EDGAR 10-K Filing

Company CIK: 732026
Filing Year: 2025
Filename: 732026_10-K_2025_0001437749-25-029455.json

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ITEM 1. BUSINESS
ITEM 1 - BUSINESS
Cautionary Statement Regarding Forward-Looking Statements
The business and activities of Trio-Tech International, a California corporation (the “Company”), discussed in this Annual Report on Form 10-K (the “Annual Report”) and in other past and future reports and announcements by the Company may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and assumptions regarding future activities and results of operations of the Company. In light of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward-looking statements made by or on behalf of the Company:
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market acceptance of Company’s products and services;
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changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company’s products and services;
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the impact of competition;
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problems with technology, product development schedules or delivery schedules;
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changes in military or commercial testing specifications which could affect the market for the Company’s products and services;
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difficulties in profitably integrating acquired businesses, if any, into the Company;
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risks associated with conducting business internationally and particularly in Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability;
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credit risks in the Chinese real estate industry;
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changes in macroeconomic conditions and credit market conditions; and
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other economic, financial and regulatory factors beyond the Company’s control.
In some cases, you can identify forward-looking statements by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential,” “believes,” “can impact,” “continue,” or the negative thereof or other comparable terminology.
Unless otherwise required by law, the Company undertakes no obligation to update forward-looking statements to reflect subsequent events, changed circumstances, or the occurrence of unanticipated events. You are cautioned not to place undue reliance on such forward-looking statements.
General
Trio-Tech International was incorporated in 1958 under the laws of the State of California. As used herein, the term “Trio-Tech,” “TTI,” the “Company,” “we,” “us” or the “Registrant” includes Trio-Tech International and its subsidiaries unless the context otherwise indicates. The mailing address and executive offices are located at Block 1008 Toa Payoh North, Unit 03-09 Singapore 318996, Singapore, and the telephone number is (65) 6265-3300.
We make available through our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and any amendments to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”). The SEC also maintains an internet site at www.sec.gov that contains such reports and statements that have been filed electronically with the SEC by the Company. Additional information about Trio-Tech is available on our website at www.triotech.com.
The Company has traditionally been a provider of reliability test equipment and services to the semiconductor and other industries. Our customers rely on us to verify that their semiconductor components meet or exceed the rigorous reliability standards demanded for automotive electronics, industrial electronics, computing and data storage, consumer electronics, and communication markets. We act as a global one-stop solution for our customers by designing and building reliability test solutions and offering comprehensive testing services. The Company also develops and manufactures an extensive range of equipment used in the manufacturing processes of semiconductors and various other industries.
During the fiscal year ended June 30, 2025 (“Fiscal 2025”), the Company operated its business in two segments: Semiconductor Back-end Solutions and Industrial Electronics. In the first quarter of Fiscal 2025, we made changes in our business strategy in an effort to better align with our focus areas and to streamline operations. Geographically, the Company operates in the United States (“U.S.”), Singapore, Malaysia, Thailand and China. While the semiconductor industry is and will remain a major market for the Company, an important component of our strategy is to reduce our historic concentration on this industry. As a result, we decided to organize our operating business based on the markets that we serve. Beginning in Fiscal 2025, we report our financial performance based on our new segments, Semiconductor Back-end Solutions and Industrial Electronics. For information relating to revenue, profit and loss and total assets for each of the segments, see Note 17 - Business Segments contained in the consolidated financial statements included in this Annual Report.
Company History - Certain Highlights for the Five Fiscal Years Ended June 30, 2025
Trio-Tech (Tianjin) Co. Ltd. recertified to ISO 9001:2015 standards. (Mar 2021)
Trio-Tech (Tianjin) Co. Ltd. recertified to ISO 14001:2015 standards. (Mar 2021)
Trio-Tech (Tianjin) Co. Ltd. certified to ISO 45001:2018 standards. (Mar 2021)
Trio-Tech International Pte. Ltd. (Singapore) recertified to ISO 9001:2015 standards. (Jul 2021)
Trio-Tech International Pte. Ltd. (Singapore) recertified to ISO 14001:2015 standards. (Jul 2021)
Trio-Tech (Malaysia) Sdn. Bhd. recertified to ISO 9001:2015 standards. (Jul 2021)
Trio-Tech (Malaysia) Sdn. Bhd. recertified to ISO 14001:2015 standards. (Jul 2021)
Trio-Tech (Bangkok) Co. Ltd. recertified to ISO 9001:2015 standards. (Jul 2021)
Trio-Tech (Jiangsu) Co. Ltd was established. (Jan 2022)
Trio-Tech (Jiangsu) Co. Ltd certified to ISO 9001:2015 standards. (Jun 2023)
Trio-Tech (Tianjin) Co. Ltd. recertified to ISO 9001:2015 standards. (Mar 2024)
Trio-Tech (Tianjin) Co. Ltd. recertified to ISO 14001:2015 standards. (Mar 2024)
Trio-Tech (Tianjin) Co. Ltd. recertified to ISO 45001:2018 standards. (Mar 2024)
Trio-Tech International Pte. Ltd. (Singapore) recertified to ISO 9001:2015 standards. (Sep 2024)
Trio-Tech International Pte. Ltd. (Singapore) recertified to ISO 14001:2015 standards. (Sep 2024)
Trio-Tech (Malaysia) Sdn. Bhd. recertified to ISO 9001:2015 standards. (Sep 2024)
Trio-Tech (Malaysia) Sdn. Bhd. recertified to ISO 14001:2015 standards. (Sep 2024)
Trio-Tech (Bangkok) Co. Ltd. recertified to ISO 9001:2015 standards. (Sep 2024)
Overall Business Strategies
Our core business is in the semiconductor industry, encompassing the manufacturing of equipment, provision of testing services and distribution of test and other semiconductor equipment and electronic components. The “Semiconductor Back-end Solutions” (“SBS”) segment comprises of our core semiconductor back-end manufacturing and testing operations that serve the semiconductor industry. Our value-added distribution business, along with our services and equipment manufacturing operations that serve various industries comprises our “Industrial Electronics” (“IE”) segment. Revenue from the SBS and IE segments accounted for 99.9% of our total revenue for the years ended June 30, 2025 and 2024, respectively. The semiconductor industry has experienced periods of rapid growth, but has also experienced downturns, often in connection with, or in anticipation of, maturing product cycles of both semiconductor companies’ and their customers’ products and decline in general economic conditions. To reduce our risks associated with sole industry focus and customer concentration, we continue to put effort into expanding our line of businesses. Management periodically evaluates the ongoing contributions of each of its business segments to its current and future revenue and prospects.
To achieve our strategic plan, we believe that we must pursue and win new business in the following areas:
• Primary markets - Capturing additional market share within our primary markets by offering superior products and services to address the needs of our major customers.
• Growing markets - Expanding our geographic reach in areas of the world with significant growth potential.
• New markets - Developing new products and technologies that serve wholly new markets.
• Complementary strategic relationships - Through complementary acquisitions or similar arrangements, we believe we can expand our markets and strengthen our competitive position. As part of our growth strategy, the Company continues to selectively assess opportunities to develop strategic relationships, including acquisitions, investments and joint development projects with key partners and other businesses.
Business Segments
In the first quarter of Fiscal 2025, we made changes in our business strategy in an effort to better align with our focus areas and to streamline operations. Beginning in Fiscal 2025, we report our financial performance based on our new segments, Semiconductor Back-end Solutions (“SBS”) and Industrial Electronics (“IE”). A mapping of our previous presentation and the revised segments is as presented below:
• Manufacturing - Manufacturing of equipment that solely serves the back-end processes of the semiconductor industry is presented under the SBS segment, and manufacturing of equipment that serves various industries is presented under the IE segment.
• Testing - Testing services are presented under the SBS segment.
• Distribution - Value-added distribution of burn-in test related equipment is presented under the SBS segment, and value-added distribution of other electronic products are presented under the IE segment.
