nine months ended September 30, 2025 reflects the Reorganization as if it occurred on January 1, 2025, resulting in 20,122,721 shares of Class A common stock and 466 shares of Class B common stock issued and outstanding. For the three and nine months ended October 2, 2026, pro forma weighted-average shares equal actual weighted-average shares, including 1,184,996 and 392,126 weighted-average shares underlying the DoW Penny Warrants, respectively.
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(c)The potential impact on pro forma weighted-average common stock outstanding (diluted) of restricted stock awards, restricted stock units, stock options and stock appreciation rights, and the DoW Strike Price Warrants was evaluated under the treasury stock method. For the three months ended October 2, 2026, the Company determined that the impact represented 656,303 dilutive shares, and for the nine months ended October 2, 2026, 540,263 dilutive shares, which include 141,424 shares for stock appreciation rights exercised during the three months ended July 3, 2026, weighted for the period outstanding before exercise, considering the weighted-average unrecognized compensation costs of approximately $8.4 million and $6.0 million, respectively, and the estimated fair value of the Company's common stock for the period. For the three and nine months ended September 30, 2025, the Company determined that the impact represented 179,202 and 108,725 dilutive shares, respectively, considering the weighted-average unrecognized compensation costs of approximately $2.2 million and $1.4 million, respectively, and the estimated fair value of the Company's common stock for the period.
19. INCOME TAXES
The Company’s domestic and foreign net loss before income tax provision for the three and nine months ended October 2, 2026 consists of the following (in thousands):
| Three Months Ended October 2, 2026 | Nine Months Ended October 2, 2026 | ||||||||||
| Domestic | $ | $ | |||||||||
| Foreign | ( | ||||||||||
| Total | $ | $ | |||||||||
The Company’s income tax provision for the three and nine months ended October 2, 2026 consists of the following (in thousands):
| Three Months Ended October 2, 2026 | Nine Months Ended October 2, 2026 | ||||||||||
| Current | |||||||||||
| Federal | $ | $ | |||||||||
| State | |||||||||||
| Foreign | |||||||||||
| Total current | |||||||||||
| Deferred | |||||||||||
| Federal | ( | ||||||||||
| State | ( | ||||||||||
| Foreign | ( | ||||||||||
| Total deferred | ( | ||||||||||
| Total income tax provision | $ | $ | |||||||||
The approximate tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows (in thousands):
| October 2, 2026 | |||||
| Deferred tax assets: | |||||
| Lease liabilities | $ | ||||
| Accrued expenses and other reserves | |||||
| Tax credits | |||||
| Deferred revenue | |||||
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| Stock-based compensation | |||||
| Net operating loss carryforwards | |||||
| Other | |||||
| Total deferred tax assets | |||||
| Deferred tax liabilities: | |||||
| Excess of book over tax basis of fixed assets | ( | ||||
| Right-of-use assets | ( | ||||
| Unrealized gains | ( | ||||
| Intangible assets | ( | ||||
| Other | ( | ||||
| Total deferred tax liabilities | ( | ||||
| Net deferred tax liabilities | $ | ( | |||
The amounts recorded as deferred tax assets as of October 2, 2026 represent the amount of tax benefits of existing deductible temporary differences that are more likely than not to be realized through the generation of sufficient future taxable income. The Company had gross deferred tax assets of approximately $7.4 million as of October 2, 2026, which it believes are more likely than not to be realized. Management reviews the recoverability of deferred tax assets during each reporting period.
The actual tax provision for the three and nine months ended October 2, 2026 differs from that derived from using a U.S. federal statutory rate of 21
| Three Months Ended October 2, 2026 | Nine Months Ended October 2, 2026 | |||||||||||||||||||
| U.S. federal statutory rate | $ | % | $ | % | ||||||||||||||||
| Increase (decrease) in income taxes resulting from: | ||||||||||||||||||||
| State and local income tax, net of federal income tax effect | ||||||||||||||||||||
| Foreign tax effects: | ||||||||||||||||||||
| Germany | ||||||||||||||||||||
| Effect of changes in tax laws or rates enacted in the current period (net deferred tax liabilities established in connection with the Reorganization) | ||||||||||||||||||||
| Effect of cross-border tax laws: | ||||||||||||||||||||
| Global Intangible low-taxed income | ||||||||||||||||||||
| Foreign-derived intangible income | ( | ( | ( | ( | ||||||||||||||||
| Nontaxable or nondeductible items: | ||||||||||||||||||||
| Tax credits | ( | ( | ( | ( | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Officers compensation | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Income from debt forbearance | ||||||||||||||||||||
| Other reconciling items | ||||||||||||||||||||
| Effective tax rate | $ | % | $ | % | ||||||||||||||||
The state and local tax jurisdiction that makes up the majority of the effect of the state and local income tax line item in 2026 is Massachusetts. The Company files income tax returns in the U.S. federal, state, and certain non-U.S. jurisdictions. The Company is subject to U.S. federal and state income tax examinations by authorities for tax years ending after December 31, 2021. The Company is subject to income tax examinations by authorities in its non-U.S. jurisdictions for tax years ending after December 31, 2020.
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Prior to the reorganization, the Company operated as an S corporation and treated as a pass-through entity and, accordingly, was not subject to U.S. federal entity-level income taxation during the periods preceding the reorganization.
20. COMMITMENTS AND CONTINGENCIES
Litigation
In the normal course of business, the Company may become subject to various claims and litigation. The Company may also become subject to threatened or pending legal actions arising from activities of contractors. A liability is recorded for claims or other contingencies when the risk of loss is probable and the amount can be reasonably estimated. Legal fees are expensed as incurred. As of October 2, 2026 and December 31, 2025, the Company was not subject to any material litigation nor was the Company aware of any material litigation threatened against it.
Retirement Plans
The Company and its subsidiaries maintain defined contribution 401(k) plans for eligible employees. Eligibility generally requires employees to be at least 21 years of age and to have completed a minimum service period. The plans provide for employer matching contributions, which are recognized as expense when incurred.
Total matching contributions for the three months ended October 2, 2026 and September 30, 2025, was approximately $0.9 million and $0.6 million, respectively, of which approximately $0.6 million and $0.4 million, respectively, were included within cost of goods sold, $0.2 million and less than $0.1 million, respectively, were included in general and administrative expenses, less than $0.1 million and less than $0.1 million, respectively, were included in sales and marketing, and less than $0.1 million and less than $0.1 million, respectively, were included in research and development in the consolidated statements of operations.
Total matching contributions for the nine months ended October 2, 2026 and September 30, 2025, was approximately $2.6 million and $2.1 million, respectively, of which approximately $1.7 million and $1.6 million, respectively, were included within cost of goods sold, $0.5 million and $0.3 million, respectively, were included in general and administrative expenses, $0.2 million and $0.1 million, respectively, were included in sales and marketing, and $0.1 million and $0.1 million, respectively were included in research and development in the consolidated statements of operations.
As of October 2, 2026 and December 31, 2025, all matching contributions had been paid except for approximately $0.1 million, which was included in accrued expenses and other current liabilities in the consolidated balance sheets.
Additionally, the Company makes contributions to a union retirement plan on behalf of its union employees at fixed rates based on hours worked. During the three months ended October 2, 2026 and September 30, 2025, expenses associated with these contributions totaled approximately $0.1 0.3
Supplier Agreement
In 2024, the Company entered into a five-year supply agreement with a vendor for the purchase of raw materials. Pursuant to the terms of the agreement, the Company made a prepayment of approximately $0.7 million, which will be applied against future purchases in accordance with the contractual schedule. As of October 2, 2026 and December 31, 2025, approximately $0.3 million and $0.6 million, respectively, of the prepayment is classified as other assets, and as of December 31, 2025, approximately $0.1 million is included in prepaid and other current assets in the consolidated balance sheets.
Blue Moon Transactions
Under the Binding Letter Agreement, the Company is bound to subscribe for 3,500,000 units of Blue Moon for C$35.0 million (approximately $24.7 million as of September 11, 2026), which closed on October 16, 2026 (see Note 22 – Subsequent Events), and the Company issued the TEG Warrants on September 21, 2026 (see Note 15 – Blue Moon Metals Inc. Transactions). The Binding Letter Agreement also contemplates a secured Tungsten Prepayment Facility for the purchase of tungsten concentrate from Blue Moon and an equity contribution by the Company to the JV Entity, in which the Company is expected to hold a 70 % interest, together with the related governance, offtake, site-sharing and APT Plant License agreements. These elements are subject to due diligence, regulatory approvals and the negotiation and execution of definitive agreements, which the parties expect to complete within twelve months of September 11, 2026. If project costs exceed the Company’s equity contribution, the Company and EQ would contribute additional equity in proportion to their
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ownership interests, after which the JV Entity partners would contribute on a pro-rata basis. As of October 2, 2026, the definitive agreements had not been executed, the Tungsten Prepayment Facility had not been funded and the JV Entity had not been formed, and the Company had not recognized a liability for these contemplated commitments.
Masan Investment
Under the SPA, the Company agreed on September 23, 2026 to acquire the 55,138,174 Sale Shares of Masan for approximately $124.7 million. The Company’s commitment to purchase the Sale Shares of $124.7 million is recognized within restricted cash. The Company recognized the Sale Shares on the settlement date of October 5, 2026 (see Note 22 – Subsequent Events). The Sale Shares are subject to a Lock-up Period of 18 months, and the Company has no further commitment to acquire additional shares of Masan.
21. SEGMENTS
The Company operates and manages its business through its divisions: CMC and EMP. Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the CODM, the Company’s CEO, in deciding how to allocate resources, assess performance, and establish budgets and forward-looking forecasts.
The Company reports its financial results in two
The remaining operations of the Company do not meet the quantitative thresholds for separate segment disclosure and are included within Corporate and Other in the below reconciliation of reportable segment results to the Company’s consolidated results. Corporate and Other includes corporate administrative functions and other consolidated entities that are insignificant to the Company’s consolidated results.
The CODM assesses performance and decides how to allocate resources and make operating decisions based on income from continuing operations before taxes that is reported on the consolidated statements of operations. This metric is also used to monitor budget versus actual results. The measure of segment assets is reported on the consolidated balance sheets as total assets. Revenues, expenses, and assets requiring disclosure by segment are also included in the accompanying consolidated financial statements.
The following tables (i) summarize total revenues by segment, (ii) reconcile each segment’s revenues to their respective segment operating income, including segment operating expenses, (iii) reconcile each segment’s income from continuing operations before taxes and (iv) reconcile (loss) income from continuing operations for the three and nine months ended October 2, 2026 and September 30, 2025 (in thousands):
| Three Months Ended October 2, 2026 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Revenue – Point in time | $ | $ | $ | $ | |||||||||||||||||||
| Revenue – Over time | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
General and administrative(1) | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
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| Operating income (loss) | ( | ( | |||||||||||||||||||||
Interest expense (income), net | ( | ( | |||||||||||||||||||||
Change in fair value of forward instruments | |||||||||||||||||||||||
| Gain on remeasurement of fair value of marketable securities | ( | ( | |||||||||||||||||||||
Other income, net | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) from continuing operations before taxes | ( | ( | |||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | ( | $ | ( | $ | |||||||||||||||||
_______________________________________________________________________
(1)Includes stock-based compensation of approximately $1.6 million, of which $0.9 million, $0.4 million, and $0.3 million were included within the Corporate and Other segment, CMC, and EMP segment, respectively.
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Revenue – Point in time | $ | $ | $ | $ | |||||||||||||||||||
| Revenue – Over time | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating income (loss) | ( | ||||||||||||||||||||||
| Interest expense (income), net | ( | ||||||||||||||||||||||
| Interest expense – related party, net | |||||||||||||||||||||||
| Other (income) expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) from continuing operations before taxes | ( | ||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | $ | ( | $ | ||||||||||||||||||
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| Nine Months Ended October 2, 2026 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Revenue – Point in time | $ | $ | $ | $ | |||||||||||||||||||
| Revenue – Over time | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
General and administrative(1) | |||||||||||||||||||||||
Research and development(2) | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating income (loss) | ( | ( | |||||||||||||||||||||
Interest expense (income), net | ( | ||||||||||||||||||||||
Interest expense – related party, net | |||||||||||||||||||||||
| Change in fair value of derivative asset | ( | ( | |||||||||||||||||||||
Change in fair value of forward instruments | |||||||||||||||||||||||
| Gain on remeasurement of fair value of marketable securities | ( | ( | |||||||||||||||||||||
Other income, net | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) from continuing operations before taxes | ( | ( | |||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | ( | $ | ( | $ | |||||||||||||||||
____________________________________________________________________
(1)Includes stock-based compensation of approximately $12.5 million, of which $11.4 million, $0.6 million, and $0.5 million were included within the Corporate and Other segment, CMC segment, and EMP segment, respectively.
(2)Includes stock-based compensation of approximately $3.6 million, all included in the CMC segment.
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| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Revenue – Point in time | $ | $ | $ | $ | |||||||||||||||||||
| Revenue – Over time | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Operating income (loss) | ( | ||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Interest expense (income) – related party, net | ( | ||||||||||||||||||||||
| Loss on remeasurement of the fair value of marketable securities | |||||||||||||||||||||||
| Other (income) expense, net | ( | ( | |||||||||||||||||||||
| Income (loss) from continuing operations before taxes | ( | ||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | $ | ( | $ | ||||||||||||||||||
For the three months ended October 2, 2026, there was one customer related to the CMC segment that accounted for more than 10% of the Company’s total revenue, accounting for approximately 11 % of total revenue for the period. For the three months ended September 30, 2025, there was no customer that accounted for more than 10% of the Company’s total revenue.
For the nine months ended October 2, 2026, there was one customer related to the CMC segment that accounted for more than 10% of the Company’s total revenue, accounting for approximately 11 % of total revenue for the period. For the nine months ended September 30, 2025, there was no customer that accounted for more than 10% of the Company’s total revenue
Depreciation and amortization expense by segment for the three and nine months ended October 2, 2026 and September 30, 2025 were as follows (in thousands):
| Three Months Ended October 2, 2026 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
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| Nine Months Ended October 2, 2026 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
Total assets for the Company’s business segments, as of October 2, 2026 and December 31, 2025, were as follows (in thousands):
| October 2, 2026 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
Capital expenditures net of grants proceeds, by segment during the nine months ended October 2, 2026 and September 30, 2025 were as follows (in thousands):
| Nine Months Ended October 2, 2026 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Purchases of property, plant and equipment, net of grant proceeds | $ | $ | $ | ( | $ | ||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| CMC | EMP | Corporate and Other | Total | ||||||||||||||||||||
| Purchases of property, plant and equipment, net of grant proceeds | $ | $ | $ | $ | |||||||||||||||||||
The accounting policies of the business segments are the same as those for the Company.
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As of October 2, 2026 and December 31, 2025, geographic information about long-lived assets associated with particular regions are as follows (in thousands):
| October 2, 2026 | |||||||||||||||||
| United States | Europe | Total | |||||||||||||||
| Property, plant and equipment, net | $ | $ | $ | ||||||||||||||
| Operating lease right-of-use assets | |||||||||||||||||
| Intangible assets, net | |||||||||||||||||
| Goodwill | |||||||||||||||||
| Deferred tax assets, net | |||||||||||||||||
| Other assets | |||||||||||||||||
| Total long-lived assets | $ | $ | $ | ||||||||||||||
| December 31, 2025 | |||||||||||||||||
| United States | Europe | Total | |||||||||||||||
| Property, plant and equipment, net | $ | $ | $ | ||||||||||||||
| Operating lease right-of-use assets | |||||||||||||||||
| Intangible assets, net | |||||||||||||||||
| Goodwill | |||||||||||||||||
| Other assets | |||||||||||||||||
| Total long-lived assets | $ | $ | $ | ||||||||||||||
22. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date of October 2, 2026 through November 9, 2026, the date the unaudited consolidated financial statements were available to be issued.
On October 5, 2026, the Company settled its purchase of 55,138,174 shares of common stock, with a trade date of October 1, 2026, for an aggregate purchase price of approximately $124.7 million at the settlement date. See Note 2 – Summary of Significant Accounting Policies for further information.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited consolidated financial statements and the related notes appearing elsewhere in this Report. In addition to our unaudited consolidated financial statements, the following discussions and other parts of this Report contain forward-looking statements that reflect our plans, objectives, expectations, intentions, and beliefs, which involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” included elsewhere in this Report.
Overview
We provide precision-engineered components and advanced high-energy systems for growth markets requiring advanced technology involving Critical Materials, such as tungsten, molybdenum and niobium and High-Power Microwave, such as plasma, radar, and high energy research. Our products and solutions are integral to the Aerospace, Defense and Government, Industrial, Medical, Semiconductor and Electronics and Energy industries. These are industries which require components capable of performing in extreme thermal, electromagnetic, and technical environments for vital use cases. Our fundamental mission is to strengthen U.S. domestic manufacturing capabilities to support the United States and its allies’ needs in both Critical Materials and advanced High-Power Microwave systems. We believe we are the leader and sole-source U.S. producer of many highly engineered Critical Materials products and a leading designer and manufacturer of High-Power Microwave components in the United States.
Through our Critical Materials Components (“CMC”) and Engineered Microwave Products (“EMP”) divisions, we own and operate a vertically integrated engineering-to-production system, with custom design, development, and processing expertise for Critical Materials and High-Power Microwave that we believe is unmatched in our markets and the industries in which we compete. Our Critical Materials engineering and production expertise enables us to custom design elegant solutions for some of the most challenging environments on the planet. Our High-Power Microwave expertise capitalizes on our vertically integrated engineering-to-production system, enabling us to deliver microwave energy solutions with custom design and development expertise. We believe these capabilities provide a significant competitive advantage in our markets and the industries in which we compete.
We are proud to be the only U.S.-owned and U.S.-based manufacturer of highly engineered tungsten and molybdenum products through our CMC division. We control the powder production, pressing, sintering, forming, milling and engineering of tungsten and molybdenum oxide to the finished engineered product. Our CMC products support many of the DoW’s most critical programs on land, sea and air. Our engineering expertise in our EMP division has enabled us to provide products and services to a wide variety of existing and emerging programs also supporting the DoW and space sector leaders like Lockheed Martin, Raytheon, Teledyne and NASA. We have supplied products to approximately 95 research programs at national laboratories, universities, and other government-sponsored and international research facilities, including Fermi and Los Alamos. Because of the common relationship among some of the products we offer, we are regularly able to incorporate our Critical Materials and our High-Power Microwave components in the same defense programs and high-powered energy research facilities throughout the United States, United Kingdom and Europe.
Through our CMC and EMP divisions, our comprehensive in-house design and manufacturing capabilities are supported by close to 100 engineers, engineering technicians, radio frequency (“RF”) experts and metallurgists. Our customers benefit from the specialized expertise, know-how and product design we have developed in both engineered high-temperature, highly dense Critical Materials and High-Power Microwave technology. Our specific capabilities provide our customers with a value proposition which allows these customers to simplify their supply chain, increase their speed to market and maintain competitive cost structures. Our engineering expertise and established track record position us to serve customers who need a systems solution required to withstand extreme environments and meet stringent performance requirements. These customers rely on us to deliver technical design and scaled manufacturing of integrated systems to meet these standards. Given the critical nature of the components and solutions we provide, we engage with customers early in their design cycle to develop difficult-to-replicate solutions, using our difficult-to-replicate processes and equipment, creating a competitive advantage.
Through our CMC and EMP divisions, we leverage our vertical integration and engineering capabilities to provide our products and services to five high-growth, strategically critical U.S. and global end-markets, who require components
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capable of performing in extreme thermal, electromagnetic, and mechanical environments including: Aerospace, Defense and Government, Industrial, Medical, Semiconductor and Electronics and Energy.
Corporate Reorganization and Structure
We are a Delaware corporation with headquarters in Portland, Maine and founded on September 13, 2024, for the purpose of acquiring, owning and operating Elmet Tech and Microwave Techniques. On January 2, 2026, we completed the Reorganization, as a result of which we now wholly own our two primary operating subsidiaries, Elmet Tech and Microwave Techniques (see “— Reorganization” below). We acquired our original interest in Elmet Tech, a company originally established in 1929, in 2015 and became Elmet Tech’s majority member in 2021. In 2023, we acquired H.C. Starck’s operating entities H.C. Starck Solutions Coldwater LLC and H.C. Starck Solutions Euclid LLC. These entities were renamed Elmet Coldwater LLC and Elmet Euclid LLC in 2024. Also in 2024, all the operating assets of Elmet Coldwater and Elmet Euclid were transferred to Elmet Tech. Elmet Coldwater and Elmet Euclid now act as real estate holding companies. We have owned Microwave Techniques, which originally began operations in 1989, since 2000. In 2023, we acquired Valvo in Hamburg, Germany for Microwave Techniques. We followed up this acquisition with the acquisition of Symphony in November 2025.
Reorganization
Prior to January 2, 2026, Peter V. Anania, our Chief Executive Officer and Chairman, was the President and majority stockholder of Anania & Associates, a Maine corporation (“A&A”), and through his personal holdings and the holdings of A&A, Mr. Anania was the holder of a majority of the voting interests of Anania & Associates Investment Company, LLC (“AAI”). Prior to January 2, 2026, AAI was the majority holder of the membership interests of each of Elmet Tech and Microwave Techniques. The Reorganization will be recognized in 2026 with recasting of historical financial information.
On October 1, 2025, A&A distributed its membership interests in Polymer Laboratories and Solutions LLC (“Poly Labs”) that it held to its stockholders (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Acquisitions and Divestitures — Recent Divestitures” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Discontinued Operations” herein).
On January 2, 2026 (the following actions and transactions collectively termed the “Reorganization”):
•AAI distributed the membership interests in Elmet Tech and Microwave Techniques that it held to A&A in redemption of A&A’s interests in AAI, which resulted in A&A becoming the direct, rather than indirect, owner of the Elmet Tech and Microwave Techniques membership interests previously held by AAI, as well as A&A no longer being a member of AAI;
•We adopted our amended and restated certificate of incorporation, which, among other things, bifurcated our common stock into two classes, Class A Common Stock, par value $0.001 per share (“Class A Common Stock”), and Class B Common Stock, par value $0.001 per share (“Class B Common Stock”), with the Class A Common Stock having one vote per share and the Class B Common Stock having 10,000 votes per share but no economic rights;
•We issued to Mr. Anania 466 shares of Class B Common Stock for an aggregate consideration of $25,000 (the “Subscription Agreement”); and
•We directly acquired all of the (i) outstanding membership interests of each of Elmet Tech and Microwave Techniques and (ii) the outstanding stock of A&A (together, the “Contributed Interests”) in exchange for, in each case, shares of Class A Common Stock pursuant to a Contribution Agreement among the Company, the members of Elmet Tech, the members of Microwave Techniques and the stockholders of A&A (the “Contribution Agreement”) and the cancellation of all of A&A’s membership interests in Elmet Tech and Microwave Techniques.
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The diagram below depicts the material aspects of our corporate structure after giving effect to the Reorganization and the IPO (as defined below).
Initial Public Offering
On April 24, 2026, we completed our initial public offering (“IPO”) of 9,857,142 shares of our common stock, which includes 1,285,714 sold by us pursuant to the exercise of the underwriters’ over-allotment option which was exercised in full, at a public offering price of $14.00 per share. The IPO resulted in net proceeds to us of $128.2 million after deducting the underwriting discounts and commissions and before deducting offering costs of $2.8 million, which were charged to additional paid-in capital as a reduction of the net proceeds received from the IPO. In connection with the IPO, we also granted Cantor Fitzgerald & Co., as representative of the underwriters, a warrant to purchase up to 147,857 shares of common stock (the “Underwriter’s Warrant”) that has an exercise price per share equal to 125% of the public offering price of $14.00 per share, or $17.50 per share. The Underwriter’s Warrant is not exercisable for a period of 180 days following the IPO date and expire four years from the date of issuance. In connection with the IPO, we redeemed all issued and outstanding shares of Class B common stock from Mr. Anania for $25,000 and consolidated and reclassified all Class A and Class B common stock into a single class of $0.001 par value common stock.
Change in Fiscal Year
On May 19, 2026, our Board of Directors approved a change in our fiscal year end from December 31 to a 4-4-5 fiscal calendar, whereby each three months consists of thirteen weeks grouped into two four-week months and one five-week month. Under the new fiscal calendar, our fiscal year ends on the Friday closest to December 31. The first fiscal year under the new calendar began on January 1, 2026, and ends on January 1, 2027. As a result of this change, our three months ending April 3, 2026, July 3, 2026 and October 2, 2026, may include an additional or lesser number of days compared to the prior year quarters ended March 31, 2025, June 30, 2025 and September 30, 2025, and accordingly, results for these periods may not be fully comparable to those of the prior year periods primarily due to the change in the number of days included in those periods. Our subsidiaries that have a fiscal year end different from that of our Company’s are consolidated using financial statements for periods that are within three months of our Company’s fiscal year end, with adjustments for material transactions, if any. This change was implemented to better align the Company’s accounting operations with quarterly public reporting requirements and to improve comparability of financial performance. The change in fiscal year will not impact our previously issued financial statements or tax reporting.
Our unaudited consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations reflect estimates and assumptions made by management. Events and changes in
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circumstances arising after October 2, 2026, including those resulting from the continuing impacts of the currently unfavorable macroeconomic climate, will be reflected in management’s estimates for future periods.
Recent Developments
Our Strategic Transformation
In September 2026, we entered into a series of transactions that we believe fundamentally expand the scale and scope of our platform. Collectively, the DoW Transactions, the Springer Transactions, the Masan Investment, the DLA Offtake Agreement, the formation of Elmet Refining & Trading and the OSRAM Acquisition (each as discussed below) are intended to enhance our position as the only U.S.-owned, vertically integrated manufacturer of tungsten and molybdenum materials and products and transform our Company into an integrated mine-to-component platform across the U.S. and Europe. The DoW Transactions provide growth capital, the Springer Transactions and related offtake agreements will help secure raw material supply and processing capacity, and the DLA Offtake Agreement provides long-term demand visibility. Together with our expanded manufacturing footprint in the U.S. and Europe, we believe these initiatives will enhance our ability to supply critical products to our defense, semiconductor, medical and industrial customers.
