PARK AEROSPACE CORP

The Company's Financial Statements begin on the next page.

The Board of Directors and Shareholders of

Park Aerospace Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Park Aerospace Corp. and Subsidiaries (the “Company”) as of March 1, 2026 and March 2, 2025 and the related consolidated statements of operations, comprehensive earnings, shareholders’ equity, and cash flows for each of the years in the three-year period ended March 1, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 1, 2026 and March 2, 2025, and the results of its operations and its cash flows for each of the years in the three-year period ended March 1, 2026, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/CohnReznick LLP

We have served as the Company’s auditor since 2014.

Melville, New York

May 29, 2026

(Amounts in thousands, except share and per share amounts)

(Amounts in thousands, except per share amounts)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Amounts in thousands) ** ** ** **

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Amounts in thousands, except share and per share amounts)

(Amounts in thousands)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three years ended March 1, 2026

(Amounts in thousands, except share (unless otherwise stated), per share and option amounts)

Park Aerospace Corp. and its subsidiaries (collectively, “Park” or the “Company”) is a global advanced materials company which develops and manufactures advanced composite materials, primary and secondary structures and assemblies and low-volume tooling for the aerospace markets.

Fair value measurements are broken down into three levels based on the reliability of inputs as follows:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures.

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The fair value of the Company’s cash and cash equivalents, accounts receivable, and accounts payable approximate their carrying value due to their short-term nature. Certain assets and liabilities of the Company are required to be recorded at fair value on either a recurring or non-recurring basis. On a recurring basis, the Company records its marketable securities at fair value using Level 1 or Level 2 inputs. (See Note 2).

The Company’s non-financial assets measured at fair value on a non-recurring basis, for purposes of calculating impairment, include goodwill and any long-lived assets written down to fair value. To measure fair value of such assets, the Company uses Level 3 inputs consisting of techniques including an income approach and a market approach. The income approach is based on a discounted cash flow analysis and calculates the fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in the discounted cash flow analysis require the exercise of significant judgment, including judgment about appropriate discount rates, terminal values, growth rates and the amount and timing of expected future cash flows. There were no transfers between levels within the fair value hierarchy during the 2026, 2025 or 2024 fiscal years.

Supplemental cash flow information:

On February 9, 2023, the Company’s Board of Directors declared a special dividend of $1.00 per share payable April 6, 2023 to shareholders of record at the close of business on March 9, 2023. The total amount of this special dividend was approximately $20.5 million.

Tax benefits are recognized for an uncertain tax position when, in the Company’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more likely than not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available. Such adjustments are recognized entirely in the period in which they are identified. The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by the Company. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes its liability for unrecognized tax benefits is adequate. Interest and penalties, if any, recognized on the liability for unrecognized tax benefits are recorded as income tax expense.

The following is a summary of available-for-sale securities:

The following tables show the amortized cost basis, gross unrealized gains and losses and gross realized gains and losses on the Company’s available-for-sale securities:

The estimated fair values of such securities as of March 1, 2026, by contractual maturity, are shown below:

Other consolidated balance sheet data consisted of the following:

The income tax provision for continuing operations includes the following:

State income tax benefits from loss carryforwards to future years were recognized as deferred tax assets in the 2026, 2025 and 2024 fiscal years.

In the fourth quarter of fiscal 2025, the Company recorded a deferred tax provision for undistributed foreign earnings that were previously considered indefinitely reinvested. The Company recorded a deferred tax charge of $2,147 related to these undistributed earnings. While the Company has pursued, and continues to pursue, investment opportunities overseas for these funds, the Company no longer considers the funds to be indefinitely reinvested.

The Company’s pre-tax earnings from continuing operations in the United States and foreign locations are as follows:

A reconciliation of the U.S. federal statutory rate to the Company’s effective income tax rate is as follows:

The Company had state net operating loss carryforwards of $1,611 and $386 as of March 1, 2026 and March 2, 2025, respectively, and total net foreign operating loss carryforwards of $7,791 as of both March 1, 2026 and March 2, 2025. The Company had valuation allowances against the remaining carryforwards as of March 1, 2026 and March 2, 2025. The state net operating loss carryforwards will expire in 2026 through 2041.

