Financial Analysis

7. INCOME TAXES We recorded an income tax provision of $ 0.3 million and an income tax benefit of $ 1.0 million for the third quarter of fiscal 2026 and the third quarter of fiscal 2025, respectively. The effective income tax rate during the third quarter of fiscal 2026 was a tax provision of 25.3 % as compared to a tax benefit of 33.4 % during the third quarter of fiscal 2025. The difference in rate during the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025 reflects changes in our geographical distribution of income (loss) and the nonrecurring healthcare asset sale loss in the third quarter of fiscal 2025. The 25.3 % effective income tax rate differs from the federal statutory rate of 21 % as a result of our geographical distribution of income (loss) and the impact of permanent items. We recorded an income tax provision of $ 0.6 million and an income tax benefit of $ 1.3 million for the first nine months of fiscal 2026 and the first nine months of fiscal 2025, respectively. The effective income tax rate during the first nine months of fiscal 2026 was a tax provision of 19.5 % as compared to a tax benefit of 36.5 % during the first nine months of fiscal 2025. The difference in rate during the first nine months of fiscal 2026 as compared to the first nine months of fiscal 2025 reflects changes in our geographical distribution of income (loss) and the nonrecurring healthcare asset sale loss in the third quarter of fiscal 2025. The 19.5 % effective i …

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11. RISKS AND UNCERTAINTIES Our business and the companies with which we do business are subject to risks and uncertainties caused by factors beyond our control. Such factors include economic pressures related to inflation, rising interest rates, economic weakness or recession, as well as geopolitical conflict and public health, rising costs of raw materials, tightening labor markets, and pandemics. These and other similar conditions and events have in the past and could in the future disrupt our operations and could have a material adverse effect on our business, results of operations, cash flows and financial condition.

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6. LEASE OBLIGATIONS The Company leases real and personal property in the normal course of business under various operating leases. The Company uses operating leases for facility space and automobiles. Most of the leased facility space is for sales and general office use. Automobile leases are used throughout the Company. Several leases include renewal clauses which vary in length and may not include specific rent renewal amounts. The Company will revise the value of the right of use assets and associated lease liabilities upon a remeasurement event. The gross amounts of assets and liabilities related to operating leases on February 28, 2026 and May 31, 2025 were as follows (in thousands) : Lease Type February 28, 2026 May 31, 2025 Right of use lease assets, net $ 1,573 $ 2,276 Lease liabilities current 938 1,171 Lease liabilities non-current 635 1,105 The components of lease costs were as follows (in thousands) : Three Months Ended February 28, 2026 March 1, 2025 Consolidated operating lease expense Operating expenses $ 426 $ 386 Nine Months Ended February 28, 2026 March 1, 2025 Consolidated operating lease expense Operating expenses $ 1,265 $ 1,240 The approximate future minimum lease payments under operating leases at February 28, 2026 were as follows (in thousands) : Fiscal Year Operating Leases Remaining 2026 $ 329 2027 777 2028 358 2029 181 2030 5 Total lease payments 1,650 Less imputed interest 77 Net minimum lease payments $ 1,573 The weighted average remaining lease …

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9. SEGMENT INFORMATION In June 2025, the Company reevaluated its operating segments to better align with how the CODM allocates resources and evaluates performance. The key factor in this evaluation was the sale of the majority of assets in the Healthcare segment to DirectMed and continued sale of CT tubes pursuant to an exclusive supply agreement. Accordingly, the Company decided to integrate PMT and Healthcare into one segment, thereby resulting in three reporting segments. The segment results for prior periods were retrospectively recast to reflect the new segment reporting structure. The Company reports its financial performance to its CODM based on the three operating and reportable segments defined as follows: PMT includes the power grid and microwave tube business and RF, Wireless and Power technologies. PMT provides design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair. PMT also offers its customers technical services for both microwave and industrial equipment and continued sale of CT tubes pursuant to an exclusive supply agreement. GES designs and manufactures products for the energy storage market and power management applications. We provide design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair. Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, …

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4. SUMMARY OF ACCOUNTING POLICIES Inventories, net: Our consolidated inventories were stated at the lower of cost and net realizable value, using a weighted-average cost method. Our net inventories include approximately $ 91.5 million of finished goods, $ 11.3 million of raw materials and $ 4.8 million of work-in-progress as of February 28, 2026 , as compared to approximately $ 86.4 million of finished goods, $ 11.5 million of raw materials and $ 4.9 million of work-in-progress as of May 31, 2025. Provisions for obsolete or slow-moving inventories were recorded based upon regular analysis of stock rotation privileges, obsolescence, the exiting of certain markets and assumptions about future demand and market conditions. If future demand changes in the industry or market conditions differ from managements estimates, additional provisions may be necessary. Inventory reserves were $ 7.8 million as of February 28, 2026 and $ 7.6 million as of May 31, 2025 . Intangible Assets: Our intangible assets represent the fair value for customer relationships and technology acquired in connection with prior acquisitions. Intangible assets subject to amortization were as follows (in thousands) : February 28, 2026 May 31, 2025 Gross Amounts: Customer Relationships $ 911 $ 911 Technology 150 150 Total Gross Amounts $ 1,061 $ 1,061 Accumulated Amortization: Customer Relationships $ 681 $ 652 Technology 80 64 Total Accumulated Amortization $ 761 $ 716 Intangible Assets, Net $ 300 $ 345 The amort …

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