We expect these transactions to:
•Expand domestic manufacturing capacity: The DoW Transactions are intended to fund more than $165 million of capacity and infrastructure investment across our Lewiston, Maine; Coldwater, Michigan; and Euclid, Ohio facilities, including an expected five-fold increase in tungsten powder production capacity, which is the key input for our downstream CMC products. Additionally, the investment is anticipated to enable expanded capacity for critical DoW programs including Patriot PAC, PrSM, Phalanx, SLAP, rocket components and F-35 programs, as well as expanded capacity for tungsten wire products and tungsten heavy alloy balance weights. See “– Department of War Transaction.”
•Establish independent U.S. midstream conversion capacity: Through the joint venture with Blue Moon and EQ, we intend to upgrade and restart the Springer APT plant, which would be the first independent APT plant in the United States that is not foreign-owned or tungsten-carbide focused. We expect the Springer mine and mill to restart production in the fourth quarter of 2027 and the APT facility to begin operations in the second half of 2028. Once operational, we expect the APT plant to have an annual APT conversion capacity of approximately 4,000 tons per year. Feedstock from this facility will help secure our internal usage needs and be supplied to strategic external domestic customers. See “– Springer Project.”
•Secure and diversify feedstock: Our refining and trading division, along with our planned equity investment in each of Blue Moon and Masan, concentrate supply arrangements with EQ Resources and Blue Moon, offtake agreement with Tungsten West, and tungsten prepayment facility to Blue Moon (each as discussed below), are intended to enable us to source and allocate tungsten across allied geographies and reduce our exposure to a market in which China controls more than 85% of global supply and has imposed export restrictions that have driven tightening supply and price volatility. We also expect greater control over input costs for our core business lines.
•Anchor long-term demand: The DLA Offtake Agreement provides a five-year base ordering period with an additional two-year option period, a $150 million minimum offtake commitment and a $2.0 billion ceiling, which we believe backstops refining volumes, de-risks the Springer investment and positions us ahead of the anticipated missile and munitions replenishment cycle. See “– DLA Offtake Agreement.”
•Establish an integrated European base: The OSRAM Acquisition is expected to add a fully integrated tungsten and molybdenum manufacturing platform in Schwabmünchen, Germany, to be consolidated within our CMC division. With this approximately 26,800 square meter facility, we expect to serve the European defense primes and other fusion, semiconductor, automotive, medical and industrial customers in rebuilding their supply chains for tungsten, an EU-designated critical raw material with limited European processing capacity today.
•Preserve capital structure flexibility: The Class A Preferred Stock issued in connection with the DoW Transactions has a 5.5% paid-in-kind dividend that requires no scheduled cash payments, and cannot be redeemed by the holder before September 14, 2036, except following certain default or liquidation events. We retain the right to redeem it at any time. The investment also contains a mechanism whereby the value of the DoW Penny Warrants will partially reduce the preferred liquidation preference as our common stock appreciates, aligning DoW’s returns with common stockholders. Funding is drawn against project spend rather than in a single lump
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sum, aligning capital deployment with construction and qualification milestones. See “– Department of War Transaction.”
We expect the initial phase of our transformation to focus on enhancing our existing facilities through modernization of infrastructure and expanded production capacity and securing long-term tungsten supply through the various offtake agreements discussed above and below. The second phase we expect to focus on the Springer Project, developing an independent U.S.-based APT facility and expanding our vertically-integrated capabilities.
Our capacity to benefit from the foregoing transactions as currently contemplated are subject to certain risks and uncertainties. See “Risk Factors – Risks Related to Our Business, Strategy and Industry” below for a detailed discussion of these risks.
Department of War Transaction
On September 11, 2026, we entered into the Investment Agreement with the DoW (the transactions contemplated thereby, the “DoW Transactions”) providing for an equity investment in the Company and related investor rights. We expect to receive an approximate package of investments and commitments from DoW of $450 million to expand and modernize our tungsten mining, processing, and manufacturing capabilities, including the planned upgrade and restart of the Springer APT plant and associated tungsten mine in Nevada, as well as to increase midstream processing capacity and expand and upgrade general infrastructure across our Coldwater, Lewiston and Euclid facilities.
Critical materials, such as tungsten, are some of the most strategically important components in advanced technology systems spanning commercial, industrial, and defense applications. However, global production of tungsten is highly concentrated in China. We intend to use this investment to build on our operational foundation to catalyze domestic production, strengthen U.S. supply chain resiliency, and secure critical supply chains for high-growth industries.
We currently plan on allocating the $450.0 million of committed capital from the DoW in the following manner: (i) approximately $165 million will be put towards upgrading and expanding our existing CMC facilities to expand production capacity for tungsten powder and components supporting key defense programs; (ii) approximately $100 million will be put toward the Masan Investment to help strengthen our long term strategic collaboration for tungsten conversion capacity; (iii) approximately $75 million will be put towards the JV Entity to restart the Springer APT plant; (iv) approximately $75 million will be put towards an investment in Blue Moon and commercial agreements related to the Springer Project; and (v) approximately $35 million will be put toward fees, expenses and miscellaneous costs.
The Investment Agreement contemplates the concurrent execution of a number of additional agreements, and the Investment Agreement and the additional agreements entered into with the DoW (the “DoW Transaction Documents”). The DoW Transactions closed on September 14, 2026 (the “Initial Closing Date”).
Investment Agreement
Pursuant to the Investment Agreement, we agreed to sell and issue, and the DoW has agreed to purchase and acquire, up to an aggregate of $450.0 million of shares of Class A Preferred Stock (as defined below) in a private placement, which will consist of (i) an initial issuance of 200,000 shares of Class A Preferred Stock and the DoW Warrants to purchase up to 7,567,341 shares of the Company’s common stock, for a purchase price of $200.0 million and (ii) additional issuances (each, a “Tranche”) of up to 50,000 shares of Class A Preferred Stock per Tranche at a purchase price of $1,000 per share of Class A Preferred Stock, respectively, for an additional aggregate of up to 250,000 shares of Class A Preferred Stock, at an aggregate purchase price of up to $250.0 million across all Tranches (the “Total Subsequent Funding Commitment Amount”). Beginning six months following the Initial Closing Date, each Tranche will be available for purchase by the DoW during a six-month commitment period, with successive Tranches becoming available at six-month intervals (each, a “Commitment Period”). The issuance of each Tranche shall be subject to (i) the delivery by us of at least thirty (30) days’ prior written notice to the DoW prior to the applicable funding date (a “Subsequent Issuance Notice”), (ii) a minimum funding amount of $25.0 million per Subsequent Issuance Notice, (iii) specification of the number of shares of Class A Preferred Stock to be issued and the intended use of the proceeds of such funding, and (iv) the satisfaction or waiver by the DoW in its sole discretion of certain closing conditions set forth in the Investment Agreement, including certain use-of-proceeds-specific conditions, and other customary closing conditions. If we do not exercise our right to draw the full amount of the Total Subsequent Funding Commitment Amount during the aggregate Commitment Period, any portion of the Total Subsequent Funding Commitment Amount not drawn shall be forfeited.
The Investment Agreement contains certain representations, warranties and covenants of each of us and the DoW, including covenants by us related to use of proceeds in connection with funding of specified projects agreed upon by us and the DoW (the “Projects”).
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Class A Redeemable Preferred Stock
On September 14, 2026 (the “Effective Date”), pursuant to the terms of the Investment Agreement, we issued and sold to the DoW 200,000 shares of our Class A Redeemable Preferred Stock, par value $0.001 per share (the “Class A Preferred Stock”), and filed the related Certificate of Designations (the “Class A Certificate of Designations”) with the Secretary of State of the State of Delaware to establish and fix the terms thereof. The Class A Preferred Stock has an initial stated value of $1,000 per share. Shares of Class A Preferred Stock accrue cumulative dividends at a rate of 5.5% per year, compounding quarterly and payable solely in-kind through an increase to the stated value of each share of Class A Preferred Stock.
The Class A Preferred Stock is entitled to vote together with the holders of our common stock as a single class on all matters submitted to a vote of the holders of our common stock. The aggregate number of votes to which the Class A Preferred Stock shall be entitled as a class shall, as of the Initial Closing Date, equal 19.9% of the total voting power of all voting securities of the Company outstanding as of the Initial Closing Date (determined immediately after giving effect to the issuance of the Class A Preferred Stock and the DoW Warrants as if such DoW Warrants had been exercised in full for shares of our common stock at the Initial Closing Date) (the “Voting Cap”).
For so long as the DoW, or any permitted DoW transferee (collectively, the “DoW Investors”), beneficially own any shares of Class A Preferred Stock, the holders of outstanding shares of Class A Preferred Stock, voting separately as a single class, shall have the exclusive right to (i) appoint and elect one individual (the “Independent Director”) to our board of directors (the “Board of Directors”), who, subject to applicable law, rules and regulations, will also serve on our Audit Committee and Compensation Committee and (ii) separately designate one additional representative (the “DoW Board Observer”) to attend all meetings of our board of directors (and any committees thereof) in a non-voting observer capacity, subject to certain requirements and exceptions.
DoW Warrants
On the Initial Closing Date, as required under the Investment Agreement, the Company issued the DoW Penny Warrant to the DoW. The DoW Penny Warrant is exercisable by the initial holder thereof at any time and from time to time after the date that is twelve (12) months after the Initial Closing Date for a period of ten (10) years from the Initial Closing Date for up to 5,675,506 shares of our common stock, at an initial exercise price of $0.001 per share. The number of shares to be issued under the terms of the DoW Penny Warrant is subject to adjustment in connection with certain transactions, including payments of stock dividends on our common stock, and stock splits and combinations of our common stock (each, an “Adjustment”). Any exercise of the DoW Penny Warrant (including any mandatory exercise) will reduce the Liquidation Preference of the Class A Preferred Stock as provided in the Class A Certificate of Designations.
On the Initial Closing Date, the Company also issued the DoW Strike Price Warrant to the DoW. The DoW Strike Price Warrant is exercisable by the initial holder thereof at any time and from time to time after the date that is twelve (12) months after the Initial Closing Date for a period of ten (10) years from the Initial Closing Date for up to 1,891,835 shares of Common Stock, at an initial exercise price of $15.92 per share, representing the last-reported sale price of our common stock on the last trading day prior to execution of the Investment Agreement and consistent with the Nasdaq “Minimum Price” requirement. The exercise price of the DoW Strike Price Warrant and the number of shares issuable under the DoW Penny Warrant is subject to adjustment in connection with an Adjustment.
The DoW Warrants are subject to mandatory exercise, on a cashless basis, upon expiration, a Liquidation Event, a Change of Control (as defined in the Class A Certificate of Designations), or, at our election, any time following September 14, 2029, if our common stock’s volume weighted average price (“VWAP”) exceeds 400% of the exercise price of the DoW Strike Price Warrant for 20 consecutive trading days. We must provide 20 calendar days’ prior notice, allowing the holder to exercise for cash.
Any portion of the DoW Warrants that remains unexercised upon their expiration shall be automatically exercised by means of a “cashless” exercise as set forth in the DoW Warrants. No fractional shares of common stock are to be issued upon the exercise of the DoW Warrants. In lieu of a fractional share of common stock, we will, upon exercise, pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the last reported sale price of our common stock.
Subject to applicable laws, the DoW Warrants may not be offered for sale, sold, transferred, assigned, pledged or disposed of without our consent (not to be unreasonably withheld, conditioned or delayed), subject to certain exceptions.
Except as provided in the DoW Warrants, the holder of a Warrant, solely in its capacity as holder of a Warrant, does not have the rights of a holder of our common stock, including any voting rights, prior to the issuance to the holder of the common stock which it is then entitled to receive upon the due exercise of a Warrant.
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Registration Rights Agreement
On the Initial Closing Date, as required under the Investment Agreement, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the DoW. The Registration Rights Agreement provides that we will, among other things, prepare and file with the SEC a resale registration statement (a “Shelf Registration Statement”) on Form S-3, or if not available to us, on another appropriate form, including Form S-1, or an amendment or supplement to an existing registration statement on Form S-3, for the shares of common stock into which the DoW Warrants are exercisable. The deadline for us to file the Shelf Registration Statement with the SEC is 60 days after the Initial Closing Date.
Pursuant to the Registration Rights Agreement, the DoW will have certain “demand” and “piggyback” registration rights and indemnification rights customary for transactions of this type, and we will under certain circumstances have the right to defer the registration and/or suspend the use of a registration statement or prospectus.
Investor Rights Agreement
On the Initial Closing Date, as required by the Investment Agreement, the Company also entered into an Investor Rights Agreement (the “Investor Rights Agreement”) with the DoW.
The Investor Rights Agreement provides, among other things, that we will provide the DoW, or any DoW Investors, so long as the DoW Investors continue to own any Class A Preferred Stock and/or at least 25% of the DoW Warrants (or the common stock issued upon exercise of the DoW Warrants) (the “Minimum Ownership Condition”), the right to purchase all or any portion of new equity securities of our or any of our subsidiaries, prior to the issuance and sale of such securities, under the same terms and conditions such securities would be offered to other purchasers, subject to certain exceptions and limitations. We must provide the DoW Investors with written notice at least sixty (60) days prior to the proposed issuance. In addition, without limiting the DoW’s right of first offer set forth above, for so long as the DoW Investors continue to satisfy the Minimum Ownership Condition, if the Company issues, sells, or authorizes the issuance or sale of any new equity securities of the Company or any of the Company’s subsidiaries, the Company shall offer the DoW within sixty (60) days prior to such issuance, the right to purchase up to their Percentage Interest (as defined in the Investors Rights Agreement) of such new securities, to enable the DoW Investors to maintain their then current holdings percentage determined on a fully diluted as-converted basis following such issuance. If the DoW Investors exercise such right of first offer or preemptive rights, as applicable, and their participation would result in their aggregate voting power of the Company to exceed 19.9%, then we shall, within sixty (60) calendar days of such date, use commercially reasonable efforts to obtain stockholder approval, if required, to issue the securities in excess of 19.9% in accordance with the requirements of Nasdaq.
Pursuant to the Investor Rights Agreement, prior to our offering any product(s) produced or derived by, associated with, attributable to or otherwise regarding us from certain projects agreed upon between us and the DoW (the “Project Products”) to any other party, the DoW Investors shall have the exclusive right to negotiate for the purchase, acquisition or exclusive offtake of such products (a “Product Contract”) at arm’s length and pricing terms consistent with then-prevailing market conditions, subject to certain exceptions. If the DoW Investors elect not to exercise their rights to Project Products, the Company will satisfy rated orders in accordance with 15 C.F.R Part 700 and will allocate and sell all remaining Project Products in accordance with the following order of priority, each as defined in the Investor Rights Agreement: (i) first, to the United States Defense Primes; (ii) second, the suppliers of the Defense Industrial Base; (iii) third, to U.S. Businesses; (iv) fourth, to U.S. Allies; and (v) fifth, to any other Person that is not a Restricted Entity (as such term is defined in the Investor Rights Agreement). We may sell Project Products to a lower priority tier in the event that (a) no higher-priority requester has submitted a purchase request within 30 days of capacity availability or (b) a higher-priority requester has submitted an offer, and a lower-priority requester subsequently offers superior commercial terms. None of the foregoing restrictions will preclude us from sales to any non-Restricted Entity so long as we have sufficient capacity to satisfy its obligations under any Product Contract.
For so long as the DoW Investors continue to satisfy the Minimum Ownership Condition, without the prior written consent of the DoW, we and our subsidiaries shall not, among other actions: (i) voluntarily liquidate, dissolve or wind-up the Company or any of its subsidiaries; (ii) authorize, create or issue any additional equity securities, or any securities convertible into or exercisable for any equity securities, of the Company having rights, preferences or privileges senior to, or in parity with the Class A Preferred Stock; (iii) change the authorized number of directors of our board of directors (or the number of votes provided to each director); (iv) enter into any transactions with an affiliate of ours pursuant to which we shall make any payment, sell, lease, transfer, or dispose of any of this properties or assets to, or purchase any property or assets from, or enter or amend any transaction or arrangement with, or for the benefit of, such affiliate of ours involving aggregate value in excess of $120,000; (v) dispose of, license, transfer, abandon, or fail to maintain, prosecute or defend any material technology or intellectual property, subject to customary exceptions for ordinary-course customer licenses, strategic transactions approved by our board of directors, and non-material intellectual property or technology; (vi) declare,
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pay, or make any (a) dividends or distributions on any common stock or other equity securities (other than the Class A Preferred Stock), and (b) repurchases, redemptions, or other acquisitions of common stock or other equity securities; (vii) change the authorized number of shares of Class A Preferred Stock; (viii) create, incur, assume, or suffer to exist any Indebtedness (as defined in the Investor Rights Agreement), other than Permitted Indebtedness (as defined in the Investor Rights Agreement) subject to certain net leverage ratio criteria; (iv) make any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it is a wholly-owned subsidiary of ours following such transaction; (x) make any loan or advance to any person, including, any employee or director except advances and similar expenditures in the ordinary course of business or under the terms of our equity incentive plan or successor plan; (xi) affect any Change of Control (as defined in the Investor Rights Agreement); or (xii) make any Restricted Payments (as defined in the Investor Rights Agreement), each subject to certain exceptions, conditions and exempt issuances.
Furthermore, the Investor Rights Agreement restricts us, without the DoW’s prior written approval, from being owned or controlled by, transferring property to, or otherwise doing business with any Restricted Entity, subject to specified exceptions. We and our subsidiaries must also maintain commercially reasonable compliance procedures and use reasonable best efforts to maintain a shareholder rights plan or similar arrangement designed to prevent a Restricted Entity, or a group including a Restricted Entity, from acquiring 10% or more of our outstanding common stock.
At any time after the DoW Investors no longer own any Class A Preferred Stock but continue to own at least 25% of the DoW Warrants (or the common stock issued upon exercise of the DoW Warrants), the DoW will have the right to (i) designate for nomination to the board of directors one independent third-party director, who meets certain qualification as set forth in the Investor Rights Agreement and (ii) designate one additional representative to attend all meetings of the board of directors (and any committees thereof) in a non-voting observer capacity, subject to certain requirements and exceptions. For so long as the DoW Investors have a right to designate an Independent Director, the board of directors (or any committee thereof) will appoint the Independent Director for membership on our Audit Committee and Compensation Committee in accordance with Nasdaq rules and SEC rules and regulations. If the Independent Director is not permitted by Nasdaq rules and SEC rules and regulations to be a member of the Audit Committee or the Compensation Committee, the Independent Director shall attend all meetings of the Audit Committee or the Compensation Committee, as applicable, in a strictly non-voting observer capacity. The removal of the DoW Board Observer will only be permitted upon the written request of the DoW. The removal of the Independent Director will only be permitted in accordance with our Second Amended and Restated Certificate of Incorporation and Delaware law.
Additionally, the Investor Rights Agreement allows the DoW Investors or an Authorized Government Official to submit a written notice on its behalf (an “Activation Notice”) to us exercising its ability to, on commercially reasonable, arm’s-length terms, including pricing terms substantially consistent with then-prevailing market conditions, designate up to one hundred percent (100%) of production capacity of the Projects, and to the extent reasonably necessary to satisfy such requirement, the corresponding production, processing, storage, loading, transportation coordination, inventory management and deliver capacity associated with the applicable Projects (collectively, the “Emergency Allocation Right”). An Activation Notice is only permitted to be issued if an Authorized Government Official (as defined in the Investor Rights Agreement) determines in writing that the Project Products are required to support national defense, war, armed conflict, military contingency operations, industrial mobilization, emergency preparedness, or response to a national emergency, and that exercise of the Emergency Allocation Right is necessary or advisable to ensure timely availability of the applicable Project Products.
The receipt of an Activation Notice supersedes our obligations to third-party customers with respect to the affected production capacity of the Projects, except to the extent prohibited by applicable law, provided that (1) we use our best efforts to obtain any exemption, license, or waiver required to eliminate such prohibition and promptly notifies the DoW Investors of any such prohibition and the actions being taken to remove it; (2) we cease entering into new commitments that would conflict with the volumes specified in the Activation Notice; (3) we take all actions reasonably necessary to redirect, defer, unwind, cancel, swap, or reassign previously committed volumes so as to maximize delivery to the DoW Investors or its designee(s); (4) we prioritize performance for the DoW Investors in all production, storage, handling, and logistics scheduling; (5) we do not assert that conflicting commercial commitments excuse performance to the extent such commitments were entered into contrary to the Investor Rights Agreement; and (6) we provide an initial response acknowledging the Activation Notice within 24 hours and a preliminary implementation plan within 3 Business Days. Our obligations under the Investor Rights Agreement shall not be conditioned upon, or delayed by, our acknowledgment or provision of an implementation plan.
Furthermore, the DoW Investors, subject to certain qualifiers, will reimburse us reasonable and documented out-of-pocket costs incurred as a direct result of an Activation Notice. We may request up to $250,000 for any single expense or up to $2,500,000 in aggregate per issued activation notice. In the event that resulting out-of-pocket expense are in excess of either of the aforementioned amount we may request additional reimbursements to be approved by an Authorized Government Official, which approval may or may not be granted.
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Restricted Entity Compliance Plan
On September 14, 2026, we entered into a Restricted Entity Compliance Plan (the “Restricted Entity Compliance Plan” or the “Plan”) with Continental Stock Transfer & Trust Company, as rights agent. In connection therewith, the board of directors declared a dividend of one preferred share purchase right (“Right”) for each outstanding share of our common stock. The dividend is payable on September 24, 2026, to stockholders of record as of the close of business on such date (the “Record Date”). In addition, one Right will automatically attach to each share of common stock issued between the Record Date and the Distribution Date (as defined below). The terms used in this section but not otherwise defined herein shall have the meaning ascribed to such terms in the Plan.
The board of directors adopted the Plan in connection with the entry into by us of the DoW Transaction Documents, pursuant to which, among other things, we agreed to use its reasonable best efforts to maintain in effect the Plan or a substantially similar arrangement to prevent any Restricted Entity (as defined in the Investor Rights Agreement) from acquiring beneficial ownership of 10% or more of our outstanding common stock.
Other than with respect to Restricted Entities, the Plan does not impact the ability of any person from acquiring shares of our common stock or making offers to acquire, merge or combine with us.
The following is a general description of the terms of the Rights, the Class B Preferred Stock (as defined below) and the Plan. This description is qualified in its entirety by the full text of the Certificate of Designations of the Class B Preferred Stock (the “Class B Certificate of Designations”) and the Plan.
The Rights. The Board of Directors authorized the issuance of one Right with respect to each share of common stock outstanding on the Record Date. The Rights will initially trade with, and will be inseparable from, the common stock. The Rights will accompany any new shares of common stock issued after the Record Date until the earlier of the Distribution Date, the Redemption Date or the Expiration Date of the Rights, as described below.
Exercise Price. Each Right will allow its holder to purchase from our one one-thousandth of a share of Class B Junior Participating Preferred Stock, par value $0.001 per share (“Class B Preferred Stock”), for $86.00 per share, subject to adjustment under certain conditions (the “Purchase Price”), once the Rights become exercisable.
Exercisability. The Rights will not be exercisable until:
•10 business days after the public announcement that a Restricted Entity has become an “Acquiring Person” (as defined in the Plan) by obtaining beneficial ownership of 10% or more of the outstanding common stock, or, if earlier;
•10 business days (or a later date determined by the board of directors before any person or group becomes an Acquiring Person) after a Restricted Entity Commences (as defined in the Plan) a tender or exchange offer which, if completed, would result in that person or group becoming an Acquiring Person.
The date when the Rights become exercisable is referred to as the “Distribution Date.” Until the Distribution Date, our common stock certificates or, in the case of uncertificated shares, notations in the book-entry account system, will evidence the Rights. Until the Distribution Date (or earlier redemption, exchange, termination or expiration of the Rights), the surrender for transfer of any certificates for common stock or book-entry shares will also constitute the transfer of the associated Rights. After the Distribution Date, the Rights will separate from the common stock and be evidenced by Right certificates that we will mail to all eligible holders of common stock. Any Rights held by an Acquiring Person will be void and may not be exercised.
Consequences of a Person or Group Becoming an Acquiring Person.
•Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person or any associate or affiliate thereof may, upon exercise of a Right, purchase for the Purchase Price shares of common stock with a market value of two times the Purchase Price, based on the market price of the common stock prior to such acquisition. If we do not have a sufficient number of shares of common stock available, we may, under certain circumstances, substitute Class B Preferred Stock or other securities or property for the common stock into which the Rights would have otherwise been exercisable.
•Exchange. After a person or group becomes an Acquiring Person, the Board of Directors may extinguish all or a portion of the Rights by exchanging one share of common stock, or such greater number as shall be sufficient to
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ensure that immediately following such exchange, the beneficial ownership of each Acquiring Person, together with its Affiliates and Associates, shall be less than 10% of the outstanding common stock, for each Right, other than Rights held by the Acquiring Person.
Springer Project
Springer Project Binding Letter Agreement
On September 11, 2026, we entered into a binding letter agreement (the “Springer Agreement”) with Blue Moon, BM US, and EQ, regarding a series of strategic transactions associated with Blue Moon’s Springer Tungsten Complex (“Springer”) located in Pershing County, Nevada. The transactions contemplated under the Springer Agreement include: (i) the formation of the JV Entity among the Springer Parties to restart, expand and operate the APT Plant, (ii) an equity investment by us into Blue Moon, (iii) our receipt of board representation in both Blue Moon and the JV Entity; (iv) a supply agreement for EQ and Blue Moon tungsten concentrate offtakes to the Springer APT Plant at market pricing, (v) a tungsten prepayment facility provided by us to Blue Moon, to be repaid through a credit against sales of concentrate from Springer, and (vi) a site sharing agreement between Blue Moon and the JV Entity, covering the land, buildings, utilities, water, and services arrangements between the JV Entity and Blue Moon (the “Springer Transactions”). The Springer Parties expect to close the Springer Transactions within twelve calendar months from the date of the Springer Agreement.
