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NY 16-0797789 90 Taylor Drive North Tonawanda NY 14120 Address of principal executive offices Registrant's telephone number, including area code 716 694-0800 Common Stock, $.025 par value per share Preferred Stock Purchase Rights TAYD NASDAQ No No Yes Yes Non-accelerated Filer true false false false false 156684000 3225015 Lumsden & McCormick, LLP 130 Buffalo, New York Lumsden & McCormick, LLP 130 Buffalo, New York

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1. Summary of Significant Accounting Policies: Nature of Operations: Taylor Devices, Inc. (the Company) manufactures and sells a single group of very similar products that have many different applications for customers. These similar products are included in one of nine categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, Vibration Dampers, Machined Springs, Custom Shock and Vibration Isolators, and Custom Actuators for use in various types of machinery, equipment and structures, primarily to customers which are located throughout the United States and several foreign countries. The products are manufactured at the Company's sole operating facility in the United States where all of the Company's long-lived assets reside. Management does not track or otherwise account for sales broken down by these categories. The chief operating decision maker is the Chief Executive Officer who assesses performance for the business (and lone segment) and decides how to allocate resources based on net income as reported in a format consistent with the consolidated statements of income included in these consolidated financial statements. The measure of segment assets is as reported on the consolidated balance sheets in these consolidated financial statements. 87% of the Company's 2026 revenue was generated from sales to customers in the United States and 8% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe, Australia, and South America. 79% of the Company's 2025 revenue was generated from sales to customers in the United States and 15% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe, Australia, and South America. Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tayco Realty Corporation (Realty). All inter-company transactions and balances have been eliminated in consolidation. Subsequent Events: The Company has evaluated events and transactions for potential recognition or disclosure in the financial statements through the date the financial statements were issued. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents: The Company includes all highly liquid investments in money market funds in cash and cash equivalents on the accompanying balance sheets. Cash and cash equivalents in financial institutions may exceed insured limits at various times during the year and subject the Company to concentrations of credit risk. Short-Term Investments: At times, the Company invests excess funds in liquid interest earning instruments. Short-term investments at May 31, 2026 and May 31, 2025 include money market funds, U.S. treasury securities and corporate bonds stated at fair value, which approximates cost. Unrealized holding gains and losses would be presented as a separate component of accumulated other comprehensive income, net of deferred income taxes. Realized gains and losses on the sale of investments are determined using the specific identification method. The short-term investments are valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. Accounts Receivable: Accounts receivable are stated at an amount management expects to collect from outstanding balances. Management provides for estimated credit losses through a charge to expense and a credit to a valuation allowance based on its assessment of the current status of individual accounts, historical trends, and forecasted economic conditions. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to the receivable. Inventory: Inventory is stated at the lower of average cost or net realizable value. Average cost approximates first-in, first-out cost. Property and Equipment: Property and equipment is stated at cost net of accumulated depreciation. Depreciation is provided primarily using the straight-line method for financial reporting purposes and accelerated methods for income tax reporting purposes. Maintenance and repairs are charged to operations as incurred; significant improvements are capitalized. Cash Value of Life Insurance: Cash value of life insurance is stated at the surrender value of the contracts. Revenue Recognition: Revenue is recognized (generally at fixed prices) when, or as, the Company transfers control of promised products or services to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts which are, therefore, not distinct. Promised goods or services that are immaterial in the context of the contract are not separately assessed as performance obligations. For contracts with customers in which the Company satisfies a promise to the customer to provide a product that has no alternative use to the Company and the Company has enforceable rights to payment for progress completed to date inclusive of profit, the Company satisfies the performance obligation and recognizes revenue over time (generally less than one year), using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred costs represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material and overhead. Adjustments to cost estimates are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. Other sales to customers are recognized upon shipment to the customer based on contract prices and terms. In the year ended May 31, 2026, 56% of revenue was recorded for contracts in which revenue was recognized over time while 44% was recognized at a point in time. In the year ended May 31, 2025, 68% of revenue was recorded for contracts in which revenue was recognized over time while 32% was recognized at a point in time. Progress payments are typically negotiated for long term projects. Payments are otherwise due once performance obligations are complete (generally at shipment and transfer of title). For financial statement presentation purposes, the Company nets progress billings against the total costs incurred on uncompleted contracts. The asset, “costs and estimated earnings in excess of billings,” represents revenue recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings,” represents billings in excess of revenue recognized. If applicable, the Company recognizes an asset for the incremental material costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year and the costs are expected to be recovered. As of May 31, 2026 and 2025, the Company does not have material incremental costs on any open contracts with an original expected duration of greater than one year, and therefore such costs are expensed as incurred. These incremental costs include, but are not limited to, sales commissions incurred to obtain a contract with a customer. Shipping and Handling Costs: Shipping and handling costs on incoming inventory items are classified as a component of cost of goods sold, while shipping and handling costs on outgoing shipments to customers are classified as a component of selling, general and administrative expenses. The amounts of these costs classified as a component of selling, general and administrative expenses were $231,485 and $239,182 for the years ended May 31, 2026 and 2025. Shipping and handling activities that occur after the customer has obtained control of the product are considered fulfillment activities, not performance obligations. Income Taxes: The provision for income taxes provides for the tax effects of transactions reported in the financial statements regardless of when such taxes are payable. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax and financial statement basis of assets and liabilities. Deferred taxes are based on tax laws currently enacted with tax rates expected to be in effect when the taxes are actually paid or recovered. The Company's practice is to recognize interest related to income tax matters in interest income / expense and to recognize penalties in selling, general and administrative expenses. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at May 31, 2026 and 2025. The Company recorded no interest expense or penalties in its consolidated statements of income during the years ended May 31, 2026 and 2025. The Company believes it is no longer subject to examination by federal and state taxing authorities for years prior to May 31, 2023. Sales Taxes: Certain jurisdictions impose a sales tax on Company sales to nonexempt customers. The Company collects these taxes from customers and remits the entire amount as required by the applicable law. The Company excludes from revenue and expenses the tax collected and remitted. Stock-Based Compensation: The Company measures compensation cost arising from the grant of share-based payments to employees at fair value and recognizes such cost in income over the period during which the employee is required to provide service in exchange for the award. The stock-based compensation expense for the years ended May 31, 2026 and 2025 was $1,637,392 and $1,222,509. New Accounting Standards: In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the effective tax rate reconciliation and income taxes paid by jurisdiction. ASU 2023-09 is effective for our annual periods beginning June 1, 2025. We adopted this standard for the year ended May 31, 2026, and applied the amendments on a prospective basis. Refer to Note 10 for more information. The adoption of this standard did not have a material effect on the financial statements and related disclosures. In November 2024, the FASB issued ASU 2025-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to enhance disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation, and intangible asset amortization) included in certain expense captions presented on the face of the income statement. ASU 2025-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted on a prospective basis for financial statements issued for reporting periods after the forementioned effective date. The Company is currently evaluating the potential effect that the updated standard will have on the financial statements and related disclosures. Other recently issued FASB Accounting Standards Codification (“FASB ASC”) guidance has either been implemented or is not significant to the Company.

Nature of Operations: Taylor Devices, Inc. (the Company) manufactures and sells a single group of very similar products that have many different applications for customers. These similar products are included in one of nine categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, Vibration Dampers, Machined Springs, Custom Shock and Vibration Isolators, and Custom Actuators for use in various types of machinery, equipment and structures, primarily to customers which are located throughout the United States and several foreign countries. The products are manufactured at the Company's sole operating facility in the United States where all of the Company's long-lived assets reside. Management does not track or otherwise account for sales broken down by these categories. The chief operating decision maker is the Chief Executive Officer who assesses performance for the business (and lone segment) and decides how to allocate resources based on net income as reported in a format consistent with the consolidated statements of income included in these consolidated financial statements. The measure of segment assets is as reported on the consolidated balance sheets in these consolidated financial statements. 87% of the Company's 2026 revenue was generated from sales to customers in the United States and 8% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe, Australia, and South America. 79% of the Company's 2025 revenue was generated from sales to customers in the United States and 15% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe, Australia, and South America.

Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tayco Realty Corporation (Realty). All inter-company transactions and balances have been eliminated in consolidation.

Subsequent Events: The Company has evaluated events and transactions for potential recognition or disclosure in the financial statements through the date the financial statements were issued.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents: The Company includes all highly liquid investments in money market funds in cash and cash equivalents on the accompanying balance sheets. Cash and cash equivalents in financial institutions may exceed insured limits at various times during the year and subject the Company to concentrations of credit risk.

Short-Term Investments: At times, the Company invests excess funds in liquid interest earning instruments. Short-term investments at May 31, 2026 and May 31, 2025 include money market funds, U.S. treasury securities and corporate bonds stated at fair value, which approximates cost. Unrealized holding gains and losses would be presented as a separate component of accumulated other comprehensive income, net of deferred income taxes. Realized gains and losses on the sale of investments are determined using the specific identification method. The short-term investments are valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings.

Accounts Receivable: Accounts receivable are stated at an amount management expects to collect from outstanding balances. Management provides for estimated credit losses through a charge to expense and a credit to a valuation allowance based on its assessment of the current status of individual accounts, historical trends, and forecasted economic conditions. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to the receivable.

Inventory: Inventory is stated at the lower of average cost or net realizable value. Average cost approximates first-in, first-out cost.

