Karman Holdings Inc. (KRMN) Business

ITEM 1. BUSINESS

Our Company

We specialize in the upfront design, testing, manufacturing, and sale of mission-critical systems for existing and emerging, high-priority missile and defense, and space programs. Our integrated payload protection, interstage and propulsion system solutions are deployed across a wide variety of existing and emerging programs supporting important Department of War (“DoW”) and space sector initiatives. For the years ending December 31, 2025 and 2024, we estimate that no single program out of the more than 130 active programs in production and development that we support accounted for more than 12% of our revenue, on average, for those twelve month periods. Our revenue base is diversified across these active programs, supporting current production and next-generation space, missile, hypersonics, and defense applications.

We believe that our engineering expertise, vertically integrated production capabilities, and successful track record with critical subcomponent and subsystem design and manufacturing position us to successfully serve our prime contractor customers. Our customers rely on us to design and deliver integrated system at scale that must operate effectively in extreme environments while meeting stringent performance requirements. We organize our highly engineered solutions in three key families: Payload Protection and Deployment Systems, Aerodynamic Interstage Systems, and Propulsion Systems:

•
Payload Protection and Deployment Systems: full design and manufacturing of the top section of a booster, launch vehicle, payload, or missile system

•
Aerodynamic Interstage Systems: supporting metallic and composite subsystems designed to enhance aerodynamics and enable different modes of interstage separation

•
Propulsion Systems: integrated solid rocket motors and supporting subsystems, critical subsystems for liquid fueled rocket motors, launch systems, and ablative composites

We supply our solutions across three growing, core end markets: Hypersonics & Strategic Missile Defense, Tactical Missiles and Integrated Defense Systems, and Space and Launch. We serve a diverse customer base within these end-markets, where we maintain long-standing relationships and engineering partnerships. We believe that our differentiated technical design, expertise, intellectual property, high degree of vertical integration and heritage of mission success combine to represent a value proposition that would be difficult to replicate by our current and potential future competitors. By deploying our vertically integrated, concept-to-production capabilities and our highly focused acquisition strategy, we have developed a business model designed to create long-term, sustainable value for our customers, the programs we support, the warfighter and our stockholders.

Our business approach combines both strong organic growth and our proven buy, build, and integrate acquisition strategy. Karman Space and Defense began with four core acquisitions that have been fully integrated into our business to create a synergistic platform with complementary capabilities and robust intellectual property (“IP”). Our formation began with the merger of Aerospace Engineering, LLC (“AEC”) and AMRO Fabricating Corporation (“AMRO”) in October 2020, which allowed us to become one of the largest independently owned suppliers focused on manufacturing complex systems for the space and missile markets. Shortly thereafter, we acquired American Automated Engineering, Inc. (“AAE”) (December 2020), a manufacturer of high-temperature composites, and Systima Technologies (“Systima”) (September 2021), a specialist in the design and integration of energetic and mechanical systems into the structural design of mission-critical space and hypersonic systems. Since IPO, we have completed three additional, complementary acquisitions focused on further expanding our capability set and further differentiating our offering. Collectively, these acquisitions have:

•
United highly complementary capabilities that are critical to Karman’s “concept-to-production capabilities” offering to blue chip missile and space primes

•
Delivered a storied heritage of trusted, mission success encompassing more than 40 years, which we deem vital to success in our industry

•
Created a platform and strategic basis to continue to seek accretive, complementary acquisitions

Today, Karman operates approximately 808,000 square feet of design, engineering, testing and manufacturing space, supporting a unified go-to-market strategy. We continue to evaluate opportunities to support anticipated growth and add flexible and dedicated capacity to support emerging and mature production programs.

5

Our Platform

The relentless pursuit of mission success, no matter the challenge, underscores our ability to design and produce [highly?] technical, mission-critical systems for prime contractor integrators. As a purpose-built collection of time-tested, engineering focused businesses, Karman Space and Defense’s integrated platform unites over 40 years of successful experience in delivering complex, engineered solutions for customers.

Our business is guided by a key, overarching mission – to expand what’s possible in space and defense through the relentless pursuit of innovation, integration, and collaboration. Our business model is focused on providing innovative and reliable integrated system solutions, based on our concept-to-production capabilities, which include comprehensive in-house design, analysis, testing and qualification, and production services. We believe this strategy and these capabilities provide a competitive advantage that results in a market-leading position.

