ESP 20250630

 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D. C. 20549

 FORM 10-K

 ANNUAL Report Pursuant to Section 13 or 15( d) of
the Securities Exchange Act of 1934

 For the fiscal year ended June 30, 2025

 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission File Number 1-4383

 ESPEY MFG. & ELECTRONICS CORP.

 (Exact name of registrant as specified in its charter)

 New York
 14-1387171

 (State of incorporation)
 (I.R.S. Employer's Identification No.)

 233 Ballston Avenue, Saratoga Springs, New York 12866

 (Address of principal executive offices)

 518 - 584-4100

 (Registrant's telephone number, including area
code)

 Securities registered pursuant to Section 12(b)
of the Act

 Title of each class
 Trading Symbol
 Name of each exchange on which registered

 Common Stock $.33-1/3 par value
 ESP
 NYSE American

 Securities registered pursuant to Section 12(g)
of the Act

 None

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

 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 No

 Indicate by check mark
whether the registrant has submitted electronically every Interactive Date File required to be submitted and posted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files). Yes No

 Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company:

 Large accelerated filer
 Non-accelerated filer

 Accelerated filer
 Smaller reporting company

 Emerging growth company

 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.

 Indicate by check mark whether
the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm
that prepared or issued its audit report.

 If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements.

 Indicate by check mark whether any of those error corrections
are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive
officers during the relevant recovery period pursuant to §240.10D-1(b)

 Indicate by check mark whether
the registrant is a shell company. Yes No

 The aggregate market value of the voting
stock held by non-affiliates of the registrant was $ 64,226,066 based upon the closing sale price of $30.15 on the NYSE American on
December 31, 2024.

 At September 14, 2025 there were 2,924,418 shares outstanding of the registrant's Common stock, $.33-1/3 par value.

 DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the registrant's definitive proxy
statement relating to the 2025 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission, are incorporated
by reference in Part III, Items 10 through 14 on Form 10-K as indicated herein.

 Forward-Looking Statements

 This Annual Report on Form 10-K contains forward-looking
statements that are based on management's expectations, estimates, projections and assumptions. Words such as "expects,"
"anticipates," "plans," "believes," "scheduled," "estimates" and variations
of these words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees
of future performance and involve certain risks and uncertainties that are difficult to predict. Therefore, actual future results and
trends may differ materially from what is forecast in forward-looking statements due to a variety of factors, including, without limitation:

 Changing priorities or decreases in the U.S. government's defense budget (including changes in priorities
in response to terrorist threats, improvement of homeland security and general U.S. Government budgetary issues);

 Termination of government contracts due to unilateral government action;

 Differences in anticipated and actual program performance, including the ability to perform under long-term
fixed-price contracts within estimated costs, and performance issues with key suppliers and subcontractors;

 Potential of changing prices for energy and raw materials;

 General strength of the industry sectors in which our customers transact business

 All forward-looking statements speak only as of
the date of this report or, in the case of any document incorporated by reference, the date of that document. All subsequent written and
oral forward-looking statements attributable to the Company or any person acting on the Company's behalf are qualified by the cautionary
statements in this section. The Company does not undertake any obligation to update or publicly release any revisions to forward-looking
statements to reflect events, circumstances or changes in expectations after the date of this report.

 Item 1.
 Business

 General

 Espey Mfg. & Electronics Corp. ("Espey")
is a power electronics design and original equipment manufacturing (OEM) company with a long history of developing and delivering highly
reliable products for use in military and severe environment applications. Design, manufacturing, and testing is performed in our 174,000+
square foot facility located at 233 Ballston Ave., Saratoga Springs, New York. Espey is classified as a "smaller reporting company"
for purposes of the reporting requirements under the Securities Exchange Act of 1934, as amended. Espey's common stock is publicly-traded
on the NYSE American under the symbol "ESP."

 Espey began operations after incorporation in
New York in 1928. We strive to remain competitive as a leader in high power energy conversion and transformer solutions through the design
and manufacture of new and improved products by using advanced and "cutting edge" electronics technologies.

 Espey is an ISO 9001:2015 and AS9100:2016 certified
manufacturer of power conversion, advanced magnetics and build to specifications provided by the customer "build to print"
products for the rugged industrial and military marketplace. Our primary products are power supplies, power converters, filters, power
transformers, magnetic components, power distribution equipment, UPS systems, and antennas. The applications of these products include
AC and DC locomotives, shipboard power, shipboard radar, airborne power, ground-based radar, and ground mobile power.

 Espey services include design and development
to specification, build to specifications provided by the customer "build to print", design services, design studies, environmental
testing services, metal fabrication, painting services, and development of automatic testing equipment. Espey is vertically integrated,
meaning that the Company produces individual components (including inductors), populates printed circuit boards, fabricates metalwork,
paints, wires, qualifies, and fully tests items, mechanically, electrically and environmentally, in house. Portions of the manufacturing
and testing process are subcontracted to vendors from time to time.

 In fiscal years ended June 30, 2025 and 2024,
the Company's total sales were $43,950,872 and $38,736,319, respectively. Sales to six customers accounted for 16%, 13%, 12%, 12%, 11%
and 10%, respectively, of total sales in 2025. Sales to five customers accounted for 20%, 18%, 16%, 16% and 11%, respectively, of total
sales in 2024. This concentration level presents significant risk. A loss of one of these customers or programs related to these customers
could significantly impact the financial performance of the Company. Historically, a small number of customers have accounted for a large
percentage of the Company's total sales in any given fiscal year. In some instances, our sales may include shipments to more than
one business unit of a particular customer.

 Export shipments in fiscal years 2025 and 2024
were $3,124,820 and $2,350,087, respectively. The increase is primarily due to the increase in shipments on a large power supply contract
in the current year when compared to the same period last year.

 Sources of Raw Materials.

 The Company has at least two potential sources
of supply for a majority of its raw materials. However, certain components used in its products are available from a single or a limited
number of sources. Despite the risk associated with single or limited source suppliers, the benefits of higher quality goods minimize
and often limit any potential risk and can eliminate problems with part failures during production. At times, replacements are required
to cover obsolete parts.

 Ongoing demand in the power electronics industry
across multiple manufacturing sectors continues to create shortages and extended lead times. In some instances, waiting times for certain
components approach a year or more. We adequately factor supplier-provided lead times into internal planning schedules and new customer
quotations. From time to time, we encounter part obsolescence which requires us to identify an alternate part suitable for use. We continue
to work with our customers on strategies to mitigate any adverse impact upon our ability to service their requirements. Factors which
may arise after the placement of the customer's order may cause us to miss projected delivery dates. Inflationary costs are expected
to continue but are not expected to have a significant impact on operating income in fiscal year 2026.

 Tariffs on steel and aluminum imports from various
countries continue to be in effect. Although we are not currently experiencing any significant financial or raw material sourcing issues
resulting from the product tariffs, the Company cannot provide any assurance that the existing tariffs, the potential of additional tariffs,
and the associated volatility arising from foreign trade policies, will not have a negative impact on our future earnings by increasing
our raw material prices and augmenting the lead time for the availability of raw materials.

 Sales Backlog

 The total sales backlog at June 30, 2025 was approximately
$139.7 million, which included approximately $95.2 million from three significant customers, compared to $97.2 million at June 30, 2024,
which included approximately $61 million from four significant customers. The Company's total backlog represents the estimated remaining
sales value of work to be performed under firm contracts. Orders from significant customers may include more than a single program and
procurement may originate from various divisions of the significant customer. The funded portion of the backlog at June 30, 2025 was $106.6
million. This includes items that have been authorized and appropriated by Congress and/or funded by the customer. The unfunded backlog
at June 30, 2025 was $33 million, the majority of which represents amounts under multiple orders from a single customer.
While there is no guarantee that future budgets and appropriations will provide funding for individual programs, management has included
in unfunded backlog only those programs that it believes are likely to receive funding based on discussions with customers and program
status. The unfunded backlog at June 30, 2024 approximated $2.3 million. Contracts are subject to modification, change or cancellation,
and the Company accounts for these changes as they are probable and estimable. The Company evaluates the impact of any scope modifications
and will adjust reserves as information is known and estimable. Contracts are generally not cancellable without penalty or recourse.

 The majority of our orders are generated from
prime defense contractors, the United States Department of Defense, other agencies of the government of the United States and foreign
governments, and are for the design and development and/or manufacture of products. Orders are also generated from industrial manufacturers
for similar services. It is not uncommon to receive orders with delivery schedules extending beyond a year from the contract purchase
date. This can cause the time between a customer's original purchase date and purchase date of their next order to vary.

 It is presently anticipated that approximately
$49.1 million of orders comprising the June 30, 2025 backlog will be filled during the fiscal year ending June 30, 2026. The estimate
of the June 30, 2025 backlog to be shipped in fiscal year 2026 is subject to future events, which may cause the amount of the backlog
actually shipped to differ from such estimate.

 Marketing and Competition

 The Company markets its products primarily through
its own direct sales organization and through outside sales representatives. Business is solicited from large industrial manufacturers
and defense companies, the government of the United States, foreign governments and major foreign electronic equipment companies. Espey
is also on the eligible list of contractors with the United States Department of Defense. We pursue opportunities for prime contracts
directly with the Department of Defense and are generally automatically solicited by Department of Defense procurement agencies for their
needs falling within the major classes of products produced by the Company. Espey contracts with the Federal Government under cage code
20950 as Espey Mfg. & Electronics Corp.

 There is competition in all classes of products
manufactured by the Company ranging from divisions of the largest electronic companies, to many small companies. The Company's sales do
not represent a significant share of the industry's market for any class of its products. The principal methods of competition for electronic
products of both a military and industrial nature include, among other factors, price, product performance, the experience of the particular
company and history of its dealings in such products.

 Our business is not seasonal. However, the concentration
of our business in the rail industry, and in equipment for military applications and industrial applications, as well as our customer
concentrations, expose us to on-going associated risks. These risks include, without limitation, requirements for power supplies in the
rail industry, dependence on appropriations from the United States Government and the governments of foreign nations, program allocations,
the potential of governmental termination of orders for convenience, and the general strength of the industry sectors in which our customers
transact business.

 Future procurement needs supporting the military
and the rail industry continue to drive competition. Many of our competitors have invested, and they continue to invest aggressively in
upfront product design costs and accept lower profit margins as a strategic means of maintaining existing business and enhancing market
share. This continues to put pressure on the pricing of our current products and has lowered our profit margins on some of our new business.
In order to compete effectively for new business, in some cases we have invested in upfront design costs, thereby reducing initial profitability
as a means of procuring new long-term programs. As part of our strategy, we adjust our pricing in order to achieve a balance which enables
us both to retain repeat programs while being more competitive in bidding on new programs.

 Our sales strategy includes identifying and obtaining
multiple new engineering design and development contracts in any given fiscal year to ensure optimal utilization of our engineering personnel
in addition to securing follow-on production awards for product previously designed in-house, as well as, build to print opportunities.
The Company targets those programs and opportunities which will generate future longer-term production tails in ensuing years. From time
to time, we accept work associated with engineering design studies. While unlikely to result in near-term follow-on orders, this positions
us competitively on future awards and expands our engineering team's skillset.

 Research and Development

 We do very little research and development with
the intent to develop and market new product offerings for sale to customers. Our business primarily is driven by customer product needs
and custom product development funded by the applicable customers. We incur research costs to support a request for quotation from a customer
product-specific need usually associated with stringent size and weight requirements. In addition, the Company's engineers and technicians
spend varying amounts of time identifying improvements to existing products with the primary objective of reducing production costs. At
times, engineers are tasked with researching replacement parts to remediate identified obsolescence on current or repeat production programs.
The Company's expenditures for research related activities were approximately $71,074 and $86,714 in fiscal years 2025 and 2024, respectively.

