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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 FORM 10-Q
QUARTERLY PERIOD PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarterly Period ended March 31, 2024
Commission File Number 0-20127


Escalon Medical Corp.
(Exact name of registrant as specified in its charter)

Pennsylvania 33-0272839
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
435 Devon Park Drive, Suite 824, Wayne, PA 19087
(Address of principal executive offices, including zip code)
(610) 688-6830
(Registrant’s telephone number, including area code)


N/A
Former name, former address and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company. or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 


Large accelerated fileroAccelerated filero
Non-accelerated filer
x
Smaller reporting companyx
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o  Yes  x  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 7,415,329 shares of common stock, $0.001 par value, outstanding as of May 13, 2024.




TABLE OF CONTENTS
  Page
PART I Financial Information
Item I.
Item 2.
Item 3.
Item 4.
PART II Other Information
Item 6.



1

PART I. FINANCIAL INFORMATION


Item I. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


2

ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,
2024		June 30,
2023
(Unaudited)
ASSETS
Current assets:
Cash $564,707 $889,674 
Restricted cash256,390 256,293 
Accounts receivable 1,491,827 1,807,599 
    Less: allowance for credit losses(132,624)(153,878)
Accounts receivable, net1,359,203 1,653,721 
Inventories, net1,804,929 1,587,989 
Other current assets166,600 249,790 
Total current assets4,151,829 4,637,467 
Property and equipment, net53,971 34,064 
Right-of-use assets276,089 503,647 
License and patent, net54,355 69,986 
Other long term assets62,787 62,787 
Total assets$4,599,031 $5,307,951 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of note payable $33,262 $37,087 
Current portion of EIDL loan3,172 3,105 
Accounts payable1,118,057 1,205,510 
Accrued expenses589,877 651,978 
Related party accrued interest 112,389 112,389 
Current portion of operating lease liabilities
282,950 329,638 
Deferred revenue403,069 426,227 
Other short-term liabilities86,333 87,125 
Total current liabilities2,629,109 2,853,059 
Note payable, net of current portion135,483 159,511 
EIDL loan, net of current portion 143,289 146,435 
Operating lease liabilities, net of current portion15,974 214,103 
Total long-term liabilities294,746 520,049 
Total liabilities2,923,855 3,373,108 
Contingencies (Note 10)
Shareholders' 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 $961,173 and $922,331)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 capital69,702,043 69,702,043 
Accumulated deficit(68,679,282)(68,419,615)
Total shareholders’ equity1,675,176 1,934,843 
Total liabilities and shareholders’ equity$4,599,031 $5,307,951 
See notes to unaudited condensed consolidated financial statements.
3


ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended March 31, For the Nine Months Ended March 31,
2024202320242023
Net revenues:
Products$2,567,387 $3,285,396 $8,101,834 $8,582,183 
Service plans128,114 148,918 407,904 462,436 
Revenues, net2,695,501 3,434,314 8,509,738 9,044,619 
Costs and expenses:
Cost of goods sold1,578,727 1,720,853 4,835,402 5,021,470 
Marketing, general and administrative1,117,534 938,161 3,401,902 3,108,177 
Research and development155,848 185,750 515,213 641,316 
Total costs and expenses
2,852,109 2,844,764 8,752,517 8,770,963 
(Loss) income from operations(156,608)589,550 (242,779)273,656 
Other expense
Interest expense(5,541)(4,315)(16,888)(15,188)
Income tax expense— — — — 
Net (loss) income(162,149)585,235 (259,667)258,468 
Undeclared dividends on preferred stocks12,830 13,006 38,842 38,735 
Net (loss) income applicable to common shareholders$(174,979)$572,229 $(298,509)$219,733 
Net (loss) income per share
Basic (loss) income per share$(0.02)$0.08 $(0.04)$0.03 
Diluted (loss) income per share$(0.02)$0.04 $(0.04)$0.02 
Weighted average shares—basic7,415,329 7,415,3297,415,329 7,415,329
Weighted average shares—diluted7,415,32913,478,9367,415,32913,478,936
See notes to unaudited condensed consolidated financial statements.
4


ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)


 Series A Convertible Preferred StockCommon StockAdditional
Paid-in
Capital		Accumulated
Deficit		Total
Shareholders’
Equity
 Shares AmountSharesAmount  
Balance at June 30, 20232,000,000 $645,000 7,415,329 $7,415 $69,702,043 $(68,419,615)$1,934,843 
Net loss— — — — — (21,197)(21,197)
Balance at September 30, 20232,000,000 645,000 7,415,329 7,415 69,702,043 (68,440,812)1,913,646 
Net loss— — — — — (76,321)(76,321)
Balance at December 31, 20232,000,000 645,000 7,415,329 7,415 69,702,043 (68,517,133)1,837,325 
  Net loss— — — — — (162,149)(162,149)
Balance at March 31, 20242,000,000 $645,000 7,415,329 $7,415 $69,702,043 $(68,679,282)$1,675,176 