The Company had Arizona tax credits of $990 in both the 2026 and 2025 fiscal years for which there were valuation allowances as of March 1, 2026 and March 2, 2025.

The deferred tax asset valuation allowance of $2,938 as of March 1, 2026 relates to the above foreign net operating losses and state tax credit carryforwards from continuing operations for which the Company does not expect to realize any tax benefit. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes.

Significant components of the Company's deferred tax assets and liabilities from continuing operations as of March 1, 2026 and March 2, 2025 were as follows:

The amount of cash taxes paid, net of refunds, by the Company during 2026 is as follows:

As of March 1, 2026 and March 2, 2025, the Company had gross unrecognized tax benefits and related interest of $39 and $71, respectively, included in other liabilities. If any portion of the unrecognized tax benefits as of March 1, 2026 were recognized, the Company’s effective tax rate would decrease. The change as of March 1, 2026 was due to a reduction in uncertain tax positions of $32 related to expiring statutes of limitations on tax positions taken in prior years regarding certain state tax related items.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits for continuing operations is as follows:

The amount of unrecognized tax benefits may increase or decrease in the future for various reasons, including adding or subtracting amounts for current year tax positions, expiration of statutes of limitations on open income tax years, changes in the Company’s judgment about the level of uncertainty, status of tax examinations, and legislative changes. Changes in prior period tax positions are the result of a re-evaluation of the probability of realizing the benefit of a particular tax position based on new information.

A list of open tax years by major jurisdiction follows:

The Company had $11 and $19 of accrued interest and penalties as of March 1, 2026 and March 2, 2025, respectively. The Company’s policy is to include applicable interest and penalties related to unrecognized tax benefits as a component of current income tax expense.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The Company completed its assessment of the OBBBA corporate tax provisions which were enacted on July 4, 2025. OBBBA contained a number of U.S. corporate tax provisions, of which the Company elected to expense U.S. incurred research or experimental expenditures immediately and full bonus depreciation for certain assets placed into service after January 19, 2025. As a result of the Company’s elections, the Company’s U.S. cash taxes decreased in 2026 with no material impact to its effective tax rate.

On August 16, 2022, the Inflation Reduction Act was signed into law. The Inflation Reduction Act includes various tax provisions, which are effective for tax years beginning on or after January 1, 2023. For tax years beginning after December 31, 2021, the Tax Cuts & Jobs Act of 2017 eliminated the option to deduct research and development expenditures as incurred and instead required taxpayers to capitalize and amortize them over five or 15 years beginning in 2022. The Company incurred research and development expenses in the U.S. in 2025 and 2024 and, as such, the research and development expense addback is in the U.S. tax return for those years. This provision was eliminated by the OBBBA and the Company has elected to expense U.S. incurred research and development expenditures immediately in 2026.

The Company has no ongoing examinations of its federal returns.

As of March 1, 2026, the Company had a 2018 Stock Option Plan (the “2018 Plan”) and no other stock-based compensation plan. The 2018 Plan was adopted by the Board of Directors of the Company on May 8, 2018 and approved by the shareholders of the Company at the Annual Meeting of Shareholders of the Company on July 24, 2018, and amended by the shareholders of the Company on July 18, 2024 and provides for the grant of options to purchase up to 1,550,000 shares of common stock of the Company. Prior to the 2018 Plan, the Company had the 2002 Stock Option Plan (the “2002 Plan”) which had been approved by the Company’s shareholders and provided for the grant of stock options to directors and key employees of the Company. All options granted under the 2018 Plan and 2002 Plan have exercise prices equal to the fair market value of the underlying Common Stock of the Company at the time of grant, which, pursuant to the terms of such Plans, is the reported closing price of the Common Stock on the New York Stock Exchange on the date preceding the date an option is granted. Options granted under the Plans become exercisable 25%one year after the date of grant, with an additional 25% exercisable each succeeding anniversary of the date of grant, and expire 10 years after the date of grant. As of March 1, 2026, options to purchase a total of 755,363 shares of Common Stock were available for grant under the 2018 Plan,738,228 shares of Common Stock of the Company were reserved for issuance upon exercise of stock options under the 2018 Plan and 2,250 shares of Common Stock of the Company were reserved for issuance upon exercise of stock options under the 2002 Plan.

The compensation expense for stock options includes an estimate for forfeitures and is recognized on a straight-line basis over the requisite service period.

