What changed in this filing

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Item 1. Financial Statements

2025-09-15 compared with 2025-03-17 · 382 added, 479 removed, 250 unchanged (77% of the section changed)

5 unchanged sentences

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowances of $ 110 at January 31, 2025 and April 30, 2024

Contract assets

Prepaid income taxes

Prepaid expenses and other

Total current assets

Property, plant, and equipment, net

Cash surrender value of life insurance

Deferred taxes

Right-of-use assets – operating leases

Restricted cash

LIABILITIES AND STOCKHOLDERS’ EQUITY:

and cash equivalents

Accounts receivable, net of allowances of $ 102 at July 31, 2025 and $ 110 April 30, 2025

expenses and other

current assets

plant, and equipment, net

Cash surrender

value of life insurance and assets held in trust

assets – operating leases

AND STOCKHOLDERS’ EQUITY:

payable – trade

provision accrual

taxes payable

lease liability – current portion

current liabilities

Accounts payable

Accrued liabilities

Loss provision accrual

Operating lease liability - current portion

Contract liabilities

Total current liabilities

Deferred compensation

Deferred taxes

Operating lease liability – non-current portion

Total liabilities

Stockholders’ equity:

lease liability – non-current portion

Stockholders’

Preferred stock - $ 1.00 par value;

1 unchanged sentence

Common stock - $ 1.00 par value;

authorized 20,000 shares, 9,697 shares issued and 9,675 shares outstanding at January 31, 2025;

authorized 20,000 shares, 9,784 shares issued and 9,749 shares outstanding at July 31, 2025;

9,717 shares issued and 9,704 shares outstanding at April 30, 2025

Additional paid-in capital

Retained earnings (accumulated deficit)

Common stock reacquired and held in treasury - at cost ( 22 shares at January 31, 2025 and 1 share at April 30, 2024)

Total stockholders’ equity

Total liabilities and stockholders’ equity

paid-in capital

Common stock reacquired and held in treasury -at cost ( 35 shares at July 31, 2025 and 13 shares at April 30, 2025)

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

and SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Operations

thousands, except per share data)

Three Months Ended January 31,

Nine Months Ended January 31,

Condensed Consolidated Statements of Operations

Cost of revenues

Selling and administrative expenses

Research and development expenses

Operating income (loss)

Other income (expense):

Investment income

Interest expense

Other expense, net

Income before (benefit) provision for income taxes

(Benefit) provision for income taxes

Net income per common share:

Basic income per share

Diluted income per share

Weighted average shares outstanding:

Months Ended July 31,

and administrative expenses

and development expenses

income (expense):

on investments

before (benefit) provision for income taxes

provision for income taxes

Net income per common

and diluted income per share

Weighted average shares

accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended January 31,

Months Ended July 31,

Cash flows from operating activities:

Non-cash charges to earnings

Net changes in operating assets and liabilities

Net cash (used in) provided by operating activities

Cash flows from investing activities:

Purchase of property, plant, and equipment, and other assets

Net used in investing activities

Cash flows from financing activities:

Payment of dividend

Purchase of treasury stock

Net cash used in financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

Supplemental disclosures of cash flow information:

Cash paid during the period for:

charges to earnings

changes in operating assets and liabilities

cash provided by (used in) operating activities

from investing activities:

of fixed assets

cash used in investing activities

from financing activities:

of Treasury stock

cash used in financing activities

in cash and cash equivalents and restricted cash

and cash equivalents and restricted cash at beginning of period

and cash equivalents and restricted cash at end of period

disclosures of cash flow information:

paid during the period for:

accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

and Nine months ended January 31, 2025

months ended July 31, 2025 and 2024

thousands, except share data)

Retained earnings

Treasury stock

Accumulated other

comprehensive

2 unchanged sentences

Stock-based compensation expense

Shares withheld on employee taxes on vested equity awards

Exercise of stock options and stock appreciation rights - net of shares tendered for exercise price

Dividends payable

Shares withheld on employee taxes on vested equity

Balance at July 31, 2025

Contribution of stock to 401(k) plan

Stock-based compensation expense

Shares withheld on employee taxes on vested equity awards

Dividends payable

Dividends paid

Balance at October 31, 2024

Contribution of stock to 401(k) plan

Stock-based compensation expense

Shares withheld on employee taxes on vested equity awards

Exercise of stock options and stock appreciation rights - net of shares tendered for exercise price

Balance at January 31, 2025

ELECTRONICS, INC.

AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

and Nine months ended January 31, 2024

thousands, except share data)

Treasury stock

Accumulated other

comprehensive

2 unchanged sentences

Stock-based compensation expense

Shares withheld on employee taxes on vested equity

Exercise of stock options and stock appreciation rights - net of shares tendered for exercise price

Dividends payable

Balance at July 31, 2024

Contribution of stock to 401(k) plan

Stock-based compensation expense

Balance at October 31, 2023

Contribution of stock to 401(k) plan

Stock-based compensation expense

Balance at January 31, 2024

accompanying notes to condensed consolidated financial statements.

6 unchanged sentences

interim financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly, in

all material respects, the condensed consolidated financial position of the Company as of January 31, 2025 and the results of its operations,

changes in stockholders’ equity for the three and nine months ended January 31, 2025 and 2024, and cash flows for the nine months

ended January 31, 2025 and 2024.

The April 30, 2024 condensed consolidated balance sheet was derived from audited financial

These financial statements are prepared in conformity with accounting principles generally accepted in the United States

of America (“U.S.

Certain information and footnote disclosures normally included in financial statements

prepared in accordance with U.S.

GAAP have been condensed or omitted.

These condensed consolidated interim financial statements

should be read in conjunction with the annual consolidated financial statements included in the Company’s Annual Report on Form

10-K for the fiscal year ended April 30, 2024, filed on August 2, 2024 with the Securities and Exchange Commission (the “Form 10-K”).

The results of operations for such interim periods are not necessarily indicative of the operating results for the full fiscal year.

all material respects, the condensed consolidated financial position of the Company as of July 31, 2025 and the results of its operations,

changes in stockholders’ equity for the three months ended July 31, 2025 and 2024, and cash flows for the three months ended July

31, 2025 and 2024.

The April 30, 2025 condensed consolidated balance sheet was derived from audited financial statements.

These financial

statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.

GAAP have been

condensed or omitted.