 Series A Convertible Preferred StockCommon StockAdditional
Paid-in
Capital		Accumulated
Deficit		Total
Shareholders’
Equity
 Shares AmountSharesAmount  
Balance at June 30, 20222,000,000 $645,000 7,415,329 $7,415 $69,702,043 $(68,876,441)$1,478,017 
Net loss— — — — — (320,724)(320,724)
Balance at September 30, 20222,000,000 645,000 7,415,329 7,415 69,702,043 (69,197,165)1,157,293 
Net loss— — — — — (6,043)(6,043)
Balance at December 31, 20222,000,000 645,000 7,415,329 7,415 69,702,043 (69,203,208)1,151,250 
Net income— — — — — 585,235 585,235 
Balance at March 31, 20232,000,000 $645,000 7,415,329 $7,415 $69,702,043 $(68,617,973)$1,736,485 


See notes to unaudited condensed consolidated financial statements.
5

ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended March 31,
20242023
Cash Flows from Operating Activities:
Net (loss) income$(259,667)$258,468 
Adjustments to reconcile net loss to net cash used in operating activities:
Change in allowance of doubtful accounts20,354 (93,400)
Depreciation and amortization
26,763 34,424 
Non cash lease expense
227,558 215,772 
Change in operating assets and liabilities:
Accounts receivable274,164 (107,573)
Inventories(216,940)(61,238)
Other current and non-current assets83,189 27,798 
Accounts payable (87,453)35,375 
   Accrued expenses
(62,101)(33,063)
Change in operating lease liability
(244,817)(226,404)
Deferred revenue(23,158)(36,985)
  Other short term and long term liabilities(792)(42,955)
Net cash used in operating activities(262,900)(29,781)
Cash Flows from Investing Activities:
  Purchase of equipment (31,038)(6,687)
 Purchase of patents— (7,155)
Net cash used in investing activities
(31,038)(13,842)
Cash Flows from Financing Activities:
Repayment of note payable(27,853)(3,165)
Repayment of EIDL loan(3,079)(2,686)
Net cash used in financing activities(30,932)(5,851)
Net decrease in cash, cash equivalents and restricted cash(324,870)(49,474)
Cash and restricted cash, beginning of period1,145,967 850,034 
Cash and restricted cash, end of period$821,097 $800,560 
Cash, cash equivalents and restricted cash consist of the following:
End of period
Cash $564,707 $544,320 
Restricted cash 256,390 256,240 
$821,097 $800,560 
6

Beginning of period
Cash $889,674 $593,869 
Restricted cash 256,293 256,165 
$1,145,967 $850,034 

Supplemental Schedule of Cash Flow Information:
Interest paid$16,985 $15,697 
See notes to unaudited condensed consolidated financial statements
7

Escalon Medical Corp. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization and Basis of Presentation

          Escalon Medical Corp. ("Escalon" or "Company") is a Pennsylvania corporation initially incorporated in California in 1987, and reincorporated in Pennsylvania in November 2001. Within this document, the “Company” collectively shall mean Escalon, which includes its division called "Trek" and its wholly owned subsidiaries: Sonomed, Inc. (“Sonomed”), Escalon Digital Solutions, Inc. (“EMI”), and Sonomed IP Holdings, Inc.

    The Company operates in the healthcare market, specializing in the development, manufacture, marketing and distribution of medical devices and pharmaceuticals in the area of ophthalmology. The Company and its products are subject to regulation and inspection by the United States Food and Drug Administration (the “FDA”). The FDA and other government authorities require extensive testing of new products prior to sale and has jurisdiction over the safety, efficacy and manufacture of products, as well as product labeling and marketing.
The accompanying unaudited condensed consolidated financial statements (“financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and have been consistently applied. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP, but which are not required for interim reporting purposes, have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position as of March 31, 2024, and the results of operations and cash flows for the interim periods ended March 31, 2024 and 2023, have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended June 30, 2023 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on October 13, 2023. Operating results for the three months and nine months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the full year ending June 30, 2024.

    The Company’s common stock trades on the OTCQB Market under the symbol “ESMC.”

2. Going Concern

The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the continuous enhancement of the current products, development of new products; changes in domestic and foreign regulations; ability of manufacture successfully; competition from products manufactured and sold or being developed by other companies, the price of, and demand for, the Company’s products and its ability to raise capital to support its operations.

To date, the Company’s operations have not generated sufficient revenues to enable consistent profitability. Through March 31, 2024, the Company had incurred historical recurring losses from operations and incurred negative cash flows from operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for the next 12 months following the issuance of these unaudited condensed consolidated financial statements.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company's continuance as a going concern is dependent on its future profitability and on the on-going support of its shareholders, affiliates and creditors. In order to mitigate the going concern issues, the Company is actively pursuing business partnerships, managing its continuing operations, and implementing cost-cutting measures. The Company may not be successful in any of these efforts.

