INTEST CORP

Previous wording

In addition to historical information, this Quarterly Report on Form 10-Q for the period ended June 30, 2026 (this “Report”), including this management’s discussion and analysis (“MD&A”), contains statements that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements do not convey historical information, but relate to predicted or potential future events, such as statements of our plans, strategies and intentions, or our future performance or goals, projections of revenue, taxable earnings (loss), net earnings (loss), net earnings (loss) per share, capital expenditures and other financial items, that are based on management’s current expectations and estimates. Our forward-looking statements can often be identified by the use of forward-looking terminology such as “believe,” “continue,” “expect,” “may,” “could,” “will,” “plans,” “depending,” “seeking,” “anticipates,” “goal,” “objective,” “target,” “estimates,” “future,” “strategy,” “intended,” or variations of such words or similar terminology. Investors and prospective investors are cautioned that such forward-looking statements are only projections based on current expectations and estimates. These statements involve risks and uncertainties and are based upon various assumptions. Such risks and uncertainties include, but are not limited to:

Current wording

In addition to historical information, this Quarterly Report on Form 10-Q for the period ended September 30, 2026 (this “Report”), including this management’s discussion and analysis (“MD&A”), contains statements that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements do not convey historical information, but relate to predicted or potential future events, such as statements of our plans, strategies and intentions, or our future performance or goals, projections of revenue, taxable earnings (loss), net earnings (loss), net earnings (loss) per share, capital expenditures and other financial items, that are based on management’s current expectations and estimates. Our forward-looking statements can often be identified by the use of forward-looking terminology such as “believe,” “continue,” “expect,” “may,” “could,” “will,” “plans,” “projection,” “depending,” “seeking,” “anticipates,” “goal,” “objective,” “target,” “estimates,” “future,” “strategy,” “intended,” or variations of such words or similar terminology. Investors and prospective investors are cautioned that such forward-looking statements are only projections based on current expectations and estimates. These statements involve risks and uncertainties and are based upon various assumptions. Such risks and uncertainties include, but are not limited to:

Previous wording

•our ability to effectively remediate the material weaknesses in our internal control over financial reporting that we have identified or our failure to develop and maintain a proper and effective system of disclosure controls and internal control over financial reporting;

Current wording

•our ability to effectively remediate the material weakness in our internal control over financial reporting that we have identified or our failure to develop and maintain a proper and effective system of disclosure controls and internal control over financial reporting;

Previous wording

In connection with the preparation of this Report’s financial statements, we identified errors in our previously issued financial statements. We evaluated the impact of the errors and concluded they were not material, individually or in the aggregate, to any previously issued interim or annual consolidated financial statements. We have reflected these corrections in the Consolidated Financial Statements for the three months ended March 31, 2026 included in this Report. The figures in this MD&A have been similarly revised, where applicable, to reflect the impact of such corrections. Refer to

Current wording

In connection with the preparation of our previously issued consolidated financial statements for the three and six months ended June 30, 2026, we identified errors in our previously issued financial statements for the three months ended March 31, 2026. We have reflected these corrections in the Consolidated Financial Statements for the three months ended March 31, 2026 in the previously issued Consolidated Financial Statements for the three and six months ended June 30, 2026. We evaluated the impact of the errors and concluded they were not material, individually or in the aggregate, to any previously issued interim or annual consolidated financial statements. We have reflected these corrections in the

Previous wording

“Note (2) Summary of Significant Accounting Policies; (b) Revision of Previously Issued Interim Financial Statements,” and “Note (18) Revision of Previously Issued Interim Financial Statements,” for additional information.

Current wording

Consolidated Financial Statements for the three months ended March 31, 2026 included in this Report. The figures in this MD&A have been similarly revised, where applicable, to reflect the impact of such corrections. Refer to “Note (2) Summary of Significant Accounting Policies; (b) Revision of Previously Issued Interim Financial Statements,” and “Note (18) Revision of Previously Issued Interim Financial Statements,” for additional information.