These condensed consolidated interim financial statements should be read in conjunction with the annual consolidated

financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2025, filed on July

18, 2025 with the Securities and Exchange Commission (the “Form 10-K”).

The results of operations for such interim periods

are not necessarily indicative of the operating results for the full fiscal year.

prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on

the previously reported changes in net assets.

B – EARNINGS PER SHARE

Reconciliation

of the weighted average shares outstanding for basic and diluted earnings per share (“EPS”) for the three and nine months

ended January 31, 2025 and 2024, respectively, were as follows:

Periods ended January 31,

Weighted average shares outstanding:

Basic EPS Shares outstanding (weighted average)

Effect of Dilutive Securities

Diluted EPS Shares outstanding

For the three months ended January 31, 2025 and 2024, and the nine months ended January 31, 2024, dilutive securities are excluded from

the calculation of EPS since the inclusion of such shares would be antidilutive.

There were no shares excluded for the three months ended

January 31, 2025.

For the nine months ended January 31, 2025, 66,000 exercisable shares were excluded.

For the three and nine months

ended January 31, 2024, 86,000 exercisable shares were excluded.

of the weighted average shares outstanding for basic and diluted earnings per share (“EPS”) for the three months ended July

31, 2025 and 2024, respectively, were as follows:

months ended July 31,

Weighted average shares

shares outstanding (weighted average)

of dilutive securities

EPS shares outstanding

the three months ended July 31, 2025 there were no shares to exclude from the calculation of dilutive securities.

For the three months

ended July 31, 2024 dilutive securities are excluded from the calculation of EPS since the inclusion of such shares would be antidilutive.

The exercisable shares excluded for the three months ended July 31, 2024 were 76,000 shares.

July 22, 2024, the Company’s Board of Directors declared a special cash dividend of $ 1.00 per share of common stock.

9 unchanged sentences

therefore, revenue has not been recognized.

During the three and nine months ended January 31, 2025, we recognized $ 10.2 million and

$ 26.2 million, respectively, of our contract liabilities at April 30, 2024 as revenue.

During the three and nine months ended January

31, 2024, we recognized $ 8.6 million and $ 12.3 million, respectively, of our contract liabilities at April 30, 2023 as revenue.

losses are anticipated, a loss provision is recorded for the full amount of such losses when they are determinable.

Contract losses for

three months ended January 31, 2025 were approximately $ 0.4 million, and the nine months ended January 31, 2025 were approximately $ 0.6

million, offset by a loss reduction of approximately $ 0.3 million, mostly related to additional funding.

Total contract losses for three

and nine months ended January 31, 2024 were approximately $ 0.6 million and $ 2.1 million, respectively.

The liability for contract losses

is presented as loss provision accrual within the consolidated balance sheets.

During the three months ended July 31, 2025, we recognized $ 4.1 million of our contract liabilities

at April 30, 2025 as revenue.

During the three months ended July 31, 2024, we recognized $ 7.7 million of our contract liabilities at

April 30, 2024 as revenue.

If contract losses are anticipated, a loss provision is recorded for the full amount of such losses when they

are determinable.

ELECTRONICS, INC.

2 unchanged sentences

D – EMPLOYEE BENEFIT PLANS

the three and nine months ended January 31, 2025, the Company made contributions of 7,850 shares and 51,884 shares, respectively, of

its common stock to the Company’s profit-sharing plan and trust under Section 401(k) of the Internal Revenue Code.

During the three

and nine months ended January 31, 2024, the Company made contributions of 5,364 shares and 35,262 shares, respectively, of its common

stock to the Company’s profit-sharing plan and trust under Section 401(k) of the Internal Revenue Code.

Such contributions are

in accordance with the Company’s discretionary match of employee voluntary contributions to this plan.

compensation expense charged to selling and administrative expenses during the three and nine months ended January 31, 2025, was approximately

$ 142,000 and $ 425,000 , respectively.

Payments made related to deferred compensation, inclusive of approximately $ 26,000 and $ 79,000 ,

respectively, of interest expense, were approximately $ 183,000 and $ 541,000 for the same periods.

Deferred compensation expense charged

to selling and administrative expenses during the three and nine months ended January 31, 2024, was approximately $ 109,000 and $ 325,000 ,

respectively.

Payments made related to deferred compensation, inclusive of approximately $ 28,000 and $ 88,000 , respectively, of interest

expense, were approximately $ 175,000 and $ 536,000 for the same periods.

the three months ended July 31, 2025, the Company made contributions of 12,405 shares of its common stock to the Company’s profit-sharing

plan and trust under Section 401(k) of the Internal Revenue Code.

During the three months ended July 31, 2024, the Company made contributions

of 26,457 shares of its common stock to the Company’s profit-sharing plan and trust under Section 401(k) of the Internal Revenue

Such contributions are in accordance with the Company’s discretionary match of employee voluntary contributions to this plan.

compensation expense charged to selling and administrative expenses during the three months ended July 31, 2025, was approximately $ 133,000 ,

inclusive of approximately $ 23,000 of interest expense.

Payments made related to deferred compensation were approximately $ 183,000 for

the same period.

Deferred compensation expense charged to selling and administrative expenses during the three months ended July 31,

2024, was approximately $ 143,000 , inclusive of approximately $ 27,000 of interest expense.

Payments made related to deferred compensation

were approximately $ 179,000 for the same period.

whole-life insurance policies on the lives of certain participants covered by deferred compensation agreements have been placed in a

Upon the death of any insured participant, cash received from life insurance policies in excess of the Company’s deferred

compensation obligations to the estate or beneficiaries of the deceased, are also placed in the Trust.

These assets belong to the Company

until a change of control event, as defined in the Trust agreement, should occur.

At that time, the Company is required to add sufficient

cash to the Trust so as to match the deferred compensation liability described above.

Such funds will be used to continue the deferred

compensation arrangements following a change of control.

The Life Insurance Policies amounted to $ 7.0 million at July 31, 2025 and at

April 30, 2025.

The business account and U.S.

securities within the Trust are valued on a Level 1 basis and amounted to $ 3.7 million

and $ 3.5 million at July 31, 2025 and April 30, 2025, respectively.

The fixed income corporate debt securities within the Trust are valued

on a Level 2 basis and amounted to $ 0.4 million at July 31, 2025 and at April 30, 2025.

Level 2 securities are valued at the closing

prices and are consistent with quoted prices of similar assets reported in active markets.

