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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended November 30, 2015

For the transition period from                      to                     

Commission file number 001-35214

API TECHNOLOGIES CORP.

(Exact Name of Registrant as Specified in its Charter)

Registrant’s Telephone Number including area code: (407) 876-0279

Securities registered under Section 12 (b) of the Exchange Act:

Securities registered under Section 12 (g) of the Exchange Act:

None

(Title of Class)

Indicate by check mark if the registrant is well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

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  ¨    No  x

Indicate by check mark if the registrant (1) filed all reports required to be filed by section 13 or 15 (d) of the Exchange Act during the past 12 months (or for a 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.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

As of May 31, 2015, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $47,081,825. For the purpose of the foregoing calculation only, all directors and executive officers of the registrant and owners of more than 10% of the registrant’s common stock are assumed to be affiliates of the registrant. This determination of affiliate status is not necessarily conclusive for any other purpose.

As of February 16, 2016, the Company had 55,850,800 shares of common shares issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days of the end of our fiscal year ended November 30, 2015 are incorporated by reference into Part III.

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PART I

FORWARD LOOKING STATEMENTS

This document and the documents incorporated in this document by reference contain forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact contained in this document and the materials accompanying this document are forward-looking statements.

The forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. Frequently, but not always, forward-looking statements are identified by the use of the future tense and by words such as “believes,” “expects,” “anticipates,” “intends,” “will,” “may,” “could,” “would,” “projects,” “continues,” “estimates” or similar expressions. Forward-looking statements are not guarantees of future performance and actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements.

The forward-looking statements contained or incorporated by reference in this document are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (“Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”) and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding our plans, intentions, beliefs or current expectations.

Among the important factors that could cause actual results to differ materially from those indicated by forward-looking statements are the risks and uncertainties described under “Risk Factors” and elsewhere in this document and in our other filings with the SEC.

Forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and we do not undertake any obligation to update forward-looking statements to reflect new information, subsequent events or otherwise.

Overview of the Company

API Technologies Corp. (“we,” “us,” “our,” the “Company,” or “API”) is a leading provider of high performance Radio Frequency (“RF”) microwave, microelectronic, power, and security solutions. We offer one of the most comprehensive selections of RF, microwave, millimeterwave and microelectronics products in the industry, ranging from components to complete system solutions. We operate through our three business segments—Systems, Subsystems & Components (SSC), Electronic Manufacturing Services (EMS) and Secure Systems & Information Assurance (SSIA).

Our primary end markets are defense, high- reliability commercial and industrial, and non-defense government. Our products may be found in a variety of applications including commercial aircraft systems, mobile and wireless systems, radar and imaging systems, missile systems, unmanned systems, spectrum defense technology, commercial and military satellites, space vehicles, medical devices, and oil and gas industrial systems.

We sell our products through direct sales force and applications engineering staff, a network of independent sales representatives, and distributors, as well as through our web site.

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We currently have business offices throughout North America, the U.K., and Germany. Our executive corporate office is located at 4705 S. Apopka Vineland Rd. Suite 210, Orlando, FL 32819, and our telephone number at that location is (407) 876-0279.

Our website address is www.apitech.com. In our web site’s “Investor Relations” section, we make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as well as proxy statements, as soon as reasonably practicable after we file electronically such material with, or furnish it to, the SEC. The content on our website is available for information purposes only and is not incorporated by reference. Our common stock trades on the NASDAQ Capital Market under the symbol “ATNY.”

2015 Product Highlights

Systems, Subsystems & Components

Secure Systems & Information Assurance (SSIA)

Demand from Government users for TEMPEST products and services was particularly strong in the U.K. and Scandinavia. Market need for thin client and zero client solutions was addressed with new products released in the year. Secure products, including IP telephones and video conferencing terminals, were designed and sold in the period. With the introduction of the ION Secure virtual Appliance, ION enters the Cloud application market, enabling remote secure services of privileged users.

Recent Developments and Financial Highlights

During fiscal 2015, we completed the following transactions:

On June 8, 2015 we completed the acquisition of Aeroflex / Inmet, Inc. (“Inmet”) and Aeroflex / Weinschel, Inc. (“Weinschel”) from Cobham plc for a total purchase price of approximately $80.0 million. Inmet and Weinschel have each been in business for more than 40 years, and each manufactures and sells RF and microwave products for defense, space, avionics, wireless, and test and measurement applications. The acquisitions of Inmet and Weinschel add breadth to our RF, microwave, and microelectronics product portfolio, extend the Company’s subsystems offering, and further our reach in key end markets, including defense, space, commercial aviation, and wireless. We financed the acquisition with an $85.0 million add-on to our existing term loan with Guggenheim Corporate Funding LLC.

During fiscal 2014, we completed the following transactions:

On March 21, 2014, we entered into Amendment No. 2 to Credit Agreement (the “Amendment No. 2”), by and among the Company, as borrower, the lenders party thereto and Guggenheim Corporate Funding, LLC, as

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administrative agent (the “Agent”). Amendment No. 2 amends the Credit Agreement, dated as of February 6, 2013, by and among the Company, as borrower, the lenders party thereto and Agent (as amended, supplemented or modified from time to time, the “Term Loan Agreement”) to provide for an incremental term loan facility in an aggregate principal amount equal to $55.0 million (the “Incremental Term Loan Facility”). The Incremental Term Loan Facility is subject to substantially the same terms and conditions, including the applicable interest rate and the maturity date of February 6, 2018, as the $165.0 million term loan facility provided upon the initial closing of the Term Loan Agreement. In addition, Amendment No. 2 amends the Term Loan Agreement to reduce the minimum interest coverage ratio and increase the maximum leverage ratio, among other things.

The proceeds of the Incremental Term Loan Facility were used (i) to pay in full the amounts due under a Credit Agreement (the “Revolving Loan Agreement”), by and among the Company and certain of its U.S. subsidiaries, as borrowers, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent and U.K. security trustee, which Revolving Loan Agreement was then terminated; (ii) to redeem all 26,000 shares of the Company’s Series A Mandatorily Redeemable Preferred Stock that were outstanding (as described below); (iii) to pay fees, costs and expenses associated with the Incremental Term Loan Facility and related transactions; and (iv) for general corporate purposes.

As of March 21, 2014, we redeemed all 26,000 shares of our Series A Mandatorily Redeemable Preferred Stock that were outstanding. We paid the holder of the Series A Mandatorily Redeemable Preferred Stock an aggregate of $27.6 million to effect the redemption. Following redemption, all shares of Series A Mandatorily Redeemable Preferred Stock were cancelled and such shares were returned to authorized but undesignated shares of preferred stock.

On December 31, 2013, we completed the sale and leaseback (the “Sale/Leaseback”) of the Company’s facility located in State College, Pennsylvania. We sold the facility to an unaffiliated third party for a gross purchase price of approximately $15.5 million and will lease the property from the buyer for approximately $1.3 million per year, subject to annual adjustments. We used $14.2 million of the proceeds of the Sale/Leaseback to reduce our outstanding indebtedness under the Term Loan Agreement.

Business Strategy

Our business strategy is to increase shareholder value by providing differentiated products to address our customers’ high reliability requirements for the RF/Radio Frequency and microwave, power, and security solutions.

Our strategies to achieve our objectives include:

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Corporate Organization and History

API was incorporated on February 2, 1999 under the laws of the State of Delaware under the name Rubincon Ventures Inc. On November 6, 2006, we completed the business combination among API, API Nanotronics Sub, Inc., which we refer to as API Sub, and API Electronics Group Corp., which we refer to as API Ontario. In this business combination, which occurred under Ontario law, API combined with API Ontario, and API Ontario became API’s wholly-owned indirect subsidiary. The holders of common shares of API Ontario were given the right to receive either 0.83 API common shares (which number reflects a subsequent share split and reverse share splits), or if the shareholder elected and was a Canadian taxpayer, 0.83 Exchangeable Shares of API Sub (which number reflects a subsequent share split and reverse share splits). Any API Ontario common shares not exchanged into Exchangeable Shares or API common shares may be cancelled on November 6, 2016.

On November 6, 2006, API changed its name to “API Nanotronics Corp.” and subsequently changed its name to API Technologies Corp. on October 22, 2009.

Products

We provide our products to our customers through three principal business segments—Systems, Subsystems & Components, Electronic Manufacturing Services and Secure Systems & Information Assurance.

Systems, Subsystems & Components (SSC)

The Systems, Subsystems & Components segment includes the products of several of our operating subsidiaries, including Spectrum, API Defense Inc., API Defense USA Inc., API Systems Inc., API Microwave Ltd. (formerly RF2M Microwave Ltd.), API Microelectronics Ltd. (formerly RF2M Microelectronics Ltd.), API Electronics, Inc., TM Systems, Keytronics, Filtran Limited, CMT, API / Inmet, Inc. and API / Weinschel, Inc.

Products offered in the SSC segment include:

We develop and offer high-performance RF, microwave and millimeterwave solutions for defense, space, commercial and military aircraft, and industrial applications. In addition to offering one of the world’s largest selections of RF and microwave filters for high reliability applications, we specialize in the development of Active Antenna Array Unit (AAAU) subsystems for AESA radar, datalink and satcom applications; high power amplifiers; and custom Integrated Microwave Assemblies (IMAs). Other featured products include small signal and high frequency amplifiers, SAW and BAW modules, agile sources, transponders and multi-channel transmit/receive modules. We also offer one of the world’s largest selection of RF and microwave attenuator based products via a wide range of frequencies and power levels consisting of gain equalizers, fixed, mechanically stepped and programmable attenuators and RF distribution subsystems.

We develop microelectronics products for a broad range of space, defense, commercial, and industrial applications. Products span digital and mixed signal microcircuits, opto-electronic media conversion solutions, multi-chip modules (MCMs), high temperature electronics, and power and general purpose hybrids and modules.

We offer one of the world’s largest selections of high reliability custom and off-the-shelf components for EMC compliance, energy efficiency, and power management, used in defense, aerospace, medical, and industrial applications. The product line features a broad range of EMI filters, power filters, magnetics, thin film capacitors, coaxial filters, specialty connectors, and advanced ceramics.

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Our core focus is to expand and grow our AC & DC SMARTStart PDU, AC & DC Custom Military PDU, as well as our Power Conversion, Power Supply product. We will be focused on strategic programs targeting specific applications and focused accounts.

The SSC product offerings are sold to defense, commercial, and industrial customers, both domestic and international.

Secure Systems & Information Assurance (SSIA)

The Secure Systems & Information Assurance segment includes the products of our operating subsidiaries Emcon Emanation Control Inc., Secure Systems and Technologies Ltd., API Cryptek Inc. and the ION Networks division.

We develop and offer various secure network and hardware solutions spanning TEMPEST and Emanation Security, ruggedized systems, secure access, information assurance products, as well as TEMPEST certification. Products are marketed under the EMCON^®, SST™, Cryptek™, ION™, and Netgard^® brand names. These product offerings are sold to U.S. and international U.S. friendly governments and military organizations and Fortune 500 firms for which security and information assurance is of paramount importance.

Electronic Manufacturing Services (EMS)

The Electronic Manufacturing Services segment includes the products of our operating subsidiaries API Defense Inc., API Systems Inc. and SenDEC.

We deliver award-winning Electronics Manufacturing Services (EMS) for high-reliability applications to defense, commercial, and medical customers. Offerings span New Product Introductions (NPI) and prototypes, turnkey manufacturing, Printed Circuit Board (PCB) assembly, electro-mechanical assembly, systems integration, test engineering, turnkey box build, and supply chain management.

Financial Information About Segments and Geographical Data

For financial information concerning our reportable segments and geographic regions, refer to note 21 of our consolidated financial statements found in Part II, Item 8 of this Form 10-K.

Sales and Marketing

We use an integrated sales approach across all of our business segments to closely manage relationships at multiple levels of the customers’ organizations, including management, engineering and purchasing personnel. At November 30, 2015 our sales, marketing and customer support team consists of approximately 68 people. Our use of experienced engineers as part of the sales effort facilitates close technical collaboration with our customers during the design and qualification phase of the engagement. We believe that close customer collaboration is critical to ensuring our products are incorporated into our customers’ systems and platforms. Products are sold through direct sales representatives and a network of independent sales representatives, distributors, and agents, with the exception of the Secure Systems and Information Assurance (SSIA) segment. SSIA products are sold almost exclusively by direct sales representatives.

The sales cycle can be long in nature with a protracted design phase. However, once a product is designed into a defense or commercial system, we may be the sole-source or primary source supplier. Due to the extensive qualification process and potential redesign required for using an alternative source, customers are often reluctant to change the incumbent supplier. We attempt to become the incumbent supplier by supporting customers’ early design and engineering efforts, thereby positioning us to realize long-term, recurring revenue throughout the lifecycle of our customers’ products.

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In the commercial market, we target industries with high-reliability applications (e.g. communications, space, medical, alternative energy). This enables us to parlay our defense engineering experience into producing products for customers who place a premium on performance, quality, and reliability.

Backlog and Orders

Our sales backlog at November 30, 2015 was approximately $118.6 million compared to approximately $120.7 million at November 30, 2014. Our backlog figures represent confirmed customer purchase orders that we had not shipped at the time the figures were calculated. We anticipate that approximately $82.3 million of our backlog orders will be filled in fiscal 2016. We lack control over the timing of new purchase orders, as such, the backlog can increase or decrease significantly based on timing of customer purchase orders.

The backlog decrease at November 30, 2015 compared to November 30, 2014 primarily related to our EMS and SSC segments. The decreases in our EMS and SSC segments resulted from lower bookings in the year ended November 30, 2015, and were partially offset by increased SSIA bookings in the year ended November 30, 2015.

Seasonality

Revenues for our Secure Systems and Information Assurance (SSIA) segment are typically slightly higher in the three months ended May relative to other quarters, partially related to the fiscal year end of the U.K. and Canadian Governments. Revenues from our Systems, Subsystems & Components (SSC) and Electronic Manufacturing Services (EMS) segment typically do not demonstrate consistent seasonal patterns. Various factors can affect the distribution of our revenue between accounting periods, including the timing of government contract awards and the ensuing subcontracts, the availability of government funding, product deliveries and customer acceptance.