• Real estate - Real estate segment relates to real estate investments made in ChongQing, China. When identifying reportable segments, management evaluates the contribution of each segment to our overall business strategy and whether the segment reported provides meaningful information to users about the Company’s performance and prospects. Revenue from the real-estate segment has been below 1% of total revenue in the past five fiscal years due to the negative real-estate environment in China. Effective in Fiscal 2025, management therefore concluded that the real-estate segment is not integral to the Company’s operations and does not intend to allocate any additional resources to this segment. As a result, this segment ceased to be a reportable segment in Fiscal 2025, and therefore will be presented under the Others segment.
Semiconductor Back-end Solutions (SBS)
The SBS segment of the Company designs and manufactures an extensive range of burn-in and reliability test equipment used in the “back-end” manufacturing processes of semiconductors. Our equipment includes burn-in systems, burn-in boards and related equipment that is used in the testing of structural integrity of integrated circuits. We also act as an extended development team of Integrated Device Manufacturers (“IDMs”) and Fabless semiconductor companies in the testing process with our expert technical skills, especially in the New Product Introduction (“NPI”) process. We provide comprehensive electrical, environmental, and burn-in testing services to semiconductor manufacturers in our testing laboratories in Asia. Our customers include both manufacturers and end users of semiconductor and electronic components who look to us when they decide to outsource their testing process. We also support the asset-light strategy of our customers by setting up test facilities and providing component level, package level and system level testing services with expert technology that improves the productivity of our customers. The independent tests are performed to industry and customer specific standards.
Industrial Electronics (IE)
The IE segment of the Company includes the design, manufacture and distribution of an extensive range of test, process and other equipment used in the manufacturing processes of customers in various industries in the consumer and industrial market. Our equipment includes environmental chambers, leak detectors, autoclaves, centrifuges, dynamic testers, Highly Accelerated Stress Test (“HAST”) testers, temperature-controlled chucks, and more. This segment also provides preventive maintenance, calibration services, repair services and upgrading and refurbishment services for temperature, humidity and pressurization equipment. In addition to marketing our proprietary products, we distribute mechanical, electrical and electronic products made by manufacturers around the world. The products include environmental chambers, mechanical shock and vibration testers, specialized equipment for aerospace applications and more. We also distribute a wide range of components such as connectors, sockets, cables, LCD displays and touch screen panels. We act as value-added resellers by enhancing the value of the distributed products by customizing each to the needs of our customers through our expert engineering and integration services. We also support our customers as their extended research and development arm in product design, leveraging the expert skills of our component engineers and design engineers.
Product Research and Development
We focus our research and development activities on improving and enhancing both product design and process technology. We conduct product and system research and development activities for our products in the U.S. and Singapore. Research and development expense was $384 and $392 for the years ended June 30, 2025 and 2024, respectively.
Marketing, Distribution and Services
We market our products and services worldwide, directly and through independent sales representatives and our own marketing team. We have approximately five independent sales representatives operating in the U.S. and another twenty-two in foreign countries. All sales representatives represented the SBS and IE segments for products and services produced and provided from our facilities in different locations.
Customer Concentration
During the years ended June 30, 2025 and 2024, combined sales of equipment and services to our three largest customers accounted for approximately 47.0% and 49.5%, respectively, of our total net revenue. Of those sales, $7,548 (20.7%) and $8,700 (20.6%) of our total net revenue were from one major customer for the years ended June 30, 2025 and 2024, respectively. The majority of our sales and services in the years ended June 30, 2025 and 2024 were made or provided to customers outside of the U.S.
As of June 30, 2025 and 2024, trade account receivables from our three largest customers accounted for approximately 56.3% and 57.0%, respectively, of our total trade account receivables. Within these balance, $2,376 (22.0%) and $2,217 (20.8%) of our total trade account receivables were from one major customer for the years ended June 30, 2025 and 2024, respectively. We regularly assess the creditworthiness of our customers and evaluate the adequacy of the allowance for expected credit losses.
Backlog
The following table sets forth the Company’s backlog as of June 30, 2025 and 2024:
For the Year Ended June 30,
Semiconductor Back-end Solutions backlog
$ 6,695
$ 9,865
Industrial Electronics backlog
4,335
4,489
11,030
14,354
Based on our past experience, we do not anticipate any significant cancellations or renegotiation of sales. The purchase orders for the SBS and IE businesses generally require delivery within 12 months from the date of the purchase order and certain costs are incurred before delivery. In the event of a cancellation of a confirmed purchase order, we require our customers to reimburse us for all costs incurred. We do not anticipate any difficulties in meeting delivery schedules. For testing services in the SBS segment, purchase orders are provided only during the process of delivery. Hence, the backlog is based on estimates provided by our customers and not based on a customer’s purchase order.
Materials and Supplies
Our products are designed by our engineers and are assembled and tested at our facilities in the U.S., China and Singapore. We purchase all parts and certain components from outside vendors for assembly purposes. We have no written contracts with any of our key suppliers. As these parts and components are available from a variety of sources, we believe that the loss of any one of our suppliers would not have a material adverse effect on our results of operations taken as a whole.
Competition
Our ability to compete is dependent on our ability to develop, introduce and sell new products, or enhanced versions of existing products, on a timely basis and at competitive prices, while reducing our costs.
Semiconductor Back-end Solutions (SBS)
Our SBS testing services operate in a competitive landscape, with numerous laboratories in our regions offering similar capabilities. The intense competition has accelerated industry consolidation, particularly in Asia, thinning the field of competitors. While the presence of semiconductor manufacturers competitors poses risks to our revenue, we believe that our established reputation, decades of expertise, and deep customer relationships will continue to secure our market position.
The principal competitive factors in the SBS manufacturing processes of burn-in and reliability test equipment include product performance, reliability, service and technical support, product improvements, price, established relationships with customers and product familiarity. We have been in business for more than 60 years which has helped us to establish and nurture long-term relationships with customers.
Industrial Electronics (IE)
Our IE segment includes the design, manufacture and distribution of an extensive range of test, process and other equipment used in the manufacturing processes of customers in various industries in the consumer and industrial market. We also distribute a wide range of components such as connectors, sockets, cables, LCD displays and touch screen panels. We act as value-added resellers by enhancing the value of the distributed products by customizing each to the needs of our customers through our expert engineering and integration services. We also support our customers as their extended research and development arm in product design, leveraging the expert skills of our component engineers and design engineers.
While the equipment and component market remains highly competitive, our integrated approach combines standard product offerings with value-added services such as customization and technical support. This combination allows us to meet specialized customer needs more comprehensively, creating modest but sustainable differentiation in our target markets, supporting consistent revenue generation while strengthening our position in key customer segments.
Patents
During the years ended June 30, 2025 and 2024, we did not register any patents within the U.S.
It is typical in the semiconductor industry to receive notices from time to time, alleging infringement of patents or other intellectual property rights of others. We do not believe that we infringe on the intellectual property rights of any others. However, should any claims be brought against us, the cost of litigating such claims and any damages could materially and adversely affect our business, financial condition, and results of operations.
Employees
As of June 30, 2025, we had approximately 614 full-time employees and 4 part-time employees. Geographically, approximately five full-time employees were located in the U.S. and approximately 609 full-time employees in Asia. None of our employees are represented by a labor union.
There were approximately 559 employees in the SBS segment, 31 employees in the IE segment and 24 employees in general administration, logistics, real estate and others as of June 30, 2025.
As of June 30, 2024, we had approximately 673 full-time employees and three part-time employees. Geographically, approximately six full-time employees were located in the U.S. and approximately 667 full-time employees in Asia. None of our employees are represented by a labor union.
There were approximately 621 employees in the SBS segment, 23 employees in the IE segment, and 29 employees in general administration, logistics, real estate and others as of June 30, 2024.

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ITEM 1A. RISK FACTORS
ITEM 1A - RISK FACTORS
As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, we are not required to provide the information required by this item.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B - UNRESOLVED STAFF COMMENTS
Not applicable.

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ITEM 2. PROPERTIES
ITEM 2 - PROPERTIES
As of the date of filing of this Form 10-K, we believe that our existing facilities are adequate and suitable to cover any sudden increase in our needs in the foreseeable future.
