Financial Analysis

NOTE 10 - COMMITMENTS AND CONTINGENCIES Litigation The Company is involved in legal proceedings arising out of the normal course of business, none of which we believe will have a material adverse effect on our business, financial condition or results of operations. Claims made in the ordinary course of business may be covered in whole or in part by insurance.

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The following table disaggregates the Companys net revenue by major source for the years ended September 30, 2025 and 2024: 2025 2024 Equipment sales recognized over time $ 50,980,000 $ 45,786,000 Equipment sales recognized at a point in time 30,715,000 34,798,000 Parts and component sales 27,016,000 26,456,000 Freight revenue 5,591,000 5,172,000 Other 1,135,000 954,000 Net revenue $ 115,437,000 $ 113,166,000 …

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NOTE 6 - INCOME TAXES The provision for income tax expense as of September 30, 2025 and 2024 consisted of the following: Year Ended September 30, 2025 2024 Current: Federal $ 4,645,000 $ 4,718,000 State 446,000 335,000 Total current 5,091,000 5,053,000 Deferred: Federal (442,000 ) 609,000 State (111,000 ) 510,000 Total deferred (553,000 ) 1,119,000 Income tax expense $ 4,538,000 $ 6,172,000 A reconciliation of the federal statutory tax rate to the total tax provision is as follows: Year Ended September 30, 2025 2024 Federal income taxes computed at the statutory rate 21.0 % 21.0 % State income taxes, net of federal benefit 1.2 % 1.2 % Unrecognized tax benefits 3.0 % 5.8 % Research and development tax credit (1.8 %) Foreign-derived intangible income deduction (1.0 %) (0.3 %) Other, net 0.1 % 2.1 % Effective income tax rate 22.5 % 29.8 % Deferred income tax assets and liabilities as of September 30, 2025 and 2024 consisted of the following: September 30, 2025 2024 Deferred Tax Assets: Accrued liabilities and reserves $ 1,347,000 $ 494,000 Allowance for credit losses 97,000 86,000 Inventory 4,942,000 4,700,000 Net operating losses carryforwards 23,000 20,000 Gross Deferred Income Tax Assets 6,409,000 5,300,000 Deferred and Other Tax Liabilities: Unrealized gain on investments (534,000 ) (233,000 ) Property and equipment (1,291,000 ) (1,643,000 ) Gross Deferred and Other Income Tax Liabilities (1,825,000 ) (1,876,000 ) Net Deferred and Other Income Tax Assets $ 4,584,000 $ 3,424, …

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NOTE 9 - LEASES The Company leases certain equipment under non-cancelable operating leases. Future minimum rental payments under these leases at September 30, 2025 are immaterial. Total rental expense for the fiscal years ended September 30, 2025 and 2024 was $64,000 and $47,000, respectively. On August 28, 2020, the Company entered into a three-year operating lease for property related to the manufacturing and warehousing. The lease term was for the period beginning on September 1, 2020 through August 31, 2023. In accordance with ASU 2016-02, Leases (Topic 842), (ASU 2016-02) the Company recorded a right-of-use (ROU) asset totaling $970,000 and related lease liabilities at inception. In March 2023, the Company extended the lease term through August 31, 2024. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $352,000 and related lease liabilities upon extension. In March 2024, the Company extended the lease term through August 31, 2025. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $361,000 and related lease liabilities upon extension. In March 2025, the Company extended the lease term through August 31, 2026 . In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $370,000 and related lease liabilities upon extension. For the year ended September 30, 2025, operating lease costs were $449,000 and cash payments related to these operating leases were $418,000. For the year ended September 30, 2024, operating …

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NOTE 8 - LONG-TERM DEBT AND ARRANGEMENTS WITH FINANCIAL INSTITUTIONS The Company had no long-term debt outstanding at September 30, 2025 or 2024. The Company does not currently require a credit facility. In April 2020, a financial institution issued an irrevocable standby letter of credit (letter of credit) on behalf of the Company for the benefit of one of the Companys insurance carriers. The maximum amount that can be drawn by the beneficiary under the letter of credit is $150,000. The letter of credit expires in February 2026, unless terminated earlier, and can be extended, as provided by the agreement. The Company intends to renew the letter of credit for as long as the Company does business with the beneficiary insurance carrier. The letter is collateralized by restricted cash of the same amount on any outstanding drawings. To date, no amounts have been drawn under the letter of credit. …

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Accounting Pronouncements and Policies Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07) , to enhance disclosures about significant segment expenses for public entities reporting segment information under Accounting Standards Codification (ASC), Segment Reporting (Topic 280) (ASC Topic 280). The amendments require public entities to disclose significant expense categories for each reportable segment, other segment items, the title and position of the chief operating decision-maker, and interim disclosures of certain segment-related information previously required only on an annual basis. The amendments clarify that entities reporting single segments must disclose both the new and existing segment disclosures under ASC Topic 280, and a public entity is permitted to disclose multiple measures of segment profit or loss if certain criteria are met. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 during the year ended September 30, 2025. The adoption of this standard impacted footnote disclosures but did not have a material impact on the Companys consolidated financial statements. Refer to Notes 1 and 12 to the consolidated financi …

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NOTE 7 - RETIREMENT BENEFITS The Company has a voluntary 401(k) employee benefit plan, which covers all eligible, domestic employees. The Company makes discretionary matching contributions subject to a maximum level, in accordance with the terms of the plan. The Company charged approximately $359,000 and $373,000 to expense under the provisions of the plan during the years ended September 30, 2025 and 2024, respectively.