Customers

Our customers consist mainly of military prime contractors and the subcontractors who work for them in the U.S., the U.K., Canada and various other countries in the world. Approximately 45% of total consolidated revenues for each of the years ended November 30, 2015 and 2014 were derived directly or indirectly from defense contracts for end use by the U.S. government and its agencies. The U.K. and Canadian Governments’ Departments of Defense (directly and through subcontractors) account for approximately 10% and 1% of our revenues for the year ended November 30, 2015, and 9% and 2% of our revenues for the year ended November 30, 2014, respectively.

Two of the U.S. customers, one a defense prime contractor, represented approximately 15% of revenues for the year ended November 30, 2015 (12% – 2014). The same customers represented 11% and 10% of accounts receivable as of November 30, 2015 and 2014, respectively.

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Revenue from these customers primarily derives from our Systems Subsystems & Components (SSC) and Electronic Manufacturing Services (EMS) segments. The loss of such customers could have a material adverse effect on such reporting segments.

Research and Development

We conduct research and development to maintain and advance our technology base. Our research and development efforts are funded by both internal sources and customer-funded development contracts.

Our research and development efforts primarily involve engineering and design relating to: developing new products, improving existing products and adapting existing products to new applications and programs.

A portion of our product development costs are recoverable under contractual arrangements; while the balance of these costs are self-funded. Our self-funded research and development expenditures for continuing operations were approximately $9.6 million and $8.3 million, for the years ended November 30, 2015 and 2014, respectively.

We believe that strategic investment in product development is essential for us to remain competitive in the markets we serve. We are committed to maintaining appropriate levels of expenditures for product development.

Competition

We are engaged in a competitive industry that is characterized by technological change and product life cycles. We face competition from large and mid-tier defense contractors, large semiconductor and electronic component companies to small specialized firms, electronic contract manufacturers, and other companies. Sole and primary source supplier positions provide us a measure of protection against impending competition. This is particularly true of the Systems, Subsystems & Components (SSC) segment, where products are designed into programs and platforms that may continue for many years.

In the SSC segment, we are considered one of the world’s largest merchant suppliers of RF microwave and millimeterwave products to the defense and commercial high reliability end markets. We also hold a significant portion, nearly 50%, of the total market share for EMI filtering coaxial and interconnect products. Some of our principal competitors in the SSC segment include Amphenol (NYSE: APH), Cobham plc, DRS.Finmeccanica, K&L Microwave, Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), M/A-COM Technology Solutions Inc., and Schaffner Group. In the EMS segment, API is one of a select group of providers to hold ISO-9001:2008, AS9100 and ISO-13485 certifications. Competitors include Ducommun Incorporated (NYSE: DCO) and regional contract manufacturing providers. In the SSIA segment, API Technologies selling through EMCON and SST brand names currently holds approximately 20% of the addressable worldwide market share for TEMPEST products; principal competitors include CIS Secure Computing, Eurotempest, and Advanced Programs, Inc.

The extent of competition in each segment for any single project generally varies according to the complexity of the product and the dollar value of the anticipated award. We believe that we compete on the basis of:

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Our future success will depend in large part upon our ability to improve existing product lines and to develop new products and technologies in the same or related fields. Since a number of consolidations and mergers of defense suppliers has occurred, the number of participants in the defense industry has decreased in recent years. We expect this consolidation trend to continue. As the industry consolidates, the large defense contractors are narrowing their supplier base, awarding increasing portions of projects to strategic mid- and lower-tier suppliers, and, in the process, are becoming oriented more toward systems integration. We believe that we have and expect to continue to benefit from this defense industry trend.

Intellectual Property

We rely upon trade secrets, technical know-how and continuing technological innovation to develop and maintain our competitive position. We have certain registered trademarks, none of which we consider to be material to our current operations. We own numerous U.S. and foreign patents and have certain patents pending, but do not believe that the conduct of our business as a whole or any single business segment is materially dependent on any single patent, trademark or copyright.

The products we sell require a large amount of engineering design and manufacturing expertise. We have patents on certain Secure Systems & Components (SSC) segment products and technologies, including our electronic components, circuits, filters, connectors, optocouplers, and antennas, and Secure Systems & Information Assurance (SSIA) segment products and technologies, including secure network systems, virtual data labeling systems, and secure access management systems. However, the majority of our technological capabilities are not protected by patents and licenses. We rely on the expertise of our employees and our learned experiences in both the design and manufacture of our products. It is possible that a competitor may also learn to design and produce products with similar performance capabilities as our products, which may result in increased competition and a reduction of sales for our products. We intend to file patent applications to protect future material proprietary technology, inventions and improvements. While we intend to protect our intellectual property rights vigorously, there can be no assurance that any of our patents will not be challenged, invalidated or circumvented, or the rights granted thereunder will provide competitive advantage to us.

Our trade secret protection for our technology in all segments is based in large part on confidentiality agreements that we enter into with our employees, consultants and other third parties. It is possible that these parties may breach these agreements. Since many agreements are made with companies much larger than us, we may not have adequate financial resources to adequately enforce our rights which could adversely impact our ability to protect our trade secrets and lead to a reduction of sales for our products. In addition, the laws of certain territories in which we develop, manufacture or sell our products may not protect our intellectual property rights to the same extent as the laws of the U.S., the U.K. or Canada.

Regulatory Matters

Government Contracting Regulations

A significant portion of our Electronic Manufacturing Services (EMS) and Systems, Subsystems & Components (SSC) business is derived from subcontracts with prime contractors of the U.S. government. As a U.S. government subcontractor, we are subject to federal contracting laws and regulations, including the U.S. Federal Acquisition Regulation (FAR) and the False Claims Act, that: (1) impose various profit and cost controls, (2) regulate the allocations of costs, both direct and indirect, to contracts, and (3) provide for the non-reimbursement of unallowable costs. Our extensive experience in the defense industry enables us to handle the strict requirements that accompany these contracts.

Under federal contracting regulations, the U.S. government is entitled to examine all of our cost records with respect to certain negotiated contracts or contract modifications for three years after final payment on such contracts to determine whether we furnished complete, accurate, and current cost or pricing data in connection with the negotiation of the price of the contract or modification.

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As is common in the U.S. defense industry, we are subject to business risks, including changes in the U.S. government’s procurement policies (such as greater emphasis on competitive procurement), governmental appropriations, national defense policies or regulations, service modernization plans, and availability of funds. Each of our business segments could be materially adversely affected by a) a reduction in expenditures by the U.S. Government for products of the type we manufacture and provide, b) lower margins resulting from increasingly competitive procurement policies, c) a reduction in the volume of contracts or subcontracts awarded to us or d) the incurrence of substantial contract cost overruns.

All of our U.S. Government prime and subcontracts, in all of our operating segments, can be terminated by the U.S. Government either for its convenience or if we default by failing to perform under the contract. Termination for convenience provisions provide only for our recovery of costs incurred or committed settlement expenses and profit on the work completed prior to termination. Termination for default provisions provide for the contractor to be liable for excess costs incurred by the U.S. Government in procuring undelivered items from another source. Our contracts and subcontracts with foreign governments generally contain similar provisions relating to termination at the convenience of the customer. Because government sales account for a material portion of our business, any such cancellations or renegotiations could have a material adverse effect on our business.

In connection with our U.S. government business, we are also subject to government audits and reviews of our accounting procedures, business practices and procedures, and internal controls for compliance with procurement regulations and applicable laws. We also could be subject to an investigation as a result of private party whistleblower lawsuits. We may be subject to downward contract price adjustments, refund obligations or civil and criminal penalties. In certain circumstances in which a contractor has not complied with the terms of a contract or with regulations or statutes, the contractor might be debarred or suspended from obtaining future contracts for a specified period of time. Since defense sales account for a significant portion of our business, any such suspension or debarment would have a material adverse effect on our business. It is our policy to cooperate with the government in any investigations of which we have knowledge, but the outcome of any such government investigation cannot be predicted with certainty. We believe we have complied in all material respects with applicable government requirements. We are not aware of any current government investigations of our policies, procedures, and internal controls for compliance with procurement regulations and applicable laws.

A significant portion of our Secure Systems & Information Assurance (SSIA) business is derived from subcontracts with prime contractors of U.K. and Canadian government agencies. In instances where the Company is a sole-source provider, certain government agencies may reserve the right to review costs and impose various profit and cost controls. These government agencies also have the right to require its prime and subcontractors to comply with relevant laws and regulations. Non-compliance with these requirements could lead to contract termination. Our extensive experience in the defense industry has enabled us to handle the strict requirements that accompany these contracts.

Some of our activities, in the SSC and SSIA segments, require security clearances from the Defense Industrial Security Clearance Office, which is part of the Defense Security Service, an agency of the DoD, as well as comparable clearances in Canada and the U.K. A security clearance is a determination by the U.S. and international government agencies that a person or company is eligible for access to classified information. There are two types of clearances: Personnel Security Clearances and Facility Security Clearance. We have sufficient security clearances for our activities.

In order to qualify as an approved supplier of products for use in equipment purchased by military or aerospace programs, we are required to meet the applicable portions of the quality specifications and performance standards designed by the Air Force, the Army, and the Navy. Our products must also conform to the specifications of the Defense Electronic Supply Center for replacement parts supplied to the military. To the extent required, we currently meet or exceed all of these specifications.

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Our products are often incorporated into wireless communications systems that are subject to various FCC regulations, as well as regulation internationally by other foreign government agencies. Regulatory changes, including changes in the allocation of available frequency spectrum, could significantly impact our operations by restricting development efforts by our customers, making current products obsolete or increasing the opportunity for additional competition, which may affect our Systems, Subsystems & Components (SSC) segment. Changes in, or the failure by us to comply with, applicable domestic and international regulations could have an adverse effect on our business, operating results and financial condition. In addition, the increasing demand for wireless communications has exerted pressure on regulatory bodies worldwide to adopt new standards for such products, generally following extensive investigation of and deliberation over competing technologies. The delays inherent in this government approval process may cause the cancellation, postponement or rescheduling of the installation of communications systems by our customers, which in turn may have a material adverse effect on the sale of products by us to such customers.

Environmental Matters

Our operations are regulated under a number of federal, state and local environmental laws and regulations, which govern, among other things, the discharge of hazardous materials into the air and water as well as the handling, storage and disposal of such materials and the use of restricted substances, including “conflict minerals.” We currently use limited quantities of hazardous materials common to our industry in connection with the production of our products. In addition, because of our use of such hazardous materials, we may be subject to potential financial exposure for costs associated with an investigation and remediation of sites at which we have arranged for the disposal of hazardous wastes, if such sites become contaminated. This is true even if we fully comply with applicable environmental laws.

Through the Spectrum acquisition on June 1, 2011, we owned certain land and manufacturing facilities in State College, Pennsylvania. The property, which was acquired by Spectrum from Murata Electronics North America (“Murata”) in December 2005, consists of approximately 53 acres of land and 250,000 square feet of manufacturing facilities. Among other uses, the acquired facilities have become the design and manufacturing center for our ceramic operations. We completed the Sale/Leaseback of our facility located in State College, Pennsylvania on December 31, 2013.

Spectrum’s purchase price for the acquired property included the assumption of, and indemnification of Murata against, all environmental liabilities related to the property. The acquired property had known environmental conditions that required remediation, and certain hazardous materials previously used on the property have migrated into neighboring third party areas. These environmental issues arose from the use of chlorinated organic solvents including tetrachloroethylene and trichloroethylene. As a condition to the purchase, Spectrum entered into an agreement with the Pennsylvania Department of Environmental Protection (“PADEP”) pursuant to which: (a) Spectrum agreed to remediate all known environmental conditions relating to the property to a specified industrial standard, with the costs for remediating such conditions being capped at $4.0 million; (b) PADEP released Murata from further claims by Pennsylvania under specified state laws for the known environmental conditions; and (c) Spectrum purchased an insurance policy providing clean-up cost cap coverage (for known and unknown pollutants) with a combined coverage limit of approximately $8.2 million, and pollution legal liability coverage (for possible third party claims) with an aggregate coverage limit of $25.0 million. The total premium cost for the insurance policy, which has a ten year term commencing 2005 and an aggregate deductible of approximately $0.7 million, was $4.8 million. The cost of the insurance associated with the environmental clean-up ($3.6 million) is being charged to general and administrative expense in direct proportion to the actual remediation costs incurred. The cost of the insurance associated with the pollution legal liability coverage ($1.2 million) is being charged to general and administrative expense on a pro rata basis over the ten-year policy term.

Based upon Spectrum’s environmental review of the property, Spectrum recorded a liability of $2.9 million to cover probable future environmental expenditures related to the remediation, the cost of which is expected to

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be entirely covered by the insurance policy. As of November 30, 2012, remediation expenditures of $2.4 million were incurred and charged against the environmental liability, with all such expenditures being reimbursed by the insurance carrier. In the second quarter of fiscal 2012, PADEP issued a site specific standard for the State College facility announcing that it meets specific industrial standards necessary to allow the discontinuance of further cleanup efforts. No reimbursements were provided by the insurance carrier thereafter; and subsequent cleanup, monitoring and decommissioning expenses were recorded as restructuring charges under administrative costs at $0.1 million in fiscal 2013 and $0.1 million in fiscal 2014. In the fourth quarter of fiscal 2014, the Company decommissioned all monitoring wells and water treatment equipment and anticipates no further material testing or cleanup requirements with respect to this matter.

International Operating and Export Sales

We currently sell several of our products internationally. The export of defense articles and data for military and satellite purposes from the U.S. is covered under International Traffic in Arms Regulations promulgated under the Arms Export Control Act.

We are registered with the U.S. Department of State and renew our registration annually. We currently hold several licenses that allow us to export technical data and product to certain foreign companies.

In addition, international sales of our U.S. products are in many cases subject to export licenses granted on a case-by-case basis by the U.S. Department of State and Department of Commerce. In certain cases, the U.S. government prohibits or restricts the export of some of our products.

We use two principal contracting methods for export sales: Direct Foreign Sales (DFS) and the U.S. government’s Foreign Military Sales (FMS). In a DFS transaction, the contractor sells directly to the foreign entity and assumes all the risks in the transaction. In an FMS transaction, the sale is funded by a U.S. prime contractor who in turn sells the product to the foreign entity.

Our international operations involve additional risks for us, such as exposure to currency fluctuations, future investment obligations and changes in international economic and political environments. In addition, international transactions frequently involve increased financial and legal risks arising from stringent contractual terms and conditions and widely different legal systems, customs and practices in foreign countries.