The following table presents the relevant information regarding the location and general character of our principal manufacturing and testing facilities:
Approx. Sq. Ft.
Owned (O) or Leased (L)
Location
Segment
Occupied
& Expiration Date
16139 Wyandotte Street, Van Nuys,
Others /IE
5,200
(L) Mar 2026
CA 91406,
United States of America
1004, Toa Payoh North, Singapore
SBS
6,864
(L) Sep 2025
Unit No. HEX 07-01/07
Unit No. HEX 07-01/07, (ancillary site)
SBS
2,532
(L) Sep 2025
Unit No. HEX 03-01/02/03
SBS
2,959
(L) Sep 2025
Unit No. HEX 01-08/15
SBS
6,864
(L) Jan 2026
Unit No. HEX 01-08/15, (ancillary site)
SBS
(L) Jan 2026
Unit No. HEX 07-10/11
Others
1,953
(L) Dec 2029
1008, Toa Payoh North, Singapore
SBS
6,099
(L) Jan 2026
Unit No. HEX 03-09/17
Unit No. HEX 03-09/17, (ancillary site)
SBS
(L) Jan 2026
Unit No. HEX 01-09/10/11
IE
2,202
(L) Nov 2026
Unit No. HEX 01-15/16
IE
1,400
(L) Sep 2026
Unit No. HEX 01-08
SBS
(L) Sep 2026
Unit No. HEX 01-12/14
IE
1,664
(L) Jul 2028
Lot No. 11A, Jalan SS8/2,
SBS
78,706
(O)
Sungai Way Free Industrial Zone,
47300 Petaling Jaya,
Selangor Darul Ehsan, Malaysia
120B-17-17, Persiaran Bayan Indah,
SBS
(L) Jul 2025
Quay West Residence, 11900 Pulau Penang
27-B, Lintang Sungai Tiram 5,
SBS
1,500
(L) Dec 2025
11900 Bayan Lepas Pulau Pinang
327, Chalongkrung Road,
SBS
34,433
(O)
Lamplathew, Lat Krabang,
Bangkok 10520, Thailand
Room 206-1, Zone B, Building 3, 99 West
SBS
7,858
(L) May 2029
Suhong Road, Suzhou industrial Park, China
27-05, Huang Jin Fu Pan,
Others
(L) Aug 2025
No. 26 Huang Jin Qiao Street
Hechuan District Chongqing
China 401520
B7-2, Xiqing Economic Development Area
SBS
45,940
(L) Apr 2026
International Industrial Park
Tianjin City, China 300385

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3 - LEGAL PROCEEDINGS
The Company is, from time to time, the subject of litigation claims and assessments arising out of matters occurring in its normal business operations. In the opinion of management, resolution of these matters will not have a material adverse effect on our consolidated financial statements.
There are no material proceedings to which any director, officer or affiliate of the Company, any beneficial owner of more than five percent of the Company’s common stock, or any associate of such person, is a party that is adverse to the Company or its properties.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Shares of the Company’s common stock, no par value, are traded on the NYSE American exchange under the symbol “TRT.”
On May 8, 2025, the Company's Board of Directors authorized a share repurchase program under which the Company may repurchase up to $1.0 million of its issued and outstanding common stock over a period of two years.
As of June 30, 2025, $1.0 million remained available for repurchases under our repurchase program.
As of September 1, 2025, there were 4,312,805 shares of our common stock issued and outstanding, and the Company had approximately 51 record holders of common stock. The number of record holders does not include the number of persons whose stock is in nominee or “street name” accounts through brokers.
Dividend Policy
We did not declare any cash dividends during the years ended June 30, 2025 or June 30, 2024.
The determination as to whether to pay any future cash dividends will depend upon our earnings and financial position at that time and other factors as the Board of Directors may deem appropriate. In general, California law prohibits the payment of dividends unless the corporation’s retained earnings prior to the dividend equals or exceeds the dividend or, immediately after payment of the dividends, the corporation’s assets would equal or exceed its total liabilities. There is no assurance that dividends will be paid to holders of common stock in the foreseeable future.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6 - [Reserved]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS, EXCEPT PERCENTAGES AND SHARE AMOUNTS)
The following discussion and analysis should be read in conjunction with our disclaimer on “Forward-Looking Statements,” “Item 1. Business,” and our Consolidated Financial Statements, the notes to those statements and other financial information contained elsewhere in this Annual Report. For purposes of this Management’s Discussion and Analysis within this Annual Report, all monetary amounts are stated in thousands except for par values and per share amounts, unless otherwise stated.
Overview
Our core business is and historically has been in the semiconductor industry, including manufacturing of test equipment, testing services, and distribution of test and other semiconductor equipment and electronic components. TTI develops and manufactures an extensive range of test equipment used in the “front-end” and the “back-end” manufacturing processes of semiconductors. Our equipment includes leak detectors, autoclaves, centrifuges, burn-in systems and boards, HAST testers, temperature-controlled chucks, and more. TTI provides comprehensive electrical, environmental, and burn-in testing services to semiconductor manufacturers in our testing laboratories.
In addition to marketing our proprietary products, we distribute complementary products made by manufacturers around the world. We act as value-added resellers by enhancing the value of the distributed products by customizing them to the needs of our customers through our expert design, engineering and integration. We also support our customers as their extended research and development arm in product design, leveraging the expert skills of our component engineers and design engineers.
During the years ended June 30, 2025 (“Fiscal 2025”) and June 30, 2024 (“Fiscal 2024”), Trio-Tech International revenue from Semiconductor Back-end Solutions and Industrial Electronics represented 67.7% and 32.2% of our revenue, respectively, as compared to 71.1% and 28.8% respectively, during Fiscal 2024. Revenue from the semiconductor industry, or our Semiconductor Back-end Solutions and Industrial Electronics segments, accounted for more than 99.9% of our total revenue for the years ended June 30, 2025 and 2024, respectively.
Fiscal 2025 Highlights
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Total revenue decreased by $5,839, or 14%, to $36,473 in Fiscal 2025, as compared to $42,312 in Fiscal 2024.
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SBS segment revenue decreased by $5,429, or 18%, to $24,682 in Fiscal 2025, as compared to $30,111 in Fiscal 2024.
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IE segment revenue decreased by $420 or 3% to $11,756 in Fiscal 2025, as compared to $12,176 in Fiscal 2024.
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Other segment revenue increased by $10 or 40% to $35 in Fiscal 2025, as compared to $25 in Fiscal 2024.
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Overall gross profit margin decreased by 0.3% to 25.1% in Fiscal 2025, as compared to 25.4% in Fiscal 2024.
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General and administrative expense decreased by $497 or 6% to $7,890 in Fiscal 2025 as compared to $8,387 in Fiscal 2024.
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Selling expense decreased by $126, or 15%, to $718 in Fiscal 2025, as compared to $844 in Fiscal 2024.
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Income from operations was $254 in Fiscal 2025, reflecting a decline of $839, as compared to income from operations of $1,093 in Fiscal 2024.
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Net other expense was $81 in Fiscal 2025, a shift of $617 as compared to net other income of $536 in Fiscal 2024.
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Income from continuing operations before income taxes was $173 in Fiscal 2025, reflecting a decline of $1,456 as compared to $1,629 in Fiscal 2024.
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Net loss attributable to TTI common shareholders for Fiscal 2025 was $41, as compared to net income of $1,050 in Fiscal 2024.
●
Net income attributable to non-controlling interest for Fiscal 2025 was $41, as compared to net income of $92 in Fiscal 2024.
●
Working capital increased by $2,537, or 11.1%, to $25,297 as of June 30, 2025, as compared to $22,760 as of June 30, 2024.
The highlights above are intended to identify certain of the Company’s significant events and transactions during Fiscal 2025. These highlights are not intended to be a full discussion of our results for the year and should be read in conjunction with the discussion of these items in Item 7 and with our consolidated financial statements and footnotes accompanying this Annual Report.