E – INVENTORIES

which are reported at the lower of cost and net realizable value, consisted of the following (in thousands):

Raw materials and component parts

Work in progress

Finished goods

materials and component parts

F – RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

Company’s leases primarily represent offices, warehouses, vehicles, manufacturing facilities and Research and Development (“R&D”)

Company’s leases primarily represent offices, warehouses, vehicles, manufacturing and research and development (“R&D”)

facilities, which expire at various times through 2030 and are operating leases.

Contractual arrangements are evaluated at inception to

determine if the agreement contains a lease.

Company elected the practical expedient for short-term leases which allows leases with terms of 12 months or less to be recorded on a

straight-line basis over the lease term without being recognized on the consolidated balance sheets.

table below presents right-of-use (“ROU”) assets and liabilities recorded on the respective consolidated balance sheets as

follows (in thousands):

Operating lease ROU assets

Operating lease liabilities (short-term)

Operating lease liabilities (long-term)

Total lease liabilities

Contractual arrangements are evaluated at inception

to determine if the agreement contains a lease.

The leases contain renewal options, early termination, rent abatement, and escalation

clauses that are factored into our determination of lease payments when appropriate.

We include options to extend or terminate leases

in the right-of-use (“ROU”) operating lease asset and liability when it is reasonably certain we will exercise these options.

As of July 31, 2025, lease options were not included in the calculation of the ROU operating lease asset and liability.

ROU assets and

lease liabilities are recorded based on the present value of future lease payments which will factor in certain qualifying initial direct

costs incurred as well as any lease incentives that may have been received.

Lease expenses for operating lease payments are recognized

on a straight-line basis over the lease term.

Company elected the practical expedient for short-term leases which allows leases with terms of twelve months or less to be recorded

on a straight-line basis over the lease term without being recognized on the consolidated balance sheet.

The Company has also elected

the practical expedient to account for lease and non-lease components as a single component.

ELECTRONICS, INC.

1 unchanged sentence

to Condensed Consolidated Financial Statements

operating lease expense was $ 0.4 million and $ 1.4 million for the three and nine months ended January 31, 2025, respectively, the majority

table below presents ROU assets and liabilities recorded on the respective consolidated balance sheets as follows (in thousands):

assets - operating leases

lease liabilities, current portion

lease liabilities, non-current portion

lease liabilities

operating lease expense was $ 0.6 million and $ 0.5 million for the three months ended July 31, 2025 and 2024, respectively, the majority

of which is included in cost of revenues and the remaining amount in selling and administrative expenses on the unaudited condensed consolidated

statements of operations.

Total operating lease expense was $ 0.5 million and $ 1.4 million for the three and nine months ended January

31, 2024, respectively, the majority of which is included in cost of revenues and the remaining amount in selling and administrative

expenses on the unaudited condensed consolidated statements of operations.

maturities of lease liabilities at January 31, 2025 are as follows:

Fiscal Year Ending April 30,

There were no ROU assets or lease liabilities that were recorded for any leases that had not commenced as of

July 31, 2025.

maturities of lease liabilities at July 31, 2025 are as follows:

Ending April 30,

(in thousands)

Remainder of 2025

Total lease payments

Less imputed interest

Present value of future lease payments

Less current obligations under leases

Long-term lease obligations

of January 31, 2025 and 2024, the weighted-average remaining lease term for all operating leases was 4.54 years and 5.12 years, respectively.

imputed interest

Present value of future

lease payments

current obligations under leases

lease obligations

of July 31, 2025 and 2024, the weighted-average remaining lease term for all operating leases was 4.30 years and 4.81 years, respectively.

The Company does not generally have access to the rate implicit in the leases and therefore selected a rate that is reflective of companies

with similar credit ratings for secured debt as the discount rate.

The weighted average discount rate for operating leases as of January

The weighted average discount rate for operating leases as of July

31, 2025 and 2024, was 6.86 % and 6.34 %, respectively.

Company has future operating lease payments of approximately $ 4.0 million related to a lease that has not yet commenced and was entered

into as of December 23, 2024.

Such lease payments are not included in the table above or the Company’s condensed consolidated financial

position as operating lease ROU assets and operating lease liabilities.

The operating lease payments are anticipated to commence in the

fourth quarter of 2025 and continue for approximately 5 years.

ELECTRONICS, INC.

and SUBSIDIARIES

to Condensed Consolidated Financial Statements

G – SEGMENT INFORMATION

11 unchanged sentences

sales and support for the Company’s wireline telecommunications family of products, including US5G, which are sold in the U.S.

ELECTRONICS, INC.

and SUBSIDIARIES

to Condensed Consolidated Financial Statements

Company measures segment performance based on total revenues and profits generated by each geographic location rather than on the specific

1 unchanged sentence

Consequently, the Company determined that the segments indicated above most appropriately reflect

the way the Company’s Chief operating decision maker views the business.

the way the Company’s chief operating decision maker (“CODM”) views the business.

accounting policies of the two segments are the same as those described in “Note 1.

1 unchanged sentence

consolidated financial statements included in the Form 10-K.

The Company evaluates the performance of its segments and allocates resources

to them based on operating profit (loss).

Investment income (expense), interest expense, and other expense, net, as reported in the condensed

consolidated statement of operations and comprehensive income, are not allocated to or disclosed for each reportable segment and reconcile

segment operating income (loss) to income before provision of income taxes.

All acquired assets, including intangible assets, are included

in the assets of the applicable reporting segment.

tables below present information about reported segments with reconciliation of segment amounts to consolidated amounts as reported in

the condensed consolidated statements of operations or the consolidated balance sheets for each of the periods (in thousands):

ended January 31,

Our Chief Executive Officer (“CEO”) serves as our CODM who evaluates

the segment performance and allocates resources to them based on operating income which is defined as income before investment income,

interest expense, other expenses, and income taxes.

Operating income by segment is used to monitor segment results compared to prior

periods, forecasted results, and the annual plan.

All acquired assets, including intangible assets, are included in the assets of both

reporting segments.