Property and Equipment: Property and equipment is stated at cost net of accumulated depreciation. Depreciation is provided primarily using the straight-line method for financial reporting purposes and accelerated methods for income tax reporting purposes. Maintenance and repairs are charged to operations as incurred; significant improvements are capitalized.

Cash Value of Life Insurance: Cash value of life insurance is stated at the surrender value of the contracts.

Revenue Recognition: Revenue is recognized (generally at fixed prices) when, or as, the Company transfers control of promised products or services to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts which are, therefore, not distinct. Promised goods or services that are immaterial in the context of the contract are not separately assessed as performance obligations. For contracts with customers in which the Company satisfies a promise to the customer to provide a product that has no alternative use to the Company and the Company has enforceable rights to payment for progress completed to date inclusive of profit, the Company satisfies the performance obligation and recognizes revenue over time (generally less than one year), using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred costs represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material and overhead. Adjustments to cost estimates are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. Other sales to customers are recognized upon shipment to the customer based on contract prices and terms. In the year ended May 31, 2026, 56% of revenue was recorded for contracts in which revenue was recognized over time while 44% was recognized at a point in time. In the year ended May 31, 2025, 68% of revenue was recorded for contracts in which revenue was recognized over time while 32% was recognized at a point in time. Progress payments are typically negotiated for long term projects. Payments are otherwise due once performance obligations are complete (generally at shipment and transfer of title). For financial statement presentation purposes, the Company nets progress billings against the total costs incurred on uncompleted contracts. The asset, “costs and estimated earnings in excess of billings,” represents revenue recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings,” represents billings in excess of revenue recognized. If applicable, the Company recognizes an asset for the incremental material costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year and the costs are expected to be recovered. As of May 31, 2026 and 2025, the Company does not have material incremental costs on any open contracts with an original expected duration of greater than one year, and therefore such costs are expensed as incurred. These incremental costs include, but are not limited to, sales commissions incurred to obtain a contract with a customer.

Shipping and Handling Costs: Shipping and handling costs on incoming inventory items are classified as a component of cost of goods sold, while shipping and handling costs on outgoing shipments to customers are classified as a component of selling, general and administrative expenses. The amounts of these costs classified as a component of selling, general and administrative expenses were $231,485 and $239,182 for the years ended May 31, 2026 and 2025. Shipping and handling activities that occur after the customer has obtained control of the product are considered fulfillment activities, not performance obligations.

Income Taxes: The provision for income taxes provides for the tax effects of transactions reported in the financial statements regardless of when such taxes are payable. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax and financial statement basis of assets and liabilities. Deferred taxes are based on tax laws currently enacted with tax rates expected to be in effect when the taxes are actually paid or recovered. The Company's practice is to recognize interest related to income tax matters in interest income / expense and to recognize penalties in selling, general and administrative expenses. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at May 31, 2026 and 2025. The Company recorded no interest expense or penalties in its consolidated statements of income during the years ended May 31, 2026 and 2025. The Company believes it is no longer subject to examination by federal and state taxing authorities for years prior to May 31, 2023.

Sales Taxes: Certain jurisdictions impose a sales tax on Company sales to nonexempt customers. The Company collects these taxes from customers and remits the entire amount as required by the applicable law. The Company excludes from revenue and expenses the tax collected and remitted.

Stock-Based Compensation: The Company measures compensation cost arising from the grant of share-based payments to employees at fair value and recognizes such cost in income over the period during which the employee is required to provide service in exchange for the award. The stock-based compensation expense for the years ended May 31, 2026 and 2025 was $1,637,392 and $1,222,509.

1637392

1222509

New Accounting Standards: In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the effective tax rate reconciliation and income taxes paid by jurisdiction. ASU 2023-09 is effective for our annual periods beginning June 1, 2025. We adopted this standard for the year ended May 31, 2026, and applied the amendments on a prospective basis. Refer to Note 10 for more information. The adoption of this standard did not have a material effect on the financial statements and related disclosures. In November 2024, the FASB issued ASU 2025-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to enhance disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation, and intangible asset amortization) included in certain expense captions presented on the face of the income statement. ASU 2025-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted on a prospective basis for financial statements issued for reporting periods after the forementioned effective date. The Company is currently evaluating the potential effect that the updated standard will have on the financial statements and related disclosures. Other recently issued FASB Accounting Standards Codification (“FASB ASC”) guidance has either been implemented or is not significant to the Company.

2. Accounts Receivable: <table style="margin:0 auto;border-collapse:collapse;width:347.7pt"><tr><td style="width:220.7pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:55pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.7pt" valign="top">Customers </td><td style="width:55pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:2pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:53pt">4,126,839</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.3pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">6,164,251</kbd> </td></tr> <tr><td style="width:220.7pt" valign="top">Less allowance for estimated credit losses </td><td style="width:55pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:53pt">195,008</kbd> </td><td style="width:4.7pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">564,466</kbd> </td></tr> <tr><td style="width:220.7pt" valign="top"></td><td style="width:55pt;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:2pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:53pt">3,931,831</kbd> </td><td style="width:4.7pt;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">5,599,785</kbd> </td></tr> </table> The Company decreased its allowance for estimated credit losses due to full collection of a $751,000 overdue balance at May 31, 2025. All amounts are expected to be collected within the next fiscal year.

<table style="margin:0 auto;border-collapse:collapse;width:347.7pt"><tr><td style="width:220.7pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:55pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.7pt" valign="top">Customers </td><td style="width:55pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:2pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:53pt">4,126,839</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.3pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">6,164,251</kbd> </td></tr> <tr><td style="width:220.7pt" valign="top">Less allowance for estimated credit losses </td><td style="width:55pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:53pt">195,008</kbd> </td><td style="width:4.7pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">564,466</kbd> </td></tr> <tr><td style="width:220.7pt" valign="top"></td><td style="width:55pt;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:2pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:53pt">3,931,831</kbd> </td><td style="width:4.7pt;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">5,599,785</kbd> </td></tr> </table>

4126839

6164251

195008

564466

3931831

5599785

3. Inventory: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.1pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:68.05pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.1pt" valign="top">Raw materials </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">642,141</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">627,616</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Work-in-process </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">6,697,444</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">7,222,613</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Finished goods </td><td style="width:68.05pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">224,458</kbd> </td><td style="width:4.7pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">286,092</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top"></td><td style="width:68.05pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">7,564,043</kbd> </td><td style="width:4.7pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">8,136,321</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Less allowance for obsolescence </td><td style="width:68.05pt;border-bottom:1pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">35,000</kbd> </td><td style="width:4.7pt;border-bottom:1pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:1pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">23,000</kbd> </td></tr> <tr><td style="width:220.1pt;border-bottom:0.5pt solid #000000" valign="top"></td><td style="width:68.05pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">7,529,043</kbd> </td><td style="width:4.7pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">8,113,321</kbd> </td></tr> </table>

<table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.1pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:68.05pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.1pt" valign="top">Raw materials </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">642,141</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">627,616</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Work-in-process </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">6,697,444</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">7,222,613</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Finished goods </td><td style="width:68.05pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">224,458</kbd> </td><td style="width:4.7pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">286,092</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top"></td><td style="width:68.05pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">7,564,043</kbd> </td><td style="width:4.7pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">8,136,321</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Less allowance for obsolescence </td><td style="width:68.05pt;border-bottom:1pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">35,000</kbd> </td><td style="width:4.7pt;border-bottom:1pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:1pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">23,000</kbd> </td></tr> <tr><td style="width:220.1pt;border-bottom:0.5pt solid #000000" valign="top"></td><td style="width:68.05pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">7,529,043</kbd> </td><td style="width:4.7pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">8,113,321</kbd> </td></tr> </table>

642141

627616

6697444

7222613

224458

286092

7564043

8136321

35000

23000

7529043

8113321

4. Costs and Estimated Earnings on Uncompleted Contracts: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.85pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.85pt" valign="top">Costs incurred on uncompleted contracts </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">9,111,805</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:4pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">12,499,313 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Estimated earnings </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">11,539,013</kbd> </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">13,175,240 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">20,650,818</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">25,674,553 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Less billings to date </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">13,985,655</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">24,696,121 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">6,665,163</kbd> </td><td style="width:4.45pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="margin-left:4pt"></kbd>$ 978,432 </td></tr> </table> Amounts are included in the accompanying balance sheets under the following captions: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.6pt" valign="top"></td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top">2026 </td><td style="width:4.8pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.6pt" valign="top">Costs and estimated earnings in excess of billings </td><td style="width:67.3pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">8,032,246</kbd> </td><td style="width:4.8pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">5,360,499</kbd> </td></tr> <tr><td style="width:220.6pt" valign="top">Billings in excess of costs and estimated earnings </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">1,367,083</kbd> </td><td style="width:4.8pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">4,382,067</kbd> </td></tr> <tr><td style="width:220.6pt" valign="top"></td><td style="width:67.3pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">6,665,163</kbd> </td><td style="width:4.8pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">978,432</kbd> </td></tr> </table> The following summarizes the status of long-term projects in progress as of May 31, 2026 and 2025: <table style="border-collapse:collapse"><tr><td style="width:252pt" valign="top"></td><td style="width:93.6pt;border-bottom:0.5pt solid #000000" valign="top">2026 </td><td style="width:93.6pt;border-bottom:0.5pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:252pt" valign="top">Number of projects in progress </td><td style="width:93.6pt;border-top:0.5pt solid #000000" valign="top">19 </td><td style="width:93.6pt;border-top:0.5pt solid #000000" valign="top">21 </td></tr> <tr><td style="width:252pt" valign="top">Aggregate percent complete </td><td style="width:93.6pt" valign="top">62% </td><td style="width:93.6pt" valign="top">65% </td></tr> <tr><td style="width:252pt" valign="top">Aggregate amount remaining </td><td style="width:93.6pt" valign="top">$10,116,421 </td><td style="width:93.6pt" valign="top">$13,100,204 </td></tr> <tr><td style="width:252pt" valign="top">Percentage of total value invoiced to customer </td><td style="width:93.6pt" valign="top">45% </td><td style="width:93.6pt" valign="top">64% </td></tr> </table> The Company expects to recognize the majority of remaining revenue on all open projects during the May 31, 2027 fiscal year. Revenue recognized during the years ended May 31, 2026 and 2025 for amounts included in billings in excess of costs and estimated earnings as of the beginning of the year amounted to $4,206,000 and $5,601,000.