Manufacturing and Source of and Availability of Materials

Our manufacturing processes for most of our products in all of our segments include the assembly of purchased components and testing of products at various stages in the assembly process. Purchased components include integrated circuits, circuit boards, sheet metal fabricated into cabinets, resistors, capacitors, semiconductors, silicon wafers and other conductive materials, and insulated wire and cables. In addition, many of our products use machine castings and housings, motors, and recording and reproducing media.

The most significant raw materials that we purchase for our SSC and EMS segment operations are integrated circuits in silicon wafers, die forms and packaged devices. As is the case with all of our business segments, materials and purchased components are generally available from a number of suppliers, several suppliers are our sole source of certain components. We are also dependent on certain suppliers for particular customers due to their product specifications. If a supplier should cease to deliver such components, other sources probably would be available; however, added cost and manufacturing delays might result. Despite the risks associated with purchasing from a limited number of sources, we have made the strategic decision to select limited source suppliers in order to obtain lower pricing, receive more timely delivery and maintain quality control. We are subject to rules promulgated by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding the use of certain materials (tantalum, tin, gold and tungsten), known as conflict minerals, which are mined form the Democratic Republic of the Congo and adjoining countries. These

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rules have and may continue to impose costs and may introduce new risks related to our ability to verify the origin of any conflict minerals used in our products.

We have long-standing strategic relationships with world class semiconductor suppliers. Because of these capabilities and relationships, we believe we can continue to meet our customers’ requirements. We do not have specific long-term contractual arrangements with our suppliers, however, we have good and long standing relationships with them.

Employees

As of November 30, 2015, we had approximately 1,863 full-time employees, including 1,342 in manufacturing, 186 in general and administrative, 177 in engineering and research and development, 68 in quality assurance, 68 in sales and marketing and 22 in contracts and customer service. With the exception of approximately 79 employees from our C-MAC acquisition, none of our employees are currently subject to a collective bargaining agreement.

There is a continuing demand for qualified technical personnel, and we believe that our future growth and success will depend upon our ability to attract, train and retain such personnel. We believe that our relations with our employees generally are satisfactory.

Executive Officers of the Registrant

The following table lists as of February 1, 2016, the name, age, and position of each of our executive officers.

Set forth below is certain biographical information regarding each of our executive officers.

Brian R. Kahn

Brian Kahn became our Chairman of the Board and Chief Executive Officer on January 21, 2011. Mr. Kahn continued to serve as Chief Executive Officer until August 1, 2012 and he continues to serve as Chairman of the Board. Mr. Kahn founded and has served as the investment manager of Vintage Capital Management, LLC (“Vintage”), and its predecessor, Kahn Capital Management, LLC since 1998. Vintage focuses on public and private market investments in the consumer, manufacturing, and defense industries. Mr. Kahn also was the former Chairman of the Board of White Electronic Designs Corporation, where he served on the Governance, Compensation and Strategic Alternatives committees. Additionally, he recently served as a director of Integral Systems, Inc. where he served on the Nominating and Governance, Strategic Growth and Special Litigation committees. Currently, Mr. Kahn serves as a director of Aaron’s, Inc. (NYSE: AAN), where he is a member of the Nominating & Governance Committee and the Operational & Financial Advisory Committee. Mr. Kahn graduated cum laude and holds a Bachelor of Arts degree in Economics from Harvard University.

Robert E. Tavares

Robert Tavares became our President and Chief Executive Officer and joined the Board on March 2, 2015. Mr. Tavares has 30 years of experience in microelectronics and semiconductors for both commercial and defense applications. From March 2012 until joining API, Mr. Tavares was President of Crane Electronics Inc., a

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provider of microelectronic-based solutions for power and microwave applications to the defense, commercial aerospace, and medical markets. Prior to Crane, Mr. Tavares served as President of e2v U.S. Operations, a leading supplier of technology solutions in RF power and semiconductors from July 2010 to March 2012. Mr. Tavares spent the majority of his career, from May 1985 to February 2010 at Tyco Electronics, M/A Com Division, where he began his tenure as a design and development engineer, moving through various management roles, and ultimately progressing to the role of Vice President, General Manager. It is in this role where he was responsible for setting the strategic direction, and driving the growth, and profitability of a $320 million RF and microwave, multi-site business. He holds a B.S in Engineering from the University of Massachusetts, Dartmouth.

Eric F. Seeton

Eric Seeton became our Chief Financial Officer on September 8, 2015 and has over 20 years of experience in the RF/Microwave and healthcare industries. Prior to joining API, Mr. Seeton served as Business Unit Finance Director for Analog Devices (NASDAQ: ADI), a $3 billion manufacturer of integrated circuits. He joined Analog Devices as part of its July 2014 acquisition of Hittite Microwave Corp., where Mr. Seeton served as Hittite’s Director of Finance for three years. From May 2006 until July 2010, he served various finance leadership roles at Johnson & Johnson and Procter & Gamble (formerly The Gillette Company), including as Manager of Financial Planning & Analysis and Operations Finance Manager. From July 2010 until July 2011, Mr. Seeton also served as the Co-Owner of Seeton Company, L.L.C., an online and retail consumer products company. Mr. Seeton holds an MBA from Cornell University and a B.S. in Accounting from Bentley University in Waltham, MA.

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Additional Risk Factors to Consider:

An investment in our securities involves a high degree of risk. You should carefully consider the risk factors described below, together with the other information included in this Annual Report on Form 10-K before you decide to invest in our securities. The risks described below are the material risks of which we are currently aware; however, they may not be the only risks that we may face. Additional risks and uncertainties not currently known to us or that we currently view as immaterial may also impair our business. If any of these risks develop into actual events, it could materially and adversely affect our business, financial condition, results of operations and cash flows, the trading price of your shares could decline and you may lose all or part of your investment.

Risks Related to the Merger

Satisfying closing conditions may delay or prevent completion of the Merger

On February 28, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RF1 Holding Company (“Parent”) and RF Acquisition Sub, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with API surviving the Merger as a wholly owned subsidiary of Parent. Completion of the Merger is conditioned upon certain closing conditions, and if such closing conditions are not met, the Merger will not be consummated.

If the Merger is not completed, the price of API common stock and future business and operations could be harmed

There is no assurance that the Merger will be effected. If the Merger is not completed, we may be subject to the following material risks, among others:

Shareholders may sell substantial amounts of API common stock in the public market, which is likely to depress the price of API common stock

A significant number of our shares of common stock may be sold at any time prior to the Merger. If our current shareholders sell API common stock in the public market prior to the Merger, it is likely that arbitrageurs

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will acquire such shares. These arbitrageurs would likely sell all such shares in the public market immediately following any announcement, or anticipated announcement, that the Merger failed, or will likely fail, to close, which in turn would likely cause the market price of API common stock to decline. In addition to the other negative effects on the Company, such sales of API common stock might make it more difficult for us to sell equity or equity-related securities in the future if the Merger is not completed.

We have incurred, and expect to continue to incur, substantial charges associated with the Merger; we cannot predict the exact timing or amounts of such charges

Other Merger related costs yet to be incurred, such as potential litigation costs related to the Merger and additional legal, accounting and certain investment banking fees, must be paid even if the Merger is not completed. Under certain circumstances specified in the Merger Agreement, we may be required to pay a termination fee of $3.5 million.

Risks Related to Our Business

We are highly reliant on defense spending

Our current orders from defense-related companies account for a material portion of our overall net sales and defense spending levels depend on factors that are outside of our control. For each of the fiscal years ended November 30, 2015 and 2014, U.S. defense revenue represented approximately 45% and 45%, respectively, of our total consolidated sales. Reductions or changes in defense spending, including as a result of new U.S. government budget reductions, could have a material adverse effect on our sales and profits. The loss or significant curtailment of government contracts or subcontracts, or failure to exercise renewal options or enter into new contracts or subcontracts, could have a material adverse effect on our business, results of operations and financial condition. Changes in federal government spending could directly affect our financial performance. Among the factors that could impact federal government spending and which would reduce our federal government contracting and subcontracting business are a significant decline in, or reapportioning of, spending by the federal government, changes or cancellations of federal government programs or requirements, and shutdowns or other delays in the government appropriations process. In addition, a difference in philosophy or the worsening economic climate of the country could reduce or change appropriations.

The current administration and Congress are under increasing pressure to reduce the federal budget deficit. This could result in a general decline in U.S. defense spending and could cause federal government agencies to reduce their purchases under contracts, exercise their rights to terminate contracts in whole or in part, to issue temporary stop work orders or decline to exercise options to renew contracts, all of which could harm our operations and significantly reduce our future revenues.

In particular, military spending may be negatively impacted by the Budget Control Act of 2011, or the Budget Control Act, which was passed in August 2011. The Budget Control Act established limits on U.S. government discretionary spending, including a reduction of defense spending by approximately $490 billion between the 2012 and 2021 U.S. government fiscal years, and also provided that the defense budget would face “sequestration” cuts of up to an additional $500 billion during that same period to the extent that discretionary spending limits were exceeded. The impact of sequestration was reduced with respect to the government’s 2014 and 2015 fiscal years, in exchange for extending sequestration into fiscal years 2022 and 2023, following the enactment of the Bipartisan Budget Act of 2013 in December 2013. The impact of sequestration was further reduced with respect to the government’s 2016 and 2017 fiscal years, following the enactment of the Bipartisan Budget Act of 2015 in November 2015. Sequestration is currently scheduled to resume in the government’s 2018 fiscal year. We are unable to predict the impact the cuts associated with Sequestration will ultimately have on funding for the military programs which we support. However, such cuts could result in reductions, delays or cancellations of these programs, which could have a material adverse effect on our business, financial condition and results of operations.

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Future congressional appropriation and authorization of defense spending and the application of sequestration remain marked by significant debate and an uncertain schedule. The debt ceiling continues to be actively debated as plans for long-term national fiscal policy are discussed. The outcome of these debates could have a significant impact on defense spending broadly and programs we support in particular. As a result of the Budget Act and deficit reduction pressures, it appears likely that discretionary spending by the federal government may remain constrained for several years.

Such occurrences are beyond our control. For instance, government contracts are conditioned upon the continuing availability of Congressional appropriations. Congress typically appropriates funds for a given program on a fiscal-year basis even though contract performance may take more than one year. As a result, at the beginning of a major program, a contract is typically only partially funded, and additional monies are normally committed to the contract by the procuring agency only as Congress makes appropriations available for future fiscal years. Also, the specific programs in which we participate, or in which we may seek to participate in the future, must compete with other programs for consideration during the budget formulation and appropriation processes.

We are subject to unique business risks as a result of supplying products to the U.S. government directly and as a subcontractor, which could lead to a reduction in our net sales from, or the profitability of our arrangements with, the U.S. Government

Companies engaged in supplying defense-related products to U.S. government agencies are subject to business risks specific to the defense industry. We contract directly with the U.S. government and as a subcontractor to customers contracting with the U.S. government. These risks include the ability of the U.S. government to unilaterally suspend or prohibit us from receiving new contracts pending resolution of alleged violations of procurement laws or regulations, reduce the value of existing contracts and audit our contract- related costs and fees. In addition, most of our U.S. and international government contracts and subcontracts can be terminated by the U.S. or foreign government or the contracting party, as applicable, at its convenience. Termination for convenience provisions provide only for our recovery of costs incurred or committed, settlement expenses and profit on the work completed prior to termination.

In addition, the U.S. government may seek to review our costs to determine whether our pricing is “fair and reasonable.” Such a review could be costly and time consuming for our management and could distract from our ability to effectively manage the business. As a result of such a review, we could be required to provide a refund to the U.S. government or we could be asked to enter into an arrangement whereby our prices would be based on cost or the DoD could seek to pursue alternative sources of supply for our parts. Any of those occurrences could lead to a reduction in our net sales from, or the profitability of certain of our arrangements with, certain agencies and buying organizations of the U.S. government.

Our business may be adversely affected by global economic conditions

The continuing turmoil in the global economy and, in the U.S., the Congressional deadlock over the federal debt ceiling and government spending restrictions, has had, and may continue to have, a significant negative impact on our business, financial condition, and future results of operations. Specific risk factors related to these overall economic and credit conditions include the following: customer or potential customers may reduce or delay their procurement or new product development; key suppliers may become insolvent resulting in delays for our material purchases; vendors and other third parties may fail to perform their contractual obligations; customers may be unable to obtain credit to finance purchases of our products; and certain customers may become insolvent. These risk factors could reduce our product sales, increase our operating costs, impact our ability to manage inventory levels and collect customer receivables, lengthen our cash conversion cycle and increase our need for cash, which would ultimately decrease our profitability and negatively impact our financial condition. In addition, defense budgets generally are under pressure. Reduced defense spending may affect products purchased by those governments or their prime contractors from us and may materially adversely affect our operations and financial condition.

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We are reliant on certain security clearances for some of our business

We have Facility Security Clearances from the Defense Industrial Security Clearance Office, which is part of the Defense Security Service, or DSS, for several of our U.S. facilities and comparable clearances at several of our U.K. and Canadian facilities. If we do not maintain the Facility Security Clearances we would be prevented from continuing those business activities that require access to classified information. Our ability to maintain our Facility Security Clearances has a direct impact on our ability to bid on or win new contracts, complete existing contracts, or effectively re-bid on expiring contracts either directly through the U.S. government or through U.S. defense contractors. The inability to obtain and maintain our Facility Security Clearances would have a material adverse effect on our business, financial condition and operating results.

We currently maintain approximately $200.0 million of debt and our failure to service such indebtedness may adversely affect our financial and operating activities

At February 1, 2016, we had approximately $200.0 million (November 30, 2015 – $200.0 million), in aggregate principal amount of outstanding debt, which was secured by substantially all of our assets.

Our ability to make scheduled payments of principal and interest on our indebtedness and to refinance our existing debt depends on our future financial performance as well as our ability to access the capital markets, and the relative attractiveness of available financing terms. We do not have complete control over our future financial performance because it is subject to economic, political, financial (including credit market conditions), competitive, regulatory and other factors affecting the aerospace and defense industry, as well as commercial industries in which we operate. It is possible that in the future our business may not generate sufficient cash flow from operations to allow us to service our debt and make necessary capital expenditures. If this situation occurs, we may have to reduce costs and expenses, sell assets, restructure debt or obtain additional equity capital. We may not be able to do so in a timely manner or upon acceptable terms in accordance with the restrictions contained in our debt agreements. Our level of indebtedness has important consequences to us. These consequences may include:

Our credit facilities contain certain restrictions that may limit our ability to operate our business

Our credit facilities contain a number of restrictive covenants that affect our business and restrict our ability to, among other things, incur indebtedness, issue guarantees, grant liens, dispose of assets and pay dividends or make distributions to stockholders.