We are focused on delivering innovative and customized solutions for our customers, with approximately 300 multidisciplinary engineers supporting our comprehensive in-house design and manufacturing capabilities. We believe we have a unique set of capabilities, which are supported by decades of experience across advanced material design, proprietary digital models, material science and testing, and manufacturing expertise. We believe that this collection of vertically integrated capabilities delivers a strong value proposition for our customers, who seek to simplify their supply chains, increase their speed to market, and reduce costs – all while benefiting from effective, high quality, integrated system solutions. Our differentiated market offering is supported by a high percentage significant sole and single source contract positions.

Our Intellectual Property (“IP”) is developed based on our differentiated technical design expertise, which enables us to work collaboratively with customers earlier in a program’s lifecycle to develop highly integrated, mission critical solutions. Such early participation often results in Karman solutions becoming part of the future production specification. The multi-decade experience from our integrated companies indicates that once a supplier has been qualified on a particular program and is delivering on the basis of quality, it is unlikely that a customer would pursue re-qualification, given its typically lengthy and costly nature. We believe this provides us with a strong competitive advantage and allows us to benefit from the long-term nature of missile and space programs and the associated revenue and budgetary visibility. Furthermore, our key design philosophy centers around providing an optimal solution for the customer’s mission, given a specific set of performance requirements. With deep advanced materials expertise and design capabilities, Karman maintains an agnostic approach to system design and material selection, crafting solutions that best meet the customer specification. These optimal solutions often incorporate our patented materials, subcomponents, and proprietary manufacturing processes that have been developed over more than 40 years of experience.

Our revenue is diversified across end-markets, product families, programs, program lifecycles and customers, with a significant portion derived from sole or single source program positions. In 2025, our revenue was nearly split evenly across our three core end markets, with revenue from approximately 80 customers and more than 130 programs.

For the year ended December 31, 2025, we generated $471.5 million in revenue, representing 36.6% year over year growth from the year ended December 31, 2024. Additionally, we generated net income of $17.4 million and $145.3 million of non-GAAP Adjusted EBITDA in 2025, representing a 3.7% and 30.8% net income and Adjusted EBITDA margin, respectively. We believe that our double-digit revenue growth and Adjusted EBITDA margin are a testament to the fundamentals of our strong underlying end-markets and the compelling value proposition that we offer to our prime contractor customers. Given what we believe to be multiple avenues for continued organic and inorganic growth and a well-diversified business across programs, customers, markets, and product families, we believe we are well-positioned to deliver continued profitable growth. For a discussion of the use of Adjusted EBITDA and Adjusted EBITDA Margin, and a reconciliation to the most directly comparable GAAP measures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Non-GAAP Operating Measures.”

Our Industry

End Markets

We primarily compete across three core end markets: Hypersonics & Strategic Missile Defense, Tactical Missiles & Integrated Defense Systems, and Space & Launch.

Hypersonics & Strategic Missile Defense: Defined by large diameter hypersonic and intercontinental missiles and interceptors, this end-market represented 31.7% of revenue in 2025. This market continues to evolve, driven in part by the development of hypersonic missiles, capable hypersonic deterrents, strategic missiles as well as the continued production of critical legacy platforms. As near-peer nation-state threats, namely China and Russia, continue to expand their anti-ballistic missile capabilities and advance their hypersonic capabilities and platforms, funding and support for viable, domestic hypersonic programs has continued to grow to

6

combat these threats. Additionally, with the development of continued geopolitical uncertainty and a focus on global defense spending, we believe the funding to develop and produce such missiles will continue to drive this end-market into the future.

Tactical Missiles & Integrated Defense Systems: The Tactical Missiles & Integrated Defense end-market, defined by smaller diameter rocket, missile technologies, and launcher systems that support the successful deployment of missiles, represented 31.5% of our revenue in 2025. This end-market comprises applications across multiple use cases, including anti-armor, air-to-air, anti-ship, air-to-surface, surface-to-air, and naval-surface to air. Similar to our Hypersonics & Strategic Missile Defense end-market, this market has continued to benefit from a shift in defense spending posture as current conflicts demonstrate the strategic importance of these missile platforms and technologies, many of which can be deployed rapidly with high effectiveness in the modern threat environment. We expect this spending shift, along with the call for the ongoing replenishment, the need for larger strategic stockpiles by both the U.S. and its allies, and development of next-generation weapon systems, to drive strong future demand.

