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Item 9A. Controls and Procedures

2026-04-15 compared with 2008-05-13 · 207 added, 127 removed, 17 unchanged (95% of the section changed)

Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

In accordance with Rule 13a-15(b) of

the Securities Exchange Act of 1934 (the "Exchange Act"), 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 President and Chief Executive Officer and the Chief Financial Officer, the effectiveness of the design and operation of the Company's disclosure controls and procedures

(as defined in Rule 13a-15(e) under the Exchange Act).

Based upon their evaluation of these disclosure controls and procedures, the President and Chief Executive Officer and the

Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the date of such evaluation in ensuring that information required to be disclosed in the

Company's Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to management, including the Company's

President and Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control.

There was no change in the Company's internal control over financial reporting

that occurred during the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, the Company's internal control

over financial reporting.

Management's Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control system was

designed to provide reasonable assurance to management and the board of directors regarding the effectiveness of our internal control processes over the preparation and fair presentation of published

financial statements.

accordance with Rule 13a-15(b) of the Exchange Act, 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 Chief Executive Officer and Chief Financial Officer, the effectiveness

of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange

These controls and procedures are designed to ensure that information required to be disclosed in the Company’s Exchange

Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to management,

including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding

required disclosure.

Based upon their evaluation of these disclosure controls and procedures as of the date of the evaluation, the Chief

Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective.

Management ’ s

Annual Report on Internal Control Over Financial Reporting

of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control

system was designed to provide reasonable assurance to management and the board of directors regarding the effectiveness of our internal

control processes over the preparation and fair presentation of published financial statements.

internal control systems, no matter how well designed, have inherent limitations.

Therefore, even those systems determined effective can provide only reasonable assurance with

respect to financial statement preparation and presentation.

Therefore, even those systems determined effective

can provide only reasonable assurance with respect to financial statement preparation and presentation.

have assessed the effectiveness of our internal controls over financial reporting as of December 31, 2025.

In making this assessment, we used the criteria set forth by the

Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal ControlIntegrated Framework.

Based on our assessment, we believe that, as of December 31, 2007,

our internal control over financial reporting is effective based on those criteria.

annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting.

report was not subject to attestation by the Company's independent registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide

only management's report in this annual report.

In making this assessment,

we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated

Framework of 2013.

Based on our assessment, we concluded that, as of December 31, 2025, our internal control over financial reporting

was effective.

in Internal Controls

was no change in the Company’s internal control over financial reporting that occurred during our most recent quarter that has

materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding the directors and executive officers of the Registrant will be included in the Registrant's 2007 proxy statement to be filed with the

Securities and Exchange Commission not later than April 30, 2008 and said portions of the proxy statement are incorporated herein by reference.

10b5-1 Trading Plans

the three months ended December 31, 2025, none of the Company’s directors or Section 16 officers adopted , modified or terminated

any “Rule 10b5-1 trading arrangements” or any “non-Rule 10b5-1 trading arrangements” (in each case, as defined

in Item 408 of Regulation S-K).

Directors, Executive Officers and Corporate Governance

regarding the directors and executive officers of the Registrant will be included in the Registrant’s proxy statement relating

to its Annual Meeting of Shareholders to be held May 13, 2026 to be filed with the Securities and Exchange Commission within 120 days

after December 31, 2025, the end of our fiscal year, and said portions of the proxy statement are incorporated herein by reference.

Board has adopted a Code of Business Conduct and Ethics (“Code of Conduct”) that applies to all of our officers, directors

and employees.

We have posted a copy of our Code of Conduct on our website at www.nortechsys.com.

