Innovative Solutions & Support Inc 10-K/A, filed Jan 27, 2026
Innovative Solutions & Support Inc (IA)
About this 10-K/A
Innovative Solutions & Support Inc filed this 10-K/A on January 27, 2026, covering the fiscal year ended September 30, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No.1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File No.
(Exact name of registrant as specified in its charter)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: | | Trading symbol(s) | | Name of each exchange on which registered |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | | Accelerated filer ☐ |
| Smaller reporting company | |
| | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of March 31, 2025 (the last business day of the registrant’s most recently completed second quarter) was approximately $
As of January 12, 2026, there were
Documents Incorporated by Reference
See “Explanatory Note” below;
Auditor Name
EXPLANATORY NOTE
Innovative Solutions and Support, Inc. dba Innovative Aerosystems and its subsidiaries is filing this Amendment No. 1 on Form 10-K/A (this “Amendment No. 1”) to our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “Form 10-K”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 23, 2025, to provide the information required by Part III of Form 10-K. This information was previously omitted from the Form 10-K in reliance on General Instruction G(3) to Form 10-K, which permits the information in Part III to be incorporated in the Form 10-K by reference from our definitive proxy statement (such definitive proxy statement, when filed, the “Proxy Statement”) if such Proxy Statement is filed no later than 120 days after end of our fiscal year. We are filing this Amendment No. 1 to include Part III information in our Form 10-K because we do not expect to file the Proxy Statement within 120 days after the end of the fiscal year covered by the Form 10-K. This Amendment No. 1 amends and restates in their entirety Items 10, 11, 12, 13 and 14 of Part III of the Form 10-K. In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, currently dated certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed hereto as Exhibit 31.3 and Exhibit 31.4, respectively, under Item 15 of Part IV.
No other changes have been made to the Form 10-K other than those described above. This Amendment No. 1 does not reflect subsequent events occurring after the original filing date of the Form 10-K or modify or update in any way the financial statements, consents or any other items or disclosures made in the Form 10-K in any way other than as required to reflect the amendments discussed above. Accordingly, this Amendment No. 1 should be read in conjunction with the Form 10-K and the Company’s other filings with the SEC subsequent to the filing of the Form 10-K.
References in this Amendment No. 1 to “the Company,” ”IA,” “we,” “us,” or “our” refer to Innovative Solutions and Support, Inc. unless the context clearly requires otherwise.
INNOVATIVE SOLUTIONS AND SUPPORT, INC.
2025 Annual Report on Form 10-K/A
Table of Contents
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 26 | |
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Certain Relationships and Related Transactions and Director Independence | 28 | |
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K/A contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based largely on current expectations and projections about future events and trends affecting the business, are not guarantees of future performance, and involve a number of risks, uncertainties and assumptions that are difficult to predict. In this Annual Report on Form 10-K/A, the words “anticipates,” “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,” “forecasts,” “expects,” “plans,” “could,” “should,” “would,” “is likely,”“ projected,” “might,” “potential,” “preliminary,” “provisionally,” and similar expressions, as they relate to the business or to its management, are intended to identify forward looking statements, but they are not exclusive means of identifying them. Unless the context otherwise requires, all references herein to “IS&S,” the “Registrant,” the “Company,” “we,” “us” or “our” are to Innovative Solutions and Support, Inc. and its consolidated subsidiaries. ThrustSense® and COCKPIT/IP®, among others, are trademarks of the Company. All other trademarks appearing herein are held by their respective owners. Subsequent use of the Company’s trademarks in this Annual Report on Form 10-K/A may occur without the applicable superscript symbol (® or TM) in order to facilitate the readability of this Annual Report on Form 10-K/A and are not a waiver of rights that may be associated with the relevant trademarks.
The forward-looking statements in this Annual Report on Form 10-K/A are only predictions, and actual events or results may differ materially. In evaluating such statements, a number of risks, uncertainties and other factors could cause actual results, performance, financial condition, cash flows, prospects and opportunities to differ materially from those expressed in, or implied by, the forward-looking statements. These risks, uncertainties and other factors include those set forth in Item 1A (Risk Factors) of this Annual Report on Form 10-K/A and the following factors:
| ● | market acceptance of the Company’s ThrustSense® Autothrottle, Vmca Mitigation, flight panel display systems, NextGen Flight Deck and COCKPIT/IP® or other planned products or product enhancements; |
| ● | continued market acceptance of the Company’s air data systems and products; |
| ● | the competitive environment and new product offerings from competitors; |
| ● | difficulties in developing, producing or improving the Company’s planned products or product enhancements; |
| ● | the deferral or termination of programs or contracts for convenience by customers; |
| ● | the ability to service the international market; |
| ● | the availability of government funding; |
| ● | the impact of general economic trends on the Company’s business; |
| ● | disruptions in the Company’s supply chain, customer base and workforce; |
| ● | the ability to gain, drive and sustain regulatory approval, including domestic and international certifications, of products in a timely manner; |
| ● | delays in receiving components from third-party suppliers; |
| ● | the bankruptcy or insolvency of one or more key customers; |
| ● | protection of intellectual property rights, including via securing patents; |
| ● | the ability to respond to technological change; |
| ● | failure to recruit and retain key personnel; |
| ● | risks related to succession planning; |
| ● | a cybersecurity incident; |
| ● | risks related to our self-insurance program; |
| ● | potential future acquisitions and integration of prior and potential future acquisitions; |
| ● | the costs of compliance with present and future laws and regulations; |
| ● | changes in law, including changes to corporate tax laws in the United States and the availability of certain tax credits; and |
| ● | other factors disclosed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”). |
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K/A. Except as expressly required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise after the date of this report. Results of operations in any past period should not be considered indicative of the results to be expected for future periods. Fluctuations in operating results may result in fluctuations in the price of the Company’s common stock.
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The forward-looking statements in this Annual Report on Form 10-K/A are intended to be subject to the safe harbor protection provided by Sections 27A of the Securities Act, and 21E of the Exchange Act.
Investors should also be aware that while the Company, from time to time, communicates with securities analysts, it is against its policy to disclose any material non-public information or other confidential commercial information. Accordingly, shareholders should not assume that the Company agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, the Company has a policy against issuing or confirming financial projections, forecasts or opinions issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, neither such reports nor the projections, forecasts or opinion contained therein are the responsibility of the Company.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
BOARD OF DIRECTORS
As of the date of this Amendment No. 1, our directors are as follows:
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| Director |
| Current |
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Name |
| Age | Since |
| Term Expires |
| Positions with the Company | |
Shahram Askarpour |
| 68 |
| 2022 | 2026 |
| Director, President & Chief Executive Officer | |
Glen R. Bressner |
| 65 |
| 1999 |
| 2026 |
| Director, Chairman of the Board |
Roger A. Carolin |
| 70 |
| 2016 |
| 2026 |
| Director |
Stephen L. Belland |
| 68 |
| 2022 |
| 2026 |
| Director |
Garry Dean |
| 69 |
| 2024 |
| 2026 |
| Director |
Denise L. Devine | | 70 | | 2025 | | 2026 | | Director |
Richard Silfen |
| 62 |
| 2025 |
| 2026 |
| Director |
Directors
Shahram Askarpour. Dr. Askarpour joined the Company as Vice President of Engineering in 2003, was promoted to President in March 2012, and was appointed as the Company’s Chief Executive Officer and joined the Company’s Board in January 2022. Dr. Askarpour has more than 40 years of aerospace industry experience in managerial and technical positions. Prior to joining the Company, he was employed by Smiths Aerospace (a division of Smiths Group plc), Instrumentation Technology, and Marconi Avionics. He holds a number of key patents in the aviation field. Dr. Askarpour received his engineering education in the United Kingdom and received an undergraduate degree in Electrical Engineering from Middlesex University, a post graduate Certificate of Advanced Study in Systems Engineering, and a PhD in Automatic Control from Brunel University London. He was awarded the title of Associate Research Fellow for three consecutive years by Brunel University and has published numerous papers in leading international, peer reviewed journals. In addition, he has completed management courses at Carnegie Mellon University and finance courses at the Wharton School of the University of Pennsylvania.
Glen R. Bressner. Mr. Bressner is the co-founder and Managing Partner of Activate Venture Partners, an early-stage focused venture capital firm that has evolved from a series of affiliated venture funds that he is a co-founder of, beginning in 1985. Mr. Bressner has been a board director of numerous companies, including IQE plc (LSE: IQEP), where he was a member of its Audit Committee, and Tabula Rasa Healthcare (NASDAQ: TRHC), where he chaired its Nomination Committee. He was also a shareholder and a director on the board of Alum-a-Lift, Inc., a family-owned manufacturer of precision material handling solutions, which was acquired in 2024 by an affiliate of Sweden-based Investor AB. From 1996 to 1997, Mr. Bressner served as the chairman of the Board of the Greater Philadelphia Venture Group. Mr. Bressner holds a Bachelor of Science, cum laude, in Business Administration from Boston University and a Masters of Business Administration degree from Babson College. Mr. Bressner’s background and expertise satisfies Nasdaq’s definition of financial sophistication and he is deemed qualified as an “audit committee financial expert,” as defined under rules and regulations of the SEC.
Roger A. Carolin. Mr. Carolin is currently an independent business consultant and an active corporate board member. From 2004 to 2025, he served as a Venture Partner at SCP Partners where he worked to identify attractive investment opportunities and assist portfolio companies in the areas of strategy development, operating management, and intellectual property. Mr. Carolin co-founded CFM Technologies, Inc., a global manufacturer of semiconductor process equipment, and served as its Chief Executive Officer for 10 years, until the company was acquired. Mr. Carolin formerly worked for Honeywell, Inc. and General Electric Co., where he developed test equipment and advanced computer systems for on-board missile applications. Mr. Carolin is also a director of Amkor Technology, Inc. (NASDAQ: AMKR), a supplier of outsourced semiconductor assembly and test services, where he chaired the audit committee for several years and has also served on the compensation and nominating and governance committees. Mr. Carolin holds a B.S. in Electrical Engineering from Duke University and an M.B.A. from the Harvard Business School. Mr. Carolin’s background and
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expertise satisfies Nasdaq’s definition of financial sophistication and he is deemed qualified as an “audit committee financial expert,” as defined under rules and regulations of the SEC.
Stephen L. Belland. Mr. Belland is the Co-Founder and Chief Executive Officer at Integrated Connection, LLC and a Principal at Clear Rock Advisors. Prior to Clear Rock Advisors, he held various executive positions at Rockwell Collins including Technical Director, Vice President of Program and Product Management, Vice President of Strategy and Marketing and Vice President of Corporate Development. Mr. Belland received his B.S. in Electrical Engineering from Michigan Technological University and has attended executive programs at the Kellogg School of Management, the Wharton School of the University of Pennsylvania, and INSEAD.
Garry Dean. Major General Dean has served as the President of Peduzzi Associates, Ltd., a consulting firm, since 2020. From 2015 to 2020, Maj. General Dean served Delta Airlines as international captain piloting Boeing 757/767 aircraft. Prior to 2015, General Dean served in the United States Air Force and the Oregon Air National Guard, where he served in command positions of increasing responsibility. From 2021 to 2024, he served Arlington County Virgina in the role as a Commissioner and Vice-Chair of the Community Oversight Board of the Police. In 2023, General Dean was appointed by Governor Glenn Youngkin to serve on the Virginia Joint Leadership Council of Veteran’s Service Organizations to work close with the Virginia legislature to propose legislation to assist military veterans and their families who reside in Virginia. Since 2016, Maj. General Dean also served as a mentor and advisor to the Chief National Guard Bureau and the Director of the Air National Guard on critical issues they face. Maj. General Dean is a graduate of the United States Air Force Academy.
Denise L. Devine. Ms. Devine is the Founder and Chief Executive Office of FNB Holdings, LLC and Co-founder and Chief Financial Officer of RTM Vital Signs, LLC, a medical device and digital health company. Previously she was founder and served for more than ten years as Chief Executive Officer of Nutripharm, Inc., served as Chief Financial Officer of Energy Solutions International and in financial management positions for Campbell Soup Company. Ms. Devine is also a named inventor on more than 30 patents. Ms. Devine currently serves on the Board of Fulton Financial Corporation (NASDAQ:FULT) , SelectQuote (NYSE:SLQT) and AUS, Inc. Ms. Devine, a certified public accountant, served as Chair of the Pennsylvania State Board of Accountancy and on the Board of the American Institute of CPAs and as Co-Chair of the Board of Ben Franklin Technology Partners. Ms. Devine has received numerous honors and awards, including the “Best 50 Business Women in Pennsylvania” Governor’s Award, and The Gold Medal Alumnae Award from Villanova University . She received an MBA from the Wharton School of the University of Pennsylvania where she served as an Entrepreneur in Residence, an M.S. in Taxation from Villanova Law School and a B.S. in Accounting from Villanova University.