Previous wording

The Semi market is highly cyclical with recurring periods of oversupply, which often severely impact the Semi market's demand for the products we manufacture and sell into the market. This cyclicality can cause wide fluctuations in both our orders and revenue and, depending on our ability to react quickly to these shifts in demand, can significantly impact our results of operations. Market cycles are difficult to predict and, because they are generally characterized by sequential periods of growth or declines in orders and revenue during each cycle, year-over-year comparisons of operating results may not always be as meaningful as comparisons of periods at similar points in either up or down cycles. These periods of heightened or reduced demand can shift depending on various factors impacting both our customers and the markets that they serve. In addition, during both downward and upward cycles in the Semi market, in any given quarter, the trend in both our orders and revenue can be erratic. This can occur, for example, when orders are canceled or currently

Current wording

The Semi market is highly cyclical with recurring periods of oversupply, which often severely impact the Semi market's demand for the products we manufacture and sell into the market. This cyclicality can cause wide fluctuations in both our orders and revenue and, depending on our ability to react quickly to these shifts in demand, can significantly impact our results of operations. Market cycles are difficult to predict and, because they are generally characterized by sequential periods of growth or declines in orders and revenue during each cycle, year-over-year comparisons of operating results may not always be as meaningful as comparisons of periods at similar points in either up or down cycles. These periods of heightened or reduced demand can shift depending on various factors impacting both our customers and the markets that they serve. In addition, during both downward and upward cycles in the Semi market, in any given quarter, the trend

Previous wording

39 - scheduled delivery dates are accelerated or postponed by a significant customer or when customer forecasts and general business conditions fluctuate during a quarter.

Current wording

39 - in both our orders and revenue can be erratic. This can occur, for example, when orders are canceled or currently scheduled delivery dates are accelerated or postponed by a significant customer or when customer forecasts and general business conditions fluctuate during a quarter.

Previous wording

As noted in “Part I; Item 1; Financial Statements; Notes to Consolidated Financial Statements; Note (9) Debt,” our Loan Agreement with M&T Bank (“M&T”) contains financial covenants, including a fixed charge coverage ratio of not less than 1.25 to 1.0. The fixed charge coverage ratio is calculated over the trailing twelve months, so the net loss reported in the first, second and third quarters impacts our ability to meet this covenant in future periods notwithstanding our strong cash position. 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. On May 4, 2026, we executed the Seventh Amendment to the Loan Agreement, effective as of April 30, 2026, to extend our ability to draw on the Term Note through August 28, 2026.

Current wording

As noted in “Part I; Item 1; Financial Statements; Notes to Consolidated Financial Statements; Note (9) Debt,” our Loan Agreement with M&T Bank (“M&T”) contains financial covenants, including a fixed charge coverage ratio of not less than 1.25 to 1.0. The fixed charge coverage ratio is calculated over the trailing twelve months, so the net loss reported in the first, second and third quarters of 2025 impacted our ability to meet this covenant notwithstanding our strong cash position. On August 5, 2025, we executed the Sixth Amendment to the Loan Agreement, which formally waived the fixed charge coverage ratio financial covenant for periods ending June 30, 2025 through and including March 31, 2026. The waiver has expired. On May 4, 2026, we executed the Seventh Amendment to the Loan Agreement, effective as of April 30, 2026, to extend our ability to draw on the Term Note through August 28, 2026. On August 14, 2026, we executed the Eighth Amendment to the Loan Agreement, to extend our ability to draw on the Term Note through August 28, 2028. The waiver has expired and at September 30, 2026 we had total debt of $0.8 million with M&T and were in compliance with all covenants included in the Loan Agreement.

Previous wording

We continue to monitor recent macroeconomic factors, including but not limited to changes in global trade policy, tariffs and related reciprocal or retaliatory trade actions announced by the U.S., China and other countries. The degree to which changes in global trade policy, tariffs and other related actions will impact our business, financial condition and results of operations depends on future developments, which are uncertain. Changes in global trade policies, tariffs and other related actions may negatively impact demand, pricing and cost for our products and technologies, contribute to the

Current wording

We continue to monitor recent macroeconomic factors, including but not limited to changes in global trade policy, tariffs and related reciprocal or retaliatory trade actions announced by the U.S., China and other countries. The degree to which changes in global trade policy, tariffs and other related actions will impact our business, financial condition and results of operations depends on future developments, which are uncertain. Changes in global trade policies, tariffs and other

Previous wording

40 - inherent uncertainties in estimating future customer demand and increase our material costs, any of which could negatively impacting our results of operations and cash flows.