In addition, as a result of the covenants and restrictions contained in our credit facilities, we are limited in how we conduct our business and we may be unable to make capital expenditures or raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities either through acquisitions or internal expansion. The terms of any future indebtedness could include more restrictive covenants.

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We cannot assure that we will be able to remain in compliance with the covenants in our credit facilities in the future and, if we fail to do so, that we will be able to obtain waivers from the appropriate parties and/or amend the covenants. Our ability to comply with these covenants is dependent on our future performance, which will be subject to many factors, some of which are beyond our control, including prevailing economic conditions. If we are not able to comply with all of these covenants for any reason and we have debt outstanding at the time of such failure, some or all of our outstanding debt could become due and payable and the incurrence of additional debt under the credit facilities would not be allowed. If our cash is utilized to repay any outstanding debt, depending on the amount of debt outstanding, we could experience an immediate and significant reduction in working capital available to operate our business.

Net sales could decline significantly if we lose a major customer or a major program

Historically, a large portion of our net sales have been derived from sales to a small number of our customers and we expect this trend to continue for the foreseeable future. The U.S., U.K. and Canadian governments’ Departments of Defense (directly and through subcontractors) account for approximately, 45%, 10% and 1%, respectively, of our revenues for the fiscal year ended November 30, 2015, and 45% and 9% and 2%, respectively, of our revenues for the fiscal year ended November 30, 2014. Two of our U.S. customers, one a defense prime contractor, represented approximately 15% of revenues for the fiscal year ended November 30, 2015 and 12% of revenues for the year ended November 30, 2014. A loss of a significant customer could materially adversely impact the future operations of our Company.

In many cases, our customers are not subject to any minimum purchase requirements and can discontinue the purchase of our products at any time. In the event one or more of our major customers reduces, delays or cancels orders with us, and we are not able to sell our products to new customers at comparable levels, our net sales could decline significantly, which could adversely affect our financial condition and results of operations. In addition, any difficulty in collecting amounts due from one or more key customers would negatively impact our results of operations, cash flows and financial position.

Our operations are subject to numerous laws, regulations and restrictions, and failure to comply with these laws, regulations and restrictions could subject us to fines, penalties, suspension or debarment

Our contracts and operations are subject to various laws and regulations. Prime contracts with various agencies of the U.S. government, and subcontracts with other prime contractors, are subject to numerous procurement regulations, including Federal Acquisition Regulation and the International Traffic in Arms Regulations promulgated under the Arms Export Control Act, with noncompliance found by any one agency possibly resulting in fines, penalties, debarment, or suspension from receiving additional contracts with all U.S. government agencies. We are also subject to the federal False Claims Act, which provides for substantial civil penalties and treble damages where a contractor presents a false or fraudulent claim to the government for payment. Actions under the False Claims Act may be brought by the government or by other persons on behalf of the government (who may then share in any recovery). Given our dependence on U.S. government business, suspension or debarment could have a material adverse effect on our financial results.

In addition, our international business subjects us to numerous U.S. and foreign laws and regulations, including, without limitation, regulations relating to import-export control, technology transfer restrictions, repatriation of earnings, exchange controls, the Foreign Corrupt Practices Act and the anti-boycott provisions of the U.S. Export Administration Act. Changes in regulations or political environments may affect our ability to conduct business in foreign markets including investment, procurement and repatriation of earnings. Failure by us or our sales representatives or consultants to comply with these laws and regulations could result in certain liabilities and could possibly result in suspension or debarment from government contracts or suspension of our export privileges, which could have a material adverse effect on our financial results.

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The possibility of goodwill impairment exists

As a result of our business acquisitions, including SenDEC, Spectrum, CMT, RTIE, C-MAC, Inmet and Weinschel, goodwill is a significant part of our total assets. At November 30, 2015, our total assets were approximately $345.0 million, which included approximately $149.2 million of goodwill. Goodwill reflects the excess of the purchase price of each of our acquisitions over the fair value of the net assets of the business acquired. We perform annual evaluations, or more frequently if impairment indicators arise, for potential impairment of the carrying value of goodwill in accordance with current accounting standards. We wrote down goodwill by $107.5 million in fiscal 2012, primarily from our EMS segment.

Major factors that influence our analyses of fair value are our estimates for future revenue and expenses associated with the reporting units. Other factors considered in our fair value calculations include assumptions as to the business climate, industry and economic conditions. These assumptions are subjective and different estimates could have a significant impact on the results of our analyses. While management, based on current forecasts and outlooks, believes that the assumptions and estimates are reasonable, we can make no assurances that future actual operating results will be realized as planned and that there will not be additional material impairment charges as a result. Any write-down of goodwill or intangible assets resulting from future periodic evaluations would, as applicable, either decrease our net income or increase our net loss and those decreases or increases could be material.

The concentration of our share ownership among our current officers, directors and their affiliates may limit our shareholders’ ability to influence corporate matters

Our officers and directors as a group beneficially own a large percentage of our shares. Therefore, directors and officers, acting together may have a controlling influence on (i) matters submitted to our shareholders for approval (including the election and removal of directors and any merger, consolidation or sale of all or substantially all of our assets) and (ii) our management and affairs. This concentration of ownership also may have the effect of delaying, deferring or preventing a change in control, impeding a merger, consolidation, takeover or other business combination or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could materially adversely affect the market price of our shares.

We have a history of net losses, and may not be profitable in the future

Prior to the six-month transition period ended November 30, 2011, we incurred net losses for each of the five fiscal years preceding the transition period and incurred a loss in our past four fiscal years. We cannot assure you that we will be profitable in the future. Even if we achieve profitability, we may experience significant fluctuations in our revenues and we may incur net losses from period to period. The impact of the foregoing may cause our operating results to be below the expectations of securities analysts and investors, which may result in a decrease in the market value of our common shares.

The integration of acquisitions may be difficult and may not yield the expected results

As part of our general business strategy, we have experienced significant growth due to acquisitions. Failure to manage this growth effectively could have a material adverse effect on our financial condition or results of operations. Expansion will place significant demands on our marketing, sales, administrative, operational, financial and management information systems, controls and procedures. Accordingly, our performance and profitability will depend on the ability of our officers and key employees to (i) manage our business and our subsidiaries as a cohesive enterprise, (ii) manage expansion through the timely implementation and maintenance of appropriate administrative, operational, financial and management information systems, controls and procedures, (iii) add internal capacity, facilities and third-party sourcing arrangements as and when needed, (iv) maintain product and service quality controls, and (v) attract, train, retain, motivate and manage effectively our employees. There can be no assurance that our systems, controls, procedures, facilities and personnel, even if

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successfully integrated, will be adequate to support our projected future operations. Any failure to maintain such systems, controls and procedures, add internal capacity, facilities and third-party sourcing arrangements or attract, train, retain, motivate and manage effectively our employees could have a material adverse effect on our business, financial condition and results of operations. Ultimately, acquisitions may not be as profitable as expected or profitable at all.

Some of the additional risks that may continue to affect integration of our acquired companies include those associated with:

For certain acquisitions, we have raised the capital required to make such acquisitions from the issuance of shares, warrants, and convertible debt, which has been dilutive to our shareholders.

Additionally, in the period following an acquisition, we are required to evaluate goodwill and acquisition-related intangible assets for impairment. When such assets are found to be impaired, they are written down to estimated fair value, with a charge against earnings.

Pending and future litigation may lead us to incur significant costs and could adversely affect our business

We are, or may become, party to various lawsuits and claims arising in the normal course of business, which may include lawsuits or claims relating to intellectual property, contracts, product liability, employment matters, environmental matters or other aspects of our business. In connection with claims or litigation, we may be required to pay damage awards or settlements or become subject to injunctions or other equitable remedies, which could have a material adverse effect on our financial position, cash flows or results of operations. The outcome of litigation is often difficult to predict, and the outcome of pending or future litigation may have a material adverse effect on our financial position, cash flows or results of operations.

We may require additional financing which we may not be able to obtain; Our shareholders may suffer dilution

We expect that we will require additional financing in order to support expansion, develop new or enhanced services or products, respond to competitive pressures, acquire complementary businesses or technologies, repay debt, or take advantage of unanticipated opportunities. Our ability to arrange such financing in the future will depend in part upon the prevailing capital market conditions, as well as our business performance. There can be no assurance that we will be successful in our efforts to arrange additional financing under satisfactory terms. If additional financing is raised by the issuance of additional shares of our common stock, our shareholders may suffer dilution. If adequate funds are not available, or are not available on acceptable terms, we may not be able to take advantage of opportunities, or otherwise respond to competitive pressures and remain in business.

Our inability to retain and attract employees with key technical or operational expertise may adversely affect our business

The products that we sell require a large amount of engineering design, manufacturing and operational expertise. However, the majority of our technological capabilities are not protected by patents and licenses. We rely on the expertise of our employees and our learned experiences in both the design and manufacture of our products. Competition for personnel in our industry is intense and there are a limited number of persons,

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especially engineers, with knowledge of and experience in our technologies. Our design and development efforts depend on hiring and retaining qualified technical personnel. An inability to attract or maintain a sufficient number of technical personnel could have a material adverse effect on our operating performance or on our ability to capitalize on market opportunities. In addition, if we were to lose one or more of our key employees, then we would likely lose some portion of our institutional knowledge and technical know-how, which could adversely affect our business.

Failure to maintain adequate internal controls could adversely affect our business

Under Section 404 of the Sarbanes-Oxley Act of 2002, we are required to include in this Annual Report and each of our Annual Reports on Form 10-K, a report containing our management’s assessment of the effectiveness of our internal control over financial reporting. These laws, rules and regulations continue to evolve and could become increasingly stringent in the future. We have undertaken actions to enhance our ability to comply with the requirements of the Sarbanes-Oxley Act of 2002, including, but not limited to, the engagement of consultants, the documentation of existing controls and the implementation of new controls or modification of existing controls as deemed appropriate.

We continue to devote substantial time and resources to the documentation and testing of our controls. If we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we could be subject to regulatory actions, civil or criminal penalties or shareholder litigation. In addition, failure to maintain adequate internal controls could result in financial statements that do not accurately reflect our financial condition, results of operations and cash flows.

We are dependent on key personnel

We are dependent upon a small number of key personnel. The loss of the services of such key personnel could have a material adverse effect on our business because we believe our success will depend in large part on the efforts of these individuals. While we have entered into employment letter agreements with certain key personnel, such letter agreements provide that their employment is at-will. We do not currently have, or propose to have, any long-term employment agreements with key personnel, nor do we intend to obtain key-man insurance in respect of such key personnel.

The defense, semiconductor and electronic components industries are highly competitive and increased competition could adversely affect our operating results

The areas of the defense, semiconductor and electronic component industries in which we do business are highly competitive. We expect intensified competition from existing competitors and new entrants. Competition is based on price, product performance, product availability, quality, reliability and customer service. Even in strong markets, pricing pressures may emerge. For instance, competitors may attempt to gain a greater market share by lowering prices. The market for commercial products is characterized by declining selling prices. We anticipate that average selling prices for our products will continue to decrease in future periods, although the timing and amount of these decreases cannot be predicted with any degree of certainty. We compete in various markets with companies of various sizes, many of which are larger and have greater financial and other resources than we have, and thus may be better able to pursue acquisition opportunities and to withstand adverse economic or market conditions. In addition, companies not currently in direct competition with us may introduce competing products in the future. We may not be able to compete successfully in the future and such competitive pressures may harm our financial condition and/or operating results.

We are required to comply with the “conflict minerals” rules promulgated by the SEC, which will impose costs on us and could raise reputational and other risks

As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act, in August 2012, the SEC promulgated final rules regarding disclosure of the use of certain minerals, known as “conflict minerals,”

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which are mined from the Democratic Republic of the Congo and adjoining countries, as well as procedures regarding manufacturers’ efforts to discover the origin of such minerals and metals produced from those minerals. These conflict minerals are commonly referred to as “3TG” and include tin, tantalum, tungsten, and gold. The conflict minerals rules required us to engage in due diligence efforts for the 2013 calendar year and such efforts are ongoing. Disclosures are required no later than May 31 of each year. We have, and we expect that we will continue to, incur additional costs and expenses, which may be significant in order to comply with these rules, including for (i) due diligence to determine whether conflict minerals are necessary to the functionality or production of any of our products and, if so, verify the sources of such conflict minerals; and (ii) any changes that we may desire to make to our products, processes, or sources of supply as a result of such diligence and verification activities. Since our supply chain is complex, ultimately we may not be able to sufficiently discover the origin of the conflict minerals used in our products through the due diligence procedures that we implement, which may adversely affect our reputation with our customers, shareholders, and other stakeholders. In such event, we may also face difficulties in satisfying customers who require that all of our products are certified as conflict mineral free. If we are not able to meet such requirements, customers may choose not to purchase our products, which could adversely affect our sales and the value of portions of our inventory. Further, there may be only a limited number of suppliers offering conflict free minerals and, as a result, we cannot be sure that we will be able to obtain metals, if necessary, from such suppliers in sufficient quantities or at competitive prices. Any one or a combination of these various factors could harm our business, reduce market demand for our products, and adversely affect our profit margins, net sales, and overall financial results.

We depend on limited suppliers for certain critical raw materials

Our manufacturing operations require raw materials that must meet exacting standards. Additionally, certain customers require us to buy from particular vendors due to their product specifications. We rely heavily on our ability to maintain access to steady sources of these raw materials at favorable prices. We do not have specific long-term contractual arrangements, but we believe we are on good terms with our suppliers. We cannot be certain that we will continue to have access to our current sources of supply at favorable prices, or at all, or that we will not encounter supply problems in the future. Any interruption in our supply of raw materials could reduce our sales in a given period, and possibly cause a loss of business to a competitor, if we could not reschedule the deliveries of our product to our customers. In addition, our gross profits could suffer if the prices for raw materials increase, especially with respect to sales associated with military contracts where prices are typically fixed.