Richard Silfen. Mr. Silfen has served as general counsel of Hildred Capital Management LLC, a New York City-based, healthcare-focused private equity firm that specializes in operationally intensive, control-oriented transactions in lower middle-market companies since June 2025. Before joining Hildred, Mr. Silfen was a partner and Co-Chair of Mergers & Acquisitions of Duane Morris LLP, a multinational law firm with more than 900 lawyers based in Philadelphia, from June 2015 to June 2025. In that role, Mr. Silfen led numerous acquisitions, divestitures, business combinations and control transactions, as well as capital formation transactions, principally for private equity-backed and publicly traded companies. Mr. Silfen is a graduate of the University of Alabama School of Law and a graduate of Baylor University with a B.A. in Physics.
Director Qualifications
The Board believes that each of the directors listed above have the sound character, integrity, judgment, and record of achievement necessary to be a member of the Board. In addition, each of the directors have exhibited, during their prior service as directors, the ability to operate cohesively with the other members of the Board, and to challenge and question management in a constructive way. Moreover, the Board believes that each director brings a strong and unique background and skillset to the Board, giving the Board, as a whole, competence and experience in diverse areas, including corporate governance and board service, finance, management, and aviation. Set forth below are certain specific experiences, qualifications, and skills that led to the Board’s conclusion that each of the directors listed above are qualified to serve as directors.
Dr. Askarpour, as Chief Executive Officer of the Company and a longstanding member of the Company’s management team, provides the Board with a comprehensive knowledge of the Company, its history, and its businesses. In addition, Dr. Askarpour brings the Board his insight into the aerospace industry from over 40 years of experience in managerial and technical positions at aviation companies, including Smiths Aerospace (a division of Smiths Group plc), Instrumentation Technology, and Marconi Avionics.
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Mr. Bressner brings the Board a wealth of experience managing financial investments from his service at venture capital firms. Mr. Bressner provides the Board with a thorough understanding of capital markets and other financial issues. Mr. Bressner’s experience in managing investments also provides him with extensive finance and accounting knowledge, and he applies this expertise in his service on the Nominating & Corporate Governance Committee of the Board (the “Nominating and Governance Committee”) (as Chairman) and the Audit Committee. Mr. Bressner is also an audit committee financial expert, as defined by SEC rules and regulations. His service as a member of the board of directors of numerous other entities, including public entities, provides him with valuable experience in corporate governance matters.
Mr. Carolin has over a decade of experience in private equity investing, previously worked in advanced computer systems and on-board missile applications, and has a significant understanding of the Company’s industry and its business. He possesses specific knowledge and experience in technology, new business opportunities, operations, management, and finance, all of which are relevant and important to the Company’s business, and he capitalizes on these strengths in his service on the Audit Committee of the Board (the “Audit Committee”) (as Chairman), the Investment Committee of the Board (the “Investment Committee”) (as Chairman), and the Compensation Committee of the Board (the “Compensation Committee”). His prior and current service as a member of the board of directors of numerous other entities, including public entities, provides him with valuable experience in corporate governance matters.
Mr. Belland has over 37 years of experience in the Aerospace and Defense Industry. Mr. Belland provides the board with familiarity with IA product lines and operations. He has also developed numerous successful plans for market strategy, product development, brand management, business optimization, acquisition strategy, as well as team building strategy. Some key successes included developing and capturing over 15 new aircraft cockpit positions, as well as positioning his corporation for becoming a leader in business jet cabin electronics. In addition, Mr. Belland has advised on over 500 M&A transactions and joint ventures, including being published in Corporate Executive Board materials. Mr. Belland applies his experience and expertise to IA in his service on the Compensation Committee (as Chairman), the Investment Committee, and the Audit Committee. Mr. Belland is also a private pilot and a member of various industry organizations, such as the National Business Aviation Association.
Maj. General Dean has experience in business development and with respect to governmental relations for companies that provided defense services or products that contract with the U.S. government. His extensive background and expertise in military aviation aids the Company’s presence in the retrofit market. He applies his expertise to IA in his service on the Nominating and Governance Committee.
Ms. Devine has extensive governance experience, including activist investor situations, private equity investors and initial public offerings. She currently serves as an independent Board Director and Chair-Audit Committee, member of the Risk Committee and former Chair–HR and Compensation Committee of Fulton Financial Corporation, (Nasdaq – FULT), Board Director and Chair–Compensation Committee, and member of the Audit and Nominating and Governance Committees at SelectQuote, Inc. (NYSE-SLQT). Additionally, she is Co-Chair of the Board of Ben Franklin Technology Partners and serves on the Pennsylvania Ben Franklin Development Authority Board and is a member of the Investment Committee. Previously, Ms. Devine was an independent director of AgroFresh Solutions, Inc. (NASDAQ –AGFS; Company sold in March, 2023) where she served as Chair–Compensation Committee and Audit Committee Member and of Cubic Corporation (NYSE – CUB; Company sold in May 2021), where she served on the Technology Strategy and Audit Committees and also formerly served on the Villanova University Board of Trustees and on the Board of Directors of Lourdes Health System (now Virtua Health).
Mr. Silfen is an accomplished board member and legal advisor with a long track record of advising companies and their boards, as well as fund sponsors and their portfolio companies, in capital markets and other capital-raising transactions, mergers and acquisitions and control transactions. In addition to serving as an advisor to public company boards, Mr. Silfen has experience as a director of a NYSE-listed company where he chaired the nominating and governance committee, served on the audit committee, and chaired a transaction committee established in connection with the sale of the company. Mr. Silfen also has considerable experience assisting emerging and private equity-backed companies to develop plans for the growth and development of their businesses and technologies, including collaborative and strategic partnerships and joint venture arrangements.
EXECUTIVE OFFICERS
Certain other information relating to the Executive Officers of the Company appears in Item 4A to Part I of the Form 10-K under the heading “Executive Officers of the Registrant” and is incorporated herein by reference.
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Set forth below is a table identifying the Company’s current executive officers who are not identified in the tables above. Biographical information for Dr. Askarpour is set forth above.
Name |
| Age |
| Position with the Company |
Shahram Askarpour | 68 |
| Director, President and Chief Executive Officer | |
Jeffrey DiGiovanni | 49 |
| Chief Financial Officer | |
Mr. DiGiovanni has served as our Chief Financial Officer since April 2024. From June 2023 through March 2024, Mr. DiGiovanni worked in a consulting capacity, advising various clients on accounting and financial reporting matters. Mr. DiGiovanni previously served as Senior Vice President and Chief Financial Officer of StoneMor Inc. (formerly NYSE: STON), a provider of funeral and cemetery products and services in the death care industry, from September 2019 to May 2023, and prior to that, he served as StoneMor Inc.’s Chief Accounting Officer from September 2018 to September 2019. From January 2012 until September 2018, Mr. DiGiovanni was Managing Director at Pine Hill Group, a leading accounting and transaction advisory firm, where he worked with clients to deliver services, including readiness for initial public offerings, financial reporting, including reporting to the Securities and Exchange Commission, and technical accounting assistance on complex transactions. Mr. DiGiovanni is a Certified Public Accountant and holds a B.S. in Accounting and an M.S. in Financial Services from Saint Joseph’s University.
RELATIONSHIPS AND ARRANGEMENTS
There is no family relationship between any of Company’s directors or executive officers and, to the best of our knowledge,
CORPORATE GOVERNANCE
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our ordinary shares and other equity securities. Specific due dates for these reports have been established, and the Company is required to report any failure to comply therewith during the fiscal year ended September 30, 2025. To our knowledge, based solely on a review of the reports filed electronically with the SEC during the Company’s most recent fiscal year and, where applicable, written representations that no other reports were required, we believe that all Section 16(a) filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were complied with in a timely manner during fiscal year ended September 30, 2025, except that each of Jeff DiGiovanni and Shahram Askarpour filed one late Form 4 and one greater than 10% beneficial owner filed a single late Form 4.
Code of Ethics
The Company maintains a Code of Business Conduct and Ethics (the “Code of Ethics”) applicable to its directors, its principal executive officer and principal financial and accounting officer, and persons performing similar functions. In addition, the Code of Ethics applies to all of the Company’s employees, officers, agents, and representatives. The Code of Ethics is posted on the Company’s website, www.innovative-ss.com, under the heading “Investor Relations.” If the Company amends or grants a waiver of one or more of the provisions of our Code of Ethics, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our Code of Ethics that apply to our principal executive officer, principal financial officer and principal accounting officer (or persons performing similar functions) by posting the required information on the Company’s website at www.innovative-ss.com. The information found on the website is not part of this Form 10-K.
Director Nominations
No material changes have been made to the procedures by which stockholders may recommend nominees to our Board of Directors.
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Audit Committee
The members of the Audit Committee are currently Mr. Carolin (Chairman), Mr. Bressner, and Ms. Devine. The Audit Committee is composed solely of independent members, as independence for audit committee members is defined by the applicable Nasdaq listing standards. In addition, the Company is required to certify to Nasdaq that the Audit Committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. The Board has determined, in its business judgment, that each member of the Audit Committee is financially literate, and that Mr. Bressner, Mr. Carolin and Ms. Devine satisfy Nasdaq’s definition of financial sophistication and each also qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.
Stock Ownership Policy
The Company has adopted a Stock Ownership and Retention Policy that applies to its non-employee directors. Each non-employee director is required to own shares of common stock with an aggregate value equal to three times such director’s annual cash base retainer (exclusive of retainers for committee service or leadership roles). Compliance with the minimum share ownership requirement is determined annually as of December 31 each year and commenced December 31, 2023. Individuals who have not yet attained the minimum share ownership requirement must retain 50% of his or her shares acquired upon the (i) vesting of restricted stock or restricted stock units, and (ii) if applicable, the exercise of options, reduced by shares retained or tendered to cover taxes or the exercise price of options. The Company determined that all non-employee directors were in compliance with the policy as of December 31, 2025.
Insider Trading Policy
We have a disclosure and insider trading policy (the “Insider Trading Policy”) which governs the purchase, sale and/or other dispositions of our securities by our directors, executive officers and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us. A copy of our Insider Trading Policy is attached as Exhibit 19.1 to this Annual Report on Form 10-K.
Anti-Hedging and Anti-Pledging Policies
The Company maintains an Insider Trading Policy which prohibits Company employees, directors and related parties from engaging in hedging transactions absent prior approval from the Chief Compliance Officer. The Insider Trading Policy also prohibits Company employees, directors and related parties from purchasing Company securities on margin, holding Company securities in a margin account or pledging Company securities.
Item 11. Executive Compensation.
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides an overview of the Company’s executive compensation program and a description of the material factors underlying the decisions that resulted in the compensation provided to the Company’s Director, President and Chief Executive Officer, Chief Financial Officers and Interim Chief Financial Officer for the fiscal year ended
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September 30, 2025 (referred to herein as our “named executive officers”). The names of the Company’s 2025 named executive officers, together with their titles during the 2025 fiscal year, are:
| · | Shahram Askarpour—Director, President and Chief Executive Officer |
| · | Jeffrey DiGiovanni—Chief Financial Officer (1) |
| 1) | Jeffrey DiGiovanni began his tenure as Chief Financial Officer effective April 8, 2024. |
Objective of the Company’s Executive Compensation Program
The objective of the Company’s executive compensation program is to attract and retain exceptional individuals as executive officers and to provide key executives with motivation to perform to the full extent of their abilities to maximize the performance of the Company and deliver increasing value to the Company’s shareholders.
What the Company’s Executive Compensation Program is Designed to Reward
Overall, the Company’s executive compensation program is designed to reward the contributions of each individual executive officer, to ensure that each executive officer’s interest is aligned with those of the Company’s shareholders, and to provide sufficient incentives to executive officers to ensure their dedication to the Company. As discussed further below, the Company seeks to achieve these goals by providing sufficient base salaries to compensate executives for the day-to-day performance of their duties and awarding cash bonuses when the executive attains the annual personal or corporate goals and objectives established by the Company. Also, from time to time, the Company grants equity-based awards when it believes that such equity awards will further align the interests of executive officers with those of the Company’s shareholders and provide an additional incentive to executive officers to contribute to the achievement of the Company’s financial and strategic objectives. Granting equity compensation to the Company’s executive officers are made at the discretion of the Compensation Committee and are not timed or coordinated with the release of material, non-public information nor is the granting of such awards timed in a manner that would enhance the value of such awards.