The future compensation expense to be recognized in earnings before income taxes for options outstanding as of March 1, 2026 was $758, which is expected to be recognized ratably over a weighted average vesting period of 1.31 years.

The Company records its stock-based compensation at fair value. The weighted average fair value for options was estimated at the dates of grants, using the Black-Scholes option pricing model.

The following table represents the weighted average fair value and valuation assumptions used for options granted in the 2026, 2025, and 2024 fiscal years:

The risk-free interest rates are based on U.S. Treasury rates at the date of grant with maturity dates approximately equal to the estimated term of the options at the date of grant. Volatility factors are based on historical volatility of the Company’s Common Stock. The expected dividend yields are based on the regular quarterly cash dividend per share most recently declared by the Company and on the exercise price of the options granted during the 2026 fiscal year. The estimated terms of the options are based on evaluations of the historical and expected future employee exercise behavior.

During the 2026, 2025 and 2024 fiscal years, the Company recorded non-cash charges of $16,000, $36,000 and $109,000, respectively, related to the modification of previously granted employee stock options resulting from the $1.00 per share special cash dividend paid by the Company in April 2023.

Information with respect to stock option activity follows:

The aggregate intrinsic values realized (the market value of the underlying shares on the date of exercise, less the exercise price, times the number of shares acquired) from the exercise of options during the 2026, 2025, and 2024 fiscal years were $869, $491, and $11, respectively.

A summary of the status of the Company’s non-vested options as of March 1, 2026, and changes during the fiscal year then ended, is presented below:

Equity Distribution Agreement- On January 13, 2026, the Company entered into an Equity Distribution Agreement with Needham & Company, LLC (“Needham”) and Citizens JMP Securities, LLC (“Citizens”) (the “Distribution Agreement”) with respect to an at the market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.10 per share, having an aggregate offering price of up to $50,000 through Needham and Citizens as its sales agents or principals. The Company is not obligated to sell any shares under the Distribution Agreement. Subject to the terms and conditions of the Distribution Agreement, Needham and Citizens will use commercially reasonable efforts, consistent with their normal trading and sales practices and applicable laws and regulations, to sell shares of the Company’s common stock from time to time based upon instructions received from the Company, including any price, time or size limits or other customary parameters or conditions specified, subject to certain limitations. Under the Distribution Agreement, Needham and Citizens may sell shares of the Company’s common stock by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. The issuance and sale, if any, of shares of the Company’s common stock under the Distribution Agreement are made pursuant to a registration statement on Form S-3 that the Company filed with the U.S. Securities and Exchange Commission (“SEC”) on January 13, 2026 and was declared effective on January 21, 2026. The offering is described in a prospectus filed as part of the registration statement. During the fiscal year ended March 1, 2026, the Company sold 942,749 shares under the Distribution Agreement for gross proceeds of $22,822. The Company incurred expenses, including commissions, legal and accounting fees of $1,086 related to the offering. The remaining amount available to be sold under the Distribution Agreement as of March 1, 2026 was $27,178.

Treasury Stock– On May 18, 2022, the Company’s Board of Directors authorized the Company’s purchase, on the open market and in privately negotiated transactions of up to 1,500,000 shares of its Common Stock which represented 7% of the Company’s 20,458,210 total outstanding shares of its Common Stock as of May 18, 2022. This authorization supersedes any unused prior Board of Directors’ authorizations to purchase shares of the Company’s Common Stock. During the years ended March 1, 2026, March 2, 2025 and March 3, 2024, the Company repurchased 166,955,330,180 and 221,099 shares, respectively, at a total cost of $2,165, $4,252 and $2,880, respectively. As of May 18, 2026, the amount remaining under the authorization was 781,766 shares which represent approximately 4% of the Company’s 20,877,859 total outstanding shares as of May 18, 2026.

Reserved Common Shares– As of March 1, 2026,1,495,841 shares of Common Stock were reserved for issuance upon exercise of stock options.

Accumulated Other Comprehensive Earnings (Loss)– Accumulated balances related to each component of other comprehensive earnings were as follows:

Basic earnings per share are computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share are computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the potential common stock equivalents outstanding during the period. Stock options are the only Common Stock equivalents, and the number of dilutive options is computed using the treasury stock method.

