INTEST CORP

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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.

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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.

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At December 31, 2024, we were in compliance with all of the covenants included in our Loan Agreement. At June 30, 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 0.80 to 1.0 for the quarter ended June 30, 2025. On August 5, 2025, we executed the Sixth Amendment to the Loan Agreement, which formally waives the fixed charge coverage ratio financial covenant for periods ending June 30, 2025 through and including March 31, 2026. During the period of this waiver we are required to request consent from M&T if we wish to utilize our Revolving Facility and we formally pledged a portion of our cash holdings equal to our total open debt with M&T. At June 30, 2025 we were holding $5.9 million of total debt with M&T. 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.

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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.

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Changes in U.S. and foreign trade policy, including the imposition of tariffs and other retaliatory trade barriers, could adversely affect our business, financial condition, and results of operations. For example, the continued tariff negotiations have increased certain of 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. For the six months ended June 30, 2025, approximately half of our sales were shipped to customers outside of the United States and thus we are potentially exposed to tariffs. We have seen this continued economic uncertainty result in certain customers delaying purchases to the latter half of the year. Retaliatory tariffs by China and/or 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.