[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_102":103},"en-item",{"_9":10,"_10":11},"kind","item",{"_12":13,"_14":15,"_16":17,"_18":19,"_20":21,"_22":23,"_24":25,"_26":27,"_28":29,"_30":31,"_32":31,"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":-5,"_48":49,"_50":-5,"_51":-5,"_52":53,"_54":55,"_56":57,"_58":42,"_59":42,"_60":61,"_62":42,"_63":64},"id","smzpe69n1g16u0rqllp2xwgr9","revision",2,"title","Escalon Medical Corp. 2026财年净收入401万美元，但存在重大内部控制缺陷","originalTitle","ESCALON MEDICAL CORP (0000862668) (Filer)","summary","Escalon Medical Corp. 2026财年净收入401万美元，较2025年10.5万美元大幅增长，主要因AXIS软件出售收益及递延税资产释放。公司存在库存估值内部控制重大缺陷，且面临产品市场接受度、供应链依赖、关税及知识产权诉讼等风险。公司现金大幅减少，需依赖运营现金流及投资收入维持运营。","reason","Escalon Medical Corp. 2026财年净收入显著增长，但存在内部控制重大缺陷及财务风险。","source",{"_12":93,"_94":95,"_9":96,"_97":42,"_98":99,"_100":101},"links",{"_90":91,"_78":92},"publishedAt","2026-10-13T20:00:55.000Z","discoveredAt","2026-10-13T23:57:06.569Z","timelineAt","category","ai-products","tags",[84,85,86,87,88,89],"stockSymbols",[83],"score",65,"selected",true,"channel","news","story",{"_73":74,"_16":75},"x","readingMode","full","author","language","body",{"_64":77,"_78":-5,"_79":80,"_81":82},"outline",[],"relatedStories",[76],"indexable","markdownAvailable","group",{"_65":66,"_45":67,"_68":69,"_70":71,"_72":71},"hasTranslation","bodyLanguage","zh","factId","f7A8wZbo9nc0",{"_73":74,"_16":75},"reportCount",1,"additionalSourceCount",0,"developmentCount","publicId","97416fd1-63af-4390-87dc-e5ef48829225","Escalon Medical 2026财年净收入增长但内控存缺陷",{"_73":74,"_16":75},"

根据《1934年证券交易法》第13条或第15(d)条的年度报告

证券交易法

10-K表

截至2026年6月30日的财年

委员会文件编号 0-20127

Escalon Medical Corp.

（注册人根据其章程所指定的名称）


宾夕法尼亚州		33-0272839
（注册或组织的州或其他司法管辖区）		（美国国税局雇主识别号）

994 Old Eagle School Road Suite 1015, Wayne, PA 19087

（主要执行办公室地址，包括邮政编码）

(610) 688-6830

（注册人的电话号码，包括区号）

根据《法案》第12(b)条注册的证券：无

根据《法案》第12(g)条注册的证券：无

普通股，面值0.001美元

如果注册人是《证券法》第405条中定义的知名资深发行人，请打勾。是 o 否 x

如果注册人不需要根据《交易所法》第13条或第15(d)条提交报告，请打勾。是 o 否 x

请打勾说明注册人（1）是否已提交根据《1934年证券交易法》第13条或第15(d)条在前12个月内（或注册人需要提交此类报告的较短期间）要求提交的所有报告，以及（2）是否在过去90天内一直受此类提交要求的约束。是 x 否 o

请打勾说明注册人是否已通过电子方式提交并将其发布在其公司网站上（如有），在前12个月内（或注册人需要提交并发布此类文件的较短期间）根据S-T条例第405条（本章第232.405条）要求提交和发布的每个交互式数据文件。是 x 否 o

请打勾说明注册人是否是大型加速提交者、加速提交者、非加速提交者、较小报告公司或新兴成长公司。请参见《交易所法》第12b-2条中对“大型加速提交者”、“加速提交者”、“较小报告公司”和“新兴成长公司”的定义。

大型加速提交者

加速提交者

非加速提交者

较小报告公司

新兴成长公司

如果为新兴成长公司，请打勾说明注册人是否已选择不使用《交易所法》第13(a)条规定的任何新修订的财务会计标准的延长过渡期。Exchange Act. o

通过勾选方框说明注册人是否已根据《萨班斯-奥克斯利法案》第404(b)条（15 U.S.C. 7262(b)）由为其出具审计报告的注册公众会计公司提交了其管理层对财务报告内部控制有效性的评估报告和鉴证。 o

如果证券根据《法案》第12(b)条注册，请通过勾选方框说明在备案文件中包含的注册人的财务报表是否反映了对以前发布的财务报表的更正。 o

通过勾选方框说明这些更正中的任何一项是否为需要对相关恢复期内注册人任何高管根据§240.10D-1(b)获得的基于激励的薪酬进行恢复分析的重述。 o

通过勾选方框说明注册人是否为壳公司（根据《法案》第12b-2条定义）。o 是 x 否

注册人于2025年12月31日持有的非关联方投票和非投票普通股的总市场价值约为505,622美元，该价值是根据该日OTCQB市场普通股最后一次出售的价格计算得出的。

截至2026年10月9日，注册人已发行7,415,329股普通股。

审计师名称：

CBIZ, CPAs P.C.

审计师地点：

新泽西州马尔顿

审计师ID：

199


		第
	第I部分

项目1。	业务	2
项目1A。	风险因素	6
项目1B。	未解决的工作人员意见	14
项目1C。	网络安全	14
项目2。	财产	14
项目3。	法律诉讼	14
项目4。	矿山安全披露	14

	第II部分
项目5。	注册人普通股的市场、相关股东事项和发行人购买权益证券	14
项目6。	[保留]
项目7。	管理层讨论与分析财务状况和经营成果	15
项目7A。	市场风险的定量和定性披露	21
第8项。	财务报表和补充数据	22
第9项。	与会计师在会计和财务披露方面的变更和分歧	45
第9A项。	控制与程序	45
第9B项。	其他信息	46
第9C项。	关于阻止检查的外国司法管辖区的披露	46

	第三部分
第10项。	董事、高管和公司治理	46
第11项。	高管薪酬	48
第12项。	特定有益所有人和管理层的股份所有权及相关股东事项	49
第13项。	特定关系和相关交易，以及董事独立性	50
第14项。	主要会计费用和业务	51

	第四部分
第15项。	附录和财务报表附表	52

第一部分

可能影响未来结果的谨慎因素

本报告中包含或通过引用纳入的某些陈述是根据1995年《私人证券诉讼改革法案》的“安全港”条款作出的前瞻性声明，这些声明提供了对未来事件的当前预期或预测。可以通过使用诸如“预期”、“相信”、“可能”、“估计”、“期望”、“预测”、“打算”、“可以”、“计划”、“可能”、“预计”、“应该”、“将”、“可能”、“寻求”等术语或表达方式来识别这些声明。公司的前瞻性声明包括与一般商业策略、增长策略、财务结果、流动性、产品开发、新产品引入、现有产品增强、公司产品潜在市场和用途、公司向食品药品监督管理局（\"FDA\"）提交的监管文件、收购、合资机会的开发、知识产权和专利保护及侵权、由于某些协议到期或终止而导致的收入损失、竞争对公司所处市场竞争结构的影响、增加的法律、会计和《萨班斯法案》合规成本、在诉讼事项中为公司辩护以及公司的成本节约计划有关的某些信息。读者必须仔细考虑前瞻性声明，并理解这些声明涉及各种已知和未知的风险和不确定性，可能受到未能如预期实现的假设的影响。因此，任何前瞻性声明都无法保证，实际结果可能会有重大差异。无法预见或识别所有影响公司前瞻性声明的因素，因此读者不应将以下风险因素列表视为对所有风险、不确定因素或可能不准确的假设的全面陈述。公司提醒读者仔细考虑这些因素以及本10-K年度报告中与每个具体前瞻性声明相关的具体因素，以及公司向证券交易委员会（\"SEC\"）提交的其他文件中的具体因素。在某些情况下，这些因素已经影响了公司，未来（与其他未知因素一起）可能会影响公司实施其商业策略的能力，并可能导致实际结果与这些前瞻性声明所设想的结果有重大差异。前瞻性声明中包含的任何预期、估计或预测可能无法实现。公司还提醒读者，前瞻性声明仅反映作出该声明时的日期。公司不承担更新任何前瞻性声明的义务，但建议投资者查阅公司向SEC提交的文件中有关此主题的任何进一步披露。

第1项业务

公司概况

Escalon Medical Corp. (\"Escalon\" 或 \"Company\") 是一家宾夕法尼亚州公司，最初于 1987 年在加利福尼亚州成立，于 2001 年 11 月重新注册为宾夕法尼亚州公司。在本文中，“Company” 一词将指代 Escalon，包括其名为 \"Trek\" 的部门及其全资子公司：Sonomed, Inc.（\"Sonomed\"）、Escalon Digital Solutions, Inc.（\"EMI\"）和 Sonomed IP Holdings, Inc.。所有内部账户和交易均已抵消。

公司运营于医疗市场，专注于眼科应用的医疗设备的开发、制造、营销和分销。公司及其产品受美国食品药品监督管理局（\"FDA\"）的监管和检查。FDA 和其他政府机构要求在销售前对新产品进行广泛测试，并对产品的安全性、有效性、制造、产品标签和营销具有管辖权。

A-Scans

A-Scan 通过沿固定轴向眼球发送超声波束，并显示从波束穿过的眼球表面反射的各种回声，从而提供有关眼球内部结构的信息。主要回声出现在角膜、晶状体的两个表面和视网膜处。该系统在电子显示器上显示回声的位置和幅度。A-Scan 还包括用于测量眼球内部距离的软件。此信息主要用于计算植入物的镜片功率。

B-Scans

B-Scan 主要是一种诊断工具，为医生提供信息，当眼球内的介质混浊或不透明时。医生通常使用无法穿过这些介质的光，而超声波束能够穿过不透明区域并显示眼球内部结构的图像。与 A-Scan 不同，B-Scan 的换能器不在固定位置；它在 60 度范围内摆动，以提供眼球的二维图像。

UBM

UBM 是一种高频/高分辨率的超声设备，旨在提供有关眼球前段的高度详细信息。UBM 用于青光眼评估、肿瘤评估和区分、眼内镜植入术前后以及角膜屈光手术。该设备使外科医生能够在眼球前房内进行精确测量。

角膜厚度计

角膜厚度计使用与 A-Scan 相同的原理，但该系统专门用于测量角膜的厚度。中央角膜厚度用于计算眼内压。角膜厚度测量也用于屈光外科医生筛选候选人并帮助计划手术。

Ispan 眼内气体

公司分销两种眼内气体产品 C3F8 和 SF6，这些产品由玻璃体视网膜外科医生在视网膜脱离手术中作为临时支撑物使用。根据与 AirGas, Inc.（\"AirGas\"）的非独家分销协议，公司分销 AirGas 气体的包装，这些包装包含最多 25 克气体的气瓶。除了眼内气体外，公司还制造和分销一种专利的一次性通用气体套件，该套件将气体从气瓶输送到患者。

手术包

该公司销售用于玻璃体视网膜手术的一次性手术包，包括有助于外科医生在注入和抽取硅油过程中使用的手术包。

AXIS 图像管理系统

AXIS 图像管理系统可通过网络浏览器从任何设备轻松管理眼科诊断图像，无论设备的类型、制造商或位置如何。

研究与开发

超声眼科设备和 AXIS 图像管理系统的开发是在公司位于纽约州韦斯特伯里市的设施中进行的。公司为截至 2026 年 6 月 30 日和 2025 年 6 月 30 日的财年，从运营中获得的研究与开发支出分别约为 501,000 美元和 753,000 美元。

制造与分销

该公司在威斯康星州新柏林市的 7,440 平方英尺租赁设施中组装和分销其眼科手术产品。该公司在纽约州韦斯特伯里市的 5,811 平方英尺租赁设施中设计、组装和维护其眼科超声产品，并在截至 2026 年 6 月 30 日的财年期间，曾在纽约州湖成功市的 6,728 平方英尺租赁设施中进行这些工作。除了自行组装外，该公司还将部件制造、灭菌和其他服务外包给多家合格的供应商。

该公司已将其设施向 FDA 进行了注册，并获得了其设施和医疗设备的 ISO 13485 认证。ISO 13485 要求实施一个适用于产品设计、制造、安装和维护的质量体系。只有在合格的独立外部审计师对公司质量体系进行审计后，才能获得认证，并且需要定期重新审查。该公司已为其许多医疗设备获得了欧洲共同体认证（“CE 标志”）。

制造、测试和营销公司的每种产品都存在产品责任风险。公司购买了产品责任保险以覆盖主要风险。

政府法规

公司的产品受到 FDA 和类似卫生机构的严格持续监管，如果这些政府机构对公司的产品批准或清关进行限制或撤销，公司可能会面临延误，这将影响公司从运营中获得资金的能力。

公司已获得 FDA 和其他必要的法规清关和批准，以销售其目前市场上的所有产品。FDA 以及州和地方司法管辖区及外国的类似机构对药品和医疗设备及其相关消耗品的制造和营销施加了大量要求，包括遵守 FDA 的良好生产规范（GMP）法规。遵守这些法规需要对制造和质量控制实践进行详细验证、FDA 定期检查以及

其他程序。如果 FDA 发现任何缺陷，可能会对特定产品的销售施加限制，直到这些缺陷得到纠正。

美国食品药品监督管理局（FDA）和外国类似卫生当局广泛监管本公司的活动。在向美国市场销售产品之前，公司必须获得 510(K) 许可或上市前批准以及新药申请批准。外国法规还要求公司在这些国家销售产品之前，从外国政府机构获得其他批准。此外，在出口尚未获得 FDA 市场许可或批准的产品或设备之前，公司可能需要获得 FDA 许可或批准。

本公司已获得 CE 标志，该标志适用于本公司多款产品，允许公司在欧洲共同体国家销售这些产品。CE 标志表明产品已由制造商评估，并被认为符合欧盟的安全、健康和环境保护要求。除了 CE 标志外，一些外国国家还要求单独的个别外国监管许可。

营销与销售

本公司的产品通过独立销售代表、分销商网络以及内部销售员工直接向全球各地的医疗机构销售。

服务与支持

本公司为所有售出的产品提供全面服务计划。本公司对所有产品提供有限的保修，以防止缺陷和性能问题。超声产品的产品维修工作在纽约设施进行。AXIS Imaging Management 和手术产品的服务支持通过远程方式提供。

专利、商标与许可

本公司旨在通过专利、商标、商业秘密、保密协议以及其他知识产权保护措施（视情况而定）来保护其专有技术、产品和流程。虽然本公司在美国对其技术的某些方面以及经适当选择的司法管辖区维护专利保护，但本公司认为其竞争地位和商业成功主要是由其专业专有技术、专有流程和商业秘密驱动的，而不是专利技术。本公司目前持有两项涵盖其某些技术的美国专利。本公司的专利、商标和许可期限各不相同，尽管本公司认为其当前的产品、收入或竞争地位并不严重依赖专利保护。

如需，本公司打算积极捍卫其专利。

竞争

在美国及海外，本公司有众多直接和间接竞争对手。这些竞争对手包括以眼科为导向的公司，这些公司营销广泛的产品组合，包括专门为眼科适应症营销处方设备和制药产品的公司，以及为眼科和其他适应症营销产品的综合公司。