Precious metals are subject to price fluctuations

Raw materials used in the manufacture of certain ceramic capacitors include silver, palladium, and platinum. Certain of our microwave components and systems require gold plating. Precious metals are available from many sources; however, their prices may be subject to significant fluctuations and such fluctuations may have a material and adverse effect on our operating results. Historically, the Company has been able to pass on precious metal price increase to its customers, in the form of precious metal price adders or direct sales price increases. However, there can be no assurance that customers will continue to accept these selling price adjustments and, as a result, there may be a material adverse effect on our operating margins and overall operating results.

We may not be able to develop new products to satisfy changes in demand

The industries in which we operate are dynamic and constantly evolving. We cannot provide any assurance that we will successfully identify new product opportunities and develop and bring products to market in a timely and cost-effective manner, or those products or technologies developed by others will not render our products or technologies obsolete or noncompetitive.

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The introduction of new products presents significant business challenges because product development commitments and expenditures must be made well in advance of product sales. The success of a new product depends on accurate forecasts of long-term market demand and future technological developments, as well as on a variety of specific implementation factors, including:

The failure of our products to achieve market acceptance due to these or other factors could harm our business.

Cancellation or changes or delays in orders could materially reduce our net sales and operating results

We generally do not receive firm, long-term purchase commitments from our customers. Customers may cancel their orders, change production quantities or delay production for a number of reasons. Cancellations, reductions or delays by a significant customer or by a group of customers would seriously harm our results of operations for a period by reducing our net sales in that period. In addition, because many of our costs and operating expenses are fixed, a reduction in customer demand could harm our gross profit and operating income.

Our lengthy sales cycle may increase the likelihood that our quarterly net sales will fluctuate which may adversely affect the market price of our shares of common stock

Due to the complexity of our technology and the types of end uses for our products, our customers perform, and require us to perform, extensive process and product evaluation and testing, which results in a lengthy sales cycle. Our sales cycles can often last for several months, and may last for up to a year or more. Additionally, as we are a tier three supplier, our orders are dependent on funding and contract negotiations through multiple parties which can affect our receipt of orders due to matters outside of our control. Our business is moving towards a business base driven more by larger orders on major defense programs. As a result of these factors, our net sales and operating results may vary unpredictably from period to period. This fact makes it more difficult to forecast our quarterly results and can cause substantial variations in operating results from quarter to quarter that are unrelated to the long-term trends in our business. This lack of predictability in our results could adversely affect the market price of our common shares in particular periods.

We depend on military prime contractors for the sale of our products

We sell a substantial portion of our products to military prime contractors and the contract manufacturers who work for them. The timing and amount of sales to these customers ultimately depend on sales levels and shipping schedules for the products into which our components are incorporated. We have no control over the volume and timing of products shipped by our military prime contractors and the contract manufacturers who work for them, and we cannot be certain that our military prime contractors or the contract manufacturers who work for them will continue to ship products that incorporate our components at current levels, or at all. Our business will be harmed if our military prime contractors or the contract manufacturers who work for them fail to achieve significant sales of products incorporating our components or if fluctuations in the timing or reductions in the volume of such sales occur. Failure of these customers to inform us of changes in their production needs in a timely manner could also hinder our ability to effectively manage our business.

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Our failure to comply with U.S. government laws, regulations and manufacturing facility certifications would reduce our ability to be awarded future military business

We must comply with laws, regulations and certifications relating to the formation, administration and performance of federal government contracts as passed down to us by our customers in their purchase orders, which affects our military business and may impose added cost on our business. We are subject to government audits and reviews of our accounting procedures, business practices, procedures, and internal controls for compliance with procurement regulations and applicable laws. We also could be subject to an investigation as a result of private party whistleblower lawsuits. Such audits could result in adjustments to our contract costs and profitability. If a government investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including the termination of our contracts, the forfeiture of profits, the suspension of payments owed to us, fines, and our suspension or debarment from doing business with federal government agencies. In addition, we could expend substantial amounts defending against such charges and incur damages, fines and penalties if such charges are proven or result in negotiated settlements. Since defense sales account for a significant portion of our business, any debarment or suspension of our ability to obtain military sales would greatly reduce our overall net sales and profits, and would likely affect our ability to continue as a going concern.

Our products may be found to be defective, product liability claims may be asserted against us and we may not have sufficient liability insurance

One or more of our products may be found to be defective after shipment, requiring a product replacement, recall or repair which would cure the defect but impede performance of the product. We may also be subject to product returns, which could impose substantial costs and harm to our business.

Product liability claims may be asserted with respect to our technology or products. Although we currently have insurance, there can be no assurance that we have obtained a sufficient amount of insurance coverage, that asserted claims will be within the scope of coverage of the insurance, or that we will have sufficient resources to satisfy any asserted claims.

We typically provide a one-year product defect warranty from the date of sale. Historically, warranty costs have been nominal and have been within management’s expectations. We continually assess the necessity for a warranty provision and accrue amounts deemed necessary.

Our inability to protect our intellectual property rights or our infringement of the intellectual property rights of others could adversely affect our business

We principally rely on our skill in the manufacture of our products and not on any proprietary technologies that we develop or license on an exclusive basis. Our manufacturing know-how is primarily embodied in our drawings and specifications, and information about the manufacture of these products purchased from others. Our future success and competitive position may depend in part upon our ability to obtain licenses of certain proprietary technologies used in principal products from the original manufacturers of such products. Our reliance upon protection of some of our production technology as “trade secrets” will not necessarily protect us from other parties independently obtaining the ability to manufacture our products. In addition, there may be circumstances in which “know how” is not documented, but exists within the heads of various employees who may leave the Company or disclose our know how to third parties. We cannot assure you that we will be able to maintain the confidentiality of our production technology, dissemination of which could have a material adverse effect on our business.

Patents of third parties may have an important bearing on our ability to offer certain of our products. Our major competitors as well as other third parties may obtain and may have obtained patents related to the types of products we offer or plan to offer. We cannot assure you that we are or will be aware of all patents containing claims that may pose a risk of infringement by our products. In addition, some patent applications in the U.S. are

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confidential until a patent is issued and, therefore, we cannot evaluate the extent to which technology concerning our products may be covered or asserted to be covered by claims contained in pending patent applications. In general, if one or more of our products were found by a court to infringe patents held by others, we may be required to stop developing or marketing the products, to obtain licenses to develop and market the products from the holders of the patents or to redesign the products in such a way as to avoid infringing those patents. An adverse ruling arising out of any intellectual property dispute could also subject us to significant liability for damages.

We cannot assess the extent to which we may be required in the future to obtain licenses with respect to patents held by others, whether such license would be available or, if available, whether we would be able to obtain such licenses on commercially reasonable terms. If we are unable to obtain licenses with respect to patents held by others, and are unable to redesign our products to avoid infringement of any such patents, this could materially adversely affect our business, financial condition and operating results.

Also, we hold various patents and licenses relating to certain of our products. We cannot assure you as to the breadth or degree of protection that existing or future patents, if any, may afford us, that our patents will be upheld, if challenged, or that competitors will not develop similar or superior methods or products outside the protection of any patent issued to us. It is possible that our existing patent rights may not be valid. We may have to expend resources to protect our patents in the event a third party infringes our patents, although we cannot assure you that we will have the resources to prosecute all or any patent violations by third parties.

We must commit resources to product manufacturing prior to receipt of purchase commitments and could lose some or all of the associated investment

We sell many of our products pursuant to purchase orders for current delivery, rather than pursuant to long-term supply contracts. This makes long-term planning difficult. Further, many of these purchase orders may be revised or canceled prior to shipment without penalty. As a result, we must commit resources to the production of products without advance purchase commitments from customers. The cancellation or deferral of product orders, the return of previously sold products, or overproduction due to the failure of anticipated orders to materialize, could result in our holding excess or obsolete inventory. This could cause inventory write-downs. Our inability to sell products after we have devoted significant resources to them could have a material adverse effect on our business, financial condition and results of operations.

Variability of our manufacturing yields may affect our gross margins

Our manufacturing yields vary significantly among products, depending on the complexity of a particular product. The difficulties that may be experienced in the production process include: defects in subcontractors components, impurities in the materials used, equipment failure, and unreliability of a subcontractor. From time to time, we have experienced difficulties in achieving planned yields, which have adversely affected our gross margins. Yield decreases can result in substantially higher unit costs, which could materially and adversely affect our operating results and have done so in the past. Moreover, we cannot assure you that we will be able to continue to improve yields in the future or that we will not suffer periodic yield problems, particularly during the early production of new products or introduction of new process technologies. In either case, our results of operations could be materially and adversely affected.

Our inventories may become obsolete

The life cycles of some of our products depend heavily upon the life cycles of the end products into which these products are designed. Products with short life cycles require us to manage closely our production and inventory levels. Inventory may also become obsolete. The life cycles for electronic components have been shortening over time at an accelerated pace. We may be adversely affected in the future by obsolete or excess inventories which may result from unanticipated changes in the estimated total demand for our products or the estimated life cycles of the end products into which our products are designed.

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Interruptions, delays or cost increases affecting our materials, parts, equipment or subcontractors may impair our competitive position

Some of our product are sometimes tested and plated using a third-party test and plating house. We do not have any long-term agreements with these subcontractors. As a result, we may not have assured control over our product delivery schedules or product quality. Due to the amount of time typically required to qualify assemblers and testers, we could experience delays in the shipment of our products if we are forced to find alternative third parties to assemble or test them. Any product delivery delays in the future could have a material adverse effect on our operating results and financial condition. Our operations and ability to satisfy customer obligations could be adversely affected if our relationships with these subcontractors is disrupted or terminated.

Environmental liabilities could adversely impact our financial position

U.S., U.K., and Canadian laws and regulations impose various restrictions and controls on the discharge of materials, chemicals and gases used in our semiconductor and other manufacturing processes or in our finished goods. Under environmental regulations, we are responsible for determining whether certain toxic metals or chemicals are present in any given components we purchase and in each product we sell. These environmental regulations have required us to expend a portion of our resources and capital on relevant compliance programs. In addition, under other laws and regulations, we could be held financially responsible for remedial measures if our current or former properties are contaminated or if we send waste to a landfill or recycling facility that becomes contaminated, even if we did not cause the contamination. Also, we may be subject to additional common law claims if we release substances that damage or harm third parties. Further, future changes in environmental laws or regulations may require additional investments in capital equipment or the implementation of additional compliance programs in the future. Any failure to comply with environmental laws or regulations could subject us to significant liabilities and could have material adverse effects on our operating results, cash flows and financial condition.

In the conduct of our manufacturing operations, we have handled and do handle materials that are considered hazardous, toxic or volatile under applicable laws. The risk of accidental release of such materials cannot be completely eliminated. In addition, we operate or own facilities located on or near real property that was formerly owned and operated by others. These properties were used in ways that may have involved hazardous materials. Contaminants may migrate from, or within or through any such property. These risks may give rise to claims. Where third parties are responsible for contamination, the third parties may not have funds, or not make funds available when needed, to pay remediation costs imposed upon us jointly with third parties under environmental laws and regulations.

Risks Relating to Our Shares of Common Stock

Our stock market price and trading volume is volatile

The market for our common stock is volatile. Our share price is subject to volatility in both price and volume arising from market expectations, announcements and press releases regarding our business, and changes in estimates and evaluations by securities analysts or other events or factors.

Over the years, the securities markets in the U.S. have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly smaller-capitalization companies like us, have experienced wide fluctuations that have not necessarily been related to the operations, performances, underlying asset values, or prospects of such companies. For these reasons, our shares of common stock are subject to significant volatility resulting from purely market forces over which we will have no control. Further, the market for our common stock has been very thin. As a result, our shareholders may be unable to sell significant quantities of common stock in the public trading markets without a significant reduction in the price of our common shares.

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Shareholders may experience dilution if a significant proportion of our outstanding options are exercised

Because our success is highly dependent upon our employees, directors and consultants, we have and intend in the future to grant to some or all of our key employees, directors and consultants options to purchase shares of our Common Stock as non-cash incentives. We have adopted an equity incentive plan for this purpose. To the extent that significant numbers of such options may be exercised when the exercise price is below the then current market price for our common shares, the interests of the other shareholders of the company may be diluted. As of November 30, 2015, we have outstanding options to purchase 2,002,627 shares of Common Stock that were granted to directors, officers, employees and consultants that have a weighted average price of $3.62 and 278,381 restricted stock units.

We do not expect to pay dividends

We intend to invest all available funds to finance our growth and/or pay down debt. Therefore our shareholders cannot expect to receive any dividends on our shares of common stock in the foreseeable future. Even if we were to determine that a dividend could be declared, we could be precluded from paying dividends by restrictive provisions of loans, leases or other agreements or by legal prohibitions under applicable corporate law.

Our failure to comply with The NASDAQ Stock Market’s continued listing standards may adversely affect the price and liquidity of our shares of common stock as well as our ability to raise capital in the future

Our common stock commenced trading on the NASDAQ Capital Market on June 27, 2011, under the symbol ATNY. Until we became listed on NASDAQ, our common stock was quoted and traded on the OTC Bulletin Board. NASDAQ requires listed companies to maintain minimum financial thresholds and comply with certain corporate governance regulations to remain listed. If we are unsuccessful in maintaining compliance with the continued listing requirements of NASDAQ, then our common stock could be delisted and may trade only in the secondary markets such as OTC Bulletin Board. Delisting from NASDAQ could adversely affect our liquidity and price of our common stock as well as our ability to raise capital in the future.

None.

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We operate from leased facilities in the following locations:

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We also operate from owned facilities in the following locations:

Our executive corporate offices are located at 4705 S. Apopka Vineland Rd. Suite 210, Orlando, Florida.

All of the owned facilities are subject to liens to secure the amounts owed under our Term Loan Agreement.

We believe that our facilities are suitable and adequate to meet our needs. We will continue to consolidate certain of our operations that will result in reduced overhead expenses and greater overall efficiencies and profitability.

Information with respect to legal proceedings can be found in Note 19 “Commitments and Contingencies” to the Consolidated Financial Statements contained in this Annual Report on Form 10-K, and such information is incorporated herein by reference.

Not applicable.

