CPI AEROSTRUCTURES INC
For the period ended Jun 30, 2025. Filed Aug 19, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 19, 2025
CVU$4.62+3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001999371-25-006227
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-19.
0001999371-25-011679
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 91 current paragraphs.
42 unchanged; 22 reworded; 25 added; 6 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Credit Agreement Waiver
Current report
Departure and Appointment of Directors or Certain Officers
Current report
Effective July 22, 2025, Pamela Levesque, was appointed by the board of directors of the Company to the positions of Interim Chief Financial Officer and Secretary. Ms. Levesque will also serve as Interim Chief Financial Officer and Secretary of each of the Company’s wholly owned subsidiaries, Welding Metallurgy, Inc. and Compac Development Corporation. Philip Passarello, who resigned as Chief Financial Officer and Secretary of the Company and its subsidiaries on July 22, 2025, will assist in the transition of Chief Financial Officer responsibilities to Ms. Levesque as Vice President of Finance. Please refer to Form 8-K filed on July 28, 2025 for additional information.
Current report
Long-Term Incentive Plan
Current report
On June 24, 2025, the shareholders of the Company approved the 2025 Plan at the Company’s 2025 annual meeting of shareholders. The plan authorizes the issuance of up to 800,000 shares of the Company’s common stock and allows for a variety of award types. The Company registered these shares on a Form S-8 registration statement filed with the SEC on July 18, 2025.
Current report
Total Revenue for the three months ended June 30, 2025 was $15,179,108 compared to $20,810,334 for the same period last year, a decrease of $5,631,226 or 27.1%, driven primarily by the unfavorable adjustment associated with the termination of our A-10 Main Landing Gear Pods program, timing of material receipts on our MS-110 and an unfavorable adjustment to our USAF T-38 Pacer Classic Structural Modification Kits program.
Current report
Revenue from military subcontracts was $23,593,083 for the six months ended June 30, 2025 compared to $31,965,642 for the six months ended June 30, 2024, a decrease of $8,372,559 or 26.2%, driven primarily by the unfavorable adjustment associated with the termination of our A-10 Main Landing Gear Pods program and timing of material receipts on our MS-110 program.
Current report
Revenue from government military contracts was $4,128,970 for the six months ended June 30, 2025 compared to $5,383,228 for the six months ended June 30, 2024, a decrease of $1,254,258 or 23.3%, driven primarily by unfavorable adjustments in our USAF T-38 Pacer Classic Structural Modification Kits program.
Current report
Revenue from commercial subcontracts was $2,857,663 for the six months ended June 30, 2025 compared to $2,542,607 for the six months ended June 30, 2024, an increase of $315,056 or 12.4%, primarily driven by an increase in our Embraer Phenom-300 and Phenom-100 Engine Inlet Assemblies programs.
Current report
Total Cost of Sales for the three months ended June 30, 2025 and 2024 was $14,515,726 and $15,694,910, respectively, a decrease of $1,1749,184or 7.5%.
Current report
Total Cost of Sales for the six months ended June 30, 2025 and 2024 was $28,266,859 and $31,222,304, respectively, a decrease of $2,955,445 or 9.5%.
Current report
Procurement for the six months ended June 30, 2025 was $17,154,890 compared to $19,483,061 for the six months ended June 30, 2024, a decrease of $2,328,171 or 11.9%, driven primarily by lower material receipts on our Collins MS-110 program, our A-10 Main Landing Gear Pods program, completion of our F-35 program, partially offset by increased material receipts on our NGJ POD program.
Current report
Labor costs for the three months ended June 30, 2025 were $1,504,475 compared to $1,800,940 for the three months ended June 30, 2024, a decrease of $296,465 or 16.5% primarily driven by the termination of our A-10 Main Landing Gear Pods program.
Current report
Labor costs for the six months ended June 30, 2025 were $3,147,061 compared to $3,598,730 for the six months ended June 30, 2024, a decrease of $451,669 or 12.6% primarily driven by the termination of our A-10 Main Landing Gear Pods program, and decreased work performed on our B-52 Radar Racks program and F-16 Rudder Island program.
Current report
Factory overhead for the three months ended June 30, 2025 was $3,952,350 compared to $3,770,396 for the three months ended June 30, 2024, an increase of $181,954 or 4.8%. Factory overhead for the six months ended June 30, 2025 was $8,070,931 compared to $8,037,491 for the six months ended June 30, 2024, an increase of $33,440 or 0.4%.