<table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.85pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.85pt" valign="top">Costs incurred on uncompleted contracts </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">9,111,805</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:4pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">12,499,313 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Estimated earnings </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">11,539,013</kbd> </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">13,175,240 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">20,650,818</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">25,674,553 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Less billings to date </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">13,985,655</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">24,696,121 </kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">6,665,163</kbd> </td><td style="width:4.45pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="margin-left:4pt"></kbd>$ 978,432 </td></tr> </table>

9111805 12499313 11539013 13175240 20650818 25674553 13985655 24696121 6665163 978432 <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.6pt" valign="top"></td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top">2026 </td><td style="width:4.8pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.6pt" valign="top">Costs and estimated earnings in excess of billings </td><td style="width:67.3pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">8,032,246</kbd> </td><td style="width:4.8pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">5,360,499</kbd> </td></tr> <tr><td style="width:220.6pt" valign="top">Billings in excess of costs and estimated earnings </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">1,367,083</kbd> </td><td style="width:4.8pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">4,382,067</kbd> </td></tr> <tr><td style="width:220.6pt" valign="top"></td><td style="width:67.3pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">6,665,163</kbd> </td><td style="width:4.8pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.3pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">978,432</kbd> </td></tr> </table> 8032246 5360499 -1367083 -4382067 6665163 978432 <table style="border-collapse:collapse"><tr><td style="width:252pt" valign="top"></td><td style="width:93.6pt;border-bottom:0.5pt solid #000000" valign="top">2026 </td><td style="width:93.6pt;border-bottom:0.5pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:252pt" valign="top">Number of projects in progress </td><td style="width:93.6pt;border-top:0.5pt solid #000000" valign="top">19 </td><td style="width:93.6pt;border-top:0.5pt solid #000000" valign="top">21 </td></tr> <tr><td style="width:252pt" valign="top">Aggregate percent complete </td><td style="width:93.6pt" valign="top">62% </td><td style="width:93.6pt" valign="top">65% </td></tr> <tr><td style="width:252pt" valign="top">Aggregate amount remaining </td><td style="width:93.6pt" valign="top">$10,116,421 </td><td style="width:93.6pt" valign="top">$13,100,204 </td></tr> <tr><td style="width:252pt" valign="top">Percentage of total value invoiced to customer </td><td style="width:93.6pt" valign="top">45% </td><td style="width:93.6pt" valign="top">64% </td></tr> </table> 19 21 0.62 0.65 10116421 13100204 0.45 0.64 4206000 5601000

5. Maintenance and Other Inventory: <table style="margin:0 auto;border-collapse:collapse;width:356.4pt"><tr><td style="width:218.45pt;border-bottom:0.5pt solid #000000" valign="top"></td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.65pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:218.45pt;border-top:0.5pt solid #000000" valign="top">Maintenance and other inventory </td><td style="width:66.65pt" valign="top">$ 1,865,680 </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top">$ 1,872,931 </td></tr> <tr><td style="width:218.45pt" valign="top">Less allowance for obsolescence </td><td style="width:66.65pt" valign="top">659,684 </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top">765,056 </td></tr> <tr><td style="width:218.45pt" valign="top"></td><td style="width:66.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top">$ 1,205,996 </td><td style="width:4.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top">$ 1,107,875 </td></tr> </table> Maintenance and other inventory represent stock that is estimated to have a product life-cycle in excess of twelve-months. This stock represents certain items the Company is required to maintain for service of products sold, and items that are generally subject to spontaneous ordering. This inventory is particularly sensitive to obsolescence in the near term due to its use in industries characterized by the continuous introduction of new product lines, rapid technological advances and product obsolescence. Therefore, management of the Company has recorded an allowance for potential inventory obsolescence. $318,000 and $107,000 of inventory was disposed of during the years ended May 31, 2026 and 2025. The provision for potential inventory obsolescence was $225,000 and zero for the years ended May 31, 2026 and 2025. The Company continues to rework slow-moving inventory, where applicable, to convert it to product to be used on customer orders.

<table style="margin:0 auto;border-collapse:collapse;width:356.4pt"><tr><td style="width:218.45pt;border-bottom:0.5pt solid #000000" valign="top"></td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.65pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:218.45pt;border-top:0.5pt solid #000000" valign="top">Maintenance and other inventory </td><td style="width:66.65pt" valign="top">$ 1,865,680 </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top">$ 1,872,931 </td></tr> <tr><td style="width:218.45pt" valign="top">Less allowance for obsolescence </td><td style="width:66.65pt" valign="top">659,684 </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top">765,056 </td></tr> <tr><td style="width:218.45pt" valign="top"></td><td style="width:66.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top">$ 1,205,996 </td><td style="width:4.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top">$ 1,107,875 </td></tr> </table> 1865680 1872931 659684 765056 1205996 1107875 318000 107000 225000 0

6. Property and Equipment: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.85pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.85pt" valign="top">Land </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">195,220</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">195,220</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Buildings and improvements </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">10,493,928</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">10,160,842</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Machinery and equipment </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">19,590,503</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">17,950,644</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Office furniture and equipment </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">3,252,655</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">3,193,150</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Autos and trucks </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">91,717</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">91,717</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Land improvements </td><td style="width:67.35pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">662,168</kbd> </td><td style="width:4.45pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">662,168</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">34,286,191</kbd> </td><td style="width:4.45pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">32,253,741</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Less accumulated depreciation </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">21,980,091</kbd> </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">20,179,569</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">12,306,100</kbd> </td><td style="width:4.45pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">12,074,172</kbd> </td></tr> </table> Depreciation expense was $1,904,373 and $1,708,849 for the years ended May 31, 2026 and 2025. The Company has commitments to make capital expenditures of approximately $1,770,000 as of May 31, 2026.

<table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.85pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.85pt" valign="top">Land </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">195,220</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">195,220</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Buildings and improvements </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">10,493,928</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">10,160,842</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Machinery and equipment </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">19,590,503</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">17,950,644</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Office furniture and equipment </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">3,252,655</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">3,193,150</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Autos and trucks </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">91,717</kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.35pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">91,717</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Land improvements </td><td style="width:67.35pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">662,168</kbd> </td><td style="width:4.45pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">662,168</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">34,286,191</kbd> </td><td style="width:4.45pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">32,253,741</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top">Less accumulated depreciation </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">21,980,091</kbd> </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">20,179,569</kbd> </td></tr> <tr><td style="width:220.85pt" valign="top"></td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">12,306,100</kbd> </td><td style="width:4.45pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">12,074,172</kbd> </td></tr> </table>

195220

10493928

10160842

19590503

17950644

3252655

3193150

91717

662168

34286191

32253741

21980091

20179569

12306100

12074172

1904373

1708849

1770000

7. Short-Term Borrowings: The Company has available a $10,000,000 bank demand line of credit with interest payable at the Company's option of 30, 60 or 90 day SOFR rate plus 2.365%. The line is secured by a negative pledge of the Company's real and personal property and is subject to renewal annually. There is no amount outstanding under the line of credit at May 31, 2026 or 2025. The Company uses a cash management facility under which the bank draws against the available line of credit to cover checks presented for payment on a daily basis. Outstanding checks under this arrangement totaled $59,107 and $97,673 as of May 31, 2026 and 2025. These amounts are included in accounts payable on the accompanying balance sheets.

