INTEST CORP

CONSOLIDATED BALANCE SHEETS

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CONSOLIDATED STATEMENTS OF OPERATIONS

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

(In thousands)

See accompanying Notes to Consolidated Financial Statements

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’** EQUITY**

(In thousands, except share data)

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See accompanying Notes to Consolidated Financial Statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We are a global supplier of innovative test and process technology solutions for use in manufacturing and testing across a wide range of markets including automotive, defense/aerospace, industrial, life sciences, security and semiconductor. We have three operating segments which are also our reportable segments and reporting units: Electronic Test, Environmental Technologies and Process Technologies.

On* March 12, 2024we completed the acquisition of Alfamation S.p.A., an Italian joint-stock company (“Alfamation”), for an aggregate base purchase price of approximately EUR 20,000 comprised of: (i) EUR 18,000, or $19,674, in cash; and (ii)187,432 shares of our common stock, valued at $2,086 based on the closing price of our stock on the date of acquisition. The cash portion of the purchase price was subject to customary working capital adjustments. These adjustments were finalized in June 2024and resulted in recording an additional EUR 129, or $141, in purchase price for assets delivered at closing in excess of agreed upon thresholds. The liabilities assumed in connection with the acquisition included debt of approximately EUR 10,294, or $11,252. The acquisition is discussed further in Note3.* The debt assumed is discussed further in Note10.

The consolidated entity is comprised of inTEST Corporation and our wholly-owned subsidiaries. We manufacture our products in the U.S., Italy, Canada and the Netherlands. Marketing and support activities are conducted worldwide from our facilities in the U.S., Italy, Canada, Germany, Singapore, the Netherlands, China and the U.K. We operate our business worldwide and sell our products both domestically and internationally.

All of our operating segments have multiple products that we design, manufacture and market to our customers. Due to a number of factors, our products have varying levels of gross margin. The mix of products we sell in any period is ultimately determined by our customers’ needs. Therefore, the mix of products sold in any given period can change significantly from the prior period. In addition, we sell our products to a variety of different types of customers with varying levels of discounts and commission expense. As a result of changes in both the mix of products sold as well as customer mix in any given period, our consolidated gross margin can vary significantly from period to period.

The semiconductor market (“semi” or the “semi market”) which includes both the broader semiconductor market, as well as the more specialized automated test equipment (“ATE”) and wafer production sectors within the broader semiconductor market, has historically been the largest single market in which we operate. The semi market is characterized by rapid technological change, competitive pricing pressures and cyclical as well as seasonal market patterns. The semi market is also subject to periods of significant expansion or contraction in demand. In addition to the semi market, we sell into a variety of other markets. Our intention is to continue diversifying our markets, our product offerings within the markets we serve and our customer base across all of our markets with the goal of reducing our dependence on anyone market, product or customer. In particular, we are seeking to reduce the impact of volatility in the semi market on our results of operations.

Our Electronic Test segment sells many of its products to semiconductor manufacturers andthird-party test and assembly houses (end user sales) and to ATE manufacturers (original equipment manufacturer (“OEM”) sales), who ultimately resell our equipment with theirs to both semiconductor manufacturers andthird-party test and assembly houses. These sales all fall within the ATE sector of the semi market. With the acquisition of Acculogic Inc. and its affiliates (“Acculogic”) in* December 2021,and Alfamation in March 2024,*our Electronic Test segment also sells its products to customers in markets outside the semi market including the automotive, defense/aerospace, industrial and life sciences and specialty consumer electronics markets. Our Environmental Technologies segment sells its products to end users and OEMs within the ATE sector of the semi market. It also sells its products to customers in a variety of other markets other than the semi market, including the automotive, defense/aerospace, industrial and life sciences markets. Our Process Technologies segment sells its products to customers in the wafer production sector within the semi market. It also sells its products to customers in a variety of other markets other than the semi market, including the automotive, defense/aerospace, industrial, life sciences and security markets.