多家大型公司主导着眼科市场，而该行业的其余部分高度分散，由从小型初创企业到成熟市场参与者的各类公司组成。总体而言，眼科市场竞争激烈，每家公司都渴望扩大其市场份额。公司的战略主要是基于其拥有专有权利的技术创新来进行竞争。因此，公司认为其业务在很大程度上取决于通过维护商业秘密、专利和其他政府法规来保护其知识产权。

Sonomed 在眼科超声行业拥有超过 30 年的领先地位。管理层认为，这有助于 Sonomed 建立起一家长期运营、提供优质产品的声誉，从而使公司能够在全球范围内建立有效的分销覆盖。提供类似产品但价格更低的各类竞争对手可能会威胁到 Sonomed 的市场地位。用于眼科生物测量和成像的光学技术的发展也可能削弱公司的市场地位。在某些应用中，这种设备可以替代超声设备，并具有某些优势。然而，这种设备更昂贵。

为了保持竞争力，公司需要维持低成本运营。还有许多其他公司可以提供这种制造服务。

公司认为，通过提供技术创新、产品功能、低总拥有成本以及有能力且响应迅速的技术支持，公司能够建立竞争优势。

人力资本

截至 2026 年 6 月 30 日，公司雇用了 40 名员工。在这些员工中，公司有 19 名员工从事制造工作，15 名员工从事一般行政职位，6 名员工从事销售和营销工作。公司员工不受集体谈判协议的约束，且公司认为其与员工的关系良好。

ITEM 1A. 风险因素

财务风险

我们的运营受多种因素的影响，这些因素可能影响我们的经营业绩和财务状况。这些因素包括但不限于：现有产品的持续改进、新产品的开发；国内和外国法规的变化；成功制造的能力；来自其他公司制造、销售或正在开发的产品竞争；我们的产品价格及需求，以及我们筹集资本以支持运营的能力。

在按照美国 GAAP 编制财务报表时，所使用的估计、判断和假设涉及固有的不确定性。所使用的任何估计、判断和假设的变化都可能对公司的业务、财务状况和经营业绩产生重大不利影响。

公司向美国证券交易委员会（SEC）提交的定期报告中所包含的合并财务报表是按照美国公认会计原则（GAAP）编制的。按照 GAAP 编制财务报表涉及做出影响资产（包括无形资产）、负债和存货、收入、费用和利润报告金额的估计、判断和假设。这包括根据财务会计准则委员会（FASB）发布的权威指导，对公司的其他无形资产的可回收性进行评估的估计、判断和假设。如果未来的任何估计、判断或假设发生变化，公司可能需要记录额外的费用或减值费用。由此产生的任何费用或减值损失都将作为对公司收益的扣除进行记录，并可能对公司的财务状况和经营成果产生重大不利影响。估计、判断和假设本质上是未来可能发生变化的，任何此类变化都可能导致资产（包括商誉和其他无形资产）、负债、收入、费用和利润金额发生相应的变化。任何此类变化都可能对公司的财务状况和经营成果产生重大不利影响。

公司会持续评估其估计，其中包括与以下内容相关的估计：

•销售退回；

•坏账准备；

•存货；

•无形资产；

•使用权资产；

•所得税和其他税费计提；

•递延所得税资产减值准备；

•销售折扣；

•保修义务；

•或有事项和诉讼。

公司基于历史经验以及公司认为在当前情况下合理的各种其他假设做出其估计，这些结果构成了对其他来源不易直接观察到的资产和负债账面价值做出判断的基础。然而，公司的假设和估计可能被证明是不正确的，并且公司的实际结果可能因不同的假设或条件而与这些估计存在差异。虽然公司认为其做出的假设和估计是合理的，但公司假设或估计的任何变化，或任何与公司假设或估计不同的实际结果，都可能对公司的财务状况和经营成果产生重大不利影响。与估计相关的内部控制的不当设计和实施可能导致财务报告出现错报。

公司在财务报告内部控制方面已识别出重大缺陷，这可能导致公司财务报表出现重大错报。

根据本年度报告第9A项所述，管理层识别出公司在2026年6月30日存在的财务报告内部控制重大缺陷。该重大缺陷涉及用于库存估值的估计值的控制设计和实施，特别是管理层对库存准备金计算的审查精度。该重大缺陷最早于2023年6月30日被识别，但至今尚未

得到补救。从 2024 财年第四季度开始，并持续到 2025 财年和 2026 财年，管理层实施了额外的控制措施，包括更新标准成本的标准化流程、加强更新和审查的职责分离、提高估值计算中的数据准确性和完整性，以及对所有重大估计进行高级管理层审查。然而，存货减值准备电子表格仍然依赖各种手动输入，管理层的审查涵盖了预设链接和公式，但不包括某些手动输入和链接。此外，对增强控制措施的运行有效性测试尚未完成。因此，管理层得出结论，截至 2026 年 6 月 30 日，重大缺陷仍然存在，且截至该日期，公司的财务报告内部控制无效。

重大缺陷是指财务报告内部控制中存在的一项缺陷或多项缺陷的组合，使得公司年度或中期财务报表的重大错报有可能无法被及时防止或发现。尽管公司已实施补救措施，包括提高管理层对存货估值中使用的所有假设的审查精度，并建立对存货估值过程中应用的所有重大估计进行高级管理层审查的制度，但无法保证这些措施足以补救重大缺陷或防止未来出现重大缺陷。

如果公司无法纠正该重大缺陷，或者未来发现其他重大缺陷或重大薄弱环节，公司将可能无法及时且准确地报告其财务结果

可能会受到不利影响，这可能导致投资者对公司的财务报告失去信心，公司普通股价格下跌，潜在的监管调查或制裁，或无法以有利的条件进入资本市场。重大缺陷的存在也可能增加公司财务报表包含重大错报的风险，这可能需要重新公布此前发布的财务报表。

运营风险

公司实施的任何收购、战略联盟、合资企业和剥离，如果有的话，可能会导致财务结果与市场预期不同。

在正常业务过程中，公司与第三方就可能的收购、战略联盟、合资企业和剥离事宜进行讨论。由于此类交易中的任何一项均无法保证一定会发生，公司的财务业绩可能与投资界在特定季度的预期存在差异。此外，收购和联盟可能需要公司整合不同的企业文化、管理团队、业务基础设施、会计系统和财务报告系统。公司可能无法促成任何此类收购或联盟。公司可能难以开发、制造和营销新收购业务的产品的方式，从而提升公司合并业务或产品线的业绩，以实现任何预期协同效应的价值。根据收购的规模和复杂性，公司对该实体的成功整合取决于多种因素，包括留住关键员工以及管理位于不同地理区域的设施和员工。这些工作需要不同层级的资源，这可能会分散公司对其他业务运营的注意力。此外，由于与收购相关的成本、某些无形资产的摊销成本以及与此类交易相关的商誉减值损失，公司的业绩可能会受到不利影响。最后，公司的收购或联盟可能不会发生，这可能会损害公司的增长。

公司的业绩会逐季波动。

公司经历了运营结果的季度波动，并预计未来将继续波动。多种因素导致这些波动：

•公司或其竞争对手推出新产品的时机和费用，尽管公司可能无法成功开发新产品，且任何此类新产品可能无法获得市场认可；

•公司产品采购的取消或延误；

•公司产品客户需求的波动；

•国内和国际法规的变化；

•重要客户的流失或获得；

•公司销售的产品组合的变化；

•公司销售产品价格的竞争压力；

•公司或其竞争对手宣布新的战略关系；

•诉讼成本和和解；以及

•一般经济状况和其他外部因素，如能源成本。

公司根据对当季度产品订单和出货量的预期，提前设定每个季度的支出水平。因此，与公司计划相比，任何特定季度的收入不足都可能对公司的运营业绩和现金流产生重大不利影响。此外，由于医疗保健行业的一般市场状况或全球经济总体情况，或与公司业务和运营结果无关的市场波动，公司的季度业绩可能会出现波动。

市场未能接受公司的产品可能会对公司业务和财务状况产生不利影响。

公司的业务和财务状况在一定程度上取决于市场对公司产品的接受程度。公司的产品可能无法实现或维持市场接受度。市场接受度取决于多种因素，包括：

•产品价格；

•持续获得多种适应症的监管批准；

•建立并证明公司产品的临床安全性和有效性；以及

•公司产品相对于竞争对手所售产品的优势。

未能实现或维持公司产品的重要市场接受度将对公司业务产生重大不利影响。

与公司产品竞争的产品取得成功可能会对公司业务产生不利影响。

公司在医疗器械和制药市场面临激烈竞争，这些市场具有技术快速变化、产品生命周期短、周期性供过于求和价格快速侵蚀的特点。公司的许多竞争对手拥有 substantially greater（显著更多）的财务、技术、营销、分销及其他资源。公司的战略主要是基于公司产品的技术创新、可靠性和质量进行竞争。如果没有及时推出新产品和改进，公司的产品将随着时间的推移而变得技术过时，在这种情况下，公司的收入和经营业绩将受到影响。公司新产品的成功取决于几个因素，包括公司：

•正确识别客户需求；

•创新和开发新技术、服务和应用；

•建立充足的产品分销覆盖；

•获得并维持来自 FDA 和其他监管机构的必要监管批准；

•保护公司的知识产权；

•及时成功商业化新技术；

•按时以足够的数量制造和交付公司的产品；

•使公司的产品与竞争对手的产品区分开来；

•具有竞争力的定价；

•预测竞争对手关于新产品、服务或技术创新的公告；以及

•预测一般市场和宏观经济状况。

公司可能无法在与公司运营的竞争环境中有效竞争。

关键系统组件的缺乏可能导致公司产品出现延误、成本增加或昂贵的重新设计。

虽然制造公司产品所使用的部分零部件可从多个来源获得，但公司目前从单一来源采购大部分零部件和外包成品，以获取批量折扣。如果这些零部件、组件或成品中的任何一种不可用，可能导致生产延误、成本增加或对公司产品进行昂贵的重新设计。任何关键零部件或成品供应的丧失都可能导致对公司业务、财务状况和经营成果产生重大不利影响。公司的一些供应商受 FDA 良好生产规范法规的约束。这些供应商未能遵守这些法规可能导致向公司供应零部件或组件的延误或限制，从而对公司财务状况和经营成果产生不利影响。

供应链挑战可能会增加产品成本、积压订单数量，并可能对我们的经营成果产生不利影响。

公司的成功依赖于其管理层和关键人员。

公司的主要行政官员和技术人员对公司的产品、研发工作、市场销售计划以及向客户提供必要支持服务拥有丰富经验。此外，公司还与其他公司、大学、研究机构和其他组织竞争，以吸引和留住合格人员。公司任何行政官员或其他技术人员的离职，或公司未能吸引和留住其他具备技能和经验的人员，都可能对公司维持或扩大业务的能力产生重大不利影响。

法律、监管与全球

公司的产品受 FDA 及类似国内和外国医疗监管机构的严格持续监管，如果公司产品的监管批准或许可受到限制或撤销，公司可能面临延误，从而损害公司从经营活动中产生资金的能力。

美国 FDA 和类似的外国医疗监管机构对公司活动进行广泛监管。公司在美国销售任何产品之前，必须获得 510(K) 许可或上市前批准以及新药申请批准。外国监管还要求公司在这些国家销售产品之前获得其他政府机构的批准。此外，公司可能需要在出口未获得 FDA 市场许可或批准的产品或设备之前获得 FDA 批准。

公司已获得在美国目前销售的所有产品所需的 FDA 批准。然而，公司所获 FDA 批准和许可的任何限制或撤销，都将阻碍相关产品和其他设备的持续销售。限制或撤销可能源于发现产品存在先前未知的缺陷。因此，FDA 的撤销将损害公司通过运营产生资金的能力。

FDA 以及州和地方司法管辖区及外国的可比机构对药品和医疗器械及相关一次性用品的生产和营销施加了繁重的要求，包括遵守 FDA 良好生产规范法规的义务。遵守这些法规需要耗时且详细的制造和质量控制流程验证、FDA 定期检查和其他程序。例如，如果 FDA 在验证过程中发现任何缺陷，FDA 可能会对销售特定产品施加限制，直到这些缺陷得到纠正。

公司已获得公司某些产品的 CE 标志，允许公司在组成欧洲共同体的国家销售这些产品。然而，除了 CE 标志外，一些外国国家可能要求单独的个别外国监管许可。公司可能无法在美国或其他外国市场获得其他产品的监管许可。

为任何新产品或设备以及现有产品的多种适应症获得临床研究基础监管许可和批准的过程是漫长的，将需要公司大量的财务资源投入以及公司管理层的时间和精力。任何许可或批准的延误或现有监管要求的任何变化，都将实质上对公司业务产生不利影响。

公司未能遵守适用法规将使公司面临罚款、批准或许可的延误或暂停、产品扣押或召回、运营限制、禁令或民事或刑事处罚，这将对公司业务、财务状况和经营业绩产生不利影响。

关税与国际贸易政策

公司的业务可能会受到关税、贸易政策、进口关税或其他影响我们从外国供应商采购的产品和组件的政府行动变化的不利影响。关税增加或实施新的贸易限制可能会增加我们的销货成本，降低毛利率，扰乱我们的供应链，或迫使我们寻求替代供应商，而这些供应商可能无法以有利的条件或所需的时间框架获得。尽管我们可能通过价格调整、供应商谈判或采购替代方案来减轻成本增加的影响，但无法保证此类措施将完全抵消关税增加或贸易限制的影响。成本显著增加或产品或组件供应中断可能会对公司经营业绩、现金流和财务状况产生不利影响。

公司的产品采用专有技术，该技术可能侵犯第三方的知识产权。

公司为其产品持有多项美国和外国专利。然而，其他方持有与类似产品和技术相关的专利。如果他人持有的专利在对抗性程序中被裁定有效且解释范围广泛，法院或机构可能会认定其涵盖公司产品或程序的一个或多个方面。任何关于专利侵权的索赔或公司关于专利执行的索赔都将耗费时间，导致昂贵的诉讼，分散技术和管理人员，或要求公司开发非侵权技术或签订版税或许可协议。公司可能会成为一项或多项专利侵权索赔的对象。公司在任何此类诉讼中可能无法胜诉，且公司的专利可能无法为对抗具有类似技术的竞争对手提供保护。

如果法院确定公司的任何产品在特定市场中直接或间接侵犯了某项专利，法院可能会禁止公司制造、使用或销售该产品。此外，如果条件可接受，公司可能被要求支付损害赔偿或获得许可费许可。

政府项目、私人保险计划和其他第三方支付方的报销限制可能会对公司销售或推广公司产品的能力产生不利影响。

公司的客户根据为患者提供的服务向包括政府项目和私人保险计划在内的各种第三方支付方开具账单。第三方支付方可能会向客户报销，通常是基于所执行程序的固定费率，或者如果确定使用公司的产品是选择性的、不必要的、不恰当的、非成本效益的、实验性的或用于未获批准的适应症，则拒绝报销。第三方支付方可能会在产品获得 FDA 批准或许可后仍拒绝报销，并可能质疑收取的医疗产品和服务价格。与竞争产品和程序可获得的报销相比，报销的拒绝或限制可能会对公司以盈利方式销售公司产品的能力产生不利影响。进一步减少与 Medicare 计划相关的资本成本转嫁系统下报销的新立法也可能对公司产品的推广产生不利影响。

