Escalon Medical Corp 10-K for FY2026

Escalon Medical Corp (ESMC)

10-K 2026-10-13 For: 2026-06-30

Added on October 13, 2026

About this 10-K

Escalon Medical Corp filed this 10-K on October 13, 2026, covering the fiscal year ended June 30, 2026 (FY2026).

Headline figures

Fiscal year ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $12.74M; up 5.7% from $12.05M a year earlier
Net income: $4.01M; up 3702.5% from net income of $105.53K a year earlier
Diluted EPS: $0.27; compared with $0.00 a year earlier

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Pennsylvania						33-0272839
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


		Page
	PART I

Item 1.	Business	2
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	14
Item 1C.	Cyber Security	14
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14

	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	[Reserved]
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 8.	Financial Statements and Supplementary Data	22
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	45
Item 9A.	Controls and Procedures	45
Item 9B.	Other Information	46
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	46

	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	46
Item 11.	Executive Compensation	48
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	49
Item 13.	Certain Relationships and Related Transactions, and Director Independence	50
Item 14.	Principal Accounting Fees and Services	51

	PART IV
Item 15.	Exhibits and Financial Statement Schedules	52


	For the Years Ended June 30,
		2026		2025		% Change
Net Revenue:
Products		$	12,082	$	11,514	4.9	%
Service plans		654		532		22.9	%
Total		$	12,736	$	12,046	5.7	%


	For the Years Ended June 30,
		2026	2025
Domestic			$	6,830	53.6	%	$	6,741	56.0	%
Foreign			5,906		46.4	%	5,305		44.0	%
Total			$	12,736	100.0	%	$	12,046	100.0	%


	For the Years Ended June 30,
		2026		%		2025		%
Cost of Revenue:
		$	7,167	56.3	%	$	6,535	54.3	%
Total		$	7,167	56.3	%	$	6,535	54.3	%


	June 30,	June 30,
	2026	2025
Current Ratio:
Current assets	$7,012	$4,612
Less: Current liabilities	2,388	2,685
Working capital	$4,624	$1,927
Current ratio	2.94 to 1	1.72 to 1
Debt to Total Capital Ratio:
Note payable, lease liabilities, and EIDL loan	$975	$523

Total equity	5,928	1,915
Total capital	$6,902	$2,439
Total debt to total capital	14.1%	21.5%



			Page
Report of Independent Registered Public Accounting Firm (CBIZ CPAs P.C., PCAOB ID 199)			23

Consolidated Balance Sheets at June 30, 2026 and 2025			24
Consolidated Statements of Operations for the Years Ended June 30, 2026 and 2025			25
Consolidated Statements of Stockholders’ Equity for the Years Ended June 30, 2026 and 2025			26
Consolidated Statements of Cash Flows for the Years Ended June 30, 2026 and 2025			27
Notes to Consolidated Financial Statements			29


	June 30, 2026		June 30, 2025
ASSETS
Current assets:
Cash	$	3,065,468	$	545,835
Restricted cash	—		256,550
Accounts receivable	1,977,254		1,667,394
Less: allowance for credit losses	(74,035)		(164,499)
Accounts receivable, net	1,903,219		1,502,895
Inventories	1,733,984		2,142,263
Other current assets	309,255		164,394
Total current assets	7,011,926		4,611,937
Property and equipment, net	26,605		34,589
Right-of-use assets	827,057		253,953
Licenses and patents, net	8,134		29,792
Net deferred tax assets	1,139,449		—
Other long term assets	114,944		62,788
Total assets	$	9,128,115	$	4,993,059
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Current portion of note payable	$	—	$	40,708
Current portion of EIDL loan	3,499		3,370
Accounts payable	928,562		1,387,192
Accrued expenses	817,529		633,422
Related party accrued interest	—		112,389
Current portion of operating lease liabilities	159,351		86,521
Deferred revenue	388,297		327,919
Other short term liabilities	91,254		93,727
Total current liabilities	2,388,492		2,685,248
Note payable, net of current portion	—		85,761
Operating lease liabilities, net of current portion	676,514		168,015
EIDL loan, net of current portion	135,376		138,928


Total liabilities	3,200,382		3,077,952
Commitments and Contingencies (Note 8)
Stockholders' equity:
Series A convertible preferred stock, $0.001 par value; 2,000,000 shares authorized; 2,000,000 shares issued and outstanding (liquidation value of $1,077,131 and $1,025,531)	645,000		645,000
Common stock, $0.001 par value; 35,000,000 shares authorized; 7,415,329 shares issued and outstanding	7,415		7,415
Additional paid-in capital	69,702,043		69,702,043
Accumulated deficit	(64,426,725)		(68,439,351)
Total stockholders’ equity	5,927,733		1,915,107
Total liabilities and stockholders’ equity	$	9,128,115	$	4,993,059