The following table sets forth the calculation of basic and diluted earnings per share:

Potentially dilutive stock options, which were not included in the computation of diluted earnings per share because either the effect would have been antidilutive or the options’ exercise prices were greater than the average market price of the common stock, were 120,635,103,713, and 94,263 for the 2026, 2025 and 2024 fiscal years, respectively.

Profit Sharing Plan – The Company has a non-contributory profit sharing retirement plan covering substantially all full-time employees in the United States. The plan may be modified or terminated at any time, but in no event may any portion of the contributions revert back to the Company. The Company’s estimated contributions are accrued at the end of each fiscal year and paid to the plan in the subsequent fiscal year. The Company’s contributions to the plan were $149 and $138 for fiscal years 2025 and 2024, respectively. The contribution for fiscal year 2026 has not been paid. Contributions are discretionary and may not exceed the amount allowable as a tax deduction under the Internal Revenue Code.

Savings Plan– The Company also sponsors a 401(k) retirement savings plan but has no financial obligations to plan participants in the form of matching contributions or otherwise.

The Company has operating leases related to land, office space, warehouse space and equipment. All of the Company’s leases have been assessed to be operating leases. Renewal options are included in the lease terms to the extent the Company is reasonably certain to exercise the option. The exercise of lease renewal options is at the Company’s sole discretion. The amounts disclosed in our consolidated balance sheet as of March 1, 2026, pertaining to the right-of-use assets and lease liabilities, are measured on our current expectations of exercising our available renewal options. The incremental borrowing rate represents the Company’s ability to borrow on a collateralized basis over a term similar to the lease term. The leases typically contain renewal options for periods ranging fromone year to 10 years and require the Company to pay real estate taxes and other operating costs. The latest land lease expiration is 2068 assuming exercise of all applicable renewal options by the Company. The Company’s existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing or exercise its available renewal options.

Future minimum lease payments under non-cancellable operating leases as of March 1, 2026 are as follows:

The above payment schedule includes renewal options that the Company is reasonably likely to exercise. Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets. The Company recognizes lease expense for leases on a straight-line basis over the terms of the leases.

During the 2026, 2025 and 2024 fiscal years, the Company’s operating lease expense was $68, $71 and $62, respectively. Cash payments of $57, $55 and $53 in the 2026, 2025 and 2024 fiscal years, respectively, pertaining to operating leases, are reflected in the Consolidated Statements of Cash Flows under cash flows from operating activities.

The following table sets forth the right-of-use assets and operating lease liabilities as of March 1, 2026:

The Company’s weighted average remaining lease terms for its operating leases were 5.59 and 6.34 years as of March 1, 2026 and March 2, 2025, respectively. The Company’s weighted average borrowing rates for its operating leases were 4.98% and 4.97% as of March 1, 2026 and March 2, 2025, respectively.

Rental expenses, inclusive of real estate taxes and other costs, were $291, $321, and $464 for the 2026, 2025, and 2024 fiscal years, respectively.

On March 27, 2025, Park and ArianeGroup SAS entered into an agreement under which Park would advance funds to ArianeGroup SAS against future purchases of RAYCARB C2®B product in the total amount of €4,587 payable in three installments in 2025, 2026, and 2027. The advance would be paid as follows: €1,376 was paid in April 2025 (actual cost of $1,564), €1,835 was paid in May 2026 (actual cost of $2,156) and €1,376 to be paid in the first quarter of fiscal 2028 (approximately $1,598 based on May 18, 2026 exchange rates). These advanced funds are to be used to help fund the purchase and installation, by ArianeGroup SAS, of additional manufacturing equipment for ArianeGroup SAS’ production of RAYCARB C2®B product. Under the agreement, the Company commits to purchase RAYCARB C2®B product through December 2033 at an estimated cost of €36,000. The Company has a remaining advance of $1,630 in Other Assets on the Consolidated Balance Sheet as of March 1, 2026.

Litigation

The Company is subject to a small number of immaterial proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. A determination of the accrual required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with these matters. The Company believes that the ultimate disposition of such proceedings, lawsuits and claims will not have a material adverse effect on the liquidity, capital resources, business or consolidated results of operations or financial position of the Company.