 Employees

 The Company had 152 employees as of August 31,
2025. Approximately 34% of the employees are represented by the International Brotherhood of Electrical Workers. The current collective
bargaining agreement was ratified on July 1, 2025 and is set to expire on June 30, 2028. Relations with the Union are considered good.

 Government Regulations

 Compliance with federal, state and local laws
regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, did not in fiscal
year 2025, and the Company believes will not in fiscal year 2026, have a material effect upon the capital expenditures, net income, or
competitive position of the Company.

 The Company's U.S. Government contract and
subcontract orders are funded by government budgets, which operate on an October-to-September fiscal year. Normally, in February of each
year, the President of the United States presents to Congress a proposed budget for the upcoming fiscal year. This budget includes recommended
appropriations for every federal agency and is the result of months of policy and program reviews throughout the executive branch. From
February through September of each year, the appropriations and authorization committees of Congress review the President's budget
proposals and establish the funding levels for the upcoming fiscal year in appropriations and authorization legislation. Once these levels
are enacted into law, the Executive Office of the President administers the funds to the agencies.

 There are two primary risks associated with this
process. First, the process may be delayed or disrupted because of congressional schedules, negotiations over funding levels for programs
or unforeseen world events, which could, in turn, alter the funding for a program or contract. Second, funding for multi-year contracts
can be changed by future appropriations, which could affect the timing of funds, schedules and program content.

 Also, our international sales are denominated
in United States dollars. Consequently, a strengthening of the United States dollar against foreign currencies could increase the price
in local currencies of our products in foreign markets and make our products relatively more expensive than competitors' products.

 U.S. Government
Defense Contracts and Subcontracts

 Generally, U.S. Government contracts are subject
to procurement laws and regulations. Some of the Company's contracts are governed by the Federal Acquisition Regulation (FAR), which
lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific acquisition regulations
that implement or supplement the FAR. For example, the Department of Defense implements the FAR through the Defense Federal Acquisition
Regulation (DFAR).

 The FAR also contains guidelines and regulations
for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part, at the government's
convenience or for default. If a contract is terminated for the convenience of the government, a contractor is entitled to receive payments
for its allowable costs and, in general, the proportionate share of fees or earnings for the work done. If a contract is terminated for
default, the government generally pays for only the work it has accepted. These regulations also subject the Company to financial audits
and other reviews by the government of its costs, performance, accounting and general business practices relating to its contracts, which
may result in adjustment of the Company's contract-related costs and fees.

 Item 1C.
 Cybersecurity

 Robust cybersecurity is an essential component
of our strategic vision. We face a variety of complex cybersecurity threats as a defense contractor. Among the risks are computer malware,
ransomware, phishing attacks, Denial of Service attacks and Advanced Persistent Threats. Our security team, comprised of members from
senior management, IT, human resources and program management, performs routine risk assessments in accordance with NIST 800-30, using
input from observed risks and threats, advisories, federal agencies and local law enforcement. The Audit Committee of the Board of Directors
is responsible for oversight of our risk management processes. The Audit Committee is briefed by senior management on cybersecurity posture,
initiatives and incidents. We allocate significant resources to mitigate these risks. We are required to adhere to rigorous regulations,
such as those outlined in the Defense Federal Acquisition Regulation Supplement (DFARS), which govern the protection of controlled unclassified
information (CUI) and the mandatory reporting of cybersecurity incidents to the Department of Defense (DoD). All DFARS requirements are
flowed down to our sub-contractors, who are required to self-report their compliance to the U.S. Government. In addition to the processes
and systems that we use to identify and mitigate risks, we utilize third party services to conduct valuations of our security controls,
including penetration testing and independent audits. Despite our efforts to uphold the highest cybersecurity standards, we may still
experience a cybersecurity incident that has a material effect on business strategy, results of operation or financial condition. It
is also possible that additional regulations could affect our supply chain and increase costs. Prior cyberattacks directed at us have
 not had a material impact on our financial results nor restricted us from being awarded contracts from other defense companies or directly
from the United States Department of Defense. However, we can provide no assurance that the occurrence of any future event would not
adversely affect our internal operations, our reputation and competitive advantage, and our future financial results.

 Item 2.
 Property

 The Company's entire operation, including administrative,
manufacturing and engineering facilities, is located in Saratoga Springs, New York.

 The Saratoga Springs plant, which the Company
owns, consists of two buildings on a 22 acre site, approximately eight acres of which is unimproved. The property is not subject to mortgage
indebtedness or any other material encumbrance. The plant has a sprinkler system throughout and contains approximately 174,000 square
feet of in-service floor space, of which 113,000 is used for manufacturing, 24,000 for engineering, 33,000 for shipping and climatically
secured storage, and 4,000 for offices. The offices, engineering and some manufacturing areas are air-conditioned. In addition to assembly
and wiring operations, the plant includes facilities for varnishing, potting, impregnation and spray-painting operations. The manufacturing
operation also includes a complete machine shop, with welding and sheet metal fabrication facilities adequate for substantially all of
the Company's current operations. Besides normal test equipment, the Company maintains a sophisticated on-site environmental test facility.
In addition to meeting all of the Company's in-house needs, the machine shop and environmental facilities are available to other companies
on a contract basis.

 Item 3.
 Legal Proceedings

 We are party to various litigation matters and
claims arising from time to time in the ordinary course of business. While the results of such matters cannot be predicted with certainty,
we believe that the final outcome of such matters will not have a material adverse effect on our business, financial condition, results
of operations or cash flows. Currently, there are no matters pending.

 Item 4.
 Mine Safety Disclosures

 Not applicable

 Item 5.
 Market for the Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity
Securities

 Price Range of Common Stock

 The table below shows the range of high and low
prices for the Company's common stock on the NYSE American (symbol "ESP"), the principal market for trading in the common stock,
for each quarterly period for the last two fiscal years ended June 30:

 2025

 High

 Low

 First Quarter

 $
 32.00

 $
 20.50

 Second Quarter

 33.00

 26.38

 Third Quarter

 30.29

 25.16

 Fourth Quarter

 48.71

 24.85

 2024

 High

 Low

 First Quarter

 $
 18.00

 $
 14.74

 Second Quarter

 19.29

 14.69

 Third Quarter

 27.32

 17.97

 Fourth Quarter

 26.31

 20.20

 Holders

 The approximate number of holders of record
of the common stock was 53 on September 12, 2025 according to records of the Company's transfer agent. Included in this number are
shares held in "nominee" or "street" name and, therefore, the number of beneficial owners of the common stock is
believed to be substantially in excess of the foregoing number.

 Dividends

 The Company paid regular cash dividends on
common stock of $1.00 per share and declared a special cash dividend of $0.75 per share for the fiscal year ended June 30, 2025 and
paid regular cash dividends on common stock of $0.675 per share for the fiscal year ended June 30, 2024. Our Board of Directors
assesses the Company's dividend policy periodically. There is no assurance that the Board of Directors will maintain the
amount of the regular cash dividend or declare a special dividend during any future years.

 During fiscal year 2025, the Company did not sell
any of its common stock to the Trustees of The Espey Mfg. & Electronics Corp. Employee Stock Ownership Plan Trust (the "ESOP").

 The Company did not make any open market purchases
of equity securities in the fourth quarter of fiscal year 2025.

 The following table sets forth information as
of June 30, 2025 with respect to compensation plans under which equity securities of the Company may be issued.

 Equity Compensation Plan Information

 Number of securities to

 Weighted-average

 Number of Securities remaining

 be issued upon exercise

 exercise price of

 available for future issuance under

 of outstanding options,

 outstanding options,

 equity compensation plan (excluding

 Plan Category

 warrants and rights

 warrants and rights

 securities reflected in column (a))

 (a)

 (b)

 (c)

 Equity compensation plans approved by security holders

 228,146

 $ 19.26

 12,469

 Equity compensation plans not approved by security holders

 —

 —

 Total

 228,146

 12,469

 Item 7.
 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Business Outlook

 Management expects revenues in fiscal year 2026
to be higher than revenues recognized during fiscal year 2025. Net income per share is anticipated to fall below fiscal 2025 results driven
primarily by orders already in our backlog that will be shipped in fiscal year 2026 with higher anticipated aggregate costs than the product
mix shipped during fiscal 2025. As market factors, including competition and product costs impact gross profit margins, management will
continue to evaluate our sales strategy, employment levels, and facility costs.

 Ongoing demand in the power electronics industry
across multiple manufacturing sectors continues to create shortages and extended lead times. In some instances, waiting times for certain
components approach a year or more. We adequately factor supplier-provided lead times into internal planning schedules and new customer
quotations. From time to time, we encounter part obsolescence which requires us to identify an alternate part suitable for use. We continue
to work with our customers on strategies to mitigate any adverse impact upon our ability to service their requirements. Factors which
may arise after the placement of the customer's order may cause us to miss projected delivery dates. Inflationary costs are expected
to continue but are not expected to have a significant impact on operating income in fiscal year 2026.

 The labor workforce remains stable. Management
continues to closely monitor workforce labor requirements to support our sales backlog and planned delivery schedules. Longer time-to-hire
challenges remain for certain positions due to specific skillsets required for those positions. Unemployment rates in the local geographic
region trend lower than the national average which has created a competitive recruiting environment. Where possible, the Company continues
to offer on-the-job training and when necessary, continues to recruit personnel outside the local region. Combined with supply chain constraints,
unforeseen labor disruptions could delay shipments and result in missing our backlog fulfillment projections and recognizing lower operating
income.

 Successful conversion of engineering program backlog
into sales is largely dependent on the execution and completion of our engineering design efforts. It is not uncommon to experience technical
or scheduling delays which can arise as a result of, among other reasons, design complexity, availability of personnel with the requisite
expertise, requirements to obtain customer approval at various milestones, and extended delivery lead times on material required for prototypes. Cost
overruns which can be caused from technical and schedule delays and increased raw material costs could negatively impact the timing of
the conversion of backlog into sales, or the profitability of such sales. Engineering programs in both the funded and unfunded portions
of the current backlog aggregate $13 million.

 The Company currently expects new orders in
fiscal year 2026 to be lower than those received in fiscal year 2025. During fiscal year 2025, the Company received $86.4
million in new orders which included two significant, multi-year contract awards in an aggregate sum of $49.4 million. In
addition to the backlog, the Company currently has outstanding opportunities representing approximately $163 million in the
aggregate as of August 31, 2025, for both repeat and new programs. Outstanding opportunities encompass various new and previously
manufactured power supplies, transformers, and subassemblies. The stated amount includes only those opportunities that we believe
are likely to be awarded based on factors which include: quotation status, communicated award dates, historical ordering, public
information on defense programs and program funding, discussion with customers, and our cost competitiveness. However, there can be
no assurance that the Company will acquire any of the outstanding opportunities described above, many of which are subject to
allocations of the United States defense spending and elements affecting the defense industry. Many
solicitations we receive for the procurement of goods and services takes place by competitive bidding.

 Our sales strategy continues to focus on the
long-standing relationships we have with many of the leading defense prime contractors. These relations yield growth opportunities
from new product development and additional sales opportunities of existing products to these customers. The Company targets
programs and opportunities which will generate future longer-term production tails in ensuing years. From time to time, we accept
work associated with engineering design studies. While unlikely to result in near-term follow-on orders, this positions us
competitively on future awards and expands our engineering team's skillset.

 Management continues to pursue opportunities with
current and new customers with an overall objective of lowering the concentration of sales, mitigating excessive reliance upon a single
major product of a particular program and minimizing the impact of the loss of a single significant customer. Given the nature of our
business, we believe our existing sales order backlog is fairly diversified in terms of customers and the category of products on order.

