New Horizon Aircraft Ltd.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References in this report (the “Annual Report”) to “we,” “us” or the “Company” refer to New Horizon Aircraft Ltd. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

All figures noted are in thousands of Canadian dollars unless noted otherwise.

Special Note Regarding Forward-Looking Statements

This Annual Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and “forward-looking information” within the meaning of the Ontario Securities Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Annual Report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Annual Report, words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to the Company’s management. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of this Annual Report.

Overview

New Horizon Aircraft Ltd. (the “Company”, “Horizon”, “we,” “us” or “our”) is a British Columbia-based aerospace company headquartered in Lindsay, Ontario, focused on developing advanced hybrid-electric vertical takeoff and landing ("eVTOL") aircraft. Our mission is to expand regional air mobility by delivering aircraft that combines the operational flexibility of vertical flight with the safety, speed, range, and efficiency of conventional fixed-wing aircraft.

Horizon’s flagship aircraft, the Cavorite X7, incorporates the Company’s patented fan-in-wing technology, enabling vertical takeoff and landing while preserving the performance characteristics of a conventional aircraft during cruise flight. The Cavorite X7 is being designed to serve a broad range of commercial and government applications, including regional passenger transportation, emergency medical services, disaster response, cargo operations and defense missions.

Horizon has successfully completed flight testing of its large-scale prototype aircraft and is currently assembling a full-scale technical demonstrator, which is expected to begin flight testing in 2026 or 2027. The Company continues to advance engineering, certification planning, manufacturing partnerships and supply chain development as it works toward commercialization.

Organization and Nature of Business

Robinson Aircraft Ltd. (“Robinson”), Horizon’s operating subsidiary, was incorporated in 2013. The company initially focused on hybrid-electric amphibious aircraft before transitioning in 2018 to the development of its proprietary hybrid-electric eVTOL platform, which ultimately evolved into the Cavorite X7.

Horizon's long-term business strategy is centered on the design, certification, and commercialization of the Cavorite X7, while leveraging strategic manufacturing partners and an established aerospace supply chain to efficiently scale production. In addition to aircraft sales, the Company believes its patented fan-in-wing technology and related intellectual property may create future licensing opportunities with other OEM’s.

Horizon intends to market the Cavorite X7 to commercial operators, aircraft lessors, government agencies and defense organizations that require aircraft capable of both vertical and conventional runway operations. The Company believes its asset-light manufacturing strategy, combined with strategic partnerships, will enable efficient capital deployment while supporting multiple commercial and government end markets.

Over the past year, Horizon has continued advancing the Cavorite X7 program through completion of major structural assemblies, expansion of its strategic supplier network, and preparation of its full-scale technical demonstrator for flight testing.

Business Combination

The Company is a former blank check company incorporated on March 11, 2022, under the name Pono Capital Three, Inc. (“Pono”), as a Delaware corporation, subsequently redomiciled in the Cayman Islands on October 14, 2022, and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination.

On February 14, 2023, we consummated the Initial Public Offering (“IPO”). On January 12, 2024 (the “Closing date”), we consummated a merger (the “Merger”) with Pono Three Merger Acquisitions Corp., a British Columbia company (“Merger Sub”) and wholly-owned subsidiary of Pono, with and into Robinson pursuant to an agreement and plan of merger, dated as of August 15, 2023, by and among Pono, Merger Sub, Horizon, and Robinson.

The Merger and other transactions contemplated thereby (collectively, the “Business Combination”) closed on January 12, 2024, when, pursuant to the Business Combination Agreement, Merger Sub merged with and into Robinson, surviving the Merger as a wholly owned subsidiary of Pono. Pono changed its name to “New Horizon Aircraft Ltd.” and the business of Robinson became the business of New Horizon Aircraft Ltd.

The financial information included in this report reflect (i) the historical operating results of Robinson prior to the Business Combination (“Legacy Horizon”); (ii) the combined results of Pono and Legacy Horizon following the closing of the Business Combination; (iii) the assets and liabilities of Legacy Horizon at their historical cost; and (iv) the Company’s equity structure for all periods presented.

Key Factors Affecting Operating Results

See the section entitled “Risk Factors” for a further discussion of these considerations.

Development of the Regional Air Mobility Market

The Company’s revenue will be directly tied to the continued development of long-distance aerial transportation and related technologies. While the Company believes the market for RAM will be significant, it is currently immature and there is no guarantee of future demand. Horizon anticipates commercialization of its aircraft beginning in 2028 or 2029, and its business will require significant investment leading up to commercialization, including, but not limited to, final engineering designs, prototyping and flight testing, manufacturing, software development, certification, and pilot training.