10000000

59107 97673

8. Accrued Expenses: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.1pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:68.05pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.1pt" valign="top">Customer deposits </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">68,482</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">104,825</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Personnel costs </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,154,490</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">3,214,157</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Other </td><td style="width:68.05pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">723,522</kbd> </td><td style="width:4.7pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">753,454</kbd> </td></tr> <tr><td style="width:220.1pt;border-bottom:0.5pt solid #000000" valign="top"></td><td style="width:68.05pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,946,494</kbd> </td><td style="width:4.7pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">4,072,436</kbd> </td></tr> </table>

<table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:220.1pt;border-bottom:0.75pt solid #000000" valign="top"></td><td style="width:68.05pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:220.1pt" valign="top">Customer deposits </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">68,482</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">104,825</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Personnel costs </td><td style="width:68.05pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,154,490</kbd> </td><td style="width:4.7pt" valign="top"> </td><td style="width:67.15pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">3,214,157</kbd> </td></tr> <tr><td style="width:220.1pt" valign="top">Other </td><td style="width:68.05pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">723,522</kbd> </td><td style="width:4.7pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-bottom:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">753,454</kbd> </td></tr> <tr><td style="width:220.1pt;border-bottom:0.5pt solid #000000" valign="top"></td><td style="width:68.05pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,946,494</kbd> </td><td style="width:4.7pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.15pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">4,072,436</kbd> </td></tr> </table>

68482

104825

2154490

3214157

723522

753454

2946494

4072436

9. Sales: The Company manufactures and sells a single group of very similar products that have many different applications for customers. These similar products are included in one of nine categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, Vibration Dampers, Machined Springs, Custom Shock and Vibration Isolators, and Custom Actuators. Management does not track or otherwise account for sales broken down by these categories. Sales of the Company's products are made to three general groups of customers: aerospace / defense, structural and industrial. A breakdown of sales to these three general groups of customers is as follows: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:216.1pt" valign="top"></td><td style="width:65.95pt;border-bottom:0.5pt solid #000000" valign="top">2026 </td><td style="width:12pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:65.95pt;border-bottom:0.5pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:216.1pt" valign="top">Aerospace / Defense </td><td style="width:65.95pt;border-top:0.5pt solid #000000" valign="top">$ 27,522,079 </td><td style="width:12pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:65.95pt;border-top:0.5pt solid #000000" valign="top">$ 27,134,038 </td></tr> <tr><td style="width:216.1pt" valign="top">Structural </td><td style="width:65.95pt" valign="top">10,262,939 </td><td style="width:12pt" valign="top"> </td><td style="width:65.95pt" valign="top">14,827,044 </td></tr> <tr><td style="width:216.1pt" valign="top">Industrial </td><td style="width:65.95pt;border-bottom:0.5pt solid #000000" valign="top">3,864,655 </td><td style="width:12pt;border-bottom:0.5pt solid #000000" valign="top"> </td><td style="width:65.95pt;border-bottom:0.5pt solid #000000" valign="top">4,331,643 </td></tr> <tr><td style="width:216.1pt" valign="top"></td><td style="width:65.95pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top">$ 41,649,673 </td><td style="width:12pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:65.95pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="top">$ 46,292,725 </td></tr> </table> Sales to three customers approximated 32% (11%, 11% and 10% respectively) of net sales for 2026. Sales to two customers approximated 36% (21% and 15% respectively) of net sales for 2025.

27522079

27134038

10262939

14827044

3864655

4331643

41649673

46292725

10. Income Taxes: The Company adopted ASU 2023-09 on a prospective basis as of June 1, 2025, which resulted in additional income tax disclosures for the rate reconciliation and income taxes paid for 2026. Given that the Company elected to adopt ASU 2023-09 prospectively, the 2025 rate reconciliation is not disaggregated in accordance with ASU 2023-09 and the income taxes paid is not presented by jurisdiction. <table style="margin:0 auto;border-collapse:collapse;width:391.55pt"><tr><td style="width:216.5pt;border-bottom:0.75pt solid #000000" valign="bottom"></td><td colspan="2" style="width:85pt;border-bottom:0.75pt solid #000000" valign="bottom">2026 </td><td style="width:18.15pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="bottom">2025 </td><td colspan="2" style="width:4.75pt" valign="bottom"> </td></tr> <tr><td style="width:216.5pt" valign="bottom">Current tax provision: </td><td colspan="2" style="width:85pt" valign="bottom"> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"> </td><td colspan="2" style="width:4.75pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">Federal </td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">100,000</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,204,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">State </td><td style="width:67.5pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">100</kbd> </td><td style="width:18.15pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">1,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom"></td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">100,100</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,205,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">Deferred tax provision (benefit): </td><td style="width:67.5pt" valign="bottom"> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">Federal </td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">324,900</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(585,000)</kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">State </td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">-</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">- </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom"></td><td style="width:67.5pt;border-top:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">324,900</kbd> </td><td style="width:18.15pt;border-top:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-top:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(585,000)</kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom"></td><td style="width:67.5pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">425,000</kbd> </td><td style="width:18.15pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">1,620,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> </table> The provision for income taxes for the fiscal year ended May 31, 2026 differed from the amount computed by applying the federal statutory income tax rate due to: <table style="margin:0 auto;border-collapse:collapse;width:418.5pt"><tr><td style="width:265.5pt" valign="top"> </td><td style="width:55.5pt;border-bottom:0.75pt solid #000000" valign="top">Amount </td><td style="width:25.5pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:58.5pt;border-bottom:0.75pt solid #000000" valign="top">Percent </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">U.S. Federal Statutory Income Tax and Rate </td><td style="width:55.5pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:0pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">1,888,000 </kbd> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">21.0%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">State and local income taxes, net of federal income tax effect (1) </td><td style="width:55.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">100 </kbd> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">0.0%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Effect of Cross Border Tax Laws: </td><td style="width:55.5pt" valign="top"> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Foreign-Derived Deduction Eligible Income </td><td style="width:55.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">(14,300)</kbd> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">-0.2%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Tax Credits: </td><td style="width:55.5pt" valign="top"> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Research and development tax credits </td><td style="width:55.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">(369,000)</kbd> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">-4.1%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Nontaxable and nondeductible items: </td><td style="width:55.5pt" valign="top"> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Share-based payment awards </td><td style="width:55.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">(929,900)</kbd> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">-10.3%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Other </td><td style="width:55.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">10,900 </kbd> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">0.1%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top">Other adjustments: </td><td style="width:55.5pt" valign="top"> </td><td style="width:25.5pt" valign="top"> </td><td style="width:58.5pt" valign="top"> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top"> Various miscellaneous items </td><td style="width:55.5pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">(160,800)</kbd> </td><td style="width:25.5pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:58.5pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">-1.8%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top"> </td><td style="width:55.5pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:0pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">425,000 </kbd> </td><td style="width:25.5pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:58.5pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:51pt">4.7%</kbd> </td><td style="width:13.5pt" valign="top"> </td></tr> <tr><td style="width:265.5pt" valign="top"> </td><td style="width:55.5pt;border-top:2.25pt solid #000000" valign="top"> </td><td style="width:25.5pt;border-top:2.25pt solid #000000" valign="top"> </td><td style="width:58.5pt;border-top:2.25pt solid #000000" valign="top"> </td><td style="width:13.5pt" valign="top"> </td></tr> </table> <kbd style="position:absolute;font:10pt Times New Roman;margin-left:-18pt">(1)</kbd>State taxes in California make up the majority (more than 50%) of the tax effect of this category. A reconciliation of the statutory U.S. federal income tax rate to the effective tax rate for the period before the adoption of ASU 2023-09 was as follows: <table style="margin:0 auto;border-collapse:collapse;width:356.35pt"><tr><td style="width:281.35pt" valign="top"></td><td style="width:4.65pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Computed tax provision at the expected statutory rate </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,317,000 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Tax effect of permanent differences: </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Research tax credits </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(489,692)</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Foreign-derived intangible income deduction </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(224,700)</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Stock option costs </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(11,682)</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Other permanent differences </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">24,300 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Other </td><td style="width:4.65pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">4,774 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top"></td><td style="width:4.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">1,620,000 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Effective income tax rate </td><td style="width:4.65pt;border-top:2.25pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-top:2.25pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">14.7%</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> </table> Income taxes paid (net of refunds) consisted of the following: <table style="margin:0 auto;border-collapse:collapse;width:356.35pt"><tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom">2026 </td></tr> <tr><td style="width:284.3pt" valign="bottom">Federal </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">- </kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom">State </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">875 </kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">875 </kbd> </td></tr> </table> Income taxes paid (net of refunds) was $2,425,000 for the year ended May 31, 2025. Income taxes paid, net of refunds, exceeded five (5) percent of total income taxes paid (net of refunds) in the following jurisdictions: <table style="margin:0 auto;border-collapse:collapse;width:356.35pt"><tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom">2026 </td></tr> <tr><td style="width:284.3pt" valign="bottom">Federal </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">-</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"> </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"> </td></tr> <tr><td style="width:284.3pt" valign="bottom">State </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"> </td></tr> <tr><td style="width:284.3pt" valign="bottom">New York </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">50</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"> California </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">800</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"> Other </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">25</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">875</kbd> </td></tr> </table> The tax effects of temporary differences that give rise to the deferred income tax assets at May 31, 2026 and 2025 are as follows: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:216.6pt" valign="top"></td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Deferred tax assets: </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Allowance for estimated credit losses </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:4pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">41,000 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">118,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Tax inventory adjustment </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">67,200 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">52,600 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Allowance for obsolete inventory </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">145,900 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">165,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Accrued professional fees </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">20,100 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">- </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Accrued vacation </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">179,000 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">169,600 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Warranty reserve </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">100,100 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">112,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">R&D capitalization </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">1,450,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">2,111,200 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Stock options issued for services </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">537,700 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">117,700 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top"></td><td style="width:67.25pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">2,541,500 </kbd> </td><td style="width:4.45pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">2,847,600 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Deferred tax liabilities: </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Excess tax depreciation </td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">(1,268,500)</kbd> </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">(1,249,600)</kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Net deferred tax assets </td><td style="width:67.25pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:4pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">1,273,000 </kbd> </td><td style="width:4.45pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">1,598,000 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> </table> Realization of the deferred tax assets is dependent on generating sufficient taxable income at the time temporary differences become deductible. The Company provides a valuation allowance to the extent that deferred tax assets may not be realized. A valuation allowance has not been recorded against the deferred tax assets since management believes it is more likely than not that the deferred tax assets are recoverable. The Company considers future taxable income and potential tax planning strategies in assessing the need for a potential valuation allowance. The amount of the deferred tax assets considered realizable however, could be reduced in the near term if estimates of future taxable income are reduced. The Company will need to generate approximately $12.1 million in taxable income in future years in order to realize the deferred tax assets recorded as of May 31, 2026 of $2,541,500. The Company and its subsidiary file consolidated Federal and State income tax returns. As of May 31, 2026, the Company had State investment tax credit carryforwards of approximately $546,000 expiring through May 2031.