Our financial results are affected by a wide variety of factors, including, butnot limited to, general economic conditions worldwide and in the markets in which we operate, economic conditions specific to the semi market and the other markets we serve, downward pricing pressures from customers, our reliance on a relatively few number of customers for a significant portion of our sales and our ability to safeguard patented technology and intellectual property in a rapidly evolving market. In addition, we are exposed to the risk of obsolescence of our inventory depending on the mix of future business and technological changes within the markets that we serve. Part of our strategy for growth includes potential acquisitions that* maycause us to incur substantial expense in reviewing and evaluating potential transactions. We mayor maynot* be successful in locating suitable businesses to acquire and in closing acquisitions of businesses we pursue. In addition, we* maynot* be able to successfully integrate any business we do acquire with our existing business and we* may**not* be able to operate the acquired business profitably. As a result of these or other factors, we* may*experience significant period-to-period fluctuations in future operating results.

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On* May 11, 2023,we entered into an At-the-Market Issuance Sales Agreement (the "Sales Agreement") pursuant to which we issued and sold 921,797 shares of our common stock having an aggregate offering price of $20,000 between May 11, 2023and May 31, 2023.*We received net proceeds from the sale of these shares of $19,244 after payment of commissions of 3.0% of the gross proceeds and other fees related to the sale of these shares.

Basis of Presentation and Use of Estimates

The accompanying consolidated financial statements include our accounts and those of our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain of our accounts, including contingent consideration, inventories, long-lived assets, goodwill, identifiable intangibles and deferred tax assets and liabilities, including related valuation allowances, are particularly impacted by estimates.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position, results of operations, and changes in cash flows for the interim periods presented. Certain footnote information has been condensed or omitted from these consolidated financial statements. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in our Annual Report on Form10-K for the year ended* December 31, 2023 (the“2023* Form10-K”) filed on* March 27, 2024*with the Securities and Exchange Commission.

Reclassification

Certain prior period amounts have been reclassified to be comparable with the current period's presentation.

Subsequent Events

We have made an assessment of our operations and determined that there wereno material subsequent events requiring adjustment to, or disclosure in, our consolidated financial statements for thesix months ended* June 30, 2024.*

Business Combinations

Acquired businesses are accounted for using the purchase method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Fair values of intangible assets are estimated by valuation models prepared by our management andthird-party advisors. The assets purchased and liabilities assumed have been reflected in our consolidated balance sheets, and the operating results are included in the consolidated statements of operations and consolidated statements of cash flows from the date of acquisition. Any change in the fair value of acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, will be recognized in the consolidated statement of operations in the period of the estimated fair value change. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in general and administrative expense in the consolidated statements of operations.

Cash, Cash Equivalents and Restricted Cash

Short-term investments that have maturities ofthree months or less when purchased are considered to be cash equivalents and are carried at cost, which approximates fair value. Our cash balances, which are deposited with highly reputable financial institutions, at times* mayexceed the federally insured limits. We havenot* experienced any losses related to these cash balances and believe the credit risk to be minimal.

Periodically we have restricted cash which represents amounts deposited at our banks to support bank guarantees which certain of our customers require as a condition of paying large deposits on orders they place with us. Typically, the amount of the deposit and related guarantee declines as shipments are made against the order. At* June 30, 2024and December 31, 2023,we hadno* amounts classified as restricted cash.

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Trade Accounts Receivable and Allowance for Credit Losses

Trade accounts receivable are recorded at the invoiced amount and donot bear interest. We grant credit to customers and generally requireno collateral. To minimize our risk, we perform ongoing credit evaluations of our customers' financial condition. As discussed below under “Effect of Recently Adopted Amendments to Authoritative Accounting Guidance”, effective* January 1, 2023,we follow the guidance in Accounting Standards Codification (“ASC”) Topic326* (Financial Instruments – Credit Losses) in developing our estimate of the allowance for credit losses related to our accounts receivable. The allowance for credit losses is our best estimate of the amount of expected credit losses in our existing accounts receivable. In establishing the amount of allowance for credit losses, we consider all information available as of the reporting date including information related to past events, such as historical loss rates and actual incurred losses, as well as current conditions that* may*indicate future risk of loss and any other factors of which we are aware, that we believe could impact the ultimate collectability of the related receivables in future periods.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We donot have any significant off-balance sheet credit exposure related to our customers. Cash flows from accounts receivable are recorded in operating cash flows.

For thesix months ended* June 30, 2024,we utilized $48 of the allowance for credit losses to offset the write-off of a receivable in our Electronic Test segment. There wereno* other significant changes in the amount of the allowance for credit losses during this time period. There wasno bad debt expense recorded for thesix months ended* June 30, 2024.During thesix* months ended* June 30, 2023,we recorded a bad debt recovery of $79. This amount had been fully written off prior to our acquisition of Acculogic and wasno* longer in our accounts receivable balance.