Horizon believes one of the primary drivers for adoption of its aircraft is the value proposition enabled by its aircraft that can take-off and land similar to a helicopter, fly almost twice as fast, and operate with much lower direct operating costs. Additional factors impacting adoption of eVTOL technology include, but are not limited to: perceptions about eVTOL quality, safety, performance and cost; perceptions about the environmental impact of hybrid-electric machines; volatility in the cost of oil and gasoline; availability of competing forms of transportation, such as ground or unmanned drone services; consumers perception about the convenience and cost of transportation using eVTOL relative to ground-based alternatives; and increases in fuel efficiency, autonomy, or electrification of vehicles. In addition, macroeconomic factors could impact demand for RAM services, particularly if customer pricing is at a premium to ground-based transportation. Horizon anticipates initial aircraft sales to be used for medevac services, firefighting services, disaster relief services, remote medical services, military operations, followed by sales to air operators and lessors for air cargo, business travel and air-taxi services. If the market for RAM does not develop as expected, this would significantly impact the Company’s ability to generate revenue or grow its business.

Competition

The markets in which we intend to operate are highly competitive and characterized by significant capital requirements and rapid technological change. We expect to compete with traditional helicopter manufacturers, fixed-wing aircraft manufacturers, ground-based mobility solutions, and other eVTOL developers, many of whom have substantially greater financial, technical, and manufacturing resources than we do. While we expect to produce a versatile aircraft that can be useful in a variety of air mobility missions, we believe this industry will be dynamic and increasingly competitive. It is possible that our competitors could gain significant market share. Horizon may not fully realize the sales it anticipates, and it may not receive any competitive advantage from its design or may be overcome by other competitors. If new companies or existing aerospace companies produce competing aircraft in the markets in which Horizon intends to service and obtain large-scale capital investment, we may face increased competition.

Horizon may receive an advantage from following well-funded competitors that are paying to create certification programs, raise awareness of eVTOL advantages, and advocate for enhanced government funding programs.

Government Certification

Commercial operation of Horizon’s Cavorite X7 aircraft will require Type Certification and related regulatory approvals. We have initiated engagement with TCCA in Canada and the FAA in the United States to discuss potential certification pathways. As a Canadian company, we expect TCCA to serve as the primary certification authority, with participation from the FAA as the program progresses, which we expect will reduce the traditional amount of time required to achieve FAA certification.

Horizon maintains a partnership with 3C to support aspects of our certification planning and development activities. 3C is leveraging their deep experience with TCCA and FAA certification programs and is assisting us in developing our certification basis and advancing regulatory engagement.

Certification of a new aircraft design is a complex, multi-year process that typically requires significant time and capital. We have not previously completed an aircraft certification program, and there can be no assurance that our Cavorite X7 aircraft will achieve certification on our anticipated timeline, or at all. In addition to type certification, we will be required to obtain production approvals prior to commercial deliveries.

Delays in certification, changes in regulatory requirements, the need for additional testing or design modifications, or the inability to obtain required approvals could delay or prevent commercialization of our aircraft. Any such outcomes could materially and adversely affect our business, financial condition, results of operations, and prospects.

Dual Use Business Model

Horizon is pursuing a dual use strategy designed to position the Cavorite X7 aircraft for both civilian and military applications. We believe this approach expands our potential addressable market, supports earlier mission adoption opportunities, and may enable a more efficient path toward scaling production over time.

Present projections indicate that sales volume of this dual use aircraft will result in a viable business model over the longer-term as production volumes scale and unit economics improve to support sufficient market adoption. The advantage of military application of Horizon’s aircraft in addition to sales volumes leads to a reduction in the risk of certification as aircraft used for military purposes do not necessarily require TCCA, FAA, or related other jurisdictional certification approval. As with any new industry and aerospace product, numerous risks and uncertainties exist. The Company’s financial results are dependent on delivering aircraft on-time and at a cost that supports returns at prices that support sufficient sales to customers who are willing to purchase based on value arising from time and versatility from utilizing regional eVTOL aircraft. Horizon’s civilian sector financial results are dependent on achieving certification on its expected timeline. Our aircraft include numerous parts and manufacturing processes unique to eVTOL aircraft, particularly its product design. Significant efforts have been made to estimate costs in the Company’s planning projections; however, the cost associated with assembling its aircraft at scale remains uncertain at this stage of development.