3. Summary of Accounting Policies

Recently Issued Accounting Standards
8




In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The adoption of the new guidance will not have a material impact on the Company's unaudited consolidated financial statements. The Company adopted the current expected credit loss model prospectively from fiscal year 2024, and assessed the allowance for expected credit losses to reflect the risk of loss, even when that risk is remote. The Company continues to use the aging matrix in conjunction with the historical information, current conditions, and reasonable and supportable forecasts. The Company groups most of the trade receivable by pools after adoption of the new standards while it analyzed the credit loss of the trade receivables one by one before adoption. The major difference is the estimate of the current expected credit loss for the receivable that are current on their payment. For the nine-month period ended March 31, 2024, the adoption of the new guidance did not have a material impact on the Company's unaudited consolidated financial statements. The Company will continue to assess the current expected credit loss. It may need to recognize a credit loss in the income statement earlier than under the legacy guidance at certain times when the expected credit loss is increased.
Principles of Consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable and Allowance for Credit Losses

Accounts receivables are recorded at net realizable value. The Company performs ongoing credit evaluations of customers’ financial condition and does not require collateral for accounts receivable arising in the normal course of business. The Company maintains allowances for potential credit losses based on the Company’s historical trends, specific customer issues and current economic trends. Accounts are written off against the allowance when they are determined to be uncollectible based on management’s assessment of individual accounts. The Company adopted the current expected credit loss model prospectively from fiscal year 2024, and assessed the allowance for expected credit losses to reflect the risk of loss, even when that risk is remote. The Company continues to use the aging matrix in conjunction with the historical information, current conditions and reasonable and supportable forecasts. The Company groups most of the trade receivable by pools after adoption of the new standards while it analyzed the credit loss of the trade receivables one by one before adoption. The major difference is the estimate of the current expected credit loss for the receivables that are current on their payment. With adoption of the new standards, the small credit loss rate applied to current receivables will be mostly offset by the lower expected credit rate applied to over 120 days past due when less than 100% of expected credit loss is applied. The historical credit loss rate is adjusted for current conditions and management's assessment for factors such as international relations, economic conditions, and special-term contracts etc. For the nine-month period ended March 31, 2024, the adoption of the new guidance did not have a material impact on the Company's unaudited consolidated financial statements. The Company will continue to assess the current expected credit loss. It may need to recognize a credit loss in the income statement earlier than under the legacy guidance at certain time when the expected credit loss is increased. The Company recorded an allowance for credit losses of approximately $132,624 and $153,878 as of March 31, 2024, and June 30, 2023, respectively.

The activity for the allowance for credit losses during the three-month and nine-month periods ended March 31, 2024, and the fiscal year ended June 30, 2023, is as follows:

9




 For the Three Months Ended March 31, For the Nine Months Ended March 31,
 2024202320242023
Balance, at the beginning of the period$133,524 $241,349 $153,878 $236,349 
Provision (Reversal)— (98,400)(20,354)(93,400)
Write-offs(900)— (900)— 
Balance, at the end of the period$132,624 $142,949 $132,624 $142,949 

Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis and include freight-in materials, labor and overhead costs. Inventories are written down if the estimated net realizable value is less than the recorded value. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based, in part, on the age of inventory. If actual conditions are less favorable than those the Company has projected, the Company may need to increase its reserves for excess and obsolete inventories. Any increases in the reserves will adversely have impact on the Company’s results of operations. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. If the Company is able to sell such inventory any related reserves would be reversed in the period of sale. In accordance with industry practice, service parts inventory is included in current assets, although service parts are carried for established requirements during the serviceable lives of the products and, therefore, not all parts are expected to be sold within one year.


Deferred Revenues

    The Company records deferred revenues when cash payments are received or due in advance of its performance. The Company’s deferred revenues relate to payments received for the customer care plans for a 12-month period. The consideration received is recognized monthly over the service period. Revenue recorded that was included within prior period deferred revenue was $165,000 and $43,000, respectively for the three-month periods ended March 31, 2024 and 2023. Revenue recorded that was included within prior period deferred revenue was $440,000 and $300,000, respectively for nine month periods ended March 31, 2024, and 2023.

(in thousands)For the Three Months Ended March 31, For the Nine Months Ended March 31,
2024202320242023
Beginning of Period$316 $259 $426 $332 
Additions284 185 560 425 
Revenue Recognized197 149 583 462 
End of Period$403 $295 $403 $295 

(Loss) earnings Per Share    
The Company utilizes the two-class method to compute net (loss) income per common share. These participating securities included the Company’s convertible preferred stock which accrues dividends payable. The two-class method requires (loss) earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had
10




all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. As of March 31, 2024 and 2023, the average market prices for the years then ended are less than the exercise price of all the outstanding stock options and, therefore, the inclusion of the stock options would be anti-dilutive.
For the Three Months Ended March 31, For the Nine Months Ended March 31,
2024202320242023
Numerator:
  Numerator for basic loss per share:
 Net (loss) income$(162,149)$585,235 $(259,667)$258,468 
Undeclared dividends on preferred stock12,830 13,006 38,842 38,735 
Net (loss) income applicable to common shareholders$(174,979)$572,229 $(298,509)$219,733 
Numerator for diluted loss per share:
Diluted (loss) income$(162,149)$585,235 $(259,667)$258,468 
Undeclared dividends on preferred stock12,830 13,006 38,842 38,735 
Net (loss) income applicable to common shareholders$(174,979)$572,229 $(298,509)$219,733 
Denominator for basic (loss) earning per share
Denominator for basic (loss) earning per share - weighted average shares outstanding
7,415,329 7,415,329 7,415,329 7,415,329 
Weighted average preferred stock converted to common stock— 6,063,607 — 6,063,607 
 Denominator for diluted (loss) income assumed conversion7,415,329 13,478,936 7,415,329 13,478,936 
Net (loss) income per share:
Basic net (loss) income per share$(0.02)$0.08 $(0.04)$0.03 
Diluted net (loss) income per share$(0.02)$0.04 $(0.04)$0.02 
11





The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect on earnings per share.