Fair Value of Financial Instruments

Our financial instruments include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable, accrued expenses, our credit facility, interest rate swaps and our liabilities for contingent consideration. Our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at cost which approximates fair value, due to the short maturities of the accounts. Our short-term investments are classified as held-to-maturity and carried at amortized cost. Our credit facility and our interest rate swap are discussed further below and in Notes4 and10. Our liabilities for contingent consideration are accounted for in accordance with the guidance in ASC Topic820 (Fair Value Measurement). ASC Topic820 establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). Our contingent consideration liabilities are measured at fair value on a recurring basis using Level3 inputs which are inputs that are unobservable and significant to the overall fair value measurement. These unobservable inputs reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. See Note4 for further disclosures related to the fair value of our liabilities for contingent consideration.

Goodwill, Intangible and Long-Lived Assets

We havethree reportable segments which are also our reporting units: Electronic Test, Environmental Technologies and Process Technologies.

We account for goodwill and intangible assets in accordance with ASC Topic350 (Intangibles - Goodwill and Other). Finite-lived intangible assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed for impairment annually at the beginning of thefourth quarter on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill* maybe impaired. Goodwill is considered to be impaired if the fair value of a reporting unit is less than its carrying amount. As a part of the goodwill impairment assessment, we have the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If, as a result of our qualitative assessment, we determine that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amount, a quantitative goodwill impairment test isnot* required. However, if, as a result of our qualitative assessment, we determine it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, or, if we choosenot to perform a qualitative assessment, we are required to perform a quantitative goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized.

The quantitative goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considerednot impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The goodwill impairment assessment is based upon the income approach, which estimates the fair value of our reporting units based upon a discounted cash flow approach. This fair value is then reconciled to our market capitalization at year end with an appropriate control premium. The determination of the fair value of our reporting units requires management to make significant estimates and assumptions including the selection of control premiums, discount rates, terminal growth rates, forecasts of revenue and expense growth rates, income tax rates, changes in working capital, depreciation, amortization and capital expenditures. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment charge.

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Indefinite-lived intangible assets are assessed for impairment annually at the beginning of thefourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. As a part of the impairment assessment, we have the option to perform a qualitative assessment to determine whether it is more likely thannot that an indefinite-lived intangible asset is impaired. If, as a result of our qualitative assessment, we determine that it is more-likely-than-not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the quantitative impairment test is required; otherwise,no further testing is required. The quantitative impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

Long-lived assets, which consist of finite-lived intangible assets, property and equipment and right-of-use (“ROU”) assets, are assessed for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets* may**not* be fully recoverable or that the useful lives of these assets areno longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded value of the asset group. If impairment is indicated, the asset group is written down to its estimated fair value. The cash flow estimates used to determine the impairment, if any, contain management's best estimates using appropriate assumptions and projections at that time.

Revenue Recognition

We recognize revenue in accordance with the guidance in ASC Topic606 (Revenue from Contracts with Customers). We recognize revenue for the sale of products or services when our performance obligations under the terms of a contract with a customer are satisfied and control of the product or service has been transferred to the customer. Generally, this occurs when we ship a product or perform a service. In certain cases, recognition of revenue is deferred until the product is received by the customer or at some other point in the future when we have determined that we have satisfied our performance obligations under the contract. Periodically, certain customers* mayrequest bill-and-hold arrangements. In such cases, revenue isnot* recognized until after control has transferred which is generally when the customer has requested such transaction and has been notified that the product (i) has been completed according to customer specifications, (ii) has passed our quality control inspections, (iii) has been separated from our inventory and is ready for physical transfer to the customer, and (iv) we cannot use the product or redirect the product to another customer. Our contracts with customers* may*include a combination of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. In addition to the sale of products and services, we also lease certain of our equipment to customers under short-term lease agreements. We recognize revenue from equipment leases on a straight-line basis over the lease term.