Current report
Other cost of sales for the six months ended June 30, 2025 was $(106,023) compared to $103,022 for the six months ended June 30, 2024, a decrease in cost of $209,045 or 202.9%. The decrease is primarily driven by benefits realized on programs nearing completion during the three months ended March 31, 2025 partially offset by changes in inventory loss reserve.
Current report
Gross profit and gross profit percentage (“gross margin”) for the six months ended June 30, 2025 was $2,312,857 and 7.6%, respectively, compared to $8,669,173 and 21.7%, respectively, for the six months ended June 30, 2024, a decrease of $6,356,316 or 73.3%, and 1,410 basis points for the reasons noted above.
Current report
The net adjustment of $4.0 million for the three months ended June 30,2025 is driven primarily by an unfavorable adjustment of $2.3 million associated with the termination of our A-10 program. Additional net unfavorable adjustments of $1.7 million were driven primarily by the NGJ Mid-Band Pod and the T-38 Classic Structural Modification Kits program were due to increased labor and material costs.
Current report
The net adjustment of $7.1 million for the six months ended June 30, 2025 is driven primarily by an unfavorable adjustment of $4.5 million associated with the termination of our A-10 program. Additional net unfavorable adjustments of $2.6 million were driven primarily by the NGJ Mid-Band Pod and the T-38 Classic Structural Modification Kits program were due to increased labor and material costs.
Current report
Selling, general and administrative expenses for the three months ended June 30, 2025 were $2,654,024 compared to $2,775,935 for the three months ended June 30, 2024, a decrease of $121,911 or 4.4%. The decrease was primarily the result of lower professional fees and lower accrued compensation.
Current report
Selling, general and administrative expenses for the six months ended June 30, 2025 were $5,489,801 compared to $5,489,839 for the six months ended June 30, 2024, remained consistent.
Current report
Income (loss) Before Provision for Income Taxes
Current report
(Loss) income before provision for income taxes for the six months ended June 30, 2025 was ($3,945,601) compared to $1,959,228 for the six months ended June 30, 2024.
Current report
(Benefit)/provision for income taxes for the six months ended June 30, 2025 was $(1,296,718) compared to a provision for income taxes of $381,044 for the six months ended June 30, 2024, a benefit increase of $1,677,762 or 440.3% is primarily the result of the change in income for the period.
Current report
On August 19, 2025, the Company entered into a Fifteenth Amendment to the Credit Agreement (the “Fifteenth Amendment”). The amendment revised certain covenants to reflect specified adjustments for the quarter ended March 31, 2025 and for the quarter ended June 30, 2025. These covenant-based adjustments were designed to offset the effect of the termination of the A-10 Program on the Company’s compliance with its financial covenants. As a result of the Fifteenth Amendment, in accordance with ASC-470, the Company determined that it is reasonably possible it will meet its covenants within the next twelve months. A copy of the Fifteenth Amendment is filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.
Removed paragraphs (6)
Previous report
Total Cost of Sales for the three months ended March 31, 2025 and 2024 was $13,751,133 and $15,527,394, respectively, a decrease of $1,776,261 or 11.4%.
Previous report
Labor costs for the three months ended March 31, 2025 were $1,642,586 compared to $1,797,790 for the three months ended March 31, 2024, a decrease of $155,204 or 8.6% primarily driven by decrease in work performed in Embraer Phenom-300 Engine Inlet Assemblies program.
Previous report
Factory overhead for the three months ended March 31, 2025 was $4,118,581 compared to $4,267,095 for the three months ended March 31, 2024, a decrease of $148,514 or 3.5%.
Previous report
The net adjustment of $3.1 million for the three months ended March 31, 2025 is driven primarily by a decrease of $2.1 million on the A-10 program as a result of increased labor and material costs.
Previous report
Selling, general and administrative expenses for the three months ended March 31, 2025 were $2,835,777 compared to $2,713,904 for the three months ended March 31, 2024, an increase of $121,873 or 4.5%. The increase was primarily the result of higher accounting and professional fees.
Previous report
The effective income tax rate for the three months ended March 31, 2025 and 2024 20.9% and 19.0%. The change in effective tax rate is result of the varying levels of income in each year and the relative impact of the R&D credit, state income taxes and permanent tax differences.