 Management, along with the Board of Directors,
continues to evaluate the need and use of the Company's working capital. Capital expenditures, primarily for machinery and
equipment and facility upgrades, are not expected to exceed $850,000 for fiscal year 2026. These upgrades would be in addition to those
that are being funded by grants the Company was awarded. A majority of these expenditures will be made to stay competitive in the marketplace
and to meet the needs of current contracts.

 Expectations are that the working capital will
be required to fund orders, general operations of the business and dividend payments. Management along with the Legal Affairs, Strategic
Planning, and M&A Committee of the Board of Directors will examine opportunities involving acquisitions or other strategic options,
including buying certain products or product lines, provided that such opportunities demonstrate synergies with the Company's existing
product base and accretion to earnings.

 Results of Operations

 Net sales for the years ended June 30, 2025 and
2024 were $43,950,872 and $38,736,319, respectively, an approximate 13.5% increase. In general, sales fluctuations within product categories
will occur during a comparable fiscal period as the direct result of product mix, influenced by the duration of specific programs and
the contractual terms of firm orders placed for product and services under those programs including contract value, scope of work and
contract delivery schedules. Deliverables within firm contracts are often subject to delivery schedules which also contributes to sales
fluctuations between comparable periods. Sales in fiscal year 2025 were higher when compared to the prior year primarily attributable
to (i) several large multi-year contracts for shipboard transformers and power distribution panels, (ii) power systems for combat vehicles,
and (iii) power systems for aircraft radar and missile platforms. Additionally, the Company saw increases on build to print sales.
These increases were partially offset by a slight decrease in sales related to our magnetics programs where various contracts had fewer
or no sales in the current reporting period as compared to the same period last year due to order completion or planned customer delivery
schedules.

 Gross profits for the years ended June 30, 2025
and 2024 were $12,684,631 and $10,653,060, respectively. Gross profit as a percentage of sales was 28.9% and 27.5%, for the same periods,
respectively. The primary factors in determining the change in gross profit and net income are overall sales levels and product mix. The
gross profits on mature products and build to print contracts are typically higher as compared to products which are still in the engineering
development stage or in early stages of production. In the case of the latter, the Company can incur what it refers to as "loss
contracts," primarily on engineering design contracts in which the Company invests with the objective of developing future product
sales. In any given accounting period, the mix of product shipments between higher margin programs and less mature programs, and expenditures
associated with loss contracts, has a significant impact on gross profit and net income.

 The increase in gross profit for the year ended
June 30, 2025 when compared to the same period last year resulted primarily from (i) sales levels and general product mix, (ii) higher
than average profit margins on completed milestone sales, and (iii) non-recurring cost savings related to realized labor efficiencies
and savings on material purchases. Moreover, the gross profit in fiscal year 2024 had been negatively impacted by significant unanticipated
costs incurred on several fixed-priced engineering design contracts and a specific build to print contract, all for power supplies, due
to unforeseen complexities of the designs. These factors did not impact the fiscal year 2025 gross profit. Finally, gross profit
in fiscal year 2025 was increased by an improvement in the overhead rate on shipments. This is attributed to the recorded pension withdrawal
obligation established in the last quarter of fiscal year 2024 that was paid in full during fiscal year 2025. See Financial Statement
Note 7. Pension Expense for further details.

 Selling, general and administrative expenses were
$4,557,945 for the fiscal year ended June 30, 2025, an increase of $444,337 compared to the fiscal year ended June 30, 2024. The increase
in spending for the year ended June 30, 2025 compared to the same period in 2024 mainly arose from the temporary increase in employee
compensation costs related to a brief overlap in a few positions requiring a training and transition
period due to retirements that occurred during 2025. In addition, the Company had an increase in ESOP contributions, facility costs due
to the completion of the new building, and travel and entertainment expenses. These increases were offset, in part, by a decrease
in the cost of insurance, conference and training costs, and marketing and advertising costs.

 Other income for the fiscal years ended June
30, 2025 and 2024 was $1,601,978 and $755,562, respectively. The increase is due to the increase in interest income resulting from an
increase in investment securities and an increase in fixed interest rates. The Company also received a one-time Capital Investment Grant
in the amount of $300,000 related to the completion of the new building in fiscal 2025. Interest income is a function of the level of
investments and investment strategies that generally tend to be conservative.

 The Company's effective tax rate was approximately
16.3% in fiscal year 2025 and approximately 20.3% in fiscal year 2024. The effective tax rate in fiscal 2025 is less than the statutory
tax rate mainly due to the benefit received from stock option exercises, dividends paid on allocated ESOP shares, and a benefit from foreign
derived intangible income, offset in part by permanent differences related to incentive stock options. The effective tax rate in fiscal
2024 is less than the statutory tax rate mainly due to the benefit received from ESOP dividends paid on allocated shares and a benefit
from foreign derived intangible income, offset in part by permanent differences related to incentive stock options.

 The Company generated net income for fiscal year
2025 of $8,142,954 or $3.14 and $3.02 per share, basic and diluted, compared to net income of $5,815,140 or $2.34 and $2.29 per share,
basic and diluted, for fiscal year 2024. The increase in net income in the year ended June 30, 2025 compared to the same period in 2024
is primarily attributable to higher sales, a higher gross profit margin percentage, an increase in other income, offset in part, by an
increase in selling, general, and administrative expenses and an increase in the provision for income taxes.

 Liquidity and Capital Resources

 The Company's working capital is an appropriate
indicator of the liquidity of its business, and during the past two fiscal years, the Company, when possible, has funded all of its operations
with cash flows resulting from operating activities and when necessary, from its existing cash and investments. The Company did not borrow
any funds during the last two fiscal years. Management has available a $3,000,000 line of credit to help fund further growth or working
capital needs, if necessary, but does not anticipate the need for any borrowed funds in the foreseeable future. Contingent liabilities
on outstanding standby letters of credit agreements aggregated to zero at June 30, 2025 and 2024. The existing line of credit was extended
and expires February 28, 2026.

 The Company's working capital as of June 30, 2025
and 2024 was approximately $46.9 million and approximately $38 million, respectively. The Company may at times be required to repurchase
shares at the ESOP participants' request at the fair market value. During the years ended June 30, 2025 and 2024, the Company did
not repurchase any shares held by the ESOP. Under existing authorizations from the Company's Board of Directors, as of June 30, 2025,
management is authorized to purchase an additional $783,460 of Company stock.

 The table below presents the summary of cash flow
information for the fiscal years indicated:

 2025

 2024

 Net cash provided by operating activities

 $
 20,991,372

 $
 10,595,200

 Net cash used in investing activities

 (6,938,966
)

 (7,840,277
)

 Net cash used in financing activities

 458,268

 (1,151,708
)

 Net cash provided by operating activities fluctuates
between periods primarily as a result of differences in sales and net income, provision for income taxes, the timing of the collection
of accounts receivable, purchase of inventory, and payment of accounts payable. The increase in cash provided by operating activities
compared to the prior year primarily relates to an increase in contract liabilities and a decrease in inventory, offset in part, by an
increase in accounts receivable, increase in prepaid expenses and other current assets, and a decrease in accounts payable. Net cash used
in investing activities decreased in the year ended June 30, 2025 as compared to the same period in 2024 due to a decrease in proceeds
received from grant awards and a decrease in additions to property, plant and equipment. This was partially offset by a decrease in the
purchase of investment securities net of proceeds from the sale and maturity of investment securities when compared to the same period
last year. Cash used in financing activities for the year ended June 30, 2025 relates primarily to dividend payments on common stock,
offset in full, by proceeds from the exercise of stock options.

 The Company currently believes that
the cash flow generated from operations and when necessary, from cash and cash equivalents, will be sufficient to meet its long-term funding
requirements for the foreseeable future.

 During the fiscal years ended June
30, 2025 and 2024, the Company expended $4,365,404 and $5,164,165, respectively, for plant improvements and new equipment. Of the total expended amount, $3,260,000 was reimbursed in fiscal year 2025 and $4,228,722 was reimbursed in fiscal year 2024 under a not-to-exceed $7.4 million award received by the Company. Additionally, during the
fiscal year ended June 30, 2025 there was $1,731,042 for plant improvements and new equipment eligible for reimbursement under a not-to-exceed $3.4 million award received by the Company. The award received by the Company is in support of facility and capital equipment
upgrades for testing and qualification for the United States Navy. This funding award is part of the Navy's investment to improve
and sustain the Surface Combatant Industrial Base. Separately, the Company has budgeted approximately $850,000 for new equipment and
plant improvements in fiscal year 2026, not reimbursable under the funding award. A majority of these expenditures will be made to stay
competitive in the marketplace and to meet the needs of current contracts.

 Management believes that the Company's
allowance for credit losses of $3,000 is adequate given the customers with whom the Company does business based on historical experience,
current economic market conditions, performance of specific account reviews, and other factored considerations to include, but not limited
to, contracts covered by government funding and the overall health of the industry. Historically, bad debt expense has been minimal.

 Critical Accounting Policies and Significant Estimates

 The preparation of our consolidated financial statements
in accordance with generally accepted accounting principles requires management to make certain judgments, estimates, and assumptions
that affect the reported amounts as presented on the face of the financial statements. These critical accounting policies and estimates
are those that are most important to the portrayal of our financial condition and results of operations. We base our estimates on historical
experience and other assumptions that we believe to be reasonable. Management continually reviews and evaluates these critical accounting
policies and estimates in light of evolving business conditions, regulatory developments, and changes in the economic environment. As
future events cannot be determined and their impact on the financial statements are uncertain, actual results may differ from our estimates
and could be material to the consolidated financial statements. Historically, we have found our application of accounting policies to
be appropriate, and actual results have not differed materially from established estimates. The critical accounting policies and estimates
that we believe have the most significant effect on our financial statements are revenue recognition, inventory valuation, and deferred
taxes.

 Revenue Recognition

 The majority of our sales are generated from military
contracts from defense companies, the Department of Defense, other agencies of the government of the United States and foreign governments.
We provide our products and design and development services under fixed-price contracts. Under fixed-price contracts we agree to perform
the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated,
our generated profit will fluctuate or a loss could be incurred.

 We evaluate the products or services promised in each
contract at inception to determine whether the contract should be accounted for as having one or more performance obligations. Significant
judgment is required in determining performance obligations. We determine the transaction price for each contract based on the consideration
we expect to receive for the products or services being provided under the contract. As the Company does not have standalone observable
prices, a contract's transaction price of each performance obligation is based on the standalone selling price, which is determined
using an expected cost plus a margin approach.

 Valuation of Inventories

 Raw materials are valued at the lower of cost (average
cost) or net realizable value. Balances for slow-moving and obsolete inventory are reviewed on a regular basis by analyzing estimated
demand, inventory on hand, sales levels, market conditions, and other available information. Inventory balances are reduced based on this
analysis.

 Inventory relating to contracts in process and
work in process is valued at cost, including factory overhead incurred to date. Contract costs include material, subcontract costs, labor,
and an allocation of overhead costs. Work in process represents spare units and parts and other inventory items acquired or produced to
service units previously sold or to meet anticipated future orders. Provision for losses on contracts is made when the existence of such
losses becomes probable and estimable. The provision for losses on contracts is included in other accrued expenses on the Company's
balance sheet. The costs attributed to units delivered under contracts are based on the estimated average cost of all units expected
to be produced. Certain contracts are expected to extend beyond twelve months.