General Financial Information
Total assets as of June 30, 2025 were $41,068, a decrease of $1,472, or 3.5%, compared to $42,540 as of June 30, 2024. The decrease was primarily due to an decrease in short term deposits, inventories and operating lease right-of-use assets. The decrease was partially offset by an increase in cash and cash equivalents, restricted term deposits, trade accounts receivables, other receivables and property, plant and equipment.
Cash and cash equivalents totaled $10,890 as of June 30, 2025, an increase of $855, or 8.5%, compared to $10,035 as of June 30, 2024. The increase was due to favorable foreign exchange movements as SGD appreciated against USD, which resulted in higher USD equivalent value of Cash and cash equivalents as of June 30, 2025. The increase in cash and cash equivalents was offset by a decrease of $450, or 5.0% in short-term deposits and restricted term deposits, which as of June 30, 2025 were $8,568, as compared to $9,018 at June 30, 2024. The decrease in short-term deposits reflects strategic decision to retain a higher proportion of funds in one-month deposits for the purpose of maintaining sufficient liquidity.
Trade account receivables as of June 30, 2025 was $10,804, an increase of $143 or 1.3%, compared to $10,661 as of June 30, 2024. The increase was due to higher sales in our Industrial Electronics segment's Singapore operations during the fourth fiscal quarter, partially offset by lower sales in our China operations. The number of days’ sales outstanding in account receivables was 106 days and 90 days for the years ended June 30, 2025 and 2024 respectively.
Other receivables as of June 30, 2025 were $608, an increase of $67, or 12.4%, compared to $541 as of June 30, 2024. Other receivables mainly comprise of advance payments to creditors, indirect taxes refundable in Singapore and China operations and interest receivable from short term deposits.
Inventories as of June 30, 2025 were $2,262, a decrease of $900, or 28.5%, compared to $3,162 as of June 30, 2024. The decrease was driven by order fulfillment in our Singapore operations, along with a reduced backlog, which led to lower inventory levels. The number of days’ inventory held was 88 days at the end of Fiscal 2025, compared to 96 days at the end of Fiscal 2024.
Prepaid expense as of June 30, 2025 were $384 as of June 30, 2025, compared to $536 as of June 30, 2024. The decrease was due to the amortization of rental expenses of our China operations during Fiscal 2025 relating to advance rental payments made as of June 30, 2024.
Investment properties as of June 30, 2025 were $345, a decrease of $62 or 15.2% from $407 as of June 30, 2024. The decrease was attributable to the depreciation charged for the year.
Property, plant and equipment as of June 30, 2025 was $6,021, an increase of $84 or 1.4% compared to $5,937 as of June 30, 2024. The increase was primarily attributed to higher capital expenditures and additions to property, plant and equipment, which was partially offset by depreciation of existing property, plant and equipment recorded during Fiscal 2025 between June 30, 2024 and June 30, 2025.
Other assets as of June 30, 2025 were $231, a decrease of $1, or 0.4%, compared to $232 as of June 30, 2024.
Total liabilities as of June 30, 2025 were $7,077, a decrease of $3,885, or 35.4%, compared to $10,962 as of June 30, 2024. The decrease in liabilities was primarily due to a decrease in accounts payable, accrued expense, contract liabilities, income tax payable, bank loans payable, operating and finance lease.
Lines of credit as of June 30, 2025 were $141, an increase of $141, compared to nil as of June 30, 2024. The increase in the line of credit reflects borrowings to support working capital needs of IE segment in our Singapore operations in Fiscal 2025.
Accounts payable as of June 30, 2025 were $1,896, a decrease of $1,279, or 40.3% from $3,175 as of June 30, 2024. The decrease reflects efforts to scale down purchases when sales slowed and inventory needs decreased.
Accrued expense as of June 30, 2025 were $3,036, a decrease of $598, or 16.5% from $3,634 as of June 30, 2024. The decrease was mainly due to reduction in performance linked bonus provisions in Fiscal 2025.
Income tax payable as of June 30, 2025 were $122, a decrease of $398, or 76.5% from $520 as of June 30, 2024. The decrease was mainly due to lower taxable profit in Fiscal 2025.
Bank loans payable as of June 30, 2025 were $684, a decrease of $190 or 21.7% from $874 as of June 30, 2024. The decrease was due to the repayments made and no new loan arrangements entered during Fiscal 2025.
Finance leases as of June 30, 2025 were $43, a decrease of $48 or 52.7% as compared to $91 as of June 30, 2024. The decrease was due to the repayments made in our Singapore and Malaysia operations.
Other non-current liabilities as of June 30, 2025 were $31, an increase of $4 or 14.8% as compared to $27 as of June 30, 2024.
Operating lease right-of-use assets and the corresponding lease liabilities as of June 30, 2025 were $864, a decrease of $1,023 or 54.2% as compared to $1,887 as of June 30, 2024. This was due to operating lease expense recognized for the period and partially driven by business model restructuring in one of our China operations, which reduced the need for space, resulting in a decrease in operating lease right-of-use assets and the corresponding lease liabilities. The decrease is partially offset by lease renewals for our Singapore office.
Uncertainties and Remedies
There are several influencing factors which create uncertainties when forecasting performance, such as the changing nature of technology, specific customer requirements, decline in demand for certain types of burn-in devices or equipment, decline in demand for testing services and fabrication services, and other factors. One factor that influences uncertainty is the highly competitive nature of the semiconductor industry. Additionally, certain customers are unable to provide a forecast of the products required in the upcoming weeks, rendering it, difficult to plan adequate resources needed to meet these customers’ requirements because of short lead time and last-minute order confirmation. This will normally result in a lower margin for these products as it is often more expensive to purchase materials in a short time frame. However, the Company has taken certain actions and formulated certain plans to deal with and to help mitigate these unpredictable factors. For example, to meet manufacturing customers’ demands upon short notice, the Company maintains higher inventories but continues to work closely with its customers to avoid stockpiling. We believe that we have improved customer service through our efforts to keep our staff up to date on the newest technology and stressing the importance of understanding and meeting the stringent requirements of our customers. Finally, the Company is exploring new markets and products, looking for new customers, and upgrading and improving burn-in technology while at the same time searching for improved testing methods for higher technology chips.
The Company’s primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar-denominated sales and operating expense in its subsidiaries. Strengthening of the United States dollar (“U.S. Dollar”) relative to foreign currencies adversely affects the U.S. Dollar value of the Company’s foreign currency-denominated sales and earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Company’s products. Margins on sales of the Company’s products in foreign countries and on sales of products that include components obtained from foreign suppliers could be materially adversely affected by foreign currency exchange rate fluctuations. In some circumstances, for competitive or other reasons, the Company may decide not to raise local prices to fully offset the U.S. Dollar’s strengthening, or at all, which would adversely affect the U.S. Dollar value of the Company’s foreign currency-denominated sales and earnings. Conversely, a strengthening of foreign currencies relative to the U.S. Dollar, which has generally resulted as a result of current U.S. economic and trade policies, while generally beneficial to the Company’s foreign currency denominated sales and earnings, could cause the Company to reduce international pricing, thereby limiting the benefit. Additionally, strengthening of foreign currencies may also increase the Company’s cost of product components denominated in those currencies, thus adversely affecting gross margins.
The Company maintains monetary assets and liabilities denominated in currencies other than its functional currency. At each reporting date, these items are remeasured into the functional currency at the period-end spot rate. Resulting unrealized foreign currency gains or losses are included in net income and reported as reconciling items in the statement of cash flows under the indirect method. Our operations in Singapore hold certain monetary assets, including U.S. dollar-denominated accounts receivable and cash balances. The weakening of the U.S. dollar against the Singapore dollar resulted in an unrealized foreign currency loss when these U.S. dollar balances were remeasured into Singapore dollars, which is the functional currency of the subsidiary. While such impacts affect reported earnings in the period, they are unrealized in nature and may reverse in future periods depending on exchange rate movements and the timing of settlement of these balances.
On August 9, 2022, the CHIPS and Science Act of 2022 (“CHIPS Act”) was enacted in the United States. The CHIPS Act will provide financial incentives to the semiconductor industry which are primarily directed at manufacturing activities within the U.S. We continue to evaluate the business impact and potential opportunities related to the CHIPS Act. As of date, we do not see any direct effect of the CHIPS Act on the Company in the foreseeable future.