Reworded paragraphs (22)
Previous wording
On May 14, 2025, the Company obtained a waiver from its lenders under its existing Credit Agreement with respect to financial covenant noncompliance as of March 31, 2025. For additional information, see “Liquidity and Capital Resources — Bank Credit Facilities” below.
Current wording
On August 14, 2025, the Company obtained a waiver from its lenders under its existing Credit Agreement with respect to financial covenant and payment noncompliance. On August 19, 2025, the Company entered the Fifteenth Amendment (defined below). The amendment revised certain covenants to reflect covenant-based adjustments related to the termination of the Company’s A-10 Program. For additional information, see “Liquidity and Capital Resources — Bank Credit Facilities” below.
Previous wording
The total backlog at March 31, 2025 is primarily comprised of long-term programs with Raytheon (Next Generation Jammer-Mid Band Pods and Advanced Tactical Pods), Lockheed Martin (F-16 RI/DCC’s), L3Harris (Next Generation Jammer-Low Band Pods), Raytheon (B-52 Radar Racks), Sikorsky (UH-60 BLACKHAWK Stabilator MRO) and USAF (T-38 Classic Structural Modification Kits).
Current wording
The total backlog at June 30, 2025 is primarily comprised of long-term programs with Raytheon (NGJ Mid-Band Pods and Advanced Tactical Pods), L3Harris (NGJ Low-Band Pods), Lockheed Martin (F-16 RI/DCC’s), Raytheon (B-52 Radar Racks), Sikorsky (MH-60 Seahawk Stabilator MRO).
Previous wording
The funded backlog at March 31, 2025 is primarily from purchase orders under long-term contracts with Raytheon (NGJ – Mid Band Pods and Advanced Tactical Pods), USAF (T-38 Classic Structural Modification Kits), L3Harris (Next Generation Jammer-Low Band Pods), Sikorsky (UH-60 BLACKHAWK Gunner Windows) and Lockheed Martin (F-16 RI/DCC’s).
Current wording
The funded backlog at June 30, 2025 is primarily from purchase orders under long-term contracts with Raytheon (NGJ Mid-Band Pods and Advanced Tactical Pods), USAF (T-38 Classic Structural Modification Kits), Lockheed Martin (F-16 RI/DCC’s), and L3Harris (NGJ Low-Band Pods),
Previous wording
We make a number of significant estimates, assumptions and judgments in the preparation of our financial statements. SeeManagement’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K, for a discussion of our critical accounting estimates. There have been no significant changes to the application of our critical accounting estimates during the quarter ended March 31, 2025.
Current wording
We make a number of significant estimates, assumptions and judgments in the preparation of our financial statements. SeeManagement’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K, for a discussion of our critical accounting estimates. There have been no significant changes to the application of our critical accounting estimates during the six month period ended June 30, 2025.
Previous wording
Total Revenue for the three months ended March 31, 2025 was $15,400,608 compared to $19,081,143 for the same period last year, a decrease of $3,680,535 or 19.3%, driven primarily by unfavorable adjustments on our A-10 Main Landing Gear Pods program due to increased labor and material costs.
Current wording
Total Revenue for the six months ended June 30, 2025 was $30,579,716 compared to $39,891,477 for the same period last year, a decrease of $9,311,761 or 23.3%, driven primarily by the unfavorable adjustment associated with the termination of our A-10 Main Landing Gear Pods program, timing of material receipts on our MS-110 program and completion of the F-35 program.
Previous wording
Revenue from military subcontracts was $11,326,608 for the three months ended March 31, 2025 compared to $15,001,768 for the three months ended March 31, 20024, a decrease of $3,675,160 or 24.5%, driven primarily by unfavorable adjustments on our A-10 Main Landing Gear Pods program due to increased labor and material costs.
Current wording
Revenue from military subcontracts was $12,266,475 for the three months ended June 30, 2025 compared to $16,963,874 for the three months ended June 30, 2024, a decrease of $4,697,399 or 27,7%, driven primarily by the unfavorable adjustment associated with the termination of our A-10 Main Landing Gear Pods program and timing of material receipts on our MS-110 program.
Previous wording
Revenue from government military contracts was $2,793,612 for the three months ended March 31, 2025 compared to $2,781,881 for the three months ended March 31, 2024, a decrease of $11,731 or 0.4%, driven primarily by a decrease in our USAF T-38 Pacer Classic Structural Modification Kits program due to timing of material receipts.