ELECTRONICS, INC.

and SUBSIDIARIES

to Condensed Consolidated Financial Statements

tables below present segment revenues, significant segment expenses, which consist of segment cost of revenues and segment R&D expenses,

and segment operating income for each reportable segment and on a consolidated basis as reported in the consolidated statements of operations

for the three months ended July 31, 2025 and 2024 (in thousands):

Months Ended July 31,

Less intersegment revenues

Consolidated revenues

Operating income (loss):

less intersegment revenues

Consolidated operating income (loss)

Identifiable assets:

less intersegment balances

Consolidated identifiable assets

Cost of revenues:

Less intersegment cost

Consolidated cost of

Research and development expenses:

Consolidated research

and development expenses

Operating income:

Less intersegment margin

Consolidated operating

in the determination of operating income is selling, general, and administrative expenses of $ 2.7 million and $ 2.1 million for the three

months ended July 31, 2025 and 2024, respectively, for the FEI-NY segment, and $ 0.7 million and $ 0.6 million for the three months ended

July 31, 2025 and 2024, respectively, for the FEI-Zyfer segment.

ELECTRONICS, INC.

1 unchanged sentence

to Condensed Consolidated Financial Statements

Total revenue recognized over

time as Percentage of Completion (“POC”) and Passage of Title (“POT”) was approximately $ 17.7 million and $ 1.3

million, respectively, of the $ 18.9 million reported for the three months ended January 31, 2025.

Total revenue recognized over time as

POC and POT was approximately $ 47.3 million and $ 2.5 million, respectively, of the $ 49.8 million reported for the nine months ended January

Total revenue recognized over time as POC and POT was approximately $ 12.9 million and $ 0.8 million, respectively, of the $ 13.7

million reported for the three months ended January 31, 2024.

Total revenue recognized over time as POC and POT was approximately $ 37.0

million and $ 2.7 million, respectively, of the $ 39.7 million reported for the nine months ended January 31, 2024.

The amounts by segment

and product line were as follows (in thousands):

Months Ended January 31,

Periods ended January 31,

tables below present the identifiable assets of each reportable segment and on a consolidated basis as reported in the consolidated balance

sheets as of July 31, 2025 and April 30, 2025 and the depreciation and amortization charges related to these identifiable assets for

the three months then ended (in thousands):

Identifiable assets:

Less intersegment

identifiable assets

Months Ended July 31,

Depreciation and amortization:

depreciation and amortization expense

revenue recognized over time as Percentage of Completion (“POC”) and Passage of Title (“POT”) was approximately

$ 12.4 million and $ 1.4 million, respectively, of the $ 13.8 million reported for the three months ended July 31, 2025.

Total revenue recognized

over time as POC and POT was approximately $ 14.5 million and $ 0.6 million, respectively, of the $ 15.1 million reported for the three

months ended July 31, 2024.

amounts by segment and product line were as follows (in thousands):

Months Ended July 31,

Revenues by product line:

1 unchanged sentence

Government non-space revenue

Other commercial & industrial revenue

Consolidated revenues

commercial & industrial revenue

ELECTRONICS, INC.

and SUBSIDIARIES

to Condensed Consolidated Financial Statements

H – INVESTMENT IN MORION, INC.

6 unchanged sentences

off in fiscal year 2022.

Accordingly, the carrying value of this investment was $ 0 as of January 31, 2025 and April 30, 2024.

the three and nine months ended January 31, 2025, the Company did not acquire any product from Morion.

During the three and nine months

ended January 31, 2024, the Company acquired product from Morion in the aggregate amount of approximately $ 89,000 for both periods.

the three and nine months ended January 31, 2025 and 2024, the Company did not receive dividends from Morion.

ELECTRONICS, INC.

and SUBSIDIARIES

to Condensed Consolidated Financial Statements

purchases of materials from Morion consisted mainly of quartz crystal blanks, which were used in the fabrication of quartz resonators.

Accordingly, the carrying value of this investment was $ 0 as of July 31, 2025 and April 30, 2025.

the three months ended July 31, 2025 and 2024, the Company did not acquire any product from Morion.

During the three months ended July

31, 2025 and 2024, the Company did not receive dividends from Morion.

purchases of materials from Morion consisted primarily of quartz crystal blanks, which were used in the fabrication of quartz resonators.

However, on October 30, 2024, the U.S.

7 unchanged sentences

I – RESTRICTED CASH

of January 31, 2025, restricted cash consisted of approximately $ 1.4 million primarily related to a letter of credit required for contractual

restrictions during the period of performance for one of the Company’s contracts.

As of April 30, 2024, restricted cash consisted

of approximately $ 945,000 related to a letter of credit required for contractual restrictions during the period of performance for one

of the Company’s contracts.

Restricted cash is classified as current or non-current based on the remaining performance period of

the contract.

of July 31, 2025 and April 30, 2025, restricted cash consisted of approximately $ 1.4 million, in both periods, primarily related to a

letter of credit required for contractual restrictions during the period of performance for one of the Company’s contracts.

cash is classified as current or non-current based on the remaining performance period of the contract.

reconciliation of cash and cash equivalents and restricted cash from the condensed consolidated balance sheets to the condensed consolidated

statements of cash flows is shown below (in thousands):

Cash and cash equivalents

Restricted cash

Total cash and cash equivalents and restricted cash

and cash equivalents

cash and cash equivalents and restricted cash

J – RECENT ACCOUNTING PRONOUNCEMENTS

November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Segment Reporting (Topic 280):

to Reportable Segment Disclosures, which expands on the required disclosure of incremental segment information.

The new guidance is effective

for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early

adoption permitted.

The Company is evaluating the effect on its consolidated financial statements when adopted in fiscal year 2025 but

does not expect the effect to be material.

December 2023, the FASB issued ASU No.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic

Improvements to Income Tax Disclosures (“ASU

2023-09”), which requires companies to annually disclose categories in the effective tax rate reconciliation and additional

information about income taxes paid.

The new guidance is effective for annual periods beginning after December 15, 2024, and interim

periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is in the process of

evaluating the impact that the adoption of ASU 2023-09 will have to the financial statements and related disclosures.

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires companies to annually disclose categories in

the effective tax rate reconciliation and additional information about income taxes paid.

The new guidance is effective for annual periods

beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2023-09 as of July 31, 2025 and determined there to be no material impact to the interim financial statements.

ELECTRONICS, INC.

and SUBSIDIARIES

to Condensed Consolidated Financial Statements

K – DEFERRED INCOME TAXES

1 unchanged sentence

statements, which will result in taxable or deductible amounts in the future.

July 4, 2025, President Trump signed H.R.1, the One Big Beautiful Bill Act (“OBBBA”) into law.

In accordance with U.S.

the Company will account for the tax effects of changes in tax law in the period of enactment which is the quarter ended July 31, 2025.