The U.S. tariff regime announced in April 2025 could potentially influence downstream demand variability among our customers. The policy's implementation remains uncertain-while the administration initially paused the tariffs, certain measures are now set to take effect in August 2025, with revised rates for some countries lower than originally proposed. While we have no direct significant exposure to these tariffs, secondary effects may arise if customers adjust their procurement strategies in response to trade policy changes. Based on our preliminary observations, demand appears to shift from China to other countries in the region. However, potential effects on macro demand in the future are far from clear, although we recognize the risk of revenue volatility should global demand continue to weaken due to the continued trade tensions between China and the U.S. and the potential that such continued trade tensions result in declining economic conditions. We continue to evaluate capacity adjustments in alignment with observable demand signals while maintaining operational flexibility to adapt to changing market conditions.
As of June 30, 2025, although we have seen improvements in both our operations and those of our suppliers, we may continue to experience supply shortages as well as inflationary cost pressures in at least the near term. Risks and uncertainties related to supply chain challenges, uncertainty regarding tariffs, and inflationary pressures may continue to negatively impact our revenue and gross margin. We continue to monitor and evaluate the business impact to react proactively.
Critical Accounting Estimates & Policies
The discussion and analysis of the Company’s financial condition presented in this section are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the U.S. During the preparation of the consolidated financial statements, we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to sales, returns, pricing concessions, bad debts, inventories, investments, fixed assets, intangible assets, income taxes and other impairments. Due to the events listed above, there has been uncertainty and disruption in the global economy and financial markets. These estimates and assumptions may change as new events occur and additional information is obtained. Actual results may differ from these estimates under different assumptions or conditions.
In response to the SEC’s Release No. 33-8040, Cautionary Advice Regarding Disclosure about Critical Accounting Policy, we have identified the most critical accounting policies upon which our financial statements depend. We determined that those critical accounting policies are related to the inventory valuation; allowance for doubtful accounts; revenue recognition; impairment of property, plant and equipment; investment properties and income tax. These accounting policies are discussed in the relevant sections in this management’s discussion and analysis, including the Recently Issued Accounting Pronouncements discussed below.
Account Receivables and Allowance for Credit Losses
During the normal course of business, we extend unsecured credit to our customers in all segments. Typically, credit terms require payment to be made between 30 to 90 days from the date of the sale. We generally do not require collateral from customers. We maintain our cash accounts at credit-worthy financial institutions.
The Company accounts for allowance for credit losses under the current expected credit loss (“CECL”) impairment model for its financial assets, including accounts receivable, and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, which considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, communications with its customers, and macro-economic conditions. Amounts are written off after considerable collection efforts have been made and the amounts are determined to be uncollectible.
Inventory Valuation
Inventories of our SBS and IE segments, consisting principally of raw materials, works in progress, and finished goods, are stated at the lower of cost and net realizable value, using the first-in, first-out (“FIFO”) method. The semiconductor industry is characterized by rapid technological change, short-term customer commitments and swiftly changing demand. Provisions for estimated excess and obsolete inventory are based on regular reviews of inventory quantities on hand and the latest forecasts of product demand and production requirements from our customers. Inventories are written down for not-saleable, excess or obsolete raw materials, works-in-process and finished goods by charging such write-downs to cost of sales. In addition to write-downs based on newly introduced parts, statistics and judgments are used for assessing provisions of the remaining inventory based on sale ability and obsolescence.
Property, Plant and Equipment & Investment Properties
Property, plant and equipment and investment properties are stated at cost, less accumulated depreciation and amortization. Depreciation is provided for over the estimated useful lives of the assets using the straight-line method. Amortization of leasehold improvements is provided for over the lease terms or the estimated useful lives of the assets, whichever is shorter, using the straight-line method.
Maintenance, repairs and minor renewals are charged directly to expense as incurred. Additions and improvements to property, plant and equipment are capitalized. When assets are disposed of, the related cost and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations and comprehensive income or loss.
Foreign Currency Translation and Transactions
The United States dollar (“U.S. dollar”) is the functional currency of the U.S. parent company. The Singapore dollar, the national currency of Singapore, is the primary currency of the economic environment in which the operations in Singapore are conducted. We also have business entities in Malaysia, Thailand, China and Indonesia, of which the Malaysian ringgit (“RM”), Thai baht, Chinese renminbi (“RMB”) and Indonesian rupiah are the national currencies. The Company uses the U.S. dollar for financial reporting purposes.
The Company translates assets and liabilities of its subsidiaries outside the U.S. into U.S. dollars using the rate of exchange prevailing at the balance sheet date, and the statement of operations is measured using average rates in effect for the reporting period. Adjustments resulting from the translation of the subsidiaries’ financial statements from foreign currencies into U.S. dollars are recorded in shareholders' equity as part of accumulated comprehensive income or loss translation adjustment. Gains or losses resulting from transactions denominated in currencies other than functional currencies of the Company’s subsidiaries are reflected in income for the reporting period.
Revenue Recognition
The Company follows Accounting Standards Update (“ASU”) No. 2014-09, Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). This standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.
We apply a five-step approach as defined in ASC Topic 606 in determining the amount and timing of revenue to be recognized: (1) identifying the contract with customer; (2) identifying the performance obligations in the contracts; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the corresponding performance obligation is satisfied.
Revenue derived from testing services in SBS and IE segment is recognized when services are rendered. Revenue generated from sale of products for both SBS and IE segments are recognized when persuasive evidence of an arrangement exists, delivery of the products has occurred, customer acceptance has been obtained (which means the control has been transferred to the customer), the price is fixed or determinable and collectability is reasonably assured. Certain customers can request for installation and training services to be performed for certain equipment sold in SBS and IE segment. These services are mainly for helping customers with the test runs of the machines sold and are considered a separate performance obligation. Such services can be provided by other entities as well, and these do not significantly modify the product. The Company recognizes the revenue at the point in time when the Company has satisfied its performance obligations.
Investment
The Company (a) evaluates the sufficiency of the total equity at risk, (b) reviews the voting rights and decision-making authority of the equity investment holders as a group, and whether there are any guaranteed returns, protection against losses, or capping of residual returns within the group and (c) establishes whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making a Variable Interest Entity (“VIE”) determination. The Company would consolidate a venture that is determined to be a VIE if it was the primary beneficiary. Beginning January 1, 2010, a new accounting standard became effective and changed the method by which the primary beneficiary of a VIE is determined. Through a primarily qualitative approach, the variable interest holder, if any, who has the power to direct the VIE’s most significant activities is the primary beneficiary. To the extent that the investment does not qualify as VIE, the Company further assesses the existence of a controlling financial interest under a voting interest model to determine whether the venture should be consolidated.
Cost Method
Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheets or consolidated statements of operations and comprehensive income or loss. However, impairment charges are recognized in the consolidated statements of operations and comprehensive income or loss. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.
Long-Lived Assets & Impairment
Our business requires heavy investment in manufacturing facilities and equipment that are technologically advanced but can quickly become significantly underutilized or rendered obsolete by rapid changes in demand. We have recorded intangible assets with finite lives related to our acquisitions.
We evaluate our long-lived assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors considered important that could result in an impairment review include significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for our business, significant negative industry or economic trends, and a significant decline in our stock price for a sustained period of time. Impairment is recognized based on the difference between the fair value of the asset and its carrying value, and fair value is generally measured based on undiscounted cash flow analysis, if there is significant adverse change.
We have not identified any changes in circumstances requiring further impairment test in Fiscal 2025. Our assessments established that the fair value of our primary assets continued to exceed their carrying amounts, resulting in no impairment charges for Fiscal 2025. We will continue to monitor impairment indicators, such as disposition activity, stock price declines or changes in forecasted cash flows in future periods. If the fair value of our reporting unit declines below the carrying value in the future, we will perform impairment testing and recognize impairment charges accordingly.