Space & Launch: Space and Launch represented 36.9% of our revenue in 2025. This end market encompasses the application of our key integrated solutions across Payload Protection and Deployment Systems, Aerodynamic Interstage Systems, and Propulsion Systems to a wide variety of traditional and emerging launch providers. With the expected continued emergence of new launch providers, an increased commercial launch cadence, deeper governmental focus and spend on the space sector, and the introduction of new space applications, we believe this end-market will continue to benefit from robust growth.

Competition

The competition we face in our core end markets is characterized by a large, fragmented supplier base of piece part and subsystems providers, with few integrated system providers. Given our technical design capability and requisite component and piece part expertise as an integrated solutions provider, we believe we occupy a differentiated position within our customers’ supply chain and face few direct competitors. These direct competitors offer vertically integrated, design-to-production capabilities and possess the ability to offer customers integrated system solutions. Other competitors for these integrated system solutions include our prime contractor customers’ ability and decision to insource as part of their “make vs. buy” determination.

Despite different positioning, we do compete with piece part and subsystem providers across each of our product categories at the sub-integrated system supply level. We believe these competitors are characterized by less differentiated intellectual property with a core focus on manufacturing and “build-to-print” capabilities. We compete mainly on the basis of technical differentiation and our ability to deliver highly complex solutions, suited for extreme operating environments, to customers in a timely manner. We believe our ability to offer tailored solutions that meet complex design requirements has allowed us to successfully cultivate lasting customer relationships and a reputation founded in innovation. We believe our track record and focus on customer and mission success positions us as a trusted supplier and affords us the opportunity to continue to capture market share on existing and next-generation programs.

Competitive Strengths

Mission-Critical, Concept-to-Production, Integrated Systems Provider

As a system-level provider, we offer a full suite of capabilities necessary to support the full program lifecycle, from design through production. We are equipped with upfront engineering and design, testing and qualification capabilities, and a scaled manufacturing footprint. We believe that our set of integrated capabilities provides a valuable service to the marketplace, by consolidating steps in the manufacturing lifecycle in an integrated manner to meet complex customer needs. Furthermore, we believe that our positioning and integrated business model provide our customers with a key advantage.

Our deep expertise across design, testing, and advanced materials allows for selection across a wide variety of capabilities necessary to create, test, and produce a specified design—all in one place. We believe this reduces the customer’s need to commit resources to in-house system design or supply chain management. As a result, when customers choose to outsource integrated system design and manufacturing to us as a single supplier, they generally benefit from increased speed to market and reduced costs. As the technical nature of design for next-generation weapon systems grows more complex, we believe that our integrated concept-to-production capabilities will provide increased value to our customers.

Differentiated Technical Design Focus with IP Creates High Barriers to Entry

With approximately 300 multi-discipline engineers and decades of combined experience, we believe we offer a high degree of differentiation as a result of our technical capabilities and our IP, which consists of patents, trade secrets and proprietary know-how.

7

We believe that our customers have come to expect and trust us to effectively design, test, and field mission-critical system solutions. Our technical capability is supported by our IP, which comprises three key categories: Design IP, Proprietary IP, and Process IP.

•
Our Design IP is applied in partnership with the prime contractor and end-customers to create complex system designs that typically meet stringent and custom performance specifications. Examples of our design IP include the full system design authority and components selection for integrated systems, such as shrouds or solid rocket motors. We believe that our design capabilities enable us to begin work with customers on next-generation platforms much earlier in the development cycle, providing an opportunity for increased revenue capture at each program stage, from technology maturation to production.

•
Our Proprietary IP consists of unique Karman technologies that are often deployed across our solutions. Examples of proprietary IP technologies include patented components relating to our core competencies of energetics, safe and arm, and advanced materials.