For the Three Months Ended March 31,For the Nine Months Ended March 31,
2024202320242023
Stock options157,000 157,000 157,000 157,000 
Convertible preferred stock6,407,820 — 6,407,820 — 
Total potential dilutive securities not included in loss per share6,564,820 157,000 6,564,820 157,000 

Income Taxes

    The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

    The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of March 31, 2024 and June 30, 2023, the Company has recorded a full valuation allowance against its deferred tax assets.

    The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

    The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. As of March 31, 2024, and June 30, 2023, no accrued interest or penalties were required to be included on the related tax liability line in the consolidated balance sheets.

4. Inventories

March 31,
June 30,
(in thousands)20242023
Inventories:
        Raw Material$1,027 $882 
        Work-In-Process388 86 
        Finished Goods650 881 
Total inventories$2,065 $1,849 
Allowance for obsolete inventory(260)(260)
Inventories, net$1,805 $1,588 

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5. Related Party Transactions and Preferred Stock

    As of March 31, 2024, and 2023, the related party interest accrual of $112,389 related to the debt prior to the exchange, remained as an on demanded payable.
On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Richard DePiano, Sr., (Mr. DePiano Sr.), the Company's former Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano Sr. is the sole owner and sole trustee (the “Holders”).  Pursuant to the terms of the Exchange Agreement, effective February 15, 2018, the Holders exchanged a total of $645,000 principal amount of debt related to the accounts receivable factoring program the Company owes the Holders for 2,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”).
    
    Each share of Preferred Stock entitles the Holder thereof to 13 votes per share and will vote together with all other classes and series of stock of the Company as a single class on all actions to be taken by the Company’s stockholders.  As a result of this voting power, the Holders as of March 31, 2024 beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s shareholders.

    Subject to the terms and conditions of Preferred Stock, the holder of any share or shares of the Preferred Stock has the right, at its option at any time, to convert each such share of Preferred Stock (except that, upon any liquidation of the Company, the right of conversion will terminate at the close of business on the business day fixed for payment of the amounts distributable on the Preferred Stock) into 2.15 shares of Common Stock (the “Conversion Ratio”).  The Conversion Ratio is subject to standard provisions for adjustment in the event of a subdivision or combination of the Company’s Common Stock and upon any reorganization or reclassification of the capital stock of the Company. If the Holders were to convert their shares of Preferred Stock into Common Stock at the Conversion Ratio the Holders would receive a total of 4,300,000 shares of Common Stock, or approximately 36.70% of the then outstanding shares of Common Stock assuming such conversion.

    Each outstanding share of the Preferred Stock accrues dividends calculated cumulatively at the annual rate of $.0258 per share (such amount subject to equitable adjustment in the event of any stock dividend, stock split, combination, reclassification other similar event), payable upon the earlier of (i) a liquidation, dissolution or winding up of the Company or (ii) conversion of the Preferred Stock into Common Stock. Upon either of such events, all such accrued and unpaid dividends, whether or not earned or declared, to and until the date of such event, will become immediately due and payable and will be paid in full. The dividends payable to the holders of the Preferred Stock is payable in cash or, at the election of any such holder, in a number of additional shares of Common Stock equal to the amount of the dividend expressed in dollars divided by the then applicable Conversion Ratio, described above. As of March 31, 2024, and June 30, 2023, the cumulative dividends payable are $316,173 ($0.1581 per share) and $277,331 ($0.1387 per share), respectively.

    Mr. DePiano Sr. passed away on October 3, 2019, and left a will by which he appointed Richard J. DePiano, Jr., the Chief Executive Officer of the Company, as executor. Richard DePiano Jr. was elected to serve as Chairman of the Company's board. Mr. DePiano, Jr. qualified as executor and has control over the listed shares in his capacity as executor of Mr. DePiano Sr.'s estate.

6. TD Note Payable

    On June 29, 2018, the Company entered a business loan agreement with TD bank receiving a line of credit evidenced by a promissory note of $250,000. The interest is subject to change based on changes in an independent index which the Wall Street Journal Prime. The index rate at the date of the agreement is 5.0% per annum. Interest on the unpaid principal balance of the note is calculated using a rate of 0.74 percentage points over the index, adjusted if necessary for any minimum and maximum rate limitations, resulting in an initial rate of 5.74% per annum based on a year of 360 days. The Company was required to put $250,000 in the TD bank savings account as collateral. The Loan is guaranteed by Mr. DePiano Jr.