Fair Value Measurements
Under the standard ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”), fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants in the market in which the reporting entity transacts its business. ASC Topic 820 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, ASC Topic 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy.
Income Tax
We account for income taxes using the liability method in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes (“ASC Topic 740”), which requires an entity to recognize deferred tax liabilities and assets. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to the difference between the tax bases of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in future years. Further, the effects of enacted tax laws or rate changes are included as part of deferred tax expense or benefits in the period that covers the enactment date. Management believed it was more likely than not that the future benefits from these timing differences would not be realized. Accordingly, a valuation allowance was provided as of June 30, 2025 and 2024.
The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. We recognize potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result.
Stock-Based Compensation
We calculate compensation expense related to stock option awards made to employees and directors based on the fair value of stock-based awards on the date of grant. We determine the grant date fair value of our stock option awards using the Black-Scholes option pricing model and for awards without performance condition, the related stock-based compensation is recognized over the period in which a participant is required to provide service in exchange for the stock-based award, which is generally four years. We recognize stock-based compensation expense in the consolidated statements of shareholders' equity based on awards ultimately expected to vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates.
Determining the fair value of stock-based awards at the grant date requires significant judgment. The determination of the grant date fair value of stock-based awards using the Black-Scholes option-pricing model is affected by our estimated common stock fair value as well as other subjective assumptions including the expected term of the awards, the expected volatility over the expected term of the awards, expected dividend yield and risk-free interest rates. The assumptions used in our option-pricing model represent management’s best estimates and are as follows:
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Fair Value of Common Stock. We determined the fair value of each share of underlying common stock based on the closing price of our common stock on the date of grant.
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Expected Term. The expected term of employee stock options reflects the period for which we believe the option will remain outstanding based on historical experience and future expectations.
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Expected Volatility. We base expected volatility on our historical information over a similar expected term.
Non-controlling Interests in Consolidated Financial Statements
ASC Topic 810, Consolidation (“ASC Topic 810”) establishes accounting and reporting standards for the non-controlling interest in a subsidiary. This guidance requires that non-controlling interests in subsidiaries be reported in the equity section of the controlling company’s balance sheet. It also changes the way the net income of the subsidiary is reported and disclosed in the controlling company’s income statement.
Loan Receivables
The loan receivables are classified as current assets carried at face value and are individually evaluated for impairment. The allowance for loan losses reflects management’s best estimate of probable losses determined principally on the basis of historical experience and specific allowances for known loan accounts. All loans or portions thereof deemed to be uncollectible or require an excessive collection cost are written off to the allowance for losses.
Interest Income
Interest income on bank deposits and loans is recognized on an accrual basis. Discounts and premiums on loans are amortized to income using the interest method over the remaining period to contractual maturity. The amortization of discounts into income is discontinued on loans that are contractually 90 days past due or when collection of interest appears doubtful.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The new guidance requires enhanced disclosures about income tax expense. This standard update is effective for the Company beginning in the fiscal year ending June 30, 2026. Early adoption is permitted on a prospective basis. The Company is currently evaluating the impact of this ASU on annual income tax disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires improved disclosures about Company’s expenses. This standard update is effective for the Company for annual periods beginning in the fiscal year ending June 30, 2027 and interim period reports beginning in the first quarter of the fiscal year ending June 30, 2027. Early adoption is permitted on a retrospective basis. The Company is currently evaluating the impact of this ASU on expense disclosures.
Other new pronouncements issued but not yet effective until after June 30, 2025 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.
Comparison of Operating Results
The following table presents certain data from the consolidated statements of operations and comprehensive income as a percentage of net sales for Fiscal 2025 and 2024:
For the Year Ended June 30,
Revenue
100.0 %
100.0 %
Cost of sales
74.9 %
74.6 %
Gross Margin
25.1 %
25.4 %
Operating expense:
General and administrative
21.6 %
19.9 %
Selling
2.0 %
2.0 %
Research and development
1.1 %
0.9 %
(Gain) / Loss on disposal of property, plant and equipment
(0.3 )%
0.1 %
Total operating expense
24.4 %
22.9 %
Income from Operations
0.7 %
2.5 %
Revenue
Revenue comprises of mainly revenue from the SBS and IE segments. The components of revenue for Fiscal 2025 and 2024 were as follows:
For the Year Ended June 30,
Semiconductor Back-end Solutions (SBS)
67.7 %
71.1 %
Industrial Electronics (IE)
32.2 %
28.8 %
Others
0.1 %
0.1 %
Total
%
%
Revenue during Fiscal 2025 was $36,473, a decrease of $5,839, or 14%, compared to $42,312 during Fiscal 2024. The decrease in revenue was primarily due to the decrease in sales from Testing services in the SBS segment amidst a challenging semiconductor market environment.
Semiconductor Back-end Solutions (SBS)
SBS segment accounted for 67.7% of revenue during Fiscal 2025, a decrease of 3.4% compared to 71.1% during Fiscal 2024. Revenue generated by the SBS segment during Fiscal 2025 was $24,682, reflecting a decrease of $5,429, or 18%, compared to $30,111 during Fiscal 2024. Persistent challenges in China operations, where revenue declines reflect both cyclical industry headwinds and lasting trade tension effects, continue to weigh on our SBS segment performance. Although the recovering demand in Malaysia and Thailand operations provided partial mitigation through Fiscal 2025, this has not yet fully offset China's shortfall. Notably, Singapore operations provided additional mitigation, with stronger fourth-quarter performance relative to earlier quarters of Fiscal 2025, to reduce the year-on-year revenue decline. While these are encouraging signs of recoveries from an industry cyclical downturn, we will continue to assess conditions with prudent optimism, balancing the sector's strong growth drivers with prudent risk management to navigate potential volatility.
As of June 30, 2025, the backlog in the SBS segment was $6,695, reflecting a decrease of $3,170 from $9,865 as of June 30, 2024. The decline in the SBS segment backlog was driven by cyclical industry headwinds and prolonged trade tensions.
Industrial Electronics (IE)
Revenue generated by the IE segment accounted for 32.2% of total revenue during Fiscal 2025, an increase of 3.4% compared to 28.8% during Fiscal 2024. The Industrial Equipment (IE) segment experienced a rebound in revenue during the fourth quarter of Fiscal 2025, mitigating the year-over-year revenue decline. On a year-on-year basis, IE segment revenue for Fiscal 2025 was $11,756, reflecting a decrease of $420, or 3%, compared to $12,176 for Fiscal 2024, which was a meaningful improvement from the earlier quarters. This improvement was partly driven by the fulfilment of deferred orders from prior quarters, which had been delayed due to supply chain disruptions from principal suppliers and timing-related shifts in customer demand.
In Fiscal 2025, the Company mitigated revenue volatility through service portfolio diversification and expanded into a new distribution channel for aviation products and projects, offsetting softer demand in existing markets. Our ability to deliver customized, value-added solutions has enabled us to capitalize on new partnership opportunities while strengthening market penetration for our proprietary product lines, including Highly Accelerated Stress Test (HAST) systems, bubble testers, centrifuges, and Artic systems. These strategic initiatives underscore our commitment to long-term growth and adaptability amid evolving market conditions.
Backlog in the IE segment as of June 30, 2025 was $4,335, a decrease of $154, compared to $4,489 at June 30, 2024. The decline of backlog mainly attributable in equipment sales, driven by adverse macroeconomic conditions, was partially offset by an increase in backlog of component sales. The equipment and electronic components market is highly competitive, with commoditized products widely available. Our differentiation lies in our value-added distribution model, with enhancement of standard products through customized design, engineering, integration, and sub-assembly services tailored to customer specifications, securing a competitive advantage for the long term.
Gross Margin
Gross margin as a percentage of revenue was 25.1% in Fiscal 2025, a decrease of 0.3% compared to 25.4% in Fiscal 2024. Overall gross profit for Fiscal 2025 was $9,144, a decrease of $1,618, or 15%, compared to $10,762 for Fiscal 2024.