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PART II

Our shares of common stock trade on the NASDAQ Capital Market under the ticker symbol ANTY. None of the shares of our subsidiaries are publicly traded.

The following table lists the reported high and low common stock sales prices on the NASDAQ Capital Market.

Registered Holders of our Common Stock

As of February 16, 2016, we had approximately 92 common shareholders of record, although there are a larger number of beneficial owners.

Dividends

Since our inception, we have not paid any dividends on our shares of common stock. In addition, our loan documents limit our ability to pay dividends or distributions subject to customary exceptions. We do not anticipate that we will pay dividends on our common stock in the foreseeable future. API Sub has not and does not intend to pay any dividends on its common shares. Dividends on Exchangeable Shares will only be paid to the extent that dividends, if any, are paid on our common shares.

Recent Sales of Unregistered Securities

We did not sell any unregistered equity securities in fiscal 2015.

Recent Repurchases of our Shares

We did not repurchase any shares of our common stock during the three months ended November 30, 2015.

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A smaller reporting company is not required to provide the information in this Item.

Introduction

This section is provided as a supplement to, and should be read in conjunction with, the audited Consolidated Financial Statements and Notes thereto and the other financial information that appears elsewhere in this Annual Report to help provide an understanding of our financial condition, changes in financial condition and results of our operations.

Recent Developments

On February 28, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with RF1 Holding Company (“Parent”) and RF Acquisition Sub, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with API surviving the Merger as a wholly owned subsidiary of Parent.

In connection with transactions contemplated by the Merger Agreement, on February 28, 2016, we also entered into Amendment No. 4 (the “Amendment No. 4”) to the Term Loan Agreement (as defined below), by and among the Company, as borrower, the lenders party thereto and Guggenheim Corporate Funding, LLC, as administrative agent (the “Agent”).

Business Overview of API Technologies Corp.

We design, develop and manufacture high reliability RF microwave, millimeterwave, microelectronics, power, and security products and solutions to the defense, aerospace, industrial, satellite, and commercial end markets. In addition, we provide electronics manufacturing services to such markets. We own and operate several state-of-the-art manufacturing facilities in the U.S., the U.K., Canada, China and Mexico.

Operating through our three segments; Systems, Subsystems & Components (SSC), Electronic Manufacturing Services (EMS) and Secure Systems & Information Assurance (SSIA), we are positioned as a differentiated solution provider to U.S. and U.S. friendly governments, military, defense, aerospace and homeland security contractors, and leading industrial and commercial firms. With a focus on high-reliability products and solutions, our product portfolio spans RF/microwave and microelectronics, electromagnetics, power products, and security products. We also offer a wide range of electronic manufacturing services from prototyping to high volume production.

On June 8, 2015 we completed the acquisition of Aeroflex / Inmet, Inc. (“Inmet”) and Aeroflex / Weinschel, Inc. (“Weinschel”) from Cobham plc for a total purchase price of approximately $80.0 million. Inmet and Weinschel have each been in business for more than 40 years, and each manufactures and sells RF and microwave products for defense, space, avionics, wireless, and test and measurement applications. The acquisitions of Inmet and Weinschel add breadth to our RF, microwave, and microelectronics product portfolio, extend our subsystems offering, and further our reach in key end markets, including defense, space, commercial aviation, and wireless. We financed the acquisition with an $85.0 million add-on to our existing term loan with the Agent through an Amendment No. 3 to Credit Agreement (the “Amendment No. 3”), by and among the Company, as borrower, the lenders party thereto and the Agent, as administrative agent. Amendment No. 3 permits the acquisitions of Inmet and Weinschel and amends the Credit Agreement, dated as of February 6, 2013, by and among the Company, as borrower, the lenders party thereto and Agent (as amended, supplemented or modified from time to time, the “Term Loan Agreement”) to provide for an incremental term loan facility in an

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aggregate principal amount equal to $85.0 million (the “Second Incremental Term Loan Facility”). The proceeds of the Second Incremental Term Loan Facility were used to fund the purchase price for the acquisition of Inmet and Weinschel and related fees and expenses, with the remainder available for general corporate purposes. We paid customary arrangement and commitment fees, as well as an amendment fee, in connection with the Second Incremental Term Loan Facility.

On March 21, 2014, we entered into Amendment No. 2 to Credit Agreement (the “Amendment No. 2”), by and among the Company, as borrower, the lenders party thereto and the Agent, as administrative agent. Amendment No. 2 amends the Term Loan Agreement to provide for an incremental term loan facility in an aggregate principal amount equal to $55.0 million (the “Incremental Term Loan Facility”). The Incremental Term Loan Facility is subject to substantially the same terms and conditions, including the applicable interest rate and the maturity date of February 6, 2018, as the $165.0 million term loan facility provided upon the initial closing of the Term Loan Agreement. In addition, Amendment No. 2 amends the Term Loan Agreement to reduce the minimum interest coverage ratio and increase the maximum leverage ratio, among other things.

The proceeds of the Incremental Term Loan Facility were used (i) to pay in full the amounts due under a Credit Agreement (the “Revolving Loan Agreement”), by and among the Company and certain of its U.S. subsidiaries, as borrowers, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent and U.K. security trustee, which Revolving Loan Agreement was then terminated; (ii) to redeem all 26,000 shares of the Company’s Series A Mandatorily Redeemable Preferred Stock that were outstanding (as described below); (iii) to pay fees, costs and expenses associated with the Incremental Term Loan Facility and related transactions; and (iv) for general corporate purposes.

As of March 21, 2014, we redeemed all 26,000 shares of our Series A Mandatorily Redeemable Preferred Stock that were outstanding. We paid the holder of the Series A Mandatorily Redeemable Preferred Stock an aggregate of $27.6 million to effect the redemption. Following redemption, all shares of Series A Mandatorily Redeemable Preferred Stock were cancelled and such shares were returned to authorized but undesignated shares of preferred stock.

On December 31, 2013, we completed the sale and leaseback (the “Sale/Leaseback”) of the Company’s facility located in State College, Pennsylvania. We sold the facility to an unaffiliated third party for a gross purchase price of approximately $15.5 million and lease the property from the buyer for approximately $1.3 million per year, subject to annual adjustments. We used $14.2 million of the proceeds of the Sale/Leaseback to prepay a portion of our outstanding indebtedness under the Term Loan Agreement.

Operating Revenues

We derive operating revenues from our three principal business segments: Systems, Subsystems & Components (SSC); Electronic Manufacturing Services (EMS); and Secure Systems & Information Assurance (SSIA). We sell our products to customers throughout the world, with a concentration in North America, western Europe, and the Asia-Pacific region.

Systems, Subsystems & Components (SSC) Revenue includes high-performance RF/microwave, microelectronics, millimeter wave, electromagnetic, power, and microelectronics solutions used in high-reliability defense, space, industrial and commercial applications, including missile systems, radar systems, electronic warfare systems (e.g. counter-IED RF jamming devices), unmanned air, ground and robotic systems, satellites, as well as industrial, medical, energy and telecommunications products. The main demand today for our SSC products come from U.S. friendly governments, including militaries, defense organizations, commercial aerospace, space, homeland security, prime defense contractors and manufacturers of industrial products.

Electronic Manufacturing Services (EMS) Revenue includes high speed surface mount circuit card assemblies using both surface mount and thru-hole processes, electromechanical assemblies, system and integrated level solutions used in high-reliability defense, industrial, and commercial applications. The main

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demand today for our EMS products come from various defense organizations, aerospace, prime defense contractors and manufacturers of industrial, medical and commercial products.

Secure Systems & Information Assurance (SSIA) Revenue includes revenues derived from the manufacturing of TEMPEST and Emanation control products, ruggedized computers and peripherals, secure mobile devices, secure access and information assurance products. The principal market for these products are the defense industries of the U.K., the U.S., and Canada and other U.S. friendly governments, Fortune 500 companies and telecommunication service providers

Cost of Revenues

We conduct all of our design and manufacturing efforts in the U.S., U.K., Canada, Mexico and China. Cost of goods sold primarily consists of costs that were incurred to manufacture, test and ship the products and some design costs for customer funded research and development (“R&D”). These costs include raw materials, including freight, direct labor, subcontractor services, tooling required to design and build the parts, and the cost of testing (labor and equipment) the products throughout the manufacturing process and final testing before the parts are shipped to the customer. Other costs include provision for obsolete and slow moving inventory, and restructuring charges related to the consolidation of operations.

Operating Expenses

Operating expenses consist of selling, general, administrative expenses, research and development, business acquisition and related charges and other income or expenses.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses include compensation and benefit costs for all employees, including sales and customer service, sales commissions, executive, finance and human resource personnel. Also included in SG&A is compensation related to stock-based awards to employees and directors, professional services for accounting, legal and tax, information technology, rent and general corporate expenditures.

Research and Development Expenses

R&D expenses represent the cost of our development efforts. R&D expenses include salaries of engineers, technicians and related overhead expenses, the cost of materials utilized in research, and additional engineering or consulting services. R&D costs are expensed as incurred.

Business Acquisition and Related Charges

Business acquisition charges primarily represent costs of engaging outside legal, accounting, due diligence, business valuation consultants and accelerated stock option expenses related to business combinations or divestitures. Related charges include costs incurred related to our efforts to consolidate operations of recently acquired and legacy businesses and expenses associated with divestitures.

Other Expenses (Income)

Other expenses (income) consists of interest expense on term loans, notes payable, operating loans and capital leases, interest income on cash and cash equivalents and marketable securities, amortization of note discounts and deferred financing costs, gains or losses on disposal of property and equipment, and gains or losses on foreign currency transactions.

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Backlog

Our sales backlog at November 30, 2015 was approximately $118.6 million compared to approximately $120.7 million at November 30, 2014. Our backlog figures represent confirmed customer purchase orders that we had not shipped at the time the figures were calculated. We anticipate that approximately $82.3 million of our backlog orders will be filled in fiscal 2016. We lack control over the timing of new purchase orders, as such, the backlog can increase or decrease significantly based on timing of customer purchase orders.

The backlog decrease at November 30, 2015 compared to November 30, 2014 primarily related to our EMS and SSC segments. The decreases in our EMS and SSC segments resulted from lower bookings in the year ended November 30, 2015, and were partially offset by increased SSIA bookings in the year ended November 30, 2015.

Results of Operations

Year Ended November 30, 2015 Compared to Year Ended 2014

The following discussion of results of operations is a comparison of our year ended November 30, 2015 and 2014.

Segment Operating Revenue and Adjusted EBITDA

Financial information for each of our segments is set forth in Part II- Item 8, Financial Statements and Supplementary Data, Note 21 “Segment Information and Geographical Data” to our audited consolidated financial statements included in this Annual Report on Form 10-K. In deciding how to allocate resources and assess performance, our chief operating decision maker regularly evaluates the performance of our reportable segments on the basis of revenue and adjusted EBITDA. Segment adjusted EBITDA assists us in comparing our segment performance over various reporting periods because it removes from our operating results the impact of items that our management believes do not reflect our core operating performance. Our reportable segment measure of adjusted EBITDA is not a recognized measure under GAAP and should not be considered an alternative to, or more meaningful than, net income (loss) or other measures of financial performance derived in accordance with GAAP. Our segment adjusted EBITDA may not be comparable to similarly titled measures of other companies because other entities may not calculate segment adjusted EBITDA in the same manner.

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Our segment Adjusted EBITDA is defined as income from continuing operations before income taxes, interest, depreciation and amortization, and excluding other items. Such items include stock-based compensation expense, non-cash inventory provisions, charges related to Inmet and Weinschel purchase accounting, franchise taxes, acquisition related charges, restructuring charges, financing and other adjustments, foreign exchange losses, contingency accruals, change in benefit liability and lease payments related to the Sale/Leaseback.

Consolidated revenues for the year ended November 30, 2015 increased 2.4% over the year ended November 30, 2014. The increase was due primarily to higher revenues in our SSC segment, partially offset by lower revenues in our SSIA segment. The SSC segment increased by more than 5.0% primarily due to approximately $21.4 million from the acquisition of Inmet and Weinschel, partially offset by the timing of certain key defense programs. The decrease in the SSIA segment is due primarily to purchasing delays by the Canadian government as a result of its federal election, but was partially offset by an increase in revenues at the SSIA U.K. location.

The SSC segment adjusted EBITDA for the year ended November 30, 2015 was lower than 2014, as a result of higher operating expenses, including higher health care costs and the acquisition of Inmet and Weinschel, partially offset by a product mix shift to sales with higher margins. During the year ended November 30, 2015, the increase in our EMS segment adjusted EBITDA was primarily due to improved efficiencies, including cost reductions in the year ended November 30, 2015 compared to the prior year. The SSIA segment has higher adjusted EBITDA, despite lower revenues, compared to the prior year as a result of a change in product mix in the year ended November 30, 2015, due primarily to the completion of a contract in the year ended November 30, 2014 with a low margin profile.

Operating Expenses

Cost of Revenues and Gross Margin

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Our consolidated gross margin for the year ended November 30, 2015 increased 1.0 percentage points compared to the prior year. Gross profit margin varies from period to period and can be affected by a number of factors, including product mix, new product introduction, production efficiency, inventory obsolescence and restructuring activities. Overall cost of revenues as a percentage of sales decreased for the year ended November 30, 2015 to 76.0% compared to 77.0% for the same period in 2014. The SSC segment cost of revenues for fiscal 2015 decreased 0.5 percentage points compared to fiscal 2014, mainly as a result of a change in product mix in fiscal 2015, as we shipped products on certain programs with lower costs of revenues from the Inmet and Weinschel acquisition. The EMS segment cost of revenues in fiscal 2015 decreased by 1.7 percentage points compared to fiscal 2014 primarily as a result of cost reductions realized in fiscal 2015 compared to fiscal 2014. The cost of revenues for the SSIA segment decreased 3.8 percentage points in fiscal 2015 compared to fiscal 2014. The decrease is a result of an unfavorable product mix in the year ended November 30, 2014, due primarily to the completion of a contract with a lower margin profile. Consolidated restructuring costs recorded in cost of revenues in fiscal 2015 decreased to approximately $0.5 million from approximately $1.1 million for the year ended November 30, 2014.