公司可能会卷入产品责任诉讼，这可能会使公司承担法律责任并分散管理层的注意力。

本公司产品的测试和销售涉及产品责任固有的风险，可能导致基于伤害或声称的伤害，或与产品缺陷相关的诊断失败而提出的索赔。其中一些伤害可能需要数年才显现。尽管本公司目前未参与任何产品责任诉讼，但本公司未来可能因涉嫌索赔而成为诉讼的一方。无论索赔的实质或结果如何，诉讼都可能消耗本公司大量时间和精力，使其无法专注于核心业务。本公司维持每起事故最高 1,000,000 美元、总计最高 2,000,000 美元的产品责任保险覆盖，并拥有超出该金额的 5,000,000 美元超额责任险保单覆盖。任何超出保险覆盖范围的成功产品责任索赔都可能对本公司财务状况和经营业绩产生不利影响。本公司产品责任保险覆盖范围在未来可能无法以合理条件继续提供给本公司，甚至根本无法获得。

本公司的国际业务可能因外国政府机构法律或政策的变化，以及本公司运营所在国家的社会和经济条件而受到不利影响。

本公司的一部分收入来自美国境外的销售。本公司运营所在国家的政府机构法律或政策的变化，以及社会和经济条件，都可能影响本公司在这些国家的业务和经营业绩。此外，包括通货膨胀、利率波动和外汇汇率波动在内的经济因素，以及价格竞争、竞争对手的业务合并或因持续经济疲软导致的行业销售下滑等竞争因素，无论是在美国还是本公司开展业务的其他国家，都可能对本公司经营业绩产生不利影响。

恐怖主义或战争行为的影响可能对本公司的业务产生重大不利影响。

恐怖主义行为、战争行为、武装冲突或其他地缘政治事件，无论发生在美国还是国外，都可能扰乱我们的运营、供应商、物流提供商、分销渠道或客户的运营。此类事件可能导致设施受损、制造或供应链中断、产品交付延迟、运营成本增加、客户需求减少，或更广泛的经济和政治不稳定，其中任何一项都可能对本公司的业务、财务状况、经营业绩和现金流产生重大不利影响。

本公司的公司章程文件和宾夕法尼亚州法律可能阻碍收购。

宾夕法尼亚州法律和公司章程的某些条款可能会延迟或阻碍现任董事的撤换，并可能使第三方收购公司控制权变得更加困难，或劝阻第三方尝试收购公司控制权。这些条款可能会限制某些投资者未来愿意为公司普通股支付的价格。公司董事会分为三个类别，每个类别的董事任期为三年。公司章程规定了各种程序和其他要求，可能使股东难以实施某些公司行为。公司董事会可在董事会确定的条款和条件下，无需股东批准即可发行优先股，并赋予其相应的权利、特权和优先权。普通股持有人的权利将受制于，并可能因未来可能发行的任何优先股持有人的权利而受到不利影响。

医疗政策变化，包括改革美国医疗体系的拟议提案和《平价医疗法案》的实施，可能对该公司产生重大不利影响。

过去十年间，医疗费用显著上升。立法者、监管机构和第三方支付方一直在并继续提出降低这些费用的提案。某些提案如果通过，将限制公司能够为其产品收取的价格，或限制政府机构或第三方支付方为其产品提供的报销金额。这些限制可能对公司的财务状况和经营业绩产生重大不利影响。

美国及其他地区医疗行业的变革可能对公司产品的需求以及公司开展业务的方式产生不利影响。2010年的《平价医疗法案》规定大多数个人必须拥有健康保险，为健康计划制定了新规定，并建立了保险池机制和其他扩大的公共卫生措施。

公司预计医疗改革立法将进一步减少对医院和其他提供商提供服务的医疗保险支出，并进一步对医疗器械制造行业征收销售税或消费税。各级联邦和州层面也出现了各种医疗改革提案。公司无法预测联邦或州层面将实施哪些医疗倡议，也无法预测任何未来立法或法规对公司的影响。然而，美国政府在美国医疗行业中的角色扩大可能会降低公司产品的报销金额，减少医疗程序量，并可能对公司业务产生不利影响，甚至可能是重大不利影响。

未来的立法或政府计划的变化可能对公司产品的市场产生不利影响。

联邦政府和国会不时会提出建议，以改变医疗服务交付和融资的某些方面。公司无法预测任何未来立法或监管可能采取的形式，或其对公司业务的影响。设定价格上限和使用控制的立法会不利地影响公司所参与市场的增长速度。如果任何未来的医疗立法或监管对这些市场产生不利影响，公司的产品营销也可能受损，从而对公司业务产生不利影响。

信息安全、网络安全和数据隐私风险

网络安全事件可能会扰乱业务运营，导致关键和机密信息丢失，并可能对公司声誉和经营业绩产生不利影响。

公司面临网络安全风险，在努力降低这些风险并遵守监管标准的过程中，公司可能会产生不断增加的成本。公司使用信息技术系统和互联网系统，包括网站，用于安全存储和传输关于公司客户、员工和其他人员的专有或机密信息，包括信用卡信息和个人身份信息。公司已投入大量努力来保护其计算机网络，以减轻可能发生的网络攻击风险，并持续致力于升级现有的信息技术系统，并就网络钓鱼、恶意软件和其他网络风险对员工进行意识培训，以确保公司尽可能受到最大程度的保护，免受网络风险和安全漏洞的影响。尽管做出了这些努力，公司计算机网络的安全性仍可能受到损害，这可能会影响运营，机密信息可能被挪用，从而导致负面宣传、销售和利润损失，或导致公司承担巨额费用向第三方赔偿损失，从而对利润产生不利影响。

其他

公司董事长兼首席执行官 Richard DePiano Jr. 是公司的控股股东，拥有足够的投票权来决定提交给公司股东批准的所有事项的结果。

2018年2月，公司与DePiano先生和DP Associates Inc.利润分享计划（DePiano先生是唯一所有者和受托人）（“持有人”）签订了债务交换协议（“交换协议”）。根据交换协议的条款，持有人将公司根据2016年2月和3月与持有人签订的保理协议和票据（“票据”）所欠的总计645,000美元债务本金，交换为2,000,000股A系列可转换优先股（“优先股”）。每份优先股的持有人有权每份股票13票，并将在公司股东的所有决议中与其他所有类别的股票一起作为单一类别进行投票。由于这种投票权，目前持有人在公司股东的所有决议中拥有约77.81%的投票权。如果持有人按照当前转换比率将其优先股转换为普通股，持有人将获得总计4,300,000股普通股，约占目前流通普通股的36.70%。

The holders, therefore, control the election of all of the members of the Company’s board of directors and control the outcome of any corporate transaction or other matter submitted to a vote of the Company’s stockholders for approval, including mergers or other acquisition proposals and the sale of all or substantially all of the Company’s assets, in each case regardless of how all of the Company’s stockholders other than the holders vote their shares. The interests of the Holders in maintaining this voting control of the Company may have an adverse effect on the price of the Company’s common stock because of the absence of any potential “takeover” premium and may, therefore, be inconsistent with the interest of the Company’s stockholders other than the holders. The voting control by the holders could also discourage a third party from attempting to acquire control of the Company and may make it more difficult for a third party to acquire control of the Company. Mr. DePiano Sr. passed away on October 3, 2019 and left a will by which he appointed Richard J. DePiano, Jr., the Chief Executive Officer of the Company, as executor. Richard DePiano Jr. was elected to serve as chairman of the Company's board. Mr. DePiano, Jr. qualified as executor and has control over the shares in his capacity as executor of Mr. DePiano Sr.'s estate.

The market price of the Company’s stock has historically been volatile, and the Company has not paid cash dividends.

The volatility of the Company’s common stock imposes a greater risk of capital losses on stockholders as compared to less volatile stocks. In addition, such volatility makes it difficult to ascribe a stable valuation to a stockholder’s holdings of the Company’s common stock. The following factors have and may continue to have a significant impact on the market price of the Company’s common stock:

•Acquisitions, strategic alliances, joint ventures and divestitures that the Company effects, if any;

•Announcements of technological innovations;

•Changes in marketing, product pricing and sales strategies or new products by the Company’s competitors;

•Changes in domestic or foreign governmental regulations or regulatory requirements; and

•Developments or disputes relating to patent or proprietary rights and public concern as to the safety and efficacy of the procedures for which the Company’s products are used.

Moreover, the possibility exists that the stock market could experience extreme price and volume fluctuations unrelated to operating performance.

The Company has not paid cash dividends on its common stock and does not anticipate paying cash dividends in the foreseeable future.

If the Company raises funds in the future, the Company may be required to raise those funds through public or private financings, strategic relationships or other arrangements at prices and other terms that may not be favorable. The sale of additional equity and debt securities may result in additional dilution to the Company’s stockholders. Additional financing may not be available in amounts or on terms acceptable to the Company or at all.

ITEM 1B. UNRESOLVED SEC STAFF COMMENTS

None.

ITEM 1C. CYBER SECURITY

Risk Management and Strategy

The Company recognizes the importance of cybersecurity and has implemented a comprehensive program to protect its information assets. Key components of our cybersecurity program include appointment of an Information Security Officer, who is also the Chief Operating officer with extensive knowledge of cybersecurity issues, information security policies and procedures, engagement of third-party security experts, regular penetration testing, managed backup and data protection, managed threat response, hardware and software protections, physical security measures, employee training, internal cybersecurity audits, and ongoing product cybersecurity assessments. The Company maintains cybersecurity insurance covering its internal operations and customer-facing products.

Despite these measures, the Company cannot guarantee that it will be immune from cybersecurity threats. A successful attack could result in unauthorized access to our systems, data breaches, disruptions to our operations, and financial losses. We are committed to continually evaluating and enhancing our cybersecurity program to mitigate these risks.

Governance

The Company's Board of Directors receives regular reports from the Information Security Officer regarding the Company's cybersecurity program. The Board ensures that the Company has the necessary resources and authority to implement and maintain a sufficient cybersecurity program. The Information Security Officer reports directly to the Chief Executive Officer and is responsible for working with internal and third-party resources to develop and implement the Company's cybersecurity strategy, manage cybersecurity risks, and oversee the Company's cybersecurity operations.

ITEM 2. PROPERTIES

As of June 30, 2026, the Company leased an aggregate of 15,437 square feet of space for (i) its corporate offices in Wayne, Pennsylvania, (ii) Sonomed’s manufacturing facility in Westbury, New York, and (iii) Trek’s distribution facility in New Berlin, Wisconsin. The corporate office lease terminated on July 15, 2025. Then the Company had a month to month lease until July 15, 2026 when it relocated its corporate offices to another building of 3,012 square feet in Wayne, Pennsylvania in early July 2026. The lease for the new corporate office expires on September 30, 2031. Please refer to Note 14-Subsequent Event. The lease for the Company’s Wisconsin distribution facility, which comprises 7,440 square feet, expires on April 30, 2028. The lease for the Sonomed facility located in Westbury, New York, consisting of 5,811 square feet, expires on October 22, 2032.

ITEM 3. LEGAL PROCEEDINGS

The Company, from time to time is involved in various legal proceedings and disputes that arise in the normal course of business. These matters have previously and could pertain to intellectual property disputes, commercial contract disputes, employment disputes, and other matters. The Company does not believe that the resolution of any of these matters has had or is likely to have a material adverse impact on the Company’s business, financial condition or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

Part II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock trades on the OTCQB Market under the symbol “ESMC.” Any over the counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not present actual transactions.

As of October 9, 2026, there were 1,252 holders of record of the Company’s common stock. On October 9, 2026 the closing price of the Company’s Common Stock as reported by the OTCQB Market was $0.15 per share.

The Company has never declared or paid a cash dividend on its common stock and presently intends to retain any future earnings to finance future growth and working capital needs.

The Company’s forecast of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in “Risk Factors” included in this Form 10-K. If the Company raises funds in the future, the Company may be required to raise those funds through public or private financings, strategic relationships or other arrangements at prices and other terms that may not be as favorable as they would without such qualification. The sale of additional equity and debt securities may result in additional dilution to the Company’s stockholders. Additional financing may not be available in amounts or on terms acceptable to the Company or at all.

ITEM 6. [Reserved]

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the sections titled “Business” and “Risk Factors” and the consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, as well as assumptions that may never materialize or that may be proven incorrect. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” and in other parts of this Annual Report.

The Company operates its business as one operating and reportable segment. For additional information, see “Note 12—Segment Information” in the notes to our consolidated financial statements included elsewhere in this Annual Report.

Financial Highlights

The following discussion and analysis should be read together with the consolidated financial statements and notes thereto and other financial information contained elsewhere in this Form 10-K and the discussion under “Risk Factors” included in Item 1A of this Form 10-K.

•Consolidated net revenue increased approximately $690,000 or 5.7%, to $12,736,000 during the year ended June 30, 2026, as compared to the prior fiscal year. The increase in net revenue is mainly attributable to a $1,259,000 increase in sales of Sonomed products and services, partially offset by a $518,000 decrease in sales of Trek products and a $51,000 decrease in AXIS revenue during the year ended June 30, 2026.

•Consolidated cost of revenue totaled approximately $7,167,000, or 56.3%, of total revenue during the year ended June 30, 2026, as compared to $6,535,000, or 54.3%, of total revenue of the prior fiscal year. The 2.0% increase in cost of revenue as a percentage of total revenue is mainly due to change in product mix.

•Consolidated marketing, general and administrative expenses increased $398,000, or 8.6%, to $5,023,000 during the year ended June 30, 2026, as compared to the prior fiscal year. The increase in marketing, general and administrative expenses was mainly due to increases in compensation, including bonuses and fringe benefits, legal expenses, advertising expenses, and travel expenses, partially offset by decreases in network expenses and a favorable bad debt adjustment during the year ended June 30, 2026.

•Consolidated research and development expenses decreased $252,000 or 33.5%, to $501,000 during the year ended June 30, 2026, as compared to the same period of the prior fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The decrease in research and development expenses is mainly due to a $406,000 decrease in AXIS consulting expenses offset by a $152,000 increase invested in ultrasound development during the year ended June 30, 2026.

•During the year ended June 30, 2026, the Company sold its AXIS software for an aggregate purchase price of $3,000,000. The Company received net proceeds of $2,800,000 and recognized a gain of $2,813,525, before income taxes, on the sale.

•The Company released $1,139,449 of its valuation allowance related to previously fully reserved deferred tax assets after evaluating the positive and negative evidence, and consequently recognized a corresponding deferred income tax benefit in the consolidated statement of operations for the fiscal year ended June 30, 2026.

Results of Operations

Years Ended June 30, 2026 and 2025

The following table shows consolidated net revenue, as well as identifying trends in revenues for the years ended June 30, 2026 and 2025. Table amounts are in thousands:


	For the Years Ended June 30,
		2026		2025		% Change
Net Revenue:
Products		$	12,082			$	11,514			4.9	%
Service plans		654			532			22.9	%
Total		$	12,736			$	12,046			5.7	%

Consolidated net revenue increased approximately $690,000 or 5.7%, to $12,736,000 during the year ended June 30, 2026,as compared to the prior fiscal year. The increase in net revenue is mainly attributable to a $1,259,000 increase in sales of Sonomed products and services, partially offset by a $518,000 decrease in sales of Trek products and a $51,000 decrease in AXIS revenue during the year ended June 30, 2026.