We believe military and special-mission use cases, which may not require the same certification approvals as commercial passenger operations, could provide earlier operational opportunities and help validate performance, reliability, and mission versatility as the broader regional air mobility market continues to develop. Over time, we expect increasing production volumes and operational experience to support improvements in unit economics and market adoption.

Our long-term success in the civilian sector will depend on our ability to deliver aircraft on schedule, at competitive costs, and at price points that support customer adoption across multiple mission profiles. While our civilian market opportunity remains dependent on achieving regulatory certification, we believe our dual-use strategy provides flexibility as we progress through development, certification, and commercialization.

Going Concern and Liquidity

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred and expects to continue to incur significant costs in pursuit of the Company’s commercialization plans. We have devoted many resources to the design and development of our eVTOL prototype aircraft. Funding of these activities has primarily been through the net proceeds received from the issuance of Class A ordinary shares, preferred shares, and the issuance of related and third-party convertible debt.

Horizon is a pre-revenue organization focused on research and development and flight-testing of our eVTOL aircraft. With $78.3 million of cash on-hand as of May 31, 2026, management expects that the Company has sufficient funds for its current operating plan for at least the next 12 months from the date the consolidated financial statements were available to be issued. There remains substantial doubt regarding the Company’s ability to meet the going concern assumption beyond that period without securing additional capital.

There can be no assurance that we will be successful in achieving our business plans, that our current capital will be sufficient to support our ongoing operations, or that any additional financing will be available in a timely manner or on acceptable terms, if at all. If events or circumstances occur such that we do not meet our business plans, we may be required to raise additional capital, alter, or scale back our aircraft design, development, and certification programs, or be unable to fund capital expenditures. Any such events could have a material adverse effect on our financial position, results of operations, cash flows, and ability to execute our business plans.

Components of Results of Operations

Revenue

The Company is working to design, develop, certify, and manufacture our eVTOL aircraft and has not yet generated revenues in any of the periods presented. We do not expect to begin generating significant revenues until we are able to complete the certification of our eVTOL aircraft. 

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of personnel expenses, including salaries, benefits, other compensation costs and costs of consulting, as well as equipment, engineering, data analysis, and materials.

We expect our research and development expenses to increase as we increase staffing to support aircraft engineering and software development, build aircraft, and continue to explore and develop our eVTOL aircraft and technologies.

Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of personnel expenses, including salaries, benefits, and stock-based compensation, related to executive management, finance, legal, and human resource functions. Other costs include business development, investor relations, contractor and professional services fees, audit and compliance expenses, insurance costs and general corporate expenses, including depreciation, rent, information technology costs and utilities.

We expect our selling, general and administrative expenses to increase as we hire additional personnel and consultants to support our operations and comply with applicable regulations, including the Sarbanes-Oxley Act and other SEC rules and regulations.

Other Income

Other income consists of grants and subsidies received for developmental work and foreign exchange gains and losses.

Interest Expense, net

Interest expense is related to the Company’s leases. Interest income consists primarily of interest earned on the Company’s cash and cash equivalents.

Change in fair value of Forward Purchase Agreement

Change in fair value of Forward Purchase Agreement consists of fluctuations in the deemed value of an agreement between the Company and a shareholder facilitating future purchases of the Company’s stock based on a simulation model. The Company mutually agreed to terminate the Forward Purchase Agreement with its counterparty on November 1, 2024, at a cost of $278. In connection with this transaction, the Company recorded a $21,400 gain.

Change in fair value of Warrants

Changes in fair value of Warrants consists of fluctuations in the fair value of the Company’s Warrants outstanding as of the end of each reporting period.

Results of Operations

We believe the following information includes all adjustments necessary to state fairly the results of operations for all periods presented. This data should be read in conjunction with Horizon’s consolidated financial statements and notes thereto. These results of operations are not necessarily indicative of the future results of operations that may be expected for any future period.

Comparison of the Year Ended May 31, 2026 to the Year Ended May 31, 2025

Significant variances in the Company’s components of operations are explained below. The following table sets forth Horizon’s statements of operations data for the years-ended May 31, 2026, and May 31, 2025 (000’s $CAD).

Operating Expenses

Operating expenses increased by $9,883, from $13,585 for the year-ended May 31, 2025, to $23,468 for the year-ended May 31, 2026. The increase was primarily driven by equipment and materials directly related to the build of the full-scale technical demonstrator aircraft, additional staff hired to support research and development activities, and other administrative costs connected with the Company’s growth activities.