We intend to satisfy the disclosure

requirements under Item 5.05 of Form 8-K regarding amendments to, or waivers from, the Code of Conduct by posting such information on

We are not including the information contained on our website as part of, or incorporating it by reference into, this Annual

Executive Compensation

Information regarding executive compensation of the Registrant will be included in the Registrant's 2007 proxy statements to be filed with the Securities and

Exchange Commission not later than April 30, 2008 and said portions of the proxy statement are incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information regarding security ownership of certain beneficial owners and management of the Registrant will be included in the Registrant's 2007 proxy statements

to be filed with the Securities and Exchange Commission no later than April 30, 2008 and said portions of the proxy statements are incorporated herein by reference.

regarding executive compensation plans (including individual compensation arrangements) as of the end of the last fiscal year, on two categories of equity compensation plans

(that is, plans that have been approved by security holders and plans that have not been approved by security holders) will be included in the Registrant's 2007 proxy statements to be filed with the

Securities and Exchange

Commission no later than April 30, 2008 and said portions of the proxy statements are incorporated herein by reference.

regarding executive compensation of the Registrant will be included in the Registrant’s proxy statement relating to its Annual

Meeting of Shareholders to be held May 13, 2026 to be filed with the Securities and Exchange Commission within 120 days after December

31, 2025, the end of our fiscal year, and said portions of the proxy statement are incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

regarding security ownership of certain beneficial owners and management of the Registrant will be included in the Registrant’s

proxy statement relating to its Annual Meeting of Shareholders to be held May 13, 2026 to be filed with the Securities and Exchange Commission

within 120 days after December 31, 2025, the end of our fiscal year, and said portions of the proxy statement are incorporated herein

by reference.

regarding executive compensation plans (including individual compensation arrangements) as of the end of the last fiscal year, on two

categories of equity compensation plans (that is, plans that have been approved by security holders and plans that have not been approved

by security holders) will be included in the Registrant’s proxy statement relating to its Annual Meeting of Shareholders to be

held May 13, 2026 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2025, the end of our fiscal

year, and said portions of the proxy statement are incorporated herein by reference.

following table provides information about our equity compensation plans (including individual compensation arrangements) as of December

Plan category

securities to be

Number of securities

to be issued upon

the exercise of

options, warrants

and rights(1)

outstanding options,

warrants and rights

Weighted-average

2 unchanged sentences

warrants and rights

available for

future issuance

plans (excluding

securities reflected

Number of securities

remaining available

for future issuance

compensation plans

(excluding securities

reflected in the first

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

(1) Represents

common shares issuable upon the exercise of outstanding options granted under our 1992 Employee Stock Incentive Plan (the "1992 Plan"), the 2003 Stock Option Plan (the

"2003 Plan"), the 2005 Incentive Compensation Plan (the "2005 Plan") and the 2007 FOCUS Incentive Compensation Plan (the "2007 Plan").

(2) Represents

common shares remaining available under the 2005 and 2007 Plans.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is included under the captions "Certain Transactions" and "Executive CompensationCompensation Committee

Interlocks and Insider Participation" in the Proxy Statement and when the Proxy Statement is filed with the Securities and Exchange Commission will be incorporated herein by reference.

common shares issuable upon the exercise of outstanding options granted under the 2017 Incentive Compensation Plan (the 2017 Plan).

common shares remaining available for issuance under the 2017 Plan of 65,136.

Certain Relationships and Related Transactions, and Director Independence

information required by this Item will be included in the Registrant’s proxy statement relating to its Annual Meeting of Shareholders

to be held May 13, 2026 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2025, the end of our

fiscal year, and said portions of the proxy statement are incorporated herein by reference.

Principal Accountant Fees and Services

The information required by this Item is included under the caption "Miscellaneous-Independent Auditor Fees" in the Proxy Statement and, when the Proxy Statement

is filed, will be incorporated herein by reference.

EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS SCHEDULES

Consolidated Financial Statementsconsolidated financial statements and related Notes are included in Part II, Item 8, and are identified in the Index on Page 20.