ESCALON MEDICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
	For the Years Ended June 30,
		2026		2025
Net revenues:
Products		$	12,082,609	$	11,514,336
Service plans		653,536		531,812
Revenues, net		12,736,145		12,046,148
Costs and expenses:
Cost of revenue		7,166,609		6,535,090
Marketing, general and administrative		5,022,813		4,624,711
Research and development		501,488		753,130

Total costs and expenses		12,690,910		11,912,931
Income from operations		45,235		133,217
Other expense
Gain from sales of AXIS software		2,813,525		—
Other income (expense)		21,876		(5,000)

Interest expense, net		(7,459)		(22,692)
Total other income (expenses), net		2,827,942		(27,692)
Net income before income tax		$	2,873,177	$	105,525
Income tax benefit		$	1,139,449	$	—
Net income		4,012,626		105,525
Less undeclared dividends on preferred stocks		51,600		51,528
Less income allocated to convertible preferred stocks		1,948,700		25,903
Net income applicable to common stockholders		$	2,012,326	$	28,094
Net income per share
Basic income per share applicable to common stockholder		$	0.27	$	0.00
Diluted income per share		$	0.27	$	0.00
Weighted average shares—basic		7,415,329		7,415,329
Weighted average shares—diluted		14,596,202		14,252,202


	Series A Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2025	2,000,000	$	645,000	7,415,329	$	7,415	$	69,702,043	$	(68,439,351)	$	1,915,107




Net income	—	—		—	—		—		4,012,626		4,012,626
Balance at June 30, 2026	2,000,000	$	645,000	7,415,329	$	7,415	$	69,702,043	$	(64,426,725)	$	5,927,733


ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended June 30,
	2026		2025
Cash Flows from Operating Activities:
Net income	$	4,012,626	$	105,525
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Net gain from sales of AXIS software	(2,813,525)		—

Change in allowance for credit loss	(61,823)		(6,605)
Decrease in inventory valuation	—		(42,838)
Depreciation and amortization	22,588		37,819
Non cash lease expense	114,137		211,191

Deferred income tax	(1,139,449)		—
Change in operating assets and liabilities:
Accounts receivable	(338,501)		627,869
Inventories	408,279		(486,307)
Other currents	(144,861)		29,702
Other long-term assets	(52,156)		—
Accounts payable	(458,630)		29,970
Accrued expenses	209,107		45,105
Related party accrued interest	(112,389)		—
Change in operating lease liability	(105,912)		(226,656)
Deferred revenue	60,378		47,915
Other short-term liabilities	(2,473)		8,035
Net cash (used in) provided by operating activities	(402,604)		380,725
Cash Flows from Investing Activities:
Purchase of equipment	(4,421)		(3,880)
Proceeds from sales of AXIS software	2,975,000		—
Consulting fee associated with sales of AXIS software	(175,000)		—
Net cash provided by (used in) investing activities	2,795,579		(3,880)
Cash Flows from Financing Activities:
Proceeds from related party loan	100,000		—
Repayment of EIDL loan	(3,423)		(3,382)
Repayment of note payable	(126,469)		(36,533)
Repayment of related party loan	(100,000)		—
Net cash used in financing activities	(129,892)		(39,915)
Net increase in cash, cash equivalents and restricted cash	2,263,083		336,930
Cash, and restricted cash, beginning of year	802,385		465,455
Cash, and restricted cash, end of year	$	3,065,468	$	802,385

Cash, and restricted cash consist of the following:
End of year
Cash	$	3,065,468	$	545,835
Restricted cash	—		256,550
	$	3,065,468	$	802,385


Beginning of year
Cash	$	545,835	$	209,033
Restricted cash	256,550		256,422
	$	802,385	$	465,455

Supplemental Schedule of Cash Flow Information:

Interest paid	$	8,316	$	21,035
Non Cash Investing Activities
Non Cash Finance Activities
Right-of-use assets obtained in exchange for lease obligations	$	687,241	$	265,155


	Years ended June 30,
		2026		2025
Beginning of Year		$	328,000	$	280,000
Additions		1,075,000		833,000
Revenue Recognized		(1,015,000)		(785,000)
End of Year		$	388,000	$	328,000


	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets
	$	17,565	$	—	$	17,565	$	(9,431)	$	8,134
Total	$	17,565	$	—	$	17,565	$	(9,431)	$	8,134