Research and Development Expenses

Research and development expenses increased by $9,584, from $3,660 during the year-ended May 31, 2025, to $13,244 during the year-ended May 31, 2026. The increase was primarily attributable to additional labour costs related to flight testing, engineering work, flight software, prototype manufacturing, and data analysis. Research and development costs can be itemized into the following categories for the respective periods:

General and Administrative

General and Administrative costs increased by $299, from $9,925 during the year-ended May 31, 2025, to $10,224 during the year-ended May 31, 2026. The increase was related to legal, accounting, travel, investor relations, compensation costs, marketing, and branding expenses related to the Company’s growth efforts.

Other expenses (income)

Other expenses (income) increased by $513, from an expense of $10 during the year-ended May 31, 2025, to income of $503 during the year-ended May 31, 2026. The increase primarily reflected foreign exchange and additional grants and subsidies received.

Cash Flows

The following tables set forth a summary of our cash flows for the periods indicated (000’s $CAD):

Net Cash used in Operating Activities

The Company’s cash flows used in operating activities have been primarily comprised of compensation costs, software expenses, technology costs, professional services related to research and development and general and administrative activities, insurance, and direct research and development costs for aircraft design, simulation, and aircraft manufacturing, partially offset by periodic grants received from various government agencies and interest earned on cash. The Company expects to increase hiring to accelerate its engineering and certification efforts in the coming years.

For the year-ended May 31, 2026, the 7,180 increase in cash used from operations as compared to the year-ended May 31, 2025, was primarily attributed to increased operating costs in connection to the Company’s engineering efforts and changes in working capital.

Net Cash used in Investing Activities

The Company’s cash flows used in investing activities have primarily been comprised of the acquisition of property and equipment.

For the year-ended May 31, 2026, the $825 increase in cash used by investing activities as compared to the year-ended May 31, 2025, was primarily attributed to tooling, aircraft rotables and spares, and technology acquisition costs.

Net Cash provided by Financing Activities

The Company’s cash flows provided by financing activities to date have primarily been composed of funding raised with convertible instruments and registered securities offerings.

For the year-ended May 31, 2026, the $73,006 increase in cash provided by financing activities was primarily attributed to proceeds from the issuance of Class A ordinary shares and warrant exercises.

On August 21, 2024, the Company completed a registered securities offering (“RSO”) by issuing 2,800,000 Class A ordinary shares, 3,000,000 Pre-Funded Warrants (“PFW’s”), and 5,800,000 General Warrants. Proceeds received by the Company are summarized below:

PFW’s may be exercised by warrant holders at any time at a nominal exercise price as they were funded in connection with the RSO. Upon exercise, each PFW may be exchanged for one Class A ordinary share. All 3 million PFW’s were exercised during the year-ending May 31, 2025.

During the year-ended May 31, 2026, warrant holders exercised 3,200,000 (May 31, 2025 - 2,590,000) General Warrants in exchange for 3,200,000 (May 31, 2025 - 2,590,000) Class A ordinary shares for proceeds of $3,280 (May 31, 2025 - $2,787).

On May 8, 2026, the Company completed a registered direct offering (“RDO I”) by issuing 9,254,889 Class A ordinary shares. There were also 277,647 warrants issued to the placement agent to purchase an equivalent number of shares at an exercise price of $USD 2.47. Proceeds received by the Company in connection with RDO I are summarized below:

On May 27, 2026, the Company completed a second registered direct offering (“RDO II”) by issuing 5,385,646 Class A ordinary shares and 4,574,514 PFW’s. There were also 298,805 RDO II Warrants issued to the placement agent to purchase an equivalent number of shares at an exercise price of $USD 2.89. Proceeds received by the Company are summarized below:

PFW’s may be exercised by warrant holders at any time at a nominal exercise price as they were funded in connection with RDO II. Upon exercise, each PFW may be exchanged for one Class A ordinary share. 2,413,617 PFW’s were exercised during the year-ended May 31, 2026.

As of May 31, 2026, there were 12,065,375 warrants outstanding at an exercise price of $11.50 USD, 10,000 General Warrants outstanding at an exercise price of $USD 0.75, 277,647 RDO I Warrants outstanding at an exercise price of $USD 2.47, and 298,805 RDO II Warrants outstanding at an exercise price of $USD 2.89 to purchase an equivalent number of Class A ordinary shares.

On December 18, 2024, the Company entered into subscription agreements with a third-party investor pursuant to which the Company issued an aggregate of 4,166,667 Class A ordinary shares of the Company, at a price of $USD 0.36 per share, and an aggregate of 4,500 Series A preferred shares (the “Series A Preferred Shares”) of the Company at a price of $1,000 per share. The financing closed on December 19, 2024.