Foreign sales

The following table presents domestic and international sales from continuing operations. Table amounts are in thousands:


	For the Years Ended June 30,
		2026	2025
Domestic				$	6,830		53.6	%		$	6,741			56.0	%
Foreign				5,906		46.4	%		5,305			44.0	%
Total				$	12,736		100.0	%		$	12,046			100.0	%

The following table presents consolidated cost of revenue and as a percentage of revenues for the years ended June 30, 2026 and 2025. Table amounts are in thousands:


	For the Years Ended June 30,
		2026		%	2025		%
Cost of Revenue:
		$	7,167		56.3	%		$	6,535	54.3	%
Total		$	7,167		56.3	%		$	6,535	54.3	%

Consolidated cost of revenue totaled approximately $7,167,000, or 56.3%, of total revenue during the year ended June 30, 2026, as compared to $6,535,000, or 54.3%, of total revenue of the prior fiscal year. The 2.0% increase in cost of revenue as a percentage of total revenue is mainly due to change in product mix.

The following table presents consolidated marketing, general and administrative expenses for the years ended June 30, 2026 and 2025. Table amounts are in thousands:


	For the Years Ended June 30,
		2026		2025	% Change
Marketing, General and Administrative:
		$	5,023		$	4,625	8.6	%
Total		$	5,023		$	4,625	8.6	%

Consolidated marketing, general and administrative expenses increased $398,000, or 8.6%, to $5,023,000 during the year ended June 30, 2026 as compared to the prior fiscal year. The increase in marketing, general and administrative expenses was mainly due to increases in compensation, including bonuses and fringe benefits, legal expenses, advertising

expenses, and travel expenses, partially offset by decreases in network expenses and a favorable bad debt adjustment during the year ended June 30, 2026.

The following table presents consolidated research and development expenses for the years ended June 30, 2026 and 2025.

Table amounts are in thousands:


	For the Years Ended June 30,
		2026		2025	% Change
Research and Development:
		$	501		$	753	(33.5)	%
Total		$	501		$	753	(33.5)	%

Consolidated research and development expenses decreased $252,000, or 33.5%, to $501,000 during the year ended June 30, 2026 as compared to the prior fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The decrease in research and development expenses is mainly due to a $406,000 decrease in nonrecurring AXIS consulting expenses offset by a $152,000 increase in ultrasound consulting expenses during the year ended June 30, 2026.

During the year ended June 30, 2026, the Company sold its AXIS software for an aggregate purchase price of $3,000,000. The Company received net proceeds of $2,800,000 and recognized a gain of $2,813,525, before income taxes, on the sale.

Recently Announced Tariffs and Trade Measures

Beginning in the third quarter of fiscal year 2025, the U.S. government announced new tariffs on a broad range of imports, including a 10% tariff on most imports and additional individualized higher tariffs on certain specific goods and countries. In response, certain affected countries have imposed or may impose retaliatory tariffs on U.S. exports and may implement additional trade restrictions and/or other retaliatory measures in the future.

These recent and potential future tariffs and trade measures could adversely affect the Company’s business in several ways. Increased costs of imported raw materials, components, and finished goods may negatively impact profitability and gross margins. The Company may face challenges in passing these increased costs on to its customers due to competitive pressures or market conditions. Additionally, the uncertainty surrounding the duration and extent of these tariffs, as well as potential trade policy changes, could disrupt the Company’s supply chain, require alternative and potentially more expensive sourcing options, and impact long-term strategic planning and investment decisions. The imposition of retaliatory tariffs by other countries could also reduce the demand for the Company’s exported products, negatively impacting revenue and international sales.

Management is actively monitoring these developments, assessing the potential impacts on the Company’s business, and evaluating possible mitigation strategies, including exploring alternative sourcing, adjusting pricing strategies where feasible, and analyzing potential shifts in global supply chains. However, the ultimate financial impact of these tariffs and the associated uncertainty cannot be reasonably estimated at this time. This situation could have a material adverse effect on the Company’s future financial condition, results of operations, and cash flows. The Company will continue to evaluate these developments and provide updates in future filings as the situation evolves and more information becomes available.

Liquidity and Capital Resources

Our total cash as of June 30, 2026, consisted approximately $3,065,000 of cash on hand compared to approximately $546,000 of cash on hand and restricted cash of $257,000 as of June 30, 2025. At June 30, 2026 and 2025, the Company’s balances exceeded federally insured limits by approximately $2,457,000 and $290,000, respectively. The Company is seeking to enhance deposit insurance coverage while investing excess cash in a short-term investment portfolio designed to balance yield, liquidity, and capital preservation.

For the fiscal year ended June 30, 2026, the Company reported income from continuing operations of approximately $45,000, compared to a net income from continuing operations of $133,000 for the year ended June 30, 2025, representing a significant improvement over the prior years when there were net losses from continuing operations. In addition, the sale of the AXIS software business generated net cash proceeds of approximately $2.8 million, substantially improving the Company's liquidity. It will continue to closely monitor costs and expenses and may need to raise additional capital to fund operations.

Based on its current cash position, anticipated operating cash requirements, and planned investment strategy, management believes the Company has sufficient liquidity to fund its operations, working capital needs, and strategic initiatives for the foreseeable future. Management will continue to monitor operating performance, cash flows, and capital requirements and may evaluate additional financing, strategic partnerships, or capital market opportunities if such transactions are deemed beneficial to the Company and its stockholders.

The Company expects to continue funding operations from cash on hand, cash generated from operations, investment income, and revenues from the licensing and sale of its products. Although management may consider additional equity, debt, or strategic financing alternatives in the future, there can be no assurance that such financing arrangements would be available on favorable terms or at all.

The following table presents overall liquidity and capital resources as of June 30, 2026 and 2025. Table amounts are in thousands:


	June 30,	June 30,
	2026	2025
Current Ratio:
Current assets	$7,012	$4,612
Less: Current liabilities	2,388	2,685
Working capital	$4,624	$1,927
Current ratio	2.94 to 1	1.72 to 1
Debt to Total Capital Ratio:
Note payable, lease liabilities, and EIDL loan	$975	$523

Total equity	5,928	1,915
Total capital	$6,902	$2,439
Total debt to total capital	14.1%	21.5%

Working Capital Position

Working capital increased approximately $2,697,000 to $4,624,000 as of June 30, 2026, and the current ratio increased to 2.94 to 1 to from 1.72 to 1 when compared to June 30, 2025.

The increase in working capital as of June 30, 2026 is mainly due to rise in current assets of $2,400,000, driven by the net proceeds from sales of AXIS software of $2,800,000.

Debt to total capital ratio was 14.1% and 21.5% as of June 30, 2026 and June 30, 2025, respectively.

Cash Flow (Used In) Provided By Operating Activities

During year ended June 30, 2026, the Company used approximately $403,000 of cash in operating activities as compared to approximately $381,000 of cash provided by operating activities during the year ended June 30, 2025.

For the year ended June 30, 2026, cash used in operations was from a $2,800,000 gain on the sale of the AXIS software and a deferred income tax benefit of $1,139,000 offsetting the net income of $4,013,000. In addition, cash used in operations is also due to a decrease in accounts payable of $459,000, and an increase in accounts receivable of $339,000, an increase in current and long term assets of $197,000, and a decrease in related party accrued interest and lease liability of $112,000 and $106,000,

respectively. Cash used in operating activities was offset by a decrease in inventories of 408,000, and an increase in accrued expenses of $209,000. The remaining offsetting items for cash used in operations is comprised of less significant items.

For the year ended June 30, 2025, its cash provided by operations is mainly due to a decrease in accounts receivable of $628,000, an increase in deferred revenue of $48,000, an increase in accrued expenses of $45,000, an increase in lease liability of $227,000, an increase in accounts payable of $30,000, and a decrease in other current assets of $30,000. The cash inflow is offset by an increase in inventories of 486,000. The remaining offsetting items for cash used in operations is comprised of less significant items.

Cash Flows Provided by (Used In) Investing Activities

Cash flows provided by investing activities for the year ended June 30, 2026, was due to net proceeds from sales of AXIS software of $2,800,000, offset by purchase of the fixed assets of $4,000. Cash flows used in investing activities for the year ended June 30, 2025, was due to purchase of the fixed assets of $4,000.

Any necessary capital expenditures have generally been funded out of cash from operations, and the Company is not aware of any factors that would cause historical capital expenditure levels to not be indicative of capital expenditures in the future and, accordingly, does not believe that the Company will have to commit material resources to capital investment for the foreseeable future.

Cash Flows Used in Financing Activities

For the year ended June 30, 2026, the cash used in the financing activities of $130,000 was attributed to repayment of TD bank loan balance of $127,000, and repayment of EIDL loan of $3,000. During the second quarter, the Company also borrowed $100,000 from a related party, which was repaid in full during the third quarter.

For the year ended June 30, 2025, the cash used in the financing activities of $40,000 was attributed to repayment of notes payable of $37,000, and repayment of EIDL loan of $3,000.

Off-balance Sheet Arrangements and Contractual Obligations

The Company was not a party to any off-balance sheet arrangements during the years ended June 30, 2026 and 2025.

Critical Accounting Estimates

The preparation of financial statements requires management to make estimates and assumptions that impact amounts reported therein. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and, as such, include amounts based on informed estimates and judgments of management. We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above. There are items within our financial statements that require estimation but are not deemed critical as defined above except for the estimated valuation allowance against the deferred tax asset. The company records a valuation allowance against the deferred tax asset when it is more likely than not that some portion of the deferred tax assets will not be realized. Determining the appropriate valuation allowance requires significant judgment regarding future taxable income, reversal patters of temporary differences, available tax planning strategies, and the utilization of net operating loss carryforwards.

Recently Issued Accounting Standards

The Company considers the applicability and impact of all accounting standards updates (\"ASUs\"). Management periodically reviews new accounting standards that are issued.

Recently Adopted Accounting Standards

On July 30, 2025, the Financial Accounting Standards Board (the \"FASB\") issued Accounting Standard Update (ASU) 2025-5, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” to simplify the estimation of expected credit losses for current accounts receivable and current contract assets arising from revenue-transactions under ASC 606. Key changes include a practical expedient, available to all entities, that allows assuming that conditions as of the balance sheet date will remain unchanged over the life of those assets. The amendments are effective for annual periods beginning after December 15, 2025, including interim periods, with early adoption permitted; the

guidance should be applied prospectively. The Company adopted this ASU for the year ended June 30, 2026, and the adoption did not have a material effect on the financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU was effective for the annual period ending June 30, 2026. As a result, the Company updated the income tax footnote disaggregating the information as required for year ended June 30, 2026, prospectively. The adoption did not have a material impact on the Company’s consolidated financial statements or results of operations and primarily resulted in additional disclosures in the income tax footnote, including disaggregated information in the effective tax rate reconciliation and income taxes paid.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, FASB issued ASU 2024-03, Income Statement reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expense. As subsequently amended by ASU 2025-01 the standard requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for the fiscal years beginning after December 15, 2026, and for interim periods within the fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosure.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. The amendments address various technical corrections, clarifications, and other improvements to the FASB Accounting Standards Codification. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. The amendments provide guidance on the initial measurement of paid-in-kind dividends on equity-classified preferred stock. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the applicability and potential impact of this ASU on its consolidated financial statements and related disclosures.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a small reporting company, we are not required to provide the information under Item 7A.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Escalon Medical Corp.

Index to Consolidated Financial Statements



	Page
Report of Independent Registered Public Accounting Firm (CBIZ CPAs P.C., PCAOB ID 199)	23

Consolidated Balance Sheets at June 30, 2026 and 2025	24
Consolidated Statements of Operations for the Years Ended June 30, 2026 and 2025	25
Consolidated Statements of Stockholders’ Equity for the Years Ended June 30, 2026 and 2025	26
Consolidated Statements of Cash Flows for the Years Ended June 30, 2026 and 2025	27
Notes to Consolidated Financial Statements	29

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Escalon Medical Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Escalon Medical Corp. (the “Company”) as of June 30, 2026 and 2025, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended June 30, 2026, and the related notes (collectively referred to as the “financial statements”). In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (\"PCAOB\") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ CBIZ, CPAs P.C.

CBIZ, CPAs P.C.

We have served as the Company’s auditor since 2018 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C. effective November 1, 2024).

Marlton, New Jersey

October 13, 2026

ESCALON MEDICAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	June 30, 2026		June 30, 2025
ASSETS
Current assets:
Cash	$	3,065,468			$	545,835
Restricted cash	—			256,550
Accounts receivable	1,977,254			1,667,394
Less: allowance for credit losses	(74,035)			(164,499)
Accounts receivable, net	1,903,219			1,502,895
Inventories	1,733,984			2,142,263
Other current assets	309,255			164,394
Total current assets	7,011,926			4,611,937
Property and equipment, net	26,605			34,589
Right-of-use assets	827,057			253,953
Licenses and patents, net	8,134			29,792
Net deferred tax assets	1,139,449			—
Other long term assets	114,944			62,788
Total assets	$	9,128,115			$	4,993,059
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Current portion of note payable	$	—			$	40,708
Current portion of EIDL loan	3,499			3,370
Accounts payable	928,562			1,387,192
Accrued expenses	817,529			633,422
Related party accrued interest	—			112,389
Current portion of operating lease liabilities	159,351			86,521
Deferred revenue	388,297			327,919
Other short term liabilities	91,254			93,727
Total current liabilities	2,388,492			2,685,248
Note payable, net of current portion	—			85,761
Operating lease liabilities, net of current portion	676,514			168,015
EIDL loan, net of current portion	135,376			138,928


Total liabilities	3,200,382			3,077,952
Commitments and Contingencies (Note 8)
Stockholders' equity:
Series A convertible preferred stock, $0.001 par value; 2,000,000 shares authorized; 2,000,000 shares issued and outstanding (liquidation value of $1,077,131 and $1,025,531)	645,000			645,000
Common stock, $0.001 par value; 35,000,000 shares authorized; 7,415,329 shares issued and outstanding	7,415			7,415
Additional paid-in capital	69,702,043			69,702,043
Accumulated deficit	(64,426,725)			(68,439,351)
Total stockholders’ equity	5,927,733			1,915,107
Total liabilities and stockholders’ equity	$	9,128,115			$	4,993,059

See notes to consolidated financial statements


ESCALON MEDICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
	For the Years Ended June 30,
		2026		2025
Net revenues:
Products		$	12,082,609			$	11,514,336
Service plans		653,536			531,812
Revenues, net		12,736,145			12,046,148
Costs and expenses:
Cost of revenue		7,166,609			6,535,090
Marketing, general and administrative		5,022,813			4,624,711
Research and development		501,488			753,130

Total costs and expenses		12,690,910			11,912,931
Income from operations		45,235			133,217
Other expense
Gain from sales of AXIS software		2,813,525			—
Other income (expense)		21,876			(5,000)

Interest expense, net		(7,459)			(22,692)
Total other income (expenses), net		2,827,942			(27,692)
Net income before income tax		$	2,873,177			$	105,525
Income tax benefit		$	1,139,449			$	—
Net income		4,012,626			105,525
Less undeclared dividends on preferred stocks		51,600			51,528
Less income allocated to convertible preferred stocks		1,948,700			25,903
Net income applicable to common stockholders		$	2,012,326			$	28,094
Net income per share
Basic income per share applicable to common stockholder		$	0.27			$	0.00
Diluted income per share		$	0.27			$	0.00
Weighted average shares—basic		7,415,329		7,415,329
Weighted average shares—diluted		14,596,202		14,252,202

See notes to consolidated financial statements

ESCALON MEDICAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JUNE 30, 2026 AND 2025


	Series A Convertible Preferred Stock	Common Stock		Additional Paid-in Capital	Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2025	2,000,000		$	645,000		7,415,329			$	7,415		$	69,702,043	$	(68,439,351)	$	1,915,107