GENERAL EXECUTIVE COMPENSATION POLICIES
Process for Setting Total Compensation
Generally, upon hiring or promoting a named executive officer, the Compensation Committee sets the executive’s initial level of base salary and other compensation on the basis of subjective factors, including experience, individual achievements, and level of responsibility assumed at the Company, and may consider market compensation practices from time to time. Actual base salaries, cash bonuses, and equity-based awards for each named executive officer may be adjusted from year to year based upon each named executive officer’s annual review and level of attainment of personal and corporate goals and objectives, including Company financial performance, shareholder return, and such other factors as the Compensation Committee deems appropriate and in the best interests of the Company’s shareholders.
Each named executive officer’s annual review is a subjective process whereby the Chief Executive Officer or the Compensation Committee (as applicable, as described below) evaluates various factors relevant to the named executive officer’s contributions to the Company, such as the executive’s role in the development and execution of strategic plans, leadership skills, motivation, and involvement in industry groups. The weight given to such factors may vary from one named executive officer to another and from year to year.
The Compensation Committee seeks recommendations from the Chief Executive Officer regarding changes to the overall compensation level or any particular element of compensation for the other named executive officers. In addition, the Chief Executive Officer is principally responsible for reviewing each other named executive officer’s performance, and for making recommendations for the Company’s compensation plan for such executive officer for the following fiscal year. The Compensation Committee reviews the recommendations of the Chief Executive Officer in light of his proximity to the other executives and his knowledge of their contributions to the Company. The Compensation Committee independently reviews the performance of the Company’s Chief Executive Officer.
In fiscal years 2023, 2024 and 2025, the Compensation Committee engaged FW Cook to advise the Compensation Committee with respect to best practices, competitive market data based on comparison companies and trends in the area of executive compensation, as well as ongoing regulatory considerations. The Compensation Committee has determined that FW Cook, which does not perform
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any work for the Company other than its services for the Compensation Committee, is independent and that its services do not raise any conflict of interest with the Company or any of the Company’s executive officers or directors.
Consideration of Shareholder Advisory Vote on Executive Compensation
Based upon the vote of the Company’s shareholders at the fiscal 2025 annual meeting of shareholders, the Company currently provides its shareholders with the opportunity to cast an advisory vote on executive compensation (a “say-on-pay proposal”) once every three (3) years. At the Company’s annual meeting of shareholders held in fiscal 2023, over 98% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the proposal. The Compensation Committee believes that this voting result affirms shareholders’ strong support of the Company’s approach to executive compensation The Compensation Committee will consider the outcome of the fiscal 2023 say-on-pay vote when making future compensation decisions for the named executive officers. The next time the Company is scheduled to hold a say-on-pay vote is at the Company’s annual meeting of shareholders to be held in fiscal 2026.
Elements of Compensation
The Company’s executive compensation program consists of the following elements of compensation, each described in greater depth below:
| · | Base Salary |
| · | Annual Bonus |
| · | Equity-Based Compensation; and |
| · | General Benefits. |
In determining the different elements of compensation to provide to the named executive officers, the Compensation Committee does not adhere to a specific allocation between short-term and long-term compensation, or between cash and non-cash compensation. Instead, the Compensation Committee determines the elements of compensation in a manner designed to reward strong financial performance, provide overall compensation opportunities that are sufficient to attract and retain highly skilled named executive officers, and ensure that named executive officers’ interests are aligned with those of the Company’s shareholders. This may result in the named executive officers receiving all cash compensation in some years (through base salary and annual bonuses) and a combination of cash and equity-based compensation in other years (through base salary, annual bonuses and equity awards).
Base Salary
The Company pays base salaries to named executive officers because the Company believes that base salaries are essential to recruiting and retaining qualified executives. In addition, base salaries create an incentive for named executive officers to make meaningful contributions to the Company’s success because they are subject to increase based on the executive’s performance. The Compensation Committee sets the initial base salary level upon the hire or promotion of a named executive officer. Base salary levels are determined initially based on the named executive officer’s previous experience and employment, and the named executive officer’s expected duties and responsibilities with respect to the Company and considering market data provided by the Company's independent compensation consultant. Thereafter, the Compensation Committee may increase a named executive officer’s base salary each year based on the results of the named executive officer’s annual review (which is conducted by the Chief Executive Officer for each of the other named executive officers and by the Compensation Committee for the Chief Executive Officer), and based on the Compensation Committee’s subjective assessment of the Company’s overall performance during the preceding year.
Annual Bonus
The Compensation Committee retains discretion to grant bonus compensation to the named executive officers and other employees of the Company. From time to time, the Company may award discretionary annual bonuses to the named executive officers and may agree, in hiring or promoting a named executive officer, to a target bonus opportunity, expressed as a percentage of base salary, in any case, to be paid only if the Company determines that the Company has attained its financial performance goals or other objectives.
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The named executive officers’ fiscal 2025 target annual bonus opportunities were as follows:
| | | | | |
Named Executive Officer |
| Annual Bonus Opportunity as a | |
| |
Shahram Askarpour |
|
| 100 | | % |
Jeffrey DiGiovanni |
|
| 50 | | % |
66% of the potential annual incentive opportunity was based on the achievement of financial performance targets and the remaining portion of the annual incentive was based on a qualitative assessment of performance. In fiscal 2025, the Company chose Revenue and Operating Income as its financial performance metrics. In the case of Dr. Askarpour, the qualitative assessment took into account organic growth, progress on mergers and acquisitions, progress on autonomous flight initiatives, increased strategic partnerships and investor relations activities. In the case of Mr. DiGiovanni, the qualitative assessment considered investor relations activities, quality of financial accounting, mergers and acquisitions support, and progress toward additional financing.
Performance Measures | | Target 100% | Maximum 150% | Weight % | |||
Revenue ($) | | $ 49,100,000 | $ 57,283,000 | 33.3% | |||
Operating Income ($) | $ 11,266,000 | $ 13,143,000 | 33.3% | ||||
Qualitative | | — | — | 33.3% | |||
In fiscal 2025, the Company achieved $ 53,897,000 in adjusted revenue and $14,866,492 in adjusted operating income, and the Compensation Committee determined that each of Dr. Askarpour and Mr. DiGiovanni achieved their qualitative goals at 150%.
As a result, the Compensation Committee approved annual incentive bonuses of $750,000 and $250,250 for Dr. Askarpour and Mr. DiGiovanni, respectively. The fiscal 2025 annual cash incentives were paid to Dr. Askarpour and Mr. DiGiovanni on December 19, 2025. The payments are listed as fiscal 2025 compensation in the Summary Compensation Table in the column labeled “Non-Equity Incentive Plan Compensation.”
In fiscal 2024, the Company achieved $ 47,198,020 in revenue and $ 11,446,807 in adjusted operating income, and the Compensation Committee determined that each of Dr. Askarpour and Mr. DiGiovanni achieved their qualitative goals at 100%.
As a result, the Compensation Committee approved annual incentive bonuses of $500,000 and $225,000 for Dr. Askarpour and Mr. DiGiovanni, respectively. Interim Chief Financial Officer, Relland Winand received a discretionary bonus of $125,000. Former Chief Financial Officer, Micheal Linacre’s October 8, 2023 resignation resulted in the forfeiture of his fiscal year 2024 bonus.
The fiscal 2024 annual cash incentives were paid to Dr. Askarpour on December 20, 2024 and to Mr. DiGiovanni on December 17, 2024, respectively. Relland Winand’s discretionary fiscal 2024 bonus was paid on April 5, 2024. The payments are listed as fiscal 2024 compensation in the Summary Compensation Table in the column labeled “Non-Equity Incentive Plan Compensation.”
Equity-based Compensation
The Company awards equity-based compensation to named executive officers in order to provide a link between the long-term results achieved for its shareholders and the rewards provided to named executive officers, thereby ensuring that such officers have a continuing stake in the Company’s long-term success (see the section titled “Equity Compensation Plan Information” below). Such awards are made at the discretion of the Compensation Committee and are not timed or coordinated with the release of material, non-public information.
In fiscal 2025, we granted 72,062 market-based stock option shares (“MSOs”), 37,835 time-vested Restricted Stock Units (“RSUs”) and 201,000 Market-Based Restricted Stock Units (“MSUs”) to Dr. Askarpour and 33,259 MSOs and 17,462 RSUs to Mr. DiGiovanni. The MSOs granted to Dr. Askarpour and Mr. DiGiovanni are scheduled to vest in accordance with the following schedule: 1/4th on the first anniversary of the grant date and 1/12th on each quarterly anniversary of the grant date thereafter, subject to continued employment by the reporting person. The options becomes exercisable, if at all, if the price of the Company's common
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stock on the Nasdaq Stock Market is equal to or greater than $9.8785 for 20 consecutive trading days during the vesting period of the option. With respect to the fiscal 2025 RSUs granted to Dr. Askarpour and Mr. DiGiovanni, the RSUs are scheduled to vest 1/4th on the first anniversary of the grant date and 1/12th on each quarterly anniversary date thereafter, subject to continued employment with the Company.
In fiscal 2025, we granted 72,062 market-based stock option shares (“MSOs”), 37,835 time-vested Restricted Stock Units (“RSUs”) and 201,000 Market-Based Restricted Stock Units (“MSUs”) to Dr. Askarpour and 33,259 MSOs and 17,462 RSUs to Mr. DiGiovanni.
The MSOs granted to Dr. Askarpour and Mr. DiGiovanni are scheduled to vest in accordance with the following schedule: 1/4th on the first anniversary of the grant date and 1/12th on each quarterly anniversary of the grant date thereafter, subject to continued employment by the reporting person. The options becomes exercisable, if at all, if the price of the Company's common stock on the Nasdaq Stock Market is equal to or greater than $9.8785 for 20 consecutive trading days during the vesting period of the option.
With respect to the fiscal 2025 201,000 MSUs granted to Dr. Askarpour, no MSUs are eligible for vesting prior to the first anniversary of the date of grant of the award, with the exception of accelerated vesting permitted under certain conditions subject to the plan provisions. Subject to the terms of the 2019 Plan, under the terms of the grant, the MSU vest as follows: 1) an initial one-third (1/3rd) of the MSUs shall vest on the first trading date after the shares of the Company’s common stock have traded at a price equal to or greater than ten dollars ($10.00) per share for twenty (20) consecutive trading days or as provided in the provisions of the second succeeding paragraph below; 2)an additional one-third (1/3rd) of the MSUs shall vest on the first trading date after shares of the Company’s common stock have traded at a price equal to or greater than twelve dollars ($12.00) per share for twenty (20) consecutive trading days; and 3) the remaining MSUs shall vest on the first trading date after the shares of the Company’s common stock have traded at a price equal to or greater than fourteen dollars ($14.00) per share for twenty (20) consecutive trading days.
Additionally, if the tranche of MSUs subject to vesting pursuant to (1) above does not vest on or before November 20, 2027, then, with respect to such MSUs, the target trading price for the Company’s common stock will be increased to twelve dollars ($12.00) per share, such that the MSUs subject to (1) above will vest on the first trading date after shares of the Company’s common stock have traded at a price equal to or greater than twelve dollars ($12.00) per share for twenty (20) consecutive trading days.
On February 13, 2025, the market performance condition for 67,000 units of MSUs granted November 20, 2024 to the Company’s Chief Executive Officer was met, these shares vest according to the Company’s Amended and Restated 2019 Stock-Based Incentive Compensation Plan.
On July 10, 2025, the market performance condition for an additional 67,000 units of MSUs granted November 20, 2024 to the Company’s Chief Executive Officer was met, these shares vest according to the Company’s Amended and Restated 2019 Stock-Based Incentive Compensation Plan.
On August 8, 2025, the market performance condition for the final 67,000 units of MSUs granted November 20, 2024 to Dr. Askarpour was met, these shares vest according to the Company’s Amended and Restated 2019 Stock-Based Incentive Compensation Plan.
On November 20, 2025, the service condition for all 201,000 units of MSUs granted November 20, 2024 to Dr. Askarpour was met. The market condition for all 201,000 units of MSU’s was met during fiscal year ended September 30, 2025. Consequently, on November 20, 2025, all 201,000 MSU’s vested according to the Company’s Amended and Restated 2019 Stock-Based Incentive Compensation Plan and 113,083 net-settled common shares were subsequently issued to Dr. Askarpour.