 The estimation of total cost at completion of
a contract is subject to variables including contract costs incurred and expected to be incurred as well as estimates regarding contract
completion dates. Given the significance of the estimation processes and judgments described above, it is possible that materially different amounts of
expected contract costs could be recorded if different assumptions were used, based on changes in circumstances, in the estimation process.
When a change in expected estimated cost is determined, changes are reflected in current period earnings.

 Deferred Taxes

 The Company follows the provisions of the Financial
Accounting Standards Board ("FASB"), Accounting Standards Codification (ASC) Topic 740-10, "Accounting for Income Taxes."

 Under the provisions of FASB ASC 740-10, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred taxes and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

 Item 8.
 Financial Statements and Supplementary Data

 Report of Independent Registered Public Accounting
Firm (PCAOB ID 317)

 Financial Statements

 Report of Independent Registered Public Accounting
Firm

 To the Stockholders and Board of Directors of

 Opinion on the Financial Statements

 We have audited the accompanying
balance sheets of Espey Mfg. & Electronics Corp. (the Company) as of June 30, 2025 and 2024, the related statements of comprehensive
income, changes in stockholders' equity and cash flows for the years then ended, and the related notes to the financial statements
(collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in
accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness
of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.

 Critical Audit Matters

 The critical audit matters communicated below are
matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the
audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions
on the critical audit matters or on the accounts or disclosures to which they relate.

 Valuation of Inventory and Accruals Related to
Contracts in Process and Work in Process

 As discussed in Notes 2 and 5 to the financial
statements, inventory relating to contracts in process and work in process is valued at cost. Contract costs include material,
subcontract costs, labor, and an allocation of overhead costs. The costs attributed to units delivered under contracts are based on
the estimated average cost of all units expected to be produced. Certain contracts are expected to extend beyond twelve months.
Provision for losses on contracts is made when the existence of such losses becomes probable and estimable. The provision for losses
on contracts is included in other accrued expenses on the balance sheet.

 The estimation of total cost at completion of a contract
is subject to variables involving contract costs incurred and expected to be incurred and estimates as to the length of time to complete
the contract. Given the significance of the estimation processes and judgments described above, it is possible that materially different
amounts of expected contract costs could be recorded if different assumptions were used, based on changes in circumstances, in the estimation
process. When a change in expected estimated cost is determined, changes are reflected in current period earnings. Due to the magnitude
of the inventory, and the subjectivity involved in estimating the total cost at completion we identified the evaluation as a critical
audit matter, which required a high degree of auditor judgment.

 Addressing the matter involved performing subjective
procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedures
performed included the following:

 Obtain understanding of the process and assumptions
used by management to develop estimates to complete including labor, overhead and materials.

 Perform retrospective review of prior period's
cost of sales percentage and estimates to complete.

 Perform brainstorming meeting among the engagement
team to determine where the estimate may be susceptible to fraud or error.

 Test management's estimate to complete
and expected gross margin.

 Review appropriateness of job loss accrual.

 /s/ Freed Maxick, P.C.

 We have served as the Company's auditor since 2014.

 Rochester, New York

 Balance Sheets

 June
30, 2025 and 2024

 2025

 2024

 ASSETS

 Cash and cash equivalents

 $
 18,862,645

 $
 4,351,970

 Investment securities

 24,717,245

 18,878,631

 Trade accounts receivable, less allowance for credit losses of $ 3,000

 7,598,888

 6,635,490

 Inventories:

 Raw materials

 2,120,462

 1,693,448

 Work-in-process

 681,334

 1,645,973

 Costs related to contracts in process

 15,040,253

 15,904,588

 Total inventories

 17,842,049

 19,244,009

 Deferred tax asset

 1,202,019

 895,154

 Prepaid expenses and other current assets

 4,933,562

 3,231,402

 Total current assets

 75,156,408

 53,236,656

 Property, plant and equipment, net

 3,960,156

 3,306,275

 Total assets

 $
 79,116,564

 $
 56,542,931

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Accounts payable

 $
 2,641,576

 $
 3,751,209

 Accrued expenses:

 Salaries and wages

 1,185,387

 928,163

 Vacation

 568,078

 511,144

 Other

 594,153

 757,552

 Payroll and other taxes withheld

 93,456

 56,862

 Contract liabilities

 22,886,404

 9,043,422

 Income taxes payable

 298,510

 220,607

 Total current liabilities

 28,267,564

 15,268,959

 Total liabilities

 28,267,564

 15,268,959

 Commitments and Contingencies (See Note 13)

 Common stock, par value $.33-1/3 per share

 Authorized 10,000,000 shares; Issued 3,129,874 shares as of June 30, 2025 and 2024. Outstanding 2,896,368 and 2,733,958 shares as of June 30, 2025 and 2024, respectively (Includes 189,817 and 211,487 Unearned ESOP Shares, respectively)

 Capital in excess of par value

 26,331,842

 23,930,428

 Accumulated other comprehensive gain (loss)

 11,596

 6,544

 Retained earnings

 31,550,390

 26,004,790

 58,937,119

 50,985,053

 Less: Unearned ESOP shares

 ( 3,471,747
)

 ( 3,868,093
)

 Cost of 233,506 and 395,916 shares of common stock in treasury as of June 30, 2025 and 2024, respectively

 ( 4,616,372
)

 ( 5,842,988
)

 Total stockholders' equity

 50,849,000

 41,273,972

 Total liabilities and stockholders' equity

 $
 79,116,564

 $
 56,542,931

 Statements of Comprehensive Income

 Years
Ended June 30, 2025 and 2024

 2025

 2024

 Net sales

 $
 43,950,872

 $
 38,736,319

 Cost of sales

 31,266,241

 28,083,259

 Gross profit

 12,684,631

 10,653,060

 Selling, general and administrative expenses

 4,557,945

 4,113,608

 Operating income

 8,126,686

 6,539,452

 Other income

 Interest income

 1,259,852

 728,299

 Other

 342,126

 27,263

 Total other income

 1,601,978

 755,562

 Income before provision for income taxes

 9,728,664

 7,295,014

 Provision for income taxes

 1,585,710

 1,479,874

 $

 $

 Other comprehensive income, net of tax:

 Unrealized gain on investment securities

 5,052

 8,973

 Total comprehensive income

 $
 8,148,006

 $
 5,824,113

 Net income per share:

 Basic

 $
 3.14

 $
 2.34

 Diluted

 $
 3.02

 $
 2.29

 Weighted average number of shares outstanding:

 Basic

 2,591,036

 2,489,165

 Diluted

 2,696,192

 2,536,967

 Statements of Changes in Stockholders' Equity

 Years Ended June 30, 2025 and 2024

 Accumulated

 Capital in

 Other

 Unearned

 Total

 Outstanding

 Common

 Excess of

 Comprehensive

 Retained

 Treasury

 Treasury

 ESOP

 Stockholders'

 Amount

 Par Value

 (Loss) Gain

 Earnings

 Amount

 Equity

 Balance as of June 30, 2023

 2,702,633

 $

 $
 23,283,245

 $
 ( 2,429
)

 $
 21,867,720

 427,241

 $
 ( 6,038,691
)

 $
 ( 4,273,378
)

 $
 35,879,758

 Comprehensive income:

 Other comprehensive income,
 net of tax of $ 1,884

 8,973

 8,973

 Total comprehensive income

 5,824,113

 Stock options exercised

 31,325

 330,659

 ( 31,325
)

 195,703

 526,362

 283,673

 283,673

 Dividends paid on common stock
 $ 0.675 per share

 ( 1,678,070
)

 ( 1,678,070
)

 Reduction of unearned ESOP shares

 32,851

 405,285

 438,136

 Balance as of June 30, 2024

 2,733,958

 $

 $
 23,930,428

 $
 6,544

 $
 26,004,790

 395,916

 $
 ( 5,842,988
)

 $
 ( 3,868,093
)

 $
 41,273,972

 Statements of Changes in Stockholders' Equity (continued)

 Years Ended June 30, 2025 and 2024

 Accumulated

 Capital in

 Other

 Unearned

 Total

 Outstanding

 Common

 Excess of

 Comprehensive

 Retained

 Treasury

 Treasury

 ESOP

 Stockholders'

 Amount

 Par Value

 (Loss) Gain

 Earnings

 Amount

 Equity

 Balance as of June 30, 2024

 2,733,958

 $

 $
 23,930,428

 $
 6,544

 $
 26,004,790

 395,916

 $
 ( 5,842,988
)

 $
 ( 3,868,093
)

 $
 41,273,972

 Comprehensive income:

 Other comprehensive income,

net of tax of $ 1,061

 5,052

 5,052

 Total comprehensive income

 8,148,006

 Stock options exercised

 162,410

 1,829,006

 ( 162,410
)

 1,226,616

 3,055,622

 346,281

 346,281

 Dividends paid on common stock
 $ 1.00 per share

 ( 2,597,354
)

 ( 2,597,354
)

 Reduction of unearned ESOP shares

 226,127

 396,346

 622,473

 Balance as of June 30, 2025

 2,896,368

 $

 $
 26,331,842

 $
 11,596

 $
 31,550,390

 233,506

 $
 ( 4,616,372
)

 $
 ( 3,471,747
)

 $
 50,849,000

 Statements of Cash Flows

 Years Ended June 30, 2025 and 2024

 2025

 2024

 Cash Flows from Operating Activities:

 $

 $

 Adjustments to reconcile net income to net cash provided by operating activities:

 346,281

 283,673

 Depreciation

 451,523

 453,517

 ESOP compensation expense

 622,472

 438,136

 Deferred income tax benefit

 ( 306,865
)

 ( 1,032,981
)

 Loss (gain) on disposal of property, plant and equipment

 —

 Changes in assets and liabilities:

 Increase in trade accounts receivable

 ( 963,398
)

 ( 880,208
)

 Decrease in income tax receivable

 —

 35,666

 Increase in inventories

 1,401,960

 645,572

 Increase in prepaid expenses and other current assets

 ( 1,702,160
)

 1,051,075

 Decrease in accounts payable

 ( 1,109,633
)

 2,538,833

 Increase in accrued salaries and wages

 257,224

 37,415

 Increase in vacation accrual

 56,934

 ( 174,044
)

 Decrease other accrued expenses

 ( 163,399
)

 209,805

 Increase in payroll and other taxes withheld

 36,594

 ( 9,180
)

 Increase in contract liabilities

 13,842,982

 961,584

 Increase in income taxes payable

 77,903

 220,607

 Net cash provided by operating activities

 $
 20,991,372

 $
 10,595,200

 Cash Flows from Investing Activities:

 Additions to property, plant and equipment

 ( 4,365,403
)

 ( 5,164,165
)

 Proceeds from grant award

 3,260,000

 4,228,722

 Proceeds from sale of property, plant and equipment

 —

 Purchase of investment securities

 ( 33,873,762
)

 ( 26,423,984
)

 Proceeds from sale/maturity of investment securities

 28,040,200

 19,519,000

 Net cash used in investing activities

 ( 6,938,965
)

 ( 7,840,277
)

 Cash Flows from Financing Activities:

 Dividends paid on common stock

 ( 2,597,354
)

 ( 1,678,070
)

 Proceeds from exercise of stock options

 3,055,622

 526,362

 Net cash provided by (used in) financing activities

 458,268

 ( 1,151,708
)

 Increase in cash and cash equivalents

 14,510,675

 1,603,215

 Cash and cash equivalents, beginning of the year

 4,351,970

 2,748,755

 Cash and cash equivalents, end of the year

 $
 18,862,645

 $
 4,351,970

 Supplemental Schedule of Cash Flow Information:

 Income taxes paid

 $
 1,815,732

 $
 2,258,965

 Note 1. Nature
of Operations

 Espey Mfg. & Electronics Corp. (the Company)
is a manufacturer of electronic equipment used primarily in military and industrial applications. The principal markets for the Company's
products are companies that provide electronic support to both military and industrial applications across the United States and at some
international locations.