TD bank elected to exercise the term note conversion option to convert the loan balance of $201,575 to a five-year term note effective March 29, 2023 the "Conversion Date"). The scheduled monthly principal and interest payments in the amount of $4,247 began on April 29, 2023. Commencing on the Conversion Date, the aggregate principal balance outstanding bears interest at a fixed per annum rate of 9.49% pursuant to the loan's terms and conditions.

The future note payable payments as of March 31, 2024 are as follows:

Year ending June 30,
TD Note Payment
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2024 (remainder of FY 2024)
8,530 
2025
37,434 
2026
41,145 
202745,224 
202836,412 
Total
$168,745 

7. Long-term debt


Economic Injury Disaster Loan ("EIDL")

    EIDL is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to the Coronavirus (COVID-19) pandemic. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation to health care benefits, rent, utilities, and fixed debt payments. The Company received a $150,000 EIDL loan. The annual interest rate is 3.75%. The payment term is 30 years and the monthly payment of $731 started on July 1st, 2021. The EIDL loan is secured by the tangible and intangible personal property of the Company.

    The future annual principal amounts to be paid as of March 31, 2024 are as follows:
Year ending June 30,EIDL Payment
2024 (remainder of FY 2024)$782 
20253,202 
20263,324 
20273,451 
20283,582 
Thereafter132,120 
Total$146,461 

8. Concentration of Credit Risk

Credit Risk

Financial instruments, which potentially subject the Company to the concentration of credit risk, consist principally of cash and cash equivalents, restricted cash and trade receivables. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across geographic areas principally within the United States and international. The Company routinely addresses the financial strength of its customer and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral.

Major Customer

    One customers accounted for 13% of net revenue during the three-month period ended March 31, 2024. One customer accounted for 11% of net revenue during the nine-month period ended March 31, 2024. No customer accounted for more than 10% during the three-month and nine-month periods ended March 31, 2023.

    As of March 31, 2024, the Company had two customers that represented 16% and 11% of the total accounts receivable balance. As of June 30, 2023, the Company had one customer that represented 24% of the total accounts receivable balance.

Major Supplier
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    The Company's two largest suppliers accounted for 36% and 11% of total purchases for the three-month period ended March 31, 2024. The Company's one largest supplier accounted for 40% of total purchases for the nine-month period ended March 31, 2024. The Company's two largest suppliers accounted for 44% and 11% of total purchases for the three-month period ended March 31, 2023. The Company's two largest suppliers accounted for 44% and 10% of total purchases for the nine-month period ended March 31, 2023.

    As of March 31, 2024, the Company had three suppliers that represented 29%, 12%, and 11% of the total accounts payable balance. As of June 30, 2023, the Company had two suppliers that represented approximately 36% and 11% of the total accounts payable balance.

Disaggregated Revenue

    Domestic and international sales from operations are as follows:
(in thousands)For the Three Months Ended March 31, For the Nine Months Ended March 31,
2024202320242023
Domestic$1,339 50 %$1,903 55 %$4,394 52 %$5,258 58 %
Foreign1,357 50 %1,531 45 %4,116 48 %3,787 42 %
Total$2,696 100 %$3,434 100 %$8,510 100 %$9,045 100 %

9. Leases

    The Company leases certain facilities and equipment under operating leases. Total lease expense, under ASC 842, was included in cost of goods sold and marketing, general and administrative costs in our unaudited condensed consolidated statements of operations for the three and nine months ended March 31, 2024, and 2023 as follows:

For the Three Months Ended March 31, For the Nine Months Ended March 31,
2024202320242023
Operating lease costs:
Fixed$84,970 $85,324 $254,992 $256,084 
Total:$84,970 $85,324 $254,992 $256,084 

    Supplemental cash flow information was as follows:
For the Three Months Ended March 31, For the Nine Months Ended March 31,
2024202320242023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$88,224 $86,350 $262,387 $256,883 
Total$88,224 $86,350 $262,387 $256,883 


    The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate)
under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheets as of March 31, 2024:
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Operating
2024 (reminder of FY 2024)$88,514 
2025212,415 
20263,928 
20271,200 
20281,200 
Thereafter600 
Total lease payments307,857 
Less interest 8,933 
Present value of lease liabilities$298,924 

    Average lease terms and discount rates were as follows:
March 31,June 30,
20242023
Weighted-average remaining lease terms (years)
Operating leases
0.971.67
Weighted-average discount rate
Operating leases
5.72 %5.69 %

10. Contingencies
The Company, from time to time is involved in various legal proceedings and disputes that arise in the normal course of business. These matters have included intellectual property disputes, contract disputes, employment disputes and other matters. The Company does not believe that the resolution of any of these matters has had or is likely to have a material adverse impact on the Company’s business, financial condition or results of operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

