Financial Analysis

NOTE 5 LINE OF CREDIT On June 15, 2018, the Company obtained an unsecured revolving line of credit, with a limit per annum of $400,000. The line expires May 15, 2026, renewing automatically every year. The Company is required to make monthly interest payments, at a rate of 7.37 % and 8.87% as of March 31, 2026 and 2025, respectively. Any unpaid principal will be due upon maturity. As of March 31, 2026 and 2025, the outstanding balances were $379,446 and $377,161, respectively. …

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Twelve Months Ended March 31, 2026 2025 Net Revenue in the US Chemical $ 622,378 $ 745,730 Electronics 1,838,152 1,526,236 Engineering 349,347 584,167 2,809,877 2,856,133 Net Revenue outside the US Chemical 537,205 340,977 Electronics - - Engineering - - 537,205 340,977 Total Revenues $ 3,347,082 $ 3,197,110

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NOTE 11 - INCOME TAXES The Company accounts for income taxes under ASC 740, Income Taxes , which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities. Income tax expense Income tax expense (benefit) from continuing operations for the years ended March 31,2026, and 2025 consisted of the following: March 31, 2026 2025 Current: Federal $ 0 $ 0 State 1,500 1,500 Foreign 0 0 Deferred: Federal 0 0 State 0 0 Foreign 0 0 Total income tax expense $ 1,500 $ 1,500 Deferred income taxes Deferred tax assets and liabilities at March 31, 2026, and 2025 consisted of the following: March 31, 2026 2025 Deferred tax assets: Allowance for doubtful accounts $ 255,478 $ 109,491 Federal net operating loss carryforward 318,661 303,674 State net operating loss carryforward 212,640 206,440 Federal tax credit carryforwards 316,772 316,772 State tax credit carryforwards 45,366 45,366 Stock Compensation 42,715 42,715 Depreciation Federal 0 33,466 Depreciation State 0 8,739 Total deferred tax assets 1,191,632 1,066,663 Less: valuation allowance (1,191,632 ) (1,066,663 ) Net deferred tax assets 0 0 Deferred tax liabilities: Depreciation - Federal (32,131 ) 0 Depreciation State (7,424 ) 0 Total deferred tax liabilities (39,555 ) 0 Less: valuation allowance 39,555 0 Net deferred tax liability $ 0 $ 0 The valuation allowance increased by $85,414 duri …

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NOTE 14 LEGAL PROCEEDINGS We are involved, from time to time, in litigation and proceedings arising out of the ordinary course of business. There are no pending material legal proceedings or environmental investigations to which we are a party or to which our property is subject. …

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NOTE 6 - PAYCHECK PROTECTION PROGRAM LOAN In May 2020, the Company obtained funding through the Small Business Administration (SBA) Paycheck Protection Program (PPP) of $381,000. In February 2021, a second PPP loan was obtained in the amount of $332,542, for a total of $713,542. The loans will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities, with at least 60% being used for payroll. The Company did use the funds for these expenses during the year ended March 31, 2021. The Company applied for loan forgiveness of both PPP loans. On September 7, 2021, the Company received from the SBA for $361,275 of PPP loan forgiveness. On December 21, 2021, The Company received approval from the SBA for $332,542 of PPP loan forgiveness on the second loan. A total of $693,817 was recorded as Forgiveness of Paycheck Protection Program loan in the accompanying statements of operations for the year ended March 31, 2022. The unforgiven portion of the first PPP loan is $19,725, which was converted to a term loan payable in equal installments of principal plus interest at 1% with a maturity date of May 15, 2025. No collateral or personal guarantees are required for the loan. As of March 31, 2026 and 2025, the outstanding balance was $-0- and $896, respectively. …

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NEW ACCOUNTING STANDARDS In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance affects entities holding financial assets and net investments in leases that are not measured at fair value through net income. The standard replaces the incurred loss model with the current expected credit loss (CECL) model, which requires organizations to measure all expected credit losses for financial instruments over their contractual life at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted this standard effective April 1, 2024. The adoption of this standard did not have a material impact on the Companys financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance enhances the transparency of income tax disclosures by requiring disaggregated information about a reporting entitys effective tax rate reconciliation and the jurisdictions in which income taxes are paid. The Company adopted this guidance effective April 1, 2024. The Company has applied the provisions of this ASU prospectively, and the adoption has resulted in expanded disclosures in Note 11 to the financial statements. In March 2024, the FASB issued ASU 2024-01, CompensationStock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awar …

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NOTE 13 401(k) RETIREMENT PLAN The Company sponsors a defined contribution 401(k) Retirement Plan (the Plan) for its eligible employees. Employees become eligible to participate in the Plan upon meeting certain age and service requirements. Employees may contribute up to the maximum amount allowed by law on a pre-tax basis. The Plans investments are recorded at fair value. As of March 31, 2026, Plan assets were diversified across various investment options, including equity funds, fixed income funds, and cash equivalents. During the years ended March 31, 2026 and 2025 the Company made matching contributions of $24,768 and $24,084. There were no significant changes to the Plans provisions during the year. …

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NOTE 10 - DISAGGREGATED NET REVENUES The following tables show the Company's net revenues disaggregated by reportable segment and by product and service type: Twelve Months Ended March 31, 2026 2025 Net Revenue in the US Chemical $ 622,378 $ 745,730 Electronics 1,838,152 1,526,236 Engineering 349,347 584,167 2,809,877 2,856,133 Net Revenue outside the US Chemical 537,205 340,977 Electronics - - Engineering - - 537,205 340,977 Total Revenues $ 3,347,082 $ 3,197,110

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NOTE 9 - SEGMENT INFORMATION Information about segments is as follows: Chemical Electronics Engineering Total Twelve months ended March 31, 2026 Revenue from external customers $ 1,159,583 $ 1,838,152 $ 349,347 $ 3,347,082 Segment operating income $ (177,969 ) $ (10,717 ) $ 29,589 $ (159,097 ) Twelve months ended March 31, 2025 Revenue from external customers $ 1,086,707 $ 1,526,236 $ 584,167 $ 3,197,110 Segment operating income $ (132,305 ) $ (69,029 ) $ 107,310 $ (94,024 ) Total assets at March 31, 2026 $ 630,004 $ 1,005,424 $ 191,084 $ 1,826,512 Total assets at March 31, 2025 $ 700,476 $ 1,038,106 $ 389,289 $ 2,127,871

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The financial statements include the accounts of ADM Tronics Unlimited, Inc. (the Company). Sonotron Medical Systems, Inc. (SMI), a formerly wholly owned subsidiary of ADM, was dissolved during the fiscal year ended March 31, 2026. The balances of SMI were merged into ADM prior to dissolution. As a wholly owned subsidiary, no adjustment to prior period comparative amounts was required. USE OF ESTIMATES These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and contingent liabilities. Significant estimates made by management include expected economic life and value of our deferred tax assets and related valuation allowance, write down of inventory, impairment of long-lived assets, allowance for doubtful accounts, and warranty reserves. Actual amounts could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on t …

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NOTE 15 SUBSEQUENT EVENTS We evaluated all subsequent events from the date of the balance sheet through the issuance date of these financial statements and determined that there are no events or transactions occurring during the subsequent event reporting period which require recognition or disclosure in the financial statements. …

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