The OBBBA made changes to the U.S.

tax code, including, but not limited to:

(1) allowing taxpayers to fully deduct domestic research

expenditures for tax years beginning after December 31, 2024, (2) provides a catch-up relief provision for taxpayers to accelerate deductions

for unamortized domestic research expenditures, (3) provides a permanent provision for 100 % bonus depreciation deductions for most tangible

personal property with a recovery period of 20 years or less, acquired and placed in service after January 19, 2025, and (4) for tax

years beginning after December 31, 2024, restores Adjusted Taxable Income by adding back amortization and depreciation to calculate the

limitation on interest deductions (effectively returning to EBITDA).

As required by the authoritative guidance on accounting for income

7 unchanged sentences

that the deferred tax assets will not be realizable, we establish a valuation allowance.

During the three months ended January 31, 2025,

the Company reduced its valuation allowance and recognized a discrete tax benefit of $ 11.8 million, resulting in an income tax benefit

of 330.6 % and 132.8 % for the three and nine months ended January 31, 2025.

A significant component of objective evidence evaluated was

the cumulative income or loss incurred over the three-year period ended January 31, 2025.

We considered other positive evidence in determining

the need for a valuation allowance including utilization of net operating loss carryforwards and a reduction of the net deferred tax asset,

our backlog, and sufficient projections of future taxable income that support the more-likely-than-not realization of the existing deferred

tax asset and the remaining net operating loss carryforward.

The weight of this positive evidence is sufficient to outweigh other negative

evidence in evaluating our need for a valuation allowance.

As a result of the positive evidence outweighing the negative evidence for

the period ended January 31, 2025, we released the valuation allowance on the U.S.

federal and state deferred tax items that the Company

expects to realize.

As of January 31, 2025, the Company maintains a valuation allowance

of $ 1.3 million against certain deferred tax assets including state tax credits and capital losses because the realization of these tax

attributes requires sufficient taxable income be sourced to the respective state jurisdiction and capital gain income is required to utilize

capital losses.

If these estimates and assumptions change in the future, the Company may be required to adjust its existing valuation

allowance resulting in changes to deferred income tax expense.

In general, the favorable research and expenditure

provisions and permanent bonus depreciation provision will allow the Company to accelerate deductions and reduce cash taxes.

The enactment

of the OBBBA did not have a material impact on our provision or effective tax rate as of July 31, 2025.

We continue to evaluate the OBBBA

and its requirements, as well as its application to our business and its impact on cash taxes and our effective tax rate.

of July 31, 2025, the Company maintains a valuation allowance of $ 1.4 million primarily against certain deferred tax assets, including

state tax credits and capital losses because the realization of these tax attributes requires sufficient taxable income be sourced to

the respective state jurisdiction and capital gain income is required to utilize capital losses.

If these estimates and assumptions change

in the future, the Company may be required to adjust its existing valuation allowance resulting in a change to deferred income tax expense.

L – PRODUCT WARRANTIES

Company generally provides its customers with a one-year warranty regarding the manufactured quality and functionality of its products.

The Company establishes warranty reserves based on its product history, current information on repair costs and annual sales levels.

As of July 31, 2025 and April 30, 2025, respectively, changes in the carrying amount of accrued product warranty costs, reported in accrued

expenses on the consolidated balance sheets, were as follows (in thousands):

Balance at beginning

Warranty costs incurred

warranty accrual

at end of year

ELECTRONICS, INC.

33 unchanged sentences

of inventory.

Both of these areas require the Company to make use of reasonable estimates including estimating the cost to

complete a contract, the realizable value of its inventory and the market value of its products.

Changes in estimates can have a

material impact on the Company’s financial position and results of operations.

The Company’s significant accounting policies

did not change during the three and nine months ended January 31, 2025.

Both of these areas require the Company to make use of reasonable estimates including estimating the cost to complete a

contract, the realizable value of its inventory and the market value of its products.

Changes in estimates can have a material impact

on the Company’s financial position and results of operations.

The Company’s significant accounting policies did not change

during the three months ended July 31, 2025.

are reported in operating results predominantly over time using the cost-to-cost method.

23 unchanged sentences

are subject to income taxes in the U.S.

and significant judgment is required in determining our provision for income taxes, our

deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets that are not more

likely than not to be realized.

We monitor the realizability of our deferred tax assets taking into account all relevant factors at

each reporting period.

In completing our assessment of realizability of our deferred tax assets, we consider our history of income

(loss) measured at pre-tax income (loss) adjusted for permanent book-tax differences on a jurisdictional basis, volatility in actual

earnings, excess tax benefits related to stock-based compensation in recent prior years and impacts of the timing of reversal of

existing temporary differences.

We also rely on our assessment of the Company’s projected future results of business

operations, including uncertainty in future operating results relative to historical results, volatility in the market price of our

common stock and its performance over time, variable macroeconomic conditions impacting our ability to forecast future taxable

income, and changes in business that may affect the existence and magnitude of future taxable income.

Our valuation allowance

assessment is based on our best estimate of future results considering all available information.

and significant judgment is required in determining our provision for income taxes, our deferred

tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets that are not more likely than not

to be realized.

We monitor the realizability of our deferred tax assets taking into account all relevant factors at each reporting period.

In completing our assessment of realizability of our deferred tax assets, we consider our history of income (loss) measured at pre-tax

income (loss) adjusted for permanent book-tax differences on a jurisdictional basis, volatility in actual earnings, excess tax benefits

related to stock-based compensation in recent prior years and impacts of the timing of reversal of existing temporary differences.

also rely on our assessment of the Company’s projected future results of business operations, including uncertainty in future operating

results relative to historical results, volatility in the market price of our common stock and its performance over time, variable macroeconomic

conditions impacting our ability to forecast future taxable income, and changes in business that may affect the existence and magnitude

of future taxable income.

Our valuation allowance assessment is based on our best estimate of future results considering all available

provision for or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted

3 unchanged sentences

OF OPERATIONS

table below sets forth for the three and nine months ended January 31, 2025 and 2024, respectively, the percentage of consolidated revenues

represented by certain items in the Company’s condensed consolidated statements of operations or notes to the condensed consolidated

financial statements:

Periods ended January 31,

table below sets forth for the three months ended July 31, 2025 and 2024, respectively, the percentage of consolidated revenues represented

by certain items in the Company’s condensed consolidated statements of operations or notes to the condensed consolidated financial

Months ended July 31,

Less intersegment revenues

1 unchanged sentence

Selling and administrative expenses

Research and development expenses

Operating income (loss)

Research and development

Operating income

Other income, net

(Benefit) provision for income taxes

Periods ended January 31,

(in thousands)

(Benefit) provision for

ended July 31,

Intersegment revenues

the three months ended January 31, 2025, revenues from commercial and U.S.