    Certain statements contained in, or incorporated by reference in, this report are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which provide current expectations or forecasts of future events. Such statements can be identified by the use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “possible,” “project,” “should,” “will,” and similar words or expressions. The Company's forward-looking statements include certain information relating to general business strategy, growth strategies, financial results, liquidity, the Company's ability to continue as a going concern, discontinued operations, research and development, product development, the introduction of new products, the potential markets and uses for the Company's products, the Company's ability to increase its sales campaign effectively, the Company's regulatory filings with the FDA, acquisitions, dispositions, the development of joint venture opportunities, intellectual property and patent protection and infringement, the loss of revenue due to the expiration or termination of certain agreements, the effect of competition on the structure of the markets in which the Company competes, increased legal, accounting and Sarbanes-Oxley compliance costs, information security, cybersecurity and data privacy risks, defending the Company in litigation matters and the Company's cost saving initiatives. The reader must carefully consider forward-looking statements and understand that such statements involve a variety of risks and uncertainties, known and unknown, and may be affected by assumptions that fail to materialize as anticipated, including risks related to the COVID-19 pandemic, inflation, the ability to continue as a going concern including the ability to raise capital, manage operations and pursue business partnerships and cost-cutting measures, and the other risks described in the Company's Form 10-K for the fiscal year ended June 30, 2023. Consequently, no forward-looking statement can be guaranteed, and actual results may vary materially. It is not possible to foresee or identify all factors affecting the Company's forward-looking statements, and the reader therefore should not consider the list of such factors contained in its periodic report on Form 10-K for the year ended June 30, 2023 and this Form 10-Q quarterly report to be an exhaustive statement of all risks, uncertainties or potentially inaccurate assumptions.
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Executive Overview—nine-month periods ended March 31, 2024, and 2023
The following highlights are discussed in further detail within this Form 10-Q. The reader is encouraged to read this Form 10-Q in its entirety to gain a more complete understanding of factors impacting Company performance and financial condition.

•Consolidated net revenue decreased approximately $535,000 or 5.9%, to $8,510,000 during the nine months ended March 31, 2024, as compared to the same period of last fiscal year. The decrease in net revenue is mainly attributed to a decrease in sales of Sonomed's ultrasound products of $467,000 during the nine months ended March 31, 2024.

•Consolidated cost of goods sold totaled approximately $4,836,000, or 56.8%, of total revenue for the nine months ended March 31, 2024, as compared to $5,021,000, or 55.5%, of total revenue of the same period of last fiscal year. The increase of 1.3% in cost of goods sold as a percentage of total revenue is mainly due to changes in product sales mix and geographic differences during the nine months ended March 31, 2024.

•Consolidated marketing, general and administrative expenses increased $294,000, or 9.5%, to $3,402,000 for the nine months ended March 31, 2024, as compared to the same period of last fiscal year. The increase in marketing, general and administrative expenses is mainly due to the recovery of bad debts of $113,000 during the prior year, tax expenses, and increase travel expense during the three months ended March 31, 2024.

•Consolidated research and development expenses decreased $126,000, or 19.7%, to $515,000 for the nine months ended March 31, 2024, as compared to the same period of last fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The decrease in research and development expenses is mainly due to decreased image management consulting expense during the nine months ended March 31, 2024.
Company Overview

    The following discussion should be read in conjunction with the interim unaudited condensed consolidated financial statements and the notes thereto, which are set forth in Item 1 of this report.

    The Company operates in the healthcare market specializing in the development, manufacture, marketing and distribution of medical devices and pharmaceuticals in the area of ophthalmology. The Company and its products are subject to regulation and inspection by the FDA. The FDA requires extensive testing of new products prior to sale and has jurisdiction over the safety, efficacy and manufacture of products, as well as product labeling and marketing. The Company's Internet address is www.escalonmed.com. Under the trade name of Sonomed-Escalon the Company develops, manufactures and markets ultrasound systems used for diagnosis or biometric applications in ophthalmology, develops, manufactures and distributes ophthalmic surgical products under the Trek Medical Products name, and manufactures and markets image management systems.
Critical Accounting Estimates
The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that impact amounts reported therein. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

For a description of the accounting policies that, in management’s opinion, involve the most significant application of judgment or involve complex estimation and which could, if different judgment or estimates were made, materially affect our reported financial position, results of operations, or cash flows, see the notes to consolidated financial statements included in the Form 10-K for the year ended June 30, 2023.

During the nine months ended March 31, 2024, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses, however there were no significant impact and no changes in our significant accounting estimates to our unaudited condensed consolidated financial statements.
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Results of Operations
Three Months and Nine Months Ended March 31, 2024, and 2023
The following table shows consolidated net revenue, as well as identifying trends in revenues for the three months and nine months ended March 31, 2024, and 2023. Table amounts are in thousands:
 For the Three Months Ended March 31, For the Nine Months Ended March 31,
 20242023% Change20242023% Change
Net Revenue:
Products$2,568 $3,285 (21.8)%$8,102 $8,582 (5.6)%
Service plans128 149 (14.1)%408 463 (11.9)%
Total$2,696 $3,434 (21.5)%$8,510 $9,045 (5.9)%
    
Consolidated net revenue decreased approximately $738,000 or 21.5%, to $2,696,000 during the three months ended March 31, 2024, as compared to the same period of last fiscal year. The decrease in net revenue is mainly attributed to a decrease in sales of Sonomed's ultrasound products of $701,000 during the three months ended March 31, 2024.