General and Administrative Expenses

Consolidated general and administrative expenses increased to approximately $29.2 million for the year ended November 30, 2015 from $23.1 million for the year ended November 30, 2014. The increase is primarily a result of approximately $5.6 million from the acquisition of Inmet and Weinschel, including higher salaries, higher amortization of intangibles and higher stock based compensation for the full year of fiscal 2015. As a percentage of sales, general and administrative expenses were 12.6% for the year ended November 30, 2015, compared to 10.2% for the year ended November 30, 2014.

The major components of general and administrative expenses are as follows:

Selling Expenses

Selling expenses increased to approximately $15.4 million for the year ended November 30, 2015 from approximately $14.5 million for the year ended November 30, 2014. The increase was largely due to sales subject to commissions and higher salaries following the acquisition of Inmet and Weinschel. As a percentage of sales, consolidated selling expenses were 6.6% for the year ended November 30, 2015, compared to 6.4% for the year ended November 30, 2014.

The major components of selling expenses are as follows:

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Research and Development Expenses

Research and development costs increased to approximately $9.6 million for the year ended November 30, 2015 compared to approximately $8.3 million for the year ended November 30, 2014. The increase was primarily due to the impact of the acquisition of Inmet and Weinschel on June 8, 2015. As a percentage of sales, research and development expenses were 4.1% for the year ended November 30, 2015, compared to 3.6% for the year ended November 30, 2014.

Business acquisition and related charges

Business acquisition charges primarily represent costs of engaging outside legal, accounting, due diligence, and business valuation consultants related to business combinations or divestitures. For the year ended November 30, 2015, business acquisition charges of approximately $1.4 million, which related primarily to the acquisition of Inmet and Weinschel, compared to approximately $0.5 million for the year ended November 30, 2014.

Operating Income (Loss)

We recorded an operating loss for the year ended November 30, 2015 of approximately $2.8 million compared to operating income of approximately $4.6 million for the year ended November 30, 2014. The increase in operating loss of approximately $7.4 million is attributed to higher operating expense following the acquisition of Inmet and Weinschel and higher restructuring charges, partially offset by improved financial results in our SSC and EMS segments due largely to efficiencies and improved product mix in fiscal 2015, as we shipped products on certain programs with lower costs of revenues.

Other Expense (Income), net

Total other expense for the year ended November 30, 2015 was approximately $18.1 million, compared to other expense of $22.2 million for the year ended November 30, 2014.

The decrease in other expense is largely attributable to lower amortization of discounts and deferred financing costs of approximately $10.2 million following the March 21, 2014 debt extinguishment during the year ended November 30, 2014, partially offset by an increase in interest expense of approximately $4.0 million largely due to higher debt levels throughout the year ended November 30, 2015, compared to the prior year, and a contingency settlement of $2.5 million.

Income Taxes

Income taxes is a net expense of approximately $1.4 million for the year ended November 30, 2015, compared to income tax expense of approximately $1.3 million for the year ended November 30, 2014. The current provision is less than the statutory tax rate due to non-deductible expenses, as well as the recording of a valuation allowance against deferred tax assets due to a history of cumulative losses and the federal and state benefit of current losses from continuing operations.

Net loss

We recorded a net loss for the year ended November 30, 2015 of approximately $22.3 million, compared to a net loss of approximately $18.9 million for the year ended November 30, 2014. The increase in net loss is largely due to approximately $4.0 million higher interest expense and higher operating expenses following the acquisition of Inmet and Weinschel and higher restructuring charges, partially offset by the higher write-off of approximately $10.2 million of discounts and deferred financing costs in fiscal 2014, and higher overall financial results in our SSC and EMS segment in fiscal 2015 as a result of efficiencies and a change in product mix.

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Liquidity and Capital Resources

Overview and Summary

Our principal sources of liquidity include cash flows from operations, funds from borrowings and existing cash on hand.

At November 30, 2015, we held cash and cash equivalents of approximately $7.2 million compared to $8.3 million at November 30, 2014. We believe that our available cash and cash equivalents and future cash flows from operations will be sufficient to satisfy our anticipated cash requirements for the next twelve months, including scheduled debt repayments, lease commitments, planned capital expenditures, and research and development expenses. There can be no assurance, however, that unplanned capital replacements or other future events will not require us to seek additional debt or equity financing and, if so required, that it will be available on terms acceptable to us, if at all. Any issuance of additional equity could dilute our current stockholders’ ownership interests.

On June 8, 2015, we entered into Amendment No. 3, which amends the Term Loan Agreement to provide for an incremental term loan facility in an aggregate principal amount equal to $85.0 million (the “Second Incremental Term Loan Facility”), increases the margins applicable to the outstanding term loans to 7.50% in the case of base rate loans and 8.50% in the case of LIBOR loans, beginning December 2015, amends the prepayment premiums that we are required to pay upon voluntary prepayments or certain mandatory prepayments of the term loans, permits certain additional adjustments to our consolidated EBITDA for cost savings in connection with the acquisition Inmet and Weinschel, and reduces the minimum interest coverage ratio and increases the maximum leverage ratio for certain compliance periods. The proceeds of the Second Incremental Term Loan Facility were primarily used to fund the purchase price for the Inmet and Weinschel acquisition. As of November 30, 2015, we had borrowed $193.7 million under the Term Loan Agreement.

Amendment No. 4, among other items, adds additional mandatory prepayment events upon the occurrence of a change of control (as defined in the Term Loan Agreement) and/or receipt of any termination fees under the Merger Agreement and decreases the prepayment premiums that we are required to pay upon a voluntary or mandatory prepayment of any of the outstanding term loans. Upon consummation of the transactions contemplated by the Merger Agreement, we will be required to pay a prepayment premium in an amount equal to 1% of the amount of the term loans prepaid. Amendment No. 4 also amends the amortization schedule applicable to future term loan payments made by the Company by removing our obligation to make an amortization payment for the fiscal quarters ending February 29, 2016 and May 31, 2016 and requiring us to make an amortization payment in an amount equal to 5.0% of the original aggregate term loan amount on the earlier of (a) May 27, 2016 and (b) the date of termination of the Merger Agreement. Amendment No. 4 reduces the minimum interest coverage ratio for certain compliance periods, increases the maximum leverage ratio for certain compliance periods, and adds additional events of default upon either (a) the termination of the Merger Agreement or (b) our failure to consummate the transactions contemplated by the Merger Agreement on or prior to May 27, 2016.

Term Loan Agreement

The outstanding term loans, including the term loans incurred pursuant to the Second Incremental Term Loan Facility (collectively, the “Term Loans”), bear interest, at our option, at the base rate plus 6.50% or an adjusted LIBOR rate (based on one, two or three-month interest periods) plus 7.50% during the first six months after Amendment No. 3’s closing date, and a base rate plus 7.50% or the adjusted LIBOR rate plus 8.50% thereafter. The base rate continues to mean the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus a margin equal to 0.50% and the adjusted LIBOR rate for a 3-month interest period plus a margin equal to 1.00%. The adjusted LIBOR rate remains subject to a floor of 1.25%.

Interest is due and payable in arrears monthly for Term Loans bearing interest at the base rate and at the end of an interest period (or at each three month interval in the case of Term Loans with interest periods greater than

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three months) in the case of Term Loans bearing interest at the adjusted LIBOR rate. Principal payments of the Term Loans are paid at the end of each of our fiscal quarters, with the balance of any outstanding Term Loans due and payable in full on February 6, 2018. The quarterly principal payments will amortize at 1.875% for the fiscal quarters through the end of our 2015 fiscal year, 0% for the quarters ending February 29, 2016 and May 31, 2016 and 2.50% for each of the fiscal quarters thereafter.

Under certain circumstances, we are required to prepay the Term Loans upon the receipt of cash proceeds from certain asset sales, cash proceeds of certain extraordinary receipts and cash proceeds of certain debt or equity financings, and based on a calculation of annual excess cash flow. Mandatory prepayments resulting from assets sales or certain debt financings may require the payment of certain prepayment premiums. Amendment No. 3 increases the prepayment premiums that we are required to pay upon voluntary prepayments or certain mandatory prepayments of any of the outstanding term loans and requires additional prepayment premiums for any prepayment of the Second Incremental Term Loan Facility made on or prior to December 8, 2015, as calculated in accordance with the Term Loan Agreement. Amendment No. 4 adds additional mandatory prepayments as described above.

The Term Loans are secured by a security interest in substantially all of the assets owned by the Company and the subsidiary guarantors.

The Term Loan Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, dispose of assets and pay dividends or make distributions to stockholders, in each case subject to customary exceptions for a term loan of this size and type.

Pursuant to the Term Loan Agreement, we are required to maintain compliance with an interest coverage ratio and a leverage ratio and to limit our annual capital expenditures to $4.0 million per fiscal year (subject to carry-over rights). The interest coverage ratio is defined as the ratio of Consolidated EBITDA to cash Interest Expense (as each term as defined in the Term Loan Agreement), as at the end of each fiscal quarter. Amendment No. 3 and Amendment No. 4 reduce the minimum interest coverage ratio and increase the maximum leverage ratio for certain compliance periods. For the first fiscal quarter during the fiscal year ending November 30, 2015, the interest coverage ratio must not have been less than the ratio of 2.20:1.00, for the second and third fiscal quarters ending November 30, 2015, it must not have been less than the ratio of 1.90:1.00, and for the fourth fiscal quarter not less than 1.55:1.00. The leverage ratio is defined as the ratio of Funded Debt to Consolidated EBITDA (as each term as defined in the Term Loan Agreement), as at the end of each fiscal quarter. For each of the fiscal quarters during the fiscal year ending November 30, 2015, the leverage ratio must not have been greater than 5.25:1.00, except for the second fiscal quarter during the fiscal year ending November 30, 2015 for which the leverage ratio must not have been greater than 5.50:1.00 and for the fourth fiscal quarter not greater than 6.50:100. Amendment No. 3 also permits certain adjustments to the Company’s consolidated EBITDA, which is used in calculating the financial covenants, to reflect cost savings in connection with the acquisition of Inmet and Weinschel.

The Term Loan Agreement includes customary events of default including, among other things, non-payment defaults, inaccuracy of representations and warranties, covenant defaults, cross default to material indebtedness, bankruptcy and insolvency defaults, non-compliance with ERISA laws and regulations, defaults under the security documents or guaranties, material judgment defaults, and a change of control default, in each case subject to certain exceptions for a term loan of this type. The occurrence of an event of default could result in an increased interest rate equal to 2.0% above the applicable interest rate for loans, the acceleration of our obligations pursuant to the Term Loan Agreement and an obligation of the subsidiary guarantors to repay the full amount of our borrowings under the Term Loan Agreement. If we were unable to obtain a waiver for a breach of covenant and the lenders accelerated the payment of any outstanding amounts, such acceleration may cause our cash position to deteriorate or, if cash on hand were insufficient to satisfy the payment due, may require us to obtain alternate financing to satisfy the accelerated payment. If our cash is utilized to repay any outstanding debt, we could experience an immediate and significant reduction in working capital available to operate our business.

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Year Ended November 30, 2015 Compared to November 30, 2014

Cash generated by operating activities of approximately $12.1 million for the year ended November 30, 2015, increased by $6.8 million from cash generated by operating activity of approximately $5.3 million for the year ended November 30, 2014. The increase in cash generated by operating activities resulted primarily from the net cash generated by changes in operating assets and liabilities during fiscal 2015, primarily related to accounts payable and accounts receivable, partially offset by higher interest payments in fiscal 2015 compared to fiscal 2014.

Cash used in investing activities for the year ended November 30, 2015 was approximately $81.8 million, which is due primarily to the acquisition of Inmet and Weinschel and the purchase of fixed and intangible assets. Cash generated by investing activities for the year ended November 30, 2014 was approximately $15.3 million, which consisted primarily of the $15.1 million proceeds from the sale of the State College facility, $1.5 million related to the release of restricted cash from the sale of Sensors and $1.8 million of tax refunds related to the SenDEC acquisition, partially offset by the acquisition of fixed and intangible assets of $3.1 million.

Cash provided by financing activities for the year ended November 30, 2015 totaled approximately $68.6 million, and resulted from the June 8, 2015 refinancing, which generated net proceeds of $81.8 million, partially offset by the repayment of long-term debt, mainly related to the term loans under the Term Loan Agreement. Cash used by financing activities for the year ended November 30, 2014 totaled approximately $18.4 million, which resulted from $55.7 million of repayments of long-term debt, mainly related to term loans under the Term Loan Agreement, the repayment and termination of the Revolving Loan Agreement and the $27.6 million redemption of preferred shares, partially offset by $64.9 million of net proceeds associated with the Revolving Loan Agreement.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Summary of Critical Accounting Policies and Estimates

Our significant accounting policies are fully described in the notes to our consolidated financial statements. Some of our accounting policies involved estimates that required management’s judgment in the use of assumptions about matters that were uncertain at the time the estimate was made. Different estimates, with respect to key variables used for the calculations, or changes to estimates, could potentially have had a material impact on our financial position or results of operations. The development and selection of the critical accounting estimates are described below. Dollar amounts are presented in thousands of USD.

Accounting estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements, and the disclosures made in the accompanying notes. Examples of estimates include the provisions made for bad debts and obsolete inventory, estimates associated with annual goodwill impairment tests, and estimates of deferred income tax and liabilities. The Company also uses estimates when assessing fair values of assets and liabilities acquired in business acquisitions as well as any fair value and any related impairment charges related to the carrying value of machinery and equipment, other long-lived assets, fixed assets held for sale and discontinued operations. The Company also uses estimates in determining the remaining economic lives of long-lived assets. In addition, the Company uses assumptions when employing the Black-Scholes valuation model to estimate the fair value of share options. Despite the Company’s intention to establish accurate estimates and use reasonable assumptions, actual results may differ from these estimates.

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Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, bank balances and investments in money market instruments with original maturities of three months or less.

Inventories

Inventories, which include materials, labor, and manufacturing overhead, are stated at the lower of cost (on a first-in, first-out basis) or net realizable value. On a quarterly basis, the Company evaluates inventories for potential write-down for identifiable obsolescence and slow moving items. The evaluation includes analysis of future demand, product mix and possible alternative uses. The Company records a provision that includes excess and obsolete inventory when write-downs or write-offs are identified. Any write-down of inventory at the close of a fiscal period creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. The Company periodically reviews and analyzes its inventory management systems, and conducts inventory impairment testing on a quarterly basis.