Current wording

40 - related actions may negatively impact demand, pricing and cost for our products and technologies, contribute to the inherent uncertainties in estimating future customer demand and increase our material costs, any of which could negatively impact our results of operations and cash flows.

Previous wording

Acculogic Inc. (“Acculogic”) has historically purchased certain parts from a key sole-source supplier in Belarus, which is bordered by Russia to the east and northeast and Ukraine to the south. As a result of the ongoing war between Russia and Ukraine, in August 2024, the United States, Canada and the European Union added additional sanctions on Belarus, which included adding this supplier to a list of prohibited entities. We have not received materials from this supplier since the issuance of Executive Order 14038. During the first half of 2025, the majority of our remaining supply of these materials was depleted.

Current wording

Acculogic Inc. (“Acculogic”) had historically purchased certain parts from a key sole-source supplier in Belarus, which is bordered by Russia to the east and northeast and Ukraine to the south. As a result of the ongoing war between Russia and Ukraine, in August 2024, the United States, Canada and the European Union added additional sanctions on Belarus, which included adding this supplier to a list of prohibited entities. We have not received materials from this supplier since the issuance of Executive Order 14038.

Previous wording

We qualified a new supplier for these materials in early 2025 and have a supply of these materials on hand to support new production. Our first system incorporating these new materials shipped to one of our customers at the end of the second quarter 2025.

Current wording

During the first half of 2025 we qualified a new supplier for these materials. Our first system incorporating these new materials shipped to one of our customers at the end of the second quarter 2025.

Previous wording

A significant portion of the additional purchases from the Belarus supplier are intended to support spare parts used for repairs and warranty claims for the existing units already in service with our customers. Those specific parts from the new supplier are not compatible with those existing units. There can be no assurance that we will be granted the amended and extended license by OFAC in a timely manner or at all, or that if granted a license by OFAC that such supplier in Belarus will be willing or able to provide these parts on reasonable commercial terms or at all.

Current wording

Currently, we have an open application with the U.S. Department of Treasury’s Office of Foreign Asset Control (“OFAC”) for a license to allow us to purchase a limited amount of materials from the Belarus supplier to support repairs and warranty claims for the existing units already in service with our customers. Those specific parts from the new supplier are not compatible with those existing units. There can be no assurance that we will be granted a license by OFAC in a timely manner or at all, or that if granted a license by OFAC that such supplier in Belarus will be willing or able to provide these parts on reasonable commercial terms or at all. As of September 30, 2026, we do not believe that our obligations with regards to existing units containing those Belarus-sourced parts are material.

Previous wording

In addition, while the supply chain and logistics challenges that we encountered throughout 2022 have eased, uncertainty in the global trade environment remains. As a result, we expect that we may continue to experience increased prices, lack of availability and logistics delays from time to time for the foreseeable future. This occurred in the three months ended June 30, 2026, where we had certain material components perform differently than previous units, forcing us to diagnose, re-engineer and rebuild our systems to meet customer specifications, and in another case, a shipment of components arrived 45 days late resulting in a shift of our product delivery date. The actions we have taken and are continuing to take to mitigate these risks include qualifying new vendors as alternate sources in our supply chain, increasing our inventory of

Current wording

In addition, while the supply chain and logistics challenges that we encountered throughout 2022 have eased, uncertainty in the global trade environment remains. As a result, we expect that we may continue to experience increased prices, lack of availability and logistics delays from time to time for the foreseeable future. This occurred in the three months ended June 30, 2026, where we had certain material components perform differently than previous units, forcing us to diagnose, re-engineer and rebuild our systems to meet customer specifications, and in another case, a shipment of components arrived 45 days late resulting in a shift of our product delivery date. This did not reoccur during the three months ended September 30, 2026. The actions we have taken and are continuing to take to mitigate these risks include qualifying new vendors as alternate sources in our supply chain, increasing our inventory of raw materials and ordering further in advance of when we expect to need materials than has been our practice in the past. We have also increased the prices that we charge our customers, where appropriate, and continue to work with our customers to find alternate options for the shipment of products where they control aspects of the logistics process. However, the environment in which we operate is dynamic and shifts rapidly at times, and the success of our efforts to mitigate and address the impacts on our business may not be successful. As a result, we could see increases in our costs or reduced revenues which would impact the level of our earnings in future periods.

