Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our operations and financial condition should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the "safe harbor" provisions under section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Act of 1995. We use forward-looking statements in our description of our plans and objectives for future operations and assumptions underlying these plans and objectives. Forward-looking terminology includes the words "may", "expects", "believes", "anticipates", "intends", "forecasts", "projects", or similar terms, variations of such terms or the negative of such terms. These forward-looking statements are based on management's current expectations and are subject to factors and uncertainties which could cause actual results to differ materially from those described in such forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Form 10-Q to reflect any change in our expectations or any changes in events, conditions or circumstances on which any forward-looking statement is based. Factors which could cause such results to differ materially from those described in the forward-looking statements include those set forth under "Item. 1 Description of Business - Risk Factors" and elsewhere in or incorporated by reference into our Annual Report on Form 10-K for the year ended March 31, 2026.

BUSINESS OVERVIEW

The Company is a technology-based developer and manufacturer of diversified lines of products and derives revenue from the production and sale of electronics for medical devices and other applications; environmentally safe chemical products for industrial, medical and cosmetic uses; and, research, development, regulatory and engineering services. The Company has increased internal research and development by utilizing their engineering resources to advance their own proprietary medical device technologies.

The Company is a corporation that was organized under the laws of the State of Delaware on November 24, 1969. Our operations are conducted through ADM and its subsidiary Sonotron.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2025 AS COMPARED TO JUNE 30, 2024.

For the three months ended June 30, 2025
		Chemical				Electronics				Engineering				Total
Revenue		$	335,060			$	514,682			$	123,933			$	973,675
Cost of Sales			203,303				241,668				47,411				492,382
Gross Profit			131,757				273,014				76,522				481,293
Gross Profit Percentage			39	%			53	%			62	%			49	%
Operating Expenses			126,500				197,193				48,366				372,059
Operating Income			5,257				75,821				28,156				109,234
Other income (expenses)			74,765				116,547				28,588				219,900
Income before provision from income taxes		$	80,022			$	192,368			$	56,744			$	329,134

For the three months ended June 30, 2024
		Chemical				Electronics				Engineering				Total
Revenue		$	319,658			$	411,166			$	127,021			$	857,845
Cost of Sales			114,594				160,098				62,250				336,942
Gross Profit			205,064				251,068				64,771				520,903
Gross Profit Percentage			64	%			61	%			51	%			61	%
Operating Expenses			131,758				171,447				53,417				356,622
Operating Income			73,306				79,621				11,354				164,281
Other income (expenses)			40,103				52,025				16,259				108,387
Income before provision from income taxes		$	113,409			$	131,646			$	27,613			$	272,668

Variance
		Chemical				Electronics				Engineering				Total
Revenue		$	15,402			$	103,516			$	(3,088	)		$	115,830
Cost of Sales			88,709				81,570				(14,839	)			155,440
Gross Profit			(73,307	)			21,946				11,751				(39,610	)
Gross Profit Percentage			-25	%			-8	%			11	%			-11	%
Operating Expenses			(5,258	)			25,746				(5,051	)			15,437
Operating Income			(68,049	)			(3,800	)			16,802				(55,047	)
Other income			34,662				64,522				12,329				111,513
Income (loss) before benefit from income taxes		$	(33,387	)		$	60,722			$	29,131			$	56,466

Revenues for the three months ended June 30, 2025, increased by $115,830 compared to the same period in 2024. The increase was driven by a $15,402 rise in the Chemical segment and a $103,516 increase in the Electronics segment, partially offset by a $3,088 decline in the Engineering segment.

Gross profit for the three months ended June 30, 2025, decreased by $39,610. This decrease was primarily due to a $73,307 decline in the Chemical segment offset by increases of $21,946 in the Electronics segment and a $11,751 increase in the Engineering segment.

Operating expenses for the three months ended June 30, 2025, increased by $15,437, reflecting an increase of $25,746 in the Electronics segment offset by decreases of $5,258 in the Chemical segment, and $5,051 in the Engineering segment.

Operating income (loss) for the three months ended June 30, 2025, declined by $55,047 compared to the prior year. This was primarily due to a $16,802 increase in the Engineering segment offset by declines of $68,049 in the Chemicals segment and a $3,800 decline in the Electronics segment.

Other income (expenses) for the three months ended June 30, 2025, increased by $111,513, primarily due to an unrealized gain in investments of $225,750 coupled with interest income of $1,821 and offset with $7,671 of interest and finance costs.

Income before benefit from income taxes for the three months ended June 30, 2025, increased by $56,466.

We are highly dependent upon certain customers. During the three months ended June 30, 2025, two customers accounted for 48% of our net revenue. Net revenues from foreign customers for the three months ended June 30, 2025 was $136,415 or 14%.

During the three months ended June 30, 2024, three customers accounted for 78% of our net revenue. Net revenues from foreign customers for the three months ended June 30, 2024 was $118,281 or 14%.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2025, we had cash and cash equivalents of $369,790 as compared to $469,365 at March 31, 2024. The $13,179 decrease was primarily the result of cash used in operations during the three-month period in the amount of $14,800, cash provided by investing of $-0- and cash provided in financing activities of $1,621. Our cash will continue to be used for increased marketing costs, and increased production labor costs all in an attempt to increase our revenue, as well as increased expenditures for our internal R&D. We expect to have enough cash to fund operations for the next twelve months.

Below is a summary of our cash flow for the three-month ending periods indicated:

		June 30, 2025				June 30, 2024
Net cash used in operating activities		$	(14,800	)		$	(59,146	)
Net cash provided by (used in) investing activities			-				-
Cash flows provided (used) in financing activities:			1,621				(8,530	)
Net decrease in cash and cash equivalents		$	(13,179	)		$	(67,676	)
Cash and cash equivalents - beginning of period		$	382,969			$	537,041
Cash and cash equivalents - end of period		$	369,790			$	469,365

Future Sources of Liquidity:

We expect that growth with profitable customers and continued focus on new customers will enable us to generate cash flows from operating activities during fiscal 2026.

Based on current expectations, we believe that our existing cash and cash equivalents of $369,790 as of June 30, 2025, and other potential sources of cash will be sufficient to meet our cash requirements. Our ability to meet these requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

OPERATING ACTIVITIES

Net cash used by operating activities was $(14,800) for the three months ended June 30, 2025, as compared to net cash used by operating activities of $(59,146) for the three months ended June 30, 2024. The cash used during the three months ended June 30, 2025 was primarily due to net income of $327,634, a decrease in net operating assets of $101,323, coupled by a decrease in net operating liabilities of $73,018, write-off of inventories of $14,905, and amortization of $1,741, credit recoveries of$14,917, unrealized gain of $225,750, non-cash interest of $3,810 and amortization of right of use asset of $22,284.

INVESTING ACTIVITIES

There were no Investing activities during the three months ended June 30, 2025.

FINANCING ACTIVITIES

For the three months ended June 30, 2025, net cash provided by financing activities was $1,621 due to net borrowing and payments in the line of credit of $2,517 coupled repayments on the PPP loan of $(896).

OFF BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.