Current wording
Revenue from government military contracts was $1,335,358 for the three months ended June 30, 2025 compared to $2,601,347 for the three months ended June 30, 2024, a decrease of $1,265,989 or 48.7%, driven primarily by unfavorable adjustments in our USAF T-38 Pacer Classic Structural Modification Kits program.
Previous wording
Revenue from commercial subcontracts was $1,280,388 for the three months ended March 31, 2025 compared to $1,297,494 for the three months ended March 31, 2024, a decrease of $17,106 or 1.3%, driven primarily by a decrease in our Embraer Phenom-300 Engine Inlet Assemblies program.
Current wording
Revenue from commercial subcontracts was $1,577,275 for the three months ended June 30, 2025 compared to $1,245,113 for the three months ended June 30, 2024, an increase of $332,162 or 26.7%, driven primarily by an increase in our Embraer Phenom-300 and Phenom-100 Engine Inlet Assemblies programs.
Previous wording
Procurement for the three months ended March 31, 2025 was $8,294,588 compared to $9,365,019 for the three months ended March 31, 2024, a decrease of $1,070,431 or 11.4%, driven primarily by lower material receipts for Embraer Phenom-300 Engine Inlet Assemblies program and the Collins MS-110 program.
Current wording
Procurement for the three months ended June 30, 2025 was $8,860,302 compared to $10,118,041 for the three months ended June 30, 2024, a decrease of $1,256,739 or 12.4%, driven primarily by lower material receipts on our Collins MS-110 program, Embraer Phenom-300 Engine Inlet Assemblies and A-10 Main Landing Gear Pods program, partially offset by increased material receipts for our NGJ POD program.
Previous wording
Other cost of sales relates to items that can increase or decrease cost of sales such as changes in inventory reserves, changes in loss contract provisions, absorption variances and direct charges to cost of sales. Other cost of sales for the three months ended March 31, 2025 was $(304,622) compared to a $97,490 for the three months ended March 31, 2024, a decrease of $402,112 or 412.5%. The decrease is primarily the result benefits realized on programs nearing completion and lower loss reserve requirements during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Current wording
Other cost of sales relates to items that can increase or decrease cost of sales such as changes in inventory reserves, changes in loss contract provisions, absorption variances and direct charges to cost of sales. Other cost of sales for the three months ended June 30, 2025 was $198,599 compared to a $5,533 for the three months ended June 30, 2024, an increase of $193,066 or 3,489.4%. The increase is primarily the result of increased inventory reserve requirements due to aged material.
Previous wording
Gross profit and gross profit percentage (“gross margin”) for the three months ended March 31, 2025 and March 31, 2024 was $1,649,475 and 10.7% compared to $3,553,749 and 18.6%, respectively, a decrease of $1,904,274, or 53.6%, and 790 basis points for the reasons noted above associated with the A-10 program. Excluding the A-10 impact, current year gross margin would be 21.6% compared to 18.6% in the first quarter of 2024.
Current wording
Gross profit and gross profit percentage (“gross margin”) for the three months ended June 30, 2025 and June 30, 2024 was $663,382 and 4.4% compared to $5,115,424 and 24.6% respectively, a decrease of $4,452,042, or 87.0%, and 2,020 basis points for the reasons noted above.
Previous wording
During the three months ended March 31, 2025 and 2024, circumstances required that we make changes in estimates to various contracts. Such changes in estimates resulted in changes in total gross profit as follows:
Current wording
During the three and six months ended June 30, 2025 and 2024, circumstances required that we make changes in estimates to various contracts. Such changes in estimates resulted in changes in total gross profit as follows:
Previous wording
Interest expense for the three months ended March 31, 2025 was $488,091, compared to $632,135 for the three months ended March 31, 2024, a decrease of $144,044 or 22.8%. The decrease was the result of lower year-over-year interest rates charged on our outstanding debt under the Credit Agreement, combined with a year-over-year decrease in the amount of our outstanding debt under the Credit Agreement.
Current wording
Interest expense for the three months ended June 30, 2025 was $287,546, compared to $587,971for the three months ended June 30, 2024, a decrease of $300,425 or 51.1%. The decrease was primarily the result of lower year-over-year interest rates charged on our outstanding debt under the Credit Agreement, combined with a year-over-year decrease in the amount of our outstanding debt under the Credit Agreement.