Previous wording

As of June 30, 2026, except for the estimates considered for our awards with market conditions, there have been no significant changes to the accounting estimates that we have deemed critical. Our critical accounting estimates are more fully described in “Part I; Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Critical Accounting Estimates” in our 2025 Form 10-K.

Current wording

As of September 30, 2026, except for the estimates considered for our awards with market conditions, there have been no significant changes to the accounting estimates that we have deemed critical. Our critical accounting estimates are more fully described in “Part II; Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Critical Accounting Policies/Estimates” in our 2025 Form 10-K.

Previous wording

Compared with the prior-year period, revenue for the second quarter increased due primarily to growth in Auto/EV, as the electronics content of modern vehicles continues to increase, and likewise the testing of those components offset partially by the decreases primarily in Semi. Sequentially, revenue increased compared to the trailing first quarter, due primarily to increases in Auto/EV and Industrial, offset partially by sequential decreases primarily in Defense/Aerospace, Life Sciences and Semi.

Current wording

Compared with the prior-year period, revenue for the third quarter increased due primarily to strength in Defense/Aerospace, Auto/EV, and Industrial offset partially by softness in Life Sciences. Sequentially, revenue decreased slightly compared to the trailing second quarter, with decrease in Auto/EV and Life Sciences offset partially by increased revenue in Defense/Aerospace and Semi.

Previous wording

Compared with the prior-year period, orders for the second quarter increased primarily in Semi and Defense/Aerospace partially offset by declines primarily in Auto/EV and Life Sciences. Sequentially, orders decreased primarily in Auto/EV and Defense/Aerospace, partially offset primarily by increases in Semi and Other.

Current wording

Compared with the prior-year period, orders for the third quarter increased primarily in Semi and Safety/Security, partially offset by declines primarily in Auto/EV and Life Sciences. Sequentially, orders increased primarily in Semi, Auto/EV and Defense/Aerospace, partially offset primarily by decreases in Life Sciences.

Previous wording

At June 30, 2026, our backlog of unfilled orders for all products was $45.4 million compared to $37.9 million at June 30, 2025, and $53.9 million at December 31, 2025. Our backlog includes customer orders that we have accepted, substantially all of which we expect to deliver in the next twelve months. While backlog is calculated on the basis of firm purchase orders, a customer may cancel an order or accelerate or postpone currently scheduled delivery dates. Our backlog may be affected by the tendency of customers to rely on short lead times available from suppliers, including us, in periods of depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of increasing backlog. As a result, our backlog at a particular date is not necessarily indicative of sales for any future period.

Current wording

At September 30, 2026, our backlog of unfilled orders for all products was $59.7 million compared to $49.3 million at September 30, 2025, and $53.9 million at December 31, 2025. Our backlog includes customer orders that we have accepted, substantially all of which we expect to deliver in the next twelve months. While backlog is calculated on the basis of firm purchase orders, a customer may cancel an order or accelerate or postpone currently scheduled delivery dates. Our backlog may be affected by the tendency of customers to rely on short lead times available from suppliers, including us, in periods of depressed demand. In periods of increased demand, there is a tendency towards longer lead times that has the effect of increasing backlog. As a result, our backlog at a particular date is not necessarily indicative of sales for any future period.

Previous wording

Gross margin decreased 210 basis points in the three months ended June 30, 2026, compared to the same prior year period due to changes in product mix.

Current wording

Gross margin increased 580 basis points in the three months ended September 30, 2026, compared to the same prior year period due to increased volumes and favorable changes in product mix.