Revenue is recorded in an amount that reflects the consideration we expect to receive in exchange for those products or services. We donot have any material variable consideration arrangements, or any material payment terms with our customers other than standard payment terms which generally range from net30 to net90 days. We generally donot provide a right of return to our customers. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Nature of Products and Services

We are a global supplier of innovative test and process technology solutions for use in manufacturing and testing in targeted markets including automotive, defense/aerospace, industrial, life sciences, security and semiconductor. Our Environmental Technologies segment sells thermal management products including ThermoStreams, ThermoChambers, process chillers, refrigerators and freezers, which we sell under our Temptronic, Sigma, Thermonics and North Sciences product lines. Our Process Technologies segment sells precision induction heating systems through our subsidiary, Ambrell Corporation (“Ambrell”), including EKOHEAT® and EASYHEAT™ products. This segment also sells industrial-grade circuit board mounted video digital cameras and related devices, systems and software through our Videology Imaging Corporation (“Videology”), subsidiary. Our Electronic Test segment sells semiconductor ATE interface solutions through our inTEST EMS (“EMS”) subsidiary, including manipulators, docking hardware and electrical interface products. This segment also sells robotics-based electronic production test equipment under the Acculogic tradename and, as a result of the acquisition of Alfamation on* March 12, 2024,which is discussed further in Note3,* this segment now sells test and measurement solutions for the automotive, life sciences and specialty consumer electronics markets. We provide post-warranty service and support for the equipment we sell. We sell our products to various markets including the automotive, defense/aerospace, industrial, life sciences, security and semiconductor markets.

We lease certain of our equipment under short-term leasing agreements with original lease terms ofsix months or less. Our lease agreements donot contain purchase options.

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Occasionally we procure and sell materials/components on behalf of and to our customers.

Types of Contracts with Customers

Our contracts with customers are generally structured as individual purchase orders which specify the exact products or services being sold or equipment being leased along with the selling price, service fee or monthly lease amount for each individual item on the purchase order. Payment terms and any other customer-specific acceptance criteria are also specified on the purchase order. We generally donot have any customer-specific acceptance criteria, other than that the product performs within the agreed upon specifications. We test substantially all products manufactured as part of our quality assurance process to determine that they comply with specifications prior to shipment to a customer.

Contract Balances

We record accounts receivable at the time of invoicing. Accounts receivable, net of the allowance for credit losses, is included in current assets on our consolidated balance sheets. In certain instances, we also receive customer deposits in advance of invoicing and recording of accounts receivable. Customer deposits are included in current liabilities on our consolidated balance sheets. To the extent that we donot recognize revenue at the same time as we invoice, we record a liability for deferred revenue. Deferred revenue estimated to be recognized within the nexttwelve months is included in current liabilities. Deferred revenue that we estimate will be recognized beyondtwelve months is recorded in Other Liabilities on our consolidated balance sheets. Any non-inventoriable costs associated with deferred revenue are also deferred and recorded in Prepaid Expenses and Other Current Assets or Other Assets on our consolidated balance sheets, depending on when the related deferred revenue is expected to be recognized.

As discussed above, we follow the guidance in ASC Topic326 in developing our estimate of the allowance for credit losses related to our accounts receivable. The allowance for credit losses is our best estimate of the amount of expected credit losses in our existing accounts receivable. We monitor the collectability of accounts receivable on an ongoing basis and record charges for bad debt expense in the period when we determine that a loss is expected to occur based on our assessment.

Costs to Obtain a Contract with a Customer

The only costs we incur associated with obtaining contracts with customers are sales commissions that we pay to our internal sales personnel orthird-party sales representatives. These costs are calculated based on set percentages of the selling price of each product or service sold. Commissions are considered earned by our internal sales personnel at the time we recognize revenue for a particular transaction. Commissions are considered earned bythird-party sales representatives at the time that revenue is recognized for a particular transaction. We record commission expense in our consolidated statements of operations at the time the commission is earned. Commissions earned butnot yet paid are included in current liabilities on our balance sheets.

Product Warranties

In connection with the sale of our products, we generally provide standardone- ortwo-year product warranties which are detailed in our terms and conditions and communicated to our customers. Our standard warranties arenot offered for sale separately from our products; therefore, there isnot a separate performance obligation related to our standard warranties. We record estimated warranty expense for our standard warranties at the time of sale based upon historical claims experience. We offer customers an option to separately purchase an extended warranty on certain products. In the case of extended warranties, we recognize revenue in the amount of the sale price for the extended warranty on a straight-line basis over the extended warranty period. We record costs incurred to provide service under an extended warranty at the time the service is provided. Warranty expense is included in selling expense in our consolidated statements of operations.