 Note 2. Summary of Significant Accounting Policies

 Revenue

 The majority of our sales are generated from military
contracts from defense companies, the Department of Defense, other agencies of the government of the United States and foreign governments,
for the design and development and/or manufacture of products. Sales are also generated from industrial manufacturers for similar services.
We provide our products and design and development services under fixed-price contracts. Under fixed-price contracts we agree to perform
the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated,
we will generate more or less profit or could incur a loss.

 We account for a contract with a customer after
it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract
has commercial substance, and collection of substantially all of the amount to which the entity will be entitled in exchange for the goods
or services that will be transferred to the customer is probable. We assess each contract at its inception to determine whether it should
be combined with other contracts. When making this determination, we consider factors such as whether two or more contracts were negotiated
and executed at or near the same time, or were negotiated with an overall profit objective.

 We evaluate the products or services promised
in each contract at inception to determine whether the contract should be accounted for as having one or more performance obligations.
Significant judgment is required in determining performance obligations. We determine the transaction price for each contract based on
the consideration we expect to receive for the products or services being provided under the contract. As the Company does not have standalone observable prices, a contract's transaction price of each performance obligation is based
on the standalone selling price, which is determined using an expected cost plus a margin approach.

 Inventory

 Raw materials are valued at the lower of cost
(average cost) or net realizable value. Balances for slow-moving and obsolete inventory are reviewed on a regular basis by analyzing estimated
demand, inventory on hand, sales levels, market conditions, and other information. Inventory balances are reduced based on this analysis.

 Inventory relating to contracts in process and
work in process is valued at cost, including factory overhead incurred to date. Contract costs include material, subcontract costs, labor,
and an allocation of overhead costs. Work in process represents spare units and parts and other inventory items acquired or produced to
service units previously sold or to meet anticipated future orders. Provision for losses on contracts is made when the existence of such
losses becomes probable and estimable. The provision for losses on contracts is included in other accrued expenses on the Company's
balance sheet. The costs attributed to units delivered under contracts are based on the estimated average cost of all units expected
to be produced. Certain contracts are expected to extend beyond twelve months.

 The estimation of total cost at completion of
a contract is subject to variables including contract costs incurred and expected to be incurred as well as estimates regarding contract completion dates. Given the significance of the estimation processes and judgments described above, it is possible that materially different amounts of
expected contract costs could be recorded if different assumptions were used, based on changes in circumstances, in the estimation process.
When a change in expected estimated cost is determined, changes are reflected in current period earnings.

 Contract Liabilities

 Contract liabilities include advance payments
and billings in excess of revenue recognized.

 Note 2. Summary of Significant Accounting Policies,
 Continued

 Depreciation

 Depreciation of plant and equipment is computed
on a straight-line basis over the estimated useful lives of the assets.

 Estimated useful lives of depreciable assets are
as follows:

 Buildings and improvements

 10 – 50 years

 Machinery and equipment

 3 – 20 years

 Furniture and fixtures

 7 – 10 years

 Income Taxes

 The Company follows the provisions of the Financial
Accounting Standards Board ("FASB"), Accounting Standards Codification (ASC) Topic 740-10, "Accounting for Income Taxes."

 Under the provisions of FASB ASC 740-10, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred taxes and liabilities of a change in tax rates is recognized in earnings in the period that includes
the enactment date.

 Cash and Cash Equivalents

 Cash and cash equivalents consist of cash and
money market funds. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

 Investment Securities

 The Company accounts for its investments in debt
securities in accordance with ASC 320-10-25, "Accounting for Certain Investments in Debt and Equity Securities." Investments
in debt securities at June 30, 2025 and 2024 consisted of a combination of municipal bonds, U.S. Treasury bills, and certificates of
deposit. The Company classifies investments in debt securities as available-for-sale, which are reported at fair market value. Unrealized holding gains and losses, net of related
tax effect, on available-for-sale debt securities are excluded from earnings and are reported as a separate component of stockholders'
equity until realized. Realized gains and losses for debt securities classified as available-for-sale are included in earnings and
are determined using the specific identification method. Interest income is recognized when earned. Fair values are based on
quoted market prices available as of the balance sheet date, and are therefore considered a Level 1 valuation.

 Fair Value of Financial Instruments

 FASB ASC Topic 820 "Fair Value Measurement"
establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

 Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access
as of the measurement date.

 Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market
data.

 Note 2. Summary of Significant Accounting Policies,
 Continued

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market
participants would use in pricing an asset or liability.

 The carrying amounts of financial instruments,
including cash and cash equivalents, short term investment securities, accounts receivable, accounts payable and accrued expenses, approximated
fair value as of June 30, 2025 and 2024 because of the immediate or short-term maturity of these financial instruments.

 Accounts Receivable and Allowance for Credit Losses

 The Company extends credit to its customers in
the normal course of business and collateral is generally not required for trade receivables. Exposure to credit risk is controlled
through the use of credit approvals, credit limits, and monitoring procedures. Accounts receivable are reported net of an allowance
for credit losses. The Company estimates the allowance based on its analysis of historical experience, current economic market conditions,
performance of specific account reviews, and other factored considerations to include, but not limited to, contracts covered by government
funding and the overall health of the industry. Interest is not charged on past due balances. Based on these factors, there was an allowance
for credit losses of $ 3,000 at June 30, 2025 and 2024. Changes to the allowance for credit losses are charged to expense and reduced
by charge-offs, net of recoveries. The opening accounts receivable balance, net of allowance for credit losses of $ 3,000, at July 1, 2024
and July 1, 2023 were $ 6,635,490 and $ 5,755,282, respectively.

 Per Share Amounts

 FASB ASC Topic 260-10 "Earnings Per Share
(EPS)" requires the Company to calculate net income per share based on basic and diluted net income per share, as defined. Basic
EPS excludes dilution and unallocated ESOP shares and is computed by dividing net income by the weighted average number of shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock. The dilutive effect of outstanding options issued by the Company are reflected in
diluted EPS using the treasury stock method. Under the treasury stock method, options will only have a dilutive effect when the average
market price of common stock during the period exceeds the exercise price of the options.

 Comprehensive Income

 Comprehensive income consists of net income and
other comprehensive income (loss). Other comprehensive income for fiscal years ended June 30, 2025 and 2024 consists of unrealized
holding gains (losses) on available-for-sale debt securities.

 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 reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 Recently Adopted Accounting Standards

 In November 2023, the FASB issued ASU 2023-07, "Segment
Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which provides updates to qualitative and quantitative
reportable segment disclosure requirements. The amendments in ASU 2023-07 require all public entities, including those with a single reportable
segment, to include additional disclosures around significant segment expenses, as well as identify
measures used by the Chief Operating Decision Maker in evaluating segment performance, allocating resources, and assessing Company results.
Espey adopted ASU 2023-07 effective June 30, 2025. The adoption of 2023-07 did not change the way that the Company identifies its reportable
segments and, did not have a material impact on the Company's segment-related disclosures. Refer to the notes to the financial statements
for further information on Espey's reportable segment.

 Note 2. Summary of Significant Accounting Policies,
 Continued

 Recent Accounting Pronouncements Not Yet Adopted

 In December
2023, the FASB issued ASU No. 2023-09, "Income Taxes ("Topic 740"): Improvements to Income Tax Disclosures", which
includes amendments that further enhance income tax disclosures through the standardization and disaggregation of rate reconciliation
categories and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be applied prospectively,
with early adoption and retrospective application permitted. We are currently evaluating the impact of this standard to our financial
statements.

 In November,
2024, the FASB issued ASU No. 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures"
(Subtopic 220-40) which is intended to improve disclosures around public business entities expenses and address requests from investors
for more detailed information about the types of expenses that are within commonly presented expense captions such as cost of sales and
selling, general, and administrative costs. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods
within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this standard
to our financial statements.

 Impairment of Long-Lived Assets

 Long-lived assets, including property, plant,
and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated
future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of
the asset. There were no impairments of long-lived assets in fiscal years 2025 and 2024. Assets to be disposed of are separately
presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and no longer depreciated. The
assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and liability
sections of the balance sheet, if applicable.

 Concentrations of Risk

 The market for our defense electronics products
is largely dependent on the availability of new contracts from the United States and foreign governments to prime contractors to which
we provide components. Any decline in expenditures by the United States or foreign governments may have an adverse effect on our
financial performance.

 Generally, U.S. Government contracts are subject
to procurement laws and regulations. Some of the Company's contracts are governed by the Federal Acquisition Regulation (FAR),
which lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific acquisition
regulations that implement or supplement the FAR. For example, the Department of Defense implements the FAR through the Defense Federal
Acquisition Regulation (DFAR).

 The FAR also contains guidelines and regulations
for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part, at the government's
convenience or for default. If a contract is terminated for the convenience of the government, a contractor is entitled to receive payments
for its allowable costs and, in general, the proportionate share of fees or earnings for the work done. If a contract is terminated
for default, the government generally pays for only the work it has accepted. These regulations also subject the Company to financial
audits and other reviews by the government of its costs, performance, accounting and general business practices relating to its contracts,
which may result in adjustment of the Company's contract-related costs and fees.

 Note 3. Revenue

 The Company follows FASB ASC 606
"Revenue from Contracts with Customers" to determine the recognition of revenue. This standard requires entities to
assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at
which to record revenues. Revenue is recognized when control of the promised products or services is transferred to customers
at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or
services.

 Significant judgment is required in
determining performance obligations. Revenues
from our performance obligations are satisfied over time using the output method, using direct measurements of the value to the
customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract. The
output method considers the appraisal of results achieved, milestones reached or units delivered based on contractual shipment
terms, typically shipping point. Revenue is recognized when, or as, the customer takes control of the product or
services. The output method best depicts the transfer of control to the customer as the output method represents progress
toward satisfaction of each performance obligation. For units delivered, control is typically transferred to the customer at the
shipping point as the Company has a present right to payment, the customer has legal title to the asset, the customer has the
significant risks and rewards of ownership of the asset, and in most instances the customer has accepted the asset. For milestones achieved, the customer has confirmed the performance defined in the contract has been met and the Company is entitled to
payment.

 Total revenue recognized for the year ended June
30, 2025 based on units delivered totaled $ 35,343,557 compared to $ 33,403,833 for the same period in fiscal year 2024. Total revenue
recognized for the year ended June 30, 2025 based on milestones achieved totaled $ 8,607,314 compared to $ 5,332,486 for the same period
in fiscal year 2024.

 The Company offers a standard one-year product
warranty. Product warranties offered by the Company are classified as assurance-type warranties, which means, the warranty only guarantees
that the good or service functions as promised. Based on this, the provided warranty is not considered to be a distinct performance obligation. The
impact of variable consideration has been considered but none identified which would result in the adjustment of the transaction price
as of June 30, 2025. Our payment terms are generally 30-60 days.

 Contract liabilities were $ 22,886,404 and
$ 9,043,422 as of June 30, 2025 and 2024, respectively. The increase in contract liabilities is primarily due to the advance
collection of cash on specific contracts, offset in part, by revenue recognized. Revenue recognized, that was in contract
liabilities in the beginning of the fiscal year, approximated $ 3,666,815 for the year ended June 30, 2025. The opening contract
liabilities balance at July 1, 2024 and July 1, 2023 were $ 9,043,422 and $ 8,081,838, respectively. The Company used the practical
expedient to expense incremental costs incurred to obtain a contract when the contract term is less than one year.