Previous wording

General and administrative expense for the three months ended June 30, 2026, increased compared to the prior year period due primarily to increases in payroll related merit increases and increased stock based compensation costs as a result of the June 17, 2026 equity modification for awards granted to independent directors in March 2026, offset partially by a decrease resulting from the change in fair value of the contingent consideration.

Current wording

General and administrative expense for the three months ended September 30, 2026, increased compared to the prior year period due primarily to increases in payroll related merit increases and increased stock based compensation costs.

Previous wording

Restructuring costs for the three months ended June 30, 2026, are the residual facility related costs from the Videology Consolidation of the Netherlands operations into our US operations in Mansfield, MA. The restructuring costs for the three months ended June 30, 2025 represent severance and retention accruals along with the payroll-related costs recognized for the Videology Consolidation as well as costs related to the leadership transition in our Environmental Technologies division. See “Part I; Item 1. Financial Statements; Notes to Consolidated Financial Statements; Note (15) Restructuring” for further details.

Current wording

Restructuring costs for the three months ended September 30, 2026, are the residual facility related costs from the Videology Consolidation of the Netherlands operations into our US operations in Mansfield, MA. The restructuring costs for the three months ended September 30, 2025 represent severance and retention accruals along with the payroll-related costs recognized for the Videology Consolidation. See “Part I; Item 1. Financial Statements; Notes to Consolidated Financial Statements; Note (15) Restructuring” for further details.

Previous wording

On a quarterly basis, we record income tax expense or (benefit) based on the expected annualized effective tax rate for the various taxing jurisdictions in which we operate our businesses. Due to the unusually large number of stock option exercises during the three months ended June 30, 2026, we recognized a discrete tax benefit in the period related to difference between the book and tax expense on those exercises, resulting in a net tax benefit for the quarter and year to date periods. There were no other unusual tax adjustments recorded in either period.

Current wording

On a quarterly basis, we record income tax expense or (benefit) based on the expected annualized effective tax rate for the various taxing jurisdictions in which we operate our businesses. Due to the unusually large number of stock option exercises during the three months ended June 30, 2026, we recognized a discrete tax benefit in the period related to the difference between the book and tax expense on those exercises, resulting in a net tax benefit for those quarter and year to date periods. During the three months ended September 30, 2026 we did not have a similar option exercise experience and we recorded income tax expense based on our expected annualized effective tax rate. There were no other unusual tax adjustments recorded in either period.

Previous wording

Compared with the prior-year period, revenue for the six months ended June 30, 2026 increased due primarily to growth in Auto/EV, Defense/Aerospace and Life Sciences, partially offset by a decrease in Other.

Current wording

Compared with the prior-year period, revenue for the nine months ended September 30, 2026 increased due primarily to growth in Auto/EV, Defense/Aerospace, Industrial, Semi and Life Sciences, partially offset by a decrease in Other.

Previous wording

Compared with the prior-year period, orders for the six months ended June 30, 2026 increased primarily in Defense/Aerospace, Semi and Auto/EV and partially offset primarily by the decline in Safety/Security.

Current wording

Compared with the prior-year period, orders for the nine months ended September 30, 2026 increased primarily in Semi and Defense/Aerospace and partially offset primarily by the declines in Auto/EV and Life Sciences.

Previous wording

Gross margin decreased 20 basis points in the six months ended June 30, 2026, compared to the same prior year period due to unfavorable product mix.

Current wording

Gross margin increased 180 basis points in the nine months ended September 30, 2026, compared to the same prior year period due to increased volumes and favorable changes in product mix.

Previous wording

Selling expense for the six months ended June 30, 2026, increased compared to the prior year period due primarily to increases in commissions and payroll related merit increases offset partially by a decline in warranty expense.

Current wording

Selling expense for the nine months ended September 30, 2026, increased compared to the prior year period due primarily to increases in commissions and payroll related merit increases offset partially by a decline in warranty expense.

Previous wording

Engineering and product development expense for the three months ended June 30, 2026, increased compared to the prior year period due primarily to increases in outside service costs and payroll related merit increases.

Current wording

Engineering and product development expense for the nine months ended September 30, 2026, increased compared to the prior year period due primarily to an increase in payroll related merit increases and increased outside service costs.