The successful execution and consummation of the Springer Transactions are subject to numerous factors and conditions discussed under “General” below. The currently contemplated terms of the definitive agreements relating to the Springer Transactions are as follows:
APT Plant Joint Venture
The Springer Parties intend to form the JV Entity to restart, expand and operate the APT Plant, with us initially owning a 70% equity interest in the JV Entity, Blue Moon owning 20%, and EQ owning the remaining 10% interest. In connection with the JV Entity formation, Blue Moon will cause BM US to grant an irrevocable and exclusive 99-year use and operating agreement to use and operate the APT Plant, all equipment and associated infrastructure contributed to the JV Entity at a value to be determined in the definitive agreement. We will provide an initial capital contribution of approximately $75.0 million to the JV Entity to bring the APT Plant into a fully operational posture and EQ will contribute its industry know-how, including overseeing engineering and project management, provision of ore sorting technology and certain off-take commitments. In the case of cost overrun in excess of the $75.0 million contributed by us, we and EQ will contribute up to an addition $25.0 million, in proportion to their respective JV Entity ownership interests, after which the Springer Parties will contribute as needed on a pro-rata ownership basis. The initial board of directors for the JV Entity will be comprised of seven members, including four directors chosen by us, two directors chosen by Blue Moon, and one director chosen by EQ. We will operate and control the JV Entity.
Equity Investment in Blue Moon
Pursuant to the Springer Agreement, we agreed to purchase, and Blue Moon has agreed to issue and sell, new equity in Blue Moon comprised of 3,500,000 units (the “Units”), within forty-five (45) calendar days of September 14, 2026, with each Unit to be comprised of one common share of Blue Moon (“BM Share”) and one Blue Moon Warrant at a price per unit of CAD 10.00 (the “Blue Moon Investment”). On October 16, 2026, we entered into a subscription agreement with Blue Moon (the “BM Purchase Agreement”) to give effect to the Blue Moon Investment. As part of the Blue Moon Investment, the Company and Blue Moon also entered into the BM Investor Rights Agreement (as defined below).
The BM Purchase Agreement contains certain representations, warranties and covenants of each of the Company and Blue Moon, including covenants by Blue Moon related to the use of proceeds in connection with the development of Springer and with respect to Material Properties and Mining Rights (as defined in the BM Purchase Agreement). The closing of the Blue Moon Investment occurred on October 16, 2026. Pursuant to applicable U.S. and Canadian securities laws, the BM Shares, the Blue Moon Warrants and the BM Shares issuable upon exercise of the Blue Moon Warrants will be subject to certain restrictions on transfer, including, but not limited to, a prohibition on sales, transfers and trades in Canada or for the benefit of a Canadian resident until February 16, 2027, four months from the date of the issuance of the Units.
Proceeds of the Blue Moon Investment will be limited to use solely in connection with the development of the projects being undertaken at Springer, with all mine and mill proceeds to be earmarked for tungsten development purposes only. Blue Moon will not apply any portions of the Blue Moon Investment proceeds to activities unrelated to Springer without our prior written consent. We will have audit rights to confirm Blue Moon’s compliance with the use of proceeds restrictions.
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BM Investor Rights Agreement and Board Representation
On October 16, 2026, as required by the BM Purchase Agreement, the Company also entered into an investor rights agreement (the “BM Investor Rights Agreement”) with Blue Moon. The BM Investor Rights Agreement provides, among other things, that Blue Moon will provide us with participation rights (the “Participation Right”) in the event Blue Moon issues any equity, voting or convertible securities (an “Offering”). Pursuant to the Participation Right, we will be granted the opportunity to participate in an Offering on substantially the same terms and conditions as well as purchase price offered to potential subscribers, subject to certain ownership limitations. We will hold the Participation Right so long as we hold at least forty percent (40%) of the equity it purchased in the Blue Moon Investment (the “Ownership Condition”).
Additionally, the Investor Rights Agreement provides us with a “Top-Up Right,” in connection with the issuance of BM Shares on the conversion, exercise or exchange of convertible securities or pursuant to any other contract, agreement or understanding that provides for the issuance of BM Shares, excluding contracts and agreements pursuant to which we have the right to exercise our Participation Right (a “Dilutive Issuance”). Should a Dilutive Issuances occur that result in an aggregate reduction of our ownership percentage of Blue Moon of at least 1.0%, we will be provided an opportunity to purchase additional BM Shares to restore our ownership percentage we would have had but for such Dilutive Issuances, adjusted for any non-exercise or deferral of our Participation Right. The purchase price of any BM Shares offered to us pursuant to the Top-Up Right will equal the volume-weighted average trading price of BM Shares on the TSX Venture Exchange or other exchange on which the BM Shares are listed for trading for the five (5) trading days prior to the date on which Blue Moon delivers a Top-up Notice (as defined in the BM Investor Rights Agreement) to us.
Furthermore, we have the right to designate a nominee to serve on the board of directors of Blue Moon (the “Blue Moon Board”). Blue Moon has agreed to take all necessary steps to appoint our initial nominee within ten (10) days of the date of the Investor Rights Agreement. We will maintain the right to designate a nominee to the Blue Moon Board at any meeting of Blue Moon shareholders, and our nominee will be reasonably considered for inclusion on one or more of the committees of the Blue Moon Board, for so long as the Ownership Condition is met. Finally, should our nominee resign, fail to be elected or if the seat is otherwise vacant, we will be entitled to appoint a non-voting board observer.
EQ and Blue Moon Offtake Agreements
Each of Blue Moon and EQ will enter into offtake agreements with the JV Entity (the “Blue Moon Offtake Agreement” and the “EQ Offtake Agreement,” respectively) to govern the purchase of tungsten concentrate by the JV Entity. The Blue Moon Offtake Agreement will obligate the JV Entity to use its best efforts to take tungsten concentrate produced from the mill and mine at Springer (the “Springer Concentrate”).
Tungsten Prepayment Facility
As part of the Blue Moon Investment, we will provide Blue Moon’s group with a prepayment facility in the aggregate principal amount of approximately $50.0 million (the “Tungsten Prepayment Facility”), to be funded in two tranches as follows: (i) the first tranche, in the amount of $25.0 million (“BM Tranche 1”), shall be funded at the closing of the Tungsten Prepayment Facility; (ii) the second tranche, in the amount of $25.0 million (“BM Tranche 2”), will be funded upon completion of milestones to be set forth in the definitive agreements, aligned with Blue Moon’s readiness covenants relating to Springer’s mine, mill, and flotation circuit, and, if test work is favorable, ore sorting progress. BM Tranche 2 will be funded only upon satisfactory completion of the construction milestones applicable to BM Tranche 1, as mutually determined by the Springer Parties. The Tungsten Prepayment Facility will be repaid through a twenty-five percent (25%) credit against sales of Springer Concentrate until the outstanding balances of BM Tranche 1 and BM Tranche 2 have both been fully retired, and no interest shall accrue on amounts outstanding thereunder except in the event of default. Security on the Tungsten Prepayment Facility will be covered by a dedicated bank account and over Springer Concentrate.
In connection with the Tungsten Prepayment Facility, we agreed to issue Blue Moon warrants to purchase an aggregate of $25.0 million of shares of our common stock within five business days of September 14, 2026 with a strike price equal to the greater of a five-day VWAP as of September 21, 2026, or the Nasdaq minimum price as determined under Nasdaq Rule 5635 at the time of issuance. On September 21, 2026, we entered into a securities purchase agreement with Blue Moon, pursuant to which the TEG Warrants were issued. The TEG Warrants are exercisable for up to an aggregated of 1,166,970 shares of our common stock and have an initial exercise price of $21.423 per share. The TEG Warrants will expire three years from the date of issuance and will become exercisable starting six months from the date of issuance.
Springer Site Plan
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The Springer Agreement contemplates Blue Moon and its U.S. affiliates (the “BM Group”) maintaining complete ownership and operation of the mine and mill at Springer, including holding all permits to operate at the site. The BM Group will additionally retain ownership of certain ancillary assets on behalf of the JV Entity, including, but not limited to, utilities interconnections, water rights, and tailings facilities. Blue Moon and the JV Entity will enter into a site master plan (the “Site Master Plan”), which will provide for, among other things, land allocation, buildings, roads and logistics, utilities and interconnections, water supply and storage, waste and tailings, lay down and receiving areas, solar, natural gas and other power generation, a potential scrap processing plant, and future expansion plans. The Site Master Plan will be subject to the approval of all Springer Parties and will govern the development of Springer. The costs of preparation of the Site Master Plan will be shared between the JV Entity and Blue Moon based on the relative percentage of the APT Plant and its associated facilities to the entirety of Springer.
General
The Springer Agreement additionally contained customary representations and warranties of the Springer Parties and will remain binding on the Springer Parties until the earliest of (i) execution and delivery of the definitive documentation for the Springer Transactions, (ii) mutual written agreement of the Springer Parties to terminate the Springer Agreement, (iii) the definitive documentation for the Springer Transactions having not been executed by the applicable Outside Date (as such term is defined in the Springer Agreement), and (iv) a material breach by any Springer Party of its obligations under the Springer Agreement that remains uncured for a thirty (30) day period following written notice thereof. The closing of the Springer Transactions (the “Springer Closing”) is conditioned upon several factors, including receipt of applicable third party and regulatory approvals, the accuracies of the representations and warranties of the Springer Parties as of the applicable Springer Closing, the performance of each of the Springer Parties under the Springer Agreement in all material respects, the satisfactory completion of due diligence by the Springer Parties, the negotiation and execution of the definitive documentation for the Springer Transactions, and the absence of a material adverse effect (as such term is defined in the Springer Agreement) having occurred with respect to a Springer Party that is continuing as of the date of the Springer Closing.
DLA Offtake Agreement
On September 11, 2026, we, through our wholly owned subsidiary, Elmet Technologies LLC, entered into an exclusive offtake agreement (the “DLA Offtake Agreement”) with The United States Defense Logistics Agency (the “DLA”) relating to an exclusive offtake arrangement for tungsten ores and concentrates and sodium tungstate. Pursuant to the DLA Offtake Agreement, we will sell, upon the DLA’s request, a minimum of $150.0 million worth of tungsten ore and concentrate and sodium tungstate (the “Minimum Offtake Amount”) over the course of a five-year base ordering period, subject to an additional two-year option period, with such option being exercised at the DLA’s discretion. Delivery orders will be submitted to us through a request-for-proposal process, with each order subject to our review and acceptance. Each order will then be delivered to the DLA within 48 months of the issuance of each respective delivery order. Upon the procurement of the Minimum Offtake Amount, the DLA, in its sole discretion, may purchase up to a maximum of $1.85 billion worth of additional tungsten ore and concentrate and sodium tungstate throughout the ordering period.
The DLA has the right to determine the source of the tungsten ore and concentrate and sodium tungstate, for which certain pre-determined sources have been agreed upon. The tungsten material supplied is required to meet certain material and packaging specifications and will be subject to certain sampling and testing requirements prior to procurement of the tungsten material to the DLA.
Formation of Elmet Refining & Trading
On September 14, 2026, we announced the formation of our refining and trading division, a new operating division responsible for coordinating sourcing, processing and delivering material across our expanding global network. We intend for the division to manage our APT conversion capacity, administer our mine offtake agreements, including the DLA Offtake Agreement and TW Offtake Agreement, and pursue a diversified and resilient feedstock portfolio through equity investments and long-term offtakes with allied producers. We believe the division represents a key step in establishing an integrated platform to source, refine, trade and allocate tungsten across allied geographies, and connects our upstream feedstock arrangements to downstream demand from our Critical Materials Components division. The division will hold our interest in the JV Entity formed to upgrade and restart the Springer APT plant, which we expect would be the first independent APT plant in the United States that is not foreign-owned or tungsten-carbide focused. There has been no current activity and no material costs incurred for this new operating division as of October 2, 2026. See “– Springer Project” and “– DLA Offtake Agreement” above and “– Tungsten West Offtake Agreement” below.
Tungsten West Offtake Agreement
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On September 22, 2026, through Elmet Tech, we entered into a Tungsten Concentrate Offtake Agreement (the “TW Offtake Agreement”) with Drakelands Restoration Limited, a private limited company incorporated in England and Wales (“Drakelands”), and Tungsten West PLC (“Tungsten West”), relating to a strategic offtake arrangement of tungsten concentrate. Under the TW Offtake Agreement, we will purchase an annual target quantity of tungsten concentrate of 1,000 metric tonnes from Drakelands, beginning in the calendar year 2027. Until Drakelands has produced a minimum target of tungsten concentrate over a twelve-month period that meets certain product specifications, we are entitled to receive not less than 50% of all tungsten concentrate produced by Drakelands that meets the product specifications. Additionally, at Drakelands’ request, we will process up to an additional amount of tungsten concentrate per annum for the United Kingdom Government or its nominee, or for entities requiring tungsten for use in the United Kingdom.
As part of the TW Offtake Agreement, for a period of sixty (60) days from the date of the TW Offtake Agreement, we will have the exclusive rights to supply tungsten concentrate produced from Drakelands material to the DLA pursuant to the DLA Offtake Agreement. Furthermore, Drakelands tungsten concentrate product will be given priority for supply by us to the DLA until the commissioning of the Springer APT Plant.
The TW Offtake Agreement will remain in effect until December 31, 2034, subject to extension by mutual agreement of the parties or unless otherwise terminated earlier by written notice in accordance with its terms.
Masan Investment
Masan SPA
On September 23, 2026, we entered into a Securities Purchase Agreement (the “SPA”) with Masan Horizon pursuant to which Masan Horizon Company Limited (“Masan Horizon”) agreed to issue and sell, and we agreed to purchase, a 4.99% interest in the total issued and outstanding voting ordinary shares of Masan, a public company incorporated in Vietnam and controlled subsidiary of Masan Horizon, or 55,138,174 ordinary shares (the “Masan Shares”) of Masan for an aggregate purchase price of approximately $124.8 (the “Masan Purchase Price”) pursuant to a put-through transaction on the UPCoM in accordance with applicable trading rules and regulations (the “Masan Investment”). The Masan Investment was conducted in VND based on the converted VND amount of the Masan Purchase Price. Masan’s ordinary shares are currently registered for trading on the UPCoM under the trading code “MSR.”
The SPA included customary representations, warranties and covenants by us and Masan Horizon. The representations, warranties and covenants contained in the SPA were made only for the purposes of such agreement and as of the specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties. The closing of the Masan Investment occurred on October 1, 2026 (the “Masan Closing Date”), and was subject to the satisfaction or waiver of certain closing conditions, including, but not limited to, the execution of certain commercial agreements between the parties, the receipt of applicable regulatory and trading market approvals, the accuracies of the representations and warranties of the parties as of the applicable Masan Closing Date, the performance of each of the parties under the SPA in all material respects, the execution of all definitive documentation for the Masan Investment, and the absence of a material adverse effect (as such term is defined in the SPA) having occurred with respect to a party that is continuing as of the time immediately prior to the first put-through order is entered in connection with the Masan Investment. The settlement of the Masan Shares and payment of the Masan Purchase Price occurred on October 5, 2026 (the “Masan Settlement Date”).
Masan SHA
On September 23, 2026, we also entered into a shareholder rights agreement (the “Masan SHA”) with Masan Horizon pursuant to which the parties memorialized certain of our rights in connection with the Masan Investment.
We are entitled to all dividends and other distributions declared, paid or made by Masan in respect of the Masan Shares on or after the Settlement Date, in accordance with our percentage shareholding in Masan; provided, however, that the parties acknowledged that we will not participate in the interim dividends for the 2026 financial year declared by Masan. For each of the three (3) financial years following the financial year in which the Masan Closing Date falls, Masan Horizon will procure that Masan targets a dividend payout ratio of up to eighty percent (80%).
For so long as we, or any of our permitted transferees (collectively, the “Elmet Investors”), hold at least eighty percent (80%) of the Masan Shares, subject to customary adjustments for corporate actions affecting the Masan Shares following the Masan Closing Date (the “Retention Threshold”), we will have the right to nominate one individual (the “Elmet Director”) for appointment to Masan’s board of directors (the “Masan Board of Directors”) for whom Masan Horizon will make all reasonable efforts to ensure the Elmet Director is appointed to the Masan Board of Directors at the first annual general meeting of shareholders of Masan held after the Masan Closing Date or at any other general meeting of shareholders of Masan held before that annual general meeting. During the period commencing on the Masan Closing Date
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and ending on the date on which the Elmet Director is appointed to the Masan Board of Directors, Masan Horizon will ensure the Elmet Director, or another individual designated by us, may attend all meetings of the Masan Board of Directors in a non-voting observer capacity, subject to certain requirements and exceptions (the “Elmet Observer”).
If at any time the Retention Threshold is no longer satisfied, the Masan SHA ceases to be in full force and effect, or we are in material breach of the Masan SHA which is not remedied within the applicable cure period, at Masan Horizon’s request, we will procure that the Elmet Director immediately resign as a member of the Masan Board of Directors and such nomination right will terminate. However, if at any time the Retention Threshold is no longer satisfied, but the Elmet Investors continue to hold, in aggregate, at least fifty percent (50%) of the Masan Shares originally acquired pursuant to the SPA and we are not in material breach of the Masan SHA, then we will remain entitled to designate one individual as the Elmet Observer to attend the meetings of the Masan Board of Directors in a non-voting observer capacity, subject to certain requirements and exceptions.
Pursuant to the Masan SHA, and subject to certain exceptions, the Elmet Investors have agreed not to transfer any Masan Shares, without the prior written consent of Masan Horizon, for a period of eighteen (18) months following the Masan Closing Date. In addition, for a period commencing on the Masan Closing Date and ending on the date falling six (6) months after the Masan Closing Date, we will not enter into any transaction or series of transactions with any third party comprising a sale of Masan’s ordinary shares at a valuation lower than the valuation of Masan applicable to the Masan Investment, subject to certain exceptions.
For so long as the Retention Threshold is satisfied, if Masan Horizon or Masan propose to enter into a Restricted Transaction (as defined in the Masan SHA), we will have the right to participate in such Restricted Transaction by matching the terms, subject to certain conditions and exceptions. Provided that Masan Horizon or Masan completes a Restricted Transaction for which we did not exercise our right to participate, then (i) all lock-up and transfer restrictions applicable to the Masan Shares held by the Elmet Investors will cease to apply, to the extent permissible under applicable law, and (ii) we will have the option, exercisable by written notice to Masan Horizon within thirty (30) days of completion of the relevant Restricted Transaction, to terminate any relevant commercial agreement entered into between the parties or their affiliates in accordance with their terms.
Furthermore, if Masan proposes to issue new securities at a price per Masan Share lower than the purchase price per Masan Share in the Masan Investment within eighteen (18) months following the Masan Closing Date, then we will have the right to acquire up to such portion of the new securities of Masan offered in such proposed offering equal to our ownership percentage of the then issued and outstanding ordinary shares of Masan, subject to certain exceptions.
Pursuant to the Masan SHA, the parties shall establish a joint committee (the “Masan Offtake Rights Committee”) comprised of two (2) representatives appointed by each of us and Masan, or such other equal number as the parties may agree in writing, which will serve solely an advisory function with no decision-making authority. The Masan Offtake Rights Committee will coordinate volumes, scheduling, quality specifications, logistics and approved customers solely in respect of volumes subject to the offtake and conversion arrangements under the commercial agreements entered into between the parties.
The Masan SHA will terminate upon the occurrence of any of the following: (i) termination of the SPA prior to the Masan Closing Date, (ii) Masan being dissolved, liquidated or wound up, (iii) either us or Masan Horizon ceasing to hold any equity securities of Masan, (iv) a liquidation event with respect to either us or Masan Horizon, (v) by mutual written agreement of us and Masan Horizon or (vi) if necessary to comply with applicable securities laws, trading market rules and regulations or the requirements of any securities exchange in connection with a listing of the ordinary shares of Masan.
We also entered into certain additional commercial agreements, including offtake agreements, with Masan Horizon for the supply of tungsten concentrate and blue tungsten oxide on the Masan Closing Date. These agreements, together with the Masan SHA and SPA, are intended to create a multi-year commercial framework and formalize our already long-standing commercial relationship with Masan, and are expected to provide for dedicated allocations of tungsten concentrate and blue tungsten oxide for our manufacturing purposes as well as for sales to strategic North American customers through our newly established refining and trading division, and for Masan to receive a best efforts supply of tungsten ore from our other offtake arrangements.
OSRAM Acquisition
On September 3, 2026, we, through our wholly owned subsidiary, Elmet Tech, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with OSRAM GmbH, a German limited liability company (Gesellschaft mit beschränkter Haftung or GmbH) duly organized and existing under the laws of the Federal Republic of Germany (“OSRAM”), pursuant to which Elmet Tech agreed to purchase substantially all of the assets and rights associated with the OSRAM’s metal production operations located in Schwabmünchen, Germany, pertaining to the OSRAM’s manufacturing
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and distribution of, among other things, metal pre-materials and metal products from tungsten and molybdenum metals required for various forms of lighting solutions, such as metal powders, rods, heavy wire, fine wire, electrodes and other formed parts (the “OSRAM Business”), and assume certain of the OSRAM’s liabilities, including employee and pension liabilities, and contractual relationships exclusively entered into or pertaining to the OSRAM Business (the “OSRAM Acquisition”), as such terms are set forth in the Purchase Agreement. The purchase price will be determined at the closing of the OSRAM Acquisition (the “OSRAM Closing”) pursuant to the purchase price formula and adjustment provisions as set forth in the Purchase Agreement, which generally consists of the aggregate of (i) a fixed amount of negative €18.0 million, (ii) plus certain pension assets, (iii) minus the amount of the defined benefit obligation for certain pension liabilities, (iv) minus a restructuring prepayment in the amount of €1 million, (v) plus the amount, if any, by which the Working Capital (as defined in the Purchase Agreement) of the OSRAM Business on the first day of the calendar month of the OSRAM Closing (the “OSRAM Effective Date”) exceeds €3.875 million, (vi) minus the amount, if any, by which the Working Capital of the Business on the OSRAM Effective Date falls below €3.875 million.
The Purchase Agreement contains certain representations, warranties and covenants of each of Elmet Tech and OSRAM, including covenants by OSRAM relating to the operation of the OSRAM Business prior to the OSRAM Closing. Elmet Tech will not acquire the real property on which the OSRAM Business is operated in the OSRAM Acquisition, and OSRAM will retain ownership of such real property and continue to operate, on the same premises, the portion of its business that is not being sold pursuant to the OSRAM Acquisition.
Each of Elmet Tech and OSRAM has agreed to indemnify the other for certain losses arising out of breaches of fundamental representations and covenants and for certain losses arising out of retained liabilities or assumed liabilities, as applicable, subject to customary limitations.
The consummation of the OSRAM Acquisition is subject to the satisfaction or waiver of customary closing conditions, including required regulatory and anti-trust approvals and the absence of any law or judgment preventing the OSRAM Closing. Each party’s obligation to consummate the OSRAM Acquisition is also subject to the accuracy of the other party’s representations and warranties contained in the Purchase Agreement (subject, with specified exceptions, to customary materiality standards) and the other party’s performance of its covenants and agreements in all material respects. The parties’ obligation to consummate the OSRAM Acquisition is also subject to a condition that, since the date of the Purchase Agreement, there has not been a “Material Adverse Change,” as defined in the Purchase Agreement. The parties have agreed to certain efforts and obligations to promptly obtain the antitrust and other regulatory approvals required for the OSRAM Acquisition.
Furthermore, the parties have agreed to the following additional closing conditions:
•OSRAM will have conducted a separation of the OSRAM Business from the remainder of the OSRAM’s business that is being retained;
•OSRAM will initiate a certain reduction in the workforce operationally assigned to the OSRAM Business as of December 31, 2027, for which associated costs are borne by OSRAM;
•Elmet Tech must provide its signed contractual trust agreement (“CTA”) documents and independent expert confirmation that Elmet Tech’s CTA protects the pension benefits of the relevant OSRAM Business employees, whose employment relationships shall be transferred to Elmet Tech from OSRAM, at least as well as the OSRAM’s CTA; and
•Elmet Tech shall have ensured all OSRAM Business employees transferred in the OSRAM Acquisition are covered by collective bargaining and enter into a binding agreement with the works council of OSRAM.
We expect to close the OSRAM Acquisition in the first quarter of our 2027 fiscal year.
Subject to the OSRAM Closing, OSRAM will grant Elmet Tech a vendor loan in the aggregate principal amount of €2.5 million, which shall bear no interest (the “Vendor Loan”) and provide funding of the Vendor Loan on the closing date of the OSRAM Acquisition. The Vendor Loan shall be repaid in two equal installment payments within twelve months of the OSRAM Effective Date, with the first installment due and payable six months following the OSRAM Effective Date and the second and final installment due and payable twelve months following the OSRAM Effective Date.
The Purchase Agreement provides withdrawal rights for Elmet Tech and OSRAM under certain circumstances, including, subject to certain conditions, an uncured material breach by the other party or if the OSRAM Acquisition is not consummated by June 30, 2027. If OSRAM withdraws from the Purchase Agreement due to Elmet Tech’s failure to consummate the OSRAM Acquisition under certain circumstances, Elmet Tech will be required to pay OSRAM liquidated
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damages of €1.35 million in cash.
In connection with the OSRAM Acquisition, the parties also intend to enter into a framework contract manufacturing agreement and related project agreements, a lease agreement, a transitional services agreement and certain other ancillary agreements at the OSRAM Closing.
General Counsel Retirement
On October 1, 2026, Christian T. Chandler, our Executive Vice President and General Counsel, provided notice to us of his decision to retire from his position effective December 31, 2026. Mr. Chandler has served as our General Counsel since our founding. Mr. Chandler will continue to serve as an advisor to the Company following his retirement in order to assist us on various legal, regulatory and compliance matters.