<table style="margin:0 auto;border-collapse:collapse;width:391.55pt"><tr><td style="width:216.5pt;border-bottom:0.75pt solid #000000" valign="bottom"></td><td colspan="2" style="width:85pt;border-bottom:0.75pt solid #000000" valign="bottom">2026 </td><td style="width:18.15pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="bottom">2025 </td><td colspan="2" style="width:4.75pt" valign="bottom"> </td></tr> <tr><td style="width:216.5pt" valign="bottom">Current tax provision: </td><td colspan="2" style="width:85pt" valign="bottom"> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"> </td><td colspan="2" style="width:4.75pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">Federal </td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">100,000</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,204,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">State </td><td style="width:67.5pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">100</kbd> </td><td style="width:18.15pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">1,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom"></td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">100,100</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,205,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">Deferred tax provision (benefit): </td><td style="width:67.5pt" valign="bottom"> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">Federal </td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">324,900</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(585,000)</kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom">State </td><td style="width:67.5pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">-</kbd> </td><td style="width:18.15pt" valign="bottom"> </td><td style="width:67.15pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">- </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom"></td><td style="width:67.5pt;border-top:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">324,900</kbd> </td><td style="width:18.15pt;border-top:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-top:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(585,000)</kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> <tr><td colspan="2" style="width:234pt" valign="bottom"></td><td style="width:67.5pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">425,000</kbd> </td><td style="width:18.15pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:67.15pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">1,620,000 </kbd> </td><td style="width:4.45pt" valign="bottom"> </td></tr> </table>

100000

2204000

100

1000

100100

2205000

324900

-585000

324900

-585000

425000

1620000

<table style="margin:0 auto;border-collapse:collapse;width:356.35pt"><tr><td style="width:281.35pt" valign="top"></td><td style="width:4.65pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Computed tax provision at the expected statutory rate </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">2,317,000 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Tax effect of permanent differences: </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Research tax credits </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(489,692)</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Foreign-derived intangible income deduction </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(224,700)</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Stock option costs </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">(11,682)</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Other permanent differences </td><td style="width:4.65pt" valign="top"> </td><td style="width:66.65pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">24,300 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Other </td><td style="width:4.65pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">4,774 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top"></td><td style="width:4.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">1,620,000 </kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> <tr><td style="width:281.35pt" valign="top">Effective income tax rate </td><td style="width:4.65pt;border-top:2.25pt solid #000000" valign="top"> </td><td style="width:66.65pt;border-top:2.25pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">14.7%</kbd> </td><td style="width:3.7pt" valign="top"> </td></tr> </table>

2317000

489692

224700

-11682

24300

4774

1620000

0.147

<table style="margin:0 auto;border-collapse:collapse;width:356.35pt"><tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom">2026 </td></tr> <tr><td style="width:284.3pt" valign="bottom">Federal </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">- </kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom">State </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">875 </kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:61pt">875 </kbd> </td></tr> </table> Income taxes paid (net of refunds) was $2,425,000 for the year ended May 31, 2025. Income taxes paid, net of refunds, exceeded five (5) percent of total income taxes paid (net of refunds) in the following jurisdictions: <table style="margin:0 auto;border-collapse:collapse;width:356.35pt"><tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom">2026 </td></tr> <tr><td style="width:284.3pt" valign="bottom">Federal </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">-</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"> </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"> </td></tr> <tr><td style="width:284.3pt" valign="bottom">State </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"> </td></tr> <tr><td style="width:284.3pt" valign="bottom">New York </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">50</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"> California </td><td style="width:4.7pt" valign="bottom"> </td><td style="width:67.35pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">800</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"> Other </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-bottom:0.75pt solid #000000" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">25</kbd> </td></tr> <tr><td style="width:284.3pt" valign="bottom"></td><td style="width:4.7pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:67.35pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">875</kbd> </td></tr> </table>

875

2425000

800

875

<table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:216.6pt" valign="top"></td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Deferred tax assets: </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Allowance for estimated credit losses </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:4pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">41,000 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">118,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Tax inventory adjustment </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">67,200 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">52,600 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Allowance for obsolete inventory </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">145,900 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">165,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Accrued professional fees </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">20,100 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">- </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Accrued vacation </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">179,000 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">169,600 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Warranty reserve </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">100,100 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">112,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">R&D capitalization </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">1,450,500 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">2,111,200 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Stock options issued for services </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">537,700 </kbd> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">117,700 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top"></td><td style="width:67.25pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">2,541,500 </kbd> </td><td style="width:4.45pt;border-top:0.5pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-top:0.5pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">2,847,600 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Deferred tax liabilities: </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td><td style="width:67.25pt" valign="top"> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Excess tax depreciation </td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">(1,268,500)</kbd> </td><td style="width:4.45pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-bottom:0.75pt solid #000000" valign="top"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">(1,249,600)</kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> <tr><td style="width:216.6pt" valign="top">Net deferred tax assets </td><td style="width:67.25pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:4pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:63pt">1,273,000 </kbd> </td><td style="width:4.45pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:67.25pt;border-top:0.75pt solid #000000;border-bottom:2.25pt solid #000000" valign="top"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:60pt">1,598,000 </kbd> </td><td style="width:4.45pt" valign="top"> </td></tr> </table>

41000 118500 67200 52600 145900 165500 20100 0 179000 169600 100100 112500 1450500 2111200 537700 117700

2541500

2847600

1268500 1249600

1273000

1598000

2541500

11. Earnings Per Common Share: Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average common shares outstanding for the period. Diluted earnings per common share reflects the weighted-average common shares outstanding and dilutive potential common shares, such as stock options. A reconciliation of weighted-average common shares outstanding to weighted-average common shares outstanding assuming dilution is as follows: <table style="margin:0 auto;border-collapse:collapse;width:388.8pt"><tr><td style="width:258.7pt" valign="top"></td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:258.7pt" valign="top">Average common shares outstanding </td><td style="width:62.7pt" valign="top">3,170,439 </td><td style="width:4.7pt" valign="top"> </td><td style="width:62.7pt" valign="top">3,131,134 </td></tr> <tr><td style="width:258.7pt" valign="top">Common shares issuable under stock option plans </td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">99,238 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">147,555 </td></tr> <tr><td style="width:258.7pt;border-bottom:0.75pt solid #000000" valign="top">Average common shares outstanding assuming dilution </td><td style="width:62.7pt;border-bottom:2.25pt solid #000000" valign="top">3,269,677 </td><td style="width:4.7pt;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:62.7pt;border-bottom:2.25pt solid #000000" valign="top">3,278,689 </td></tr> </table>

<table style="margin:0 auto;border-collapse:collapse;width:388.8pt"><tr><td style="width:258.7pt" valign="top"></td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:258.7pt" valign="top">Average common shares outstanding </td><td style="width:62.7pt" valign="top">3,170,439 </td><td style="width:4.7pt" valign="top"> </td><td style="width:62.7pt" valign="top">3,131,134 </td></tr> <tr><td style="width:258.7pt" valign="top">Common shares issuable under stock option plans </td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">99,238 </td><td style="width:4.7pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:62.7pt;border-bottom:0.75pt solid #000000" valign="top">147,555 </td></tr> <tr><td style="width:258.7pt;border-bottom:0.75pt solid #000000" valign="top">Average common shares outstanding assuming dilution </td><td style="width:62.7pt;border-bottom:2.25pt solid #000000" valign="top">3,269,677 </td><td style="width:4.7pt;border-bottom:2.25pt solid #000000" valign="top"> </td><td style="width:62.7pt;border-bottom:2.25pt solid #000000" valign="top">3,278,689 </td></tr> </table>

3170439 3131134 99238 147555 3269677 3278689

12. Employee Stock Purchase Plan: In March 2004, the Company reserved 295,000 shares of common stock for issuance pursuant to a non-qualified employee stock purchase plan. Participation in the employee stock purchase plan is voluntary for all eligible employees of the Company. Purchase of common shares can be made by employee contributions through payroll deductions and without brokers’ fees. At the end of each calendar quarter, the employee contributions will be applied to the purchase of common shares using a share value equal to the mean between the closing bid and ask prices of the stock on that date. These shares are distributed to the employees at the end of each calendar quarter or upon withdrawal from the plan. During the years ended May 31, 2026 and 2025, 90 ($43.88 to $58.02 price per share) and 155 ($32.51 to $49.40 price per share) common shares, respectively, were issued to employees. As of May 31, 2026, 215,748 shares were reserved for further issue.