Fixed Assets

Fixed assets are recorded at cost less accumulated depreciation and are depreciated using the straight-line method over the following periods:

Betterments are capitalized and amortized by the Company, using the same amortization basis as the underlying assets over the remaining useful life of the original asset. Betterments include renovations, major repairs and upgrades that increase the service of a fixed asset and extend the useful life. Gains and losses on depreciable assets retired or sold are recognized in the consolidated statements of operations in the year of disposal. Repairs and maintenance expenditures are expensed as incurred.

Fixed Assets Held for Sale

Certain fixed assets within our SSC segment were classified as held for sale in the consolidated balance sheets. The Company estimated the fair value of the net assets to be sold at approximately $150 at November 30, 2014. There are no fixed assets held for sale at November 30, 2015.

Goodwill and Intangible Assets

Goodwill and intangible assets result primarily from business acquisitions accounted for under the purchase method. Goodwill and intangible assets with indefinite lives are not amortized but are subject to impairment by applying a fair value based test. The Company completes an annual (or more often if impairment indicators arise under the applicable accounting guidance) impairment assessment of its goodwill on a reporting unit level. The Company’s annual impairment test for goodwill is September 1st.

The Company has three reporting units: (i) SSC, (ii) EMS, and (iii) SSIA. The goodwill in the consolidated financial statements relates to the acquisition of Inmet and Weinschel in June 2015, RTIE in March 2012, C-MAC in March 2012, Commercial Microwave Technology, Inc. (“CMT”) in November 2011, Spectrum in June 2011, and SenDEC Corp. (“SenDEC”) in January 2011. All of the goodwill relates to our SSC reporting

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unit, except for the goodwill associated with SenDEC, which relates to the EMS reporting unit. Goodwill represents the excess of the purchase price of acquired companies over the estimated fair value assigned to the individual assets acquired and liabilities assumed.

A two-step test is performed to assess goodwill impairment. First, the fair value of each reporting unit is compared to its carrying value. The fair value is determined based on a market approach as well as the discounted future cash flows of the subsidiary carrying the goodwill. If the calculated fair value exceeds the carrying value of the assets, goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value of the goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss equal to the difference is recorded.

Following the required accounting guidance, the Company performed the first step of the two-step test method based on an income approach and a market approach on September 1, 2015. The respective reporting units’ future cash flows exceeded the carrying value of the underlying assets and therefore goodwill was not at risk of impairment and no further testing was required for the year ending November 30, 2015.

Intangible assets that have a finite life are amortized using the following basis over the following period:

Long-Lived Assets

The Company periodically evaluates the net realizable values of long-lived assets, principally identifiable intangibles and capital assets, for potential impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, as determined based on the estimated future undiscounted cash flows. If such assets were considered to be impaired, the carrying value of the related assets would be reduced to their estimated fair value.

Income taxes

Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial reporting and tax bases of assets and liabilities and available net operating loss carry forwards. A valuation allowance is established to reduce tax assets if it is more likely than not that all or some portions of such tax assets will not be realized.

The Company’s valuation allowance was recorded on the deferred tax assets to reduce deferred tax assets to the amount that we estimate are probable to be realized. In determining the adequacy of the valuation allowance, the Company applied the authoritative guidance, and considered such factors as (i) the reversal of existing temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carryforwards; (iii) taxable income in prior carryback years where carryback is permitted; and (iv) prudent and feasible tax planning strategies.

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The Company follows the guidance concerning accounting for uncertainty in income taxes, which clarifies the accounting and disclosure for uncertainty in tax positions. The guidance requires that the Company determine whether it is more likely than not that a tax position will not be sustained upon examination by the appropriate taxing authority. If a tax position does not meet the more likely than not recognition criterion, the guidance requires that the tax position be measured at the largest amount of benefit greater than 50 percent not likely of being sustained upon ultimate settlement.

Based on the Company’s evaluation, management has concluded that there are no significant uncertain tax positions requiring recognition in the consolidated financial statements. Open tax years include the tax years ended January 21, 2011 through November 30, 2015.

The Company from time to time has been assessed interest or penalties by major tax jurisdictions, however such assessments historically have been minimal and immaterial to our financial results. If the Company receives an assessment for interest and/or penalties, it would be classified in the consolidated financial statements as general and administrative expense.

Revenue Recognition

The Company recognizes non-contract revenue when it is realized and earned. The Company considers non-contract revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until products have been shipped and risk of loss and ownership has transferred to the client. Revenue from production-type contracts, which represents less than one per cent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred, excluding costs that are not representative of progress to completion, as a percentage of total costs anticipated for each contract. A provision is made for losses on contracts in progress when such losses first become known. Revisions in cost and profit estimates, which can be significant, are reflected in the accounting period in which the relevant facts become known. Revenue from contracts under the percentage of completion method is not significant to the financial statements.

Deferred Revenue

The Company defers revenue when payment is received in advance of the service or product being shipped or delivered.

Warranty

The Company provides up to a one-year product defect warranty on various products from the date of sale. Historically, warranty costs have been nominal and have been within management’s expectations. The Company has accrued approximately $328 and $325, in warranty liability as of November 30, 2015 and 2014, respectively, which has been included in accounts payable and accrued expenses.

Shipping and Handling

Shipping and handling costs are expensed as incurred and included in cost of revenues.

Sales Taxes

The Company records sales tax on the sale of its products as a liability, and does not include such amounts in revenue.

Research and Development

Research and development costs are expensed when incurred.

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Advertising Costs

Advertising costs are expensed as incurred and were $849 and $1,118, for the years ended November 30, 2015, and 2014, respectively.

Stock-Based Compensation

The Company follows the authoritative guidance for accounting for stock-based compensation. The guidance requires that new, modified and unvested stock-based payment transactions with employees, such as grants of stock options, restricted stock units (“RSUs”) and restricted stock, be recognized in the financial statements based on their fair value at the grant date and recognized as compensation expense over their vesting periods. Stock-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model which takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying shares and its expected volatility, expected dividends on the shares and the risk-free interest rate for the term of the option.

Foreign Currency Translation and Transactions

The Company’s functional currency is U.S. dollars and the consolidated financial statements are stated in U.S. dollars, “the reporting currency.” Integrated operations have been translated from various foreign currencies (British Pounds Sterling, Canadian dollars, Chinese Yuan, Euros, and Mexican Pesos) into U.S. dollars at the period-end exchange rate for monetary balance sheet items, the historical rate for fixed assets and shareholders’ equity, and the average exchange rate for the year for revenues, expenses, gains and losses. The gains or losses on translation are included as a component of other comprehensive income (loss) for the period.

Receivables and Credit Policies

Accounts receivable are non-interest bearing, uncollateralized customer obligations. Accounts receivable are stated at the amounts billed to the customer. Customer account balances with invoices over 90 days old are considered delinquent. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices. The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management’s estimate of the amounts that will not be collected.

Financial Instruments

The fair values of financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and short-term borrowings approximate their carrying values due to the short-term nature of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest rate, currency or credit risks arising from its financial instruments. The recorded value of long-term debt approximates the fair value of the debt as the terms and rates approximate market rates.

In the ordinary course of business, the Company carries out transactions in various foreign currencies (British Pounds Sterling, Canadian Dollars, Chinese Yuan, Euros, and Mexican Pesos) included in the Company’s cash, accounts receivable, accounts payable, bank indebtedness, as well as a mortgage loan. The translation adjustments related to these accounts have been reflected as a component of comprehensive income. Currently, the Company does not maintain a foreign currency hedging program.

Debt Issuance Costs and Long-term Debt Discount

Fees paid to obtain debt financing or amendments under such debt financing are treated as debt issuance costs and are capitalized and amortized over the life of the debt using the effective interest method. These payments are shown as a financing activity on the consolidated statement of cash flows and are shown as other non-current assets in the consolidated balance sheets.

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The Company may record debt and equity discounts in connection with raising funds through the issuance of convertible notes or equity instruments. These discounts may arise from (i) the receipt of proceeds less than the face value of convertible notes or equity instruments, (ii) beneficial conversion features and/or (iii) recording derivative liabilities related to embedded features. These costs are amortized over the life of the debt to interest expense utilizing the effective interest method. If a conversion of the underlying debt occurs, a proportionate share of the unamortized discount is immediately expensed.

Concentration of Credit Risk

The Company maintains cash balances, at times, with financial institutions, which are in excess of amounts insured by the Federal Deposit Insurance Corporation (FDIC), Canadian Deposit Insurance Corporation (CDIC) and Financial Services Compensation Scheme (FSCS in the U.K.). Management monitors the soundness of these institutions and has not experienced any collection losses with these institutions.

The U.S., U.K. and Canadian Governments’ Departments of Defense (directly and through subcontractors) accounts for approximately 45%, 10% and 1% of the Company’s revenues for the year ended November 30, 2015, and 45%, 9% and 2% of the Company’s revenues for the year ended November 30, 2014. Two of the U.S. customers, one a defense prime contractor, represented approximately 15% of revenues for the year ended November 30, 2015 (12% of revenues for the year ended November 30, 2014). The same customers represented 11% and 10% of accounts receivable as of November 30, 2015 and 2014, respectively. A loss of a significant customer could adversely impact the future operations of the Company.

Earnings (Loss) per Share of Common Stock

Basic earnings per share of common stock is computed by dividing income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock gives effect to all dilutive potential shares of common stock outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings per share.

Comprehensive Income (Loss)

Comprehensive income (loss), which includes foreign currency translation adjustments, is shown in the Consolidated Statement of Operations and Comprehensive Income (Loss).

Recently Issued Accounting Pronouncements

In November 2015, the FASB issued guidance which clarifies that in a classified statement of financial position, an entity shall classify deferred tax liabilities and assets as noncurrent amounts. The former guidance required the valuation allowance for a particular tax jurisdiction be allocated between current and noncurrent deferred tax assets for that tax jurisdiction on a pro rata basis. The update is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in this guidance may be applied either prospectively to adjustments to provisional amounts that occur after the effective date of this guidance or retrospectively to all periods presented, with earlier application permitted for financial statements that have not been issued. The Company has early adopted this guidance prospectively for the fiscal year ended November 30, 2015.

In April 2015, the FASB issued guidance which changes the presentation of debt issuance costs in financial statements to present such costs as a direct deduction from the related debt liability rather than as an asset. The guidance will become effective for public companies during interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company has early adopted this guidance for the fiscal year ended November 30, 2015.

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In May 2014, the FASB issued guidance which affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The new guidance will supersede the existing revenue recognition requirements, and most industry-specific guidance. Following the announcement of a one year deferral in July 2015, for a public entity, the amendments in this guidance are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented or apply the requirements in the year of adoption, through a cumulative adjustment. The Company has not yet selected a transition method nor has it determined the impact of adoption on its condensed consolidated financial statements.

In April 2014, the FASB issued guidance which changes the threshold for reporting discontinued operations and adds additional disclosures. The guidance updates the definition of discontinued operations to include the disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The guidance is effective prospectively for all disposals of components of an entity that occur with annual periods beginning on or after December 15, 2014, and interim periods therein.

A smaller reporting company is not required to provide the information in this Item.

Our financial statements are included in this Annual Report on Form 10-K immediately following the signature page.

None.

Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of November 30, 2015. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of November 30, 2015.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

With the participation of the Company’s Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of November 30,

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2015, based on the framework and criteria established in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that evaluation, management has concluded that our internal control over financial reporting was effective as of November 30, 2015.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

During our most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

None.

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PART III

Directors, Executive Officers and Corporate Governance

The information called for by this Item 10 of Part III of Form 10-K is incorporated by reference to the information set forth in our definitive proxy statement relating to our 2016 Annual Meeting of Stockholders (the “Proxy Statement”) to be filed pursuant to Regulation 14-A under the Exchange Act within 120 days from 2015 fiscal year end. Reference is also made to the information appearing in Item 1 of Part I of this Annual Report on Form 10-K under the caption “Business—Executive Officers of the Registrant.”

Code of Ethics

We have adopted a Code of Ethics that applies to our directors and employees (including our principal executive officer, principal financial officer, principal accounting officer and controller and persons performing similar functions). The Code of Ethics is posted on our website at www.apitech.com on the Investor Relations section. We will post on our website any amendments to or waivers of the Code of Ethics for executive officers or directors in accordance with applicable laws and regulations.

The information called for by this Item 11 of Part III of Form 10-K is incorporated by reference to our Proxy Statement, which will be filed with the Securities and Exchange Commission within 120 days from 2015 fiscal year end.

The information called for by this Item 12 of Part III of Form 10-K is incorporated by reference to the information set forth in our Proxy Statement, which will be filed with the Securities and Exchange Commission within 120 days from 2015 fiscal year end.

The information called for by this Item 13 of Part III of Form 10-K is incorporated by reference to our Proxy Statement, which will be filed with the Securities and Exchange Commission within 120 days from 2015 fiscal year end.

The information required to be disclosed by this Item 14 of Part III of Form 10-K is incorporated by reference to our Proxy Statement, which will be filed with the Securities and Exchange Commission within 120 days from 2015 fiscal year end.

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PART IV

1. Financial statements are set forth in this report following the signature page of this report. See index on page F-1.

2. Consolidated financial statement schedule

All financial statement schedules are omitted because they are not applicable or because the required information is shown in the financial statements or in the notes thereto.

3. Exhibit Index. The exhibits listed below, as part of this Annual Report on Form 10-K, are numbered in conformity with the numbering used in Item 601 of Regulation S-K of the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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Consolidated Financial Statements

F-1

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

API Technologies Corp.

We have audited the accompanying consolidated balance sheets of API Technologies Corp. as of November 30, 2015 and 2014, and the related consolidated statements of operations and comprehensive loss, changes in redeemable preferred stock and shareholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of API Technologies Corp. at November 30, 2015 and 2014, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

March 2, 2016

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API TECHNOLOGIES CORP.

Consolidated Balance Sheets

(In thousands of dollars, except share data)

The accompanying notes are an integral part of these consolidated financial statements.

F-3

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API TECHNOLOGIES CORP.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands of dollars, except share data)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

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API Technologies Corp.

Consolidated Statements of Changes in Redeemable Preferred Stock and Shareholders’ Equity—continued

(In thousands of dollars, except share data)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

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API Technologies Corp.

Consolidated Statements of Changes in Shareholders’ Equity—continued

(In thousands of dollars, except share data)