See Notes6 and14 for further information about our revenue from contracts with customers.

Inventories

Inventories are valued at cost on afirst-in,first-out basis,not in excess of market value. Cash flows from the sale of inventories are recorded in operating cash flows. On a quarterly basis, we review our inventories and record excess and obsolete inventory charges based upon our established objective excess and obsolete inventory criteria. Our criteria identify excess material as the quantity of material on hand that is greater than the average annual usage of that material over the priorthree years. Our criteria identify obsolete material as material that hasnot been used in a work order during the priortwenty-four months. In certain cases, additional excess and obsolete inventory charges are recorded based upon current market conditions, anticipated product life cycles, new product introductions and expected future use of the inventory. The excess and obsolete inventory charges we record establish a new cost basis for the related inventories. We incurred excess and obsolete inventory charges of $306 and $266 for thesix months ended* June 30, 2024and2023,* respectively.

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Leases

We account for leases in accordance with ASC Topic842 (Leases). We determine if an arrangement is a lease at inception. A lease contract is within scope if the contract has an identified asset (property, plant or equipment) and grants the lessee the right to control the use of the asset during the lease term. The identified asset* maybe either explicitly or implicitly specified in the contract. In addition, the supplier mustnot* have any practical ability to substitute a different asset and wouldnot economically benefit from doing so for the lease contract to be in scope. The lessee’s right to control the use of the asset during the term of the lease must include the ability to obtain substantially all of the economic benefits from the use of the asset as well as decision-making authority over how the asset will be used. Leases are classified as either operating leases or finance leases based on the guidance in ASC Topic842. Operating leases are included in operating lease ROU assets and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment and financing lease liabilities. We donot currently have any financing leases.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.None of our leases provide an implicit rate; therefore, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms* mayinclude options to extend or terminate the lease. We include these options in the determination of the amount of the ROU asset and lease liability when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Certain of our operating leases contain predetermined fixed escalations of minimum rentals and rent holidays during the original lease terms. Rent holidays are periods during which we have control of the leased facility but arenot* obligated to pay rent. For these leases, our ROU asset and lease liability are calculated including any rent holiday in the determination of the life of the lease.

We have lease agreements which contain both lease and non-lease components, which are generally accounted for separately. In addition to the monthly rental payments due, most of our leases for our offices and warehouse facilities include non-lease components representing our portion of the common area maintenance, property taxes and insurance charges incurred by the landlord for the facilities which we occupy. These amounts arenot included in the calculation of the ROU assets and lease liabilities as they are based on actual charges incurred in the periods to which they apply.

Operating lease payments are included in cash outflows from operating activities on our consolidated statements of cash flows. Amortization of ROU assets is presented separately from the change in operating lease liabilities and is included in Depreciation and Amortization on our consolidated statements of cash flows.

We have made an accounting policy electionnot to apply the recognition requirements of ASC Topic842 to short-term leases (leases with a term ofone year or less at the commencement date of the lease). Lease expense for short-term lease payments is recognized on a straight-line basis over the lease term.

See Note9 for further disclosures regarding our leases.

Interest Rate Swap Agreement

We are exposed to interest rate risk on our floating-rate debt. We have entered into an interest rate swap agreement to effectively convert our floating-rate debt to a fixed-rate basis for a portion of our floating rate debt, as discussed further in Notes4 and10. The principal objective of this agreement is to eliminate the variability of the cash flows for interest payments associated with our floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. We have elected to apply the hedge accounting rules in accordance with ASC Topic815 (Derivatives and Hedging). Further, we have determined that this agreement qualifies for the shortcut method of hedge accounting. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of accumulated other comprehensive earnings (loss) within stockholders’ equity and are amortized to interest expense over the term of the related debt.