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The Company recognizes revenue under ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The following table disaggregates the Companys net revenue by major source for the quarters and six months ended March 31, 2026 and 2025: Quarter Ended March 31, Six Months Ended March 31, 2026 2025 2026 2025 Equipment sales recognized over time $ 10,591,000 $ 14,116,000 $ 19,886,000 $ 30,947,000 Equipment sales recognized at a point in time 12,932,000 12,121,000 18,836,000 19,709,000 Parts and component sales 8,448,000 8,874,000 15,194,000 15,025,000 Freight revenue 1,354,000 2,588,000 2,928,000 3,333,000 Other 474,000 505,000 532,000 606,000 Net revenue $ 33,799,000 $ 38,204,000 $ 57,376,000 $ 69,620,000 …

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Note 7 Income Taxes Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and primarily consist of taxes currently due, plus deferred taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns using current tax rates. The Company and its domestic subsidiaries file a consolidated federal income tax return. Deferred tax assets and liabilities are measured using the rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse and the credits are expected to be used. The effect on deferred tax assets and liabilities of the change in tax rates is recognized in income in the period that includes the enactment date. All available evidence, both positive and negative, is considered to determine whether, based on the weight of that evidence, the Company is more likely than not to realize the benefit of a deferred tax asset and whether a valuation allowance is needed for some portion or all of a deferred tax asset. No such valuation allowances were recorded as of March 31, 2026 and September 30, 2025. Significant judgment is required in evaluating the Companys uncertain tax position s and determining the Companys provision for taxes. Although the Company believes the reserves for unrecognized tax benefits (UTBs) are reaso …

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Note 9 Leases The Company leases certain equipment under non-cancelable operating leases. Future minimum rental payments under these leases at March 31, 2026 were immaterial. On August 28, 2020, the Company entered into a three-year operating lease for property related to manufacturing and warehousing. The lease term was for the period beginning on September 1, 2020 through August 31, 2023. In accordance with ASU 2016-02, Leases (Topic 842), (ASU 2016-02) the Company recorded a right-of-use (ROU) asset totaling $970,000 and related lease liabilities at inception. In March 2023, the Company extended the lease term through August 31, 2024. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $352,000 and related lease liabilities upon extension. In March 2024, the Company extended the lease term through August 31, 2025. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $361,000 and related lease liabilities upon extension. In March 2025, the Company extended the lease term through August 31, 2026. In accordance with ASU 2016-02, the Company recorded a ROU asset totaling $370,000 and related lease liabilities upon extension. For the quarter and six months ended March 31, 2026, operating lease costs and cash payments related to these operating leases were $115,000 and $229,000, respectively. For the quarter and six months ended March 31, 2025, operating lease costs related to these operating leases were $112,000 and $224,000, respectiv …

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Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), to enhance transparency into income tax disclosures. The amendments require annual disclosure of certain information relating to the rate reconciliation, income taxes paid by jurisdiction, income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign jurisdictions. The amendments also eliminate certain requirements relating to unrecognized tax benefits and certain deferred tax disclosure relating to subsidiaries and corporate joint ventures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its condensed consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (ASU 2024-03), which requires entities to (i) disclose amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depre …

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Note 8 Revenue Recognition and Related Costs The Company recognizes revenue under ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The following table disaggregates the Companys net revenue by major source for the quarters and six months ended March 31, 2026 and 2025: Quarter Ended March 31, Six Months Ended March 31, 2026 2025 2026 2025 Equipment sales recognized over time $ 10,591,000 $ 14,116,000 $ 19,886,000 $ 30,947,000 Equipment sales recognized at a point in time 12,932,000 12,121,000 18,836,000 19,709,000 Parts and component sales 8,448,000 8,874,000 15,194,000 15,025,000 Freight revenue 1,354,000 2,588,000 2,928,000 3,333,000 Other 474,000 505,000 532,000 606,000 Net revenue $ 33,799,000 $ 38,204,000 $ 57,376,000 $ 69,620,000 Revenues from contracts with customers for the design, manufacture and sale of custom equipment are recognized over time when the performance obligation is satisfied by transferring control of the equipment. Control of the equipment transfers over time, as the equipment is unique to the specific contract and thus does not create an asset with an alternative use to the Company. Revenues and costs are recognized in proportion to actual labor costs incurred, as compared with total estimated labor costs expected to be incurred, during the entire contract. All incremental costs related to obtaining a contract are expensed as incurred, as the amortization period is less than one year. Changes to total estimated contract costs or losses, …

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Note 11 Subsequent Events The Company has evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued for potential recognition and disclosure. The Company did not identify any subsequent events that would have required adjustment to or disclosure in the condensed consolidated financial statements other than the event listed below. Change in Control Effective May 1, 2026 (the Change in Control Date), a change in control occurred. On such date, pursuant to multiple assignments, Marc G. Elliott, the Companys President and Chairman of the Board, acquired a majority of the membership interests in E.J. Elliott, LLC, a Nevada limited liability company (the LLC), the sole general partner of E.J. Elliott Family Limited Partnership, a Nevada limited partnership (the LP), as reported in the Companys 8-K filing on May 7, 2026 Departure of Certain Officers; Appointment of Certain Officers: As previously disclosed on May 14, 2026, Eric Mellen, who served as Chief Financial Officer and Treasurer of the Company, provided notice of his decision to retire effective June 10, 2026. The Company has begun a search to consider candidates for the Chief Financial Officer role. In the interim, the Company has appointed Raymond Cole as the Companys Interim Chief Financial Officer, effective June 1, 2026. …

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