Consolidated Financial ScheduleThe following consolidated financial statement schedule supporting the consolidated financial statements and the Accountants' report thereon is included in this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firms on Supplementary Information

Consolidated Financial Statements Schedule for the years ended December 31, 2007 and 2006

II Valuation and Qualifying Accounts

other schedules are omitted since they are not applicable, not required, or the required information is included in the financial statements or notes thereto.

following exhibits accompany our Annual Report on Form 10-K for the year ended December 31, 2007.

Consent of McGladrey & Pullen, LLP.

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

information required by this Item will be included in the Registrant’s proxy statement relating to its Annual Meeting of Shareholders

to be held May 13, 2026 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2025, the end of our

fiscal year, and said portions of the proxy statement are incorporated herein by reference.

Exhibits and Financial Statements Schedules

Financial Statements - Consolidated Financial Statements and related Notes are included in Part II, Item 8, and are identified in

the Index on Page 25.

Financial Statement Schedule - The following financial statement schedule and the Auditors’ report thereon is included in this

Annual Report on Form 10-K:

schedules are omitted because it is not required information, or the information is presented in the consolidated financial statements

or related notes.

following exhibits are incorporated herein by reference:

of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No.

1 to Form S-1 filed July 16, 1996 (File No.

Bylaws (incorporated by reference to Exhibit 3.2 to Form 10-K filed on April 1, 2019)

Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015)

Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd.

(incorporated by reference to Form 10-K filed March 22, 2016).

2017 Stock Incentive Plan approved by shareholders May 3, 2017 (incorporated by reference to Exhibit A to the Definitive Proxy Statement filed March 22, 2017).**

Lease Agreement dated February 21, 2018 by and between Manufacturing Assembly Solutions of Monterrey, Inc., a wholly owned Mexican subsidiary of the Company, and OPERADORA STIVA, S.A.

(incorporated by reference to Exhibit 10.1 to Form 8-K filed February 27, 2018)

Employment Agreement with John Lindeen dated September 9, 2019 (incorporated by reference to Exhibit 10.2 to Form 8-K filed September 11, 2019).**

First Amendment to Lease Agreement dated September 17, 2018 between the Company and AR Meridian Circle Owner, LLC, as successor to LSOP 3 MN 3, LLC.

(incorporated by reference to Exhibit 10.21 to Form 10-K filed March 19, 2020).

Lease Agreement between the Company and Essjay Investment Company, LLC dated August 27, 2020 relating to the Company’s Bemidji facility (incorporated by reference to Exhibit 10.1 to Form 8-K filed September 1, 2020)

Lease Agreement between the Company and Essjay Investment Company, LLC dated August 27, 2020 relating to the Company’s Mankato facility (incorporated by reference to Exhibit 10.2 to Form 8-K filed September 1, 2020)

Employment Agreement with Jay D.

Miller dated February 27, 2022 (incorporated by reference to Exhibit 10.1 to Form 8-K filed March 3, 2022).**

Employment Agreement with Andrew D.

LaFrence dated December 1, 2023 (incorporated by reference to Exhibit 10.1 to Form 8-K filed December 5, 2023).**

Credit Agreement dated as of February 29, 2024, by and between Nortech Systems Incorporated and Bank of America, N.A.

(incorporated by reference to Exhibit 10.1 to Form 8-K filed March 5, 2024).

Second Amendment to Lease dated 15 th day of May, 2024 by and between Sri Management and Consulting LLC, a Minnesota limited liability company as agent for the property owner and Nortech Systems Incorporated, a Minnesota corporation (incorporated by reference to Exhibit 10.1 to Form 8-K filed May 16, 2024)

Amendment No.

1 to Credit Agreement, Waiver, and Consent by and between Nortech Systems Incorporated and Bank of America, N.A.

dated March 27, 2025 (incorporated by reference to Exhibit 10.12 to Form 10-K filed March 31, 2025).

First Amendment to Employment Agreement with Jay D.

Miller dated March 27, 2025 (incorporated by reference to Exhibit 10.13 to Form 10-K filed March 31, 2025).**

First Amendment to Employment Agreement with Andrew D.