Contingent Liability for Repayment of State and Local Grant Funds Received

In connection with leasing a facility in Rochester, New York, which our subsidiary, Ambrell, occupied in* May 2018,we entered into agreements with the city of Rochester and the state of New York under which we received grants totaling $550 to help offset a portion of the cost of the leasehold improvements we made to this facility. The final payment of $87 was received during thethree* months ended* March 31, 2022.In exchange for the funds we received under these agreements, we are required to create and maintain specified levels of employment in this location through various dates ending in2024.* If we fail to meet these employment targets, we* maybe required to repay a proportionate share of the proceeds. At June 30, 2024,$123 of the total proceeds received could still be required to be repaid if we donot* meet the targets. We have recorded this amount as a contingent liability which is included in other liabilities on our consolidated balance sheet. Those portions of the proceeds which areno longer subject to repayment are reclassified to deferred grant proceeds and amortized to income on a straight-line basis over the remaining lease term for the Rochester facility. Deferred grant proceeds are included in other current liabilities and other liabilities on our balance sheet and totaled $280 at* June 30, 2024.At June 30, 2024,*we were in compliance with the employment targets as specified in the grant agreement with the city of Rochester.

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Stock-Based Compensation

We account for stock-based compensation in accordance with ASC Topic718 (Compensation - Stock Compensation) which requires that employee share-based equity awards be accounted for under the fair value method and requires the use of an option pricing model for estimating fair value of stock options, which is then amortized to expense over the service periods. See further disclosures related to our stock-based compensation plans in Note11.

Income Taxes

The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carryforwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely thannot that such assets willnot be realized.

Earnings (Loss) Per Common Share

Earnings (loss) per common share - basic is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during each period. Earnings (loss) per common share - diluted is computed by dividing earnings (loss) by the weighted average number of common shares and common share equivalents outstanding during each period. Common share equivalents represent unvested shares of restricted stock and stock options and are calculated using the treasury stock method. Common share equivalents are excluded from the calculation if their effect is anti-dilutive.

The table below sets forth, for the periods indicated, a reconciliation of weighted average common shares outstanding - basic to weighted average common shares and common share equivalents outstanding - diluted and the average number of potentially dilutive securities that were excluded from the calculation of diluted earnings (loss) per share because their effect was anti-dilutive:

Effect of Recently Issued Amendments to Authoritative Accounting Guidance

In* November 2023,the FASB issued amendments to the guidance for disclosures about reportable segments which require disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis. The amendments are to be applied on a retrospective basis and are effective for fiscal years beginning after December 15, 2023and interim periods within fiscal years beginning after December 15, 2024.*We are evaluating the impact of the amendments on disclosures in our consolidated financial statements.

In* December 2023,the FASB issued amendments to the guidance for disclosures about income tax which provide for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. The amendments require entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. The amendments also require entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to afive* percent quantitative threshold. The amendments* maybe adopted on a prospective or retrospective basis and are effective for fiscal years beginning after December 15, 2024*with early adoption permitted. We are evaluating the impact of the amendments on disclosures in our consolidated financial statements.

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On* March 12, 2024we completed the acquisition of Alfamation S.p.A., an Italian joint-stock company (“Alfamation”). Alfamation is a leading global provider of state-of-the-art test and measurement solutions for the automotive, life sciences and specialty consumer electronics markets. Alfamation is included in our Electronic Test operating segment. The acquisition of Alfamation deepens our presence in the automotive/EV and life science markets, expands our exposure in consumer electronics, extends our geographic reach with a sizable footprint in Europe, and widens our portfolio of products and solutions. Additionally, we believe Alfamation brings engineering talent and a management team that culturally aligns with our mission to provide innovative, engineered solutions that address the high-value challenges of our customers. The aggregate purchase price was approximately EUR 20,000 comprised of: (i) EUR 18,000, or $19,674, in cash; and (ii)187,432 shares of our common stock, valued at $2,086 based on the closing price of our stock on the date of acquisition. The cash portion of the purchase price was subject to customary working capital adjustments. These adjustments were finalized in June 2024and resulted in recording an additional EUR 129, or $141, in purchase price for assets delivered at closing in excess of agreed upon thresholds. The liabilities assumed in connection with the acquisition included debt of approximately EUR 10,294, or $11,252. The debt assumed is discussed further in Note10.* Total acquisition costs incurred to complete this transaction were $1,139. Acquisition costs were expensed as incurred and included in general and administrative expense.

In connection with the acquisition, we have entered into a lease agreement (the “Lease Agreement”) with the former owner of Alfamation who will continue to serve as the managing director of Alfamation under our ownership. The Lease Agreement commenced on* March 12, 2024and will last forsix years. It will be automatically renewed for the same period of time unless terminated by either party. Under the terms of the Lease Agreement, Alfamation will lease warehouse and office space totaling about 51,817 square feet. Alfamation will pay a yearly lease payment of EUR 260 broken up intotwo* equal payments. At the date of the signing of the Lease Agreement, the yearly lease payment equated to approximately $284.

