Nortech Systems Announces New Patent for Active Optical Xtreme for Sophisticated Magnetic Environments, Redefining Connectivity in Digital and Manufacturing Technologies

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MINNEAPOLIS--(BUSINESS WIRE)-- Nortech Systems Incorporated (Nasdaq: NSYS) (“Nortech Systems”, or the “Company”), a leading provider of engineering and manufacturing solutions for complex electromedical and electromechanical products serving the medical, aerospace & defense and industrial markets, today announced the issuance of a new patent for their groundbreaking Active Optical Xtreme (AOX) technology platform. This innovative technology, which integrates cutting-edge transceivers, receivers, and optical fiber within a non-magnetic cable or connector assembly designed to operate in magnetically sensitive environments, is set to transform data transmission capabilities across a range of sectors, including medical imaging, avionics, wireless communications, scientific instrumentation and industrial applications.

Nortech last week announced the consolidation of all wire and cable production for Aerospace and Defense customers to its Bemidji facility. This move follows four years of strategic investments in research and development, significantly upgrading the fiber optic manufacturing capabilities at the Bemidji location. By centralizing production, Nortech aims to grow the fiber optic business, enhance operational efficiency, bolster product quality, and reinforce its commitment to innovation and sustainability within the industry.

Nortech’s AOX technology is a significant leap forward in the realm of data connectivity and management, providing a hybrid design that far exceeds the data transmission capabilities of traditional copper cables while offering power and signal delivery. By incorporating fiber optics and minimizing magnetic content, the highly ruggedized AOX enhances performance and does so in an environmentally sustainable manner. This aligns with Nortech Systems' commitment to innovation and sustainability, reflecting the Company's broader ethos of pushing the boundaries of what's possible in digital connectivity and manufacturing technologies.

The incorporation of fiber optics allows AOX cables to offer a litany of benefits over traditional data transfer methods, including substantially increased data transfer speeds, EMI immunity, managed voltage drop, with flexibility and durability across longer distances. This makes AOX uniquely suitable for high-performance data communications that cannot impact magnetically sensitive applications.

"Nortech Systems is proud to announce the patent of our Active Optical Xtreme technology that works in sophisticated magnetic environments, a testament to our team's dedication to innovation, hard work and excellence in the field of digital connectivity solutions," said Jay D. Miller, CEO of Nortech Systems. "AOX represents not only a significant advancement in our product offerings but also underscores our commitment to providing state-of-the-art solutions that meet the evolving needs of our clients to deliver products that offer lighter weight, lower cost, and durable solutions in a sustainable manner."

The AOX platform is expected to see increased adoption as industries seek more efficient and reliable methods to manage and transmit data in applications where sophisticated magnetic performance is required. The patent and subsequent implementation of AOX technologies are poised to set a new standard of digital data transfer in magnetically sensitive environments, reinforcing Nortech Systems' position as a leader in the global electronics manufacturing services (EMS) market. AOX for Non-Magnetic Applications is the Company's second patent in its technology portfolio. AOX adoption will ramp up through 2024 and will not have a material impact on Nortech's 2024 or 2025 financial results.

For more information about Active Optical Xtreme and other Nortech Systems solutions, please visit www.nortechsys.com.

About Nortech Systems Incorporated

Nortech Systems is a leading provider of design and manufacturing solutions for complex electromedical devices, electromechanical systems, assemblies, and components. Nortech primarily serves the medical, aerospace & defense, and industrial markets. Its design services span concept development to commercial design, and include medical device, software, electrical, mechanical, and biomedical engineering. Its manufacturing and supply chain capabilities are vertically integrated around wire/cable/interconnect assemblies, printed circuit board assemblies, as well as system-level assembly, integration, and final test. Headquartered in Maple Grove, Minn., Nortech currently has seven manufacturing locations and design centers across the U.S., Latin America, and Asia. Nortech Systems is traded on the NASDAQ Stock Market under the symbol NSYS. Nortech's website is www.nortechsys.com.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 including without limitation statements regarding performance and impact of the Active Optical Xtreme (AOX) technology platform on the business operations of the Company’s customers and the financial impact on the Company’s financial results. Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: (1) commodity cost increases coupled with challenges in raising prices and/or customer pressure to reduce prices; (2) supply chain disruptions leading to shortages of critical components; (3) volatility in market conditions which may affect demand for the Company's products; (4) increased competition; (5) geopolitical, economic, financial and business conditions; (6) risks inherent in product and technology development; or (7) the impact of global health epidemics on our customers, employees, manufacturing facilities, suppliers, the capital markets and our financial condition. Some of the above-mentioned factors are described in further detail in the section entitled "Risk Factors" in our annual and quarterly reports, as applicable. You should assume the information appearing in this document is accurate only as of the date hereof, or as otherwise specified, as our business, financial condition, results of operations and prospects may have changed since such date. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the United States Securities and Exchange Commission, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

Andrew D. C. LaFrence Chief Financial Officer and Senior Vice President of Finance alafrence@nortechsys.com 952-345-2243

Source: Nortech Systems Incorporated

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