Net income	—		—		—			—			—		4,012,626	4,012,626
Balance at June 30, 2026	2,000,000		$	645,000		7,415,329			$	7,415		$	69,702,043	$	(64,426,725)	$	5,927,733


	Series A Convertible Preferred Stock	Common Stock		Additional Paid-in Capital	Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2024	2,000,000		$	645,000		7,415,329			$	7,415		$	69,702,043	$	(68,544,876)	$	1,809,582




Net income	—		—		—			—			—		105,525	105,525
Balance at June 30, 2025	2,000,000		$	645,000		7,415,329			$	7,415		$	69,702,043	$	(68,439,351)	$	1,915,107

See notes to consolidated financial statements


ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended June 30,
	2026		2025
Cash Flows from Operating Activities:
Net income	$	4,012,626			$	105,525
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Net gain from sales of AXIS software	(2,813,525)			—

Change in allowance for credit loss	(61,823)			(6,605)
Decrease in inventory valuation	—			(42,838)
Depreciation and amortization	22,588			37,819
Non cash lease expense	114,137			211,191

Deferred income tax	(1,139,449)			—
Change in operating assets and liabilities:
Accounts receivable	(338,501)			627,869
Inventories	408,279			(486,307)
Other currents	(144,861)			29,702
Other long-term assets	(52,156)			—
Accounts payable	(458,630)			29,970
Accrued expenses	209,107			45,105
Related party accrued interest	(112,389)			—
Change in operating lease liability	(105,912)			(226,656)
Deferred revenue	60,378			47,915
Other short-term liabilities	(2,473)			8,035
Net cash (used in) provided by operating activities	(402,604)			380,725
Cash Flows from Investing Activities:
Purchase of equipment	(4,421)			(3,880)
Proceeds from sales of AXIS software	2,975,000			—
Consulting fee associated with sales of AXIS software	(175,000)			—
Net cash provided by (used in) investing activities	2,795,579			(3,880)
Cash Flows from Financing Activities:
Proceeds from related party loan	100,000			—
Repayment of EIDL loan	(3,423)			(3,382)
Repayment of note payable	(126,469)			(36,533)
Repayment of related party loan	(100,000)			—
Net cash used in financing activities	(129,892)			(39,915)
Net increase in cash, cash equivalents and restricted cash	2,263,083			336,930
Cash, and restricted cash, beginning of year	802,385			465,455
Cash, and restricted cash, end of year	$	3,065,468			$	802,385

Cash, and restricted cash consist of the following:
End of year
Cash	$	3,065,468			$	545,835
Restricted cash	—			256,550
	$	3,065,468			$	802,385


Beginning of year
Cash	$	545,835		$	209,033
Restricted cash	256,550		256,422
	$	802,385		$	465,455

Supplemental Schedule of Cash Flow Information:

Interest paid	$	8,316		$	21,035
Non Cash Investing Activities
Non Cash Finance Activities
Right-of-use assets obtained in exchange for lease obligations	$	687,241		$	265,155

See notes to consolidated financial statements

Escalon Medical Corp. and Subsidiaries

Notes to Consolidated Financial Statements

1. Organization and Description of Business

Escalon Medical Corp. (\"Escalon\" or \"Company\") is a Pennsylvania corporation initially incorporated in California in 1987, and reincorporated in Pennsylvania in November 2001. Within this document, the Company collectively shall mean Escalon, which includes its division called \"Trek\" and its wholly owned subsidiaries: Sonomed, Inc. (“Sonomed”), Escalon Digital Solutions, Inc. (“EMI”), and Sonomed IP Holdings, Inc.

The Company operates in the healthcare market, specializing in the development, manufacture, marketing and distribution of medical devices and pharmaceuticals in the area of ophthalmology. The Company and its products are subject to regulation and inspection by the United States Food and Drug Administration (the “FDA”). The FDA and other government authorities require extensive testing of new products prior to sale and have jurisdiction over the safety, efficacy and manufacture of products, as well as product labeling and marketing.

The Company’s common stock trades on the OTCQB Market under the symbol “ESMC.”

2. Basis of Presentation and Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimate

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Segment Information

The Company has one operating and reportable segment. The Company’s CODM is its Chief Executive Officer and Chief Operating Officer, who reviews financial information presented on a consolidated basis for the purpose of allocating resources and evaluating financial performance.

Cash

For the purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. From time to time cash balances exceed federal insurance limits. At June 30, 2026 and 2025, the Organization’s balances exceeded federally insured limits by approximately $2,457,000 and $290,000, respectively.

Restricted Cash

As of June 30, 2026 and 2025, restricted cash included $0 and $256,550, which was pursuant to the requirements in the TD Bank Loan entered into June 2018 (see Note 5 TD Note Payable).

Accounts Receivable

Accounts receivables are recorded at net realizable value. The Company performs ongoing credit evaluations of customers financial conditions and does not require collateral for accounts receivable arising in the normal course of business. The Company maintains allowances for potential credit losses based on the Company’s historical trends, specific customer issues and current economic trends. Accounts are written off against the allowance when they are determined to be uncollectible based on management’s assessment of individual accounts. While such credit losses have historically been within the Company’s expectation and the provision established, the Company cannot guarantee that this will continue. The Company recorded an allowance for credit losses of $74,035 and $164,499 as of June 30, 2026 and 2025, respectively.

The activity for the allowance for credit losses during years ended June 30, 2026 and 2025, is as follows:



	For the Years ended June 30,
	2026		2025
Balance, July 1	$	164,499			$	171,104
Provision	28,641			—
Recovery	(67,500)			(6,605)
Write-offs	(51,605)			—
Balance, June 30	$	74,035			$	164,499

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis and include freight-in materials, labor and overhead costs. Inventories are written down if the estimated net realizable value is less than the recorded value. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based, in part, on age of inventory. If actual conditions are less favorable than those the Company has projected, the Company may need to increase its reserves for excess and obsolete inventories. Any increases in the reserves will adversely impact the Company’s results of operations. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. If the Company is able to sell such inventory any related reserves would be reversed in the period of sale. In accordance with industry practice, service parts inventory is included in current assets, although service parts are carried for established requirements during the serviceable lives of the products and, therefore, not all parts are expected to be sold within one year.



	June 30,
	2026		2025
Raw materials	$	997,520			$	1,120,605
Work in process	59,552			96,496
Finished goods	676,912			925,162
Total inventories	$	1,733,984			$	2,142,263

Property and Equipment

Property and equipment are recorded at cost. Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or lease term. Depreciation on property and equipment is recorded using the straight-line method over the estimated economic useful life of the related assets. Estimated useful lives are generally three years to five years for computer equipment and software, five years to seven years for furniture and fixtures and five years to ten years for production and test equipment. Depreciation and amortization expense for the years ended June 30, 2026 and 2025 was approximately $23,000 and $35,000, respectively.

Property and equipment consist of the following:


	June 30,
	2026		2025
Equipment	$	826,371			$	821,950
Furniture and fixtures	128,499			128,499
Leasehold improvements	39,048			39,048
	993,918			989,497
Less: Accumulated depreciation and amortization	(967,313)			(954,908)
	$	26,605			$	34,589

Intangible Assets and Long-Lived Assets

Long-lived assets including intangible assets deemed to have finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit or material adverse

changes in the business climate that indicate that the carrying amount of an asset may be impaired. When impairment indicators are present, the recoverability of the asset is measured by comparing the carrying value of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the projected undiscounted cash flows from the asset are less than the carrying value of the asset the asset is considered to be impaired. The impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. At June 30, 2026 and 2025 the Company performed a qualitative assessment and considered the totality of events and circumstances, and concluded that it is not more likely than not that the fair value of the related assets are below their carrying amount. Based on this assessment, no impairment charges were recorded for the periods presented.

Accrued Warranties

The Company provides a limited one-year warranty against manufacturer’s defects on its products sold to customers. The Company’s standard warranties require the Company to repair or replace, at the Company’s discretion, defective parts during such warranty period. The Company accrues for its product warranty liabilities based on estimates of costs to be incurred during the warranty period, based on historical repair information for warranty costs.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximate their fair value because of their short-term maturity. The Company determined that the carrying amount of the notes payable and lease liabilities approximates fair value since such debt borrowing bears interest at the approximate current market rate. While the Company believes the carrying value of the assets and liabilities are reasonable, considerable judgment is used to develop estimates of fair value; thus the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities, are as follows:

Level 1: Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Revenue Recognition

The Company recognizes revenue when its performance obligations with its customers have been satisfied. At contract inception, the Company determines if the contract is within the scope of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and then evaluates the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period.

The Company generates product revenue from the sale of medical device products and the sale and installation of the Company's AXIS image management system software. Revenue for service plans relate to the customer care plans for the Company’s equipment and AXIS image management system software.

Revenue is recognized upon transfer of control of the promised goods or services to the customer for an amount that reflects the consideration that the Company expects to be entitled in exchange for those goods or services. The Company’s performance obligations are for product sales, installation of AXIS image management system software and customer care plans. The performance obligations are determined at contract inception based upon promises within the contract that are distinct.

The product sales and installation of AXIS image management system software performance obligations are satisfied at a point in time, which is upon shipment for product sales and upon successful installation for the AXIS image management system. The performance obligation for customer care plans is satisfied over time as the customer receives and consumes the Company’s services.

The Company invoices its customers upon shipment for product sales. For the installation of AXIS image management system

software and customer care plans, the Company invoices its customers upon successful installation. Invoice payments are generally due within 30 days of invoice date. The transaction price is determined based on fixed consideration in the Company’s customer contracts and is recorded net of variable consideration. In determining the transaction price, a significant financing component does not exist since the timing from when the Company invoices its customers to when payment is received as it is less than one year.

Revenue for product sales and installation of AXIS image management system software is recognized when delivered or installed. The customer care plan revenues are recognized proportionately over the service period, which is a 12-month period.

The Company has elected the following practical expedients in applying ASC 606:

•Unsatisfied Performance Obligations - all performance obligations relate to contracts with a duration of less than one year, the Company has elected to apply the optional exemption provided in ASC 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

•Contract Costs - all incremental customer contract acquisition costs are expensed as they are incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less in duration.

•Significant Financing Component - the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

•Sales Tax Exclusion from the Transaction Price - the Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer.

•Shipping and Handling Activities - the Company elected to account for shipping and handling activities as a fulfillment cost rather than as a separate performance obligation.

•Portfolio Approach - the Company applied the Portfolio Approach to contract reviews within its identified revenue streams that have similar characteristics and the Company believes this approach would not differ materially than if applying Topic 606 to each individual contract.

Deferred Revenue

The Company records deferred revenues when cash payments are received or due in advance of its performance. The Company’s deferred revenues relate to payments received for the customer care plans for a 12-month period. The consideration received is recognized monthly over the service period.


	Years ended June 30,
		2026		2025
Beginning of Year		$	328,000			$	280,000
Additions		1,075,000			833,000
Revenue Recognized		(1,015,000)			(785,000)
End of Year		$	388,000			$	328,000

Revenue recorded that was included within prior period deferred revenue was $254,000 and $238,000, respectively for the years ended June 30, 2026 and 2025, respectively. The movement within the deferred revenue balance was due to new orders and the subsequent revenue recognition.

Shipping and Handling Revenues and Costs

Shipping and handling revenues are included in product revenue and the related costs are included in cost of revenue.

Research and Development

All research and development costs are charged to operations as incurred.

Earnings Per Share

The Company used the two-class method to compute net income per common share. These participating securities included the Company’s convertible preferred stock which accrues dividends payable. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. As of June 30, 2026 and 2025, the average market prices for the years then ended are less than the exercise price of all the outstanding stock options and, therefore, the inclusion of the stock options would be anti-dilutive.


	For the Years Ended June 30,
		2026		2025
Numerator:
Numerator for basic earnings per share:
Net income		$	4,012,626			$	105,525
Less undeclared dividends on convertible stocks		51,600			51,528
Less net income allocated to convertible preferred stocks		1,948,700			25,903
Net income applicable to common stockholders		$	2,012,326			$	28,094
Numerator for diluted earnings per share:

Net income		$	4,012,626			$	105,525
Undeclared dividends on convertible stocks		51,600			51,528
Diluted income		$	3,961,026			$	53,997

Denominator:
Denominator for basic earnings per share - weighted average shares outstanding		7,415,329			7,415,329
Weighted average preferred stock converted to common stock		7,180,873			6,836,873
Denominator for diluted earnings per share - weighted average and assumed conversion		14,596,202			14,252,202

Net income per share:
Basic net income per share		$	0.27			$	0.00
Diluted net income per share		$	0.27			$	0.00

The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect

on earnings per share.


	For the Years Ended June 30,
		2026	2025
Stock options		—	21,000

Total potential dilutive securities not included in income per share		—	21,000

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The estimated annual effective tax rate is updated quarterly based on changes in the forecast of full-year income and tax expense.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company maintains a full valuation allowance against its deferred tax assets as of June 30, 2025. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a corresponding income tax benefit in the period the release is recorded. The amount of the valuation allowance release will be determined based on the available sources of future taxable income as of the period in which the release is recorded.

During the fiscal year ended June 30, 2026, the Company evaluated all available positive and negative evidence, including its cumulative income in recent years and projected future taxable income. The Company’s June 30, 2026 assessment indicates that the available positive evidence outweighs the negative evidence for certain of its deferred tax assets. In particular, management believes that the combination of demonstrated recent profitability, positive adjusted three-year results, and the availability of NOL carryforwards with indefinite carryforward periods and forecasted future taxable income provides sufficient positive evidence to overcome the Company's historical loss experience. Based on that evaluation, it concluded that it is more likely than not that a portion of its deferred tax assets will be realized. Accordingly, the Company released $1,139,449 of its valuation allowance related to previously unrecognized deferred tax assets and recognized a corresponding deferred income tax benefit in the consolidated statement of operations for the fiscal year ended June 30, 2026. The Company will continue to assess the realizability of its deferred tax assets each reporting period. Any further release of the valuation allowance would result in an additional income tax benefit in the period the release is recorded. The remaining valuation is at $5,393,142. The Company continues to maintain a valuation allowance against deferred tax assets that are not considered more likely than not to be realized.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. As of June 30, 2026 and June 30, 2025, no accrued interest or penalties were required to be included on the related tax liability line in the consolidated balance sheets.

Leases

The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use (\"ROU\") assets are included in right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, net of current portion, respectively on the consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

New Accounting Pronouncements

Recently Adopted Accounting Standards

On July 30, 2025, the Financial accounting Standards Board (the \"FASB\") issued Accounting Standard Update (ASU) 2025-5, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” to simplify the estimation of expected credit losses for current accounts receivable and current contract assets arising from revenue-transactions under ASC 606. Key changes include a practical expedient, available to all entities, that allows assuming that conditions as of the balance sheet date will remain unchanged over the life of those assets. The amendments are effective for annual periods beginning after December 15, 2025, including interim periods, with early adoption permitted; the guidance should be applied prospectively. The Company adopted this ASU for the year ended June 30, 2026, and the adoption did not have a material effect on the financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU was effective for the annual period ending June 30, 2026. As a result, the Company updated the income tax footnote disaggregating the information as required for year ended June 30, 2026 prospectively. The adoption did not have a material impact on the Company’s consolidated financial statements or results of operations and primarily resulted in additional disclosures in the income tax footnote, including disaggregated information in the effective tax rate reconciliation and income taxes paid.

Recent Accounting Pronouncements Not Yet Adopted

3. Intangible Assets

The Company's intangible assets consist of the following:

Licenses and Patents

The Company capitalized and amortized its purchased licenses and patents over 10 years and 20 years, respectively. Amortization expense is approximately $20,000 for each of the years ended June 30, 2026 and 2025. Annual amortization related entirely to licenses and patents is estimated to be zero for the year ending June 30, 2027.