Special Meeting of Stockholders
On October 19, 2026, we held a special meeting of stockholders (the “Meeting”) to approve and adopt our proposed The Elmet Group Co. 2026 Employee Stock Purchase Plan (the “ESPP”). At the Meeting, a majority of our issued and outstanding shares of common stock as of August 28, 2026, the record date for the meeting, were voted in favor of approving and adopting the ESPP.
Key Factors Impacting Our Performance
U.S. Government Spending and Federal Budget Uncertainty
Changes in the volume and relative mix of U.S. government spending as well as areas of spending growth could impact our business and results of operations. In particular, our results can be affected by shifts in strategies and priorities on homeland security, intelligence, defense-related programs and infrastructure. Changes in spending on technology and innovation, including cybersecurity, artificial intelligence, connected communities and physical infrastructure will also affect our business and results of operations. Cost-cutting and efficiency initiatives, along with current and future budget restrictions, spending cuts and shifts in priorities, could lead some of our customers, including those conducting significant business related to U.S. government contracts and funding, to reduce or delay orders. This may result in diminishing demand for our products and services.
Furthermore, change in grant funding through the DoW or other defense agencies or any disruption in the functioning of other government agencies, including national laboratories or other facilities, as a result of government closures and shutdowns, could increase our costs and negatively impact our results of operations.
There is also uncertainty around the timing, extent, nature and effect of congressional and other U.S. government actions to address budgetary constraints, spending caps on the discretionary budget for defense and non-defense departments and agencies. The ability of Congress to determine how to allocate the available resources and pass appropriations bills to fund both U.S. government departments and agencies that are, and are not, subject to the caps also makes fiscal planning a challenge. Budget deficits and the growing U.S. national debt may increase pressure on the U.S. government to reduce federal spending across all federal agencies, with uncertainty about the size and timing of those reductions. Any delays in the completion of future U.S. government budgets could in the future delay procurement of the products we provide or grants which we receive. A reduction in the amount, delays in or cancellations of funding for services or products we are contracted to provide to prime U.S. government contractors could have a material adverse effect on our business and results of operations. Significant delays or reductions in appropriations for programs which fund our capital expansion or incorporate our products and services, or changes in U.S. government priorities or spending levels more broadly may affect our business and could have a material adverse effect on our financial condition and results of operations.
The People’s Republic of China’s Export Controls and Related Trade Measures on Critical Materials
Our operations and those of our suppliers may be adversely affected by recent and potential future changes in international trade policies, including the PRC’s restrictions on the export of molybdenum and tungsten and the imposition of tariffs on goods imported to the United States. The Chinese government has implemented export controls, licensing requirements and quotas that limit the availability of what has been deemed “dual use” materials, used in commercial and defense applications, for foreign buyers. These restrictions have the potential to reduce global supply, increase raw-material costs, and create significant volatility in the pricing and availability of these materials. Tungsten is very sensitive to the
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PRC’s control of the global supply chain. If we or our suppliers are unable to obtain sufficient quantities of tungsten on commercially acceptable terms, our production timelines, input costs and product margins could be materially affected. We source the raw materials of our tungsten from suppliers outside of the PRC; however, we may be indirectly affected due to the collective disruption in the global tungsten supply chain, including increases in the global market prices of tungsten in response to actions of the PRC.
The outcome and duration of these trade restrictions and tariff regimes remain unknown and could change with geopolitical developments or modifications in governmental trade policy. Any escalation of export controls or expansion of tariff measures could intensify supply chain risks and suppress our operating results, cash flows and overall financial condition. While we continue to evaluate mitigation strategies — including supplier diversification, inventory management and contractual adjustments — there can be no assurance that these measures will be successful or economically feasible.
Operational Performance on Contracts
Revenue, net income and the timing of our cash flows depend on our ability to perform on our contracts and purchase orders in a timely manner. When agreeing to contractual terms, our management team makes assumptions and projections about future conditions and events. The accounting for our contracts and programs requires assumptions and estimates concerning these conditions and events, including:
•the cost and availability of raw materials and components;
•the productivity and availability of skilled labor;
•the complexity of the work to be performed;
•our subcontractors’ capacities, capabilities and lead times;
•equipment & tooling durability, capabilities and lead times to procure;
•schedule requirements;
•robustness of public utilities supporting our factories; and
•our ability to protect against and respond to threats to our IT infrastructure and our confidential and proprietary information.
If there is a significant change in one or more of these circumstances, estimates or assumptions, or if the risks under our contracts are not managed adequately, the profitability of our operations could be adversely affected. This could result in a material change in our net income and margin.
The timing of our cash flows can be affected by rapid changes in material costs, in particular tungsten and molybdenum, and the availability of skilled labor. For instance, rapid market price increases of raw material feed stock can lead to temporary cash flow shortfalls. By contract, cash flow influxes will result from early completions compared to initial delivery estimates. Historically, this has resulted in, and could continue to result in, fluctuations in working capital levels and quarterly free cash flow results.
To manage these fluctuations, we have implemented several strategies, such as engaging in long-term strategic supply agreements, structuring our terms of sale to initiate prepayments and deposits from customers, restructuring our revolving debt facilities and incentivizing our workforce to deliver products within specifications and on time. Despite these measures, the inherent variability in order flow and material demand means that quarter-to-quarter comparisons of our results of operations may not necessarily be meaningful and should not be relied upon as indicators of future performance. We expect these fluctuations to persist, particularly as the materials, products and services with which we work become subject to higher global demand. However, we believe our proactive cash flow management strategies will help mitigate the impact of these fluctuations and contribute to our overall financial stability.
Oversight
U.S. government procurement regulations impose various operational requirements on government contractors and their subcontractors. Non-compliance with these regulations could lead to civil or criminal penalties, which may materially adversely affect our operating results. U.S. government agencies routinely audit, review, investigate and scrutinize our performance, and that of our customers, under government contracts, and any failure by us or our customers
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to comply with the terms of those contracts and applicable laws could affect our operating results. If a government inquiry or investigation reveals improper or illegal activities, we or our customers may face civil or criminal penalties or administrative sanctions, including contract termination, fines, fee forfeiture, payment suspension, or suspension and debarment from conducting business with U.S. government agencies. Any of these actions could materially and adversely affect our reputation, business, financial condition, results of operations and cash flows.
Results of Operations
Three Months Ended October 2, 2026 Compared to Three Months Ended September 30, 2025
The following table sets forth, for the three months ended October 2, 2026 and September 30, 2025, our results of continuing operations, including presentation of the changes in between reporting periods:
| Three Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Revenue | $ | 79,560 | 100.0 | % | $ | 51,124 | 100.0 | % | $ | 28,436 | 55.6 | % | ||||||||||||||||||||||||||
| Cost of goods sold | 54,686 | 68.7 | % | 40,023 | 78.3 | % | 14,663 | 36.6 | % | |||||||||||||||||||||||||||||
| Gross profit | 24,874 | 31.3 | % | 11,101 | 21.7 | % | 13,773 | 124.1 | % | |||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||||||||
| General and administrative | 9,592 | 12.1 | % | 5,565 | 10.9 | % | 4,027 | 72.4 | % | |||||||||||||||||||||||||||||
| Research and development | 850 | 1.1 | % | 770 | 1.5 | % | 80 | 10.4 | % | |||||||||||||||||||||||||||||
| Sales and marketing | 2,455 | 3.1 | % | 1,353 | 2.6 | % | 1,102 | 81.4 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 12,897 | 16.3 | % | 7,688 | 15.0 | % | 5,209 | 67.8 | % | |||||||||||||||||||||||||||||
Operating income | 11,977 | 15.0 | % | 3,413 | 6.7 | % | 8,564 | 250.9 | % | |||||||||||||||||||||||||||||
| Other expense, net: | ||||||||||||||||||||||||||||||||||||||
Interest (income) expense, net | (345) | (0.4) | % | 552 | 1.1 | % | (897) | (162.5) | % | |||||||||||||||||||||||||||||
Interest expense – related party, net | — | — | % | 505 | 1.0 | % | (505) | (100.0) | % | |||||||||||||||||||||||||||||
Change in fair value of forward instruments | 222 | 0.3 | % | — | — | % | 222 | 100.0 | % | |||||||||||||||||||||||||||||
Gain on remeasurement of fair value of marketable securities | (1,640) | (2.1) | % | — | — | % | (1,640) | (100.0) | % | |||||||||||||||||||||||||||||
Other (income) expense, net | (55) | (0.1) | % | (66) | (0.1) | % | 11 | 16.7 | % | |||||||||||||||||||||||||||||
Total other income, net | (1,818) | (2.3) | % | 991 | 2.0 | % | (2,809) | (283.5) | % | |||||||||||||||||||||||||||||
Income from continuing operations before taxes | 13,795 | 17.3 | % | 2,422 | 4.7 | % | 11,373 | 469.6 | % | |||||||||||||||||||||||||||||
Income tax provision | 5,504 | 6.9 | % | — | — | % | 5,504 | 100.0 | % | |||||||||||||||||||||||||||||
Income from continuing operations | $ | 8,291 | 10.4 | % | $ | 2,422 | 4.7 | % | $ | 5,869 | 242.3 | % | ||||||||||||||||||||||||||
n/m = not meaningful
Nine Months Ended October 2, 2026 Compared to Nine Months Ended September 30, 2025
The following table sets forth, for the nine months ended October 2, 2026 and September 30, 2025, our results of continuing operations, including presentation of the changes in between reporting periods:
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| Nine Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Revenue | $ | 201,968 | 100.0 | % | $ | 146,641 | 100.0 | % | $ | 55,327 | 37.7 | % | ||||||||||||||||||||||||||
| Cost of goods sold | 148,660 | 73.6 | % | 116,782 | 79.6 | % | 31,878 | 27.3 | % | |||||||||||||||||||||||||||||
| Gross profit | 53,308 | 26.4 | % | 29,859 | 20.4 | % | 23,449 | 78.5 | % | |||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||||||||
| General and administrative | 34,416 | 17.0 | % | 12,840 | 8.8 | % | 21,576 | 168.0 | % | |||||||||||||||||||||||||||||
| Research and development | 6,021 | 3.0 | % | 2,590 | 1.8 | % | 3,431 | 132.5 | % | |||||||||||||||||||||||||||||
| Sales and marketing | 6,659 | 3.3 | % | 4,912 | 3.3 | % | 1,747 | 35.6 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 47,096 | 23.3 | % | 20,342 | 13.9 | % | 26,754 | 131.5 | % | |||||||||||||||||||||||||||||
Operating income | 6,212 | 3.1 | % | 9,517 | 6.5 | % | (3,305) | (34.7) | % | |||||||||||||||||||||||||||||
| Other (income) expense, net: | ||||||||||||||||||||||||||||||||||||||
Interest expense, net | 395 | 0.2 | % | 1,855 | 1.3 | % | (1,460) | (78.7) | % | |||||||||||||||||||||||||||||
Interest expense – related party, net | 860 | 0.4 | % | 1,298 | 0.9 | % | (438) | (33.7) | % | |||||||||||||||||||||||||||||
| Change in fair value of derivative asset | (2,214) | (1.1) | % | — | — | % | (2,214) | (100.0) | % | |||||||||||||||||||||||||||||
Change in fair value of forward instruments | 222 | 0.1 | % | — | — | % | 222 | 100.0 | % | |||||||||||||||||||||||||||||
| (Gain) loss on remeasurement of fair value of marketable securities | (2,721) | (1.3) | % | 23 | — | % | (2,744) | n/m | ||||||||||||||||||||||||||||||
Other income, net | (259) | (0.1) | % | (64) | — | % | (195) | (304.7) | % | |||||||||||||||||||||||||||||
Total other income, net | (3,717) | (1.8) | % | 3,112 | 2.2 | % | (6,829) | (219.4) | % | |||||||||||||||||||||||||||||
Income from continuing operations before taxes | 9,929 | 4.9 | % | 6,405 | 4.3 | % | 3,524 | 55.0 | % | |||||||||||||||||||||||||||||
| Income tax provision | 6,464 | 3.2 | % | — | — | % | 6,464 | 100.0 | % | |||||||||||||||||||||||||||||
Income from continuing operations | $ | 3,465 | 1.7 | % | $ | 6,405 | 4.3 | % | $ | (2,940) | (45.9) | % | ||||||||||||||||||||||||||
n/m = not meaningful
Revenues
Three Months Ended October 2, 2026 Compared to Three Months Ended September 30, 2025
Revenues for the three months ended October 2, 2026, increased $28.4 million, or 55.6%, compared to the three months ended September 30, 2025. Our CMC division revenues for the three months ended October 2, 2026, increased $28.1 million, or 64.7%, compared to the three months ended September 30, 2025, driven by increases in molybdenum powder products in our medical end market, increased shipments with key missile programs Javelin and Hellfire and favorable pricing impacts associated with tungsten products in general. Our EMP division saw an increase of $0.3 million, or 4.4%, driven by increased sales of radar components.
Nine Months Ended October 2, 2026 Compared to Nine Months Ended September 30, 2025
Revenues for the nine months ended October 2, 2026, increased $55.3 million, or 37.7%, compared to the nine months ended September 30, 2025. Our EMP division saw an increase of $2.8 million, or 12.5%, driven by industrial microwave systems for tempering and drying. Our CMC division revenues for the nine months ended October 2, 2026, increased $52.5 million, or 42.3%, compared to the nine months ended September 30, 2025, driven by increases in molybdenum powder products in our medical end market, increased shipments with key missile programs Next Generation Interceptor, Javelin and Hellfire and favorable pricing impacts associated with tungsten products in general.
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Revenue by Market
For our CMC and EMP divisions, we track our revenue and customers for our operating divisions across five key markets. We develop sales strategies for each and incentivize our sales resources to profitably grow our business. The following tables demonstrate revenues by markets for the three month and nine month periods ended October 2, 2026 and September 30, 2025.
Three Months Ended October 2, 2026 Compared to Three Months Ended September 30, 2025
| Three Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Aerospace, Defense & Government | $ | 35,990 | 45.2 | % | $ | 21,692 | 42.4 | % | $ | 14,298 | 65.9 | % | ||||||||||||||||||||||||||
| Industrial | 26,033 | 32.7 | % | 17,146 | 33.5 | % | 8,887 | 51.8 | % | |||||||||||||||||||||||||||||
| Medical | 13,492 | 17.0 | % | 9,030 | 17.7 | % | 4,462 | 49.4 | % | |||||||||||||||||||||||||||||
| Semiconductor & Electronics | 2,875 | 3.6 | % | 2,252 | 4.4 | % | 623 | 27.7 | % | |||||||||||||||||||||||||||||
| Energy | 1,170 | 1.5 | % | 1,004 | 2.0 | % | 166 | 16.5 | % | |||||||||||||||||||||||||||||
| Total | $ | 79,560 | 100.0 | % | $ | 51,124 | 100.0 | % | $ | 28,436 | 55.6 | % | ||||||||||||||||||||||||||
Nine Months Ended October 2, 2026 Compared to Nine Months Ended September 30, 2025
| Nine Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Aerospace, Defense & Government | $ | 84,880 | 42.0 | % | $ | 61,892 | 42.2 | % | $ | 22,988 | 37.1 | % | ||||||||||||||||||||||||||
| Industrial | 68,236 | 33.8 | % | 47,999 | 32.7 | % | 20,237 | 42.2 | % | |||||||||||||||||||||||||||||
| Medical | 35,287 | 17.5 | % | 27,343 | 18.6 | % | 7,944 | 29.1 | % | |||||||||||||||||||||||||||||
| Semiconductor & Electronics | 9,187 | 4.5 | % | 5,863 | 4.0 | % | 3,324 | 56.7 | % | |||||||||||||||||||||||||||||
| Energy | 4,378 | 2.2 | % | 3,544 | 2.5 | % | 834 | 23.5 | % | |||||||||||||||||||||||||||||
| Total | $ | 201,968 | 100.0 | % | $ | 146,641 | 100.0 | % | $ | 55,327 | 37.7 | % | ||||||||||||||||||||||||||
Aerospace, Defense and Government
Aerospace, Defense and Government revenues increased $14.3 million, or 65.9%, and increased as a percentage of our business from 42.4% to 45.2% in the three months ended October 2, 2026, as compared to the prior year period. Growth was driven by increased sales to larger defense programs including Hellfire and Javelin, commercial aerospace programs, radar programs and favorable pricing impacts associated with tungsten products in general.
Aerospace, Defense and Government revenues increased $23.0 million, or 37.1%, but decreased as a percentage of our business from 42.2% to 42.0% in the nine months ended October 2, 2026, as compared to the prior year period. Growth was driven by increased sales to larger defense programs including the Hellfire, Javelin and Next Generation Interceptor, commercial aerospace programs, radar programs and favorable pricing impacts associated with tungsten products in general.
Industrial
Industrial revenues increased $8.9 million, or 51.8%, but decreased as a percentage of our business from 33.5% to 32.7% in the three months ended October 2, 2026, as compared to the prior year period. We saw higher sales of industrial microwave systems for tempering and drying, increased EMP sales into communications end applications, along with favorable pricing impacts associated with tungsten products.
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Industrial revenues increased $20.2 million, or 42.2%, and increased as a percentage of our business from 32.7% to 33.8% in the nine months ended October 2, 2026, as compared to the prior year period. Drivers of the increase were consistent with the drivers from the previously stated three month comparisons.
Medical
Medical revenues increased $4.5 million, or 49.4%, but decreased as a percentage of our business from 17.7% to 17.0% in the three months ended October 2, 2026, as compared to the prior year period.
For the nine months ended October 2, 2026, revenues increased $7.9 million, or 29.1%, but decreased as a percentage of our business from 18.6% to 17.5%, as compared to the prior year period. Changes in revenue for both comparable periods were substantially driven by one long term customer demand.
Semiconductor and Electronics
Semiconductor and Electronics revenues increased $0.6 million, or 27.7%, but decreased as a percentage of our business from 4.4% to 3.6% in the three months ended October 2, 2026, as compared to the prior year period. Increases were driven by demand from semiconductor equipment customers and favorable pricing impacts associated with tungsten products.
Semiconductor and Electronics revenues increased $3.3 million, or 56.7%, and increased as a percentage of our business from 4.0% to 4.5% in the nine months ended October 2, 2026, as compared to the prior year period. Drivers of the increase were consistent with the drivers from the previously stated three month comparisons.
Energy
Energy revenues increased $0.2 million, or 16.5%, but decreased as a percentage of our business from 2.0% to 1.5% in the three months ended October 2, 2026, as compared to the prior year period.
Energy revenues increased $0.8 million, or 23.5%, but decreased as a percentage of our business from 2.5% to 2.2% for the nine months ended October 2, 2026, as compared to the prior year period. Both comparable periods reflect normal fluctuations in this developing end market with changes distributed across multiple customers in both the oil and gas and nuclear sub-markets.
Shipments by Geography, Material and Type
For our CMC and EMP divisions, we track our shipments of products by geography and material type. It is important to note that this tracking is based on physical shipments and is not reconciled back to revenue timing adjustments associated with ASC 606, Revenue from Contracts with Customers. These metrics are intended to provide relative versus absolute changes and are therefore expressed as percentages versus dollars. We use these metrics to help navigate the impacts of global supply chain disruptions and capital allocation.
Shipments by Geography
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Shipments based on major geographic territory as a percentage of total shipments for the three and nine months ended October 2, 2026, as compared to the prior year periods, saw an increase in the Americas from 78.8% to 84.3% and 82.4% to 85.6%, respectively, driven by increased shipments into various Aerospace, Defense and Government programs, industrial microwave systems for tempering and drying and tungsten pricing impacts. Shipments to Europe saw a decrease as a percentage of total shipments for the three and nine months ended October 2, 2026 as compared to the prior year periods, from 14.3% to 11.0% and 12.4% to 10.2%, respectively. However, gross shipments to Europe increased 17.2%, or $1.2 million, and 17.1%, or $3.0 million, for the three and nine month periods as compared to the respective prior year periods, driven by multiple customers within our CMC segment.
Shipments by Type of Materials and Services
Shipment composition based on the type of materials and services as a percentage of total shipments for the three and nine months ended October 2, 2026, as compared to the prior year periods, saw tungsten increase from 14.8% to 33.6% and 16.4% to 24.3%, respectively. These increases were driven by pricing increases associated with material input costs and increased volumes across multiple Aerospace and Defense customers. Molybdenum saw gross shipment increases in the comparable periods driven by several key medical customers and ADG programs Javelin and Hellfire; however, Molybdenum also saw a decrease in the percent total shipments period-over-period for the three and nine months ended October 2, 2026 from 59.4% to 50.3% and 57.6% to 55.9%, respectively. Microwave products saw a decrease for the three and nine month period-over-periods from 15.7% to 10.5% and 15.9% to 12.6%, respectively, primarily driven by a lower rate of growth compared to tungsten. Other materials and services saw a decrease for the three and nine month period-over-periods from 10.2% to 5.6% and 10.1% to 7.2%, respectively, driven by a lower rate of growth compared to tungsten.
Cost of Goods Sold and Gross Profit
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Three Months Ended October 2, 2026 Compared to Three Months Ended September 30, 2025
Costs of goods sold for the three months ended October 2, 2026 increased $14.7 million, or 36.6%, compared to the prior year period. Gross profit margin improved from 21.7% for the three months ended September 30, 2025, to 31.3% for the three months ended October 2, 2026.
EMP saw an increase in cost of goods sold for the three months ended October 2, 2026 of $0.6 million, or 11.3%, associated with an increase of $0.3 million, or 4.4%, in revenue compared to the prior year period, resulting in a decrease of $0.3 million, or 11.2%, in gross profit between the three months ended October 2, 2026 and the prior year period. This was driven by a shift in product mix within the division toward lower-margin industrial products, a rapid increase in aluminum and copper material input pricing as well as operating throughput challenges at one of our facilities, which resulted in a decrease in EMP’s gross profit margin from 30.7% for the three months ended September 30, 2025, to 26.1% for the three months ended October 2, 2026.
CMC cost of goods sold for the three months ended October 2, 2026 increased $14.1 million, or 40.5%, associated with an increase of $28.1 million, or 64.7%, in revenue compared to the prior year period, resulting in an increase of $14.0 million, or 160.5%, in gross profit between the three months ended October 2, 2026 and the prior year period. This change was primarily driven by active sourcing and pricing management of the tungsten supply chain during the rapid increase in tungsten concentrate price over the first three months of 2026, as well as increased demand and productivity gains, which together increased CMC’s gross profit margin from 20.1% for the three months ended September 30, 2025, to 31.8% for the three months ended October 2, 2026.
Nine Months Ended October 2, 2026 Compared to Nine Months Ended September 30, 2025
Costs of goods sold for the nine months ended October 2, 2026 increased $31.9 million, or 27.3%, compared to the prior year period. Gross profit margin improved from 20.4% for the nine months ended September 30, 2025, to 26.4% for the nine months ended October 2, 2026.
EMP saw an increase in cost of goods sold for the nine months ended October 2, 2026 of $4.0 million, or 26.5%, associated with an increase of $2.8 million, or 12.5%, in revenue compared to the prior year period, resulting in a decrease of $1.2 million, or 17.6%, in gross profit between the nine months ended October 2, 2026 and the prior year period. This was driven by a shift in product mix within the division toward lower-margin industrial products, a rapid increase in aluminum and copper material input pricing as well as operating throughput challenges at one of our facilities, which together resulted in a decrease in EMP’s gross profit margin from 31.7% for the nine months ended September 30, 2025, to 23.2% for the nine months ended October 2, 2026.
CMC cost of goods sold for the nine months ended October 2, 2026 increased $27.8 million, or 27.4%, associated with an increase of $52.5 million, or 42.3%, in revenue compared to the prior year period, resulting in an increase of $24.7 million, or 108.5%, in gross profit between the nine months ended October 2, 2026 and the prior year period. This change was primarily driven by active sourcing and pricing management of the tungsten supply chain during the rapid increase in tungsten concentrate price over the first three months of 2026, increased demand from key missile programs Next Generation Interceptor, Javelin and Hellfire, increased demand for commercial aerospace programs and productivity gains which together increased CMC’s gross profit margin from 18.3% for the nine months ended September 30, 2025, to 26.8% for the nine months ended October 2, 2026.
General and Administrative Expenses
General and administrative expenses increased $4.0 million, or 72.4%, for the three months ended October 2, 2026, compared to the prior year period. The increase was primarily related to $1.7 million of stock-based compensation and $0.9 million of one-time expenses incurred with diligence activities related to the anticipated acquisition on AMS Osram’s Schwabmünchein, Germany facility, and expenses incurred associated with the consummated and contemplated agreements announced in September 2026 in relationship to the DoW Transactions, during the three months ended October 2, 2026. Additional general and administrative expenses growth was attributable to the increase of staffing and professional services to support public company compliance.
General and administrative expenses increased $21.6 million, or 168.0%, for the nine months ended October 2, 2026, compared to the prior year period. The increase was primarily a result of approximately $12.5 million related to stock-
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based compensation incurred in connection with the acceleration of certain vesting criteria associated with the IPO, $3.6 million of equity compensation recognized over time and $1.0 million of one-time expenses incurred with diligence activities related to the anticipated acquisition on AMS Osram’s Schwabmünchein, Germany facility, and expenses incurred associated with the consummated and contemplated agreements announced in September 2026 in relationship to the DoW Transactions, during the nine months ended October 2, 2026. Additionally, general and administrative expenses growth was attributable to the increase of staffing and professional services to support public company compliance, which included $1.2 million of one-time costs associated with third-party accounting and legal assistance in preparation for the IPO.
Research and Development
Research and development expenses did not materially change for the three months ended October 2, 2026, compared to the prior year period.
Research and development expenses increased $3.4 million, or 132.5%, for the nine months ended October 2, 2026 compared to the prior year period. The increase was primarily related to stock-based compensation incurred in connection with the acceleration of certain vesting criteria associated with the IPO, during the nine month periods ending October 2, 2026 as compared to the prior year periods.