•
Our Process IP consists of engineered, and often complex, production methods that leverage our decades-long experience in manufacturing to enable the production of various advanced materials into designs that require high precision and quality. Examples of Process IP include Karman’s manufacturing methods deployed to create solid rocket motor nozzles, spun form shrouds, and solid propellant driven actuators.

In many instances, the solutions that we provide to our customers combine all three categories of IP, creating a unique offering, which we believe creates high barriers to entry for our competitors.

Strategically Aligned with Priority Production and Emerging Missile & Defense Programs, including Golden Dome

We were a supplier to over 130 funded missile and space programs in 2025, covering a multitude of high priority programs with key content provided to both production and early stage, next-generation programs. We provided content on a wide variety of high-priority missile programs across the U.S. Army, Navy, Air Force, Missile Defense Agency, and a variety of U.S. commercial space and NASA-sponsored programs. Many of the proven missile defense programs we have been supporting for years are positioned to form key elements of the Golden Dome program for defending the U.S. homeland against myriad strategic and tactical threats.

Our technical capabilities and strategic focus on early partnership for next-generation programs have also enabled us to capture multiple positions on key hypersonic development programs integral to the future defense of the U.S. and its allies. We believe our diverse and aligned programmatic exposure provides an important tailwind for the business and will continue to drive long-term growth as we continue to support important DoW initiatives.

Diversified Business Model with Balanced Revenue Mix, Offering Both Stability and Growth

Our mission-critical solutions are deployed across a diverse set of end markets, products, customers, and programs and phases of the product lifecycle within programs. This diversification reduces the reliance on any one program, end market, customer, or product offering and positions us well for future secular growth amidst a variety of potential market backdrops.

•
End-markets: Our revenue for the fiscal year ended December 31, 2025 was nearly equally distributed across our 3 core end markets with 32% from Hypersonics & Strategic Missile Defense, 36% from Tactical Missiles and Integrated Defense Systems, and 32% from Space and Launch.

•
Products: Our payload protection systems, aerodynamic and interstage separation systems and propulsion systems deliver critical capabilities to the highest priority missile, missile defense, hypersonic and space launch programs.

•
Customers: We supplied more than 80 customers in 2025, including both established and emerging enterprises.

•
Programs: Our solutions are qualified content across a diverse set of DoW missile, UAS, counter-UAS and private space programs, with over 130 programs contributing to revenue.

•
Phases of product lifecycle: We support programs in early development, testing, low rate and full rate production, increasing the probability that production revenue will increase over time as more development programs mature.

We often occupy a single or sole source position on key strategic missile and space programs. The life of these programs can often exceed 20 years with lengthy production lifecycles, providing us with a long, recurring, and visible tail of revenue.

8

Strong, Long-standing Customer Relationships in Attractive End-markets

Given the mission-critical nature of our products, we believe experience to be a pre-requisite for fostering long-standing relationships as our customers seek trusted suppliers with a heritage of technical quality and success to deliver on current and next-generation weapons systems. With an extensive track record spanning decades, we believe we have established ourselves as a trusted partner known for advanced technical design capabilities and high quality products. Through consistent delivery of on-time, manufacturable, high-quality solutions, we have fostered enduring partnerships of more than 15 years, in many cases.

We primarily serve these customers across three key end markets: Hypersonics & Strategic Missile Defense, Tactical Missiles & Integrated Defense Systems, and Space & Launch. We believe that exposure to these end markets provides an attractive market backdrop, with current tailwinds supported by:

•
Heightened global geopolitical uncertainty amidst ongoing conflicts leading to an increased focus on defense as nations seek to prioritize security and military readiness.

•
Continued emergence of near-peer threats to the U.S. and its allies, including the advancement of next-generation weapon systems technologies (e.g., hypersonic) resulting in an increased focus on developing new technologies to deter such threats.

•
Accelerating innovation in space launch capabilities and technologies to exploit space for scientific, defense and commercial benefits.

