On February 16, 2024 (the “RMS Acquisition Date”), the Company acquired 100% of the equity interests of Rapid Machining Solutions - Wolcott Design Services (RMS) pursuant to the terms of a Securities Purchase Agreement (the “RMS Agreement”) in exchange for cash consideration (the “RMS Acquisition”). The primary purpose of the business combination was to create synergies based on RMS’s expertise in Aviation and Aerospace industry and expand the Company’s design and manufacturing capabilities.

The RMS Acquisition was accounted for as a business combination under ASC 805 using the acquisition method of accounting. The assets and liabilities acquired, affected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the RMS Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805. As of February 15, 2025, the valuation of the acquired assets and assumed liabilities has been completed.

To fund the RMS Acquisition, the Company increased its TCW Term Note by $35.0 million. The fair value of the total purchase consideration transferred was $31.3 million in cash. The RMS Acquisition does not have any contingent consideration arrangements.

The Company also incurred $1.6 million of direct acquisition-related expenses, recognized as general, and administrative expenses on the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2024.

The following table sets forth the estimated fair values of the assets acquired, and liabilities assumed in connection with the RMS Acquisition:


	Total Amount
Assets Acquired	(in thousands)
Cash and cash equivalents	$	44
Accounts receivable		2,312
Prepaid expenses		5
Inventory		828
Property plant and equipment		2,987
Customer backlogs		5,300
Customer relationships		13,000
Right of use lease assets		348
Total assets acquired	$	24,824

Accounts payable	$	857
Accrued liabilities		157
Lease liabilities, current		12
Lease liabilities, non-current		336
Total liabilities assumed	$	1,362

Goodwill	$	7,872
Fair Value of Consideration	$	31,334

The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill and is fully deductible for tax purposes. The components of goodwill do not qualify as a separately recognized intangible asset.

Below is a summary of the intangible assets acquired in the RMS Acquisition:


	Acquisition Date Fair Value		Estimated Life
Intangible Asset	(in thousands)		(in years)
Customer Backlog	$	5,300		2.5
Customer Relationships	$	13,000		16.0

The fair value for both the customer backlog and the customer relationships were determined using the multi-period excess earnings method (“MPEEM”). This method reflects the present value of the operating cash flows generated by the intangible assets after considering the cost to realize the revenue, and an appropriate discount rate to reflect the time value and risk associated with the invested capital. In total, the intangible assets acquired subject to amortization have a weighted average life of 12.1 years.

On April 2, 2025 (the “MTI Acquisition Date”), the Company, through its indirect wholly-owned subsidiary Karman Parent LLC (“Karman Parent”), acquired all the issued and outstanding membership interests and other equity interests of MTI Metal Technology Inc., pursuant to the terms of a Securities Purchase Agreement (the “MTI Agreement”) in exchange for cash consideration (the “ MTI Acquisition”). The acquisition of MTI expands the Company’s capabilities in advanced materials and is expected to strengthen its position in the strategic missile defense market through enhanced product offerings and customer relationships.

The MTI Acquisition met the requirements to be considered a business combination under ASC 805. The assets and liabilities acquired, affected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the MTI Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805.

The MTI Acquisition was funded by the Company’s new Citi credit facilities and was accounted for using the acquisition method of accounting. The fair value of the total purchase consideration transferred was $82.3 million. The MTI Acquisition does not have any contingent consideration arrangements.

The Company also incurred $1.4 million of direct acquisition-related expenses, recognized as general, and administrative expenses on the condensed consolidated statements of operations for the three and six months ended June 30, 2025.