Government communication satellite programs accounted for

approximately 59% of consolidated revenues compared to approximately 50% of consolidated revenues during this same period in the prior

the three months ended July 31, 2025, revenues from commercial and U.S.

Government communication satellite programs accounted for approximately

47% of consolidated revenues compared to approximately 55% of consolidated revenues during this same period in the prior fiscal year.

Revenues are recognized primarily over time under the percentage-of-completion (“POC”) method.

from the satellite market are recorded in the FEI-NY segment.

Revenues from the satellite

market are recorded in the FEI-NY segment.

Revenues from non-space U.S.

Government/Department of Defense (“DOD”)

customers, which are recorded in both the FEI-NY and FEI-Zyfer segments, accounted for approximately 39% of consolidated revenues for

the three months ended January, 31, 2025 compared to approximately 44% of consolidated revenue during the same period in the prior fiscal

Other commercial and industrial revenues for the three months ended January 31, 2025 accounted for approximately 2% of consolidated

revenue compared to 7% in the same period of the prior fiscal year.

The significant increase in revenue for the quarter ended January

31, 2025, compared to the same quarter in the previous fiscal year, was reflected in both the FEI-NY and FEI-Zyfer segments and was related

to an increase of approximately $4.4 million in sales to U.S.

Government space customers and an increase of approximately $1.4 million

in sales to Government non-space customers, partially offset by a decrease of approximately $0.6 million in other commercial and industrial

Government/Department of Defense (“DOD”) customers,

which are recorded in both the FEI-NY and FEI-Zyfer segments, accounted for approximately 50% of consolidated revenues for the three

months ended July, 31, 2025 compared to approximately 42% of consolidated revenue during the same period in the prior fiscal year.

commercial and industrial revenues for the three months ended July 31, 2025 and 2024 accounted for approximately 3% of consolidated revenue.

ELECTRONICS, INC.

and SUBSIDIARIES

the nine months ended January 31, 2025, revenues from commercial and U.S.

Government communication satellite programs accounted for approximately

58% of consolidated revenues compared to approximately 41% of consolidated revenues during this same period in the prior fiscal year.

Revenues from non-space U.S.

Government/DOD customers accounted for approximately 39% of consolidated revenues for the nine months ended

January, 31, 2025 compared to approximately 53% of consolidated revenue during the same period in the prior fiscal year.

Other commercial

and industrial revenues for the nine months ended January 31, 2025 accounted for approximately 3% of consolidated revenue compared to

6% in the same period of the prior fiscal year.

The significant increase in revenue for the nine month period ended January 31, 2025,

compared to the same period in the previous fiscal year, and was reflected predominately in U.S.

Government satellite programs.

Periods ended January 31,

(in thousands)

Gross margin rate

the three months ended January 31, 2025, both gross margin (“GM”) and GM rate increased compared to the same period in the

prior fiscal year.

The increase in GM was mainly due to an increase in revenue and the GM rate increase was mainly attributable to a

large space program that completed a major milestone in its production.

The completed milestone, and related mitigation of risk, resulted

in a higher GM on this program for the quarter.

For the nine months ended January 31, 2025, both GM and GM Rate increased compared to

the same period in the prior fiscal year.

This is partially due to the large space program mentioned above that completed major milestones

during the nine months ended January 31, 2025.

revenue for the three months ended July, 31, 2025 is lower than revenues in the prior period due to several customer imposed program

These delays are not expected to result in revenue reductions as the revenue shortfalls are anticipated to be realized in the

upcoming quarters, predominately in this fiscal year.

Months ended July 31,

For the three months ended

July 31, 2025, both gross margin (“GM”) and GM rate decreased compared to the same period in the prior fiscal year.

in GM was primarily due to a decrease in revenue;

and the decrease in GM rate was attributable to quarterly fluctuations in the mix of

business activity between higher margin programs and lower margin programs, including cumulative catch-up adjustments for some ongoing

As we have stated in the past, gross margins on the manufacturing of existing products are generally high;

whereas, gross margins

on development efforts and new products are typically lower.

General, and Administrative Expenses

Periods ended January 31,

(in thousands)

the three months ended January 31, 2025 and 2024, selling, general, and administrative (“SG&A”) expenses were approximately

ended July 31,

the three months ended July 31, 2025 and 2024, selling, general, and administrative (“SG&A”) expenses were approximately

26% and 19%, respectively, of consolidated revenues.

For the nine months ended January 31, 2025 and 2024, SG&A expenses were

approximately 19%, of consolidated revenues in both periods.

The increase in SG&A expense during the three and nine months ended

January 31, 2025, was mainly related to an increase in payroll related expenses including stock compensation and incentive accruals based

upon Company performance, costs from the re-alignment of employees from overhead to SG&A, and costs related to Frequency Electronics’

first Quantum Summit in October 2024.

The Company believes the costs related to SG&A will remain fairly consistent throughout the

remainder of fiscal year 2025.

The increase in SG&A expenses during the three months ended July 31, 2025

was an increase in payroll related expenses, including stock compensation, and investments in the future growth of the Company, including

expansion into Colorado and Quantum sensing, which are expected to continue through the fiscal year.

and Development Expenses

Periods ended January 31,

(in thousands)

ended July 31,

and Development (“R&D”) expenditures represent investments intended to keep the Company’s products at the leading

edge of time and frequency technology and enhance future competitiveness.

The change in R&D expenditures for the three and nine months

ended January 31, 2025, as compared to the prior year periods, was primarily due to a focus on advances and modernization of products.

The Company plans to continue to invest in R&D in the future to keep its products at the state of the art, however, we expect the

actual quarterly spend to vary.

Fluctuations in R&D expenditures will occur in some periods

due to current operational needs supporting ongoing programs.

The Company plans to continue to invest in R&D in the future to keep

its products at the state of the art.

ended July 31,

ELECTRONICS, INC.

and SUBSIDIARIES

Income (Loss)

Periods ended January 31,

(in thousands)

the three and nine months ended January 31, 2025, operating income increased due to higher revenue and GM percentage, partially offset

by higher R&D expenses.