Previous wording

General and administrative expense for the six months ended June 30, 2026, increased compared to the prior year period due primarily to increases in payroll related merit increases, officer bonuses and increased stock based compensation costs as a result of the June 17, 2026 equity modification for awards granted to independent directors in March 2026, offset partially by a decrease resulting from the change in fair value of the contingent consideration and decreases in legal and other professional service fees.

Current wording

General and administrative expense for the nine months ended September 30, 2026, increased compared to the prior year period due primarily to increases in payroll related merit increases, increased bonus expense and increased stock based compensation costs as a result of the June 17, 2026 equity modification for awards granted to independent directors in March 2026, offset partially by a decrease resulting from the change in fair value of the contingent consideration and decreases in legal and other professional service fees.

Previous wording

Amortization of acquired intangible assets for the six months ended June 30, 2026, decreased compared to the prior year period due to the declining pattern of benefit for the assets and the May 2026 completion of amortization of intangible assets from the Ambrell® acquisition, offset partially by the impact of changes in foreign exchange rates.

Current wording

Amortization of acquired intangible assets for the nine months ended September 30, 2026, decreased compared to the prior year period due to the declining pattern of benefit for the assets and the May 2026 completion of amortization of intangible assets from the Ambrell® acquisition, offset partially by the impact of changes in foreign exchange rates.

Previous wording

Restructuring costs for the six months ended June 30, 2026, are primarily the costs associated with our March 31, 2026 CEO transition. The costs for the six months ended June 30, 2025 represent severance and retention accruals along with the payroll-related costs recognized for the Videology Consolidation as well as costs related to the leadership transition in our Environmental Technologies division. See “Part I; Item 1. Financial Statements; Notes to Consolidated Financial Statements; Note (15) Restructuring” for further details.

Current wording

Restructuring costs for the nine months ended September 30, 2026, are primarily the costs associated with our March 31, 2026 CEO transition. The costs for the nine months ended September 30, 2025 represent severance and retention accruals along with the payroll-related costs recognized for the Videology Consolidation as well as costs related to the leadership transition in our Environmental Technologies division. See “Part I; Item 1. Financial Statements; Notes to Consolidated Financial Statements; Note (15) Restructuring” for further details.

Previous wording

On a quarterly basis, we record income tax expense or (benefit) based on the expected annualized effective tax rate for the various taxing jurisdictions in which we operate our businesses. Due to the unusually large number of stock option exercises during the six months ended June 30, 2026, we recognized a discrete tax benefit in the three month period

Current wording

On a quarterly basis, we record income tax expense or (benefit) based on the expected annualized effective tax rate for the various taxing jurisdictions in which we operate our businesses. Due to the unusually large number of stock option exercises during the three months ended June 30, 2026, we recognized a discrete tax benefit in the period related to the difference between the book and tax expense on those exercises, resulting in a net tax benefit for those quarter and year to date periods. During the three months ended September 30, 2026 we did not have a similar option exercise experience and we recorded income tax expense based on our expected annualized effective tax rate. There were no other unusual tax adjustments recorded in either period.

Previous wording

As discussed in “Note (9) Debt” to our Consolidated Financial Statements in this Report, on October 15, 2021, we entered into an Amended and Restated Loan and Security Agreement with M&T which, was subsequently amended on October 28, 2021, December 30, 2021, September 20, 2022, May 2, 2024, December 18, 2024 and August 5, 2025 (as amended, the “Loan Agreement”). The Loan Agreement includes a $50.5 million non-revolving delayed draw term note (the “Term Note”) and a $10.0 million revolving credit facility (the “Revolving Facility” and together with the Term Note, the “Credit Facility”). The Credit Facility has a five-year contract period that began on October 15, 2021, and, as amended, expires on May 2, 2031, and draws under the Term Note, as amended, are permissible until May 2, 2026. On May 4, 2026, we amended the Credit Facility, effective as of April 30, 2026, to extend our ability to draw on the Term Note through August 28, 2026.