The Series A Preferred Shares are convertible, at the option of the holder and without additional consideration, into Class A ordinary shares on a one for 2222.222222 basis. The proceeds received by the Company are summarized below:

In March 2025 the Company filed a shelf registration statement on Form S-3 with the SEC and a related prospectus pursuant to which it may, from time to time, sell shares of its Class A ordinary shares, having an aggregate value of up to $USD 6.25 million, pursuant to a Capital on Demand™ Sales Agreement (the “Sales Agreement”) with a placement agent for the sale of its Class A ordinary shares.

On June 27, 2025, we filed a prospectus supplement to increase the maximum aggregate offering price of the Class A ordinary shares issuable under the Sales Agreement to up to an additional aggregate $USD 16.5 million of Class A ordinary shares. On October 31, 2025, the Company filed a prospectus supplement to increase the maximum aggregate offering price of the Class A ordinary shares issuable under the Sales Agreement to $USD 50 million of Class A ordinary shares. On May 26, 2026, the Company filed a prospectus supplement to decrease the maximum aggregate offering price of the Class A ordinary shares issuable under the Sales Agreement to $USD 28 million of Class A ordinary shares.

During the year-ended May 31, 2026, the Company sold 9,037,738 (May 31, 2025 – 940,562) Class A ordinary shares under the Sales Agreement for net proceeds of $27.9 million (May 31, 2025 - $880). As of May 31, 2026, the Company had $USD 6.6 million remaining eligible for sales under the Sales Agreement.

Sources of Liquidity

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, contractual obligations, and other commitments. The Company assesses liquidity in terms of its cash flows from financing activities and their sufficiency to fund its operating and development activities. Beyond May 31, 2026, the Company’s principal source of liquidity is expected to be cash and cash equivalents of more than $78 million on-hand, future government grants and subsidies, and future sales of securities.

To date, the Company has funded its operations primarily with the issuances of Class A ordinary shares, Series A Preferred Shares, and issuances of convertible debt instruments. Additional funding has been provided through government-backed grants.

The Company believes it has sufficient cash to fulfill its business plan for at least the next 12 months from the date of this filing. To the extent the Company is able to raise additional financing, either by way of the Sales Agreement, warrants, or by other means, the Company may be in a position to expedite its business plan including hiring employees at a more rapid pace. To achieve the Company’s long-term objectives, additional financing may be required.

Horizon is a pre-revenue organization that is currently building a full-scale technical demonstrator aircraft in pursuit to certify its Cavorite X7 aircraft. While management estimates that cash and cash equivalents on-hand of more than $78 million will be sufficient to fund our current operating plan for at least the next 12 months from the date these consolidated financial statements were available to be issued, there is substantial doubt around the Company’s ability to meet the going concern assumption beyond that period without securing additional capital.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of May 31, 2026, and May 31, 2025.

Significant Accounting Judgements, Estimates, and Assumptions

The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For derivative instruments that are classified as equity, the derivative instruments are initially measured at fair value (or allocated value), and subsequent changes in fair value are not recognized so long as the contracts continue to be classified in equity.

The Company’s Forward Purchase Agreement and Warrants outstanding that are recognized as a derivative liability in accordance with ASC 815 are recognized as an asset or liability at fair value and with changes in fair value recognized in the Company’s consolidated statements of operations. The estimated fair value of the Forward Purchase Agreement was measured at fair value using a simulation model. At the settlement date, the Forward Purchase Agreement was recognized as a derivative asset at the value of cash paid based on the number of shares, with any changes in fair value recognized in the Company’s statements of operations. The Company mutually agreed to terminate the Forward Purchase Agreement with its counterparty on November 1, 2024, at a cost of $278 and resulting in a gain of $21,400.

Research and Development Costs

The research and development costs are accounted for in accordance with ASC 730, Research and Development, which requires all research and development costs to be expensed as incurred.

Recent Accounting Standards

Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements through enhanced disclosures about significant segment expenses, interim segment profit or loss and assets, and how the CODM uses reported segment profit or loss information in assessing segment performance and allocating resources. The Company adopted ASU 2023-07 effective June 1, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure of additional information about specific expense categories in the notes to the financial statements. The update is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The update can be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any of all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2024-03 on its disclosures within its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes the accounting for government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. The update is effective for annual periods beginning after December 15, 2028, and interim periods beginning within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If a business entity adopts the amendments in this Update in an interim reporting period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. The Company is currently evaluating the impact of ASU 2024-03 on its disclosures within its consolidated financial statements.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s financial statements.