90 155 215748

13. Stock Option Plans: In 2025, the Company adopted a stock option plan which permits the Company to grant both incentive stock options and non-qualified stock options. The incentive stock options qualify for preferential treatment under the Internal Revenue Code. Under this plan, 316,200 shares of common stock have been reserved for grant to key employees and directors of the Company and 83,850 shares have been granted as of May 31, 2026. Under the plan, the option price may not be less than the fair market value of the stock at the time the options are granted. Options vest immediately and expire ten years from the date of grant. Using the Black-Scholes option pricing model, the weighted average estimated fair value of each option granted under the plan was $19.53 during 2026 and $13.61 during 2025. The pricing model uses the assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company's stock. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options granted is derived from previous history of stock exercises from the grant date and represents the period of time that options granted are expected to be outstanding. The Company uses historical data to estimate option exercise and employee termination assumptions under the valuation model. The Company has never paid dividends on its common stock and does not anticipate doing so in the foreseeable future. <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:217.5pt" valign="top"></td><td style="width:67.5pt;border-bottom:0.75pt solid #000000" valign="top">2026 </td><td style="width:7.5pt;border-bottom:0.75pt solid #000000" valign="top"> </td><td style="width:67.5pt;border-bottom:0.75pt solid #000000" valign="top">2025 </td></tr> <tr><td style="width:217.5pt" valign="top">Risk-free interest rate </td><td style="width:67.5pt" valign="top">3.84% </td><td style="width:7.5pt" valign="top"> </td><td style="width:67.5pt" valign="top">3.87% </td></tr> <tr><td style="width:217.5pt" valign="top">Expected life in years </td><td style="width:67.5pt" valign="top">4.3 </td><td style="width:7.5pt" valign="top"> </td><td style="width:67.5pt" valign="top">4.2 </td></tr> <tr><td style="width:217.5pt" valign="top">Expected volatility </td><td style="width:67.5pt" valign="top"> 42% </td><td style="width:7.5pt" valign="top"> </td><td style="width:67.5pt" valign="top">39% </td></tr> <tr style="height:4pt"><td style="width:217.5pt" valign="top">Expected dividend yield </td><td style="width:67.5pt" valign="top">0% </td><td style="width:7.5pt" valign="top"> </td><td style="width:67.5pt" valign="top">0% </td></tr> </table> The following is a summary of stock option activity: <table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:171.2pt" valign="bottom"></td><td style="width:62.3pt;border-bottom:0.5pt solid #000000" valign="bottom">Shares </td><td style="width:1.9pt;border-bottom:0.5pt solid #000000" valign="bottom"> </td><td style="width:62.3pt;border-bottom:0.5pt solid #000000" valign="bottom">Weighted Average Exercise Price </td><td style="width:62.3pt;border-bottom:0.5pt solid #000000" valign="bottom">Intrinsic Value </td></tr> <tr><td style="width:171.2pt" valign="bottom">Outstanding - May 31, 2024 </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom">340,500 </td><td style="width:1.9pt;border-top:0.5pt solid #000000" valign="bottom"> </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">18.07</kbd> </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">11,185,815</kbd> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Options granted </td><td style="width:62.3pt" valign="bottom">89,800 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">37.24</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options exercised </td><td style="width:62.3pt" valign="bottom">31,000 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">11.51</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options expired </td><td style="width:62.3pt" valign="bottom">- </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">-</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom">Outstanding - May 31, 2025 </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom">399,300 </td><td style="width:1.9pt;border-top:0.5pt solid #000000" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">22.89</kbd> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">6,341,305</kbd> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Options granted </td><td style="width:62.3pt" valign="bottom">83,850 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">49.14</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options exercised </td><td style="width:62.3pt" valign="bottom">99,205 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">19.35</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options expired </td><td style="width:62.3pt" valign="bottom">1,500 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">-</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr style="height:12.55pt"><td style="width:171.2pt" valign="bottom">Outstanding - May 31, 2026 </td><td style="width:62.3pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">382,445 </td><td style="width:1.9pt;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:62.3pt;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">29.58</kbd> </td><td style="width:62.3pt;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">8,386,635</kbd> </td></tr> </table> We calculated intrinsic value for those options that had an exercise price lower than the market price of our common shares as of the balance sheet dates. The aggregate intrinsic value of outstanding options as of the end of each fiscal year is calculated as the difference between the exercise price of the underlying options and the market price of our common shares for the options that were in-the-money at that date (346,445 at May 31, 2026 and 309,500 at May 31, 2025). The Company's closing stock price was $51.00 and $36.93 as of May 31, 2026 and 2025. As of May 31, 2026, there are 232,350 options available for future grants under the 2025 stock option plan. $1,920,098 was received from the exercise of options during the fiscal year ended May 31, 2026; $356,883 was received from the exercise of options during the fiscal year ended May 31, 2025. The following table summarizes information about stock options outstanding at May 31, 2026: <table style="margin:0 auto;border-collapse:collapse;width:367.2pt"><tr><td colspan="4" style="width:360pt;border-bottom:0.75pt solid #000000" valign="bottom">Outstanding and Exercisable </td></tr> <tr><td style="width:144pt;border-top:0.75pt solid #000000" valign="bottom">Range of Exercise Prices </td><td style="width:50.4pt;border-top:0.75pt solid #000000" valign="bottom">Number of Options </td><td style="width:100.8pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Remaining Years of Contractual Life </td><td colspan="2" style="width:72pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Exercise Price </td></tr> <tr><td style="width:144pt" valign="bottom">$ 9.01-$10.00 </td><td style="width:50.4pt" valign="bottom">30,000 </td><td style="width:100.8pt" valign="bottom">4.9 </td><td colspan="2" style="width:72pt" valign="bottom">$ 9.69 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$10.01-$11.00 </td><td style="width:50.4pt" valign="bottom">10,250 </td><td style="width:100.8pt" valign="bottom">3.1 </td><td colspan="2" style="width:72pt" valign="bottom">$10.17 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$11.01-$12.00 </td><td style="width:50.4pt" valign="bottom">70,850 </td><td style="width:100.8pt" valign="bottom">4.6 </td><td colspan="2" style="width:72pt" valign="bottom">$11.68 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$12.01-$13.00 </td><td style="width:50.4pt" valign="bottom">3,750 </td><td style="width:100.8pt" valign="bottom">1.2 </td><td colspan="2" style="width:72pt" valign="bottom">$12.28 </td></tr> <tr><td style="width:144pt" valign="bottom">$13.01-$14.00 </td><td style="width:50.4pt" valign="bottom">5,000 </td><td style="width:100.8pt" valign="bottom">0.9 </td><td colspan="2" style="width:72pt" valign="bottom">$13.80 </td></tr> <tr><td style="width:144pt" valign="bottom">$19.01-$20.00 </td><td style="width:50.4pt" valign="bottom">42,000 </td><td style="width:100.8pt" valign="bottom">6.9 </td><td colspan="2" style="width:72pt" valign="bottom">$19.96 </td></tr> <tr><td style="width:144pt" valign="bottom">$20.01-$21.00 </td><td style="width:50.4pt" valign="bottom">23,250 </td><td style="width:100.8pt" valign="bottom">7.4 </td><td colspan="2" style="width:72pt" valign="bottom">$20.78 </td></tr> <tr><td style="width:144pt" valign="bottom">$30.01-$31.00 </td><td style="width:50.4pt" valign="bottom">42,000 </td><td style="width:100.8pt" valign="bottom">8.9 </td><td colspan="2" style="width:72pt" valign="bottom">$30.55 </td></tr> <tr><td style="width:144pt" valign="bottom">$43.01-$44.00 </td><td style="width:50.4pt" valign="bottom">77,345 </td><td style="width:100.8pt" valign="bottom">8.9 </td><td colspan="2" style="width:72pt" valign="bottom">$43.53 </td></tr> <tr><td style="width:144pt" valign="bottom">$46.01-$47.00 </td><td style="width:50.4pt" valign="bottom">42,000 </td><td style="width:100.8pt" valign="bottom">7.9 </td><td colspan="2" style="width:72pt" valign="bottom">$46.99 </td></tr> <tr><td style="width:144pt" valign="bottom">$56.01-$57.00 </td><td style="width:50.4pt" valign="bottom">36,000 </td><td style="width:100.8pt" valign="bottom">9.9 </td><td colspan="2" style="width:72pt" valign="bottom">$56.43 </td></tr> <tr><td style="width:144pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$ 9.01-$57.00 </td><td style="width:50.4pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">382,445 </td><td style="width:100.8pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">7.1 </td><td colspan="2" style="width:72pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$29.58 </td></tr> </table> The following table summarizes information about stock options outstanding at May 31, 2025: <table style="margin:0 auto;border-collapse:collapse;width:367.2pt"><tr><td colspan="4" style="width:360pt;border-bottom:0.75pt solid #000000" valign="bottom">Outstanding and Exercisable </td></tr> <tr><td style="width:144pt;border-top:0.75pt solid #000000" valign="bottom">Range of Exercise Prices </td><td style="width:50.4pt;border-top:0.75pt solid #000000" valign="bottom">Number of Options </td><td style="width:100.8pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Remaining Years of Contractual Life </td><td colspan="2" style="width:72pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Exercise Price </td></tr> <tr><td style="width:144pt" valign="bottom">$ 9.01-$10.00 </td><td style="width:50.4pt" valign="bottom">45,000 </td><td style="width:100.8pt" valign="bottom">5.8 </td><td colspan="2" style="width:72pt" valign="bottom">$ 9.71 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$10.01-$11.00 </td><td style="width:50.4pt" valign="bottom">15,250 </td><td style="width:100.8pt" valign="bottom">3.7 </td><td colspan="2" style="width:72pt" valign="bottom">$10.21 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$11.01-$12.00 </td><td style="width:50.4pt" valign="bottom">99,000 </td><td style="width:100.8pt" valign="bottom">5.4 </td><td colspan="2" style="width:72pt" valign="bottom">$11.72 </td></tr> <tr><td style="width:144pt" valign="bottom">$12.01-$13.00 </td><td style="width:50.4pt" valign="bottom">6,000 </td><td style="width:100.8pt" valign="bottom">1.7 </td><td colspan="2" style="width:72pt" valign="bottom">$12.41 </td></tr> <tr><td style="width:144pt" valign="bottom">$13.01-$14.00 </td><td style="width:50.4pt" valign="bottom">10,000 </td><td style="width:100.8pt" valign="bottom">1.9 </td><td colspan="2" style="width:72pt" valign="bottom">$13.80 </td></tr> <tr><td style="width:144pt" valign="bottom">$16.01-$17.00 </td><td style="width:50.4pt" valign="bottom">10,000 </td><td style="width:100.8pt" valign="bottom">0.9 </td><td colspan="2" style="width:72pt" valign="bottom">$16.40 </td></tr> <tr><td style="width:144pt" valign="bottom">$19.01-$20.00 </td><td style="width:50.4pt" valign="bottom">47,500 </td><td style="width:100.8pt" valign="bottom">7.3 </td><td colspan="2" style="width:72pt" valign="bottom">$19.89 </td></tr> <tr><td style="width:144pt" valign="bottom">$20.01-$21.00 </td><td style="width:50.4pt" valign="bottom">33,750 </td><td style="width:100.8pt" valign="bottom">8.4 </td><td colspan="2" style="width:72pt" valign="bottom">$20.78 </td></tr> <tr><td style="width:144pt" valign="bottom">$30.01-$31.00 </td><td style="width:50.4pt" valign="bottom">43,000 </td><td style="width:100.8pt" valign="bottom">9.9 </td><td colspan="2" style="width:72pt" valign="bottom">$30.55 </td></tr> <tr><td style="width:144pt" valign="bottom">$43.01-$44.00 </td><td style="width:50.4pt" valign="bottom">46,800 </td><td style="width:100.8pt" valign="bottom">9.4 </td><td colspan="2" style="width:72pt" valign="bottom">$43.38 </td></tr> <tr><td style="width:144pt" valign="bottom">$46.01-$47.00 </td><td style="width:50.4pt" valign="bottom">43,000 </td><td style="width:100.8pt" valign="bottom">8.9 </td><td colspan="2" style="width:72pt" valign="bottom">$46.99 </td></tr> <tr><td style="width:144pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$ 9.01-$47.00 </td><td style="width:50.4pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">399,300 </td><td style="width:100.8pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">6.9 </td><td colspan="2" style="width:72pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$22.89 </td></tr> </table>