Consolidated net revenue decreased approximately $535,000 or 5.9%, to $8,510,000 during the nine months ended March 31, 2024, as compared to the same period of last fiscal year. The decrease in net revenue is mainly attributed to a decrease in sales of Sonomed's ultrasound products of $467,000 during the nine months ended March 31, 2024.

The following table presents the domestic and foreign sales for the three months and nine months ended March 31, 2024, and 2022. The table amounts are in thousands:
For the Three Months Ended March 31, For the Nine Months Ended March 31,
2024202320242023
Domestic$1,339 49.7 %$1,903 55.4 %$4,394 51.6 %$5,258 58.1 %
Foreign1,357 50.3 %1,531 44.6 %4,116 48.4 %3,787 41.9 %
Total$2,696 100.0 %$3,434 100.0 %$8,510 100.0 %$9,045 100.0 %

The following table presents consolidated cost of goods sold and as a percentage of revenues for the three months and nine months ended March 31, 2024, and 2022. Table amounts are in thousands:

 
 For the Three Months Ended March 31, For the Nine Months Ended March 31,
 2024%2023%2024%2023%
Cost of Goods Sold:
$1,579 58.6 %$1,721 50.1 %4,836 56.8 %5,021 55.5 %
Total$1,579 58.6 %$1,721 50.1 %4,836 56.8 %5,021 55.5 %


Consolidated cost of goods sold totaled approximately $1,579,000, or 58.6%, of total revenue for the three months ended March 31, 2024, as compared to $1,721,000, or 50.1%, of total revenue of the same period of last fiscal year. The increase of 8.5% in the cost of goods sold as a percentage of total revenue is mainly due to changes in product sales mix and geographic differences during the three months ended March 31, 2024.

Consolidated cost of goods sold totaled approximately $4,836,000, or 56.8%, of total revenue for the nine months ended March 31, 2024, as compared to $5,021,000, or 55.5%, of total revenue of the same period of last fiscal year. The increase of 1.3% in the cost of goods sold as a percentage of total revenue is mainly due to changes in product sales mix and geographic differences during the nine months ended March 31, 2024.

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    The following table presents consolidated marketing, general and administrative expenses for three months and nine months ended March 31, 2024, and 2023. Table amounts are in thousands:
 
 For the Three Months Ended March 31, For the Nine Months Ended March 31,
 20242023% Change 20242023% Change 
Marketing, General and Administrative:
$1,118 $938 19.2 %$3,402 $3,108 9.5 %
Total$1,118 $938 19.2 %$3,402 $3,108 9.5 %

Consolidated marketing, general and administrative expenses increased $180,000, or 19.2%, to $1,118,000 for the three months ended March 31, 2024, as compared to the same period of last fiscal year. The increase in marketing, general and administrative expenses is mainly due to the recovery of bad debts of $113,000 during the prior year, tax expenses, and increase travel expense during the three months ended March 31, 2024.

Consolidated marketing, general and administrative expenses increased $294,000, or 9.5%, to $3,402,000 for the nine months ended March 31, 2024, as compared to the same period of last fiscal year. The increase in marketing, general and administrative expenses is mainly due to he recovery of bad debts of $113,000 during the prior year, temporary hiring costs, increased network expenses and travel expenses during the nine months ended March 31, 2024.

The following table presents consolidated research and development expenses for the three months and nine months ended March 31, 2024, and 2023.
Table amounts are in thousands:
For the Three Months Ended March 31, For the Nine Months Ended March 31,
 20242023% Change  20242023% Change
Research and Development:
$156 $186 (16.1)%515 $641 (19.7)%
Total$156 $186 (16.1)%$515 $641 (19.7)%

Consolidated research and development expenses decreased $30,000, or 16.1%, to $156,000 for the three months ended March 31, 2024, as compared to the same period of last fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The decrease in research and development expenses is mainly due to decreased image management consulting expenses offset by the increased current year's new consulting services designing the housing and mechanical inner parts of probes during the three months ended March 31, 2024.
Consolidated research and development expenses decreased $126,000, or 19.7%, to $515,000 for the nine months ended March 31, 2024, as compared to the same period of last fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The decrease in research and development expenses is mainly due to decreased image management consulting expense during the nine months ended March 31, 2024.

Russia-Ukraine War

In February 2022, Russia invaded Ukraine. As military activity proceeds and sanctions, export controls and other measures are imposed by many countries against Russia, Belarus and specific areas of Ukraine, the war is increasingly affecting the global economy and financial markets, as well as exacerbating ongoing economic challenges, including rising inflation and global supply-chain disruption.

Israel-Hamas war

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In October 2023, Hamas terrorists attacked Israel, and then Israel declared war and decimated the Gaza Strip. The Israel-Hamas war and conflicts could affect economic activity via lower trade with the Middle East, disruption of supply chain and collection of trade receivables in the region.

The Company has operations or activities in countries and regions outside the United States. As a result, its global operations are affected by economic, political, and other conditions in the foreign countries in which it does business as well as U.S. laws regulating international trade, although the Company has not yet assessed that these wars have had a material effect on its financial position or results of operations.    