Gross margin as a percentage of revenue in the SBS segment was 27.4% in Fiscal 2025, a decrease of 0.5%, compared to 27.9% in Fiscal 2024. Despite the revenue contraction, gross profit margin demonstrated relative stability, primarily attributable to reduced cost of sales following the completion of asset depreciation cycles in our China operations during the first half of Fiscal 2025. Moving forward, the Company will maintain its focus on cost control initiatives to navigate the ongoing challenging demand environment. Gross profit for the SBS segment in Fiscal 2025 was $6,764, a decrease of $1,623 or 19.4%, compared to $8,387 in Fiscal 2024. The decrease in absolute dollar of gross profit is attributed to the decline in revenue.
Gross margin as a percentage of revenue in the IE segment was 20.5% in Fiscal 2025, an increase of 0.5%, compared to 20.0% in Fiscal 2024. The IE segment's gross margin improvement resulted from a strategic shift toward higher-margin equipment sales, where a more favorable sales composition led to lower direct material costs and thereby reducing cost of sales during Fiscal 2025 as compared to Fiscal 2024. Gross profit in the IE segment in Fiscal 2025 was $2,413, a decrease of $18, or 1%, compared to $2,431 in Fiscal 2024.
Operating Expense
Operating expense for the years ended June 30, 2025 and 2024 was as follows:
For the Year Ended June 30,
General and administrative
$ 7,890
$ 8,387
Selling
Research and development
(Gain) / Loss on disposal of property, plant and equipment
(102 )
Total
$ 8,890
$ 9,669
General and administrative expense was $7,890 in Fiscal 2025, a decrease of $497 or 6% from $8,387 in Fiscal 2024.
The decrease in general and administrative expense was primarily driven by lower performance-related manpower costs across the Company, complemented by the continued execution of cost control initiatives in our China operations to enhance operational efficiency and optimize resource utilization.
Selling expense was $718 in Fiscal 2025, a decrease of $126 or 15% compared to $844 in Fiscal 2024. The decrease in selling expense was primarily attributable to lower commission payments because of a decrease in commissionable revenue in Fiscal 2025 as compared to Fiscal 2024.
Income from Operations
Income from operations was $254 in Fiscal 2025, a decrease of $839, compared to income from operations of $1,093 in Fiscal 2024. The decline was mainly due to the decrease in revenue in absolute dollar amounts.
Interest Expense
Interest expense for the years ended June 30, 2025 and 2024 was as follows:
For the Year Ended June 30,
Interest expense
$
$
Interest expense was $45 in Fiscal 2025, a decrease of $32 compared to $77 in Fiscal 2024 due to lower utilization of credit facilities and a reduction in outstanding loans over the period. The bank loans payable decreased by $190 to $684 in Fiscal 2025, as compared to $874 in Fiscal 2024 due to payments made.
Other (Expense) / Income
Other (expense) / income for the years ended June 30, 2025 and 2024 was as follows:
For the Year Ended June 30,
Interest income
$
$
Other rental income
Exchange loss
(671 )
(74 )
Other miscellaneous income
Total
$ (181 )
$
During Fiscal 2025, the Company recorded other expense of $181, representing an unfavorable shift of $681 compared to other income of $500 in Fiscal 2024. This variance was primarily driven by foreign exchange losses, both realized and unrealized. During the second half of Fiscal 2025, the U.S. dollar weakened significantly against the Singapore dollar with the exchange rate fluctuating between approximately 1.35 to 1.28 Singapore dollar between January and June 2025. Given that our Singapore operations represent the Company's largest revenue contributor, this currency movement resulted in substantial foreign exchange losses, both from U.S. dollar denominated sales where customers payments were converted into Singapore dollar at lower rates (realized exchange losses) and outstanding U.S. dollar denominated monetary items in our balance sheet (unrealized exchange losses).
Government Grant
During Fiscal 2025, the Company received government grants amounting to $145, $82 of which was an incentive from the Singapore government for local resident recruitment, $48 from the U.S. government related to Employee Retention Credit (“ERC”) and the remaining $15 related to capital expenditure subsidy received from the government in China.
During Fiscal 2024, the Company received government grants amounting to $113, $23 of which was financial assistance received from the Singapore government for local resident recruitment, $57 from the U.S. government related to ERC and the remaining related to capital expenditure subsidy received from the government in China.
Income Tax Expense
Income tax expense for Fiscal 2025 was $168, representing a decrease of $318, as compared to income tax expense of $486 for Fiscal 2024. The decrease was primarily due to lower taxable income in Fiscal 2025 compared to Fiscal 2024.
At June 30, 2025, the Company had no federal net operating loss carry-forwards, and a state net operating loss carry-forward of $2,384, which expires in 2034. These carryovers may be subject to limitations under I.R.C. Section 382. In assessing the ability to realize the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not 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 on these criteria, management believes it is more likely than not the Company will not realize the benefits of the federal, state, and foreign deductible differences. Accordingly, a valuation allowance has been established against deferred tax assets recorded in the US and various foreign jurisdictions.
Loss from Discontinued Operations
Loss from discontinued operations was $5 in Fiscal 2025, compared to loss from discontinued operations of $4 in Fiscal 2024. The Company discontinued its fabrication segment in Fiscal 2013.
Non-controlling Interest
As of June 30, 2025, the Company held a 55% interest in each of Trio-Tech (Malaysia) Sdn. Bhd., SHI International Pte Ltd, and 52% interest in PT SHI Indonesia. We also held a 76% interest in Prestal Enterprise Sdn. Bhd. The share of non-controlling interest for Fiscal 2025, in the net income of subsidiaries, was $41, a decrease of $51 compared to a non-controlling interest in the net income of $92 for the previous fiscal year, due to the decrease in net income generated by the Company's China operations during Fiscal 2025 before the Company's acquisition of the remaining 49% of the equity interest in Trio-Tech (Jiangsu) Co. Ltd, resulting in the acquisition of all the equity interest in Trio-Tech (Jiangsu) Co. Ltd as of June 30, 2025.
Net (Loss) / Income Attributable to Trio-Tech International Common Shareholders
Net loss attributable to Trio-Tech International common shareholders for Fiscal 2025 was $41 compared to the net income attributable to Trio-Tech International common shareholders of $1,050 for Fiscal 2024. The decline was mainly due to the decrease in revenue and gross margin in absolute dollar amounts, which was further exacerbated by exchange losses due to unfavorable foreign currency movements.
(Loss) / Earnings per Share
Basic loss per share from continuing operations was $0.01 in Fiscal 2025, as compared to basic earnings per share of $0.25 in Fiscal 2024. Basic earnings per share from discontinued operations was $nil for Fiscal 2025 and Fiscal 2024.
Diluted loss per share from continuing operations was $0.01 in Fiscal 2025, as compared to diluted earnings per share $0.24 in Fiscal 2024. Diluted earnings per share from discontinued operations was $nil for Fiscal 2025 and Fiscal 2024.
Segment Information
The revenue, gross margin and income/(loss) from each segment for the years ended June 30, 2025 and 2024 are presented below. As the segment revenue and gross margin for each segment has been discussed in previous sections, only the comparison of income/(loss) from operations is discussed below.
Semiconductor Back-end Solutions (SBS)
The revenue, gross margin and income from operations for the SBS segment for the years ended June 30, 2025 and 2024 were as follows:
For the Year Ended June 30,
Revenue
$ 24,682
$ 30,111
Gross margin
27.4 %
27.9 %
Income from operations
$
$ 1,095
Income from operations in the SBS segment was $411 in Fiscal 2025, a decrease of $684, as compared to an income from operations of $1,095 in Fiscal 2024. The decrease in income from operations was mainly due to a decrease in revenue in absolute dollar amounts. Operating expense was $6,353 and $7,292 for Fiscal 2025 and 2024, respectively. The decrease in operating expense was mainly due to lower performance based remunerations for Fiscal 2025 as compared to Fiscal 2024.