Environmental Contingencies* *

The Company and certain of its subsidiaries have been named by the Environmental Protection Agency (the “EPA”) or a comparable state agency under the Comprehensive Environmental Response, Compensation and Liability Act (the “Superfund Act”) or similar state law as potentially responsible parties in connection with alleged releases of hazardous substances at three sites.

Under the Superfund Act and similar state laws, all parties who may have contributed any waste to a hazardous waste disposal site or contaminated area identified by the EPA or comparable state agency may be jointly and severally liable for the cost of cleanup. Generally, these sites are locations at which numerous persons disposed of hazardous waste. In the case of the Com‐pany’s subsidiaries, generally the waste was removed from their manufacturing facilities and disposed at waste sites by various companies which contracted with the subsidiaries to provide waste disposal services. Neither the Company nor any of its subsidiaries have been accused of or charged with any wrongdoing or illegal acts in connection with any such sites. The Company believes it maintains an effective and comprehensive environmental compliance program.

The insurance carriers which provided general liability insurance coverage to the Company and its subsidiaries for the years dur‐ing which the Company’s subsidiaries’ waste was disposed at these sites have in the past reimbursed the Company and its subsidiaries for 100% of their legal defense and remediation costs associated with two of these sites.

The Company doesnot record environmental liabilities and related legal expenses for which the Company believes that it and its subsidiaries have general liability insurance coverage for the years during which the Company’s subsidiaries’ waste was disposed attwo sites for which certain subsidiaries of the Company have been named as potentially responsible parties. Pursuant to such general liability insurance coverage, three insurance carriers reimburse the Company and its subsidiaries for 100% of the legal defense and remediation costs associated with the two sites.

Included in selling, general and administrative expenses are charges for actual expenditures and accruals, based on estimates, for certain environmental matters described above. The Company accrues estimated costs asso‐ciated with known environmental matters, when such costs can be reasonably estimated and when the outcome appears probable. The Company believes that the ultimate disposition of known environmental matters will not have a material adverse effect on the Company’s consolidated results of operations, cash flows or financial position.

The Company’s products are sold to customers in North America, Asia and Europe. The Company’s manufacturing facilities are located in Kansas. Sales are attributed to geographic regions based upon the region in which the materials were delivered to the customer. Sales between geographic regions were not significant.

Financial information regarding the Company’s continuing operations by geographic region is as follows:

The Company operates in a single segment. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM assesses the performance of this reportable segment and allocates resources on a consolidated basis using the entity-wide revenues and expense information reported on the Consolidated Statement of Operations. The primary measure of segment profit is consolidated net income as reported on the Consolidated Statement of Operations. In addition, segment assets reviewed by the CODM are reported on the Company’s Consolidated Balance Sheet as total assets.

Customers – Net sales to affiliate and non-affiliate subtier suppliers of GE Aerospace were 39.3%,39.8%, and 37.7% of the Company’s total worldwide sales in the 2026, 2025, and 2024 fiscal years, respectively. In addition, sales to Aerojet Rocketdyne accounted for 11.7% of the Company’s total worldwide sales in the 2026 fiscal year.

While no other customer accounted for 10% or more of the Company’s total worldwide net sales in the 2026, 2025, or 2024 fiscal years, the loss of a major customer or of a group of customers could have a material adverse effect on the Company’s business or consolidated results of operations or financial position.

Sources of Supply – The principal materials used in the manufacture of the Company’s advanced composite materials are aerospace grade reinforcements, thermoset resins and base chemicals. Although there is a limited number of qualified suppliers of these materials, the Company has nevertheless identified alter‐nate sources of supply for many of such materials. While the Company has not experienced significant problems in the delivery of these materials and considers its relationships with its suppliers to be strong, a disruption of the supply of material from a principal supplier could adversely affect the Company’s business. Furthermore, substitutes for these materials are not readily available, and an inability to obtain essential materials, if prolonged, could materially adversely affect the Company’s business.

Recently Adopted

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures. The amendments in the ASU provide changes to income tax disclosure requirements. The amendments in ASU 2023-09 were effective for public business entities for fiscal years beginning after December 15, 2024. Early adoption was permitted. The Company elected to not early adopt ASU 2023-09. The adoption of ASU 2023-09 did not have an impact on the Company’s Consolidated Financial Statements. The required disclosures have been included in Note 4.