 The Company's backlog, representing performance
obligations not yet satisfied, at June 30, 2025 totaling approximately $ 139.7 million is expected, based on expected due dates, to be
recognized in the following fiscal years: 35 % in 2026, 19 % in 2027, 15 % in 2028, and 31 % thereafter. The nature of the contracts that
make up the Company's backlog are enforceable and include cancellation clauses. If a contract is terminated for the convenience
of the government, a contractor is entitled to receive payments for its allowable costs and, in general, the proportionate share of fees
or earnings for the work done. If a contract is terminated for default, the government generally pays for only the work it has accepted.

 Significant Customers
& Accounts Receivable Concentrations:

 A significant portion of the Company's
business is the production of military and industrial electronic equipment for use by the U.S. and foreign governments and certain
industrial customers. Sales to six domestic customers accounted for 74 % of total sales in 2025. Each of the six customers accounted
for 16 %, 13 % 12 %, 12 %, 11 % and 10 % of sales in fiscal year 2025. Sales to five domestic customers accounted for 81 % of total sales
in 2024. Each of those five customers accounted for 20 %, 18 %, 16 %, 16 % and 11 %, respectively, of total sales in 2024. Orders from
significant customers may include more than one program and procurement may originate from various divisions of the significant
customer. The related accounts receivable balance, as a percentage of the Company's total trade accounts receivable balance, was 51%
represented by three customers at June 30, 2025. Each of the three customers accounted for 26 %, 14 %, and 11 % of accounts
receivable in fiscal year 2025. The related accounts receivable balance, as a percentage of the Company's total trade accounts
receivable balance, was 79% represented by five customers at June 30, 2024. Each of the five customers accounted for 38 %, 20 %, 10 %,
 7 %, and 4 % of accounts receivable in fiscal year 2024.

 Export shipments in fiscal years 2025 and 2024
were $ 3,124,820 and $ 2,350,087, respectively.

 Note 4. Investment Securities

 Investment securities at June 30, 2025 consist
of certificates of deposit and municipal bonds and at June 30, 2024, consisted of certificates of deposit, municipal bonds and U.S. Treasury
bills. The Company classifies investment securities as available-for-sale which have been determined to be level 1 assets. The cost,
gross unrealized gains, gross unrealized losses and fair value debt securities by major security type at June 30, 2025 and June 30,
2024 are as follows:

 Gross

 Gross

 Amortized

 Unrealized

 Unrealized

 Fair

 Cost

 Gains

 Losses

 Value

 June 30, 2025

 Certificates of deposit

 $
 23,539,000

 $
 —

 $
 —

 $
 23,539,000

 Municipal bonds

 1,163,567

 14,678

 —

 1,178,245

 U.S. Treasury bills

 —

 —

 —

 —

 Total investment securities

 $
 24,702,567

 $
 14,678

 $
 —

 $
 24,717,245

 Gross

 Gross

 Amortized

 Unrealized

 Unrealized

 Fair

 Cost

 Gains

 Losses

 Value

 June 30, 2024

 Certificates of deposit

 $
 17,651,000

 $
 —

 $
 —

 $
 17,651,000

 Municipal bonds

 709,059

 5,824

 ( 3,313
)

 711,570

 U.S. Treasury bills

 510,288

 5,773

 —

 516,061

 Total investment securities

 $
 18,870,347

 $
 11,597

 $
 ( 3,313
)

 $
 18,878,631

 The portfolio is diversified and highly liquid
and primarily consists of investment grade fixed income instruments. At June 30, 2025, the Company did not have any investments in individual
securities that have been in a continuous loss position considered to be other than temporary.

 As of June 30, 2025 and June 30, 2024, the remaining
contractual maturities of available-for-sale debt securities were as follows:

 Years to Maturity

 Less than

 One to

 One Year

 Five Years

 Total

 June 30, 2025

 Available-for-sale

 $
 22,933,933

 $
 1,783,312

 $
 24,717,245

 June 30, 2024

 Available-for-sale

 $
 17,889,582

 $
 989,049

 $
 18,878,631

 Note 5. Contracts in Process

 Contracts in
process at June 30, 2025 and 2024 are as follows:

 2025

 2024

 Unrecognized gross contract value

 $
 139,673,288

 $
 97,216,542

 Costs related to contracts in process

 $
 15,040,253

 $
 15,904,588

 Included in costs relating to contracts in process
at June 30, 2025 and 2024 are costs relative to contracts that may not be completed within the ensuing year as contracts vary in size,
scope and duration. Under the units-of-delivery method, the related sale and cost of sales will not be reflected in the statements of
comprehensive income until the units under contract are shipped.

 Note 6. Property, Plant and Equipment

 Property, plant and equipment at June 30, 2025
and 2024 is as follows:

 2025

 2024

 Land

 $
 45,000

 $
 45,000

 Building and improvements

 6,137,629

 5,472,156

 Machinery and equipment

 11,887,737

 11,509,018

 Furniture and fixtures

 165,651

 165,651

 18,236,017

 17,191,825

 Accumulated depreciation

 ( 14,275,861
)

 ( 13,885,550
)

 Property, plant and equipment, net

 $
 3,960,156

 $
 3,306,275

 Depreciation expense was $ 451,523 and $ 453,517
for the years ended June 30, 2025 and 2024, respectively.

 The Company was awarded $ 7.4 million in
funding during the second quarter of fiscal year 2023 in support of facility and capital equipment upgrades for testing and
qualification for the United States Navy. The funding is part of the Navy's investment to improve and sustain the Surface
Combatant Industrial Base. The work is being conducted on the Company's property in Saratoga Springs, NY, which was completed
in April 2025. The Company received payment related to the third and final submission of milestone invoices. The Company recorded
the receipt of milestone payments received as a reduction from the cost of the assets. The Company incurred an initial cash outlay
to satisfy income tax obligations arising from the value of the milestone payments received. The cash outlay arising from federal
income tax obligations is expected to be recaptured in future periods. Until recaptured, estimated tax obligations associated with
the receipt of milestone payments are recorded on the balance sheet and included in deferred tax assets. As of June 30, 2025, net
deferred tax asset includes a deferred tax asset of $ 1,298,291 associated with milestone reimbursements received totaling
$ 7,488,722. As of June 30, 2025 no portion of the property, plant, and equipment balance was related to facility and capital upgrades
pending reimbursement under the funding award, compared to $ 965,392 in spending that was not yet reimbursed and included in
property, plant, and equipment at June 30, 2024. As of June 30, 2025 no portion of the accounts payable balance was related to
capital upgrades eligible for reimbursement under this funding award compared to approximately $ 272,560 included in accounts payable
at June 30, 2024. All assets related to this award were placed in service at June 30, 2025.

 The Company received an additional award for
$ 3.4 million in funding during the second quarter of fiscal year 2025 in support of continued facility and capital equipment
upgrades for testing and qualification for the United States Navy. The funding is part of the Navy's investment to improve and
sustain the Surface Combatant Industrial Base. Work is being conducted on the Company's property in Saratoga Springs, NY,
which is anticipated to be completed by the end of fiscal year 2026. The Company will receive payment related to submission of
milestones. The first two milestones are achieved upon placement of all purchase orders and subsequently submitted for
reimbursement. The final milestone and final reimbursement is dependent on completion of all work to be performed and assets
purchased to be placed in service. To receive full reimbursement for the $ 3.4 million award, the Company must invest approximately
 15 % or $ 508,000 in relation to these facility improvements and capital equipment upgrades. The Company will record the receipt of
milestone payments as a reduction from the cost of the assets. The Company will have an initial cash outlay to satisfy income tax
obligations arising from the value of the milestone payments received. The cash outlay arising from federal income tax obligations
is expected to be recaptured in future periods. Until recaptured, estimated tax obligations associated with the receipt of milestone
payments are recorded on the balance sheet and included in deferred tax assets. As of June 30, 2025, net deferred tax asset includes
a deferred tax asset of $ 386,808 associated with items that will be reimbursed under this grant. As of June 30, 2025 the Company has
received $ 0 in milestone reimbursements. Included in property, plant, and equipment at June 30, 2025 was approximately $ 1,731,042
not yet reimbursed for facility and capital upgrades under this funding award, which includes $ 63,029 related to assets that have been placed in service. Included in accounts payable at June 30, 2025 was
approximately $ 108,306 for facility and capital upgrades eligible to be reimbursed under this funding award.

 Note 7. Pension Expense

 In the last quarter of the 2024 fiscal year, the
Company notified the third-party administrator of the IBEW Local 1799 Pension Fund of its intention to withdraw permanently from the plan
effective June 16, 2024. As required by the Employee Retirement Income Security Act "ERISA", the Company is subject to a termination
withdrawal liability. At June 30, 2024, the Company recorded a termination withdrawal obligation totaling $ 772,157, based on calculated
amounts provided by a third-party actuary retained by the Pension Fund. This outstanding amount was shown within the accounts payable
balance on the Company's balance sheet at June 30, 2024. An initial withdrawal liability contribution payment to the Plan totaling
$ 210,305 was made during July 2024. Final withdrawal calculations were provided to the Company on April 11, 2025 resulting in a final
payment of $ 534,583 which was paid on May 8, 2025. The cost of the withdrawal liability obligation is recorded in indirect overhead product
costs, capitalized in inventory and expensed through cost of sales based on shipments.

 The Company is obligated to make contributions
to the National Electrical Benefit Fund (NEBF) (Plan identifying number is 53-0181657). The Plan is a defined pension benefit plan covering
eligible union employees. Such contributions and expenses amounted to $ 79,739 in fiscal year 2025 and $ 79,429 in fiscal year 2024.
The contribution did not and will not in the future have a material impact on the Company's financial statements.

 The Company sponsors a 401(k) plan for non-union
workers with employee and employer matching contributions. The employer match is 10 % of the employee contribution and was $ 66,617 and
$ 60,301, for fiscal years 2025 and 2024, respectively.

 Note 8. Provision for Income Taxes

 A summary of the components of the provision for
income taxes for the years ended June 30, 2025 and 2024 is as follows:

 2025

 2024

 Current tax expense - federal

 $
 1,882,969

 $
 2,515,865

 Current tax (benefit) expense - state

 9,606

 ( 3,010
)

 Deferred tax benefit

 ( 306,865
)

 ( 1,032,981
)

 Provision for income taxes

 $
 1,585,710

 $
 1,479,874

 Deferred income taxes reflect the impact of "temporary
differences" between the amount of assets and liabilities for financial reporting purposes and such amounts measured by tax laws
and regulations. These "temporary differences" are determined in accordance with FASB ASC 740-10.

 The combined U.S. federal and state effective
income tax rates of 16.3 % and 20.3 %, for 2025 and 2024 respectively, differed from the statutory U.S. federal income tax rate for the
following reasons:

 2025

 2024

 U.S. federal statutory income tax rate

 21.0 %

 21.0 %

 Increase (reduction) in rate resulting from:

 State franchise tax, net of federal income tax benefit

 0.1

 —

 ESOP cost versus Fair Market Value

 0.5

 0.1

 Dividend on allocated ESOP shares

 ( 0.6
)

 ( 0.3
)

 ( 3.8
)

 0.2

 Foreign derived intangible income

 ( 0.9
)

 ( 0.8
)

 Other

 ( 0.0
)

 0.1

 Effective tax rate

 16.3 %

 20.3 %

 Note 8. Provision for Income Taxes, Continued

 For the years ended June 30, 2025 and 2024 deferred
income tax benefit of $ 306,865 and $ 1,032,981, respectively, results from the changes in temporary differences for each year. The tax
effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of June 30, 2025 and 2024 are presented
as follows:

 2025

 2024

 Deferred tax assets:

 Accrued expenses

 $
 171,491

 $
 138,158

 ESOP

 39,113

 32,698

 Property, plant and equipment - principally due to differences in depreciation methods

 1,023,074

 601,358

 Pension Withdrawal

 —

 162,153

 38,568

 39,724

 Total deferred tax assets

 $
 1,272,246

 $
 974,091

 Deferred tax liability:

 Inventory - effect of uniform capitalization

 25,477

 33,817

 Prepaid expenses

 44,750

 45,120

 Total deferred tax liability

 $
 70,227

 $
 78,937

 Net deferred tax asset (liability)

 $
 1,202,019

 $
 895,154

 In assessing the realization of deferred tax assets,
management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projection for future taxable
income over the period in which the deferred tax assets are deductible, management believes it is more likely than not that the Company
will realize the benefits of these temporary differences without consideration of a valuation allowance.