With respect to the fiscal 2025 RSUs granted to Dr. Askarpour and Mr. DiGiovanni, the RSUs are scheduled to vest 1/4th on the first anniversary of the grant date and 1/12th on each quarterly anniversary date thereafter, subject to continued employment with the Company.
General Benefits
The following are standard benefits offered to all eligible Company employees, including the named executive officers.
Retirement Benefits. The Company maintains a tax-qualified 401(k) savings plan for all eligible employees, including the named executive officers, known as the Innovative Solutions and Support 401(k) Plan (the “Savings Plan”). The Savings Plan is a voluntary
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contributory plan under which employees may elect to defer compensation for federal income tax purposes under Section 401(k) of the Code. The Company makes a matching contribution to the Savings Plan at one half of each participant’s deferral rate, limited to a maximum contribution of 4% of base salary and subject to limitations imposed by the Internal Revenue Code.
Medical, Dental, Life Insurance, and Disability Coverage. The Company makes available medical, dental, life insurance, and disability coverage to all active eligible employees, including the named executive officers.
Other Paid Time-Off Benefits. The Company provides vacation and other paid holidays to all employees, including the named executive officers.
EMPLOYMENT AGREEMENTS
It is the Company’s general philosophy that all of the Company’s employees should be “at will” employees, thereby allowing both the Company and the employee to terminate the employment relationship at any time and without restriction or financial obligation.
However, in certain cases, the Company has determined that, as a retention device and a means to obtain agreement to enter into non-compete arrangements, employment agreements or other contractual agreements are appropriate.
The Company entered into an amended and restated employment agreement with Dr. Askarpour on April 14, 2022 in connection with his appointment as Chief Executive Officer of the Company on January 14, 2022. The initial term of the employment agreement began on April 14, 2022 and will end on April 13, 2024. Pursuant to the terms of the agreement, the term extends for one additional year each subsequent April 14, unless either party provides written notice to the other party at least 30 days prior to the expiration of the then-current term that the term will not be renewed. The agreement provides for a base salary of $400,000 per year, which the Company determined to be appropriate given Dr. Askarpour’s increased duties and responsibilities as Chief Executive Officer. If Dr. Askarpour’s employment is terminated by the Company without “cause” or by Dr. Askarpour for “good reason,” then, subject to Dr. Askarpour’s execution and non-revocation of a release of claims in favor of the Company, the Company will continue to pay Dr. Askarpour his base salary at the rate then in effect for a period of twelve (12) months following his termination date, during which period the Company will also pay Dr. Askarpour’s COBRA premiums. The employment agreement contains covenants restricting Dr. Askarpour’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for twelve (12) months after the cessation of Dr. Askarpour’s employment. The employment agreement also contains standard confidentiality, assignment of invention, and non-disparagement provisions.
On September 6, 2024, the Company entered into an amendment (the “Amendment”) to amend its employment agreement dated April 14, 2022 (the “Employment Agreement”) with Shahram Askarpour, the Company’s Chief Executive Officer. The Amendment amends and restates the severance provisions of the Employment Agreement. As amended, if Mr. Askarpour is terminated by the Company without Cause (as defined in the Employment Agreement) or resigns for Good Reason (as defined in the Amendment), Mr. Askarpour will be entitled to (i) payment of his base salary and (ii) payment of COBRA premiums for Mr. Askarpour and his dependents, in each case for 12 months following the date of Mr. Askarpour’s termination or resignation. The Amendment further provides that, in the event that Mr. Askarpour’s employment is terminated by the Company without Cause or for Good Reason during a period beginning six months prior to, and ending two years following, a Change of Control (as defined in the Employment Agreement), Mr. Askarpour shall receive, in lieu of the severance benefits set forth above, the following benefits from the Company: (i) an amount in cash equal to twice the sum of (a) Mr. Askarpour’s base salary and (b) the maximum annual cash bonus and/or other incentive compensation opportunity available to Mr. Askarpour; (ii) immediate vesting of all unvested equity awards held by Mr. Askarpour; (iii) extension of the exercise period with respect to any options held by Mr. Askarpour for a period lasting until the earlier of two years following Mr. Askarpour’s termination and the expiration date of the option; and (iv) payment of the employer portion of health and disability insurance coverage substantially comparable to the coverage Mr. Askarpour received from the Company immediately prior to Mr. Askarpour’s termination, for a period of 18 months following Mr. Askarpour’s termination.
The Amendment provides that delivery by the Company of a Nonrenewal Notice (as defined in the Employment Agreement) to Mr. Askarpour will be treated as a termination without Cause on the last day of the applicable term.
The Amendment sets forth the definition of “Good Reason,” which includes, absent Mr. Askarpour’s prior written consent and subject to certain exceptions relating to a Change of Control of the Company, (i) any material reduction in Mr. Askarpour’s title, duties, responsibilities or authority, (ii) any material reduction of Mr. Askarpour’s aggregate compensation, (iii) relocation of Mr. Askarpour’s primary work location that results in an increase in Mr. Askarpour’s one-way commute by more than 25 miles, (iv) in the event of a Change of Control, failure or refusal of a successor to the Company to either materially assume the Company’s obligations under the
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Employment Agreement or enter into a new employment agreement with Mr. Askarpour on terms that are materially similar to those provided under the Employment Agreement, or (v) a material breach of the Employment Agreement by the Company. Under the Amendment, Good Reason shall not be deemed to exist unless (i) the Company receives notice of the alleged basis for Good Reason and fails to cure the deficiency within 30 days after receiving such notice and (ii) Mr. Askarpour terminates his employment within 30 days after the expiration of such 30-day cure period.
The Company entered into an offer letter agreement with Mr. DiGiovanni on March 18, 2024 in connection with his hiring as the Chief Financial Officer of the Company. The offer letter provided for a base salary of $325,000 per year pro-rated from Mr. DiGiovanni’s start date, an annual target bonus amount equal to 50% of his base salary, a grant of restricted common stock of the Company (as described in the section titled “Equity-based Compensation” above) and a grant of stock options. If Mr. DiGiovanni’s employment had been terminated by the Company without “cause,” then, subject to Mr. DiGiovanni’s execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. DiGiovanni his base salary at the rate then in effect for a period of six (6) months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. The offer letter contained covenants restricting Mr. DiGiovanni’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for twelve (12) months after the cessation of Mr. DiGiovanni’s employment. The offer letter also contained standard confidentiality, assignment of invention, and non-disparagement provisions.
The Company entered into an offer letter agreement with former Chief Financial Officer, Michael. Linacre on June 1, 2022 in connection with his hiring as the Chief Financial Officer of the Company. The offer letter provided for a base salary of $230,000 per year, an annual target bonus amount equal to 30% of his base salary, a grant of restricted common stock of the Company (as described in the section titled “Equity-based Compensation” above) and certain relocation benefits. If Mr. Linacre’s employment was terminated without “cause,” then, subject to Mr. Linacre’s execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. Linacre his base salary at the rate then in effect for a period of six (6) months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. The offer letter contained covenants restricting Mr. Linacre’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for twelve (12) months after the cessation of Mr. Linacre’s employment. The offer letter also contained standard confidentiality, assignment of invention, and non-disparagement provisions.
On November 8, 2023, Mr. Linacre resigned from all of his positions with the Company. In connection with his resignation, Mr. Linacre received continued salary compensation in the amount of $62,500, for three months subsequent to his resignation.
In connection to Mr. Linacre’s resignation, on November 8, 2023, Relland M. Winand was appointed as the interim Chief Financial Officer of the Company. Mr. Winand had previously served the Company as Chief Financial Officer from December 2014 until his retirement in July 2022, after serving as the Company’s Controller from September 2014 to December 2014.
On November 9, 2023, the Company entered into an offer letter (the “Offer Letter”) with Mr. Winand with respect to his employment as the Company’s Interim Chief Financial Officer. Pursuant to the Offer Letter, Mr. Winand received an annual base salary of $250,000 and was eligible to participate in the Company’s benefit plans and programs generally available to employees of the Company, including retirement and health and welfare plans. Subsequent to Mr. Winands employment termination as Interim Chief Financial Officer, Mr. Winand received continued salary compensation in an amount of $165,000, which includes a one-time discretionary bonus of $125,000.
Change in Control Benefits
The Compensation Committee has the authority to accelerate the vesting of Company equity awards granted to named executive officers under the Company’s 2019 Stock-Based Incentive Compensation Plan (the “2019 Plan”) upon a change in control of the Company (except for certain transactions that are expressly carved out under the 2019 Plan). The Company believes that such accelerated vesting is essential to maintaining the commitment and dedication of its key employees throughout a potential change in control of the Company. Unless otherwise determined by the Compensation Committee or provided in an award agreement, “change in control” is generally defined for these purposes as:
·the acquisition in one or more transactions during any 12-month period by any “person” (as such term is used for purposes of section 13(d) or section 14(d) of the Exchange Act) but excluding, for this purpose, the Company or its subsidiaries or any employee benefit plan of the Company or its subsidiaries, of “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of forty percent (40%) or more of the combined voting power of the Company’s then outstanding voting securities;
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·a change in the composition of the Board during any 12-month period such that the individuals who at the beginning of such period constituted the Board cease to constitute a majority of the Board;
·the consummation of a merger or consolidation involving the Company, if the shareholders of the Company, immediately before such merger or consolidation, do not own, directly or indirectly, immediately following such merger or consolidation, more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation; or
·a complete liquidation or dissolution of the Company or a sale or other disposition of all or substantially all of the assets of the Company.
Under Dr. Askarpour’s amended and restated employment agreement, if, during the Term, Dr. Askarpour’s employment is terminated by IS&S without Cause (and not due to death or Disability, but for the avoidance of doubt, including IS&S’s delivery of a Nonrenewal Notice), or by Dr. Askarpour for Good Reason (as defined below), then:
(a) IS&S shall be released from any and all further obligations under this Agreement;
(b) IS&S shall pay Askarpour all salary, benefits, bonuses, reimbursable expenses and all other compensation owing or accrued to Askarpour through the effective date of termination; and;
(c) IS&S shall pay to Askarpour his Base Salary for a period of twelve (12) months following the date of Askarpour’s termination, provided such termination occurs outside the Change of Control Period (as defined below).
For purposes of the amended and restated employment agreement, IS&S’s delivery of a Nonrenewal Notice to Dr. Askarpour shall be treated as termination without Cause on the last day of the Initial Term or a Renewal Term, as applicable. If Dr. Askarpour and his eligible dependents are eligible for, and timely elect, COBRA continuation coverage, IS&S shall reimburse Dr. Askarpour (or Dr. Askarpour’s estate or legal representative, as applicable) for the COBRA premiums for Dr. Askarpour and his eligible dependents under IS&S’ benefit plans for the period of Base Salary continuation under clause (c) of the preceding sentence (the “COBRA Benefit”); provided, however, that notwithstanding the foregoing, the COBRA Benefit shall not be provided to the extent that it would result in any fine, penalty or tax upon IS&S; and provided further, that the COBRA Benefit shall cease earlier if Dr. Askarpour or his dependents become eligible for health coverage under the health plan of another employer.”
Under Dr. Askarpour’s amended and restated employment agreement, in the event that Dr. Askarpour’s employment is terminated by IS&S without Cause or Dr. Askarpour resigns with Good Reason within the period beginning six (6) months prior to, and ending two (2) years following a Change of Control (the “Change of Control Period”), (i) IS&S shall pay, or cause to be paid, to Dr. Askarpour an amount equal to two (2) times the sum of (A) the Base Salary immediately prior to the Change of Control and (B) the maximum annual cash bonus and/or other incentive compensation opportunity available to Dr. Askarpour (as determined by the Board in its sole discretion), payable in one lump sum subject to and in accordance with Paragraph 4.10(a) of the September , 2024 amended employment agreement, (ii) all unvested equity awards held by Askarpour shall immediately become fully vested and exercisable, (iii) any options held by Dr. Askarpour at the time of such termination shall continue to be exercisable until the earlier of two (2) years following the date of such termination and the option’s original expiration date, and (iv) IS&S shall provide Dr. Askarpour with health (medical, dental and vision) and disability coverage substantially comparable to the coverage Dr. Askarpour was receiving from IS&S immediately prior to the Change of Control for a period of 18 months following such termination (the “Coverage Period”). Dr. Askarpour shall pay the same percentage of the total cost of coverage under the applicable employee benefit plans as Dr. Askarpour was paying when Dr. Askarpour’s employment terminated.