Current wording

As discussed in “Note (9) Debt” to our Consolidated Financial Statements in this Report, on October 15, 2021, we entered into an Amended and Restated Loan and Security Agreement with M&T which, was subsequently amended on October 28, 2021, December 30, 2021, September 20, 2022, May 2, 2024, December 18, 2024 and August 5, 2025 (as amended, the “Loan Agreement”). The Loan Agreement includes a $50.5 million non-revolving delayed draw term note (the “Term Note”) and a $10.0 million revolving credit facility (the “Revolving Facility” and together with the Term Note, the “Credit Facility”). The Credit Facility has a five-year contract period that began on October 15, 2021, and, as amended, expires on May 2, 2031, and draws under the Term Note, as amended, are permissible until August 28, 2028.

Previous wording

On October 28, 2021, we drew $12 million under the Term Note to finance the acquisition of Videology®. We also entered into an interest rate swap agreement with M&T as of this date which is designed to protect us against fluctuations in interest rates during the five-year repayment and amortization period. As a result, the annual interest rate we expect to pay for this draw under the Term Note is fixed at approximately 3.2% based on current leverage.

Current wording

On October 28, 2021, we drew $12 million under the Term Note to finance the acquisition of Videology®. We also entered into an interest rate swap agreement with M&T as of this date which is designed to protect us against fluctuations in interest rates during the five-year repayment and amortization period. That interest rate swap matured on October 1, 2026 which coincides with the date of the final payment on this portion of Term Note. As a result, the annual interest rate we expect to pay for this draw under the Term Note is fixed at approximately 3.2% based on current leverage.

Previous wording

On December 29, 2021, we drew $8.5 million under the Term Note to finance the acquisition of Acculogic. We did not enter into an interest rate swap agreement with M&T related to this draw. The annual interest rate we expect to pay for this draw under the Term Note is variable. At June 30, 2026, it was 5.8% based on current leverage.

Current wording

On December 29, 2021, we drew $8.5 million under the Term Note to finance the acquisition of Acculogic. We did not enter into an interest rate swap agreement with M&T related to this draw. The annual interest rate we expect to pay for this draw under the Term Note is variable. At September 30, 2026, it was 6.0% based on current leverage.

Previous wording

At June 30, 2026, Alfamation™’s debt was $4.5 million, including $2.5 million that is backed by Alfamation™’s accounts receivable. The reduction since the acquisition date represents repayments of short-term instruments and principal payments on long-term debt, net of new borrowings that are backed by Alfamation™’s accounts receivable. The short-term variable financing rate at June 30, 2026, was 3.5%. At June 30, 2026, the weighted average interest rate payable on the bank issued term loans was 0.6% for fixed rate debt and 4.2% for variable rate debt and the overall weighted average interest rate for the bank issued term loans was 3.5%.

Current wording

At September 30, 2026, Alfamation™’s debt was $4.7 million, including $3.2 million that is backed by Alfamation™’s accounts receivable. The reduction since the acquisition date represents repayments of short-term instruments and principal payments on long-term debt, net of new borrowings that are backed by Alfamation™’s accounts receivable. The short-term variable financing rate at September 30, 2026, was 3.7%. At September 30, 2026, the weighted average interest rate payable on the bank issued term loans was 0.4% for fixed rate debt and 4.7% for variable rate debt and the overall weighted average interest rate for the bank issued term loans was 3.8%.

Previous wording

Total interest expense for the six months ended June 30, 2026 and 2025, related to our various debt arrangements was $0.1 million and $0.3 million, respectively.

Current wording

Total interest expense for the nine months ended September 30, 2026 and 2025, related to our various debt arrangements was $0.3 million and $0.4 million, respectively.

Previous wording

As of June 30, 2026, $10.3 million, or 47%, of our cash and cash equivalents was held by our foreign subsidiaries. We currently expect our cash and cash equivalents, in combination with the borrowing capacity available under our Revolving Facility and the anticipated net cash to be provided by our operations in the next twelve months to be sufficient to support our short-term working capital requirements and other corporate requirements. Our Revolving Facility is discussed in “Note (9) Debt” to our Consolidated Financial Statements in this Report.