Sales and Marketing
Sales and marketing expenses increased $1.1 million, or 81.4%, for the three months ended October 2, 2026, compared to the prior year period. This increase was due to variable sales compensation associated with sales growth, stock-based compensation, and the expansion of our sales team in support of our strategy.
Sales and marketing expenses increased $1.7 million, or 35.6%, for the nine months ended October 2, 2026, compared to the prior year period. This increase was due to variable sales compensation associated with sales growth, stock-based compensation, and the expansion of our sales team in support of our strategy.
Interest (Income) Expense, Net
Interest (income) expense, net changed $0.9 million, or 162.5%, for the three months ended October 2, 2026 of $0.3 million interest income, compared to the prior year period of $0.6 million interest expense. The change was primarily attributable to debt repayments made in the current year compared to the same prior year period.
Interest expense, net decreased $1.5 million, or 78.7%, for the nine months ended October 2, 2026, compared to the prior year period. The decrease was primarily attributable to debt repayments made in the current year compared to the same prior year period.
Interest Expense — Related Party, Net
Related party interest expense, net decreased $0.5 million, or 100.0%, for the three months ended October 2, 2026, compared to the prior year period. This was primarily attributable to repayment of the CEO Line of Credit following the IPO.
Related party interest expense, net decreased $0.4 million, or 33.7%, for the nine months ended October 2, 2026, compared to the prior year period. This was primarily attributable to repayment of the CEO Line of Credit following the IPO.
Change in Fair Value of Derivative Asset
The change in fair value of derivative assets increased $2.2 million, or 100%, during the nine months ended October 2, 2026, due to changes in the value of the equity underlying the options to purchase common stock in a publicly-traded company in each period.
Change in Fair Value of Forward Instruments
The change in the fair value of forward instruments decreased approximately $0.2 million, or 100%, during the three and nine months ended October 2, 2026, compared to the prior year periods, due to the forwards related to the Blue Moon Investment and the Masan SHA.
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(Gain) Loss on Remeasurement of Fair Value of Marketable Securities
The (gain) loss on remeasurement of fair value of marketable securities increased approximately $1.6 million and $2.7 million during the three and nine months ended October 2, 2026, respectively, compared to the prior year periods, respectively, due to an increase in the fair value of the Company's marketable securities investments in both periods.
Other Income (Expense), Net
Other income (expense), net did not materially change for the three and nine months ended October 2, 2026, compared to the prior year period.
Income Tax Provision
The income tax provision for the three months ended October 2, 2026 was $5.5 million as compared to $0.0 million for the period year period. For the nine months ended October 2, 2026, the Company recognized an income tax provision of $6.5 million, as compared to $0.0 million for the prior year period. Both changes were a result of our being subject to income taxes as a C-corporation following the Reorganization. Prior to the Reorganization A&A was an S-corporation for taxation purposes, and its income and losses were passed through to its shareholders and reported on their individual tax returns.
For the nine months ended October 2, 2026, of the total tax expense of $6.5 million, $3.8 million was attributable to a one-time deferred tax expense recorded in connection with the Company's reorganization into a C-corporation ahead of its IPO, reflecting the initial recognition of deferred tax balances for a structure not previously subject to entity-level income tax. The remaining balance was primarily attributable to the year-to-date pretax income incurred through October 2, 2026.
Pro Forma Net Income Per Share Information
The following pro forma net income per share information is presented for comparative purposes only and does not purport to be indicative of the results that would have been achieved had the Reorganization occurred at an earlier date, nor of future results.
The following table sets forth a reconciliation of the numerators and denominators used to compute pro forma basic and diluted net income per share (in thousands, except share and per share amounts):
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| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | September 30, 2025 | October 2, 2026 | September 30, 2025 | ||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
Net income | $ | 8,291 | $ | 1,570 | $ | 3,465 | $ | 4,007 | ||||||||||||||||||
| Income tax effects of Reorganization(a) | — | (109) | 3,791 | (278) | ||||||||||||||||||||||
Pro forma net income | 8,291 | 1,461 | 7,256 | 3,729 | ||||||||||||||||||||||
| Less: cumulative dividend on Class A Preferred Stock | (551) | — | (551) | — | ||||||||||||||||||||||
| Less: accretion of Class A Preferred Stock to redemption value | (83) | — | (83) | — | ||||||||||||||||||||||
| Pro forma net income available to common stockholders | 7,657 | 1,461 | 6,622 | 3,729 | ||||||||||||||||||||||
| Less: undistributed earnings allocated to participating securities | (37) | — | (5) | — | ||||||||||||||||||||||
| Pro forma net income attributable to common stockholders – basic | $ | 7,620 | $ | 1,461 | $ | 6,617 | $ | 3,729 | ||||||||||||||||||
| Add: reallocation of undistributed earnings to participating securities | 1 | — | — | — | ||||||||||||||||||||||
| Pro forma net income attributable to common stockholders – diluted | $ | 7,621 | $ | 1,461 | $ | 6,617 | $ | 3,729 | ||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Pro forma weighted average common stock outstanding – basic(b) | 31,644,494 | 20,123,187 | 26,679,325 | 20,123,187 | ||||||||||||||||||||||
| Pro forma weighted average common stock outstanding – diluted(b,c) | 32,300,797 | 20,302,389 | 27,219,588 | 20,231,912 | ||||||||||||||||||||||
Pro forma net income per share – basic | $ | 0.24 | $ | 0.07 | $ | 0.25 | $ | 0.19 | ||||||||||||||||||
Pro forma net income per share – diluted | $ | 0.24 | $ | 0.07 | $ | 0.24 | $ | 0.18 | ||||||||||||||||||
______________________________________________________________________
(a)Following the Reorganization, the Company is subject to U.S. federal and applicable state income taxes. The adjustment for income taxes reflects the estimated income tax expense that would have been recognized had the Reorganization occurred on January 1, 2025, based on an effective tax rate of 6.95% for the three and nine months ended September 30, 2025. No pro forma adjustment for income taxes was required for the three months ended October 2, 2026, as the Reorganization was in effect for the entirety of that period, such that the Company's actual effective tax rate reflects its full corporate tax status without adjustment. The pro forma impacts for the nine months ended October 2, 2026 represents the effect of the deferred tax adjustment of $3.5 million, which was recognized in the period of the Reorganization and does not reflect ongoing income tax expense, and other discrete tax impacts of $0.3 million related to the Reorganization. Since the Reorganization occurred during the three months ended April 3, 2026, these amounts are fully reflected within the nine-month period and no incremental adjustment relates to the three months ended October 2, 2026. For the three and nine months ended September 30, 2025, the difference between the U.S. federal statutory rate of 21.0% and the effective tax rate of 6.95% is primarily driven by a 15.45% reduction due to federal tax credits, partially offset by other immaterial rate items of 1.4%, including state taxes and permanent differences. The pro forma income tax effect for the three and nine months ended September 30, 2025 includes the results of discontinued operations.
(b)Pro forma weighted-average common stock outstanding (basic and diluted) for the three and nine months ended September 30, 2025 reflects the Reorganization as if it occurred on January 1, 2025, resulting in 20,122,721 shares of Class A common stock and 466 shares of Class B common stock issued and outstanding. For the three and nine months ended October 2, 2026, pro forma weighted-average shares equal actual weighted-average shares, including 1,184,996 and 392,126 weighted-average shares underlying the DoW Penny Warrants, respectively.
(c)The potential impact on pro forma weighted-average common stock outstanding (diluted) of restricted stock awards, restricted stock units, stock options and stock appreciation rights, and the DoW Strike Price Warrants were evaluated under the treasury stock method. For the three months ended October 2, 2026, the Company determined that the impact represented 656,303 dilutive shares, and for the nine months ended October 2, 2026, 540,263 dilutive shares, which include 141,424 shares for stock appreciation rights exercised during the three months ended July 3, 2026, weighted for the period outstanding before exercise, considering the weighted-average unrecognized compensation
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costs of approximately $8.4 million and $6.0 million, respectively, and the estimated fair value of the Company’s common stock for the period. For the three and nine months ended September 30, 2025, the Company determined that the impact represented 179,202 and 108,725 dilutive shares, respectively, considering the weighted-average unrecognized compensation costs of approximately $2.2 million and $1.4 million, respectively, and the estimated fair value of the Company's common stock for the period.
Critical Materials and Components Results
Three Months Ended October 2, 2026 Compared to Three Months Ended September 30, 2025
| Three Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Revenue | $ | 71,550 | 100.0 | % | $ | 43,454 | 100.0 | % | $ | 28,096 | 64.7 | % | ||||||||||||||||||||||||||
| Cost of goods sold | 48,768 | 68.2 | % | 34,708 | 79.9 | % | 14,060 | 40.5 | % | |||||||||||||||||||||||||||||
| Gross profit | 22,782 | 31.8 | % | 8,746 | 20.1 | % | 14,036 | 160.5 | % | |||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||
| General and administrative | 2,923 | 4.1 | % | 2,484 | 5.7 | % | 439 | 17.7 | % | |||||||||||||||||||||||||||||
| Research and development | 555 | 0.8 | % | 496 | 1.1 | % | 59 | 11.9 | % | |||||||||||||||||||||||||||||
| Sales and marketing | 1,711 | 2.4 | % | 1,047 | 2.4 | % | 664 | 63.4 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 5,189 | 7.3 | % | 4,027 | 9.2 | % | 1,162 | 28.9 | % | |||||||||||||||||||||||||||||
| Operating income | 17,593 | 24.5 | % | 4,719 | 10.9 | % | 12,874 | 272.8 | % | |||||||||||||||||||||||||||||
| Other expense, net: | ||||||||||||||||||||||||||||||||||||||
| Interest expense | 451 | 0.6 | % | 466 | 1.1 | % | (15) | (3.2) | % | |||||||||||||||||||||||||||||
| Interest expense – related party | — | — | % | 420 | 1.0 | % | (420) | (100.0) | % | |||||||||||||||||||||||||||||
| Other income, net | (18) | — | % | (23) | (0.1) | % | 5 | 21.7 | % | |||||||||||||||||||||||||||||
| Total other expense, net | 433 | 0.6 | % | 863 | 2.0 | % | (430) | (49.8) | % | |||||||||||||||||||||||||||||
| Income from continuing operations before taxes | 17,160 | 23.9 | % | 3,856 | 8.9 | % | 13,304 | 345.0 | % | |||||||||||||||||||||||||||||
| Income tax provision | — | — | % | — | — | % | — | — | % | |||||||||||||||||||||||||||||
| Income from continuing operations | $ | 17,160 | 23.9 | % | $ | 3,856 | 8.9 | % | $ | 13,304 | 345.0 | % | ||||||||||||||||||||||||||
n/m = not meaningful
Nine Months Ended October 2, 2026 Compared to Nine Months Ended September 30, 2025
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| Nine Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Revenue | $ | 176,803 | 100.0 | % | $ | 124,272 | 100.0 | % | $ | 52,531 | 42.3 | % | ||||||||||||||||||||||||||
| Cost of goods sold | 129,338 | 73.2 | % | 101,503 | 81.7 | % | 27,835 | 27.4 | % | |||||||||||||||||||||||||||||
| Gross profit | 47,465 | 26.8 | % | 22,769 | 18.3 | % | 24,696 | 108.5 | % | |||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||
| General and administrative | 8,888 | 5.0 | % | 6,264 | 5.0 | % | 2,624 | 41.9 | % | |||||||||||||||||||||||||||||
| Research and development | 5,129 | 2.9 | % | 1,648 | 1.3 | % | 3,481 | 211.2 | % | |||||||||||||||||||||||||||||
| Sales and marketing | 4,448 | 2.5 | % | 3,397 | 2.7 | % | 1,051 | 30.9 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 18,465 | 10.4 | % | 11,309 | 9.0 | % | 7,156 | 63.3 | % | |||||||||||||||||||||||||||||
| Operating income | 29,000 | 16.4 | % | 11,460 | 9.3 | % | 17,540 | 153.1 | % | |||||||||||||||||||||||||||||
| Other expense, net: | ||||||||||||||||||||||||||||||||||||||
| Interest expense | 1,354 | 0.8 | % | 1,410 | 1.1 | % | (56) | (4.0) | % | |||||||||||||||||||||||||||||
| Interest expense – related party | 467 | 0.3 | % | 1,189 | 1.0 | % | (722) | (60.7) | % | |||||||||||||||||||||||||||||
| Other (income) expense, net | (56) | — | % | 1 | — | % | (57) | n/m | ||||||||||||||||||||||||||||||
| Total other expense, net | 1,765 | 1.1 | % | 2,600 | 2.1 | % | (835) | (32.1) | % | |||||||||||||||||||||||||||||
| Income from continuing operations before taxes | 27,235 | 15.3 | % | 8,860 | 7.2 | % | 18,375 | 207.4 | % | |||||||||||||||||||||||||||||
| Income tax provision | — | — | % | — | — | % | — | — | % | |||||||||||||||||||||||||||||
| Income from continuing operations | $ | 27,235 | 15.3 | % | $ | 8,860 | 7.2 | % | $ | 18,375 | 207.4 | % | ||||||||||||||||||||||||||
n/m = not meaningful
Revenues
Revenues for the three months ended October 2, 2026, increased $28.1 million, or 64.7%, compared to the prior year period. Revenues for the nine months ended October 2, 2026, increased $52.5 million, or 42.3%, compared to the prior year period. Growth was driven by increases in molybdenum powder products in our medical end market, increased shipments with key missile programs Javelin, Hellfire and Next Generation Interceptor, and favorable pricing impacts associated with tungsten products in general.
Cost of Goods Sold
Cost of goods sold for the three months ended October 2, 2026 increased $14.1 million, or 40.5%, associated with an increase of $28.1 million, or 64.7%, in revenue compared to the prior year period, resulting in an increase of $14.0 million, or 160.5%, in gross profit between the three months ended October 2, 2026 and the prior year period. Cost of goods sold for the nine months ended October 2, 2026 increased $27.8 million, or 27.4%, associated with an increase of $52.5 million, or 42.3%, in revenue compared to the prior year period, resulting in an increase of $24.7 million, or 108.5%, in gross profit between the nine months ended October 2, 2026 and the prior year period. This change was driven by active sourcing and pricing management of the tungsten supply chain during the rapid increase in tungsten concentrate price over the first three months of 2026, increased demand and productivity gains, together increasing CMC’s gross profit margin from 20.1% for the three months ended September 30, 2025, to 31.8% for the three months ended October 2, 2026 and 18.3% for the nine months ended September 30, 2025 to 26.8% for the nine months ended October 2, 2026.
General and Administrative Expenses
CMC general and administrative expenses for the three months ended October 2, 2026 increased $0.4 million, or 17.7%, compared to the prior year period and $2.6 million, or 41.9% for the nine months ended October 2, 2026 compared to the prior year period. These increases for both periods were attributable to multiple factors including stock-based compensation incurred in connection with the IPO, internal reorganization and resource increases in support of the IPO and public company compliance, additional IT costs associated with defense contractor compliance requirements and variable compensation associated with growth.
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Research and Development
CMC research and development expenses did not meaningfully change for the three months ended October 2, 2026 compared to the prior year period and increased $3.5 million, or 211.2%, for the nine months ended October 2, 2026 compared to the prior year period. The increase was primarily related to stock-based compensation incurred with the IPO during the nine month period ending October 2, 2026 as compared to the prior year period.
Sales and Marketing
CMC selling and marketing expenses for the three months ended October 2, 2026 increased $0.7 million, or 63.4%, compared to the prior year period and $1.1 million, or 30.9%, for the nine months ended October 2, 2026 compared to the prior year period. The increase was driven by primarily increased sales staffing and commissions in support of growth, contributing to the 64.7% revenue growth for the three month period and 42.3% revenue growth for the nine month period at the CMC division.
Interest Expense
CMC interest expense did not meaningfully change for the three and nine months ended October 2, 2026, compared to the prior year periods.
Interest Expense — Related Party
CMC related party interest expense for the three months ended October 2, 2026 decreased $0.4 million, or 100.0% as compared to the prior year period, and $0.7 million, or 60.7%, for the nine months ended October 2, 2026 compared to the prior year period. The decrease in interest expense for both periods was primarily due to the repayment of the Great Falls Term Loan in April 2026 and IPO proceeds used to manage revolving debt associated with our Wells Fargo credit facility.
Other (Income) Expense, Net
CMC other (income) expense, net for the three and nine months ended October 2, 2026 did not meaningfully change compared to the prior year periods.
Engineered Microwave Products Results
Three Months Ended October 2, 2026 Compared to Three Months Ended September 30, 2025
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| Three Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Revenue | $ | 8,010 | 100.0 | % | $ | 7,670 | 100.0 | % | $ | 340 | 4.4 | % | ||||||||||||||||||||||||||
| Cost of goods sold | 5,918 | 73.9 | % | 5,315 | 69.3 | % | 603 | 11.3 | % | |||||||||||||||||||||||||||||
| Gross profit | 2,092 | 26.1 | % | 2,355 | 30.7 | % | (263) | (11.2) | % | |||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||
| General and administrative | 1,799 | 22.5 | % | 1,465 | 19.1 | % | 334 | 22.8 | % | |||||||||||||||||||||||||||||
| Research and development | 295 | 3.7 | % | 274 | 3.6 | % | 21 | 7.7 | % | |||||||||||||||||||||||||||||
| Sales and marketing | 568 | 7.1 | % | 162 | 2.1 | % | 406 | 250.6 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 2,662 | 33.3 | % | 1,901 | 24.8 | % | 761 | 40.0 | % | |||||||||||||||||||||||||||||
| Operating (loss) income | (570) | (7.2) | % | 454 | 5.9 | % | (1,024) | (225.6) | % | |||||||||||||||||||||||||||||
Other (income) expense, net: | ||||||||||||||||||||||||||||||||||||||
| Interest expense | 16 | 0.2 | % | 90 | 1.2 | % | (74) | (82.2) | % | |||||||||||||||||||||||||||||
| Interest expense – related party | — | — | % | 60 | 0.8 | % | (60) | (100.0) | % | |||||||||||||||||||||||||||||
| Other income, net | (27) | (0.3) | % | (17) | (0.2) | % | (10) | (58.8) | % | |||||||||||||||||||||||||||||
Total other (income) expense, net | (11) | (0.1) | % | 133 | 1.8 | % | (144) | (108.3) | % | |||||||||||||||||||||||||||||
(Loss) income from continuing operations before taxes | (559) | (7.1) | % | 321 | 4.1 | % | (880) | (274.1) | % | |||||||||||||||||||||||||||||
| Income tax provision | — | — | % | — | — | % | — | — | % | |||||||||||||||||||||||||||||
(Loss) income from continuing operations | $ | (559) | (7.1) | % | $ | 321 | 4.1 | % | $ | (880) | (274.1) | % | ||||||||||||||||||||||||||
n/m = not meaningful
Nine Months Ended October 2, 2026 Compared to Nine Months Ended September 30, 2025
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| Nine Months Ended | $ | % | ||||||||||||||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | % of Revenue | September 30, 2025 | % of Revenue | Change | Change | ||||||||||||||||||||||||||||||||
| Revenue | $ | 25,165 | 100.0 | % | $ | 22,369 | 100.0 | % | $ | 2,796 | 12.5 | % | ||||||||||||||||||||||||||
| Cost of goods sold | 19,322 | 76.8 | % | 15,279 | 68.3 | % | 4,043 | 26.5 | % | |||||||||||||||||||||||||||||
| Gross profit | 5,843 | 23.2 | % | 7,090 | 31.7 | % | (1,247) | (17.6) | % | |||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||
| General and administrative | 4,843 | 19.2 | % | 3,784 | 16.9 | % | 1,059 | 28.0 | % | |||||||||||||||||||||||||||||
| Research and development | 890 | 3.5 | % | 942 | 4.2 | % | (52) | (5.5) | % | |||||||||||||||||||||||||||||
| Sales and marketing | 1,695 | 6.7 | % | 1,083 | 4.8 | % | 612 | 56.5 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 7,428 | 29.4 | % | 5,809 | 25.9 | % | 1,619 | 27.9 | % | |||||||||||||||||||||||||||||
| Operating (loss) income | (1,585) | (6.2) | % | 1,281 | 5.8 | % | (2,866) | (223.7) | % | |||||||||||||||||||||||||||||
| Other expense, net: | ||||||||||||||||||||||||||||||||||||||
| Interest expense | 171 | 0.7 | % | 280 | 1.3 | % | (109) | (38.9) | % | |||||||||||||||||||||||||||||
| Interest expense – related party | 78 | 0.3 | % | 165 | 0.7 | % | (87) | (52.7) | % | |||||||||||||||||||||||||||||
| Other income, net | (89) | (0.4) | % | (74) | (0.3) | % | (15) | (20.3) | % | |||||||||||||||||||||||||||||
| Total other expense, net | 160 | 0.6 | % | 371 | 1.7 | % | (211) | (56.9) | % | |||||||||||||||||||||||||||||
| (Loss) income from continuing operations before taxes | (1,745) | (6.8) | % | 910 | 4.1 | % | (2,655) | (291.8) | % | |||||||||||||||||||||||||||||
| Income tax provision | 4 | — | % | — | — | % | 4 | n/m | ||||||||||||||||||||||||||||||
| (Loss) income from continuing operations | $ | (1,749) | (6.8) | % | $ | 910 | 4.1 | % | $ | (2,659) | (292.2) | % | ||||||||||||||||||||||||||
n/m = not meaningful
Revenue
Revenue for the three months ended October 2, 2026, increased $0.3 million, or 4.4%, as compared to the prior year period, and $2.8 million, or 12.5%, for the nine months ended October 2, 2026 compared to the prior year period. This was primarily driven by increased sales of radar components and industrial microwave systems.
Cost of Goods Sold
Cost of goods sold for the three months ended October 2, 2026, increased $0.6 million, or 11.3%, associated with an increase in revenue of $0.3 million, or 4.4%, compared to the prior year period, resulting in a decrease of $0.3 million, or 11.2%, in gross profit between the three months ended October 2, 2026 and the prior year period. This was driven by a shift in product mix within EMP toward lower margin industrial products, rapid increases in aluminum and copper material input pricing, and operating throughput challenges at one of our facilities, together resulting in a decrease in EMP’s gross profit margin from 30.7% for the three months ended September 30, 2025, to 26.1% for the three months ended October 2, 2026.
Cost of goods sold for the nine months ended October 2, 2026, increased $4.0 million, or 26.5%, associated with an increase of $2.8 million, or 12.5%, in revenue compared to the prior year period, resulting in a decrease of $1.2 million, or 17.6%, in gross profit between the nine months ended October 2, 2026 and the prior year period. This was driven by a shift in product mix within EMP toward lower margin industrial products, rapid increases in aluminum and copper material input pricing and operating throughput challenges at one of our facilities, together resulting in a decrease in EMP’s gross profit margin from 31.7% for the nine months ended September 30, 2025, to 23.2% for the nine months ended October 2, 2026.
General and Administrative Expenses
General and administrative expenses for the three months ended October 2, 2026, increased $0.3 million, or 22.8%, compared to the prior year period, and increased $1.1 million, or 28.0%, for the nine months ended October 2, 2026
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compared to the prior year period. The increase was attributable to multiple factors including stock-based compensation, internal reorganization, resource increases in support of the IPO and public company compliance and variable compensation associated with growth.
Research and Development
Research and development expenses for the three and nine months ended October 2, 2026, did not meaningfully change compared to the prior year periods.
Sales and Marketing
EMP sales and marketing expenses for the three months ended October 2, 2026, increased $0.4 million, or 250.6%, compared to the prior year period, and increased $0.6 million, or 56.5%, for the nine months ended October 2, 2026 compared to the prior year period. This increase was attributable to additional technical sales resources associated with the acquisition of Symphony Microwave Technologies in November of 2025 and stock based compensation.
Interest Expense
EMP interest expense for the three and nine months ended October 2, 2026, did not meaningfully change as compared to the prior year periods.
Interest Expense — Related Party
EMP related party interest expense for the three and nine months ended October 2, 2026, did not meaningfully change compared to the prior year periods.
Other Income, Net
EMP other income, net, for the three and nine months ended October 2, 2026, did not meaningfully change compared to the prior year periods.