For purposes of Dr. Askarpour’s employment agreement, Dr. Askarpour shall have “Good Reason” to resign from his employment with IS&S upon the occurrence of any of the following actions taken by IS&S without Dr. Askarpour’s prior written consent:
(a)a material reduction in Askarpour’s title, duties, responsibilities or authority;
(b)a material reduction of Askarpour’s aggregate compensation;
(c)relocation of Askarpour’s primary work location that results in an increase in Askarpour’s one-way commute by more than twenty-five (25) miles;
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(d)failure or refusal of a successor to IS&S to either materially assume IS&S’ obligations under this Agreement or enter into a new employment agreement with Dr. Askarpour on terms that are materially similar to those provided under this Agreement, in any case, in the event of a Change of Control; or
(e)a material breach of this Agreement by IS&S.
Notwithstanding the foregoing, Good Reason shall not be deemed to exist unless (A) Dr. Askarpour gives IS&S written notice within thirty (30) days after the first occurrence of the event which Dr. Askarpour believes constitutes the basis for Good Reason, specifying the particular act or failure to act which Dr. Askarpour believes constitutes the basis for Good Reason, (B) IS&S fails to cure such act or failure to act within thirty (30) days after receipt of such notice and (C) Dr. Askarpour terminates his employment within thirty (30) days after the end of such 30-day cure period specified in clause (B).
Unless the Board determines otherwise in its sole discretion prior to the consummation of a Change of Control, in the event that a Change of Control is consummated resulting in IS&S becoming a privately-held company, Dr. Askarpour shall not have Good Reason to resign (A) solely on account of the consummation of such transaction or (B) on account of any diminution in the particular duties or responsibilities relating solely to being a public company that he may have held immediately prior to the Change of Control by virtue of his position as the chief executive officer of a public company.
For purposes of Dr. Askarpour’s employment agreement, “change in control” is generally defined for these purposes as:
· | a “person” (as such term is used for purposes of section 13(d) or section 14(d) of the Exchange Act) but excluding, for this purpose, any employee benefit plan of the Company or its subsidiaries, is or becomes a “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of forty percent (40%) or more of the combined voting power of the Company’s then outstanding voting securities; |
· | a change in the composition of the Board during any 2-year period such that the individuals who at the beginning of such period constituted the Board cease to constitute a majority of the Board; |
· | the consummation of a merger or consolidation involving the Company, if the shareholders of the Company, immediately before such merger or consolidation, do not own, directly or indirectly, immediately following such merger or consolidation, at least seventy-five percent (75%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation; or |
· | a complete liquidation or dissolution of the Company or a sale or other disposition of all or substantially all of the assets of the Company. |
On June 20, 2024, the Company entered into a Change in Control Agreement with Mr. DiGiovanni (the “Change in Control Agreement”). Pursuant to the Change in Control Agreement, in the event Mr. DiGiovanni is terminated (i) by the Company without Cause, or (ii) by Mr. DiGiovanni for Good Reason during the period beginning six (6) months prior to and ending two (2) years following a Change in Control of the Company (the terms “Cause,” “Change in Control” and “Good Reason” are defined in the Change in Control Agreements), Mr. DiGiovanni will be entitled to receive an amount equal to two (2) times the sum of (A) his base salary in effect immediately prior to the Change in Control, and (B) the maximum annual cash bonus and/or other incentive compensation opportunity available to Mr. DiGiovanni (as determined by the Board in its sole discretion). The Change in Control benefit will be paid in one lump sum on the 60th day following termination of employment, provided that the executive has executed and delivered a release of claims and the statutory period during which he or she may revoke that release has expired on or before that 60th day. Upon such termination, (x) all unvested equity awards held by Mr. DiGiovanni will immediately become vested and exercisable, (y) any options held by Mr. DiGiovanni at the time of such termination will continue to be exercisable until the earlier of two (2) years following the date of such termination and the option’s original expiration date, and (z) the Company will provide Mr. DiGiovanni with health (medical, dental and vision) and disability coverage substantially comparable to the coverage Mr. DiGiovanni was receiving from the Company immediately prior to the Change in Control for a period of eighteen (18) months following such termination.
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Stock Ownership/Retention Requirements
The Company has adopted a Stock Ownership and Retention Policy that applies to its Section 16 officers. We believe that the Stock Ownership and Retention Policy aligns the interests of our management team, directors and shareholders.
The ownership requirement for our CEO and our executive officers is calculated as a multiple of base salary, as noted below:
Position |
| Minimum Ownership of Common Stock (as multiple of base salary) | |
CEO |
| 3x | |
Other Section 16 Officers |
| 1x | |
Compliance with the minimum share ownership requirement is determined annually as of December 31 each year and commenced December 31, 2025. Individuals who have not yet attained the minimum share ownership requirement must retain 50% of his or her shares acquired upon the (i) vesting of restricted stock or restricted stock units, and (ii) if applicable, the exercise of options, reduced by shares retained or tendered to cover taxes or the exercise price of options. The Company has determined that each of our Section 16 officers were in compliance with the policy as of December 31, 2025.
Qualifying shares that count toward the ownership requirement include:
·Shares owned outright (including shares held through an IRA, 401(k) account, spouse or dependent children, or shares held in trust for the benefit of the owner, his or her spouse, or his or her dependent children);
·Shares underlying equity awards that are deferred shares;
·Shares underlying vested options.
Tax and Accounting Considerations
The Company considers tax and accounting implications in determining all elements of its executive compensation program. Section 162(m) of the Code generally denies a federal income tax deduction for compensation exceeding $1,000,000 paid in a taxable year to the Chief Executive Officer, the Chief Financial Officer or any of the three highest compensated officers (other than the Chief Executive Officer and Chief Financial Officer). The Compensation Committee considers the impact of this deductibility limitation on the compensation that it intends to award and may pay compensation that is not deductible if it determines that doing so is in the best interest of the Company and consistent with the Company’s executive compensation program.
The Compensation Committee considers the impact of various forms of compensation on the Company’s financial results. In particular, the Compensation Committee considers the potential impact on current and future financial results of all equity compensation that it approves.
16
SUMMARY COMPENSATION TABLE
This Summary Compensation Table provides information on the total compensation earned by each named executive officer for fiscal years ended September 30, 2025, 2024 and 2023.
| | | Fiscal | | | | Salary | | | | Bonus | | | | Non-Equity Incentive Plan Compensation | | | | Option Awards | | | | Stock Awards | | | | All Other Compensation | | | | Total | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Name and Principal Position |
| Year |
|
|
| $(4),(5),(6) |
|
|
| $ |
|
|
| $ |
|
|
| $(2) |
|
|
| $(2) |
|
|
| $(1) |
|
|
| $(1) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| Shahram Askarpour | | 2025 | | | | 525,000 | | | | | | | | 750,750 | | | | 196,340 | | | | 1,019,953 | | | | 14,000 | | | | 2,506,043 | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Chief Executive Officer |
| 2024 |
|
|
| 500,000 |
|
|
| - |
|
|
| 500,000 |
|
|
| 1,280,624 |
|
|
| 683,307 |
|
|
| 8,258 |
|
|
| 2,972,189 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| | | 2023 | | | | 400,000 | | | | - | | | | 355,816 | | | | 852,000 | | | | 819,000 | | | | 12,592 | | | | 2,439,408 | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Jeffrey DiGiovanni | | 2025 | | | | 350,000 | | | | - | | | | 250,250 | | | | 115,509 | | | | 151,974 | | | | 14,000 | | | | 881,733 | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Chief Financial Officer | | 2024 | | | | 156,250 | | | | - | | | | 225,000 | | | | 249,998 | | | | 449,994 | | | | 2,185 | | | | 1,083,427 | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Relland Winand | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interim Chief Financial Officer | | 2024 | | | | 147,692 | | | | 125,000 | | | | - | | | | - | | | | - | | | | 4,308 | | | | 277,000 | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Michael Linacre | | 2024 | | | | 116,594 | | | | - | | | | - | | | | - | | | | - | | | | 1,006 | | | | 117,600 | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Former Chief Financial Officer | | 2023 | | | | 233,770 | | | | - | | | | 118,605 | | | | 111,264 | | | | 49,994 | | | | 162,491 | | | | 676,124 | | |||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||
1.The amounts set forth in this column represent (i) for Dr. Askarpour’s and Mr. DiGiovanni’s contributions to their Savings Plan accounts for the applicable fiscal year, and (ii) for Mr. Linacre’s $154,761 in relocation benefits and $7,730 in contributions to his Savings Plan account for the applicable fiscal year.
2.These amounts represent the aggregate grant date fair value determined in accordance with the valuation guidelines of ASC Topic 718 “Stock Compensation” with respect to the options granted to the named executive officers in the applicable year. See also Note 3, under the heading “Share-Based Compensation,” in the Company’s audited financial statements as filed in the Annual Report. The values do not correspond to the actual value that will be recognized by the named executive officers at the time such awards vest.
3.Mr. DiGiovanni’s fiscal 2024 annual base salary was $325,000; however, his fiscal 2024 pro-rata salary paid from date of hire for fiscal 2024 was $156,250.
4.Mr. Winand’s fiscal 2024 annual base salary was $250,00; however, his fiscal 2024 pro-rata salary paid from date of hire for fiscal 2024 was $147,692 and included retainer compensation of $40,000.
5.Mr. Linacre’s fiscal 2024 annual base salary reflects pro-rata compensation as Mr. Linacre’s employment with the Company terminated effective as of November 8, 2023 and included retainer compensation of $62,500.
17
GRANTS OF PLAN-BASED AWARDS
The following table sets forth information about non-equity and equity awards granted to the named executive officers in the fiscal year ended September 30, 2025.
| | | | Estimated Future Payouts under | | All other stock awards: | | All other option awards: | | | | Grant date fair value of | ||||
Name | Grant Date |
| Threshold |
| Target |
| Maximum |
| Number of |
| Number of |
| Exercise price of option awards ($/Sh) |
| stock and option awards ($) (1) | |
Shahram Askarpour |
|
| 500,000 |
| 750,750 |
|
|
|
| |||||||
Shahram Askarpour | 2/19/2025 |
|
|
|
| 37,835 |
|
|
| 325,000 | ||||||
Shahram Askarpour | | 2/18/2025 |
| |
| |
| |
| |
| 72,062 |
| 8.59 |
| 325,000 |
Shahram Askarpour | | 11/20/2024 |
| |
| |
| |
| 201,000 |
| |
| |
| |
| | | | | | | | | | | | | | | | |
Jeffrey DiGiovanni |
|
| 162,500 |
| 250,250 |
| |
|
|
| ||||||
Jeffrey DiGiovanni | | 2/19/2025 |
| |
| |
| |
| 17,462 |
| |
| |
| 150,000 |
Jeffrey DiGiovvani | | 2/18/2025 |
| |
| |
| |
| |
| 33,259 |
| 8.59 |
| 150,000 |
1.The amounts included in this column are the dollar amounts representing the grant date fair value of each restricted stock unit or option share, as applicable, calculated in accordance with FASB ASC Topic 718, and do not represent the actual value that may be recognized by the named executive officers upon vesting of restricted stock units or options.
18
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table provides outstanding equity awards for the named executive officers as of the end of fiscal year 2025:
Option Awards |
|
|
| Stock Awards |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Name |
|
| Number of securities | (1) |
|
| Number of |
|
|
| Option |
|
|
| Option |
|
|
| Number of shares or units of |
|
| Market value of |
| ||||||||||||||||||||||||||||||||||
Shahram Askarpour |
|
| 200,000 | (1) |
|
| - |
|
|
| 8.19 |
|
|
| 1/11/2033 |
|
|
| 18,750 | (4) |
|
| 234,188 |
| |||||||||||||||||||||||||||||||||
Shahram Askarpour |
|
| 25,000 | (2) |
|
| - |
|
| 8.12 |
|
|
| 2/22/2034 |
|
|
| 30,018 | (4) |
|
| 374,925 |
| ||||||||||||||||||||||||||||||||||
Shahram Askarpour | | | 18,003 | | | | 54,011 | (3) | | | 8.12 | | | | 2/22/2034 | | | | 201,000 | (8) | | | 2,510,490 |
| |||||||||||||||||||||||||||||||||
Shahram Askarpour | | | | | | | 72,062 | (7) | | | 9.88 | | | | 2/18/2035 | | | | 37,835 | (4) | | | 472,559 |
| |||||||||||||||||||||||||||||||||
Jeffrey DiGiovanni | | | 20,187 | | | | 44,412 | (6) | | | 7.06 | | | | 4/08/2034 | | | | 26,588 | (4) | | | 332,084 |
| |||||||||||||||||||||||||||||||||
Jeffrey DiGiovanni | | | | | | | 33,259 | (7) | | | 9.88 | | | | 2/18/3205 | | | | 26,454 | (5) | | | 330,410 | | |||||||||||||||||||||||||||||||||
Jeffrey DiGiovanni | | | | | | | | | | | | | | | | | | | 17,462 | (4) | | | 218,100 | | |||||||||||||||||||||||||||||||||
1.The award becomes vested according to the following schedule: 50% at the date of grant, and the remaining 50% on a quarterly basis, becoming fully vested on the first anniversary of the date of grant.