Current wording

As of September 30, 2026, $9.6 million, or 46%, of our cash and cash equivalents was held by our foreign subsidiaries. We currently expect our cash and cash equivalents, in combination with the borrowing capacity available under our Revolving Facility and the anticipated net cash to be provided by our operations in the next twelve months to be sufficient to support our short-term working capital requirements and other corporate requirements. Our Revolving Facility is discussed above in “Credit Facility” and in “Note (9) Debt” to our Consolidated Financial Statements in this Report.

Previous wording

Our material short-term cash requirements include payments due under our various lease agreements, recurring payroll and benefits obligations to our employees, purchase commitments for materials that we use in the products we sell and principal and interest payments on our debt. We estimate that our short-term working capital requirements currently range between $8.0 million and $10.0 million. We expect our current cash and cash equivalents, in combination with the borrowing capacity available under our Revolving Facility and the anticipated net cash to be provided by our operations to be sufficient to support these additional investments as well as our current short-term cash requirements. As discussed above in “Credit Facility” and in “Note (9) Debt”, on August 5, 2025 we formally pledged a portion of our cash holdings equal to our total outstanding debt with M&T. The waiver has expired and at June 30, 2026, we were in compliance with all covenants included in the Loan Agreement. On May 4, 2026, we amended the Credit Facility, effective as of April 30, 2026, to extend our ability to draw on the Term Note through August 28, 2026.

Current wording

Our material short-term cash requirements include payments due under our various lease agreements, recurring payroll and benefits obligations to our employees, purchase commitments for materials that we use in the products we sell and principal and interest payments on our debt. We estimate that our short-term working capital requirements currently range between $8.0 million and $10.0 million. We expect our current cash and cash equivalents, in combination with the borrowing capacity available under our Revolving Facility and the anticipated net cash to be provided by our operations to be sufficient to support these additional investments as well as our current short-term cash requirements. As discussed

Previous wording

Operating Activities: Net cash provided by operating activities for the six months ended June 30, 2026, was $3.0 million, a decrease of $1.8 million compared to the prior year period. The decrease was driven primarily by the changes in accounts receivable, driven by increased revenue outpacing the rate of collections period-over-period, along with the

Current wording

Operating Activities: Net cash provided by operating activities for the nine months ended September 30, 2026, was $2.7 million, a decrease of $5.6 million compared to the prior year period. The decrease was driven primarily by the changes in accounts receivable, driven by increased revenue outpacing the rate of collections period-over-period, along with the change in customer deposits and deferred revenue, accounts payable, offset partially by the increase in net earnings and the change in inventory from the comparative period.

Previous wording

Investing Activities: Net cash used in investing activities for the six months ended June 30, 2026, was $1.0 million, an increased usage of $0.4 million compared to the prior year period due to increased capital expenditures.

Current wording

Investing Activities: Net cash used in investing activities for the nine months ended September 30, 2026, was $1.4 million, an increased usage of $0.3 million compared to the prior year period due to increased capital expenditures.

Previous wording

Financing Activities: Net cash provided by financing activities for the six months ended June 30, 2026, was $2.3 million, whereas we reported a cash usage in financing activities of $5.6 million for the prior year period. During the six months ended June 30, 2026, we reported short term borrowings, net of repayments, of $0.9 million, which is related to the short-term variable financing used at Alfamation™. We did not have any stock repurchases under the March 5, 2025 renewal of the previously expired share repurchase plan in either the current year or prior year periods. As a result of our stock price increase between January 1, 2026 and June 30, 2026, we saw an increase in stock option exercise activity, which resulted in an increased cash inflow of $3.4 million compared to the prior year period.

Current wording

Financing Activities: Net cash provided by financing activities for the nine months ended September 30, 2026, was $1.7 million, whereas we reported a cash usage in financing activities of $6.8 million for the prior year period. As a result of our stock price increase since January 1, 2026, we saw an increase in stock option exercise activity, which resulted in an increased cash inflow of $3.4 million compared to the prior year period. During the nine months ended September 30, 2026, we reported short term borrowings, net of repayments, of $1.3 million, which is related to the short-term variable financing used at Alfamation™. We did not have any stock repurchases under the March 5, 2025 renewal of the previously expired share repurchase plan in either the current year or prior year periods.