 As the result of the implementation of the FASB
interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No.
109, the Company recognized no material adjustments to unrecognized tax benefits. As of June 30, 2025 and 2024, the Company has no unrecognized
tax benefits.

 The Company recognizes interest and penalties
in general and administrative expense. As of June 30, 2025 and 2024, the Company has not recorded any provision for accrued interest and
penalties.

 The Company is subject to taxation in the United
States and various state jurisdictions. The federal tax returns are subject to audit for three years from date of filing unless the return
was audited within that period. In general, the majority of state statutes follow similar guidelines. As such, the Company's tax
returns for tax years ending June 30, 2025, 2024, and 2023 remain open to examination by the respective taxing authorities.

 Note 9. Employee Stock Ownership Plan

 The Company sponsors a leveraged employee
stock ownership plan (the "ESOP") that covers all nonunion employees who work 1,000 or more hours per year and are
employed on June 30. The Company makes annual contributions to the ESOP equal to the ESOP's debt service less dividends on
unallocated shares received by the ESOP. All dividends on unallocated shares received by the ESOP are used to pay debt service.
Dividends on allocated ESOP shares are recorded as a reduction of retained earnings. As the debt is repaid, shares are released and
allocated to active employees, based on the proportion of debt service paid in the year. The Company accounts for its ESOP in
accordance with FASB ASC 718-40 "Compensation-Stock Compensation". Accordingly, the shares purchased by the ESOP are
reported as Unearned ESOP Shares in the statement of financial position. As shares are released or committed-to-be-released, the
Company reports compensation expense equal to the current average market price of the shares, and the shares become outstanding for
earnings-per-share (EPS) computations. The ESOP borrowed from the Corporation an amount equal to the purchase price. The loan
will be repaid in fifteen (15) equal annual installments of principal commencing June 2021. The Board of Directors has fixed
the interest rate and the unpaid balance will bear interest at a fixed rate of 3.00 % per annum. ESOP compensation expense was
$ 622,472 and $ 438,136 for the years ended June 30, 2025 and 2024, respectively.

 Note 9. Employee Stock Ownership Plan, Continued

 The ESOP shares as of June 30,
2025 and 2024 were as follows:

 2025

 2024

 Allocated shares

 405,482

 451,132

 Unearned shares

 189,817

 211,487

 Total shares held by the ESOP

 595,299

 662,619

 Fair value of unearned shares

 $
 8,676,535

 $
 4,494,099

 The Company may at times be required to repurchase
shares at the ESOP participants' request at the fair market value. During the years ended June 30, 2025 and 2024, the Company did
not repurchase shares previously held by the ESOP.

 The ESOP allows for eligible participants to take
whole share distributions from the plan on specific dates in accordance with the provision of the plan. Share distributions from the ESOP
during the years ended June 30, 2025 and 2024 totaled 67,320 shares and 55,984 shares, respectively.

 Note 10. Stock-based Compensation

 The Company follows FASB ASC 718-40 "Compensation-Stock
Compensation" in establishing standards for the accounting for transactions in which an entity exchanges its equity instruments
for goods or services, as well as transactions in which an entity incurs liabilities in exchange for goods or services that are based
on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments. ASC 718
requires that the cost resulting from all share-based payment transactions be recognized in the financial statements based on the fair
value of the share-based payment. ASC 718 establishes fair value as the measurement objective in accounting for share-based payment transactions
with employees, except for equity instruments held by employee share ownership plans. Included as a reduction to the cost recognized for
share-based payments is an estimate for option forfeitures. It is the Company's policy to estimate expected option forfeitures based
on historical experience. Actual forfeitures are adjusted prior to the vesting date if the impact is material.

 Total stock-based compensation expense recognized
in the statements of comprehensive income for the fiscal years ended June 30, 2025 and 2024, was $ 346,281 and $ 283,673, respectively,
before income taxes. The amount of this stock-based compensation expense related to non-qualified stock options ("NQSOs")
for the fiscal years ended June 30, 2025 and 2024, was $ 32,145 and $ 34,903, respectively. The deferred tax benefit related to the NQSOs
as of June 30, 2025 and 2024 was $ 6,750 and $ 7,330, respectively. The remaining stock option expense, in each year, related to incentive
stock options ("ISOs") which are not deductible by the corporation when exercised, assuming a qualifying disposition and as
such no deferred tax benefit was established related to these amounts.

 As of June 30, 2025, there was $ 233,094 of unrecognized
compensation cost related to stock option awards that is expected to be recognized as expense over the next 1.75 years, of which $ 212,609
relates to ISOs and $ 20,485 relates to NQSOs. The total deferred tax benefit related to the NQSOs in future years will be $ 4,302.

 Note 10. Stock-based Compensation, Continued

 The Company has one employee stock option plan
under which options or stock awards may be granted, the 2017 Stock Option and Restricted Stock Plan (the "2017 Plan"), approved
by the Company's stockholders at the Company's Annual Meeting on December 1, 2017. The Board
of Directors may grant options to acquire shares of common stock to employees and non-employee directors of the Company at the fair market
value of the common stock on the date of grant. The maximum aggregate number of shares of common stock subject to options or awards to
non-employee directors is 133,000 and the maximum aggregate number of shares of common stock subject to options or awards granted to non-employee
directors during any single fiscal year is the lesser of 13,300 and 33 1/3% of the total number of shares subject to options or awards
granted in such fiscal year. The maximum number of shares subject to options or awards granted to any individual employee may not exceed
 15,000 in a fiscal year. Generally, options granted have a two-year vesting period based on two years of continuous service and have a
ten-year contractual life. Option grants provide for accelerated vesting if there is a change in control. Shares issued upon the exercise
of options are from those held in Treasury. Options covering 400,000 shares are authorized for issuance under the 2017 Plan. As of June
30, 2025, options covering 163,435 shares have been exercised, options covering 224,096 shares are outstanding and options covering 154,473
shares have been cancelled. As of June 30, 2025, options covering 12,469 shares remain available for grant, after factoring the cancelled
shares, which are eligible to be re-granted. While no further grants of options may be made under the Company's 2007 Stock Option
and Restricted Stock Plan, as of June 30, 2025, 4,050 options were outstanding under such plan of which all are vested and exercisable.

 ASC 718 requires the use of a valuation model
to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option valuation model, which incorporates
various assumptions including those for volatility, expected life, and interest rates.

 The table below outlines the weighted average
assumptions that the Company used to calculate the fair value of each option award for the years ended June 30, 2025 and 2024.

 2025

 2024

 Dividend yield

 3.79 %

 3.61 %

 Expected stock price volatility

 32.85 %

 31.21 %

 Risk-free interest rate

 4.35 %

 4.39 %

 Expected option life (in years)

 5.1 yrs

 5.3 yrs

 Weighted average fair value per share of options granted during the period

 $
 5.37

 $
 4.11

 The Company paid regular cash dividends on
common stock of $ 1.00 per share for the fiscal year ended June 30, 2025 and paid regular cash dividends on common stock of $ 0.675
per share for the fiscal year ended June 30, 2024. Expected stock price volatility is based on the historical volatility of the
Company's stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an
equivalent term approximating the expected life of the options. The expected option term (in years) represents the estimated period
of time until exercise and is based on actual historical experience.

 The following table summarizes stock option activity
during the years ended June 30, 2025 and 2024:

 Employee Stock Option Plans

 Weighted

 Number of

 Weighted

 Average

 Average

 Remaining

 Aggregate

 Subject

 Exercise

 Contractual

 Intrinsic

 to Option

 Price

 Term

 Value

 Balance at July 1, 2023

 296,331

 $
 19.15

 6.49

 Granted

 80,900

 $
 16.78

 9.22

 Exercised

 ( 31,325
)

 $
 16.80

 —

 Forfeited or expired

 ( 23,850
)

 $
 24.30

 —

 Outstanding at June 30, 2024

 322,056

 $
 18.41

 6.59

 $
 1,259,317

 Granted

 79,000

 $
 21.79

 9.04

 Exercised

 ( 162,410
)

 $
 18.81

 —

 Forfeited or expired

 ( 10,500
)

 $
 18.90

 —

 Outstanding at June 30, 2025

 228,146

 $
 19.26

 7.30

 $
 6,033,634

 Vested or expected to vest at June 30, 2025

 214,100

 $
 19.21

 7.20

 $
 5,671,899

 Exercisable at June 30, 2025

 83,746

 $
 19.07

 4.99

 $
 2,231,351

 Note 10. Stock-based Compensation, Continued

 The aggregate intrinsic value in the table above
represents the total pretax intrinsic value (the difference between the closing sale price of the Company's common stock as reported
on the NYSE American on June 30, 2025 and the exercise price, multiplied by the number of in-the-money options) that would have been received
by the option holders if all option holders had exercised their options on June 30, 2025. This amount changes based on the fair market
value of the Company's common stock. The total intrinsic values of the options exercised during the twelve months ended June 30,
2025 and 2024 was $ 2,023,198 and $ 195,236, respectively.

 The following table summarizes changes in non-vested stock options
during the years ended June 30, 2025 and 2024:

 Weighted Number

 Average

 of Shares

 Grant Date

 Subject

 Fair Value

 to Option

 (per Option)

 Non-vested at July 1, 2023

 132,600

 $
 3.98

 Granted

 80,900

 $
 4.11

 Vested

 ( 60,700
)

 $
 3.74

 Forfeited or expired

 ( 5,500
)

 $
 4.04

 Non-vested at June 30, 2024

 147,300

 $
 4.15

 Granted

 79,000

 $
 5.37

 Vested

 ( 71,400
)

 $
 4.18

 Forfeited or expired

 ( 10,500
)

 $
 4.71

 Non-vested at June 30, 2025

 144,400

 $
 4.76

 Note 11. Concentration of Credit Risk

 Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable.
The Company maintains cash and cash equivalents with various financial institutions. At times such investments may be in excess of FDIC
insurance limits. As disclosed in Note 3, a significant portion of the Company's business is the production of military and industrial
electronic equipment for use by the U.S. and foreign governments and certain industrial customers. The related accounts receivable balance,
as a percentage of the Company's total trade accounts receivable balance, was 70 % represented by six customers at June 30, 2025. Each
of the six customers accounted for 26 %, 14 %, 11 %, 7 %, 7 % and 6 % of accounts receivable in fiscal year 2025. The related accounts receivable
balance, as a percentage of the Company's total trade accounts receivable balance, was 79 % represented by five customers at June 30, 2024.
Each of the five customers accounted for 38 %, 20 %, 10 %, 7 %, and 4 % of accounts receivable in fiscal year 2024.

 Although the Company's exposure to credit risk
associated with nonpayment of these concentrated balances is affected by the conditions or occurrences within the U.S. and foreign governments,
the Company believes that its trade accounts receivable credit risk exposure is limited. The Company performs ongoing credit evaluations
of its customer's financial conditions and requires collateral, such as progress payments, in certain circumstances. The Company establishes
an allowance for credit losses based upon factors surrounding the credit risk of specific customers, historical trends and other information.