Highly Attractive Financial Profile

Our purpose-built Karman platform is powered by a single go-to-market strategy and cohesive design, engineering, and manufacturing expertise. We believe that this integrated set of capabilities enables us to deliver a value proposition to our end markets that has produced an attractive financial profile underpinned by strong revenue growth and robust Adjusted EBITDA. For the fiscal year ended December 31, 2025, we experienced 36.6% revenue growth, a 3.7% Net Income margin, and a 30.8% Adjusted EBITDA margin compared to fiscal year ended December 31, 2024. We believe that our business model with technical-led, integrated capabilities, attractive production and emerging program exposure, significant sole/single source contract exposure, and a culture focused on operational excellence will continue to provide the elements necessary to drive strong financial performance in the future. For a discussion of the use of Adjusted EBITDA, Adjusted EBITDA Margin, and a reconciliation to the most directly comparable GAAP measures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Key Financial and Non-GAAP Operating Measures.”

Mission-Focused, Experienced Leadership Team

Our mission-focused leadership team, with 20 years of average experience across Aerospace & Defense and other related industries, is driven by a commitment to excellence, unconventional thinking, and a passion to grow and shape the future of space and defense. We have invested in talent and have elevated key industry and operating partners from our four legacy businesses to Karman leadership roles to lead the next phase of growth for the combined platform. We believe our leadership team possesses the industry, leadership, operational, business development, and finance experience necessary to successfully navigate industry dynamics and drive continued, profitable growth. On March 12, 2026, we announced a transition in leadership to drive the next phase of growth, with Tony Koblinski, our Chief Executive Officer and a member of our Board retiring from his role as Chief Executive Officer and Jonathan “Jon” Rambeau assuming the role of Chief Executive Officer effective March 23, 2026.

•
Jon Rambeau, our Chief Executive Officer, has over 30 years of defense industry experience most recently serving as president of the Communications & Spectrum Dominance segment for L3Harris Technologies, where he led an extensive portfolio that included electronic warfare, advanced communications, threat sensing and targeting, and integrated vision systems.

•
Jonathan Beaudoin, our Chief Operating Officer, has over 18 years of aerospace engineering, most recently as the Regional President of the Northwest Region at Karman where he led programs and product development of Karman’s technologies across space and emerging missile platforms.

•
Stephanie Sawhill, our Chief Growth Officer, has over 20 years of aerospace industry experience and most recently served as VP of Strategy and Business Development at Systima Technologies prior to Karman’s acquisition of the company in September 2021. Sawhill is a named inventor on multiple patents and has co-authored papers in JANNAF, AIAA, IEEE, Ceramics International and other publications.

9

•
Mike Willis, our Chief Financial Officer, is a Certified Management Accountant and spent over 17 years in finance and operations management, most recently as the Director of Finance within the Forgings Division at Precision Castparts Corp where he was responsible for 14 business units across five countries.

Growth Strategy

We aim to drive value for shareholders with continued best-in-class financial performance, underlined by strong, profitable top-line growth. Our growth strategy is focused on both organic and inorganic growth initiatives, with a cohesive go-to-market strategy across each of our three core end markets:

Expand Content on Existing Programs, Leaning on Track Record of Mission Success

We are focused on providing high quality, integrated system solutions to prime contractor customers and have built decades-long partnerships with many of them. We believe that our regimented focus on customer relationship development via a differentiated technical solution and track record of mission success on existing programs creates an opportunity to drive further shipset expansion. Utilizing our internal processes and our customer relationship management (“CRM”) initiatives, we continue to develop and execute on, a targeted pipeline of potential content expansion opportunities for pre-low-rate initial production (“LRIP”) phase programs where we believe we could offer a superior solution. Additionally, we continue to educate and demonstrate the value of our full scope of solutions across payload protection and deployment, aerodynamic and interstage and propulsion systems with prime integrators on existing programs and believe that there is significant growth potential from the continued execution of these efforts.

Lead with Design Capabilities to Capture Positions on Next-Generation Programs

Our design capabilities present a unique opportunity to collaborate with our customers as they seek solutions for their emerging hypersonic and next-generation weapons platforms. Being an early partner in the design and creation of increasingly complex, next-generation systems enables revenue capture at the earliest stages of development and across the program lifecycle, from technology maturation through long-term production. Given what is typically a lengthy and costly requalification process, we believe that once a quality supplier has been included as part of the specification, it is unlikely that a prime integrator will seek an alternative solution. To drive growth, we intend to continue to execute as a trusted partner on our portfolio of existing next-generation platforms as they mature through qualification and into production. Building on current momentum, we regularly seek further opportunities on newly emerging missile and space programs, utilizing our current integrated design-to-production capabilities and industry partnerships to efficiently develop and deliver innovative solutions. Aided by long-term secular growth trends across our key end-markets and by our ability to meet the increasingly complex design challenges required of next-generation weapon systems, we believe that our strategic efforts can drive profitable growth as these programs develop, mature and enter production.