Corporate and Other
Three Months Ended October 2, 2026 Compared to Three Months Ended September 30, 2025
| Three Months Ended | $ | % | ||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | September 30, 2025 | Change | Change | ||||||||||||||||||||||
| General and administrative | $ | 4,870 | $ | 1,616 | $ | 3,254 | 201.4 | % | ||||||||||||||||||
| Sales and marketing | 176 | 144 | 32 | 22.2 | % | |||||||||||||||||||||
| Total operating expenses | 5,046 | 1,760 | 3,286 | 186.7 | % | |||||||||||||||||||||
| Operating loss | (5,046) | (1,760) | (3,286) | (186.7) | % | |||||||||||||||||||||
Other income, net: | ||||||||||||||||||||||||||
Interest income, net | (812) | (4) | (808) | n/m | ||||||||||||||||||||||
| Interest expense (income) – related party, net | — | 25 | (25) | n/m | ||||||||||||||||||||||
Change in fair value of forward instruments | 222 | — | 222 | 100.0 | % | |||||||||||||||||||||
| (Gain) loss on remeasurement of fair value of marketable securities | (1,640) | — | (1,640) | (100.0) | % | |||||||||||||||||||||
Other income, net | (10) | (26) | 16 | n/m | ||||||||||||||||||||||
Total other income, net | (2,240) | (5) | (2,235) | n/m | ||||||||||||||||||||||
| Loss from continuing operations before taxes | (2,806) | (1,755) | (1,051) | (59.8) | % | |||||||||||||||||||||
Income tax provision | 5,504 | — | 5,504 | n/m | ||||||||||||||||||||||
| Loss from continuing operations | $ | (8,310) | $ | (1,755) | $ | (6,555) | (373.4) | % | ||||||||||||||||||
n/m = not meaningful
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Nine Months Ended October 2, 2026 Compared to Nine Months Ended September 30, 2025
| Nine Months Ended | $ | % | ||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | September 30, 2025 | Change | Change | ||||||||||||||||||||||
| General and administrative | $ | 20,685 | $ | 2,792 | $ | 17,893 | 640.9 | % | ||||||||||||||||||
| Research and development | 2 | — | 2 | n/m | ||||||||||||||||||||||
| Sales and marketing | 516 | 432 | 84 | 19.4 | % | |||||||||||||||||||||
| Total operating expenses | 21,203 | 3,224 | 17,979 | 557.7 | % | |||||||||||||||||||||
| Operating loss | (21,203) | (3,224) | (17,979) | (557.7) | % | |||||||||||||||||||||
| Other (income) expense, net: | ||||||||||||||||||||||||||
| Interest (income) expense, net | (1,130) | 165 | (1,295) | (784.8) | % | |||||||||||||||||||||
| Interest expense (income) – related party, net | 315 | (56) | 371 | 662.5 | % | |||||||||||||||||||||
| Change in fair value of derivative asset | (2,214) | — | (2,214) | (100.0) | % | |||||||||||||||||||||
Change in fair value of forward instruments | 222 | — | 222 | 100.0 | % | |||||||||||||||||||||
| (Gain) loss on remeasurement of fair value of marketable securities | (2,721) | 23 | (2,744) | n/m | ||||||||||||||||||||||
| Other (income) expense, net | (114) | 9 | (123) | 0 | n/m | |||||||||||||||||||||
| Total other (income) expense, net | (5,642) | 141 | (5,783) | n/m | ||||||||||||||||||||||
| Loss from continuing operations before taxes | (15,561) | (3,365) | (12,196) | (362.4) | % | |||||||||||||||||||||
| Income tax provision | 6,460 | — | 6,460 | 100.0 | % | |||||||||||||||||||||
| Loss from continuing operations | $ | (22,021) | $ | (3,365) | $ | (18,656) | (554.4) | % | ||||||||||||||||||
n/m = not meaningful
General and Administrative Expenses
General and administrative expenses for the three months ended October 2, 2026, increased $3.3 million, or 201.4%, compared to the prior year period, driven by approximately $0.5 million increase in stock-based compensation, and $0.9 million one-time expenses associated with acquisitions, and one-time expenses associated with the aforementioned DoW Transactions. Additional general and administrative expenses growth was attributable to the increase in staffing and professional services to support public company compliance.
General and administrative expenses increased $17.9 million, or 640.9%, for the nine months ended October 2, 2026 compared to the prior year period. This was primarily attributable to an increase in stock-based compensation of approximately $10.7 million including grants in anticipation of the IPO, $1.2 million of non-recurring expenses associated with preparation for the IPO, and $1.0 million of one-time expenses associated with the aforementioned DoW Transactions. Additional general and administrative expenses growth was attributable to the increase in staffing and professional services to support public company compliance.
Research and Development
Research and development expenses for the nine months ended October 2, 2026, did not meaningfully change as compared to the prior year period.
Sales and Marketing
Sales and marketing expenses for the three and nine months ended October 2, 2026, did not meaningfully change as compared to the prior year periods.
Interest (Income) Expense, net
Interest (income) expense, net, increased $0.8 million for the three months ended October 2, 2026, compared to the prior year period, from less than $0.1 million of interest income for the three months ended September 30, 2026 to $0.8
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million of interest income for the three months ended October 2, 2026. Interest (income) expense increased $1.3 million for the nine months ended October 2, 2026 compared to the prior year period, from $0.1 million of interest expense for the nine months ended September 30, 2025 to $1.1 million of interest income for the nine months ended October 2, 2026. This was primarily due to interest income earned from IPO proceeds.
Interest Expense (Income) — Related Party, net,
Interest expense (income) – related party, net, did not meaningfully change for the three months ended October 2, 2026 compared to the prior year period, and increased $0.4 million for the nine months ended October 2, 2026, compared to the prior year period, from less than $0.1 million of interest income for the nine months ended September 30, 2025 to $0.3 million of interest expense for the nine months ended October 2, 2026, primarily due to an origination fee paid on related part debt.
Change in Fair Value of Derivative Asset
The change in fair value of derivative assets increased $2.2 million during the nine months ended October 2, 2026, compared to the prior year period, due to changes in the value of the equity underlying the options to purchase common stock in one of our publicly-traded vendors in each period.
Change in Fair Value of Forward Instruments
The change in the fair value of forward instruments decreased approximately $0.2 million during the three and nine months ended October 2, 2026, compared to the prior year periods, due to the forward related to the Blue Moon Investment and the Masan SHA.
(Gain) Loss on Remeasurement of Fair Value of Marketable Securities
The (gain) loss on remeasurement of fair value of marketable securities increased approximately $1.6 million and $2.7 million during the three and nine months ended October 2, 2026, respectively, compared to the prior year periods, respectively, due to an increase in the fair value of the Company's marketable securities investments in both periods.
Other (Income) Expense, Net
Other (income) expense, net, did not meaningfully change for the three and nine months ended October 2, 2026, compared to the prior year periods.
Income Tax Provision
The income tax provision for the three months ended October 2, 2026 was $5.5 million as compared to $0.0 million for the prior year period. For the nine months ended October 2, 2026, the Company recognized an income tax provision of $6.5 million, as compared to $0.0 million for the prior year period. Both changes were as result of our being subject to income taxes as a C-corporation following the Reorganization. Prior to the Reorganization A&A was an S-corporation for taxation purposes, and its income and losses were passed through to its shareholders and reported on their individual tax returns.
For the nine months ended October 2, 2026, of the tax expense of $6.5 million, $3.8 million was attributable to a one-time deferred tax expense recorded in connection with the Company's reorganization into a C-corporation ahead of its IPO, reflecting the initial recognition of deferred tax balances for a structure not previously subject to entity-level income tax. The remaining balance was primarily attributable to the year-to-date pretax income incurred through October 2, 2026.
Key Performance Indicators and Non-GAAP Financial Measures
We measure our business, monitor results of operations and ensure proper allocation of capital using the following key performance indicators and non-GAAP financial measures: (i) Revenue, (ii) Backlog, (iii) Gross Profit, (iv) Gross Profit Margin, (v) Adjusted EBITDA from Continuing Operations, (vi) Adjusted EBITDA Margin from Continuing Operations, (vii) Net Income, and (viii) Adjusted Net Income, and (ix) Adjusted Net Income Per Share. We believe the non-GAAP financial measures presented in this Report will help investors understand our financial condition and operating results and assess our future prospects. We believe these non-GAAP financial measures, each of which are discussed in greater detail below, are important supplemental measures because they exclude unusual or non-recurring items as well as
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non-cash items that are unrelated to or may not be indicative of our ongoing operating results. Further, when read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as a tool to help make financial, operational and planning decisions. We may use non-GAAP financial metrics in certain management compensation plans, debt covenants, internal budgetary decision making, and other resource allocation decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry by providing more comparable measures that are less affected by factors such as capital structure.
Open Order Backlog
Our focus on Aerospace, Defense and Government (“ADG”) end market has improved our open order backlog ("Backlog"), as described below. See "Twelve-Month Backlog Trend”. As of October 2, 2026, compared to September 30, 2025, our total backlog increased $260.1 million, or 297.8% driven by the ADG end market. Our recently formed ERT division received the DLA Offtake Agreement from the DLA for tungsten offtake in the amount of $2.0 billion, with $161.9 million initially funded and now reflected in backlog. While this award falls within our ADG end market, we have separately identified the related impact on backlog to maintain adequate comparability to prior reported quarters. Our preexisting CMC and EMP divisions saw ADG backlog growth of $96.9 million, or 184.2% driven by a mix of programs and contracts including a separate DLA award of $35.6 million for primarily molybdenum products in support of numerous defense related programs, tungsten material price flowing through to our end product pricing, defense programs such as PrSM, Next Generation Interceptor, Hellfire, Javelin, Aegis, Patriot and KC-135 Stratotanker, commercial aerospace programs, and various defense radar programs. All other end markets’ backlog for CMC and EMP divisions saw an increase of 3.5%, period-over-period, driven by a mix of growth across multiple industrial customers offset by the timing of orders with our largest medical customer. This customer drove the medical revenue increases in the reported periods, but also places inconsistent short duration purchase orders creating variability in the aggregated other end markets backlog.
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Twelve-Month Backlog Trend
Backlog is measured by confirmed orders and contracts from customers less revenues recognized as of the date measured. The chart below presents our Backlog as of the dates indicated, which represents a key measure of our business growth. Backlog in the chart below excludes discontinued operations.
Adjusted Net Income and Adjusted Net Income Per Share
Adjusted Net Income and Adjusted Net Income Per Share are non-GAAP measurements and are performance measures. We define adjusted net income as net income less stock-based compensation and one-time non-recurring costs such as tax impacts of the Reorganization, discontinued operations, the costs associated with the IPO, certain acquisition and transaction costs, severance and restructuring costs, and other non-recurring costs and the income tax effect of such adjustments, as applicable.
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The following table summarizes our reconciliation of adjusted earnings per share from continuing operations for the three and nine month periods ended October 2, 2026 and September 30, 2025, with discontinued operations excluded from the results of continuing operations (in thousands, except percentages):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| ($ in thousands) | October 2, 2026 | September 30, 2025 | October 2, 2026 | September 30, 2025 | ||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
Net income | $ | 8,291 | $ | 1,570 | $ | 3,465 | $ | 4,007 | ||||||||||||||||||
Less: cumulative dividend on Class A Preferred Stock | (551) | — | (551) | — | ||||||||||||||||||||||
Less: accretion of Class A Preferred Stock to redemption value | (83) | — | (83) | — | ||||||||||||||||||||||
Net income available to common stockholders | 7,657 | 1,570 | 2,831 | 4,007 | ||||||||||||||||||||||
Less: undistributed earnings allocated to participating securities | (37) | — | (5) | — | ||||||||||||||||||||||
Net income attributable to common stockholders – basic | 7,620 | 1,570 | 2,826 | 4,007 | ||||||||||||||||||||||
Add: reallocation of undistributed earnings to participating securities | 1 | — | — | — | ||||||||||||||||||||||
Net income attributable to common stockholders – diluted | 7,621 | 1,570 | 2,826 | 4,007 | ||||||||||||||||||||||
| Adjustments to net income attributable to common stockholders: | ||||||||||||||||||||||||||
| One time tax expense associated with the Reorganization(1) | — | — | 3,791 | — | ||||||||||||||||||||||
| Loss from discontinued operations | — | 852 | — | 2,398 | ||||||||||||||||||||||
| Corporate costs associated with the IPO(2) | — | 983 | 1,296 | 1,229 | ||||||||||||||||||||||
| Stock-based compensation(3) | 2,074 | 427 | 16,872 | 810 | ||||||||||||||||||||||
| Acquisition and transaction costs(4) | 928 | 90 | 1,038 | 246 | ||||||||||||||||||||||
Fair value adjustments of equity instruments | (1,418) | — | (4,713) | — | ||||||||||||||||||||||
| Other(5) | — | 791 | 315 | 791 | ||||||||||||||||||||||
| Tax effect of adjustments(6) | 2,223 | — | (2,625) | — | ||||||||||||||||||||||
Adjusted net income attributable to common stockholders – basic | $ | 11,427 | $ | 4,713 | $ | 18,800 | $ | 9,481 | ||||||||||||||||||
Adjusted net income attributable to common stockholders – diluted | $ | 11,428 | $ | 4,713 | $ | 18,800 | $ | 9,481 | ||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted average shares outstanding – basic | 31,644,494 | 20,123,187 | 26,679,325 | 20,123,187 | ||||||||||||||||||||||
| Weighted average shares outstanding – diluted(7) | 32,300,797 | 20,302,389 | 27,219,588 | 20,231,912 | ||||||||||||||||||||||
Net income per share: | ||||||||||||||||||||||||||
| Basic | $ | 0.24 | $ | 0.08 | $ | 0.11 | $ | 0.20 | ||||||||||||||||||
| Diluted | $ | 0.24 | $ | 0.08 | $ | 0.10 | $ | 0.20 | ||||||||||||||||||
| Adjusted net income per share: | ||||||||||||||||||||||||||
| Basic | $ | 0.36 | $ | 0.23 | $ | 0.70 | $ | 0.47 | ||||||||||||||||||
| Diluted | $ | 0.35 | $ | 0.23 | $ | 0.69 | $ | 0.47 | ||||||||||||||||||
_______________________________________________________________________________
(1)Reflects the impact of the deferred tax adjustment of $3.5 million, which was recognized in the period of Reorganization and does not reflect ongoing income tax expense, and other discrete tax impacts of $0.3 million related to the Reorganization.
(2)Corporate costs associated with the IPO include third-party expenses related to enhancing our accounting controls and procedures, incremental audit costs, recruitment of executive team and legal expenses.
(3)Stock-based compensation includes expenses associated with restricted stock grants made in support of the IPO and the Reorganization. In the three and nine months ended October 2, 2026, the Company expensed $2.1 million and $16.9 million, respectively, of which $4.1 million was settled in cash in association with stock appreciation rights.
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(4)The adjustment for acquisition and transaction costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, and dispositions, in each case, regardless of whether consummated.
(5)Other includes restructuring and severance costs associated with a reorganization at our CMC division as well as Germany retention costs and certain non-recurring costs associated with a utility failure at our CMC facility in Euclid, Ohio.
(6)Income tax effects associated with non-GAAP adjustments were calculated based on the specific tax treatment applicable to each adjustment and reflect the estimated current and deferred income tax consequences of the excluded items. The Company's effective GAAP tax rate for the year was 65.0%, while the effective tax rate applied to non-GAAP results was 14.1%. The difference between the GAAP and non-GAAP tax rates primarily reflects the impact of tax effects associated with the Reorganization impacts, stock-based compensation arrangements, executive compensation limitations, discrete tax items recognized during the period, and other tax-related adjustments that are not directly proportional to the underlying pretax non-GAAP adjustments. Accordingly, the tax effect of non-GAAP adjustments differs from the amount that would be determined by applying the Company's GAAP effective tax rate or statutory tax rate to the related pretax adjustments. There is no tax impact prior to the quarter ended April 3, 2026, as we were treated as an S-corporation for tax purposes prior to the Reorganization.
(7)For the purpose of both the denominator of the net income per share and for the denominator for the adjusted net income per share, the Company considered the potential impact on the weighted average common stock outstanding dilutive impact of the 664,847 shares of restricted stock units, 457,390 restricted stock awards, and 677,280 of stock appreciation rights that were issued and outstanding during the period, which were all evaluated under the treasury stock method. For the purposes of the denominator for the adjusted net income per share, for the three and nine months ended October 2, 2026, the Company determined that the impact represented 656,303 and 540,263 dilutive shares, respectively, considering the weighted average unrecognized compensation costs of approximately $8.4 million and $6.0 million, respectively, and the estimated fair value of our common stock for the period. For the three and nine months ended September 30, 2025, the Company determined that the impact represented 179,202 and 108,725 dilutive shares, respectively, considering the weighted average unrecognized compensation costs of approximately $2.2 million and $1.4 million, respectively, and the estimated fair value of our common stock for the period.
Adjusted EBITDA from Continuing Operations
The following tables summarize our reconciliation of income (loss) from continuing operations to Adjusted EBITDA from Continuing Operations and our Adjusted EBITDA Margin from Continuing Operations for the three and
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nine month periods ended October 2, 2026, for our divisions, with discontinued operations excluded from the results of continuing operations (in thousands, except percentages):
| Three Months Ended October 2, 2026 | ||||||||||||||||||||||||||
| ($ in thousands) | CMC | EMP | Corporate & Other | Total | ||||||||||||||||||||||
| Revenue | $ | 71,550 | $ | 8,010 | $ | — | $ | 79,560 | ||||||||||||||||||
| Income (loss) from continuing operations | $ | 17,160 | $ | (559) | $ | (8,310) | $ | 8,291 | ||||||||||||||||||
| Income (loss) from continuing operations % | 24.0 | % | (7.0) | % | n/m | 10.4 | % | |||||||||||||||||||
| Adjustments to income (loss) from continuing operations: | ||||||||||||||||||||||||||
Income tax provision | $ | — | $ | — | $ | 5,504 | $ | 5,504 | ||||||||||||||||||
Interest expense (income), net(1) | 451 | 16 | (812) | (345) | ||||||||||||||||||||||
| Depreciation and amortization | 1,656 | 268 | 1 | 1,925 | ||||||||||||||||||||||
Acquisition and transaction costs | — | — | 928 | 928 | ||||||||||||||||||||||
Fair value adjustments of equity instruments | — | — | (1,418) | (1,418) | ||||||||||||||||||||||
Stock-based compensation | 798 | 381 | 895 | 2,074 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 20,065 | $ | 106 | $ | (3,212) | $ | 16,959 | ||||||||||||||||||
| Adjusted EBITDA Margin | 28.0 | % | 1.3 | % | n/m | 21.3 | % | |||||||||||||||||||
n/m = not meaningful
| Nine Months Ended October 2, 2026 | ||||||||||||||||||||||||||
| ($ in thousands) | CMC | EMP | Corporate & Other | Total | ||||||||||||||||||||||
| Revenue | $ | 176,803 | $ | 25,165 | $ | — | $ | 201,968 | ||||||||||||||||||
| Income (loss) from continuing operations | $ | 27,235 | $ | (1,749) | $ | (22,021) | $ | 3,465 | ||||||||||||||||||
| Income (loss) from continuing operations % | 15.4 | % | (7.0) | % | n/m | 1.7 | % | |||||||||||||||||||
| Adjustments to income (loss) from continuing operations: | ||||||||||||||||||||||||||
| Income tax provision | $ | — | $ | 4 | $ | 6,460 | $ | 6,464 | ||||||||||||||||||
Interest expense (income), net(1) | 1,821 | 249 | (815) | 1,255 | ||||||||||||||||||||||
| Depreciation and amortization | 4,872 | 828 | 4 | 5,704 | ||||||||||||||||||||||
| Corporate costs associated with the IPO(2) | 108 | — | 1,188 | 1,296 | ||||||||||||||||||||||
Acquisition and transaction costs | — | — | 1,038 | 1,038 | ||||||||||||||||||||||
Fair value adjustments of equity instruments | — | — | (4,713) | (4,713) | ||||||||||||||||||||||
Stock-based compensation (3) | 4,806 | 569 | 11,497 | 16,872 | ||||||||||||||||||||||
| Other(4) | 166 | 149 | — | 315 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 39,008 | $ | 50 | $ | (7,362) | $ | 31,696 | ||||||||||||||||||
| Adjusted EBITDA Margin | 22.1 | % | 0.2 | % | n/m | 15.7 | % | |||||||||||||||||||
______________________________________________________________________
n/m = not meaningful
(1)Interest expense includes both third-party interest expense and related party interest expense.
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(2)Corporate costs associated with the IPO include third-party expenses related to enhancing our accounting controls and procedures, incremental audit costs, recruitment of executive team and legal expenses.
(3)Stock-based compensation includes expenses associated with restricted stock grants made in support of the IPO and the Reorganization. In the three and nine months ended October 2, 2026, the Company expensed $2.1 million and $16.9 million, respectively, of which $4.1 million was settled in cash in association with stock appreciation rights.
(4)Other includes restructuring and severance costs associated with a reorganization at our CMC division as well as Germany retention costs.
The following tables summarize our reconciliation of income (loss) from continuing operations to Adjusted EBITDA from Continuing Operations and our Adjusted EBITDA Margin from Continuing Operations for the three and
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nine month periods ended September 30, 2025 for our divisions, with discontinued operations excluded from the results of continuing operations (in thousands, except percentages):
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| ($ in thousands) | CMC | EMP | Corporate & Other | Total | ||||||||||||||||||||||
| Revenue | $ | 43,454 | $ | 7,670 | $ | — | $ | 51,124 | ||||||||||||||||||
| Income (loss) from continuing operations | $ | 3,856 | $ | 321 | $ | (1,755) | $ | 2,422 | ||||||||||||||||||
| Income (loss) from continuing operations % | 8.9 | % | 4.2 | % | n/m | 4.7 | % | |||||||||||||||||||
| Adjustments to income (loss) from continuing operations: | ||||||||||||||||||||||||||
Interest expense, net(1) | 886 | 150 | 21 | 1,057 | ||||||||||||||||||||||
| Depreciation and amortization | 1,347 | 277 | — | 1,624 | ||||||||||||||||||||||
| Corporate costs associated with the IPO(2) | — | — | 983 | 983 | ||||||||||||||||||||||
Acquisition and transaction costs | — | — | 90 | 90 | ||||||||||||||||||||||
| Stock-based compensation | 382 | — | 45 | 427 | ||||||||||||||||||||||
Other (3) | 791 | — | — | 791 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 7,262 | $ | 748 | $ | (616) | $ | 7,394 | ||||||||||||||||||
| Adjusted EBITDA Margin | 16.7 | % | 9.8 | % | n/m | 14.5 | % | |||||||||||||||||||
n/m = not meaningful
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| ($ in thousands) | CMC | EMP | Corporate & Other | Total | ||||||||||||||||||||||
| Revenue | $ | 124,272 | $ | 22,369 | $ | — | $ | 146,641 | ||||||||||||||||||
| Income (loss) from continuing operations | $ | 8,860 | $ | 910 | $ | (3,365) | $ | 6,405 | ||||||||||||||||||
| Income (loss) from continuing operations % | 7.1 | % | 4.1 | % | n/m | 4.4 | % | |||||||||||||||||||
| Adjustments to income (loss) from continuing operations: | ||||||||||||||||||||||||||
Interest expense, net (1) | 2,599 | 445 | 109 | 3,153 | ||||||||||||||||||||||
| Depreciation and amortization | 3,995 | 844 | — | 4,839 | ||||||||||||||||||||||
| Corporate costs associated with the IPO(2) | — | — | — | 1,221 | 1,221 | |||||||||||||||||||||
| Acquisition and transaction costs | — | — | 246 | 246 | ||||||||||||||||||||||
| Stock-based compensation | 765 | — | 45 | 810 | ||||||||||||||||||||||
Other(3) | 791 | — | — | 791 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 17,010 | $ | 2,199 | $ | (1,744) | $ | 17,465 | ||||||||||||||||||
| Adjusted EBITDA Margin | 13.7 | % | 9.8 | % | n/m | 11.9 | % | |||||||||||||||||||
______________________________________________________________________
n/m = not meaningful
(1)Interest expense includes both third-party interest expense and related party interest expense.
(2)Corporate costs associated with the IPO include third-party expenses related to enhancing our accounting controls and procedures, incremental audit costs, recruitment of executive team and legal expenses.
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(3)Other includes restructuring and severance costs associated with a reorganization at our CMC division as well as Germany retention costs and certain non-recurring costs associated with a utility failure at our CMC facility in Euclid, Ohio.
(4)Beginning with the three and nine-months ending October 2, 2026, fair value adjustments of equity investments are now excluded from Adjusted EBITDA. Prior reported Adjusted EBITDA for the three and six months ending April 3, 2026 and July 3, 2026 included the fair value adjustments.
We recognize that these non-GAAP financial measures have limitations and that other companies may calculate non-GAAP financial measures differently and may use their non-GAAP financial measures under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to address these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. Investors should review the reconciliations below and should not rely on any single financial measure to evaluate our business.
We define these non-GAAP financial measures as:
•Adjusted Net Income. We define adjusted net income as net income less stock-based compensation and one-time non-recurring costs such as tax impacts of the Reorganization, discontinued operations, the costs associated with the IPO, certain acquisition and transaction costs, severance and restructuring costs, and other non-recurring costs and the income tax effect of such adjustments, as applicable.
•Adjusted Net Income Per Share (basic and diluted). Adjusted Net Income Per Share is calculated by dividing Adjusted Net Income by weighted average shares outstanding (basic and diluted).
•Adjusted EBITDA. We define Adjusted EBITDA as our net income plus interest expense, income taxes, depreciation and amortization, and, as applicable for each period, stock-based compensation expense. Adjusted EBITDA also excludes certain non-recurring costs such as the costs associated with the IPO, certain acquisition and transaction costs, severance and restructuring costs, fair value adjustments to equity investments, and other non-recurring costs. Prior to the three months ending October 2, 2026, fair value adjustments to equity investments were not excluded due to the nature of a single investment into a critical tungsten supply chain partner EQ Resources as a hedge to tungsten material pricing. Contemplating the September 2026 equity subscription agreements into Masan and Blue Moon, and the contemplated joint venture agreement with Blue Moon and EQ Resources, the nature of our equity investments have changed, and we believe it’s best to exclude all equity investment adjustments to preserve comparability of underlying operations to investors.
•Adjusted EBITDA Margin. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue.
•Adjusted Gross Profit. We define Adjusted Gross Profit as total revenue less adjusted cost of goods sold, which we define as cost of goods sold less costs related to one-time non-recurring, non-inventory related expenses that under U.S. GAAP are categorized as costs of goods sold. This measure was not disclosed as there were no items that met these criteria for the periods presented.
•Adjusted Gross Profit Margin. Adjusted Gross Profit Margin is calculated by dividing Adjusted Gross Profit by total revenue. This measure was not disclosed as there were no items that met these criteria for the periods presented.
Although we use Adjusted Net Income, Adjusted Net Income Per Share, Adjusted EBITDA, and Adjusted EBITDA Margin as measures to assess the performance of our business and for the other purposes set forth above, the use of non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are:
•Non-recurring adjustments to Adjusted Net Income and Adjusted Net Income Per Share often require cash and, if material in nature, the use of such cash could materially negatively affect cash flows;
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•Adjusted EBITDA and Adjusted EBITDA Margin do not reflect the significant interest expense, or the cash requirements, necessary to service interest payments on our indebtedness;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and the cash requirements for such replacements are not reflected in Adjusted EBITDA and Adjusted EBITDA Margin;
•Adjusted Net Income, Adjusted Net Income Per Share, Adjusted EBITDA and Adjusted EBITDA Margin exclude the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions;
•Omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of Adjusted EBITDA and Adjusted EBITDA Margin; and
•Adjusted EBITDA and Adjusted EBITDA Margin do not include the payment of taxes, which is a necessary element of our operations.