Year ending June 30,	EIDL Loan Payment

2027	$	3,499
2028	3,632
2029	3,771
2030	3,914
2031	4,064
Thereafter	119,995
Total	$	138,875



	For the Years ended June 30,
	2026		2025
Balance, July 1	$	164,499	$	171,104
Provision	28,641		—
Recovery	(67,500)		(6,605)
Write-offs	(51,605)		—
Balance, June 30	$	74,035	$	164,499



	June 30,
	2026		2025
Raw materials	$	997,520	$	1,120,605
Work in process	59,552		96,496
Finished goods	676,912		925,162
Total inventories	$	1,733,984	$	2,142,263


	June 30,
	2026		2025
Equipment	$	826,371	$	821,950
Furniture and fixtures	128,499		128,499
Leasehold improvements	39,048		39,048
	993,918		989,497
Less: Accumulated depreciation and amortization	(967,313)		(954,908)
	$	26,605	$	34,589


	June 30,
	2026		2025
Accrued compensation	$	667,268	$	526,307

Warranty reserve	32,078		32,078
Tax payable	41,952		41,952
Other accruals	76,231		33,085
Total accrued expenses	$	817,529	$	633,422


	2026		2025
Current income tax provision
Federal	$	—	$	—
State	—		—
	—		—
Deferred income tax provision
Federal	625,619		501,054
State	(84,833)		33,333
Change in valuation allowance	(1,680,235)		(534,387)
Total deferred provision	(1,139,449)		—
Income tax expense (benefit)	$	(1,139,449)	$	—


	2026		2026
Statutory federal income tax rate	$	603,367	21.00	%
State and local income tax (1), net of federal income tax effect	11,785		0.41	%
Permanent differences	8,189		0.29	%
Return to provision	7,065		0.25	%
Expired net operating loss	—		0.00	%

Other deferred adjustments	(14,295)		(0.50)	%
Valuation allowance	(1,755,560)		(61.10)	%
Effective income tax rate	$	(1,139,449)	(39.65)	%


	2026		2025
Deferred income tax assets:
Net operating loss carryforward	$	6,364,824	$	6,532,220
Stock options	—		3,295
Operating lease liability	184,987		56,878
Allowance for doubtful accounts	16,560		36,843
Accrued vacation	56,851		59,149
Inventory reserve	48,515		48,580


174 R&D	—		351,395
Accelerated amortization on goodwill and other intangible assets	42,456		41,513
Warranty reserve	7,175		7,184
Total deferred income tax assets	6,721,368		7,137,057
Valuation allowance	(5,393,142)		(7,073,376)
Net deferred tax assets	1,328,226		63,681
Deferred income tax liabilities:
Accelerated depreciation	(1,819)		(6,673)
Right of use asset	(186,958)		(57,008)
Total deferred income tax liabilities	(188,777)		(63,681)
Net deferred tax assets	$	1,139,449	$	—


(in thousands)	For the Years Ended June 30,
		2026	2025
Domestic			$	6,830	53.6	%	$	6,741	56.0	%
Foreign			5,906		46.4	%	5,305		44.0	%
Total			$	12,736	100.0	%	$	12,046	100.0	%


	Year Ended June 30,
	2026		2025
Operating lease costs:
Fixed	$	168,308	$	348,112
Total:	$	168,308	$	348,112


		June 30,
Leases (operating)	Classification on the Balance Sheet	2026		2025
Assets
Operating lease ROU assets	Right-of-use asset	$	827,057	$	253,953
Liabilities
Current	Current portion of operating lease liabilities	$	159,351	$	86,521
Non-current	Operating lease liabilities	$	676,514	$	168,015


	Operating

2027	$	224,230
2028	215,467
2029	145,261
2030	147,420
2031	143,142
Thereafter	197,063
Total lease payments	1,072,583
Less interest	236,718
Present value of lease liabilities	$	835,865


Name and Principal Position	Year	Salary		Bonus		Stock Awards		Option Awards (1)		Non-Equity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation (1)		Total

Richard J. DePiano, Jr. Chief Executive Officer, President and General Counsel	2026	$	183,000	$	—	$	—	$	—	$	—	$	—	$	22,000	$	205,000
	2025	$	182,000	$	—	$	—	$	—	$	—	$	—	$	23,000	$	205,000

Mark Wallace Chief Operating Officer and Principal Financial & Accounting Officer	2026	$	156,000	$	60,000	$	—	$	—	$	—	$	—	$	13,000	$	229,000
	2025	$	149,000	$	—	$	—	$	—	$	—	$	—	$	13,000	$	162,000