The following table sets forth the preliminary allocation, as of June 30, 2025, of the fair value of the assets acquired and liabilities assumed in connection with the MTI Acquisition:


	Total Amount
Assets Acquired	(in thousands)
Cash and cash equivalents	$	2,230
Accounts receivable, net		2,734
Inventory		3,258
Prepaid and other current assets		173
Property, plant and equipment		10,672
Intangible assets, net		30,700
Right of use lease assets		715
Total assets acquired	$	50,482

Accounts payable		374
Accrued payroll and related expenses		10,815
Lease liabilities, current		113
Lease liabilities, non-current		602
Other current liabilities		461
Total liabilities assumed	$	12,365

Goodwill	$	44,196
Fair Value of Consideration	$	82,313

Below is a summary of the intangible assets acquired in the MTI Acquisition:


Intangible Asset	Acquisition Date Fair Value (in thousands)		Estimated Life (Years)
Customer Relationships	$	19,700		14.0
Backlog		3,600		2.7
Know-How	$	7,400		7.0
Total Intangible Assets Acquired	$	30,700

The fair value for trade name and developed technology was determined using the relief from royalty method and the fair values of customer relationships and backlog was determined using the multi-period excess earnings method. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 11.0 years.

Net revenue and net income from this acquisition has been included in the Consolidated Statements of Operations from the acquisition date through the end of the three months ended June 30, 2025, and the impact of the acquisition to the ongoing operations on the Company’s net revenue and net income was not significant. Supplemental pro forma results of operations have not been presented because they were not material to the condensed consolidated results of operations.

On May 28, 2025 (the “ISP Acquisition Date”), the Company completed its acquisition of Industrial Solid Propulsion (“ISP”) pursuant to a Securities Purchase Agreement (the “ISP Agreement”), under which the Company purchased all issued and outstanding equity interests in ISP and related real estate of ISP, for approximately $50 million in cash and 147,842 shares of common stock of the Company and a $5.0 million potential earnout (the “Earnout”), subject to satisfaction or waiver of certain customary closing adjustments. The ISP Agreement contains customary representations, warranties and covenants of the parties. The acquisition of ISP expands the Company’s capabilities in small-diameter solid propellant and energetic propulsion systems, strengthening its position in the UAS and missile defense markets through proprietary technologies and integrated manufacturing expertise.

The ISP Acquisition met the requirements to be considered a business combination under ASC 805. The assets and liabilities acquired, affected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the ISP Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805.

The ISP Acquisition was funded by increasing the Company’s term note and was accounted for using the acquisition method of accounting. The fair value of the total purchase consideration transferred was $58.6 million, of which $52.9 million represents cash consideration, $5.7 million represents the fair value of the equity consideration as of the ISP Acquisition Date. Of the $52.9 million cash consideration, $3.9 million represents the fair value of the Earnout, which was recorded in other current liabilities on the unaudited condensed balance sheets. The earnout liability was estimated using a Monte Carlo simulation under a risk-neutral framework, based on the average present value of the simulated earnout payments. The Earnout provides for a cash payment equal to $5.0 million to the seller of ISP, contingent upon the achievement of specified Adjusted EBITDA threshold for the twelve months ended December 31, 2025, as defined in the ISP Agreement. If the Adjusted EBITDA threshold is achieved, the Earnout is expected to be paid in 2026.

The Company also incurred $1.2 million of direct acquisition-related expenses, recognized as general, and administrative expenses on the condensed consolidated statements of operations for the three and six months ended June 30, 2025.

The following table sets forth the preliminary allocation, as of June 30, 2025, of the fair value of the assets acquired and liabilities assumed in connection with the ISP Acquisition:


	Total Amount
Assets Acquired	(in thousands)
Cash and cash equivalents	$	2,791
Accounts receivable, net		883
Inventory		1,202
Prepaid and other current assets		39
Property, plant and equipment		4,239
Intangible assets, net		21,400
Total assets acquired	$	30,554

Accounts payable		279
Accrued payroll and related expenses		2,122
Contract liabilities		95
Long-term notes payable, net of current portion and net of debt issuance costs		1,919
Total liabilities assumed	$	4,415

Goodwill	$	32,498
Fair Value of Consideration	$	58,637

Below is a summary of the intangible assets acquired in the ISP Acquisition:


Intangible Asset	Acquisition Date Fair Value (in thousands)		Estimated Life (Years)
Customer Relationships	$	13,500		10.0
Backlog		1,900		1.6
Know-How	$	6,000		15.0
Total Intangible Assets Acquired	$	21,400

The fair value for developed technology was determined using the relief from royalty method and the fair values of customer relationships and backlog was determined using the multi-period excess earnings method. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 10.7 years.