During fiscal 2026, the Company retired a software license with an original cost of $196,500 and accumulated amortization of $185,025. The remaining carrying value of $11,475 was written off.

The following table presents amortized licenses and patents as of June 30, 2026:


	Gross Carrying Amount		Impairment	Adjusted Gross Carrying Amount		Accumulated Amortization	Net Carrying Value
Amortized Intangible Assets
	$	17,565		$	—		$	17,565	$	(9,431)	$	8,134
Total	$	17,565		$	—		$	17,565	$	(9,431)	$	8,134

The following table presents amortized licenses and patents as of June 30, 2025:


	Gross Carrying Amount		Impairment	Adjusted Gross Carrying Amount		Accumulated Amortization	Net Carrying Value
Amortized Intangible Assets
	$	214,065		$	—		$	214,065	$	(184,273)	$	29,792
Total	$	214,065		$	—		$	214,065	$	(184,273)	$	29,792

4. Accrued Expenses

The following table presents accrued expenses:


	June 30,
	2026		2025
Accrued compensation	$	667,268			$	526,307

Warranty reserve	32,078			32,078
Tax payable	41,952			41,952
Other accruals	76,231			33,085
Total accrued expenses	$	817,529			$	633,422

Accrued compensation as of June 30, 2026 and 2025 primarily relates to payroll and vacation accrual.

5. TD Note Payable

On June 29, 2018 the Company entered a business loan agreement with TD bank receiving a line of credit evidenced by a promissory note of $250,000. The index rate at the date of the agreement is 5.000% per annum. Interest on the unpaid principal balance of the note is calculated using a rate of 0.740 percentage points over the index, adjusted if necessary for any minimum and maximum rate limitations, resulting in an initial rate of 5.740% per annum based on a year of 360 days. TD bank elected to exercise the term note conversion option to convert the loan balance of $201,575 to a five-year term note effective March 29, 2023 (\"the Conversion Date\") at an annual rate of 9.49%. On October 17, 2025, the Company fully repaid its outstanding loan with TD Bank of $113,960 with its restricted cash. As a result, the Company has no outstanding balance under the TD Bank loan agreement as of June 30, 2026.

6. Long-term debt

Economic Injury Disaster (\"EIDL\") loan

EIDL is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to the Coronavirus (COVID-19) pandemic. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation to health care benefits, rent, utilities, and fixed debt payments. The Company received $150,000 EIDL loan. The annual interest rate is 3.75%. The payment term is 30 years and the monthly payment is $731 from July 1, 2021. The EIDL loan is secured by the tangible and intangible personal property of the Company.

The future annual principal amounts and accrued interest to be paid as of June 30, 2026 are as follows:



Year ending June 30,	EIDL Loan Payment

2027	$	3,499
2028	3,632
2029	3,771
2030	3,914
2031	4,064
Thereafter	119,995
Total	$	138,875

7. Income Taxes

Our income before provision for (benefit from) income taxes for the years ended June 30, 2026 and 2025 was as follows:


	June 30,
	2026		2025
Income before income taxes
Domestic	$	2,873,177		$	105,525
Income before Taxes	$	2,873,177		$	105,525

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes relate to difference between the basis of assets and liabilities for financial reporting and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled.”

The provision for income taxes for the years ended June 30, 2026 and 2025 consists of the following:


	2026		2025
Current income tax provision
Federal	$	—			$	—
State	—			—
	—			—
Deferred income tax provision
Federal	625,619			501,054
State	(84,833)			33,333
Change in valuation allowance	(1,680,235)			(534,387)
Total deferred provision	(1,139,449)			—
Income tax expense (benefit)	$	(1,139,449)			$	—

The Company is subject to taxation in the United States at both the federal level and within various state jurisdictions. The Company is not currently under audit, and its statute of limitations remains open for 2021 and subsequent years.

The Company had an effective tax rate of (39.65)% and 0% for the years ended June 30, 2026 and 2025, respectively.

Beginning in fiscal year 2026 annual reporting, the Company adopted ASU 2023-09 prospectively. See Note 2-Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for additional details on the adoption of ASU

2023-09. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended June 30, 2026 is as follows (in dollars, except for percentages):

Income tax expense (benefit) as a percentage of loss for the years ended June 30, 2026 and 2025 differ from statutory federal income tax rate due to the following:


	2026	2026
Statutory federal income tax rate	$	603,367		21.00	%
State and local income tax (1), net of federal income tax effect	11,785		0.41	%
Permanent differences	8,189		0.29	%
Return to provision	7,065		0.25	%
Expired net operating loss	—		0.00	%

Other deferred adjustments	(14,295)		(0.50)	%
Valuation allowance	(1,755,560)		(61.10)	%
Effective income tax rate	$	(1,139,449)		(39.65)	%


	2025
Statutory federal income tax rate	21.00	%
State taxes, net of federal	1.40	%
Change in valuation allowance	(506.41)	%
Return to provision	(59.68)	%
Expired net operating loss	494.52	%
State rate change	34.41	%
Other	7.40	%
Permanent differences	7.36	%
Effective income tax rate	0.00	%

(1) CA, MA, NY, and WI account for 100% of the tax effect in this category.

Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended June 30, 2026 is as follows:


	2026
Federal	$	—
State
California	$	3,394
Massachusetts	$	515
New York	$	498
Texas	$	1,268
Other	$	53
Cash paid for income taxes, net of refunds received	$	5,728

The components of the net deferred income tax assets and liabilities as of June 30, 2026 and 2025 are as follows:


	2026		2025
Deferred income tax assets:
Net operating loss carryforward	$	6,364,824			$	6,532,220
Stock options	—			3,295
Operating lease liability	184,987			56,878
Allowance for doubtful accounts	16,560			36,843
Accrued vacation	56,851			59,149
Inventory reserve	48,515			48,580


174 R&D	—			351,395
Accelerated amortization on goodwill and other intangible assets	42,456			41,513
Warranty reserve	7,175			7,184
Total deferred income tax assets	6,721,368			7,137,057
Valuation allowance	(5,393,142)			(7,073,376)
Net deferred tax assets	1,328,226			63,681
Deferred income tax liabilities:
Accelerated depreciation	(1,819)			(6,673)
Right of use asset	(186,958)			(57,008)
Total deferred income tax liabilities	(188,777)			(63,681)
Net deferred tax assets	$	1,139,449			$	—

As of June 30, 2026 and June 30, 2025, the Company has a valuation allowance of $5,393,142 and 7,073,376, which primarily relate to the federal net operating loss carryforwards. During the year ended June 30, 2026, the valuation allowance decreased by $1,680,235 and during the year ended June 30, 2025, the valuation decreased by $534,387.

The valuation allowance is a result of management evaluating its estimates of the net operating losses available to the Company as they relate to the results of operations of acquired businesses subsequent to their being acquired by the Company. The Company evaluates a variety of factors in determining the amount of the valuation allowance, including the Company's earnings history, the number of years the Company's operating loss can be carried forward, the existence of taxable temporary differences, and near-term earnings expectations. Future reversal of the valuation allowance will be recognized either when the benefit is realized or when it has been determined that it is more likely than not that the benefit will be realized through future earnings.

During the year ended June 30, 2026, the Company released approximately $1,139,449 of its valuation allowance after concluding that it is more likely than not that a portion of its deferred tax assets will be realized. In assessing the realizability of its deferred tax assets, which consist primarily of federal and state net operating loss (\"NOL\") carryforwards, management considered all available positive and negative evidence in accordance with ASC 740, including historical operating results, recent earnings trends, projected future taxable income, the timing and character of temporary difference reversals, and the availability and utilization periods of existing tax attributes. Management's assessment was further supported by several favorable developments during the year, including the resolution of the Company's prior going concern uncertainty and its return to a cumulative pre-tax income position. As part of this evaluation, management performed a detailed scheduling analysis to assess the extent to which future income could support the utilization of both finite-lived and indefinite-lived NOL carryforwards. The analysis demonstrated that a portion of the Company's deferred tax assets is expected to be realized through forecasted future income and available tax attributes, including federal NOL carryforwards generated after enactment of the Tax Cuts and Jobs Act that are not subject to expiration. Accordingly, the Company released the portion of its valuation allowance supported by the available positive evidence, while continuing to maintain a valuation allowance against deferred tax assets for which realization is not considered more likely than not.

As of June 30, 2026 and 2025, Company has available federal net operating loss carry forwards of approximately $28.3 million and $29.5 million, respectively, and state net operating loss carry forwards of approximately $5.7 million and $4.2 million, respectively. As of June 30, 2026, approximately $24.8 million of federal and $4.6 million of state net operating loss carryforwards are scheduled to expire within the next ten years, while an additional $0.9 million and $1.2 million, respectively, will expire in years eleven through twenty. The remaining $2.6 million of federal net operating loss carryforwards may be carried forward indefinitely. As of June 30, 2025, approximately $23.0 million of federal and $2.3 million of state net operating loss carryforwards were scheduled to expire within the next ten years, $4.0 million of federal and $1.4 million of state

net operating loss carryforwards scheduled to expire in years eleven through twenty. $2.2 million of federal and $0.5 million of sate net operating loss carryforwards could be carried forward indefinitely.

The Company's U.S. Federal NOLs pre 2017 Tax Cuts and Jobs Act (\"TCJA\") NOLs and post 2017 TCJA NOLs are $25.7 million and $2.6 million, respectively, as of June 30, 2026.

The Company's U.S. Federal NOLs generated prior to the enactment o`f the TCJA may be utilized to offset up to 100% of taxable income and generally expire 20 years after the year in which they were generated. The Company’s U.S. Federal NOLs, generated after the enactment of the TCJA are available for indefinite carryforward; however, their utilization is limited to 80% of taxable income.

The utilization of the Company’s net operating loss carryforwards and research tax credit carryovers could be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state tax provisions, due to ownership change limitations that may have occurred previously or that could occur in the future. These ownership changes limit the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383 of the Code, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percent points over a three-year period. The Company has not completed an analysis of an ownership change under Section 382 of the Code. To the extent that a study is completed and an ownership change is deemed to occur, the Company’s net operating losses and tax credits could be limited.

The Company files income tax returns in the U.S. and various state and local jurisdictions. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the fiscal year ended June 30, 2021 and subsequent years remain open to tax examination. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss amount.

The Company’s policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on the Company’s Condensed Consolidated Balance Sheets. To date, the Company has not recognized any interest and penalties in its Condensed Consolidated Statements of Operations, nor has it accrued for or made payments for interest and penalties. The Company has no unrecognized tax benefits as of June 30, 2026 and June 30, 2025.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provision of the Tax Cuts and Jobs Act, modification to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and other implemented through 2027. Under OBBBA, the Company is permitted to claim 100% bonus depreciation and to immediately expense Section 174 costs. These provisions accelerate tax deductions but does not create a permanent tax difference; therefore, the impact is timing‑related only and does not materially affect the Company’s income tax provision.

8. Commitments and Contingencies

Legal Proceedings

The Company, from time to time is involved in various legal proceedings and disputes that arise in the normal course of business. These matters have included intellectual property disputes, contract disputes, employment disputes and other matters. The Company does not believe that the resolution of any of these matters has had or is likely to have a material adverse impact on the Company’s business, financial condition or results of operations.

9. Related Party Transactions and Preferred Stock

On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Mr. DePiano Sr., the Company's former Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano Sr. is the sole owner and sole trustee (the “Holders”). Pursuant to the terms of the Exchange Agreement, effective February 15, 2018, the holders exchanged a total of $645,000 principal amount of debt related to the accounts receivable factoring program for 2,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”). As of June 30, 2025, the related party interest accrual of $112,389 related to the debt prior to the exchange, remained as an on demanded payable. The related party interest accrual was paid in full during the year ended June 30, 2026.

Each share of Preferred Stock entitles the holder thereof to 13 votes per share and will vote together with all other classes and series of stock of the Company as a single class on all actions to be taken by the Company’s stockholders. As a result of this voting power, the holders as of June 30, 2026 beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s stockholders.

Subject to the terms and conditions of Preferred Stock, the holder of any share or shares of the Preferred Stock has the right, at its option at any time, to convert each such share of Preferred Stock (except that, upon any liquidation of the Company, the right of conversion will terminate at the close of business on the business day fixed for payment of the amounts distributable on the Preferred Stock) into 2.15 shares of Common Stock (the “Conversion Ratio”). The Conversion Ratio is subject to standard provisions for adjustment in the event of a subdivision or combination of the Company’s Common Stock and upon any reorganization or reclassification of the capital stock of the Company. If the Holders were to convert their shares of Preferred Stock into Common Stock at the Conversion Ratio the Holders would receive a total of 4,300,000 shares of Common Stock, or approximately 36.70% of the then outstanding shares of Common Stock assuming such conversion.

Each outstanding share of the Preferred Stock accrues dividends calculated cumulatively at the annual rate of $.0258 per share (such amount subject to equitable adjustment in the event of any stock dividend, stock split, combination, reclassification other similar event), payable upon the earlier of (i) a liquidation, dissolution or winding up of the Company or (ii) conversion of the Preferred Stock into Common Stock. Upon either of such events, all such accrued and unpaid dividends, whether or not earned or declared, to and until the date of such event, will become immediately due and payable and will be paid in full. The dividends payable to the holders of the Preferred Stock is payable in cash or, at the election of any such holder, in a number of additional shares of Common Stock equal to the amount of the dividend expressed in dollars divided by the then applicable Conversion Ratio, described above. As of June 30, 2026 and 2025 the cumulative dividends payable is $432,131 ($0.2161 per share) and $380,531 ($0.1903 per share), respectively.

The weighted average preferred stock converted to common stock is the total of 4,300,000 shares converted from the convertible preferred stock and shares converted from accrued dividends. As of June 30, 2026 and 2025, the weighted average preferred stock converted to common stock balance was 7,180,873 and 6,836,873, respectively.

After Mr. DePiano Sr. passed away on October 3, 2019, the abovementioned shares of Preferred Stock are now held in Richard DePiano Sr Trust under the Will (TUW) with Mr. DePiano, Jr. as the trustee.

During November 2025, the Company entered into a loan agreement with TUW. Under the terms of the agreement, TUW provided financing to the Company in the amount of $100,000 to support working capital needs secured by collateral. The loan has an annualized interest rate of 14% during the three-month term. The $100,000 short-term loan and accrued interest of 4,037 was paid in full on February 19, 2026.

10. Concentration of Credit Risk

Credit Risk

Financial Instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents, restricted cash and trade receivables. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across geographic areas principally within the United States and international. The Company routinely address the financial strength of its customer and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral.

Major Customer

One customer accounted for approximately 12% of net sales during the year ended June 30, 2026. One customer accounted for approximately 17% of net sales during the year ended June 30, 2025.

As of June 30, 2026, the Company had one customer that represented approximately 17% of the total accounts receivable balance. As of June 30, 2025, the Company had one customer that represented approximately 21% of the total accounts receivable balance.

Major Supplier

The Company's one largest supplier accounted for 45% of the total purchases for the year ended June 30, 2026. The Company's one largest supplier accounted for the total purchases for 43% of total purchases for the year ended June 30, 2025.

As of June 30, 2026, the Company had one supplier that represented approximately 44% of the total accounts payable balance. As of June 30, 2025, the Company had two suppliers that represented 30% and 28% of the total accounts payable balance.