LaFrence dated March 28, 2025 (incorporated by reference to Exhibit 10.14 to Form 10-K filed March 31, 2025).**

First Amendment to Employment Agreement with John Lindeen dated March 28, 2025 (incorporated by reference to Exhibit 10.15 to Form 10-K filed March 31, 2025).**

Amendment No.

2 to Credit Agreement by and between Nortech Systems Incorporated and Bank of America, N.A.

dated May 14, 2025 (incorporated by reference to Exhibit 10.16 to Form 10-Q filed May 14, 2025).

Amendment No.

3 to Credit Agreement by and between Nortech Systems Incorporated and Bank of America, N.A.

dated July 29, 2025 (incorporated by reference to Exhibit 10.1 to Form 8-K filed August 1, 2025).

Waiver and Amendment No.

4 to Credit Agreement dated as of February 27, 2026, by and between Nortech Systems Incorporated and Bank of America, N.A.

(incorporated by reference to Exhibit 10.1 to Form 8-K filed March 6, 2026).

Credit Agreement dated as of March 20, 2026 by and between Nortech Systems Incorporated and Associated Bank, National Association (incorporated by reference to Exhibit 10.1 to Form 8-K filed March 23, 2026.

Policy on Insider Trading (incorporated by reference to Form 10-K filed March 31, 2025).

Subsidiaries of Nortech Systems Incorporated*

Consent of Baker Tilly US, LLP*

Certification of the Chief Executive Officer and President pursuant to Rule 13a-20(a) and Rule 15d-20(a), promulgated under the Securities Exchange Act of 1934, as amended.*

Certification of the Chief Financial Officer pursuant to Rule 13a-20(a) and Rule 15d-20(a), promulgated under the Securities Exchange Act of 1934, as amended.*

Certification of the Chief Executive Officer and Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

following exhibits are incorporated by reference to exhibits accompanying our Annual Report on Form 10-K for the year ended December 31, 2006.

Sixth Amendment to amended and restated Credit and Security Agreement, Amended and Restated Revolving Note between the Company and Wells Fargo Bank Minnesota National Association.

Seventh Amendment to amended and restated Credit and Security Agreement, Amended and Restated Revolving Note between the Company and Wells Fargo Bank Minnesota National Association.

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.

NORTECH SYSTEMS INCORPORATED

/s/ Richard G.

Wasielewski Richard G.

Chief Financial Officer and

Principal Accounting Officer

/s/ Michael J.

Degen Michael J.

President, Chief Executive

Officer and Director

to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the registrant and in the capacities and on the dates indicated have signed this

/s/ Michael J.

Degen Michael J.

President, Chief Executive

Officer and Director

/s/ Myron Kunin Myron Kunin

Chairman and Director

/s/ Richard W.

Perkins Richard W.

Perkins, Director

Trent Riley C.

Trent Riley, Director

/s/ Ken Larson Ken Larson, Director

INDEX TO EXHIBITS

DESCRIPTIONS OF EXHIBITS

Consent of McGladrey & Pullen, LLP

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.

Certification of the Chief Executive Officer and President and Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

Nortech Systems Incorporated Clawback Policy (incorporated by reference to Exhibit 97.1 to Form 10-K filed March 20, 2024)

statements from the annual report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL:

(i) Consolidated Balance

Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Cash Flows,

and (iv) the Notes to Consolidated Financial Statements.*

Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

electronically herewith.

contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate

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.

Systems Incorporated

March 26, 2026

President and Chief Executive Officer

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.

March 26, 2026

and Chief Executive Officer (principal executive officer) and Director

March 26, 2026

Financial Officer (principal financial and accounting officer)

March 26, 2026

Kunin, Chairman and Director

March 26, 2026

Kruse, Director

March 26, 2026

McManus, Director

March 26, 2026

Sen, Director

Amy Fredregill

March 26, 2026

Fredregill, Director

March 26, 2026

Peris, Director