0.0384

0.0387

P4Y3M18D

P4Y2M12D

0.42

0.39

<table style="margin:0 auto;border-collapse:collapse;width:360pt"><tr><td style="width:171.2pt" valign="bottom"></td><td style="width:62.3pt;border-bottom:0.5pt solid #000000" valign="bottom">Shares </td><td style="width:1.9pt;border-bottom:0.5pt solid #000000" valign="bottom"> </td><td style="width:62.3pt;border-bottom:0.5pt solid #000000" valign="bottom">Weighted Average Exercise Price </td><td style="width:62.3pt;border-bottom:0.5pt solid #000000" valign="bottom">Intrinsic Value </td></tr> <tr><td style="width:171.2pt" valign="bottom">Outstanding - May 31, 2024 </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom">340,500 </td><td style="width:1.9pt;border-top:0.5pt solid #000000" valign="bottom"> </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">18.07</kbd> </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">11,185,815</kbd> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Options granted </td><td style="width:62.3pt" valign="bottom">89,800 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">37.24</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options exercised </td><td style="width:62.3pt" valign="bottom">31,000 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">11.51</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options expired </td><td style="width:62.3pt" valign="bottom">- </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">-</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom">Outstanding - May 31, 2025 </td><td style="width:62.3pt;border-top:0.5pt solid #000000" valign="bottom">399,300 </td><td style="width:1.9pt;border-top:0.5pt solid #000000" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">22.89</kbd> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">6,341,305</kbd> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Options granted </td><td style="width:62.3pt" valign="bottom">83,850 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">49.14</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options exercised </td><td style="width:62.3pt" valign="bottom">99,205 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">19.35</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr><td style="width:171.2pt" valign="bottom"> Less: options expired </td><td style="width:62.3pt" valign="bottom">1,500 </td><td style="width:1.9pt" valign="bottom"> </td><td style="width:62.3pt" valign="bottom"><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">-</kbd> </td><td style="width:62.3pt" valign="bottom"> </td></tr> <tr style="height:12.55pt"><td style="width:171.2pt" valign="bottom">Outstanding - May 31, 2026 </td><td style="width:62.3pt;border-top:0.5pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">382,445 </td><td style="width:1.9pt;border-bottom:2.25pt solid #000000" valign="bottom"> </td><td style="width:62.3pt;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:7pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:55pt">29.58</kbd> </td><td style="width:62.3pt;border-bottom:2.25pt solid #000000" valign="bottom"><kbd style="position:absolute;font:10pt Times New Roman;margin-left:6pt">$</kbd><kbd style="position:absolute;text-align:right;font:10pt Times New Roman;width:56pt">8,386,635</kbd> </td></tr> </table>