Weiying Huang Chief Financial Officer	2026	$	132,000	$	—	$	—	$	—	$	—	$	—	$	7,000	$	139,000
Weiying Huang Chief Financial Officer	2025	$	126,000	$	—	$	—	$	—	$	—	$	—	$	7,000	$	133,000


Name (1)	Amount of Beneficial Ownership of Outstanding Shares (1)		Percent of Class		Amount of Beneficial Ownership of Shares Underlying Options	Series A Convertible Preferred Stock	Amount of Aggregate Beneficial Ownership		Aggregate Percent of Class


Richard J. DePiano, Jr.	4,440,833	(2)	59.9	%	—	4,300,000	8,740,833	(2)	74.6	%
Mark G. Wallace	—		—	%	—	—	—		*
Weiying Huang	—		—	%	—	—	—		*
Lisa A. Napolitano	—		—	%	—	—	—		*
C. Todd Trusk	250		—	%	—	—	250		*
John P. Dogum	—		—	%	—	—	—		*
David J. Jacovini	—		—	%	—	—	—		*
All Directors and Executive Officers as a group (7 persons)	4,441,083		59.9	%	—	4,300,000	8,741,083		74.6	%


3.1	(a)	Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company with the SEC on December 5, 2007).
3.2		Agreement and Plan of Merger dated as of September 28, 2001 between Escalon Pennsylvania, Inc. and Escalon Medical Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Proxy Statement on Schedule 14A filed with the SEC on September 21, 2001).
3.3		Statement with respect to shares dated February 15, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2018).
3.4		Bylaws of Registrant (incorporated by reference to Exhibit 3.2 to the Company’s Proxy Statement on Schedule 14A filed with the SEC on September 21, 2001).
4.1		Description of Securities*
10.1		Company’s Amended and Restated 1999 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003).†
10.2		Manufacturing Supply and Distribution Agreement between Sonomed, Inc. and Ophthalmic Technologies, Inc. dated as of March 11, 2004 (incorporated by reference to Exhibit 10.30 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004).
10.3		2013 Equity Incentive Plan (incorporated by reference to Exhibit 1 to the Company’s Proxy Statement on Schedule 14A filed with the SEC on November 14, 2013).†
10.4		Business Loan Agreement with TD Bank, N.A. dated June 29, 2018 (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2018).
10.5		Promissory Note dated June 29, 2018 between the Company and TD Bank N.A. (incorporated by reference to Exhibit 10.70 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2018).
10.6		Agreement of Deposit Account dated June 29, 2018 between the Company and TD Bank N.A. (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2018).
10.7		Asset Purchase Agreement by and between Escalon Medical Corp. and Optos Public Limited Company, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2026).
21		List of Subsidiaries (incorporated by reference to Exhibit 21 to the Company’s Annual Report on Form 10-KSB/A for the year ended June 30, 2002).
23.1		Consent of Independent Registered Public Accounting Firm (CBIZ CPAs P.C.)*.

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (**).
31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (**).
32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (*).
		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (*).
101.1		The following materials are formatted in inline XBRL (inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of June 30, 2026 and 2025, (ii) Consolidated Statements of Operations for the years ended June 30, 2026 and 2025, (iii) Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2026 and 2025, (iv) Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025, and (v) Notes to Consolidated Financial Statements.*
104		The cover page of this Annual Report on Form 10-K, formatted as Inline XBRL and contained in Exhibit 101.1.


Escalon Medical Corp.
(Registrant)

	By:	/s/ Richard J. DePiano, Jr.
		Richard J. DePiano, Jr. Chief Executive Officer




By:	/s/ Richard J. DePiano, Jr.	Chairman and Chief Executive Officer (Principal Executive Officer)	October 13, 2026
	Richard J. DePiano, Jr.

By:	/s/ Mark Wallace	Chief Operating Officer and Principal Financial & Accounting Officer	October 13, 2026
	Mark Wallace

By:	/s/ John P. Dogum	Director	October 13, 2026
	John P. Dogum

By:	/s/ Lisa Napolitano	Director	October 13, 2026
	Lisa Napolitano

By:	/s/ C. Todd Trusk	Director	October 13, 2026
	C. Todd Trusk

By:	/s/ David J Jacovini	Director	October 13, 2026
	David J Jacovini


/s/ Richard J. DePiano Jr.
Richard J. DePiano Jr.
Chief Executive Officer
Date: October 13, 2026


/s/ Mark Wallace
Mark Wallace
Chief Operating Officer and Principal Accounting & Financial Officer