 Note 12. Related Parties

 The administration of the shares of common stock
held by the ESOP Trust is subject to the Espey Mfg. & Electronics Corp. Employee Retirement Plan and Trust (ESOP) and a Trust Agreement,
each effective as of July 1, 2016. The Trustees' rights with respect to the disposition of shares are governed by the terms of the
Plan and the Trust Agreement. As to shares that have been allocated to the accounts of participants in the ESOP Trust, the Plan provides
that the Trustees are required to vote such shares in accordance with instructions received from the participants. As to unallocated shares
and allocated shares for which voting instructions have not been received from participants, the Plan provides that the Trustees are required
to vote such shares in accordance with the direction of the Board of Directors of the Company under the terms of the Plan and Trust Agreement,
which is currently in the same proportion as the instructions received on the allocated shares. See Note 9 for additional information
regarding the ESOP.

 Note 13. Commitments and Contingencies

 The Company at certain times enters into
standby letters of credit agreements with financial institutions primarily relating to the guarantee of future performance on
certain contracts. Contingent liabilities on outstanding standby letters of credit agreements aggregated to zero at June 30, 2025
and 2024. The Company, as a U.S. Government contractor, is subject to audits, reviews, and investigations by the U.S. Government
related to its negotiation and performance of government contracts and its accounting for such contracts. Failure to comply with
applicable U.S. Government standards by a contractor may result in suspension from eligibility for award of any new government
contract and a guilty plea or conviction may result in debarment from eligibility for awards. The government may, in certain cases,
also terminate existing contracts, recover damages, and impose other sanctions and penalties. As a result of contract audits the
Company will determine a range of possible outcomes and in accordance with FASB ASC 450 "Contingencies" the Company will
accrue amounts within a range that appears to be its best estimate of a possible outcome. Adjustments are made to accruals, if any,
periodically based on current information.

 We are party to various litigation matters and
claims arising from time to time in the ordinary course of business. While the results of such matters cannot be predicted with certainty,
we believe that the final outcome of such matters will not have a material adverse effect on our business, financial condition, results
of operations or cash flows. Currently, there are no matters pending.

 Note 14. Stockholders' Equity

 Reservation of Shares

 The Company has reserved common shares for future
issuance as follows as of June 30, 2025:

 Stock options outstanding

 228,146

 Stock options available for issuance

 12,469

 Number of common shares reserved

 240,615

 The following table sets forth the reconciliation
of the numerators and denominators of the basic and diluted earnings per share computations for continuing operations for the years ended
June 30:

 2025

 2024

 Numerator:

 $

 $

 Denominator:

 Basic EPS:

 Common shares outstanding, beginning of period

 2,733,958

 2,702,633

 Unearned ESOP shares

 ( 211,487
)

 ( 233,645
)

 Weighted average common shares issued during the period

 60,416

 11,837

 Weighted average ESOP shares earned during the period

 8,149

 8,340

 Denominator for basic earnings per common shares –

 Weighted average common shares

 2,591,036

 2,489,165

 Diluted EPS:

 Common shares outstanding, beginning of period

 2,733,958

 2,702,633

 Unearned ESOP shares

 ( 211,487
)

 ( 233,645
)

 Weighted average common shares issued during the period

 60,416

 11,837

 Weighted average ESOP shares earned during the period

 8,149

 8,340

 Weighted average dilutive effect of stock options

 105,156

 47,802

 Denominator for diluted earnings per common shares –

 Weighted average common shares

 2,696,192

 2,536,967

 Not included in this computation of earnings
per share for the years ended June 30, 2025 and 2024 were options to purchase 0 and 62,691 shares, respectively, of the Company's
common stock. These options were excluded because their inclusion would have been anti-dilutive due to the average strike price exceeding
the average market price of those shares.

 The Company paid regular cash dividends on common
stock of $ 1.00 per share for the fiscal year ended June 30, 2025 and paid regular cash dividends on common stock of $ 0.675 per share for
the fiscal year ended June 30, 2024. Our Board of Directors assesses the Company's dividend policy periodically. There is no assurance
that the Board of Directors will maintain the amount of the regular cash dividend during any future years.

 Note 15. Line of Credit

 At June 30, 2025, the Company has an uncommitted
and unused Line of Credit with a financial institution. The agreement provides that the Company may borrow up to $ 3,000,000. The line
provides for interest payments equal to the SOFR Daily Floating Rate plus 2 percentage points. Any borrowing under the line of credit
will be collateralized by accounts receivable. All outstanding balances are payable no later than the expiration date of the agreement,
unless other terms are agreed to by the lender. The existing line of credit expires February 28, 2026. The Company did not borrow any
funds during the last two fiscal years.

 Note 16. Quarterly Financial Information (Unaudited)

 First

 Second

 Third

 Fourth

 2025

 Quarter

 Quarter

 Quarter

 Quarter

 Net sales

 $
 10,443,218

 $
 13,608,740

 $
 10,302,719

 $
 9,596,194

 Gross profit

 2,800,882

 3,163,712

 2,948,384

 3,771,652

 1,598,317

 1,908,499

 1,704,487

 2,931,651

 Net income per share -

 Basic

 0.63

 0.74

 0.66

 1.10

 Diluted

 0.61

 0.71

 0.63

 1.05

 2024

 Net sales

 $
 8,568,214

 $
 10,302,541

 $
 8,254,653

 $
 11,610,911

 Gross profit

 2,245,377

 3,142,575

 2,064,191

 3,200,917

 1,094,544

 1,795,370

 1,031,930

 1,893,296

 Net income per share -

 Basic

 0.44

 0.73

 0.41

 0.76

 Diluted

 0.44

 0.72

 0.40

 0.73

 Note 17. Segment Reporting

 As of June 30, 2025, the Company adopted FASB's
ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which provides enhancements to
qualitative and quantitative reportable segment disclosure requirements for all public companies. Operating segments are clearly defined
components of an entity in which separate financial information is readily available and reviewed by the chief operating decision maker
("CODM") when allocating resources and assessing company performance. Espey's CODM is the Chief Executive Officer. There
is one management team that oversees a single operating segment and reports directly to the CEO. Our CODM evaluates performance and makes
operating decisions about allocating resources based on financial data presented on a consolidated basis, focusing on significant expenses,
net income, and certain key performance indicators ("KPI") presented on our internal monthly and weekly management reports.
Significant expenses regularly provided to and reviewed by the CODM are Cost of Sales and Selling, General and Administrative costs which
are each separately presented on the Company's Consolidated Statement of Income. During the years ended June 30, 2025 and 2024,
domestic revenue accounted for more than 90% of total revenue. The Company manages sales on a consolidated basis under one reportable
segment.

 Item 9.
 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None

 Item 9A.
 Controls and Procedures

 Evaluation of Controls and Procedures

 (a) The Company's management, with the
participation of the Company's Chief Executive Officer and Principal Financial Officer, carried out an evaluation of the
effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive
Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of
the period covered by this report.

 (b) There have been no changes in our internal
controls over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.

 Management's Report on Internal Control
over Financial Reporting

 Management of our Company is responsible for establishing
and maintaining adequate internal control over financial reporting, as that term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

 Under the supervision and with the participation
of our management, including the Chief Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness
of our internal control over financial reporting using the criteria set forth in Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission in 2013. Based on our evaluation using the criteria set forth in Internal Control-Integrated
Framework, management has concluded that our internal control over financial reporting was effective as of June 30, 2025.

 This annual report does not include an attestation
report of our registered public accounting firm regarding internal control over financial reporting. Our report was not subject to attestation
by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management's report in this
annual report.

 Item 9B.
 Other information

 None

 The information called for by "Item 10. Directors,
Executive Officers, and Corporate Governance", "Item 11. Executive Compensation", "Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters", "Item 13. Certain Relationships and Related Transactions,
and Director Independence" and "Item 14. Principal Accountant Fees and Services", is hereby incorporated by reference to
the Company's Proxy Statement for its Annual Meeting of Shareholders, (scheduled to be held on December 5, 2025) to be filed with the
SEC pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

 Item 15. Exhibits, Financial Statement Schedules,
Signatures

 3.1

 Certificate of incorporation
 and all amendments thereto (incorporated by reference to Exhibit
 3.1 to Espey's Report on Form 10-K for the year ended June 30, 2004 and Report
 on Form 10-Q for the quarter ended December 31, 2004)

 3.2

 Amended and Restated By-Laws
 ( incorporated by reference to Exhibit 3.2 to Espey's Report on Form 8 -K dated September 21, 2020)

 4.1

 Description of Capital Stock
 ( incorporated
 by reference to Espey's Report on Form 8-K dated October 7, 2005)

 10.3

 2007 Stock Option and Restricted
 Stock Plan ( incorporated by reference to Espey's Proxy Statement dated October 23, 2007 for the November 30, 2007 Annual Meeting)

 10.4

 2017 Stock Option and Restricted
 Stock Plan ( incorporated by reference to Espey's Proxy Statement dated October 27, 2017 for the December 1, 2017 Annual Meeting)

 10.13

 Employment Agreement dated September 8, 2025 with David O'Neil (filed herewith)

 10.14

 Employment Agreement with Peggy Murphy ( incorporated by reference to Exhibit 10.14 on Espey's Report on Form 10–Q dated February 14, 2022)

 10.18

 Stock Purchase Agreement dated
 as of December 1, 2020 between Espey Mfg. & Electronics Corp. and The Trustees of the Espey Mfg. & Electronics Corp. Employee
 Retirement Plan Trust ( incorporated by reference to Exhibit 10.18 on Espey's Report on Form 8-K dated December 1, 2020)

 10.19

 ESOP Loan Agreement dated as of
 December 1, 2020 between The Trustees of Espey Mfg. & Electronics Corp. Employee Retirement Plan Trust and Espey Mfg. & Electronics
 Corp. ( incorporated by reference to Exhibit 10.19 on Espey's Report on Form 8-K dated December 1, 2020)

 10.20

 Employment Agreement dated January 1, 2022 with Katrina L. Sparano ( incorporated by reference to Exhibit 10.20 on Espey's Report on Form 8–K dated January 1, 2022)

 10.21

 Employment Agreement dated March 15, 2025 with Jennifer M. Pickering (filed herewith)

 10.22

 Employment Agreement dated March 15, 2025 with Kaitlyn O'Neil (filed herewith)

 14.1

 Code of ethics (incorporated by reference to Espey's
 website www.espey.com)

 19.1

 Policy on Insider Trading (Revised March 8, 2024) ( incorporated
 by reference to Exhibit 19.1 on Espey's Report on Form 10 –K dated September 27, 2024)

 23.1

 Consent of Freed Maxick, P.C. (filed herewith)

 31.1

 Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 31.2

 Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 32.1

 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 32.2

 Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 97.1

 Policy Related to Recovery of Erroneously Awarded Compensation
 ( incorporated
 by reference to Exhibit 19.1 on Espey's Report on Form 10 –K dated September 27, 2024)

 S I G N A T U R E S

 Pursuant to the requirements of Section 13 and 15(d) 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.

 ESPEY MFG. & ELECTRONICS CORP.

 /s/ David O'Neil

 David O'Neil

 President and Chief Executive Officer

 Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

 /s/David O'Neil

 President and Chief Executive Officer

 David O'Neil

 /s/Kaitlyn O'Neil

 Principal Financial Officer

 Kaitlyn O'Neil

 /s/Carl Helmetag

 Chairman of the Board

 Carl Helmetag

 /s/Paul J. Corr

 Director

 Paul J. Corr

 /s/Nancy Patzwahl

 Director

 Nancy Patzwahl

 /s/Michael W. Wool

 Director

 Michael W. Wool

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