2.The award became immediately vested at date of grant.
3.The award becomes ratably vested 25% per year for 4 years.
4.The award vests 25% at date of grant and 25% percent ratably for 3 years.
5.The award vests 25% percent ratably for 4 years.
6.The award becomes vested according to the following schedule: 25% on the first anniversary of grant date and 25% per quarter for the next 3 successive anniversary dates from date of grant.
7.The award becomes vested according to the following schedule: 1/4th on the first anniversary of the grant date and 1/12th on each quarterly anniversary of the grant date thereafter, subject to continued employment by the reporting person. The option becomes exercisable, if at all, if the price of the Company's common stock on the Nasdaq Stock Market is equal to or greater than $9.8785 for 20 consecutive trading days during the vesting period of the option.
8.The award becomes vested according to the following schedule: (1) an initial 1/3 shall vest on the first trading date after the shares of the Company’s common stock have traded at a price equal to or greater than ten dollars per share for twenty consecutive trading days or as provided in the provisions of the second succeeding paragraph below; 2) an additional one-third (1/3rd) of the MSUs shall vest on the first trading date after shares of the Company’s common stock have traded at a price equal to or greater than twelve dollars per share for twenty (20) consecutive trading days; and (3) the remaining MSUs shall vest on the first trading date after the shares of the Company’s common stock have traded at a price equal to or greater than fourteen dollars per share for twenty (20)
19
consecutive trading days. Any MSUs that have not vested on or before the fourth anniversary of the grant date are immediately forfeited. Vesting occurs upon the attainment of: 1) the stock price appreciation criteria noted above and 2) one year of participant service from grant date.
OPTION EXERCISES AND STOCK VESTED
The following table provides information on the value of stock options that were exercised and stock awards that vested during the fiscal year ended September 30, 2025 for each of our named executive officers:
|
|
| - Option Awards |
|
|
| Stock Awards |
| ||||||||
|
|
|
|
| Value |
|
| Number of |
|
| Value |
| ||||
|
| Number of |
|
| Realized on |
|
| Shares |
|
| Realized on |
| ||||
|
| Shares Acquired |
|
| Exercise |
|
| Acquired on |
|
| Vesting |
| ||||
Name |
| on Exercise |
|
| $ |
|
| Vesting |
|
| ($) |
| ||||
Shahram Askarpour |
|
| - |
|
|
| - |
|
|
| 35,006 |
|
|
| 293,295 |
|
Jeffrey DiGiovanni |
|
| - |
|
|
| - |
|
|
| 21,649 |
|
|
| 205,875 |
|
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Dr. Askarpour’s amended and restated employment agreement provides that if his employment is terminated by the Company without “cause” or by Dr. Askarpour for “good reason,” then, subject to his execution and non-revocation of a release of claims in favor of the Company, the Company will continue to pay Dr. Askarpour his base salary at the rate then in effect for a period of twelve (12) months following his termination date, during which period the Company will also pay Dr. Askarpour’s COBRA premiums. If Dr. Askarpour’s employment were terminated by the Company without “cause” or for “good reason”, other than a change in control, on September 30, 2025, the total amounts payable to Dr. Askarpour would have been $525,000. For purposes of Dr. Askarpour’s employment agreement, “cause” generally means (a)the commission by or conviction of Dr. Askarpour, or plea of guilty or nolo contendere to, a felony or any crime involving dishonesty, disloyalty, or moral turpitude; (b) Dr. Askarpour’s willful misconduct or willful failure substantially to perform the duties of his position or his willful refusal to comply with the lawful directives of the Board; (c) a breach by Dr. Askarpour of his employment agreement or any written policies of the Company applicable to Dr. Askarpour; (d) any act or omission by Dr. Askarpour constituting dishonesty, fraud or embezzlement, or an intentional violation of Dr. Askarpour’s duty of loyalty to the Company under law; (e) Dr. Askarpour’s gross negligence in the performance of his duties; or (f) Dr. Askarpour’s poor job performance or other improper conduct not otherwise described above, except that cause shall not exist based solely on clauses (e) or (f), unless the Company has given Dr. Askarpour written notice of its intent to terminate his employment for cause, and allowed Dr. Askarpour thirty (30) days to cure such alleged poor job performance or other improper conduct. For purposes of Dr. Askarpour’s employment agreement, “good reason” generally means (a) a material reduction of Dr. Askarpour’s duties, responsibilities or authority; (b) a reduction of Dr. Askarpour’s base salary; (c) failure or refusal of a successor to the Company to either materially assume the Company’s obligations under Dr. Askarpour’s employment agreement or enter into a new employment agreement with Dr. Askarpour on terms that are materially similar to those provided under his employment agreement, in any case, in the event of a “change in control”; (d) a relocation of Dr. Askarpour’s primary work location that results in an increase in his one-way commute by more than twenty-five (25) miles; or (e) a material breach of Dr. Askarpour’s employment agreement by the Company. See the section titled “Compensation Discussion and Analysis” for additional information.
Mr. DiGiovanni offer letter provided that if his employment is terminated by the Company without “cause,” then, subject to his execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. DiGiovanni his base salary at the rate then in effect for a period of six (6) months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. If Mr. DiGiovanni’s employment were terminated by the Company without “cause”, other than a change in control, on September 30, 2025, the total amounts payable to Mr. DiGiovanni would have been $175,000. For purposes of Mr. DiGiovanni’s offer letter, “cause” generally means (a) the indictment or conviction of Mr. DiGiovanni, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude or dishonesty; (b) Mr. DiGiovanni’s intentional action or an act of fraud, dishonesty or theft affecting the property, reputation, or business of the Company or its affiliates; (c) Mr. DiGiovanni’s willful and persistent neglect of his duties and responsibilities; (d) Mr. DiGiovanni’s failure or refusal to carry out the lawful directives of the Board; (e) Mr. DiGiovanni’s diverting any business opportunity of the Company or its affiliates for his own personal gain; (f) Mr. DiGiovanni’s omission of or misrepresentation of a significant fact on his employment
20
application or resume; or (g) Mr. DiGiovanni misuse of alcohol or drugs affecting his work performance. See the section titled “Compensation Discussion and Analysis” for additional information.
Pursuant to the Change in Control Agreement with Mr. DiGiovanni effective June 20, 2024, in the event Mr. DiGiovanni is terminated (i) by the Company without Cause, or (ii) by Mr. DiGiovanni for Good Reason during the period beginning six (6) months prior to and ending two (2) years following a Change in Control of the Company (the terms “Cause,” “Change in Control” and “Good Reason” are defined in the Change in Control Agreements), Mr. DiGiovanni will be entitled to receive an amount equal to two (2) times the sum of (A) his base salary in effect immediately prior to the Change in Control, and (B) the maximum annual cash bonus and/or other incentive compensation opportunity available to Mr. DiGiovanni (as determined by the Board in its sole discretion). The Change in Control benefit will be paid in one lump sum on the 60th day following termination of employment, provided that the executive has executed and delivered a release of claims and the statutory period during which he or she may revoke that release has expired on or before that 60th day. Upon such termination, (x) all unvested equity awards held by Mr. DiGiovanni will immediately become vested and exercisable, (y) any options held by Mr. DiGiovanni at the time of such termination will continue to be exercisable until the earlier of two (2) years following the date of such termination and the option’s original expiration date, and (z) the Company will provide Mr. DiGiovanni with health (medical, dental and vision) and disability coverage substantially comparable to the coverage Mr. DiGiovanni was receiving from the Company immediately prior to the Change in Control for a period of eighteen (18) months following such termination.
Pursuant to an June 1, 2022 offer letter agreement with former Chief Financial Officer, Michael Linacre, if Mr. Linacre’s employment was terminated without “cause,” then, subject to Mr. Linacre’s execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. Linacre his base salary at the rate then in effect for a period of six (6) months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. The offer letter contained covenants restricting Mr. Linacre’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for twelve (12) months after the cessation of Mr. Linacre’s employment. The offer letter also contained standard confidentiality, assignment of invention, and non-disparagement provisions.
On November 8, 2023, Mr. Linacre resigned from all of his positions with the Company. In connection with his resignation, Mr. Linacre received continued salary compensation in an amount of $62,500.
On November 9, 2023, the Company entered into an offer letter (the “Offer Letter”) with Mr. Winand with respect to his employment as the Company’s Interim Chief Financial Officer. Pursuant to the Offer Letter, Mr. Winand received an annual base salary of $250,000 and was eligible to participate in the Company’s benefit plans and programs generally available to employees of the Company, including retirement and health and welfare plans. Mr. Winand’s Offer Letter contained no termination or change in control provisions. Subsequent to Mr. Winands employment termination as Interim Chief Financial Officer, Mr. Winand received continued salary compensation in an amount of $165,000, which includes a one-time discretionary bonus of $125,000.
The Company’s Compensation Committee has the authority to accelerate the vesting of Company stock options granted to named executive officers under the 2019 Plan upon a change in control of the Company. See the section titled “Compensation Discussion and Analysis” for additional information.
PAY VERSUS PERFORMANCE
In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the fiscal years shown.
PAY VERSUS PERFORMANCE |
| ||||||||||||||||||||||||||||||||||||
Fiscal Year |
|
| Summary |
|
| Compensation |
|
| Average Summary |
|
| Average |
|
| Value of Initial |
|
| Net |
| ||||||||||||||||||
2025 |
|
| $ | 2,506,043 |
|
| $ | 3,538,403 |
|
| $ | 881,733 |
|
| $ | 1,458,180 |
|
| $ | 144.73 |
|
| $ | 15.63 | |||||||||||||
2024 |
|
| $ | 2,972,189 |
|
| $ | 1,564,964 |
|
| $ | 492,676 |
|
| $ | 404,050 |
|
| $ | 92.88 |
|
| $ | 7.00 |
| ||||||||||||
2023 |
|
| $ | 2,439,408 |
|
| $ | 2,394,368 |
|
| $ | 676,259 |
|
| $ | 661,666 |
|
| $ | 108.26 |
|
| $ | 6.02 |
| ||||||||||||
21
1.The Principal Executive Officer (“PEO”) in fiscal 2023, fiscal 2024 and fiscal 2025 is Shahram Askarpour. The Non-PEO NEOs for whom the average compensation is presented in this table for fiscal 2025 is Mr. Jeffrey DiGiovanni. The Non-PEO NEOs for whom the average compensation is presented in this table for fiscal 2024 is Mr. Jeffrey DiGiovanni, Mr. Michael Linacre and Mr. Relland Winand. The Non-PEO NEOs for whom the average compensation is presented in this table for fiscal 2023 is Michael Linacre.
2.The amounts shown as Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually realized or received by the Company’s NEOs. These amounts reflect total compensation as set forth in the Summary Compensation Table for each year, adjusted as described in footnote 3 below.
3.Compensation Actually Paid reflects the exclusions and inclusions for the PEO and NEOs set forth below. Amounts excluded, which are set forth in the Exclusion of Stock Awards columns below, represent the Stock Awards amounts from the applicable Summary Compensation Table. Amounts included in the Inclusion of Equity Values column below are the aggregate of the following components, as applicable: the fair value as of the end of the fiscal year of unvested equity awards granted in that year; the change in fair value during the year of equity awards granted in prior years that remained outstanding and unvested at the end of the year; and the change in fair value during the year through the vesting date of equity awards granted in prior years that vested during that year, less the fair value at the end of the prior year of awards granted prior to the year that failed to meet applicable vesting conditions during the year. Equity values are calculated in accordance with FASB ASC Topic 718.
4.Dollar values assume $100 was invested in the Company for the cumulative periods from September 30, 2022 to September 30, 2025 for fiscal 2025, Dollar values assume $100 was invested in the Company for the cumulative periods from September 30, 2021 to September 30, 2024 for fiscal 2024, and from September 30, 2021 to September 30,2023 for fiscal 2023 respectively and assumes reinvestment of the pre-tax value of dividends paid. Historical stock performance is not necessarily indicative of future stock performance.