The increase is partially due to a large space program that completed major milestones in its production

during the nine months ended January 31, 2025, as discussed above, however, the increase is also the result of the successful efforts

of the Company to complete complex programs and to work more efficiently in bidding, building and testing our products.

The Company believes

the improved operating income results for the first nine months of this fiscal year are a tangible outcome of these efforts.

seeks to continue to implement changes to further improve its performance.

the three months ended July 31, 2025, operating income decreased due to lower revenue and gross margin and increased SG&A as described

Income (Expense), net

Periods ended January 31,

(in thousands)

ended July 31,

Investment income, net

5 unchanged sentences

Interest expense is related to the deferred compensation payments made to retired employees.

majority of the approximately $0.1 million and $0.6 million of investment income for the three and nine months ended January 31, 2025,

respectively, was from interest income and unrealized gains on assets held in the Frequency Electronics, Inc.

majority of the approximately $0.2 million of investment income for the three months ended July 31, 2025, was from interest income and

unrealized gains on assets held in the Frequency Electronics, Inc.

Deferred Compensation Trust.

Provision for Income Tax

Periods ended January 31,

(in thousands)

(197,166.7 )%

Periods ended January 31,

Effective tax rate on pre-tax book income (loss):

ended July 31,

Months ended July 31,

tax rate on pre-tax book income:

ELECTRONICS, INC.

and SUBSIDIARIES

assessing the realizability of deferred tax assets, the Company evaluates whether it is more likely than not (more than 50%) that some

portion or all of the deferred tax assets will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation

of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized.

The Company assesses all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely

than not to be realized.

This evidence includes, but is not limited to, prior earnings history, scheduled reversal of taxable temporary

differences, tax planning strategies and projected future taxable income.

Significant weight is given to positive and negative evidence

that is objectively verifiable.

Concluding that a valuation allowance is not needed is difficult when there is significant negative evidence

such as cumulative losses in recent years.

The change in estimate occurred in Q3 2025 because Frequency no longer

has cumulative losses in recent years due to significant earnings in Q3 2025.

The positive evidence that led to the Q3 2025 release of

the valuation allowance includes (i) objectively verifiable cumulative earnings as of January 31, 2025, (ii) utilization of net operating

loss carryforwards and a reduction of the net deferred tax asset, (iii) a backlog of $73 million, and (iv) sufficient projections of future

taxable income that support the more-likely-than-not realization of the existing deferred tax asset and the remaining net operating loss

carryforward.

The projections of future taxable income are considered objectively verifiable positive evidence because the Company has

demonstrated a sustained return to profitability as of Q3 2025.

The Company maintains a valuation allowance of $1.3 million against certain

deferred tax assets including state tax credits and capital loss carryforwards because the realization of these tax attributes requires

sufficient taxable income be sourced to the respective state jurisdiction and capital gain income is required to utilize capital losses.

The Company will continue to evaluate the realizability of its net deferred tax assets quarterly.

Any further increases or decreases in

the valuation allowance could have an unfavorable or favorable impact on the Company’s income tax provision and net income in the

period in which such determination is made.

As of January 31, 2025, the deferred tax asset is recorded at its more-likely-than-not realizable

Under the accounting for income

taxes guidance, the change in the valuation allowance may be reflected in the annual estimated effective tax rate or recognized discretely

in the interim period, or both.

The Company recognized the reduction in the valuation allowance in both the annual estimated effective

tax rate and discretely in Q3 2025.

The estimated annual effective tax rate for the fiscal year ending April 30, 2025 is 3.54%.

This calculation

reflects estimated income tax expense based on our current year annual pretax income forecast which is offset by the estimated change

in the current year valuation allowance.

During the three months ended January 31, 2025, the Company reduced its valuation allowance and

recognized a discrete income tax benefit of $11.8 million resulting in an income tax benefit of 330.6% and 132.8% for the three and nine

months ended January 31, 2025.

the three months ended January 31, 2025, the Company recorded an income tax benefit of $11.8 million which includes a discrete tax income

benefit of $11.9 million.

The discrete tax benefit is primarily due to the reduction in the valuation allowance.

The calculation of the

overall income tax benefit consists of a discrete tax benefit for the release of the valuation allowance offset by current U.S.

and state income taxes.

For the three months ended January 31, 2024, the Company recorded an income tax provision of $6,000.

the nine months ended January 31, 2025, the Company recorded an income tax benefit of $11.6 million which includes a discrete tax benefit

of $11.9 million.

The calculation of the overall income tax provision consists of a discrete tax benefit for the release of the valuation

allowance offset by current U.S.

federal and state income taxes.

For the nine months ended January 31, 2024, the Company recorded an

income tax provision of $19,000.

effective tax rate for the three months ended January 31, 2025 was an income tax benefit of 330.2% on pretax income of $3.6 million compared

to an income tax provision of 4.4% on pretax income of $0.1 million in the comparable prior fiscal year period.

The effective tax rate

for the three months ended January 31, 2025 differs from the U.S.

federal statutory rate of 21% primarily due to the release of the valuation

effective tax rate for the nine months ended January 31, 2025 was an income tax benefit of 129.3% on pretax income of $8.9 million compared

July 4, 2025, President Trump signed the OBBBA into law.

In accordance with U.S.

GAAP, the Company will account for the tax effects of

changes in tax law in the period of enactment which is the quarter ended July 31, 2025.

The OBBBA made changes to the U.S.

including, but not limited to:

(1) allowing taxpayers to fully deduct domestic research expenditures for tax years beginning after December

31, 2024, (2) provides a catch-up relief provision for taxpayers to accelerate deductions for unamortized domestic research expenditures,

(3) a permanent provision for 100% bonus depreciation deductions for most tangible personal property with a recovery period of 20 years

or less, acquired and placed in service after January 19, 2025, and (4) for tax years beginning after December 31, 2024, restores Adjusted

Taxable Income by adding back amortization and depreciation to calculate the limitation on interest deductions (effectively returning

estimated annual effective tax rate for the fiscal year ending April 30, 2026 is 20.96%.

This calculation reflects an estimated income

tax expense based on our current fiscal year annual pretax income forecast which includes non-deductible expenses, estimated research

and development credits, and state income taxes.

The estimate of the annual effective tax rate is based on evaluations of possible future

events and may be subject to revision in subsequent reporting periods.

For the three months ending July

31, 2025, the Company recorded an income tax benefit of $77,270 which includes a discrete income tax benefit of $193,919.

income tax benefit is primarily due to stock compensation windfall tax benefits.