Previous wording
(Loss) income before provision for income taxes for the three months ended March 31, 2025 was $(1,672,893) compared to $207,710 for the three months ended March 31, 2024, a decrease of $1,880,603 or 905.4% for the reasons noted above.
Current wording
(Loss) income before provision for income taxes for the three months ended June 30, 2025 was ($2,272,708) compared to $1,751,518 for the three months ended June 30, 2024.
Previous wording
(Benefit) for income taxes for the three months ended March 31, 2025 was $(348,969) compared to provision for income taxes of $39,472 for the three months ended March 31, 2024, an increase of $388,441 or 984.1%.
Current wording
(Benefit)/provision for income taxes for the three months ended June 30, 2025 was $(947,749) compared to provision for income taxes of $341,572 for the three months ended June 30, 2024, a benefit increase of $1,289,321 or 377.5% is primarily related to the decrease in income.
Previous wording
The effective income tax rate for the three months ended March 31, 2025 is 20.9%. The difference between the effective income tax rate for the three months ended March 31, 2025, and the statutory income tax rate of 21% is primarily due to estimated R&D credit, state income taxes and permanent tax differences.
Current wording
The effective income tax rate for the three months ended June 30, 2025 and June 30, 2024 is 44.7% and 19.5%, respectively. The difference between the effective income tax rate for the three months ended June 30, 2025, and the statutory income tax rate of 21% is primarily due to the change in income and the relative impact of the estimated R&D credit, state income taxes and permanent tax differences.
Previous wording
The effective income tax rate for the three months ended March 31, 2024 is 19.0%. The difference between the effective income tax rate for the three months ended March 31, 2024, and the statutory income tax rate of 21% is primarily due to estimated R&D credit, state income taxes and permanent tax differences.
Current wording
The effective income tax rate for the six months ended June 30, 2025 and June 30, 2024 is 34.2% and 19.4%, respectively. The difference between the effective income tax rate for the six months ended June 30, 2025 and the statutory income tax rate of 21% for the six months ended June 30, 2024 is primarily due to the change in income and the relative impact of the estimated R&D credit, state income taxes and permanent tax differences.
Previous wording
Net (loss) income for the three months ended March 31, 2025 was $(1,323,924) or $(0.10) per basic share, compared to net income of $168,238 or $0.01 per basic share, for the same period last year. Diluted (loss) per share was $(0.10) for the three months ended March 31, 2025 calculated utilizing 12,720,148 weighted average shares outstanding. Diluted income per share was $0.01 for the three months ended March 31, 2024 calculated utilizing 12,680,584 weighted average shares outstanding. The decrease in net income was primarily driven by a decrease in gross profit.
Current wording
Net (loss) income for the three months ended June 30, 2025 was $(1,324,959) or $(0.10) per basic share, compared to net income of $1,409,946 or $0.11 per basic share, for the same period last year. Diluted (loss) per share was $(0.10) for the three months ended June 30, 2025 calculated utilizing 12,748,869 weighted average shares outstanding. Diluted income per share was $0.11 for the three months ended June 30, 2024 calculated utilizing 12,554,153 weighted average shares outstanding. The decrease in net income was primarily driven by a decrease in gross profit.
Previous wording
At March 31, 2025, we had working capital of $14,951,205 compared to $17,122,111 at December 31, 2024, a decrease of $2,170,906 or 12.7%. The decrease was driven primarily by a decrease in cash partly offset by an increase in accounts receivable.
Current wording
At June 30, 2025, we had working capital of $13,066,383 compared to $17,122,111 at December 31, 2024, a decrease of $4,055,728 or 23.7%. The decrease was driven primarily by a decrease in cash.
Previous wording
At March 31, 2025, we had cash of $1,868,580 compared to $5,490,963 at December 31, 2024, a decrease of $3,622,383 or 65.9%. This decrease was primarily the result of cash flow used in operating activities and repayment of debt.
Current wording
At June 30, 2025, we had cash of $674,481 compared to $5,490,963 at December 31, 2024, a decrease of $4,816,482 or 87.7%. This decrease was primarily the result of cash flow used in operating activities and repayment of debt.