Continue to Provide Increasingly Integrated Systems

We believe that our integrated system solutions provide significant value to our prime contractor customers who seek to streamline their supply chains and increase their speed to market. In alignment with our customers’ needs, we intend to develop increasingly integrated system solutions through the development or acquisition of new, complementary capabilities to bolster the breadth and depth of our current integrated offerings. We also intend to selectively expand the application of our current offerings and capabilities to develop additional integrated vehicles and vessels such as lunar landers and other unmanned platforms. As our offerings continue to become increasingly integrated with more Karman content, we believe that we only further enhance our competitive advantage in a supply chain characterized by fragmentation. Our strategy remains focused on designing and producing the optimal, engineered system solution for our customers based on their specified performance requirements.

Seek Value-Added Acquisitions Complementary to our Existing Capability Set

We have a rigorous approach to acquisitions, as demonstrated by the successful integration of nine acquisitions since formation. In pursuing acquisitions, we target companies with:

•
Highly engineered products

•
Significant intellectual property and/or proprietary processes

•
Capabilities that enable the next or deeper integrated system solution capabilities

•
Capabilities that can be leveraged across multiple programs and end markets

10

Management’s experience in driving financial performance from our defined model, which remains focused on profitable growth and our customer’s mission success, and integration with our Karman operating systems has led to a targeted goal of meaningfully improving an acquired business’ Adjusted EBITDA over a three-year time frame, post-acquisition. We believe that the fragmented market of piece part and subsystem suppliers presents an opportunity for continued acquisitions.

Government Contracts

A material portion of our revenue is derived from direct and indirect defense contracts with the U.S. military that are subject to U.S. government contracting rules and regulations, and therefore are subject to the business risks specific to the defense industry, including the ability of the U.S. government to unilaterally: (1) suspend us from receiving new contracts; (2) terminate existing contracts at its convenience and without significant notice; (3) reduce the value of existing contracts; (4) audit our contract-related costs and fees, including allocated indirect costs; and (5) revoke required security clearances. Violations of government procurement laws could result in civil or criminal penalties.

Government Regulation

Many of the components we manufacture are required to be certified by one or more government agencies. We must also satisfy the requirements of our customers, including OEMs, and provide these customers with products and services that comply with government regulations. Since we sell defense products, we can be subject to various laws and regulations governing pricing and other factors. Contracting in the defense industry also makes us subject to rules related to bidding, billing, and accounting, as well as prohibitions related to kickbacks and false claims.

Furthermore, we are at times subject to trade laws and regulations like the Arms Export Control Act, the International Traffic in Arms Regulations, the Export Administration Regulations, and the sanctions administered by the United States Department of the Treasury’s Office of Foreign Assets Control. Additionally, we are subject to data protection laws, including but not limited to the California Consumer Privacy Act and the European Union General Data Protection Regulation.

There has been no material adverse effect to our consolidated financial statements nor competitive positions as a result of these government regulations. Our operations may in the future be subject to new and more stringent regulatory requirements.

Manufacturing and Engineering

We continually strive to optimize productivity and achieve value pricing over inflation, implementing precision engineering and manufacturing to produce parts essential for today’s aircraft systems and structures. We strive to differentiate ourselves from our competitors by manufacturing products in an accurate, reliable and repeatable manner without sacrificing attention to detail, which is evident in the durability and precision of our products. We are able to keep capital expenditure levels low, since we do not constantly require new, state-of-the-art equipment, which contributes to our lean entrepreneurial structure and helps us drive continuous improvement.