For the three months ending July 31, 2024, the Company

recorded an income tax provision of $132,930 which included a discrete income tax expense of $6,894.

effective tax rate for the three months ended July 31, 2025 was an income tax benefit of 13.89% on pretax income of $0.6 million compared

to an income tax provision of 5.19% on pretax income of $2.6 million in the comparable prior fiscal year period.

The effective tax rate

for the nine months ended January 31, 2025 differs from the U.S.

federal statutory rate of 21% primarily due to the release of the valuation

for the three months ended July 31, 2025 differs from the U.S.

federal statutory rate of 21% primarily due to non-deductible expenses,

state income taxes, R&D credits and discrete items.

AND CAPITAL RESOURCES

Company’s consolidated balance sheets continue to reflect a strong working capital position of approximately $27.3 million at January

Company’s consolidated balance sheets continue to reflect a strong working capital position of approximately $29.6 million at July

31, 2025 and approximately $29.7 million at April 30, 2025.

Included in working capital at July 31, 2025 and April 30, 2025 was $4.5

million and $4.7 million, respectively, of cash and cash equivalents.

The Company’s current ratio was 2.3 to 1 at both July 31,

2025 and at April 30, 2025.

Included in working capital at January 31, 2025 and April 30, 2024 was $5.5 million and $18.3

million, respectively, of cash and cash equivalents.

The Company’s current ratio was 2.2 to 1 at January 31, 2025 compared

to 1.9 to 1 as of April 30, 2024.

ELECTRONICS, INC.

and SUBSIDIARIES

cash used in operating activities for the nine months ended January 31, 2025 was approximately $1.3 million and net cash provided by

operating activities for the nine months ended January 31, 2024 was approximately $1.2 million.

The increase in net cash used in

operating activities in the first nine months of fiscal 2025 as compared to the prior fiscal year period was primarily due to an increase

in operating income offset by increases in deferred tax assets, accounts receivable, and inventories levels.

For the nine months

ended January 31, 2025 and 2024, the Company incurred approximately $4.2 million and $3.1 million, respectively, of non-cash operating

expenses including amortization of ROU assets, depreciation and amortization, inventory net realizable value adjustments, deferred compensation,

and accruals for employee benefit programs.

cash used in investing activities for the nine months ended January 31, 2025 and 2024 was approximately $1.2 million and $0.7 million,

respectively.

The Company acquired property, plant, and equipment in the amount of approximately $1.2 million and $0.7 million for the

nine month periods ended January 31, 2025 and 2024, respectively.

cash used in financing activities for the nine months ended January 31, 2025 was $9.9 million, of which $9.6 million was related to a

special cash dividend payment of $1.00 per share of common stock paid on August 29, 2024.

There were no financing activities for the

nine months ended January 31, 2024.

cash provided by operating activities for the three months ended July 31, 2025 was approximately $1.2 million and net cash used in operating

activities for the three months ended July 31, 2024 was approximately $1.5 million.

The increase in net cash provided by operating

activities in the first three months of fiscal 2026 as compared to the prior fiscal year period was primarily due to timing of billings

and cash collections.

For the three months ended July 31, 2025 and 2024, the Company incurred approximately $1.3 million, in both

periods, of non-cash operating expenses including amortization of ROU assets, depreciation and amortization, inventory net realizable

value adjustments, deferred compensation, and accruals for employee benefit programs.

cash used in investing activities for the three months ended July 31, 2025 and 2024 was approximately $0.8 million and $0.3 million,

respectively, all relating to purchases of capital expenditures.

cash used in financing activities for the three months ended July 31, 2025 and 2024 was $0.6 million and $0.1 million, respectively,

all related to purchase of treasury stock.

Company has been authorized by its Board of Directors to repurchase up to $5.0 million worth of shares of its common stock when appropriate

opportunities arise.

During the nine months ended January 31, 2025, the Company acquired 24,264 shares, at a weighted average

share price of $15.55 per share, from withholdings pursuant to RSU tax repayments.

As of January 31, 2025, the Company has repurchased

approximately $3.9 million of its common stock out of the $5.0 million authorization.

For the nine months ended January 31, 2024,

there were no repurchases of shares.

During the three months ended July 31, 2025, the Company acquired 21,910 shares, at a weighted average share price

of $26.60 per share, for withholdings pursuant to RSU tax repayments.

As of July 31, 2025, the Company has repurchased approximately

$4.4 million of its common stock out of the $5.0 million authorization.

During the three months ended, July 31, 2024, the Company

repurchased 4,569 shares of outstanding common stock at a weighted average share price of $13.60 per share.

Company will continue to expend resources for R&D to develop, improve and acquire products for space applications, guidance and targeting

6 unchanged sentences

connection with such acquisitions.

of January 31, 2025, the Company’s consolidated funded backlog was approximately $73 million compared to approximately $78 million

ELECTRONICS, INC.

and SUBSIDIARIES

of July 31, 2025, the Company’s consolidated funded backlog was approximately $71 million compared to approximately $70 million

at April 30, 2025.

Approximately 65% of the backlog, as of January 31, 2025, is expected to be realized in the next twelve

The Company excludes from backlog any contracts or awards for which it has not received authorization to proceed.

On fixed price contracts, the Company excludes any unfunded portion.

Over time, as partially funded contracts become fully funded, the

Company will add the additional funding to its backlog.

The backlog is subject to change for various reasons, including possible cancellation

of orders, change orders, terms of the contracts and other factors beyond the Company’s control.

Accordingly, the backlog is not

necessarily indicative of future revenues or profits (losses) which may be realized when the results of such contracts are reported.

Company believes that its liquidity is adequate to meet its short-term operating and investment needs through at least March 17, 2026

Approximately 64% of the backlog, as of July 31, 2025, is expected to be realized in the next twelve months.

excludes from backlog any contracts or awards for which it has not received authorization to proceed.

On fixed price contracts, the Company

excludes any unfunded portion.

Over time, as partially funded contracts become fully funded, the Company will add the additional funding

to its backlog.

The backlog is subject to change for various reasons, including possible cancellation of orders, change orders, terms

of the contracts and other factors beyond the Company’s control.

Accordingly, the backlog is not necessarily indicative of future

revenues or profits (losses) which may be realized when the results of such contracts are reported.

Company believes that its liquidity is adequate to meet its short-term operating and investment needs through at least September 15,

2026 and its long-term operation and investment needs for the foreseeable future thereafter.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements