INTEST CORP

Current report

Item 1A. Risk Factors

Current report

The terms and covenants relating to our credit facility could adversely impact our ability to pursue our strategy and our financial performance and liquidity, and thus we may need additional financial resources to maintain our liquidity.

Current report

Our credit facility with M&T Bank contains covenants requiring us to, among other things, provide financial and other information and to provide notice upon the occurrence of certain events affecting us or our business. These covenants also place restrictions on our ability to incur additional indebtedness, and enter into certain transactions, including selling assets, engaging in mergers or acquisitions, or engaging in transactions with affiliates. If we fail to satisfy one or more of the covenants under our credit facility, we would be in default thereunder and may be required to repay such debt with capital from other sources or otherwise not be able to draw down against our facility. Under such circumstances, we may have difficulty in locating another lender that would be willing to extend credit to us, and other sources of capital may not be available to us on reasonable terms or at all.

Current report

At December 31, 2024, we were in compliance with all of the covenants included in our Loan Agreement. At March 31, 2025, we were in compliance with all of the covenants included in the Loan Agreement, except for the fixed charge coverage ratio financial covenant which was 0.99 to 1.0 for the quarter ended March 31, 2025, for which we have received a one-time waiver from M&T on May 1, 2025. We anticipate that we likely will not be in compliance with the fixed charge coverage ratio as currently defined for the three months ended June 30, 2025. As a result, we are in discussions with M&T regarding options to address this covenant, including an amendment to the Credit Facility to adjust the formula used to calculate the fixed charge coverage ratio that reflects our strong cash position and provides flexibility to respond to volatile market conditions, a broader waiver in terms of scope and/or time from M&T, or paying down outstanding balances under the Credit Facility, however, there can be no assurance that a resolution acceptable to the Company will be attained. See“Part I; Item 1. Financial Statements; Notes to Consolidated Financial Statements; Note (10) Debt” “Part I; Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Liquidity and Capital Resources; Credit Facility” in this Report for a discussion of the material terms of our credit facility.

Current report

U.S. tariff policies and potential global retaliatory countermeasures could increase our cost, disrupt our supply chain or affect customer purchasing activities, any of which could negatively impact our results of operations.

Current report

Changes in U.S. and foreign trade policy, including the imposition of tariffs and other trade barriers, could adversely affect our business, financial condition, and results of operations. For example, the recent imposition of a 10% base tariff on imports from certain countries and higher, country-specific tariffs on other countries, including a 145% tariff on certain Chinese imports, has increased our material costs and may force us to seek alternative suppliers or navigate through a period of reduced orders and revenues and/or unprofitability if we are unable to pass cost increases onto customers. We believe that approximately 73% of our materials are sourced from within the United States, however approximately 52% of our revenue for the three months ended March 31, 2025, were shipped to customers outside of the United States and thus potentially exposed to tariffs. Retaliatory tariffs by China and other countries could further disrupt our supply chain, reduce demand for our products, or result in lost sales. The unpredictable nature of these trade policies and the potential for further escalation may increase uncertainty and volatility in our industry, which could negatively impact our financial performance.

Previous report

The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act, of our common stock during the three months ended September 30, 2024, including those made pursuant to publicly announced plans or programs and those not made pursuant to publicly announced plans or programs.

Previous report

None.

Previous report

Not applicable.