🧾 What This Document Is

This is an 8-K filing with an attached Asset Purchase and License Agreement. It's not just a report; it's the legally binding contract for a major deal. ISSC is buying specific assets from Honeywell and, crucially, getting a long-term license to use Honeywell's technology to run that part of the business. The agreement is dated March 27, 2026.

🏢 What The Company Does

👉 In simple terms, Innovative Solutions & Support, Inc. (ISSC) makes systems for the aerospace and defense industry. Think flight controls, displays, and other specialized equipment for aircraft. This deal is about them buying a specific product line and the rights to make and sell it from the industrial giant Honeywell.

💰 The Financial Heart of the Deal

• Purchase Price: $22,000,000 (Twenty-Two Million Dollars). This is the core payment for the assets.
• Inventory Adjustment: The final price could change. ISSC will count the inventory it receives. If the actual value is significantly different from Honeywell's estimate, they'll make a "true-up" payment (either ISSC pays Honeywell more, or Honeywell pays ISSC back).
• Payment Terms: The money is paid via wire transfer upon closing. It's non-refundable.

🚀 What ISSC is Buying & The Critical License

The Purchased Assets (What ISSC Gets):

• Inventory: All the parts and finished goods related to the specific "Exclusive Licensed Products."
• Equipment: The tooling, fixtures, and test equipment needed to work on those products.
• Contracts: Customer and supplier contracts only for the exclusive products (transferring these requires third-party consent).
• Documents: All technical data, drawings, manuals, and customer lists for these products.

The License (How ISSC Can Use Honeywell's Tech):

• Exclusive License: For certain core products, ISSC gets the exclusive right to repair, manufacture, sell, and distribute them using Honeywell's intellectual property (IP).
• Non-Exclusive License: For other related products, ISSC gets a non-exclusive right to do the same.
• Licensed Field & Territory: The licenses are strictly limited to a specific product area ("Licensed Field") and geographic region ("Licensed Territory"). ISSC cannot use this tech for anything else without Honeywell's permission.
• Term: The licenses are perpetual (forever), unless ISSC commits a "Willful Breach" of the license terms.

⚖️ Key Risks & Responsibilities for ISSC

• Assumed Liabilities: ISSC isn't just buying assets; it's taking on all the related liabilities. This includes warranty claims, product liability lawsuits, and obligations under the contracts it's acquiring. This is a significant risk transfer.
• Compliance & Audits: ISSC must follow all laws and allow Honeywell to audit its records twice a year to ensure it's complying with the license terms.
• No Trademark Rights: ISSC cannot use the "Honeywell" name or trademarks. It must clearly mark products as manufactured by ISSC.
• Confidentiality: ISSC must protect Honeywell's trade secrets and confidential information with strict security.

🔮 What's Next & The Big Picture

This is a strategic move for ISSC to expand its product portfolio by acquiring a mature business line from a major player. They gain customers, inventory, tools, and the essential IP to operate. However, they are also inheriting the operational risks and liabilities of that business.

👍 Strengths: Immediate growth, established products, and customer contracts. ⚠️ Risks: Heavy liabilities, strict license restrictions, and dependency on Honeywell's underlying IP.

🧠 The Analogy

Imagine buying a fleet of specialized delivery trucks (the assets) and also getting the only blueprint and operating manual (the license) from the original manufacturer. You can now run the delivery service yourself, but you must follow the blueprint exactly, can only deliver in your assigned city, and you're on the hook if any of the trucks have a mechanical failure from before you bought them.

📇 Key Contacts & People

For Notices (as per Section 8.1):

• To Purchaser (ISSC):
  • Innovative Solutions & Support, Inc.
  • Attn: CEO
  • 40675 Meredith Court
  • Murrieta, CA 92562
• To Seller (Honeywell):
  • Honeywell International Inc.
  • Attn: President, Defense & Space
  • 1944 E. Sky Harbor Circle North
  • Phoenix, AZ 85034

🧩 Final Takeaway

ISSC is paying $22M+ to buy a self-contained product business from Honeywell, including its inventory, tools, and contracts. The most valuable part is the perpetual license to Honeywell's intellectual property, which allows ISSC to manufacture and sell those products—but only within very strict limits. ISSC takes on all the past and future liabilities of this business, making thorough integration and compliance critical.