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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-20 · 149 added, 78 removed, 65 unchanged (78% of the section changed)

Controls and Procedures

In 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 Act).

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

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.

All 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.

We have assessed the effectiveness of our internal controls over financial reporting as of December 31, 2023.

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, 2023, our internal control over financial reporting was effective.

Changes in Internal Controls

There 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.

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.

have assessed the effectiveness of our internal controls over financial reporting as of December 31, 2024.

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, 2024, 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

10b5-1 Trading Plans

the three months ended December 31, 2024, 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

Information 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 15, 2024 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023, the end of our fiscal year, and said portions of the proxy statement are incorporated herein by reference.

The company has adopted a code of conduct applicable to all officers, directors, and employees.

A copy of this code of conduct will be provided to any person, without charge, upon request from Nortech c/o Chief Financial Officer 7550 Meridian Circle N # 150, Maple Grove, MN 55369.

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 14, 2025 to be filed with the Securities and Exchange Commission within 120 days

after December 31, 2024, 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 proxy statement relating to its Annual Meeting of Shareholders to be held May 15, 2024 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023, the end of our fiscal year, and said portions of the proxy statement 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 14, 2025 to be filed with the Securities and Exchange Commission within 120 days after December

31, 2024, 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

Information 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 15, 2024 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023, the end of our fiscal year, and said portions of the proxy statement are incorporated herein by reference.

Information 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 15, 2024 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023, the end of our fiscal year, and said portions of the proxy statement are incorporated herein by reference.

The following table provides information about our equity compensation plans (including individual compensation arrangements) as of December 31, 2023.

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 14, 2025 to be filed with the Securities and Exchange Commission

within 120 days after December 31, 2024, 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 14, 2025 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, 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

16 unchanged sentences

Equity compensation plans not approved by security holders

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

Represents common shares remaining available for issuance under the 2017 Plan of 67,423.

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

common shares remaining available for issuance under the 2017 Plan of 146,782.

Certain Relationships and Related Transactions, and Director Independence

The 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 15, 2024 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2023, the end of our fiscal year, and said portions of the proxy statement are incorporated herein by reference.

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 14, 2025 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, the end of our

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

Principal Accountant Fees and Services

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 14, 2025 to be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, the end of our

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

Exhibits and Financial Statements Schedules

Consolidated Financial Statements - Consolidated Financial Statements and related Notes are included in Part II, Item 8, and are identified in the Index on Page 25.

Consolidated Financial Statement Schedule - The following financial statement schedule and the Auditors' report thereon is included in this Annual Report on Form 10-K:

All schedules are omitted because it is not required information or the information is presented in the consolidated financial statements or related notes.

The following exhibits are incorporated herein by reference:

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

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.

7 unchanged sentences

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).

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)

3 unchanged sentences

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 field March 5, 2024).

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

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).**

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.*

First Amendment to Employment Agreement with Jay D.

Miller dated March 27, 2025.*

First Amendment to Employment Agreement with Andrew D.

LaFrence dated March 28, 2025.*

First Amendment to Employment Agreement with John Lindeen dated March 28, 2025.*

Policy on Insider Trading*

Subsidiaries of Nortech Systems Incorporated*

3 unchanged sentences

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*

Financial statements from the annual report on Form 10-K for the year ended December 31, 2023, 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.*

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

Filed electronically herewith.

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

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

March 20, 2024

President and Chief Executive Officer

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.

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, 2024, 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

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 31, 2025

President and Chief Executive Officer (principal executive officer) and Director

/s/ Andrew D.

and Chief Executive Officer (principal executive officer) and Director

March 31, 2025

Chief Financial Officer (principal financial and accounting officer)

Financial Officer (principal financial and accounting officer)

March 31, 2025

4 unchanged sentences

McManus, Director

/s/ Steven J.

March 31, 2025

Rosenstone, Director

/s/ Amy Fredregill

Sen, Director

Amy Fredregill

March 31, 2025

Amy Fredregill, Director

/s/ Dan Sachs

Fredregill, Director

March 31, 2025

Dan Sachs, Director

Sachs, Director

March 31, 2025

Peris, Director

INDEX TO EXHIBITS

DESCRIPTIONS OF EXHIBITS

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

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 3.2 to Form 10-K filed on April 1, 2019)

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)

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).

Stock Incentive Plan approved by shareholders May 3, 2017 (incorporated by reference to Exhibit A to the Definitive Proxy Statement

filed March 22, 2017).**

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).**

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)

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

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).

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)

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).**

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 field March 5, 2024).

Employment Agreement with Andrew D.

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).

Agreement with Andrew D.

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

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

Nortech Systems Incorporated Clawback Policy*

Financial statements from the annual report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL:

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

Filed electronically herewith.

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

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.*

First Amendment to Employment Agreement with Jay D.

Miller dated March 27, 2025.*

First Amendment to Employment Agreement with Andrew D.

LaFrence dated March 28, 2025.*

First Amendment to Employment Agreement with John Lindeen dated March 28, 2025.*

Policy on Insider Trading*

of Nortech Systems Incorporated*

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,

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.*

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, 2024, 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.

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-K

Item 9A. Controls and Procedures