Foreign Sales

Domestic and international sales from continuing operations are as follows:


(in thousands)	For the Years Ended June 30,
		2026	2025
Domestic				$	6,830		53.6	%		$	6,741			56.0	%
Foreign				5,906		46.4	%		5,305			44.0	%
Total				$	12,736		100.0	%		$	12,046			100.0	%

11. Leases

Lessee Arrangements

On October 23rd, 2025, the Company entered into a new lease agreement for three office spaces in a building located at 865 Merrick Avenue, Westbury, New York. The lease has a seven year term, with no option to extend. The lease has monthly payments ranging from $10,390 to $12,407 for the three spaces, and the Company determined the discount rate for the lease to be 9.49%. On the lease commencement date, only one space was available for use. The Company recognized a right of use asset and a lease liability of $365,967. The Company recognized an additional right of use asset and a lease liability of $321,274 accordingly during the fourth quarter of 2026 for other two spaces. The lease addition did not have a material impact on the Company's results of operations for the year ended June 30, 2026.

Total lease expense, under ASC 842, was included in cost of revenue and marketing, general and administrative costs in the Company's audited consolidated statement of operations for the years ended June 30, 2026 and 2025 as follows:


	Year Ended June 30,
	2026	2025
Operating lease costs:
Fixed	$	168,308	$	348,112
Total:	$	168,308	$	348,112

Supplemental cash flow information was as follows:


	Year Ended June 30,
	2026	2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	160,083	$	357,781
Total	$	160,083	$	357,781

Leases recorded on the balance sheet consist of the following:


		June 30,
Leases (operating)	Classification on the Balance Sheet	2026		2025
Assets
Operating lease ROU assets	Right-of-use asset	$	827,057		$	253,953
Liabilities
Current	Current portion of operating lease liabilities	$	159,351		$	86,521
Non-current	Operating lease liabilities	$	676,514		$	168,015

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate)

under noncancelable operating leases with terms of more than one year to the total operating lease liabilities

recognized on the consolidated balance sheets as of June 30, 2026:

The aggregate future lease payments for operating leases as of June 30, 2026 were as follows:


	Operating

2027	$	224,230
2028	215,467
2029	145,261
2030	147,420
2031	143,142
Thereafter	197,063
Total lease payments	1,072,583
Less interest	236,718
Present value of lease liabilities	$	835,865

Average lease terms and discount rates were as follows:


	June 30,
	2026		2025
Weighted-average remaining lease terms (years)
Operating leases	5.57		3.18
Weighted-average discount rate
Operating leases	9.47	%		5.74	%

Lessor Arrangement

During the year ended June 30, 2026, the Company entered into one sales-type lease. As of June 30, 2026, the Company's investment in the sales-type lease was $29,470, consisting of $4,621 classified as short-term and $24,849 classified as long-term. These amounts are included in short-term other assets and long-term other assets, respectively, in the accompanying consolidated balance sheets. For the year ended June 30, 2026, the Company recognized $2,128 of interest income and $29,470 of selling profit related to the sales-type lease. Interest income is recognized over the lease term using the effective interest method. Selling profit, if applicable, is recognized at lease commencement when the criteria for sales-type lease accounting are met.

12. Segment Information

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly provided to the Chief Operating Decision Maker (\"CODM\") in deciding how to allocate resources to an individual segment and in assessing performance.

The Company’s CODM consists of the Chief Executive Officer and Chief Operating Officer. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The accounting policies of the Company’s reportable segment, as well as how the Company derives revenue, are consistent with those described in \"Note 2-Basis of Presentation and Summary of Significant Accounting Policies” within these financial statements.

The CODM uses consolidated net income, consistent with GAAP to assess performance, evaluate cost optimization, and allocate resources, including personnel-related and financial or capital resources, in the annual budget and forecasting process, as well as budget-to-actual variances on a monthly basis. As such, the Company has determined that it operates as one operating and reportable segment.

As the Company has only one reportable segment, all revenues, expenses, and operating results are attributable to that segment. Total assets attributable to the Company’s sole reportable segment were $9,128,115 and $4,993,059 as of June 30, 2026 and June 30, 2025, respectively.

The following tables set forth significant expense categories and other specified amounts included in consolidated net income that are otherwise regularly provided to the CODM for the years ended June 30, 2026 and 2025:


	Years Ended June 30,
	2026		2025
Revenue	$	12,736,145			$	12,046,148
Cost of Revenue (1)	(7,153,276)			(6,507,646)
Research and Development	(501,488)			(753,130)
Sales and Marketing	(1,365,101)			(1,202,636)
General and Administrative (1)(2)	(3,710,286)			(3,418,305)
Depreciation and Amortization	(22,582)			(37,819)
Credit loss Adjustment	61,823			6,605
Gain from sale of AXIS software	2,813,525			—
Other income (expense)	21,876			(5,000)
Interest expense, net	(7,459)			(22,692)
Income tax benefits	1,139,449			$	—
Segment net income	$	4,012,626			$	105,525

(1) 2026 and 2025 exclude depreciation and amortization expenses in cost of revenue, general and administrative expenses.

(2) 2026 and 2025 exclude the credit loss adjustment.

13. Other Income

During the year ended June 30, 2026, the Company was a party to a certain asset purchase agreement by and between the Company and Optos Public Limited Company, a company incorporated in Scotland (“Optos”). Pursuant to the asset purchase agreement, the Company agreed to sell to Optos certain software-related assets associated with the Company’s AXIS platform (the “Disposition”) in exchange for the aggregate purchase price of $3,000,000. The purchase price is payable in three milestone installments, each in the amount and subject to the conditions as set forth in the asset purchase agreement, in addition to $25,000 which was paid upon the execution by the Company and Optos of a term sheet with respect to the Disposition. The Company received the full purchase price, less the deposit, and recognized a net gain of $2,813,525 before tax on the sale during the year ended June 30, 2026. The pretax gain is calculated as the net proceeds less selling cost and the remaining book value of the license. The Company is evaluating the tax impact of the gain from sales on its condensed consolidated financial statements, and it is expected that the impact is not significant due to the existing and available net operating losses.

The Company considered the accounting guidance for discontinued operations noting that the disposition did not represent a strategic shift as required under the standard and therefore no adjustments were reflected in the condensed consolidated financial statements to reflect discontinued operations. The Company has evaluated the tax impact of the gain from sales on its condensed consolidated financial statements, and concluded that the impact is not significant due to the existing and available net operating losses and sales allocation by state.

14. Subsequent Event

The Company entered into a Short-Form Lease Agreement (the \"Lease\") with HP BC Eagle One LLC (\"Landlord\") for approximately 3,012 rentable square feet of office space located at 994 Old Eagle School Road, Wayne, Pennsylvania, to serve as the Company's corporate office. The lease term is 62 months with first 2 full months free. The lease started in early July 2026. The lease is approximately $6,024 per month in year one, escalating annually to approximately $6,983 per month in the final partial period (months 61–62).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, the Company’s management evaluated, with the participation of the Company’s principal executive officer and principal financial officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are not effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company's management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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 (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). The Company’s 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 GAAP and includes those policies and procedures that:

•Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and

•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on our financial statements.

As of June 30, 2026, the Company had a material weakness in its internal control over financial reporting related to the design and implementation of controls over estimates used in the valuation of inventory, specifically the precision of management’s review of inventory reserve calculations. This material weakness was first identified during the year ended June 30, 2023. Beginning in the fourth quarter of fiscal 2024 and continuing through fiscal 2025 and 2026, management implemented additional controls, including a standardized process for updating standard costs, enhanced segregation of duties, improved data accuracy in the valuation calculations, and senior management review of all material estimates. However, the material weakness has not been remediated because the inventory reserve spreadsheet still relies on manual entries that management’s review does not fully cover, and the enhanced controls have not yet operated for a sufficient period, or been tested, to demonstrate that they are operating effectively. Accordingly, the Company’s management, with the participating of its principal executive officer, concluded that its internal control over financial reporting was not effective as of June 30, 2026.

Remediation Plan for Existing Material Weakness

Management is committed to the remediation of the material weakness described above. As part of its remediation plan, the Company has implemented additional controls to increase the precision of management's review of all assumptions used in the valuation of inventory and to institute senior management of all material estimates applied in the inventory valuation process.

Pursuant to the rules of the SEC, the Company’s management’s report on internal control over financial reporting is furnished with this Annual Report on Form 10-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.

This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding the Company's internal control over financial reporting. The Company’s management’s report on internal control over financial reporting was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the rules of the SEC that permits the Company to provide only the management’s report on internal control over financial reporting in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

During the year ended June 30, 2026, the Company made changes designed to improve its internal control over financial reporting. These changes include standardizing the process for updating standard costs, enhancing segregation of duties in both the updating and review stages and improving the accuracy and integrity of data used in inventory valuation calculations. The Company believes these changes strengthen the accuracy and reliability of the inventory valuation process. Other than the foregoing, there were no changes in the Company's internal control over financial reporting during the year ended June 30, 2026 that have material affected, or are reasonably likely to materially affect the Company's internal control over financial reporting.

As previously disclosed, management identified a material weakness in internal control over financial reporting related to the design and implementation of controls over estimates used in the valuation of inventory, specifically regarding the precision of management's review of inventory reserve calculations.

ITEM 9B. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the fiscal year ended June 30, 2026, none of our directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as those terms are defined in Item 408 of Regulation S-K).

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable

PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth information with respect to our directors and our executive officers.

Name

Age

Position

Richard J. DePiano, Jr.

Chief Executive Officer, President and General Counsel and Director

Mark G. Wallace

Chief Operating Officer and Principal Financial & Accounting Officer

Weiying Huang

Chief Financial Officer

Lisa A. Napolitano

Director

C. Todd Trusk

Director

John P. Dogum

Director

David J. Jacovini

Director

Set forth below are the names, positions held and business experience, including during the past five years, of our directors and executive officers as of October 13, 2026. Officers serve at the discretion of the board of directors.

Mr. DePiano, Jr. has been a Class I director since May 9, 2013, and was appointed our President and General Counsel of the Company on January 1, 2008 and our Chief Executive Officer on September 28, 2013. Previously, he was Chief Operating Officer and General Counsel. Mr. DePiano, Jr. joined us in November of 2000 as Vice President Corporate and Legal Affairs. He currently serves as a member of the board of directors, and served as President from 2008 to 2009 of the Delaware Valley Corporate Counsel Association (“DELVACCA”). Mr. DePiano, Jr. also serves as a member of the nominations committee, Chairman of the law school initiative committee and member of the pro-bono committee of DELVACCA. He also is vice chairman of the board of directors of the Montgomery County Industrial Development Authority.

Mr. Wallace was appointed our Chief Operating Officer on January 1, 2008. He was also appointed the Principal Financial and Accounting Officer on July 7, 2017. Mr. Wallace has worked with us since 1997. Previous to being appointed Chief Operating Officer he was Executive Vice President of our Escalon Digital Solutions and Trek Medical subsidiaries. He has jointly held the position of Vice President-Quality, with quality and regulatory responsibilities for all of our companies, and has also previously served as Operations Manager at Sonomed, Inc. and our Quality Manager. He had previously worked with Lunar Corp. (now GE Healthcare) and Trek Medical. He holds a B.S. in Industrial Engineering and a M.S. in Manufacturing Systems Engineering, both from the University of Wisconsin-Madison, is a senior member of the American Society of Quality and has over 20 years' experience in the medical device industry.

Ms. Huang was appointed Chief Financial Officer on May 1, 2026. She has been with the Company since 2008 and has previously served as Assistant Controller, Controller, and Vice President of Finance. With more than 15 years of experience at the Company, she has played a key role in financial reporting, compliance, and corporate finance activities. Ms. Huang holds a M.S. in Accounting and an MBA from Drexel University. She is a Certified Public Accountant (CPA) and a Certified Management Accountant (CMA).

Ms. Napolitano has served on our board of directors since 2003. She is a Class II director. Ms. Napolitano has served as a Tax Manager at Global Tax Management, Inc., a provider of compliance support services for both federal and state taxes, since 1998. Ms. Napolitano is a Certified Public Accountant in Pennsylvania. Ms. Napolitano qualifies for our board of directors and audit committee based on her extensive experience in public accounting and through her understanding of internal controls, accounting principles, business operations and regulatory compliance. We believe that Ms.Napolitano financial, operational and regulatory experience qualifies her to serve as a member of our board of directors and our audit committee.

Mr. Trusk was appointed as a member of our Board in 2015 as a Class I director. He is President of BroadBase Solutions, Inc., an information technology staffing and consulting firm since 2000. Mr. Trusk was a sales executive with CB Technologies an IT consulting firm based in the Philadelphia suburbs. Before joining CB Technologies Mr. Trusk held several sales and sales management positions within the disposable medical equipment markets. B. Braun Medical from 1994 to 1997 and Calgon Vestal Labs, a subsidiary of Merck & Co.; Inc. from 1991 to 1994. We believe Mr. Trusk’s operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee.

Mr. Jacovini was appointed as a Class III Director in February 2018. He previously served as the Chief Financial Officer of LaFrance Corp, a global manufacturer specializing in on-product branding. Previously, he was President and Founder of Innovator Management LLC, a sponsor of mutual funds and exchange traded funds, from 2011 to 2017. He served as Chief Executive Officer and portfolio manager of Academy Asset Management LLC from 2007 to 2015. Between 2007 and 2017 he held the positions of President, Treasurer, and Trustee of the Academy Funds Trust, a registered investment company. Prior to that, he worked on Wall Street as a derivatives marketer at Deutsche Bank AG and as a municipal strategist at Prudential Securities Incorporated. He holds a BA from the College of the Holy Cross and an MBA from the MIT Sloan School of

Management. We believe Mr. Jacovini's operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee.

Mr. Dogum was appointed as a Class II director in February 2018. John P. Dogum is a partner at Martin Law where he has been working since 2003. He has concentrated his practice on litigating Pennsylvania workers’ compensation cases since 1992. Mr. Dogum has served as consultant to major insurers in addition to frequently appearing before Workers’ Compensation Judges in the Eastern region of Pennsylvania. Mr. Dogum has argued a case of first impression before the Third Circuit Court of Appeals. He has also litigated claims under the Federal Longshore and Harbor Workers’ Compensation Act. Mr. Dogum has been listed as a Pennsylvania Super Lawyer since 2009 as well as a Top 100 Philadelphia Super Lawyer in 2009. He has been listed as a Best Lawyer since 2013 by Best Lawyers in America. He holds a BS from the Susquehanna University and JD from the Widener University School of Law. We believe Mr. Dogum's operational, executive and professional experience qualifies him to serve as a member of our Board.

Section 16 (a) Beneficial Ownership Reporting Compliance

Section 16 (a) of the Securities Exchange Act of 1934 requires our directors, executive officers and 10% stockholders to file initial reports of ownership and reports of changes in ownership of our common stock and other equity securities with the Securities and Exchange Commission (the \"SEC\"). The directors, executive officers and 10% stockholders are required to furnish us with copies of all Section 16(a) reports they file. Based on a review of the copies of such reports furnished to us and written representations from our directors and executive officers that no other reports were required, we believe that our directors, executive officers and 10% stockholders complied with all Section 16 (a) filing requirements applicable to them for the year ended June 30, 2026.