Liquidity and Capital Resources

Our total cash on hand as of March 31, 2024 was approximately $565,000 of cash on hand and restricted cash of approximately $256,000 compared to approximately $890,000 of cash on hand and restricted cash of $256,000 as of June 30, 2023.

Because the Company's operations have not historically generated sufficient revenues to enable profitability, we will continue to monitor costs and expenses closely and may need to raise additional capital or take other actions to fund operations.

The Company expects to continue to fund operations from cash on hand and through capital raising sources if possible and available, which may be dilutive to existing stockholders, through revenues from the licensing of the Company's products, or through strategic alliances. Additionally, we may seek to sell additional equity or debt securities through one or more discrete transactions, or enter a strategic alliance arrangement, but can provide no assurances that any such financing or strategic alliance arrangement will be available on acceptable terms, or at all. Moreover, the incurrence of indebtedness in connection with a debt financing would result in increased fixed obligations and could contain covenants that would restrict our operations.

As of March 31, 2024, we had an accumulated deficit of approximately $68.7 million, historically incurred recurring losses from operations and negative cash flows from operating activities. These factors raise substantial doubt regarding our ability to continue as a going concern, and our ability to generate cash to meet our cash requirements for the following twelve months as of the date of this form 10-Q.
    
The following table presents overall liquidity and capital resources as of March 31, 2024, and June 30, 2023. Table amounts are in thousands:
 
March 31,June 30,
 20242023
Current Ratio:
Current assets$4,152$4,637
Less: Current liabilities2,6292,853
Working capital$1,523$1,784
Current ratio1.58 to 11.63 to 1
Debt to Total Capital Ratio:
Note payable, lease liabilities, and EIDL loan$614$890
Total debt 614890
Total equity 1,6751,935
Total capital $2,290$2,825
Total debt to total capital 26.8%31.5%
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Working Capital Position
Working capital decreased approximately $261,000 as of March 31, 2024, and the current ratio decreased to 1.58 to 1 from 1.63 to 1 when compared to June 30, 2023.
Debt to total capital ratio was 26.8% and 31.5%  as of March 31, 2024, and June 30, 2023, respectively. The decrease of debt to total capital ratio is mainly due to lease payments.
Cash Flow Used in Operating Activities
During the nine months ended March 31, 2024, the Company used approximately $263,000 of cash in operating activities as compared to cash of approximately $30,000 used in operating activities during the nine months ended March 31, 2024.
    For the nine months ended March 31, 2024, its cash used in operations is due to an increase in inventory of $217,000, a decrease in accounts payable of $87,000, a decrease in lease liability of $245,000, and a decrease in deferred revenue of $23,000, offset by a decrease in accounts receivable of $274,000 and a decrease in current assets of $83,000. The remaining offsetting items for cash provided by operations is comprised of less significant items.
     For the nine months ended March 31, 2023, its cash used in operations is due to operating income of $258,000, an increase in accounts payable of $35,000, and a decrease in other current and non-current assets of $28,000, offset by an increase in accounts receivable of approximately $108,000, an increase of inventory of $61,000, a repayment of employer tax deferral of $43,000, and a decrease of other deferred revenue of $37,000 and a decrease in accrued expense of $33,000. The remaining offsetting items for cash provided by operations is comprised of less significant items
Cash Flows used in Investing Activities
Cash flows used in investing activities for the nine months ended March 31, 2024 was due to purchase of fixed assets of $31,000. Cash flows used in investing activities for the nine-month period ended March 31, 2023 was due to the addition to the patent of $7,000 and addition to the fixed assets of $7,000.
Cash Flows Used in Financing Activities
For the nine months ended March 31, 2024 the cash used in financing activities was due to loan payments of $28,000 and repayment of EIDL loan of $3,000. For the nine months ended March 31, 2023 the cash used in financing activities was due to an auto loan payment of $3,000 and repayment of EIDL loan of $3,000.
Item 3.    Quantitative and Qualitative Disclosures About Market Risk

None.

Item 4. Controls and Procedures

(A)    Evaluation of Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer and Principal Financial and Accounting Officer, have established disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify the Company's financial reports and to other members of senior management and the Board of Directors.

Based on their evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2024, the Chief Executive Officer and Principal Financial and Accounting Officer of the Company have concluded that such disclosure controls and procedures are not effective to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its Chief Executive Officer and Principal Financial and Accounting Officer, to allow timely decisions regarding required disclosure. We identified a material weakness in internal control related to the proper design and implementation of controls over our estimates relating to the valuation of inventory and allowance for doubtful accounts, specifically over the precision of management’s review during the year end June 30, 2023.


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(B)    Internal Control over Financial Reporting

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act), during the third quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Part II. OTHER INFORMATION
Item 5. Other Information

None.
Item 6.    Exhibits
101. CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101. DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101. LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101. PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document


Signatures
    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Escalon Medical Corp.
(Registrant)
Date: May 14, 2024By:/s/ Richard J. DePiano, Jr.
Richard J. DePiano, Jr.
Chief Executive Officer
Date: May 14, 2024By:/s/ Mark Wallace
Mark Wallace
Chief Operating Officer and Principal Accounting & Financial Officer

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