340500

18.07

11185815

89800

37.24

31000

11.51

399300

22.89

6341305

83850

49.14

99205

19.35

1500

382445

29.58

8386635

The following table summarizes information about stock options outstanding at May 31, 2026: <table style="margin:0 auto;border-collapse:collapse;width:367.2pt"><tr><td colspan="4" style="width:360pt;border-bottom:0.75pt solid #000000" valign="bottom">Outstanding and Exercisable </td></tr> <tr><td style="width:144pt;border-top:0.75pt solid #000000" valign="bottom">Range of Exercise Prices </td><td style="width:50.4pt;border-top:0.75pt solid #000000" valign="bottom">Number of Options </td><td style="width:100.8pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Remaining Years of Contractual Life </td><td colspan="2" style="width:72pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Exercise Price </td></tr> <tr><td style="width:144pt" valign="bottom">$ 9.01-$10.00 </td><td style="width:50.4pt" valign="bottom">30,000 </td><td style="width:100.8pt" valign="bottom">4.9 </td><td colspan="2" style="width:72pt" valign="bottom">$ 9.69 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$10.01-$11.00 </td><td style="width:50.4pt" valign="bottom">10,250 </td><td style="width:100.8pt" valign="bottom">3.1 </td><td colspan="2" style="width:72pt" valign="bottom">$10.17 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$11.01-$12.00 </td><td style="width:50.4pt" valign="bottom">70,850 </td><td style="width:100.8pt" valign="bottom">4.6 </td><td colspan="2" style="width:72pt" valign="bottom">$11.68 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$12.01-$13.00 </td><td style="width:50.4pt" valign="bottom">3,750 </td><td style="width:100.8pt" valign="bottom">1.2 </td><td colspan="2" style="width:72pt" valign="bottom">$12.28 </td></tr> <tr><td style="width:144pt" valign="bottom">$13.01-$14.00 </td><td style="width:50.4pt" valign="bottom">5,000 </td><td style="width:100.8pt" valign="bottom">0.9 </td><td colspan="2" style="width:72pt" valign="bottom">$13.80 </td></tr> <tr><td style="width:144pt" valign="bottom">$19.01-$20.00 </td><td style="width:50.4pt" valign="bottom">42,000 </td><td style="width:100.8pt" valign="bottom">6.9 </td><td colspan="2" style="width:72pt" valign="bottom">$19.96 </td></tr> <tr><td style="width:144pt" valign="bottom">$20.01-$21.00 </td><td style="width:50.4pt" valign="bottom">23,250 </td><td style="width:100.8pt" valign="bottom">7.4 </td><td colspan="2" style="width:72pt" valign="bottom">$20.78 </td></tr> <tr><td style="width:144pt" valign="bottom">$30.01-$31.00 </td><td style="width:50.4pt" valign="bottom">42,000 </td><td style="width:100.8pt" valign="bottom">8.9 </td><td colspan="2" style="width:72pt" valign="bottom">$30.55 </td></tr> <tr><td style="width:144pt" valign="bottom">$43.01-$44.00 </td><td style="width:50.4pt" valign="bottom">77,345 </td><td style="width:100.8pt" valign="bottom">8.9 </td><td colspan="2" style="width:72pt" valign="bottom">$43.53 </td></tr> <tr><td style="width:144pt" valign="bottom">$46.01-$47.00 </td><td style="width:50.4pt" valign="bottom">42,000 </td><td style="width:100.8pt" valign="bottom">7.9 </td><td colspan="2" style="width:72pt" valign="bottom">$46.99 </td></tr> <tr><td style="width:144pt" valign="bottom">$56.01-$57.00 </td><td style="width:50.4pt" valign="bottom">36,000 </td><td style="width:100.8pt" valign="bottom">9.9 </td><td colspan="2" style="width:72pt" valign="bottom">$56.43 </td></tr> <tr><td style="width:144pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$ 9.01-$57.00 </td><td style="width:50.4pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">382,445 </td><td style="width:100.8pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">7.1 </td><td colspan="2" style="width:72pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$29.58 </td></tr> </table> The following table summarizes information about stock options outstanding at May 31, 2025: <table style="margin:0 auto;border-collapse:collapse;width:367.2pt"><tr><td colspan="4" style="width:360pt;border-bottom:0.75pt solid #000000" valign="bottom">Outstanding and Exercisable </td></tr> <tr><td style="width:144pt;border-top:0.75pt solid #000000" valign="bottom">Range of Exercise Prices </td><td style="width:50.4pt;border-top:0.75pt solid #000000" valign="bottom">Number of Options </td><td style="width:100.8pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Remaining Years of Contractual Life </td><td colspan="2" style="width:72pt;border-top:0.75pt solid #000000" valign="bottom">Weighted Average Exercise Price </td></tr> <tr><td style="width:144pt" valign="bottom">$ 9.01-$10.00 </td><td style="width:50.4pt" valign="bottom">45,000 </td><td style="width:100.8pt" valign="bottom">5.8 </td><td colspan="2" style="width:72pt" valign="bottom">$ 9.71 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$10.01-$11.00 </td><td style="width:50.4pt" valign="bottom">15,250 </td><td style="width:100.8pt" valign="bottom">3.7 </td><td colspan="2" style="width:72pt" valign="bottom">$10.21 </td></tr> <tr style="height:12.15pt"><td style="width:144pt" valign="bottom">$11.01-$12.00 </td><td style="width:50.4pt" valign="bottom">99,000 </td><td style="width:100.8pt" valign="bottom">5.4 </td><td colspan="2" style="width:72pt" valign="bottom">$11.72 </td></tr> <tr><td style="width:144pt" valign="bottom">$12.01-$13.00 </td><td style="width:50.4pt" valign="bottom">6,000 </td><td style="width:100.8pt" valign="bottom">1.7 </td><td colspan="2" style="width:72pt" valign="bottom">$12.41 </td></tr> <tr><td style="width:144pt" valign="bottom">$13.01-$14.00 </td><td style="width:50.4pt" valign="bottom">10,000 </td><td style="width:100.8pt" valign="bottom">1.9 </td><td colspan="2" style="width:72pt" valign="bottom">$13.80 </td></tr> <tr><td style="width:144pt" valign="bottom">$16.01-$17.00 </td><td style="width:50.4pt" valign="bottom">10,000 </td><td style="width:100.8pt" valign="bottom">0.9 </td><td colspan="2" style="width:72pt" valign="bottom">$16.40 </td></tr> <tr><td style="width:144pt" valign="bottom">$19.01-$20.00 </td><td style="width:50.4pt" valign="bottom">47,500 </td><td style="width:100.8pt" valign="bottom">7.3 </td><td colspan="2" style="width:72pt" valign="bottom">$19.89 </td></tr> <tr><td style="width:144pt" valign="bottom">$20.01-$21.00 </td><td style="width:50.4pt" valign="bottom">33,750 </td><td style="width:100.8pt" valign="bottom">8.4 </td><td colspan="2" style="width:72pt" valign="bottom">$20.78 </td></tr> <tr><td style="width:144pt" valign="bottom">$30.01-$31.00 </td><td style="width:50.4pt" valign="bottom">43,000 </td><td style="width:100.8pt" valign="bottom">9.9 </td><td colspan="2" style="width:72pt" valign="bottom">$30.55 </td></tr> <tr><td style="width:144pt" valign="bottom">$43.01-$44.00 </td><td style="width:50.4pt" valign="bottom">46,800 </td><td style="width:100.8pt" valign="bottom">9.4 </td><td colspan="2" style="width:72pt" valign="bottom">$43.38 </td></tr> <tr><td style="width:144pt" valign="bottom">$46.01-$47.00 </td><td style="width:50.4pt" valign="bottom">43,000 </td><td style="width:100.8pt" valign="bottom">8.9 </td><td colspan="2" style="width:72pt" valign="bottom">$46.99 </td></tr> <tr><td style="width:144pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$ 9.01-$47.00 </td><td style="width:50.4pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">399,300 </td><td style="width:100.8pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">6.9 </td><td colspan="2" style="width:72pt;border-top:1pt solid #000000;border-bottom:2.25pt solid #000000" valign="bottom">$22.89 </td></tr> </table>

30000

P4Y10M24D

9.69

10250

P3Y1M6D

10.17

70850

P4Y7M6D

11.68

3750

P1Y2M12D

12.28

5000

P0Y10M24D

13.8

42000

P6Y10M24D

19.96

23250

P7Y4M24D

20.78

42000

P8Y10M24D

30.55

77345

P8Y10M24D

43.53

42000

P7Y10M24D

46.99

36000

P9Y10M24D

56.43

382445

P7Y1M6D

29.58

45000

P5Y9M18D

9.71

15250

P3Y8M12D

10.21

99000

P5Y4M24D

11.72

6000

P1Y8M12D

12.41

10000

P1Y10M24D

13.8

10000

P0Y10M24D

16.4

47500

P7Y3M18D

19.89

33750

P8Y4M24D

20.78

43000

P9Y10M24D

30.55

46800

P9Y4M24D

43.38

43000

P8Y10M24D

46.99

399300

P6Y10M24D

22.89

14. Retirement Plan: The Company maintains a retirement plan for essentially all employees pursuant to Section 401(k) of the Internal Revenue Code. The Company matches a percentage of employee voluntary salary deferrals subject to limitations. The Company may also make discretionary contributions as determined annually by the Company's Board of Directors. The amount expensed under the plan was $471,767 and $462,445 for the years ended May 31, 2026 and 2025.

471767

462445

15. Fair Value of Financial Instruments: The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments. The fair values of short-term investments were determined as described in Note 1.

16. Legal Proceedings: The Company has been named as a third-party defendant in an action captioned Board of Managers of the 432 Park Condominium, et al. v. 56th and Park (NY) Owner LLC, et al. (the “Original Action”). The Original Action was filed on or about September 23, 2021. In the Original Action, the Board of Managers of 432 Park Condominium (the “Owner”), a condominium association for a high-rise condominium building (the “Building”) located at 432 Park Avenue in New York, N.Y., asserts a claim against the condominium sponsor, 56th and Park (NY) Owner LLC (the “Sponsor”) for damages arising from construction and design defects to the residential and commercial units at the Building. The Sponsor subsequently filed a third-party complaint against LendLease Construction (US) LMB (“LendLease”) and other parties involved in the Building’s design. As to LendLease, the third-party complaint alleges breach of a construction management contract between LendLease and the Sponsor and negligence arising from purported failure to perform under the contract, and seeks indemnification against any damages asserted against the Sponsor by the Owner. LendLease subsequently initiated a third-party complaint seeking indemnification from entities with whom LendLease had contracted for the supply of materials and services in connection with construction of the Building. The third-party complaint also names the Company as a third-party defendant based upon a contract between the Company and LendLease to supply 16 Viscous Damping Devices that were incorporated into a Tuned Mass Damper system designed by a third party to limit accelerations of the Building during wind events. The Company has timely filed and served an answer denying the allegations in LendLease’s third- party complaint. On June 15, 2026, the Owner filed an amended third-party complaint asserting claims for fraud against the Sponsor arising from construction of the façade at the Building (the “Fraud Action”). The Sponsor subsequently filed a third-party complaint against LendLease for contribution and indemnity relating to the Fraud Action, and LendLease subsequently initiated a third-party complaint against multiple parties, including the Company, relating to the Fraud Action. The Company believes it had no involvement in the façade work performed at the Building. After the Company and other third-party defendants objected to their being named defendants in LendLease’s third-party complaint relating to the Fraud Action, LendLease agreed to discontinue, without prejudice and pursuant to a proposed stipulation, its third-party claims against the Company and other third-party defendants, but only to the extent those claims relate to the Fraud Action. The Company does not expect to participate in discovery proceedings relating to the Fraud Action. However, the proposed stipulation has not yet been agreed to by all parties, and thus the Company has timely filed and served an answer denying the allegations in LendLease’s third-party complaint relating to the Fraud Action. The Original Action and the Fraud Action, and all of the related third-party actions thereto, are pending in the Commercial Division of the Supreme Court, New York County. Discovery relating to the Original Action is substantially complete. Discovery relating to the Fraud Action remains ongoing and is expected to conclude on or about February 26, 2027. At present, the Company is unable to determine the likelihood of an unfavorable outcome or to quantify a potential loss.

The Company has been named as a third-party defendant

Board of Managers of the 432 Park Condominium, et al.

2021-09-23

construction and design defects to the residential and commercial units at the Building

At present, the Company is unable to determine the likelihood of an unfavorable outcome or to quantify a potential loss. Note 2 Note 3 Note 4Note 4 Note 5 Note 6 Note 10Note 10 Note 8 Note 9 Note 11Note 11