Raw Materials

We require the use of a variety of raw materials and manufactured component parts in our manufacturing processes, and we purchase these from various suppliers. The primary raw materials used to produce our products include composites (including Epoxy, BMI, and Phenolic), metals and alloys (including aluminum, copper, and various alloys of each), specialty chemicals, and energetic materials. We believe that most of our raw materials and component parts are generally available from multiple suppliers at competitive prices. The lingering supply chain disruptions stemming from the COVID-19 pandemic have disrupted the availability of raw materials to a certain extent. These disruptions in raw material supply could temporarily impair our ability to manufacture our products for our customers or require us to pay higher prices to obtain these raw materials from other sources. However, we believe that the loss of any one source, although potentially disruptive in the short- term, would not materially affect our long-term operations. We try to limit the volume of raw materials and component parts on hand, and we are highly dependent on the availability of essential materials, so continued inflationary pressures could impact material costs. Although we believe in most cases that we could identify alternative suppliers, or alternative raw materials or component parts, the lengthy and expensive OEM certification processes associated with our products could prevent efficient replacement of a supplier, raw material or component part. Additionally, an open conflict or war across any region, including, but not limited to, the conflicts in Ukraine and Israel, could affect our ability to obtain raw materials. See “Risk Factors—Risks Related to Our Operations—If critical components or raw materials used to manufacture our products or used in our development programs become scarce or unavailable, then we may incur delays in the manufacturing and delivery of our products and in completing our development programs, which could damage our business.”

11

Seasonality

We do not believe our net sales are subject to significant seasonal variation.

Intellectual Property

We rely on patents, trade secrets and proprietary knowledge and technology, both internally developed and acquired, in order to maintain a competitive advantage. The Company’s products are manufactured, marketed and sold using a portfolio of patents and other forms of intellectual property, some of which expire in the future. The Company develops and acquires new intellectual property on an ongoing basis. Based on the broad scope of the Company’s product lines, management believes that the loss or expiration of any single intellectual property right would not have a material effect on our consolidated financial statements.

As of December 31, 2025, we own 23 issued patents, which will expire between July 2027 and June 2044. We currently have 7 pending or published patent applications, for which the rights and duration are dependent on the grant of the patent by the U.S. Patent and Trademark Office or other applicable national or regional patent authority. We also have registered domain names for websites that we use in our business. We have no registrations for marks or copyrights.

Environmental Matters

Our operations and facilities are subject to an extensive regulatory framework of federal, state and local environmental laws and regulations that govern, among other things, the discharge of pollutants into the air and water, the generation, handling, storage and disposal of hazardous materials and waste, and the investigation and remediation of certain materials, substances, and waste. We are committed to monitoring our business’s environmental performance, and to the health and safety of our employees, and as such, we continually make efforts to ensure our operations are in substantial compliance with all applicable environmental laws and regulations. Environmental laws and regulations may require that the Company investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations.

Based upon consideration of currently available information, we believe liabilities for environmental matters will not have a material adverse impact on our consolidated financial statements, but we cannot assure that material environmental liabilities may not arise in the future. For further information on environmental- related risks, including climate change, see “Risk Factors.”

Human Capital Resources

As of December 31, 2025, we had approximately 1,400 full-time, part-time and temporary employees, including 300 multi-discipline engineers supporting our comprehensive in-house design and manufacturing capabilities. None of our full-time and part-time employees are represented by labor unions.

Our employees are critical to our long-term success and are essential to helping us meet our goals. Therefore, it is crucial that we continue to attract, retain and motivate exceptional and high-performing employees by providing opportunities available for all our employees to not only contribute to Karman, but also grow and develop in their careers. As we expand production capacity and support our space and defense programs, we expect to continue growing our engineering and manufacturing workforce.

We offer training and development programs encouraging advancement from within in order to support the advancement of our employees. We leverage both formal and informal programs to identify, foster, and retain top talent at both the corporate and operating unit level. We believe we offer competitive compensation programs to our employees to help attract and retain our employees.

Additionally, we maintain recruiting relationships with universities and technical institutions and support early-career hiring through internship and graduate programs.

Available Information

Our website address is https://karman-sd.com/. The contents of, or information accessible through, our website are not part of this Annual Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC. The public may read and copy the materials we file with the SEC at the SEC’s

12

Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov. The information contained in the SEC’s website is not intended to be a part of this filing.