Code of Conduct and Ethics

Our board of directors has adopted a Code of Conduct and Ethics, which applies to all of our directors, the principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions, officers and employees. Our Code of Conduct and Ethics is posted in the “Corporate Governance” section of our Internet web site at www.escalonmed.com. Any amendments to, or grant of waiver with respect to, any provision of our Code of Conduct and Ethics, will be disclosed noting the nature of such amendment or waiver in the “Corporate Governance” section of our Internet web site at www.escalonmed.com or by other appropriate means as required or permitted under the applicable regulations of the SEC.

Insider Trading Policies and Procedures

The Company has not adopted formal insider trading policies or procedures governing transactions in its securities by directors, officers, or employees. The Company has not adopted such policies due to its size, limited number of security holders, and the absence of an active trading market for its common stock.

Audit Committee Members and Financial Expert

The members of the audit committee of our board of directors are Ms. Napolitano, Mr. Trusk, and Mr. Jacovini. Our board of directors has determined that each audit committee member has the attributes, education and experience of, and therefore is, an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K, and that each member of our audit committee is “independent,” as defined by OTCQB market Listing Rules.


ITEM 11.	EXECUTIVE COMPENSATION

Overview of Executive Employment Agreements and Equity-Based Awards

The Company does not maintain formal written employment agreements with any of its Named Executive Officers. Each Named Executive Officer serves at the discretion of the board of directors. Compensation for the Named Executive Officers consists primarily of base salary and, in the case of certain officers, discretionary cash bonuses determined by the board of directors. The Company also provides certain perquisites to its Named Executive Officers, including those described in the footnotes to the Summary Compensation Table below.

Compensation of Named Executive Officers

Summary Compensation Table

The following table sets forth certain summary information concerning compensation that we paid or accrued to or on behalf of each of our executive officers (the “Named Executive Officers”) during each of the fiscal years ended June 30, 2026, and 2025.


Name and Principal Position		Year		Salary		Bonus		Stock Awards		Option Awards (1)		Non-Equity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation (1)		Total

Richard J. DePiano, Jr. Chief Executive Officer, President and General Counsel		2026		$	183,000			$	—			$	—			$	—			$	—			$	—			$	22,000			$	205,000
2025		$	182,000			$	—			$	—			$	—			$	—			$	—			$	23,000			$	205,000

Mark Wallace Chief Operating Officer and Principal Financial & Accounting Officer		2026		$	156,000			$	60,000			$	—			$	—			$	—			$	—			$	13,000			$	229,000
	2025		$	149,000			$	—			$	—			$	—			$	—			$	—			$	13,000			$	162,000

Weiying Huang Chief Financial Officer		2026		$	132,000			$	—			$	—			$	—			$	—			$	—			$	7,000			$	139,000
Weiying Huang Chief Financial Officer		2025		$	126,000			$	—			$	—			$	—			$	—			$	—			$	7,000			$	133,000

(1)Includes payment of, (a) an auto and gym allowance and (b) insurance premiums paid for life insurance.

Outstanding Equity Awards at Fiscal Year-End

There were no outstanding equity awards held by an Named Executive Officer as of June 30, 2026.

Director Compensation

No compensation was paid to non-employee directors for their service on the board of directors during the fiscal year ended June 30, 2026. The Company does not maintain any non-equity incentive plans, pension plans, or deferred compensation plans for its directors.

Compensation Committee Interlocks and Insider Participation

The Company does not have a separately designated compensation committee. The full board of directors performs the functions of a compensation committee. During the fiscal year ended June 30, 2026, Richard J. DePiano, Jr., who served as the Company’s Chairman, Chief Executive Officer, President and General Counsel, participated in deliberations of the board of directors concerning executive officer compensation. No other executive officer of the Company served as a member of the board of directors or compensation committee (or equivalent) of any other entity that has one or more executive officers serving on the Company’s board of directors.

Accounting and Tax Considerations

On July 1, 2007, we adopted in the FASB issued authoritative guidance related to share based payments. Under this accounting standard, we are required to value stock options granted in fiscal year 2007 and in subsequent fiscal years under the fair value method and expense those amounts in the income statement over the vesting period of the stock option. We were also required to value unvested stock options granted prior to our adoption of the FASB issued authoritative guidance related to share based payments under the fair value method and amortize such expense in the income statement over the stock option’s remaining vesting period. A material portion of such amortizing expense relates to option grants made to our executive officers.


ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners and Management

The following table indicates, as of October 9, 2026 information about the beneficial ownership of our common stock by (1) each director as of September 28, 2026, (2) each Named Executive Officer, (3) all directors and executive officers as of

October 9, 2026 as a group and (4) each person who, to our knowledge, beneficially owns more than 5% of our common stock. Unless otherwise indicated, the business address of each person listed in the table below is c/o Escalon Medical Corp., 994 Eagle School road, Suite 1015, Wayne, PA 19087. All such shares were owned directly with sole voting and investment power unless otherwise indicated.

Beneficial Ownership Table


Name (1)	Amount of Beneficial Ownership of Outstanding Shares (1)	Percent of Class		Amount of Beneficial Ownership of Shares Underlying Options		Series A Convertible Preferred Stock		Amount of Aggregate Beneficial Ownership			Aggregate Percent of Class


Richard J. DePiano, Jr.	4,440,833	(2)		59.9	%		—			4,300,000			8,740,833		(2)	74.6	%
Mark G. Wallace	—		—	%		—			—			—			*
Weiying Huang	—		—	%		—			—			—			*
Lisa A. Napolitano	—		—	%		—			—			—			*
C. Todd Trusk	250		—	%		—			—			250			*
John P. Dogum	—		—	%		—			—			—			*
David J. Jacovini	—		—	%		—			—			—			*
All Directors and Executive Officers as a group (7 persons)	4,441,083		59.9	%		—		4,300,000			8,741,083			74.6	%


(*)	Less than one percent

(1)Information furnished by each individual named. This table includes shares that are owned jointly, in whole or in part with the person’s spouse, or individually by his or her spouse. No shares held by board members or named executive officers are pledged as collateral.

(2) Includes the shares of Mr. DePiano Sr. as Mr. DePiano, Jr. qualified as executor and has the sole voting and investment power over such shares in his capacity as executor of Mr. DePiano.Sr.'s estate.

Securities Authorized for Issuance Under Equity Compensation Plans

As of June 30, 2026, the Company did not have any equity compensation plans in effect under which securities were authorized for issuance. Accordingly, there were no securities to be issued upon exercise of outstanding options, warrants or rights, no weighted-average exercise price applicable to such securities, and no securities remaining available for future issuance under equity compensation plans.


ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Person Transactions

We recognize that related person transactions present a heightened risk of conflicts of interest and can create the appearance of a conflict of interest. Therefore, all proposed related person transactions are disclosed to our board of directors before we enter into the transaction, and, if the transaction continues for more than one year, the continuation is reviewed annually by our board of directors.

On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Mr. DePiano Sr., the Company's former Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano Sr. is the sole owner and sole trustee (the “holders”). Pursuant to the terms of the Exchange Agreement, effective February 15, 2018, the holders exchanged a total of $645,000 principal amount of debt related to the accounts receivable factoring program for 2,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”).

Subject to the terms and conditions of Preferred Stock, the holder of any share or shares of the Preferred Stock has the right, at its option at any time, to convert each such share of Preferred Stock (except that, upon any liquidation of the Company, the right of conversion will terminate at the close of business on the business day fixed for payment of the amounts distributable on the Preferred Stock) into 2.15 shares of Common Stock (the “Conversion Ratio”). The Conversion Ratio is subject to standard provisions for adjustment in the event of a subdivision or combination of the Company’s Common Stock and upon any reorganization or reclassification of the capital stock of the Company. If the holders were to convert their shares of Preferred Stock into Common Stock at the Conversion Ratio the holders would receive a total of 4,300,000 shares of Common Stock, or approximately 36.70% of the then outstanding shares of Common Stock assuming such conversion.

Mr. DePiano Sr. passed away on October 3, 2019 and appointed Richard J. DePiano, Jr., the Chairman of the board and the Chief Executive Officer of the Company, as executor. Mr. DePiano, Jr. has control over the listed shares in his capacity as executor of Mr. DePiano Sr.'s estate.

Director Independence

Our board of directors has determined that, Lisa Napolitano, C. Todd Trusk, John P. Dogum and David J. Jacovini are “independent,” as such term is defined in the applicable rules of the SEC and and the applicable OTCQB market Listing Rules.

In making its independence determinations, the board of directors considered all relevant transactions, relationships and arrangements between each independent director and the Company. Other than as disclosed in “Related Person Transactions” above, the board of directors determined that none of the independent directors had any material relationships with the Company that would impair their independence.


ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES

On November 1, 2024, CBIZ CPAs P.C. (“CBIZ CPAs”) acquired the attest business of Marcum LLP (“Marcum”). On April 2, 2025, Marcum resigned as the Company’s independent registered public accounting firm, and the Company, with the approval of the Audit Committee of the Company’s Board of Directors, engaged CBIZ CPAs P.C. as the Company’s independent registered public accounting firm. The change in the Company’s independent registered public accounting firm from Marcum to CBIZ CPAs was disclosed in the Company’s Current Report on Form 8-K filed with the SEC on April 4, 2025.

The following table summarizes the aggregate fees billed to Escalon Medical Corp. by Marcum and CBIZ for the fiscal years ended June 30, 2026 and 2025.


	For the years ended June 30,
	2026		2025
Audit Fees	$	150,220			$125,475	*

Tax Fees	35,000			36,800

Total Fees	$	185,220			$	162,275

* Approximately $91,000 relates to CBIZ CPAs

In the table above, pursuant to definitions under the applicable regulations of the SEC, “audit fees” are fees for professional services rendered for the audit of our annual financial statements and review of our financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements; “audit-related fees” are fees for assurance and related services that are reasonably related to the performance of the audit and review of our financial statements, and primarily include accounting consultations and audits in connection with potential acquisitions; “tax fees” are fees for tax compliance, tax advice and tax planning; and “all other fees” are fees for any services not included in the first three categories.

Our audit committee is responsible for pre-approving all audit services and permitted non-audit services to be performed by our principal accountant, except in those instances which do not require such pre-approval pursuant to the applicable regulations of the SEC. The audit committee has established policies and procedures for its pre-approval of audit services and permitted non-audit services and, from time to time, the audit committee reviews and revises its policies and procedures for pre-approval. All of the services described in the table above were pre-approved by the audit committee.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1.Documents Filed as Part of This Annual Report on Form 10-K:

a.Financial Statements

The following consolidated financial statements of the Company and its subsidiaries are included in Part II, Item 8 of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm (CBIZ CPAs P.C., PCAOB ID 199;)

Consolidated Balance Sheets as of June 30, 2026 and 2025

Consolidated Statements of Operations for the years ended June 30, 2026 and 2025

Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2026 and 2025

Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025

Notes to Consolidated Financial Statements

2.Financial Statement Schedules

All other schedules have been omitted because the required information is not applicable or the information is included in the Company’s Consolidated Financial Statements or the related Notes to Consolidated Financial Statements.

3.EXHIBITS

The following is a list of exhibits filed or incorporated by reference as part of this Annual Report on Form 10-K, where so indicated by footnote, exhibits that were previously filed, are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated parenthetically, followed by the footnote reference to the previous filing.


3.1	(a)	Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company with the SEC on December 5, 2007).
3.2		Agreement and Plan of Merger dated as of September 28, 2001 between Escalon Pennsylvania, Inc. and Escalon Medical Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Proxy Statement on Schedule 14A filed with the SEC on September 21, 2001).
3.3			Statement with respect to shares dated February 15, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2018).
3.4			Bylaws of Registrant (incorporated by reference to Exhibit 3.2 to the Company’s Proxy Statement on Schedule 14A filed with the SEC on September 21, 2001).
4.1			Description of Securities*
10.1			Company’s Amended and Restated 1999 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003).†
10.2		Manufacturing Supply and Distribution Agreement between Sonomed, Inc. and Ophthalmic Technologies, Inc. dated as of March 11, 2004 (incorporated by reference to Exhibit 10.30 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004).
10.3		2013 Equity Incentive Plan (incorporated by reference to Exhibit 1 to the Company’s Proxy Statement on Schedule 14A filed with the SEC on November 14, 2013).†
10.4		Business Loan Agreement with TD Bank, N.A. dated June 29, 2018 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2018).
10.5			Promissory Note dated June 29, 2018 between the Company and TD Bank N.A. (incorporated by reference to Exhibit 10.70 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2018).
10.6			Agreement of Deposit Account dated June 29, 2018 between the Company and TD Bank N.A. (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2018).
10.7			Asset Purchase Agreement by and between Escalon Medical Corp. and Optos Public Limited Company, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2026).
21			List of Subsidiaries (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-KSB/A for the year ended June 30, 2002).
23.1			Consent of Independent Registered Public Accounting Firm (CBIZ CPAs P.C.)*.

31.1			Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (**).
31.2			Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (**).
32.1			Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (*).
		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (*).
101.1			The following materials are formatted in inline XBRL (inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of June 30, 2026 and 2025, (ii) Consolidated Statements of Operations for the years ended June 30, 2026 and 2025, (iii) Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2026 and 2025, (iv) Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025, and (v) Notes to Consolidated Financial Statements.*
104			The cover page of this Annual Report on Form 10-K, formatted as Inline XBRL and contained in Exhibit 101.1.

* Filed herewith

** Furnished herewith

† Represents a management contract, compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.

Signatures

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


Escalon Medical Corp.
(Registrant)

	By:	/s/ Richard J. DePiano, Jr.
		Richard J. DePiano, Jr. Chief Executive Officer

Dated: October 13, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.




By:	/s/ Richard J. DePiano, Jr.	Chairman and Chief Executive Officer (Principal Executive Officer)	October 13, 2026
	Richard J. DePiano, Jr.

By:	/s/ Mark Wallace	Chief Operating Officer and Principal Financial & Accounting Officer	October 13, 2026
	Mark Wallace

By:	/s/ John P. Dogum	Director	October 13, 2026
	John P. Dogum

By:	/s/ Lisa Napolitano	Director	October 13, 2026
	Lisa Napolitano

By:	/s/ C. Todd Trusk	Director	October 13, 2026
	C. Todd Trusk

By:	/s/ David J Jacovini	Director	October 13, 2026
	David J Jacovini

","original","zhKind","translation","complete",false,"ESMC","公司与财报","宏观与美联储","行业与主题","政策与监管","观点与解读","其他","aihot","/items/smzpe69n1g16u0rqllp2xwgr9","https://www.sec.gov/Archives/edgar/data/862668/000162828026065683/0001628280-26-065683-index.htm","rss-sec-xbrl","name","SEC · EDGAR 财务披露","rss","firstParty","iconUrl","/api/img-proxy?u=https%3A%2F%2Fwww.sec.gov%2Fthemes%2Fcustom%2Fuswds_sec%2Fassets%2Fimg%2Ffavicons%2Fapple-touch-icon.png&mode=avatar&exp=1792195200&sig=4eab1165515e57e2","iconSrcSet","/api/img-proxy?u=https%3A%2F%2Fwww.sec.gov%2Fthemes%2Fcustom%2Fuswds_sec%2Fassets%2Fimg%2Ffavicons%2Fapple-touch-icon.png&mode=avatar-48&exp=1792195200&sig=df95c58c297800b1 48w, /api/img-proxy?u=https%3A%2F%2Fwww.sec.gov%2Fthemes%2Fcustom%2Fuswds_sec%2Fassets%2Fimg%2Ffavicons%2Fapple-touch-icon.png&mode=avatar-96&exp=1792195200&sig=2a4278e6e5e85947 96w","changelogVersion","2026-10-01T08:00"]