Because of these limitations, Adjusted Net Income, Adjusted Net Income Per Share, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as measures of cash available to us to invest in the growth of our business. Adjusted Net Income, Adjusted Net Income Per Share, Adjusted EBITDA, and Adjusted EBITDA Margin are not measurements of financial performance under U.S. GAAP, and they should not be considered as alternatives to net income, income from continuing operations or cash flow from continuing operations determined in accordance with U.S. GAAP.
Critical Accounting Policies and Estimates
Our consolidated financial statements and the related notes included elsewhere in this Report are prepared in accordance with GAAP. The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and various other assumptions we believe to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or circumstances. While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Report, we believe the following critical accounting policies require the use of significant estimates and judgments in the preparation of our consolidated financial statements.
Revenue Recognition
We recognize revenue in a manner which depicts the transfer of promised goods or services to customers in an amount reflecting the consideration to which we expect to be entitled in exchange for those goods or services.
Most of our revenue is recognized at the point in time control transfers to our customer based on predetermined shipping terms. Revenue is recognized over time under certain contracts for highly customized products that have no alternative use and in which the contract specifies we have enforceable right to payment for our costs, plus a reasonable margin.
For products recognized over time, the transfer of control is measured using the input method, which measures progress toward completion as costs are incurred and estimates of costs to complete such contracts. Significant judgment is used to estimate total costs at completion. Unforeseen events and circumstances can alter the estimate of the costs and potential benefits associated with a particular contract. Changes in job performance, job conditions, estimated profitability, and final contract settlements may result in revisions to costs and income. We recognize changes in contract estimates on a cumulative “catch-up” basis in the period in which the changes are identified. Such changes in contract estimates can result in the recognition of revenue in the current period for performance obligations which were satisfied or partially satisfied in a prior period. Changes in contract estimates may also result in the reversal of previously recognized revenue if the current estimate differs from the previous estimate. Losses on contracts are fully recognized in the period in which the losses become determinable.
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Inventory Valuation
Inventory includes material, direct labor and related manufacturing overhead, and are stated at the lower of cost, determined on a first-in, first-out basis and average cost, or net realizable value determined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
We adjust the carrying value of inventory for the estimated difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and selling price. We also analyze our inventory levels on each reporting date for excess and obsolete inventory. Our analysis requires judgment and is based on factors including, but not limited to, recent historical activity, anticipated or forecasted demand for our products, competitiveness of product offerings, and market conditions. If estimates of customer demand diminish further or market conditions become less favorable than we project, we may need to make additional inventory adjustments, subject to judgment and estimation.
Stock-Based Compensation Expense
We record stock-based compensation expense for stock-based awards issued to our employees based on our estimate of the fair value of the stock-based awards at the grant date. We estimate the fair value of our stock-based awards based on the fair value of our common stock. See “Note 2 — Summary of Significant Accounting Policies — Stock-Based Compensation” within our unaudited consolidated financial statements as of October 2, 2026 and for the three and nine month periods ended October 2, 2026, and September 30, 2025, respectively, included elsewhere in this Report.
For stock-based awards that include a service-based vesting condition, we recognize the expense ratably over the requisite service period. For stock-based awards that include a performance-based vesting condition, we recognize the expense when it is probable that the performance-based vesting condition will be satisfied and the award has satisfied other vesting conditions, if any. Forfeitures are recognized as they are incurred. Refer to “— Critical Accounting Policies and Significant Judgments and Estimates — Common Stock Valuations” below for additional detail on the valuation methodology to determine the fair value of our common stock.
Common Stock Valuations
Prior to the completion of our initial public offering, there was no public market for our common stock. As such, the estimated fair value of our equity was determined at each grant date by our board of directors, with input from management, based on the information known to us on the grant date and upon a review of any recent events and their potential impact on the estimated per share fair value of our common stock. As part of these fair value determinations, our board of directors obtained and considered valuation reports prepared by an independent third-party valuation specialist in accordance with the guidance outlined in the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The value of our common stock was estimated using income and market valuation approaches. The assumptions underlying these valuations included projected future revenue and cash flows, discount rates, market multiples, selection of comparable companies, the lack of marketability of our common stock and probability of possible future events and represented our best estimates at the time they were made, which involves inherent uncertainty and the application of judgment. Changes to the key assumptions and estimates used in the valuations could have resulted in materially different fair values of our common stock at each valuation date.
Following the closing of our initial public offering, it was no longer necessary for our board of directors to estimate the fair value of our common stock in connection with the accounting for stock-based awards we grant, as the fair value of our common stock is determined based on the closing price of our common stock as reported on the date of grant.
Valuation of Forward Instruments
We measure forward instruments at fair value at each reporting date, with changes in fair value recognized in earnings. See Note 2 — Summary of Significant Accounting Policies and Note 15 —Blue Moon Metals Inc. Transactions within our unaudited consolidated financial statements as of October 2, 2026 and for the three and nine month periods ended October 2, 2026, and September 30, 2025, respectively, included elsewhere in this Report.
The Forward was measured as a single instrument comprised of common shares and warrants, net of the aggregate subscription price payable at closing. Fair value for the underlying BM Shares was determined using the quoted closing price of third-party common shares in an active market, multiplied by the quantity to be received, less the aggregate subscription price. The fair value of the underlying Blue Moon Warrants is estimated using a Black-Scholes option pricing model with observable inputs, including the quoted price and volatility of third-party common shares and the risk-free rate.
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The forward instrument to purchase the common shares under the Masan SHA (the “Masan Forward”), outstanding from September 23, 2026 until the settlement, was measured as the excess of the quoted closing price of the common share underlying the Masan SHA, translated at the period-end VND/USD rate, over the purchase price. The measurement of the Masan Forward relies on a quoted price in an active market and a contractual purchase price, it does not require a valuation model or significant unobservable inputs.
Valuation and Classification of Equity-Classified Instruments
We evaluate warrants, rights and other instruments issued in connection with financing and other transactions including the DoW Penny Warrants and the TEG Warrants, to determine whether they are classified as liabilities or in equity, and we measure those classified in equity at fair value at issuance. Equity-classified instruments are not remeasured after issuance. Proceeds from transactions in which multiple instruments are issued are allocated among the instruments on a relative fair value basis. See Note 14 — DoW Investment Agreement and Related Transactions and Note 15 — Blue Moon Metals Inc. Transactions within our unaudited condensed consolidated financial statements.
We estimate the fair value of the DoW Warrants, the Tranche Right, the TEG Warrants, and the Class A Preferred Stock using a combination of the Monte Carlo simulation model and an implied (back-to-solve) approach. Inputs include the fair value of our common stock, discount rate, expected volatility, expected term, the risk-free interest rate, and the probability and timing of exercise. Significant judgment is used to estimate these inputs, particularly volatility, the discount rate, and the probability and timing of exercise. If our conclusions on classification change, or the estimates change, we may be required to remeasure certain instruments at fair value through earnings or to change the amount of accretion, subject to judgment and estimation.
Recent Accounting Pronouncements
See “Note 3 — Recently Adopted and Recently Issued Accounting Pronouncements” within our unaudited consolidated financial statements as of October 2, 2026 and for the three and nine month periods ended October 2, 2026 and September 30, 2025, respectively, included elsewhere in this Report for any recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
Liquidity and Capital Resources
As of October 2, 2026, we had $105.7 million in cash, $124.7 million in restricted cash, $6.6 million in marketable securities, and approximately $18.1 million in available debt facility capacity. As of December 31, 2025, our continuing operations had $1.8 million in cash, $0.2 million in marketable securities, and $26.1 million in available debt capacity.
Our principal historical liquidity requirements have been for organic growth, acquisitions, capital expenditures, servicing indebtedness, and working capital needs. We do not expect there to be substantial changes in our future capital requirements. We anticipate over the next 12 months we will meet our liquidity needs, including debt servicing, through the proceeds from the IPO, cash generated, available cash balances, and borrowings from our line of credit facilities discussed below. We fund our investing activities primarily from cash provided by our operating and financing activities. As we continue to expand our business, including any acquisitions we may make, we may in the future require additional working capital for increased costs.
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Indebtedness
The following table summarizes our indebtedness, excluding forgivable loans, as of October 2, 2026:
| ($ in thousands) | October 2, 2026 | |||||||
| Line of Credit Facilities: | ||||||||
Wells Fargo Line of Credit | $ | 27,377 | ||||||
| Auburn Savings Loan | 766 | |||||||
| Term Loans: | ||||||||
| Wells Fargo Term Loan | 6,281 | |||||||
| First BankProv Term Note | 1,369 | |||||||
| United Federal Credit Union Note | 678 | |||||||
| Other Equipment Loans | 31 | |||||||
| Total Indebtedness | $ | 36,502 | ||||||
The following provides additional details on our material indebtedness, excluding the Other Equipment Loans, Symphony Line of Credit and Symphony Term Loans (see Note 12 — Debt within the notes to our unaudited consolidated financial statements included elsewhere in this Report for details on those loans), as of October 2, 2026:
Wells Fargo LOC
On November 6, 2023, Elmet Tech entered into a $40.0 million revolving credit facility with Wells Fargo Bank (the “Wells Fargo LOC”) pursuant to an Amended and Restated Credit Agreement (the “Wells Fargo Credit Agreement”). The Wells Fargo LOC accrues interest monthly based on a floating rate, as defined by the lender, and is subject to periodic adjustments based on prevailing market conditions.
As of October 2, 2026 and December 31, 2025, outstanding borrowings under the Wells Fargo LOC were approximately $27.4 million and $20.5 million, respectively. As of October 2, 2026 and December 31, 2025, the applicable interest rates were 7.75% and 5.92%, respectively, on the $27.4 million and $10.0 million outstanding as of each period and 0.00% and 7.75% on the remaining outstanding amount of approximately $0.0 million and $10.5 million as of October 2, 2026 and December 31, 2025, respectively. The Wells Fargo LOC consists of two different borrowing tranches with different applicable rates, and therefore there may be multiple rates for the same period, depending on the overall outstanding balance. As of October 2, 2026, availability to borrow under the Wells Fargo LOC was approximately $12.5 million. The Wells Fargo LOC matures on November 6, 2028.
Elmet Tech is required to pay customary fees associated with the credit facility, including commitment and administrative fees. In addition, the Wells Fargo LOC contains customary conditions regarding Elmet Tech’s borrowing, including events of default and covenants. Covenants include restrictions on Elmet Tech’s ability to incur indebtedness, grant liens, dispose of assets, make investments, bail or consign inventory or engage in transactions with affiliates (each such restriction subject to certain exceptions), and require us to maintain a consolidated Fixed Charge Coverage Ratio (as such term is defined in the Wells Fargo Credit Agreement) of not less than 1.05 to 1.00, as measured on a month-end basis. The obligations under the Wells Fargo LOC are secured by liens on substantially all of the assets of Elmet Tech, Elmet Coldwater and Elmet Euclid. We were in compliance with all covenants as of the date of this Report.
Domestic March 2020 Line of Credit
On March 2, 2020, Microwave Techniques entered into a $3.0 million demand line of credit with BankProv (formerly known as The Provident Bank and now known as Needham Bank after its merger in November 2025) (the “Domestic March 2020 Line of Credit”) to finance domestic receivables and inventory. Amounts under the Domestic March 2020 Line of Credit are secured by certain assets of Microwave Techniques and are guaranteed by Microwave Techniques. The Domestic March 2020 Line of Credit accrued interest monthly based on a floating rate equal to the prime rate as reported in the Wall Street Journal, which was equal to 7.00% as of October 2, 2026 and December 31, 2025.
The Domestic March 2020 Line of Credit was originally set to expire in February 2025. On January 30, 2025, Microwave Techniques entered into an amendment to the Domestic March 2020 Line of Credit, increasing the Domestic
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March 2020 Line of Credit from $3.0 million to $4.0 million and extending the maturity date from February 2025 to February 2026. On January 30, 2026, Microwave Techniques entered into a second amendment, which further extended the maturity date from February 2026 to April 2, 2026. All other key terms of the original Domestic March 2020 Line of Credit agreement remained consistent.
On March 31, 2026, we entered into a third amendment of the Domestic March 2020 Line of Credit to remove the stated maturity. Following the third amendment, the Domestic March 2020 Line of Credit is due on demand.
As of October 2, 2026, the entire balance of the Domestic March 2020 Line of Credit was repaid and there was no outstanding balance. As of December 31, 2025, the outstanding balance was approximately $3.3 million. As of October 2, 2026, availability to borrow under the Domestic March 2020 Line of Credit was the full principal sum of up to $4.0 million.
Microwave Techniques was required to pay customary fees associated with the credit facility, including commitment and administrative fees. The Domestic March 2020 Line of Credit contained customary conditions, events of default and financial covenants, including leverage ratio requirements, which we were in compliance with as of the date of this Report.
CEO Line of Credit
On January 1, 2023, A&A entered into a $2.0 million line of credit note with Peter V. Anania, our Chief Executive Officer and Chairman (the “CEO Line of Credit”). On October 1, 2025, A&A and our Chief Executive Officer and Chairman entered into an amendment which increased the total amount available to borrow on the CEO Line of Credit from $2.0 million to $2.5 million. The CEO Line of Credit accrued interest monthly on the outstanding balance based on a stated interest rate of 9.00%.
As of December 31, 2025, the outstanding principal balance of the CEO Line of Credit was approximately $1.8 million. The CEO Line of Credit was subject to customary conditions, including events of default, which we were in compliance with as of the date of repayment.
The original maturity date of the CEO Line of Credit was January 1, 2026. On January 1, 2026, we amended the CEO Line of Credit to extend the maturity date from January 1, 2026 to the earlier of: (i) the closing of an initial public offering, or (ii) July 1, 2026. In connection with the amendment, we agreed to pay an extension fee of $0.2 million at maturity in addition to the outstanding principal and accrued, unpaid interest.
The CEO Line of Credit was repaid in full on May 1, 2026 with proceeds from the IPO.
Auburn Savings Loan
On December 26, 2024, Elmet Tech entered into a $0.8 million construction loan with Auburn Savings Bank, FSB (“Auburn Savings Bank”) pursuant to a Commercial Note Agreement (the “Auburn Savings Loan”). Once drawn, the Auburn Savings Loan accrues interest monthly at an initial rate of 7.00% for the first five years, which will be adjusted every fifth anniversary of January 25, 2026, to the Federal Home Loan Bank’s 5/20 amortizing advance rate plus 3.00%. The maturity date of the Auburn Savings Loan is December 25, 2046.
As of October 2, 2026 and December 31, 2025, there was $0.8 million of outstanding borrowings under the Auburn Savings Loan. As of October 2, 2026, there was no availability to borrow under the Auburn Savings Loan, as the principal amount was borrowed.
The obligations under the Auburn Savings Loan are secured by a lien on certain real estate assets and guaranteed by consolidated subsidiary. In addition, the Auburn Savings Loan is subject to customary conditions, including events of default, of which we were in compliance with as of the date of this Report. The Auburn Savings Loan will be converted to a term loan at the completion of the related construction.
Foreign March 2020 Line of Credit
On March 2, 2020, Microwave Techniques entered into a $1.0 million demand line of credit with BankProv (the “Foreign March 2020 Line of Credit”) to finance foreign receivables. Amounts under the Foreign March 2020 Line of Credit were secured by certain assets of a consolidated subsidiary and were guaranteed by a consolidated subsidiary. The Foreign March 2020 Line of Credit accrued interest monthly based on a floating rate equal to the prime rate as reported in
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the Wall Street Journal, which was 7.00% as of October 2, 2026 and December 31, 2025. As of October 2, 2026, the entire balance was repaid and there was no outstanding balance. As of December 31, 2025, the outstanding balance was $0.2 million. As of October 2, 2026, the availability to borrow under the Foreign March 2020 Line of Credit was the full principal of $1.0 million.
On January 30, 2025, and on January 30, 2026, we entered into two separate amendments to the Foreign March 2020 Line of Credit. The first amendment entered into during January 2025 extended the maturity date from February 2025 to February 2026, which was subsequently extended to April 2026 as executed under the second amendment entered into during January 2026.
On March 31, 2026, we entered into an additional amendment of the Foreign March 2020 Line of Credit to remove the stated maturity. Following this amendment, the Foreign March 2020 Line of Credit is due on demand.
Microwave Techniques was required to pay customary fees associated with the credit facility, including commitment and administrative fees. The Foreign March 2020 Line of Credit contained customary conditions on events of default and financial covenants, including leverage ratio requirements, which we were in compliance with as of the date of this Report.
Auburn Savings LOC
On April 14, 2025, Elmet Tech entered into a $0.6 million line of credit facility with Auburn Savings Bank pursuant to a Demand Commercial Line of Credit Agreement (the “Auburn Savings LOC”). The Auburn Savings LOC accrues interest monthly at the prime rate as published by The Wall Street Journal plus 0.50%. The effective interest rate as of October 2, 2026 and December 31, 2025 was 7.50%.
As of October 2, 2026, there were no outstanding balance owed and the amount available to borrow under the Auburn Savings LOC was the full principal of $0.6 million. As of December 31, 2025, the outstanding borrowings were $0.1 million. The Auburn Savings LOC does not have a maturity date but is due on demand at Auburn Savings Bank’s discretion or upon an event of default as defined in the Auburn Savings LOC.
The obligations under the Auburn Savings LOC are secured by a lien on certain real estate assets and guaranteed by Poly Labs Solar LLC. In addition, the Auburn Savings LOC is subject to customary conditions, including events of default, which we were in compliance with as of the date of this repayment.
Term Loans
Great Falls Term Loan
On November 6, 2023, Elmet Tech entered into a secured $20.0 million term note with Great Falls Property, LLC (the “Great Falls Term Loan”), which is owned by George Schott, one of our principal stockholders. The Great Falls Term Loan accrued interest monthly based on a floating rate equal to the prime rate as reported by the Wall Street Journal plus a spread of 1.00%, with a floor of 9.50%. As of December 31, 2025, approximately $15.0 million was outstanding under the Great Falls Term Loan. The maturity date of the Great Falls Term Loan was November 6, 2028; however, on April 28, 2026, the Great Falls Term Loan was repaid in full with proceeds from the IPO.
The Great Falls Term Loan was secured by the real estate associated with our Coldwater and Euclid facilities, held by Elmet Coldwater and Elmet Euclid, respectively, and contained conditions on events of default resulting in acceleration of payment in full of the principal and interest outstanding at the time of the event of default, which we were in compliance with as of the date of this Report.
Wells Fargo Term Loan
On November 6, 2023, Elmet Tech entered into a secured $8.7 million term loan with Wells Fargo Bank pursuant to an Amended and Restated Credit Agreement (the “Wells Fargo Term Loan”). The Wells Fargo Term Loan accrues interest monthly based on a floating rate, as defined by the lender, and is subject to periodic adjustments based on prevailing market conditions. Under the Wells Fargo Term Loan, we make payments of principal monthly. During the year ended December 31, 2024, we modified the Wells Fargo Term Loan and borrowed an additional $2.0 million.
As of October 2, 2026 and December 31, 2025, the outstanding balance under the Wells Fargo Term Loan was approximately $6.3 million and $7.7 million, respectively. As of October 2, 2026 and December 31, 2025, the applicable
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interest rates were 6.44% and 6.62%, respectively, on the portion of outstanding principal entered into during November 2023, and 8.75% and 8.50%, respectively, on the $2.0 million incremental borrowings entered into during December 2024. During the nine months ended October 2, 2026 and September 30, 2025, the Company made aggregate principal repayments of $1.4 million and $1.2 million, respectively. The Wells Fargo Term Loan matures on November 6, 2028.
The Wells Fargo Term Loan contains customary conditions regarding our borrowing, including events of default and covenants. Covenants include restrictions on certain consolidated subsidiaries’ ability to incur indebtedness, grant liens, dispose of assets, make investments, bail or consign inventory or engage in transactions with affiliates (each such restriction subject to certain exceptions), and require us to maintain a consolidated Fixed Charge Coverage Ratio (as such term is defined in the Wells Fargo Credit Agreement) of not less than 1.05 to 1.00, as measured on a month-end basis. The obligations under the Wells Fargo Term Note are secured by substantially all of the assets of a consolidated subsidiary. We were in compliance with all covenants as of the date of this Report.
First BankProv Term Note
On March 2, 2020, a consolidated subsidiary entered into a secured $6.5 million term note with BankProv (the “First BankProv Term Note”). Amounts under the First BankProv Term Note are secured by certain assets of the consolidated subsidiary and are guaranteed by the consolidated subsidiary. The First BankProv Term Note accrued monthly interest at 4.79% until March 31, 2026, and accrues at a fixed 6.50% thereafter. As of October 2, 2026 and December 31, 2025, the outstanding balance of the First BankProv Term Note was approximately $1.4 million and $1.7 million, respectively.
On March 31, 2026, we amended the First BankProv Term Note to extend the maturity date from March 2, 2027 to March 1, 2033. In connection with the amendment, the interest rate increased to a fixed rate of 6.50% and the repayment schedule was amended, whereby we are required to make interest-only payments for a period of twelve months commencing April 1, 2026, followed by principal payments over a six-year amortization period.
The First BankProv Term Note contains conditions on the consolidated subsidiary’s borrowing, including events of default and covenants. Covenants include restrictions on the consolidated subsidiary’s ability to incur indebtedness, grant liens, dispose of assets, make investments or loans, and strategic transactions (each such restriction subject to certain exceptions), and require the consolidated subsidiaries to maintain several financial covenants, including a leverage ratio. We were in compliance with all obligations under the First BankProv Term Note as of the date of this Report.
United Federal Credit Union Note
On September 23, 2024, Elmet Tech entered into a secured $1.6 million term note with United Federal Credit Union (the “United Federal Credit Union Note”). Amounts under the United Federal Credit Union Note are secured by a solar project at Elmet Coldwater LLC, which now serves as a real estate holding company for properties used by our CMC division. The United Federal Credit Union Note accrues monthly interest based on a stated interest rate of 9.00% and principal payments began in March 2025. As of October 2, 2026 and December 31, 2025, the outstanding balance under the United Federal Credit Union Note was $0.7 million and $1.1 million, respectively. The United Federal Credit Union Note has a maturity date of September 10, 2027.
The United Federal Credit Union Note contains customary conditions on borrowing, including events of default. Upon an event of default, the lender would be entitled to exercise customary remedies, including acceleration of amounts due and enforcement of any applicable rights against the borrower. We were in compliance with all obligations under the United Federal Credit Union Note as of the date of this Report.
AAI Note
On January 2, 2026, in connection with the Reorganization, we entered into a $2.4 million promissory note (the “AAI Note”) with AAI, which is controlled by our CEO, related to outstanding obligations between us and AAI. The AAI Note was due and payable on the earlier of demand or January 1, 2027, and accrued interest at a rate of 6.00% per annum. As of October 2, 2026, the balance was paid in full and the note was terminated.
Poly Labs Note Payable (Due to Poly Labs)
Following our distribution of Poly Labs (see Note 5 — Discontinued Operations within the notes to our unaudited consolidated financial statements included elsewhere in this Report), AAI had an outstanding note payable owed to Poly Labs of approximately $1.7 million (the “Poly Labs Note Payable”). Prior to the distribution of Poly Labs, the Poly Labs
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Note Payable was eliminated in consolidation. The Poly Labs Note Payable accrued interest monthly based on a stated interest rate of 10.00% and had a maturity date of January 31, 2026. As of December 31, 2025, the outstanding balance under the Poly Labs Note Payable was $0.5 million. On January 19, 2026, the Poly Labs Note Payable was repaid in full and terminated.
October 2023 Term Loans
On October 6, 2023, we entered into two separate unsecured term loans with investors of AAI, with aggregate gross proceeds of approximately $0.5 million (the “October 2023 Term Loans”). The October 2023 Term Loans accrued interest monthly based on a stated fixed interest rate of 8.00%. In April 2025, AAI amended one of the October 2023 Term Loans to add a conversion feature to enable the holder to convert the outstanding principal and accrued interest into membership units of AAI upon certain liquidity events, including an initial public offering. On December 29, 2025, the holder of this October 2023 Term Loan waived his right to convert the term loan into AAI membership units. The maturity dates of the October 2023 Term Loans ranged from October 2026 to October 2027. As of December 31, 2025, approximately $0.5 million was outstanding related to the October 2023 Term Loans. In connection with the Reorganization, the October 2023 Term Loans were repaid in full, terminated and replaced by the AAI Note.
Cash Flows
The following table summarizes our consolidated cash flows from continuing operations for the nine months ended:
| Nine Months Ended | ||||||||||||||
| ($ in thousands) | October 2, 2026 | September 30, 2025 | ||||||||||||
| Net cash (used in) provided by operating activities from continuing operations | $ | (60,727) | $ | 1,422 | ||||||||||
| Net cash used in investing activities from continuing operations | (6,255) | (5,872) | ||||||||||||
Net cash provided by financing activities from continuing operations | 295,719 | 1,858 | ||||||||||||
| Effects of exchange rate changes on cash from continuing operations | (72) | 98 | ||||||||||||
Net change in cash and restricted cash from continuing operations | $ | 228,665 | $ | (2,494) | ||||||||||
Operating Activities
Net cash used in operating activities from continuing operations was $60.7 million for the nine months ended October 2, 2026, driven primarily by changes in net working capital of $84.3 million, partially offset by net income from continuing operations of $3.5 million and non-cash adjustments to income from continuing operations of $20.1 million. The change in net working capital was a result of an $85.5 million increase in inventories, a net cash outflow of $5.8 million related to the timing of billing and cash receipts from customers, an increase of $4.5 million in prepaid expenses and other current assets, and a net cash outflow of $0.9 million from changes in other operating assets and liabilities, partially offset by an increase in accounts payable of $4.7 million, and an increase in accrued expenses and other current liabilities of $7.7 million. Non-cash adjustments to income from continuing operations primarily consisted of stock-based compensation expense of $12.8 million, deferred income taxes of $3.1 million, an unrealized loss on forward instruments of $0.2 million, depreciation and amortization expense of $5.7 million, provision for excess and obsolete inventories of $2.4 million, non-cash operating lease expense of $0.7 million, and provision for credit losses of approximately $0.1 million, partially offset by a $2.2 million unrealized gain on fair market value of derivative assets, and a $2.7 million unrealized gain on marketable securities.