22
ADJUSTMENTS MADE TO DETERMINE COMPENSATION ACTUALLY PAID
| | | | | | FY 2025 | | FY 2024 | | FY 2023 | | |
Summary Compensation Table Total |
| PEO |
|
| $ | 2,506,043 | | 2,972,189 | | 2,439,408 |
| |
|
| Average Non-PEO NEOs |
|
| $ | 881,733 | | 492,676 | | 676,259 |
| |
Deduction for amounts reported under the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table |
| PEO |
|
| $ | 1,216,293 | | 879,018 | | 1,671,000 |
| |
|
| Average Non-PEO NEOs |
|
| $ | 267,483 | | 233,331 | | 161,258 |
| |
Fair value as of the end of the covered year of awards granted during year that remain unvested as of year-end |
| PEO |
|
| $ | 1,790,449 | | 505,456 | | 689,560 |
| |
|
| Average Non-PEO NEOs |
|
| $ | 314,450 | | 140,203 | | 154,923 |
| |
Increase/Deduction for change in fair value from prior year-end to current year-end of awards granted prior to that year that were outstanding and unvested as of year-end |
| PEO |
|
| $ | 361,711 | | - | | - |
| |
|
| Average Non-PEO NEOs |
|
| $ | 464,756 | | - | | (6,092) |
| |
Increase for fair value as of the vesting dates for awards granted during year that vest during the year |
| PEO |
|
| $ | - | | 51,250 | | 936,400 |
| |
|
| Average Non-PEO NEOs |
|
| $ | - | | 5,751 | | - |
| |
Increase/Deduction for change in fair value from prior year-end to vesting date of awards granted prior to that year that vested during year |
| PEO |
|
| $ | 96,493 | | - | | - |
| |
|
| Average Non-PEO NEOs |
|
| $ | 64,724 | | (44) | | (2,030) |
| |
Deduction for fair value of awards granted prior to year that were forfeited during year |
| PEO |
|
| $ | - | | - | | - |
| |
|
| Average Non-PEO NEOs |
|
| $ | - | | (1,205) | | - |
| |
Compensation Actually Paid |
| PEO |
|
| $ | 3,538,403 | | 1,564,964 | | 2,394,368 |
| |
|
| Average Non-PEO NEOs |
|
| $ | 1,458,180 | | 404,050 | | 661,666 | ||
23
Description of Relationship Between NEO Compensation Actually Paid and Total Shareholder Return (“TSR”)
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR over the fiscal three-year period from fiscal 2023 through fiscal 2025.
Description of Relationship Between NEO Compensation Actually Paid and Net Income
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our net income during the three-year period from fiscal 2023 through fiscal 2025.
24
Compensation of Directors
Prior to January 1, 2025, the Company’s fiscal 2025 compensation program for Non-Employee Directors consisted of an annual retainer and restricted stock or restricted stock unit awards. Each Non-Employee Director was entitled to an annual retainer of $45,000 and an annual grant of restricted stock units, with each such unit representing a contingent right to receive one share of common stock upon vesting to Non-Employee Directors under the 2019 Plan. The target value of such annual awards was $75,000 for each Non-Employee Director for fiscal 2025. The number of shares underlying such annual awards is calculated based upon the price of the Company’s common stock at the close of business on the date of the Company’s annual meeting and such shares vest on the first anniversary of the date of grant. A director who resigns during the course of the year will vest in and receive a pro rata portion of the shares that he or she otherwise would have vested (in the case of restricted stock) or received (in the case of restricted stock units) had no such resignation occurred, based on the number of days served during the applicable calendar year. In addition, all directors are reimbursed for reasonable travel and lodging expenses actually incurred in connection with required attendance at board and committee meetings.
Further, prior to January 1, 2025, the Chairman of the Board received an annual retainer of $30,000 in addition to grants of restricted stock or restricted stock awards. The chairs of the Compensation Committee and Governance Committee each received an annual retainer of $5,000. members of the Nominating and Governance Committee received an additional cash retainer of $3,750, the Chairman of the Audit Committee received an additional cash retainer of $12,000, the Chairman of the Nominating and Governance Committee received an additional cash retainer of $5,000 and the Chairman of the Compensation Committee received an additional cash retainer of $7,500.
On April 17, 2025, the Compensation Committee amended the Company’s fiscal 2025 board compensation program. Retroactive to January 1, 2025, each Non-Employee Director is entitled to an annual retainer of $45,000 and an annual grant of restricted stock unit awards with a date of grant target value of $80,000. The grant is made on the date that the Board members are elected or re-elected at the annual meeting and will vest on the one-year anniversary of the date of grant. All cash retainers are paid quarterly in arrears. For Non-Employee Directors elected other than at an annual meeting, both cash retainers and equity grants will be pro-rated for the portion of the year that the Non-Employee Director serves until the next annual meeting.
Additionally, the Chairman of the Board receives an additional cash retainer of $30,000, members of the Audit Committee receive an additional cash retainer of $7,000, members of the Compensation Committee receive an additional annual cash retainer of $5,000, members of the Nominating and Governance Committee receive an additional cash retainer of $3,750, the Chairman of the Audit Committee receives an additional cash retainer of $12,000, the Chairman of the Nominating and Governance Committee receives an additional cash retainer of $5,000 and the Chairman of the Compensation Committee receives an additional cash retainer of $7,500.
Director Compensation Table
The following table provides information on the total compensation earned by each non-employee director of the Company for the fiscal year ended September 30, 2025:
|
| Fees Earned or Paid in Cash |
|
| Stock Awards |
|
| Option Awards |
|
| Non-Equity Incentive Plan Compensation |
|
| Change in Pension Value and Non-qualified Compensation |
|
| All Other Compensation |
|
| Total |
| ||
Name |
| $ (1) |
|
| $ (2) |
|
| $ |
|
| $ |
|
| Earnings |
|
| $ |
|
| $ |
| ||
Glen R. Bressner |
|
| 85,250 |
|
|
| 77,483 |
|
| - | - | - | - |
|
| 162,733 |
| ||||||
Stephen L. Belland |
|
| 60,625 |
|
|
| 77,483 |
|
| - | - | - | - |
|
| 138,108 |
| ||||||
Roger A. Carolin |
|
| 68,500 |
|
|
| 77,483 |
|
| - | - | - | - |
|
| 145,983 |
| ||||||
Garry Dean |
|
| 53,750 |
|
|
| 78,752 |
|
| - | | | - | | | - | | | - |
|
| 132,502 |
|
Denise L. Devine (3) |
|
| 40,250 |
|
|
| 87,115 |
|
| - | - | - | - |
|
| 127,365 |
| ||||||
| 1. | The amounts reported in this column include fees paid for attendance of Board and Board committee meetings and annual retainer for each non-employee director for the year ended September 30, 2025. |
25
| 2. | The amounts reported in this column represent the grant date fair value, computed based on the compensation cost recognized for financial reporting purposes by the Company in accordance with the valuation guidelines of Accounting Standards Codification (“ASC”) 505-50, “Equity-Based Payments to Non-Employees” and ASC 718 “Compensation—Stock Compensation” with respect to the stock awards granted to each non-employee director during the fiscal year ended September 30, 2025. See also Note 3, under the heading “Share-Based Compensation,” to the Company’s audited financial statements as filed in the Annual Report, which sets forth the material assumptions used in determining the compensation cost to the Company with respect to such awards. In addition, as of the close of the fiscal year ended September 30, 2025, none of the non-employee directors held outstanding options to purchase stock of the Company. |
| 3. | Denise L. Devine’s tenure with the Board began January 27, 2025. |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to the beneficial ownership, as of January 12, 2026, of each person whom the Company knew to be the beneficial owner of more than 5% of its common stock. To the knowledge of the Company, each of the shareholders named below has sole power to vote or direct the vote of such shares of common stock or the sole investment power with respect to such shares of common stock, unless otherwise indicated. The information provided in the table is based on the Company’s records, information filed with the SEC and information provided to the Company.
|
| Common Stock |
| |||||
Name of Beneficial Owner |
| Number of Shares |
|
| Percent of Class (1) |
| ||
Estate of Geoffrey S. M. Hedrick (2) |
|
| 894,621 |
|
|
| 5.0 | % |
Wealth Trust Axiom, LLC (3) |
|
| 1,157,040 |
|
|
| 6.5 | % |
1.As used in this table, beneficial ownership means the sole or shared power to vote or direct the voting of a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose, or direct the disposition, of a security). A person is deemed as of any date to have beneficial ownership of any security that such person has the right to acquire within 60 days after such date. Percentage ownership is based upon 17,778,343 of common stock outstanding as of January 12, 2026.
2.Based solely on the Schedule 13D/A filed on August 19, 2024 filed by the Estate of Geoffrey S. M. Hedrick (the “Estate”) and Christopher Scott Ginieczki, as Personal Representative of the Estate of Geoffrey S. M. Hedrick (“Mr. Ginieczki”). According to the Schedule 13D/A, this amount includes 873,673 shares of common stock owned by the Estate and 20,948 shares of common stock owned by the Ginieczki Family Trust, of which Mr. Ginieczki is a co-trustee. According to the Schedule 13D/A, the Estate has shared voting and dispositive power as to 873,673 shares of common stock and Mr. Ginieczki has shared voting and dispositive power as to 894,621 shares of common stock. The address for the Estate is c/o Innovative Solutions and Support, Inc., Attn: Christopher Scott Ginieczki, Personal Representative of Estate, 720 Pennsylvania Drive, Exton, PA 19341. Mr. Ginieczki’s address is 2788 San Tomas Expressway, Santa Clara, CA 95051.
3.Based solely on Schedule 13G/A filed on February 3, 2022. Wealth Trust Axiom LLC’s address is 550 Swedesford Road, Suite 110, Wayne, PA 19087.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership, as of January 12, 2026, of (i) each director, (ii) the chief executive officer, the chief financial officer and the Company’s other executive officers during the fiscal year ended September 30, 2025, and (iii) all the current directors and executive officers as a group. Unless otherwise indicated, each of the shareholders named below has sole voting and investment power with respect to such shares, and the address of each of the shareholders named below is c/o Innovative Solutions and Support, Inc., 720 Pennsylvania Drive, Exton, Pennsylvania 19341. The information provided in the table is based on the Company’s records, information filed with the SEC, and information provided to the Company.
26
|
| Common Stock | ||
Name of Beneficial Owner |
| Number of Shares |
| Percent of Class (1) |
Shahram Askarpour (2) |
| 596,797 |
| 3.3% |
Jeffrey DiGiovanni |
| 82,750 |
| * |
Glen R. Bressner |
| 141,737 |
| * |
Roger A. Carolin |
| 77,570 |
| * |
Stephen L Belland |
| 36,941 |
| * |
Garry Dean |
| 23,790 |
| * |
Parizad Olver (Parchi) |
| - |
| * |
Michael Linacre |
| 6,082 |
| * |
Denise L. Devine | | 20,407 | | * |
Relland Winand | | - | | * |
Richard Silfen | - | * | ||
All beneficial owners |
| 986,574 |
| 5.5% |
* Less than 1%.
1.As used in this table, beneficial ownership means the sole or shared power to vote or direct the voting of a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose, or direct the disposition, of a security). A person is deemed as of any date to have beneficial ownership of any security that such person has the right to acquire within 60 days after such date. Percentage ownership is based upon 17,778,343 shares of common stock outstanding and 206,250 vested stock options and unvested RSU’s as of January 12, 2026.
2.Dr. Askarpour’s Beneficial Ownership as of January 12, 2026 includes (1) 396,797 shares of Common Stock issued and outstanding, and (2) 200,000 Non-Qualified Stock Options (NQSO’s) vested as of January 12, 2026.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information about Company common stock that may be issued upon the exercise of options and pursuant to other awards under all of the Company’s existing equity compensation plans and arrangements as of September 30, 2025, including the 2019 Plan.
|
|
|
|
|
|
|
| Number of securities | ||
|
|
|
|
|
|
|
| remaining available for | ||
|
|
|
|
|
|
|
| future issuance under | ||
|
| Number of securities |
|
| Weighted-average |
|
| equity compensation | ||
|
| to be issued upon exercise |
|
| exercise price of |
|
| plans (excluding | ||
|
| of outstanding options, |
|
| outstanding options, |
|
| securities reflected in the | ||
Plan Category |
| warrants, and rights(a) |
|
| warrants, and rights(b)(1) |
|
| first column)(a) (c) (2) | ||
Equity compensation plans approved by security holders(3) |
|
| 945,769 |
|
| $ | 8.07 |
|
| 1,375,682 |
Equity compensation plans not approved by security holders |
|
| — |
|
|
| — |
|
| — |
Total |
|
| 945,769 |
|
| $ | 8.07 |
|
| 1,375,682 |
(1)Consists of the weighted average exercise price of outstanding options (“NQSOs”) and time vested stock options with a market-based exercise price condition (“MSOs”) as of September 30, 2025.