Previous wording
The Credit Agreement, as amended, requires us to maintain the following financial covenants: (a) minimum debt service coverage ratio of no less than 1.5 to 1.0 for trailing four fiscal quarter periods; (b) maximum leverage ratio of no less than 4.0 to 1.0 for trailing four fiscal quarter periods; (c) minimum net income after taxes as of the end of each fiscal quarter being no less than $1.00; and (d) a minimum adjusted EBITDA at the end of each fiscal quarter of no less than $1.0 million. As of March 31, 2025, the Company was not in compliance with the financial covenants described in items (a), (c) and (d) above. The noncompliance constituted events of default under the Credit Agreement. On May 14, 2025, the Company obtained a written waiver from the Lenders waiving the specified covenant defaults for the fiscal quarter ended March 31, 2025. A copy of the waiver letter is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q. Although the waiver cured the defaults for the first quarter, failure to comply with the financial covenants in future periods could result in additional events of default, and unless further waivers or amendments are obtained, of which there is no assurance of obtaining such waivers in the future could permit the lenders to accelerate the Company’s outstanding obligations under the Credit Agreement and exercise other remedies available under the loan documents. The Company continues to monitor its financial performance and covenant compliance and may seek further waivers or amendments if necessary.
Current wording
The Credit Agreement, as amended, requires us to maintain the following financial covenants: (a) minimum debt service coverage ratio of no less than 1.5 to 1.0 for trailing four fiscal quarter periods; (b) maximum leverage ratio of no less than 4.0 to 1.0 for trailing four fiscal quarter periods; (c) minimum net income after taxes as of the end of each fiscal quarter being no less than $1.00; and (d) a minimum adjusted EBITDA at the end of each fiscal quarter of no less than $1.0 million (collectively, the “Financial Covenants”). As of March 31, 2025, the Company was not in compliance with the Financial Covenants described in items (a), (c) and (d) above and the Company obtained a written waiver from the Lenders waiving the specified covenant non-compliance for the fiscal quarter ended March 31, 2025. As of June 30, 2025, the Company was not in compliance with all of the Financial Covenants. In addition, the Company did not satisfy the July 1, 2025 mandatory repayment requirement under the Credit Agreement (the “July 2025 Payment Obligation”), On August 14, 2025, the Company obtained a written waiver from the Lenders pursuant to which the Lenders (i) waived the Financial Covenant non-compliance for the fiscal quarter ended June 30, 2025 and (ii) temporarily waived non-compliance with the July 2025 Payment Obligation until September 30, 2025. The waiver is limited strictly to its terms and does not constitute a waiver or modification of any other provision of the Credit Agreement. A copy of the August 14, 2025 waiver letter is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q. Although the waivers cured the defaults for the first and second quarters, failure to comply with the financial covenants in future periods or make mandatory repayments could result in additional events of default, and unless further waivers or amendments are obtained, of which there is no assurance, future non-compliance could permit the Lenders to accelerate the Company’s outstanding obligations under the Credit Agreement and exercise other remedies available under the loan documents. The Company continues to monitor its financial performance and covenant compliance and may seek further waivers or amendments if necessary.
Previous wording
As of March 31, 2025 and December 31, 2024, the Company had $16,640,000 and $17,390,000 outstanding under the Revolving Loan, respectively.
Current wording
As of June 30, 2025 and December 31, 2024, the Company had $16,140,000 and $17,390,000 outstanding under the Revolving Loan, respectively.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Interest expense for the six months ended June 30, 2025 was $775,637, compared to $1,220,106 for the six months ended June 30, 2024, a decrease of $444,469 or 36.4%. The decrease was the result of lower year-over-year interest rates charged on our outstanding debt under the Credit Agreement, combined with a year-over-year decrease in the amount of our outstanding debt under the Credit Agreement.
Current report — wording carried from elsewhere
Net (loss) income for the six months ended June 30, 2025 was $(2,648,883) or $(0.21) per basic share, compared to net income of $1,578,184 or $0.13 per basic share, for the same period last year. Diluted (loss) per share was $(0.21) for the six months ended June 30, 2025 calculated utilizing 12,728,209 weighted average shares outstanding. Diluted income per share was $0.12 for the six months ended June 30, 2024 calculated utilizing 12,656,753 weighted average shares outstanding. The decrease in net income was primarily driven by a decrease in gross profit.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(Loss) income Before Provision for Income Taxes