Industrial Electronics (IE)
The revenue, gross margin and income from operations for the IE segment for the years ended June 30, 2025 and 2024 were as follows:
For the Year Ended June 30,
Revenue
$ 11,756
$ 12,176
Gross margin
20.5 %
20.0 %
Income from operations
$
$
Income from operations in the IE segment in Fiscal 2025 was $236, as compared to income from operations of $509 in Fiscal 2024. The decrease in income from operations was mainly due to a decrease in revenue in absolute dollar amounts. Operating expense was $2,177 and $1,922 for Fiscal 2025 and 2024, respectively. The increase of $255 in operating expense was driven by higher travel costs from the pursuit of new business opportunities to expand into new markets, along with higher selling and distribution expenses from more agency commission payments, tied to higher proportion of commissionable revenue in the IE segment.
Corporate
The loss from operations for corporate for the years ended June 30, 2025 and 2024, respectively:
For the Year Ended June 30,
Loss from operations
$ (393 )
$ (511 )
In Fiscal 2025, corporate operating loss was $393, as compared to $511 in Fiscal 2024. During Fiscal 2024, there was a one-off $307 incurred for professional fees associated with advisory services aimed at optimizing our portfolio and aligning our strategic focus.
Liquidity
Net cash provided by operating activities was $371 for the year ended June 30, 2025, a decrease of $2,346 as compared to $2,717 provided by operating activities for the prior year. The decrease in net cash provided by operating activities was primary due to lower net income of $1,142 in Fiscal 2025 compared to Fiscal 2024, partially offset by decrease in inventory. Higher payments to trade creditors by $2,661 further contributed to the decrease in net cash provided by operating activities.
Net cash provided by investing activities was $167 for the year ended June 30, 2025, an increase of $280 as compared to $113 net cash used in investing activities for the prior year. The increase was primarily due to higher withdrawals from unrestricted deposits which was held for working capital purposes and also higher cash outflow for addition to property, plant and equipment amounting to $425.
The decrease in cash usage in financing activities was mainly because the net cash outflow for lines of credit and bank loans amounted to $146 in Fiscal 2025, which was lower by $338 compared to $484 in Fiscal 2024. Cash generated from the proceeds from the exercise of stock options in Fiscal 2024 was $341 higher than Fiscal 2025.
We believe that our projected cash flows from operations, borrowing availability under our revolving lines of credit, cash on hand, trade credit and the secured bank loans will provide the necessary financial resources to meet our projected cash requirements for at least the next 12 months.
Capital Resources
Our working capital (defined as current assets minus current liabilities) has historically been generated primarily from the following sources: operating cash flow, availability under our revolving line of credit, and short-term loans. Working capital was $25,297 as of June 30, 2025, representing an increase of $2,537, or 11.1%, compared to working capital of $22,760 as of June 30, 2024. The increase in working capital was mainly due to decreases in current liabilities, including accounts payable, accrued expense, contract liabilities, income taxes payable and operating leases. Such fluctuations were partially offset by decreases in current assets, including short-term deposits and prepaid expenses and increases in current liabilities, including lines of credit.
The majority of our capital expenditures are based on demands from our customers, as we are operating in a capital-intensive industry. Our capital expenditures were $967 and $542 for the years ended June 30, 2025 and 2024, respectively. The capital expenditures in Fiscal 2025 were primarily for machinery & equipment in Singapore, Malaysia and Thailand operations and leasehold improvement in China and Singapore operations. We financed our capital expenditures and other operating expense through operating cash flows.
Our credit rating provides us with ready and adequate access to funds in the global market.
As of June 30, 2025, the Company had certain lines of credit that are collateralized by restricted deposits.
Entity with
Type of
Interest
Credit
Unused
Facility
Facility
Rate
Limitation
Credit
Trio-Tech International Pte. Ltd.,
Lines of Credit
Cost of Funds Rate +1.25%
$ 4,155
$ 3,856
Singapore
Universal (Far East) Pte. Ltd.
Lines of Credit
Cost of Funds Rate +1.25%
$ 1,960
$ 1,864
Trio-Tech Malaysia Sdn. Bhd.
Revolving credit
Cost of Funds Rate +2%
$
$
As of June 30, 2024, the Company had certain lines of credit that are collateralized by restricted deposits.
Entity with
Type of
Interest
Credit
Unused
Facility
Facility
Rate
Limitation
Credit
Trio-Tech International Pte. Ltd.,
Lines of Credit
Cost of Funds Rate +1.25%
$ 3,907
$ 3,626
Singapore
Universal (Far East) Pte. Ltd.
Lines of Credit
Cost of Funds Rate +1.25%
$ 1,843
$ 1,818
Trio-Tech Malaysia Sdn. Bhd.
Revolving credit
Cost of Funds Rate +2%
$
$
Off-Balance Sheet Arrangements
We do not consider the Company to have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expense, results of operations, liquidity, capital expenditures or capital resources.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, we are not required to provide the information required by this item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information called for by this item is included in the Company's consolidated financial statements beginning on page of this Annual Report.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A - CONTROLS AND PROCEDURES
An evaluation was carried out by the Company’s Chief Executive Officer and Chief Financial Officer (the principal executive and principal financial officers, respectively, of the Company) of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of June 30, 2025, the end of the period covered by this Form 10-K. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2025.
Additionally, management has the responsibility for establishing and maintaining adequate internal control over financial reporting for the Company and thus also assessed the effectiveness of our internal controls over financial reporting as of June 30, 2025. Management used the framework set forth in the report entitled “Internal Control - Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 to evaluate the effectiveness of the Company’s internal control over financial reporting.
Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with U.S. generally accepted accounting principles, and includes those policies and procedures that:
1.
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2.
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and
3.
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition and use or disposition of the Company’s assets that could have a material effect on the financial statements.
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, the risk.
Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal controls over financial reporting were effective as of June 30, 2025.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the fourth quarter of Fiscal 2025, which were identified in connection with management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B - OTHER INFORMATION
On September 17, 2025, the Company and Lodestar Enterprise Sdn. Bhd. (“Lodestar”) entered into an Equity Purchase Agreement (“Agreement”) pursuant to which the Company, through its wholly-owned subsidiary, Trio-Tech International Pte. Ltd (Singapore) (“Trio-Tech Singapore”) agreed to acquire from Lodestar the remaining 50% of the total share capital of Trio-Tech (Malaysia) Sdn. Bhd. owned by Lodestar and not already owned by Trio-Tech Singapore (the “Acquisition”). The Acquisition is subject to conditions to closing, including approval of the Acquisition by the Ministry of Investment, Trade and Industry in Malaysia. The purchase price for the Acquisition is RM14,200 payable in cash, or approximately $3,357 USD. Upon consummation of the Acquisition, the Company will indirectly through Trio-Tech Singapore own 100% of the share capital of Trio-Tech Malaysia.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by the full text of each of the Agreement, a copy of which is filed hereto as Exhibit 10.6 and is incorporated by reference herein. The Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type, and such representations, warrants, and covenants were made to each other as of the date of the Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Agreement. The Agreement is incorporated herewith to provide investors with information regarding its terms. It is not intended to provide any other factual information about the parties to the Agreement. In particular, the representations, warranties, covenants and agreements contained in the Agreement, which were made only for purposes of the Agreement and as of specific dates, were solely for the benefit of the parties to the Agreement, may be subject to limitations agreed upon by the contracting parties and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors, security holders and reports and documents filed with the Securities and Exchange Commission (“SEC”). In addition, the representations, warranties, covenants and agreements and other terms of the Agreement may be subject to subsequent waiver or modification.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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ITEM 11. EXECUTIVE COMPENSATION

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (1 and 2) FINANCIAL STATEMENTS AND SCHEDULES:
The following financial statements, including notes thereto and the independent auditors' report with respect thereto, are filed as part of this Annual Report on Form 10-K, starting on page 34 hereof:
1.
Report of Independent Registered Public Accounting Firm (PCAOB ID 2136)
2.
Consolidated Balance Sheets
3.
Consolidated Statements of Operations and Comprehensive Income (Loss)
4.
Consolidated Statements of Shareholders' Equity
5.
Consolidated Statements of Cash Flows
6.
Notes to Consolidated Financial Statements
(b) The exhibits filed as part of this Annual Report on Form 10K are set forth on the Exhibit Index immediately preceding such exhibits and are incorporated herein by reference.