(2)Consists entirely of shares of common stock that remain available for future issuance under 2019 Stock-Based Incentive Compensation Plan as of September 30, 2025.
(3)Consists of 361,613 NQSOs, 72,062 MSOs, 311,094 RSUs and 201,000 MSUs outstanding as of September 30, 2025 under the 2019 Stock-Based Incentive Compensation Plan.
27
(3)RSUs and MSUs were excluded when determining the weighed-average exercise price of outstanding options, warrants and rights.
In the fiscal years ended September 30, 2025, 2024 and 2023, awards were granted to the Company’s non-employee directors under the Company’s then-existing equity compensation plans and arrangements with respect to 74,461, 43,986 and 36,182 shares, respectively.
2019 Stock-Based Incentive Compensation Plan
The 2019 Plan was approved by the Company’s shareholders at the Company’s Annual Meeting of Shareholders held on April 2, 2019. The 2019 Plan authorizes the grant of stock appreciation rights, restricted stock, options and other equity-based awards. Options granted under the 2019 Plan may be either “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or nonqualified stock options, as determined by the Compensation Committee.
Subject to an adjustment necessary upon a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution, or similar corporate transaction or event, the maximum number of shares of common stock available for awards under the 2019 Plan is 750,000, plus 139,691 shares of common stock that were authorized but unissued under the Company’s 2019 Stock-Based Incentive Compensation Plan as of the effective date of the 2019 Plan (i.e., April 2, 2019), all of which may be issued pursuant to awards of incentive stock options. On April 18, 2024, the Company amended the 2019 Stock-Based Incentive Compensation Plan to include an additional 1,950,000 authorized shares available for issuance. As of September 30, 2025, there were 1,375,682 shares of common stock available for awards under the 2019 Plan.
If any award is forfeited, terminates or otherwise is settled for any reason without an actual distribution of shares to the participant, the related shares of common stock subject to such award will again be available for future grant. Any shares tendered by a participant in payment of the exercise price of an option or the tax liability with respect to an award (including, in any case, shares withheld from any such award) will not be available for future grant under the 2019 Plan. If there is any change in the Company’s corporate capitalization, the Compensation Committee must proportionately and equitably adjust the number and kind of shares of common stock which may be issued in connection with future awards, the number and kind of shares of common stock covered by awards then outstanding under the 2019 Plan, the aggregate number and kind of shares of common stock available under the 2019 Plan, any applicable individual limits on the number of shares of common stock available for awards under the 2019 Plan, the exercise or grant price of any award, or if deemed appropriate, make provision for a cash payment with respect to any outstanding award. In addition, the Compensation Committee may make adjustments in the terms and conditions of any awards, including any performance goals, in recognition of unusual or non-recurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations, or accounting principles.
The 2019 Plan will terminate on April 2, 2029, unless earlier terminated by the Board. Termination will not affect awards outstanding at the time of termination. The Board may amend, alter, suspend, discontinue, or terminate the 2019 Plan without shareholder approval, provided that shareholder approval is required for any amendment which (i) would increase the number of shares subject to the 2019 Plan; (ii) would decrease the price at which awards may be granted; or (iii) would require shareholder approval by law, regulation, or the rules of any stock exchange or automated quotation system.
Item 13. Certain Relationships and Related Transactions and Director Independence.
Related Party Transactions
The written charter of the Audit Committee provides that it is the responsibility of the Audit Committee to review and approve any transaction between the Company and its officers, directors, and 5% shareholders.
During the fiscal years ended September 30, 2025 and September 30, 2024, there was not, nor is there any currently proposed transaction or series of similar transactions to which the Company was or is to be a party in which the amount involved exceeded or exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years and in which any executive officer, director, director nominee or holder of more than 5% of any class of voting securities of the Company and members of that person’s immediate family had, has or will have a direct or indirect material interest, other than as set forth in “Executive Compensation” and “Director Compensation Table” sections above.
28
On October 18, 2024, the Company entered into a consulting agreement with Peduzzi Associated, ltd. (“PAL”), an entity in which Maj. General Dean serves as President. PAL will provide consulting services in support of IA business development growth into the Department of Defense. The term of the agreement is for one year and in consideration for services IA will pay PAL a retainer of $9,500 per month.
DIRECTOR INDEPENDENCE
The Board has affirmatively determined, in its business judgment, that the following directors are independent directors within the meaning of the applicable Nasdaq listing standards: Glen Bressner, Stephen Belland, Roger Carolin, Garry Dean, Denise L. Devine and Richard Silfen. All members of our Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee are currently independent (as currently set forth in Rule 5605 of the Nasdaq listing rules).
Item 14. Principal Accounting Fees and Services
Services provided by Grant Thornton for the fiscal years ended September 30, 2025 and 2024 have included audits of the annual consolidated financial statements of the Company and other services related to filings made with the SEC. The aggregate fees billed by Grant Thornton in connection with services rendered during the fiscal years ending September 30, 2025 and 2024, respectively, were:
|
|
| ||||||
| | Grant Thornton | | | Grant Thornton | | ||
| FY 2025 |
|
| FY 2024 |
| |||
Audit Fees |
| $ | 661,575 |
|
| $ | 577,430 |
|
Audit Related Fees |
|
| - |
|
|
| - |
|
Tax Fees |
|
| - |
|
|
| - |
|
All Other Fees |
|
| - |
|
|
| - |
|
| | | | | | | | |
Total |
| $ | 661,575 |
|
| $ | 577,430 |
|
Audit Fees
Audit fees for fiscal years 2025 and 2024 were for professional services rendered for the audit of the Company’s annual consolidated financial statements, review of the interim consolidated financial statements included in quarterly reports, and services that are normally provided by Grant Thornton in connection with statutory and regulatory filings or engagements.
Audit Related Fees
No Audit-related fees were paid to Grant Thornton during fiscal years 2025 and 2024. Audit-related fees were paid to Grant Thornton during fiscal 2023 for services related to the audit of the required historical financial statements of certain assets acquired from Honeywell International, Inc. during fiscal 2023.
Tax-Related Fees
No tax-related fees were paid to Grant Thornton during fiscal years 2025 or 2024.
All Other Fees
No other fees were incurred in connection with services provided by Grant Thornton during fiscal years 2025 or 2024.
Pre-Approved Policies and Procedures
The Audit Committee’s policy is to pre-approve the engagement of accountants to render all audit and tax-related services for the Company and any changes to the terms of the engagement. The Audit Committee pre-approves all proposed non-audit related services to be provided by the Company’s independent registered public accounting firm. The Audit Committee reviews the terms of the engagement and a description of the services along with a fee proposal for the engagement. If agreed to by the Audit Committee, the Audit Committee formally accepts the engagement letter and fee proposal. Any proposal by the Company’s independent registered
29
public accounting firm for non-audit services must be specific as to the particular services to be provided. Management and the independent registered public accounting firm must each confirm to the Compensation Committee that each proposed non-audit and non-audit related service is permissible under all applicable legal requirements. Requests can be submitted to the Audit Committee and approved in one of the following ways: by a request for approval of services at a meeting of the Audit Committee, or through a written request to the Audit Committee, which may be approved by a written consent by the Audit Committee or by a designated member of the Audit Committee. The Audit Committee approved all fiscal year 2025 and 2024 fees paid to Grant Thornton.
Pursuant to the adoption of the Audit Committee Charter (as revised), the Board has adopted a policy which prohibits the Company from entering into non-audit related consulting agreements for financial information systems design and implementation, for certain other services considered to have an impact on independence, and for all other services prohibited by Sarbanes-Oxley and SEC regulations. The policy also contains procedures requiring Audit Committee pre-approval of all audit and permitted non-audit services provided by the Company’s independent registered public accounting firm.
30
PART IV
Item 15. Exhibits and Financial Statement Schedules.
| (a) | The following documents are filed as part of the Form 10-K: |
| 1. | Financial Statements |
See index to Financial Statements at Item 8 of the Form 10-K.
| 2. | Financial Statement Schedules |
Schedules have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the financial statements or notes thereto.
| (b) | The following exhibits are filed as part of, or incorporated by reference into the Form 10-K: |
Exhibit | | Exhibit Title |
2.1 | | |
2.2 | | |
2.3 | | |
2.4 | | |
2.5 | | |
3.1 | | Articles of Incorporation of Innovative Solutions and Support, Inc. (6) |
3.2 | | |
3.3 | | Amended and Restated Bylaws of Innovative Solutions and Support, Inc. (8) |
4.1 | | |
4.2 | | |
4.3 | | |
4.4 | | |
10.1 | | |
10.2 | | |
10.3 | | |
10.4 | | Offer Letter with Jeffrey DiGiovanni, dated March 18, 2024 (16) |
10.5 | | |
10.6 | | |
10.7 | | |
10.8 | | |
10.9 | | |
10.10 | |
31
10.11 | | |
10.12 | | |
10.13 | | |
10.14 | | |
10.15 | | |
10.16 | | |
10.17 | | |
10.18 | | |
10.19 | | |
10.20 | | |
19.1 | | |
21 | | |
23.1 | | |
31.1 | | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) (36) |
31.2 | | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) (37) |
31.3 | | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) (filed herewith) |
31.4 | | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) (filed herewith) |
32.1 | | |
97 | | |
101.INS | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101 |
*Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
| (1) | Incorporated by reference to Exhibit 2.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024. |
| (2) | Incorporated by reference to Exhibit 2.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024. |
| (3) | Incorporated by reference to Exhibit 2.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024. |
| (4) | Incorporated by reference to Exhibit 2.4 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024. |
32
| (5) | Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on October 3, 2024. |
| (6) | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 19, 2007. |
| (7) | Incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 18, 2023. |
| (8) | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 1, 2018. |
| (9) | Incorporated by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 23, 2025. |
| (10) | Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 12, 2022. |
| (11) | Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 1, 2023. |
| (12) | Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 10, 2024. |
| (13) | Incorporated by reference to Exhibit 5.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 2, 2012. |
| (14) | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 12, 2024. |
| (15) | Incorporated by reference to Exhibit 10,1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024. |
| (16) | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 21, 2024. |
| (17) | Incorporated by reference to Exhibit 10,2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024. |
| (18) | Incorporated by reference to Exhibit 10,3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024. |
| (19) | Incorporated by reference to Exhibit 5.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on November 22, 2024. |
| (20) | Incorporated by reference to Exhibit 10,3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2024. |
| (21) | Incorporated by reference to Exhibit 10,4 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 14, 2024. |
| (22) | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2023. |
| (23) | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2023. |
| (24) | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2023. |
| (25) | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2023. |
| (26) | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2023. |
| (27) | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2023. |
33
| (28) | Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on October 3, 2024. |
| (29) | Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on October 3, 2024. |
| (30) | Incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on October 3, 2024. |
| (31) | Incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 22, 2023. |
| (32) | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on July 22, 2025. |
| (33) | Incorporated by reference to Exhibit 19.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 30, 2024. |
| (34) | Incorporated by reference to Exhibit 21 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 23, 2025. |
| (35) | Incorporated by reference to Exhibit 23.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 23, 2025. |
| (36) | Incorporated by reference to Exhibit 31.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 23, 2025. |
| (37) | Incorporated by reference to Exhibit 31.2 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 23, 2025. |
| (38) | Incorporated by reference to Exhibit 32.1 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 23, 2025. |
| (39) | Incorporated by reference to Exhibit 97 to the Registrant’s Annual Report on Form 10-K filed with the SEC on December 23, 2024. |
*Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INNOVATIVE SOLUTIONS AND SUPPORT, INC.
| /s/ Shahram Askarpour | |
| Shahram Askarpour | |
| Director & Chief Executive Officer | |
Dated: January 27, 2026
35
Exhibit 31.3
I, Shahram Askarpour, certify that:
1. | I have reviewed this Amendment No. 1. to the Annual Report on Form 10-K/A of Innovative Solutions and Support, Inc.; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
January 27, 2026
/s/ Shahram Askarpour |
|
Shahram Askarpour |
|
Chief Executive Officer |
|
Exhibit 31.4
I, Jeffrey DiGiovanni, certify that:
1. | I have reviewed this Amendment No. 1. to the Annual Report on Form 10-K/A of Innovative Solutions and Support, Inc.; and |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
January 27, 2026
/s/ Jeffrey DiGiovanni |
|
Jeffrey DiGiovanni |
|
Chief Financial Officer |
|