Net cash provided by operating activities from continuing operations was $1.4 million for the nine months ended September 30, 2025, driven primarily by net income from continuing operations of $6.4 million and non-cash adjustments to income from continuing operations of $7.2 million, partially offset by changes in net working capital of $12.2 million. The change in net working capital was a result of a $13.0 million increase in inventories, a decrease in accrued expenses and other current liabilities of $2.4 million, an increase of $1.2 million in prepaid expenses and other current assets, and a net cash outflow of $0.7 million from changes in other operating assets and liabilities, partially offset by a net cash inflow of $1.7 million related to the timing of billing and cash receipts from customers, and an increase in accounts payable of $3.4 million,. Non-cash adjustments to income from continuing operations primarily consisted of depreciation and amortization expense of $4.8 million, stock-based compensation expense of $0.8 million, non-cash lease expense of $0.7
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million, provision for excess and obsolete inventories of $0.5 million, provision for credit losses of approximately $0.1 million, and other non-cash adjustments of $0.3 million.
Net cash used in investing activities from continuing operations was $6.3 million for the nine months ended October 2, 2026, driven primarily by purchases of marketable securities of $1.4 million and purchases of property, plant and equipment of $8.9 million, which were partially offset by $4.0 million of cash received from government grants related to capital projects.
Net cash used in investing activities from continuing operations was $5.9 million for the nine months ended September 30, 2025, driven primarily by purchases of property, plant and equipment of $9.4 million, which were partially offset by $3.5 million of cash received from government grants related to capital projects.
Financing Activities
Net cash provided by financing activities from continuing operations was $295.7 million for the nine months ended October 2, 2026, driven primarily by proceeds from initial public offering of $125.4 million, gross proceeds from the DoW Transactions of $200.0 million, and proceeds from revolving credit facility of $177.7 million, partially offset by payments of principal on revolving credit facilities of $174.5 million, payments of principal on long-term debt – related party of $17.3 million, employee taxes paid on shares for tax-withholding purposes of $4.4 million, DoW Transactions capitalized costs of $6.9 million, payments on principal on long-term debt of $2.4 million, net payments of principal on revolving credit facilities - related party of $1.8 million, and net cash outflows from other financing activities of $0.1 million.
Net cash provided by financing activities from continuing operations was $1.9 million for the nine months ended September 30, 2025, driven primarily by proceeds from revolving credit facility of $15.5 million, partially offset by cash distributions paid to stockholders of $6.8 million, principal payments on long-term debt of $5.3 million, and net payments of principal on revolving credit facilities - related party of $1.4 million.
Material Cash Commitments
Our material future cash commitments are to fund the OSRAM Acquisition, as described elsewhere in this Report, fund the Springer Transaction, as described elsewhere in this Report, fund the Masan SHA, as described elsewhere in this Report, repay our current indebtedness obligations, as described above, and make payments under leases for our facilities. We have operating leases for our manufacturing facilities with lease terms that expire between November 2026 and February 2037. Many leases include one or more options to renew, but renewals are not assumed in the determination of the lease term due to uncertainty. For more information on our leases, see Note 10 — Leases within our unaudited consolidated financial statements included elsewhere in this Report.
The following table summarizes our material cash commitments as of October 2, 2026 (in thousands):
| Fiscal Year, | Leases | Indebtedness | Masan SHA | Blue Moon Equity Subscription | Total | |||||||||||||||||||||||||||
| Remaining 2026 | $ | 565 | $ | 421 | $ | 124,710 | $ | 24,655 | $ | 150,351 | ||||||||||||||||||||||
| 2027 | 2,254 | 2,327 | 0 | — | 4,581 | |||||||||||||||||||||||||||
| 2028 | 2,253 | 32,006 | 0 | — | 34,259 | |||||||||||||||||||||||||||
| 2029 | 2,028 | 237 | 0 | — | 2,265 | |||||||||||||||||||||||||||
| 2030 | 1,790 | 253 | 0 | — | 2,043 | |||||||||||||||||||||||||||
| Thereafter | 10,667 | 1,258 | 0 | — | 11,925 | |||||||||||||||||||||||||||
| Total | $ | 19,557 | $ | 36,502 | $ | 124,710 | $ | 24,655 | $ | 205,424 | ||||||||||||||||||||||
Our material future cash commitments to fund the OSRAM Acquisition, as described elsewhere in this Report, fund the Springer Transaction, as described elsewhere in this Report, repay our current indebtedness obligations, as described above, and make payments under leases for our facilities.
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Off-Balance Sheet Arrangements
As of October 2, 2026 and December 31, 2025, we did not have any off-balance sheet arrangements.
ITEM 3: Quantitative and Qualitative Disclosure About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
ITEM 4: Controls and Procedures
Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of October 2, 2026, our disclosure controls and procedures were not effective at the reasonable assurance level as a result of the material weaknesses described below.
Material Weaknesses and Remediation Plan
As disclosed in our Registration Statement on Form S-1 (File No. 333-294725), as amended and supplemented (the “IPO Registration Statement”), and declared effective by the SEC on April 22, 2026, as of December 31, 2025, the following material weaknesses existed:
•We did not maintain effective segregation of duties surrounding the review and approval of transactions in our EMP division as a result of limited headcount resources within the finance department; and
•We did not maintain effective information technology general controls due to a lack of design and maintenance of such controls.
We have not identified a material misstatement to our financial statements resulting from the material weaknesses described above.
Our management has taken action to begin remediating these material weaknesses; however, certain remedial actions have not started or have only recently been undertaken, and we cannot be certain as to when remediation will be fully completed. In addition, we could in the future identify additional internal control deficiencies that could rise to the level of a material weakness or uncover other errors in financial reporting. During the course of our evaluation, we may identify areas requiring improvement and may be required to design additional enhanced processes and controls to address issues identified through this review. In addition, there can be no assurance that such remediation efforts will be successful, that our internal control over financial reporting will be effective as a result of these efforts or that any such future deficiencies identified may not be material weaknesses that would be required to be reported in future periods.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended October 2, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be subject to legal proceedings, investigations and claims incidental to the conduct of our business.
We are not a party to, nor are we aware of, any legal proceedings, investigations or claims which, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition or results of operations.
Item 1A. Risk Factors
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. Our current risk factors are set forth in the section entitled “Risk Factors” contained in our Registration Statement on Form S-1 (File No. 333-294725), as amended and supplemented (the “IPO Registration Statement”), and declared effective by the SEC on April 22, 2026.
Except as set forth below, there have been no material changes to the risk factors previously disclosed in the IPO Registration Statement.
The purchase price for the OSRAM Acquisition is not currently determinable. The final purchase price we pay at the OSRAM Closing will be determined by a number of factors, some of which, including the price of tungsten, will be outside of our control. The final purchase price may differ from our pre-OSRAM Closing expectations, which if the difference is significant, could materially affect our financial results.
The final purchase price we pay for the OSRAM Acquisition will not be determined until the OSRAM Closing and will be determined in accordance with a purchase price formulation detailed in the Purchase Agreement, which includes factors outside of our control. For example, part of the value that will be ascribed to the OSRAM Business at the OSRAM Closing is the current inventory of the OSRAM Business, which includes significant amounts of APT, molybdenum powder, work in process and finished goods that will be valued at prevailing market prices. The international tungsten market has seen significant volatility in recent years, with prices surging from $330 per metric ton unit on January 1, 2025, to over $3,132 per metric ton unit on July 3, 2026, an increase of over 949%. If the price of tungsten were to significantly increase, or the value of any of the factors of the purchase price formulation were to significantly change between the date hereof and the OSRAM Closing, it could result in a significant increase in the purchase price for the OSRAM Acquisition. If the purchase price for the OSRAM Acquisition were to significantly increase above our current expectations, among other things, the OSRAM Acquisition may become economically unviable, forcing us to abandon the OSRAM Acquisition and potentially pay liquidated damages to OSRAM, or, if we consummate the transaction it may take us longer than anticipated to obtain the anticipated benefits from the OSRAM Acquisition, if we are able to obtain a benefit at all. Whether the OSRAM Acquisition is consummated or abandoned, any significant increase to the purchase price for the OSRAM Acquisition could have a material adverse impact on our business, liquidity position, financial condition and results of operations. See “Part I Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments.”
While we have executed the DoW Transaction Documents with the DoW and received funding thereunder, there can be no assurances that the authorization of and continued support for the transactions contemplated by the DoW Transaction Documents will not be modified, challenged or impaired in the future, which would have a material adverse effect on our business, prospects, financial condition and results of operations.
The DoW Transaction Documents contain representations by the DoW regarding its authority to enter into the DoW Transaction Documents and the availability of funds for the Initial Closing Date. Those representations were made solely for purposes of the Investment Agreement and should not be construed as a legal opinion, a representation by any other U.S. Government entity, or an endorsement of the Company, its securities, or its projects. The parties’ respective obligations under the DoW Transaction Documents are subject to the terms of those agreements and applicable law. A dispute or legal or administrative challenge concerning the interpretation, validity, enforceability, or performance of the DoW Transaction Documents could materially adversely affect our business, prospects, financial condition and results of operations. No U.S. Government entity other than the DoW is a party to, or assumes obligations under, the DoW Transaction Documents. The DoW Transaction Documents contain affirmative covenants requiring us to take certain actions and negative covenants restricting us from taking certain actions. A failure by us to comply with those covenants could constitute an event of default under the DoW Transaction Documents. In that event, subject to the applicable terms of
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the DoW Transaction Documents, the DoW may exercise the remedies provided therein, which may include termination of one or more of the DoW Transaction Documents and redemption of the Class A Preferred Stock, any of which could materially adversely affect our business, results of operations and financial position.
The DoW Transaction Documents require us to make substantial investments in and commitments to specific aspects of our business, including, among others, the Springer Transactions. We received $200 million at the Initial Closing Date and expect to rely in part on the additional funding commitment provided for in the Investment Agreement to implement certain planned projects and its related business strategy. The Investment Agreement contemplates up to $250 million of additional preferred stock purchases during specified funding periods following the Initial Closing Date, subject to our exercise of our funding rights and the satisfaction or waiver of applicable closing conditions. Those conditions include, among other things, continuing congressional authorization or reauthorization for the contemplated investments and the availability of appropriations. If the subsequent closing does not occur when expected, including because applicable conditions are not satisfied or waived, we may need to seek alternate financing or modify the timing, scope, or sequencing of its planned projects. There can be no assurance that alternative financing would be available on acceptable terms, in a timely manner or at all. If we cannot obtain alternate financing when needed, it may be required to reduce costs, or delay, cancel, or scale back development projects. Further, historically, market prices for critical materials, such as tungsten, and their downstream products have been subject to a high degree of volatility. Because many of our products may be designed to satisfy DoW specifications and requirements, our products may not find customers in the commercial marketplace, and our profitability may be materially adversely impacted if we are unable to identify alternative sales channels, which could have a material adverse impact on our business, prospects, financial condition and results of operations.
Our operations are subject to extensive federal, state, local and other regulatory requirements. If applicable laws or regulations are interpreted or enforced in a manner adverse to us, we may be subject to enforcement actions, penalties, exclusion, and other material limitations on our operations. Our obligations under, and the performance or termination of, the DoW Transaction Documents may affect our operations and strategic plans. The DoW Transaction Documents do not assure us of access to sources of supply, the receipt of permits and approvals, or action or assistance by any government entity except as expressly provided therein. We remain responsible for obtaining all permits, approvals, supply arrangements, and authorizations required for our operations and projects. A modification, termination or failure of performance under one or more of the DoW Transaction Documents could adversely affect our business, financial condition, and results of operations, and any remedies available to us would be subject to the applicable agreements and applicable law.
In addition, our performance under the DoW Transaction Documents may subject us to additional contractual and compliance requirements that could constrain our future business or otherwise adversely affect our financial results. We may be subject to heightened scrutiny of our business activities with both government and non-government customers, government audits, investigations, congressional scrutiny, inquiries about conflicts of interest, civil or criminal enforcement by the Department of Justice (including actions under the False Claims Act), exclusion or limitation on future government-funded opportunities, suspension, debarment, and other administrative remedies. See “Part I Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Department of War Transaction.”
An event of default or Liquidation Event under the DoW Transaction Documents could require us to redeem all, or a portion of, the outstanding Class A Preferred Stock, which could have a material adverse effect on our business, liquidity, financial condition and results of operations.
Upon the occurrence of an event of default or Liquidation Event under the DoW Transaction Documents, each of the holders of Class A Preferred Stock may, in its sole discretion, require us to redeem all, or any portion, of its outstanding shares of Class A Preferred Stock in accordance with the terms of the Class A Certificate of Designations. Any such redemption obligation could require us to use a significant portion of our available cash or obtain additional financing, which may not be available on favorable terms or at all. If we fail to pay the applicable redemption price when due, such failure will constitute an event of default under the DoW Transaction Documents. The resulting reduction in our liquidity and available capital, or an event of default under the DoW Transaction Documents, could materially adversely affect our ability to fund our operations and meet our other obligations and could have a material adverse effect on our business, financial condition and results of operations. See “Part I Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Department of War Transaction.”
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The DoW Transaction Documents contain affirmative and negative covenants that may restrict our ability and the ability of our subsidiaries to take actions management believes are important to our long-term strategy, and therefore could have a material adverse effect on our business, prospects, financial condition, or results of operations.
The DoW Transaction Documents contain affirmative covenants requiring us to take certain actions and negative covenants restricting our ability to take certain actions. The affirmative covenants impose obligations on us with respect to, among other things, (i) own or hold valid licensed rights to use all intellectual property and technology material to the Projects; (ii) maintain, prosecute and defend all material registrations and applications included in the intellectual property material to the Projects, and use commercially reasonable efforts to preserve the confidentiality of all material trade secrets and know-how included in the intellectual property material to the Projects; and (iii) comply in all material respects with all applicable export control and technology-transfer laws. The negative covenants in the DoW Transaction Documents restrict us with respect to, among other things, (i) authorize, create or issue any additional equity securities, or any securities convertible into or exercisable for any equity securities, of the Company having rights, preferences or privileges senior to, or in parity with the Class A Preferred Stock; (ii) change the authorized number of directors of the Board of Directors (or the number of votes provided to each director); (iii) enter into any transactions with an affiliate of the Company pursuant to which the Company shall make any payment, sell, lease, transfer, or dispose of any of this properties or assets to, or purchase any property or assets from, or enter or amend any transaction or arrangement with, or for the benefit of, such affiliate of the Company involving aggregate value in excess of $120,000; (iv) knowingly issuing common stock to Restricted Entities (as defined in the Investor Rights Agreement) and person(s) from foreign jurisdictions other than certain permitted jurisdictions; (v) being owned or controlled by, transferring property to, or otherwise doing business with any Restricted Entity in violation of applicable law, subject to specified exceptions; and (vi) making any Restricted Payments (as defined in the Investor Rights Agreement).
Compliance with the affirmative and negative covenants contained in the DoW Transaction Documents could restrict our ability to take actions that management believes are important to our long-term strategy. If strategic transactions we wish to undertake are prohibited by the DoW Transaction Documents, our ability to execute our long-term strategy could be materially adversely affected, which could in turn have a material adverse effect on our business, prospects, financial condition, or results of operations. See “Part I Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Department of War Transaction.”
The exercise of the DoW Penny Warrant and DoW Strike Price Warrant into shares of Common Stock would dilute the ownership position of existing common stockholders, and the subsequent sale of a substantial number of such shares of Common Stock in the public market, or the perception of such sales, could cause our stock price to decline.
The shares of common stock into which the DoW Penny Warrant and DoW Strike Price Warrant are initially exercisable collectively represent 24.84% of our issued and outstanding common stock as of the Initial Closing Date, without giving effect to the issuance of such shares. The DoW Penny Warrant and DoW Strike Price Warrant are exercisable at any time and from time to time after the date that is twelve (12) months after the Initial Closing Date, and the initial exercise prices of the DoW Penny Warrant and DoW Strike Price Warrant are equal to $0.001 and $15.92, respectively. At any time after the three-year anniversary of the Initial Closing Date, if the VWAP of our common stock exceeds 400% of the exercise price of the DoW Strike Price Warrant for 20 consecutive trading days, the DoW Warrants will be subject to a mandatory exercise, on a cashless basis, provided, that, we provide 20 calendar days’ prior notice, allowing the holders of the DoW Warrants to exercise for cash. Any portion of the DoW Warrants that remains unexercised upon their expiration shall be automatically exercised by means of a “cashless” exercise as set forth in the DoW Warrants. As such, existing common stockholders may experience substantial dilution of their ownership positions.
Furthermore, the sale of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, including of the shares issuable upon exercise of the DoW Warrants, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common stock. See “Part I Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Department of War Transaction – DoW Warrants.”
The financial, tax and accounting treatment of the DoW Transactions contemplated by the DoW Transaction Documents remains uncertain and subject to change.
Given both the novelty and complexity of the DoW Transactions, our initial analysis of the financial, tax and accounting implications of its commitments and obligations under the DoW Transaction Documents has not been
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completed and may take considerable time and require significant attention from management. The accounting for the DoW Transactions is complex and involves significant judgments and estimates. Our conclusions are based on the current contractual terms and facts and may require revision if those terms are modified or relevant facts change. Additionally, no assurance can be provided that this initial assessment will not require adjustment or amendment over time due to changes in tax law or regulations, accounting practices and requirements and unforeseen developments in the course of providing services and receiving cash flows relating to the DoW Transactions. The DoW Transaction Documents are also highly integrated, and certain of the obligations under each DoW Transaction Document are contingent upon or impacted by the terms and obligations of the others. If one or more of the DoW Transaction Documents, or one or more elements of the DoW Transactions, were to be altered, amended or terminated, management would need to assess the financial, tax and accounting implications of such changes, which could be significant, together with any related remedies available to us and the present condition of our business and operations. We are unable to predict, and may not be able to anticipate, either these changes or the impact thereof. Any of the foregoing may have a material adverse effect on our business, prospects, financial condition and results of operations, including, but not limited to, material changes to our financial outlook, recharacterizations, restatements or other modifications of our financial statements or adjustments to previously provided estimates or guidance.
The Springer Transactions will require us to make substantial investments, and we may not realize the anticipated benefits from these investments.
We will be making substantial investments in connection with the Springer Transactions, specifically the JV Entity and the Blue Moon Investment. We may not realize the anticipated strategic, operational or financial benefits of these investments, and the costs required to develop and operate the JV Entity, including but not limited to, the APT Plant, may exceed our expectations. We may also encounter difficulties in managing the JV Entity, aligning the interests of the JV Entity partners, achieving anticipated synergies and efficiencies, and retaining key personnel and business relationships. If the JV Entity and its operations or the Blue Moon Investment do not perform as anticipated, or if we are unable to realize the expected benefits of such investments, our business, financial condition and results of operations could be materially and adversely affected. See “Part I Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments – Springer Project.”
We may not realize the anticipated benefits of the DLA Offtake Agreement if it is unable to satisfy contractual requirements, achieve planned production levels, or deliver tungsten ore or concentrate or sodium tungstate in accordance with applicable specifications and timelines.
Our ability to generate revenue and achieve the strategic benefits contemplated by the DLA Offtake Agreement depends on our ability to successfully develop, finance, construct, and operate our production facilities or contract for supply of tungsten ore and concentrate and sodium tungstate to meet contractual requirements, including volume commitments, delivery schedules, quality standards, and other performance obligations. Delays in project execution, permitting, financing, supply chain disruptions, technical challenges, or operational difficulties could impair our ability to fulfill our obligations under the DLA Offtake Agreement and could result in reduced purchases, contractual penalties, termination, or loss of anticipated commercial opportunities with the U.S. government or other industry participants.
The Defense Logistics Agency may modify, suspend, delay, or terminate the DLA Offtake Agreement, and government funding, policy priorities, or procurement decisions may change.
Offtake agreements with U.S. government entities may be subject to federal procurement requirements, appropriations, agency priorities, and contractual provisions that provide the government with certain rights not typically available in commercial agreements. Changes in government policy, legislation, administration priorities, funding availability, national security priorities, or procurement requirements could adversely affect the continuation, timing, scope, or economic terms of the DLA Offtake Agreement. Any reduction, delay, modification, or termination of the agreement could materially impact our expected revenues, business plans, and financial condition.
If we are deemed to be an investment company under the Investment Company Act of 1940 (the “1940 Act”), including as a result of our investments in Masan and Blue Moon, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or (2) it engages, or proposes to engage, in the
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business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% Test”). We do not believe that we are an “investment company,” as such term is defined in either of those sections of the 1940 Act. We intend to conduct our operations so that we will not be deemed an investment company. However, our investments in Masan, Blue Moon and other strategic relationships could be considered “investment securities” for purposes of the 1940 Act, and if the value of our investments in Masan, Blue Moon or others were to violate the 40% Test, we may inadvertently be deemed an investment company and be forced to divest some of our ownership of Masan, Blue Moon or other companies’ securities. If it were established that we were an unregistered investment company, we could be subject to monetary penalties and injunctive relief in an action brought by the SEC, we could be unable to enforce contracts with third parties and third parties could seek to obtain rescission of transactions undertaken during the period it was established that we were an unregistered investment company. If we were required to register as an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
a)Sales of Unregistered Securities
During the three months ended October 2, 2026, the Company did not conduct any unregistered sales of equity securities other than those previously disclosed in the Current Reports on Form 8-K.
b)Use of Proceeds
On April 24, we consummated our IPO, in which we issued and sold an aggregate of 9,857,141 shares of our common stock, par value $0.001 per share, including 1,285,714 shares of common stock pursuant to the underwriters’ exercise in full of their over-allotment option, at a public offering price of $14.00 per share. We received gross proceeds of approximately $138.0 million and net proceeds of approximately $125.4 million, after deducting underwriter discounts and commissions of $9.7 million and other offering expenses. All shares sold were registered pursuant to our IPO Registration Statement, declared effective by the SEC on April 22, 2026, and the additional Registration Statement on Form S-1 (File No. 333-2945291) (together with the IPO Registration Statement, the “Registration Statements”), filed with the SEC on April 22, 2026, which became immediately effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as amended. Cantor Fitzgerald & Co. acted as representative of the underwriters for the offering. The offering terminated after the sale of all securities registered pursuant to the Registration Statements. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities, or (iii) any of our affiliates.
Between July 3, 2026 and October 2, 2026, we used proceeds from our IPO of approximately $68.2 million for working capital, treasury management and other corporate requirements.
There has been no material change in the planned use of proceeds from the IPO as described in the IPO Registration Statement.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine and Safety Disclosure
Not applicable
Item 5. Other Information
No director or Section 16 officer adopted terminated
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Item 6. Exhibits
The following is a complete list of exhibits filed or furnished, as applicable, as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.
| Exhibit | Description | |||||||
| 2.1+# | Asset Purchase Agreement, dated September 3, 2026, by and between Elmet Technologies LLC and OSRAM GmbH (incorporated by reference to Exhibit 2.1 of the Company’s Current report on Form 8-K, filed with the SEC on September 8, 2026). | |||||||
| 3.1* | Second Amended and Restated Certificate of Incorporation of The Elmet Group Co. | |||||||
| 3.2 | Amended and Restated Bylaws of The Elmet Group Co. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on April 24, 2026). | |||||||
| 4.1 | Penny Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 4.2 | Strike Price Warrant (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 4.3 | Restricted Entity Compliance Plan (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 4.4 | Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 22, 2026). | |||||||
| 10.1+†# | Investment Agreement, dated September 11, 2026, by and between The Elmet Group Co. and the United States Department of War (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 10.2+ | Registration Rights Agreement, dated September 14, 2026, by and between The Elmet Group Co. and the United States Department of War (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 10.3+†# | Investor Rights Agreement, dated September 14, 2026, by and between The Elmet Group Co. and the United States Department of War (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 10.4† | Binding Letter Agreement, dated September 11, 2026, by and among The Elmet Group Co., Blue Moon Metals Inc., Blue Moon (Springer) Inc. and EQ Resources Limited (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 10.5+† | DLA Offtake Agreement, dated September 11, 2026, by and between The Elmet Group Co. and The Defense Logistics Agency (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 10.6 | Supplemental Market Capitalization Cash Bonus Award Agreement, dated September 9, 2026, by and between The Elmet Group Co. and Scott Knoll (incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K, filed with the SEC on September 14, 2026). | |||||||
| 10.7+ | Warrant Purchase Agreement, dated September 21, 2026, by and between The Elmet Group Co. and Blue Moon Metals Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 22, 2026). | |||||||
| 10.8+†# | Share Purchase Agreement, dated September 24, 2026, by and between The Elmet Group Co. and Masan Horizon Company Limited (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on September 24, 2026). | |||||||
| 10.9† | Shareholders’ Agreement, dated September 24, 2026, by and between The Elmet Group Co. and Masan Horizon Company Limited (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, filed with the SEC on September 24, 2026). | |||||||
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
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| 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1** | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2** | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS* | Inline XBRL Instance Document | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
| * | Filed herewith. | ||||
| ** | Furnished herewith. | ||||
| + | Certain portions of this exhibit (indicated by “[*]”) have been omitted pursuant to Item 601(a)(6) of Regulation S-K. | ||||
| † | Certain portions of this exhibit (indicated by “[**]”) have been omitted pursuant to Item 601(b)(10)(iv). The Company hereby agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon its request. | ||||
| # | Certain annexes, schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request. | ||||
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 9, 2026 | THE ELMET GROUP CO. | |||||||
| By: | /s/ Peter V. Anania | |||||||
| Peter V. Anania | ||||||||
| Chief Executive Officer and Chairman | ||||||||
| By: | /s/ Michael Lee | |||||||
| Michael Lee | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer and Principal Accounting Officer) | ||||||||
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