The acquisition of Alfamation has been accounted for as a business combination using purchase accounting, and, accordingly, the results of Alfamation have been included in our consolidated results of operations from the date of acquisition. The allocation of the purchase price for Alfamation isnot yet complete. The preliminary allocation of the Alfamation purchase price was based on estimated fair values as of* March 12, 2024.We are currently working withthird*-party valuation specialists to assist us with our purchase accounting. The information that needs to be gathered from multiple sources, including the records and personnel at Alfamation, isnot yet fully assembled. As a result, the values reflected below are preliminary and we expect that they* maychange. Adjustments to these preliminary amounts will be included in the final allocation of the purchase price for Alfamation, which we expect to finalize in thethird* quarter of2024. These adjustments could be material.

The excess of the purchase price over the identifiable intangible and net tangible assets was allocated to goodwill and isnot deductible for tax purposes. Goodwill is attributed to synergies that are expected to result from the operations of the combined businesses.

The total purchase price of $21,901 has been allocated as follows:

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We estimated the fair value of identifiable intangible assets acquired using the income approach. Identifiable intangible assets acquired include customer relationships, customer backlog, technology and a tradename. We are amortizing the finite-lived intangible assets acquired over their estimated useful lives based on the pattern in which the economic benefits of the intangible asset are expected to be consumed.

The following table summarizes the estimated fair value of Alfamation’s identifiable intangible assets and their estimated useful lives as of the acquisition date:

For the period from* March 13, 2024to June 30, 2024,*Alfamation contributed $11,098 of revenue and net earnings of $482.

The following unaudited pro forma information gives effect to the acquisition of Alfamation as if the acquisition occurred on* January 1, 2023.These proforma summaries donot* reflect any operating efficiencies or costs savings that* maybe achieved by the combined businesses. These proforma summaries are presented for informational purposes only and arenot* necessarily indicative of what the actual results of operations would have been had the acquisition taken place as of that date, nor are they indicative of future consolidated results of operations:

The pro forma results shown above donot reflect the impact on general and administrative expense of investment advisory costs, legal costs and other costs of $1,139 incurred by us as a direct result of the transaction.

ASC Topic820 (Fair Value Measurement) establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

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ASC820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC820 establishes athree-tier fair value hierarchy that distinguishes among the following:

Level1 Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access.

Level2 Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that arenot active and models for which all significant inputs are observable, either directly or indirectly.

Level3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level3. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Recurring Fair Value Measurements

The interest rate swap agreement we entered into in connection with our Term Note, as discussed further in Notes2 and10, is measured at fair value on a recurring basis using Level2 inputs. The contingent consideration liability on our balance sheet is measured at fair value on a recurring basis using Level3 inputs.

Our contingent consideration liability is a result of our acquisition of Acculogic on* December 21, 2021,and represents the estimated fair value of the additional cash consideration payable that is contingent upon sales to Electric Vehicle (“EV”) or battery customers. We maypay the seller up to an additional CAD $5,000 in thefive*-year period from2022 through2026. The additional payments will be based on a percent of net invoices for which payments have been received on systems sold to EV or battery customers in excess of CAD $2,500 per year in each of thefive years. The maximum payment is capped at CAD $5,000, which equates to approximately $3,655 at* June 30, 2024.There wereno* payments due to the seller for the years ended* December 31, 2022or2023.* To estimate the fair value of the contingent consideration at the acquisition date, an option-based income approach using a Monte Carlo simulation model was utilized due to the non-linear payout structure. As of the acquisition date, this resulted in an estimated fair value of $1,430. This amount was recorded as a contingent consideration liability and included in the purchase price as of the acquisition date. We reassess the estimated fair value of this liability annually using this same approach, or more frequently, if we determine that there have been material changes to the assumptions used in the calculation of the probable payout. Changes in the amount of the estimated fair value of the earnouts since the acquisition date are recorded as operating expenses in our consolidated statement of operations in the quarter in which they occur. During the quarter ended* June 30, 2024we further reduced the contingent consideration liability by $50. At June 30, 2024,the contingent consideration had an estimated fair value of $1,008. The current portion of our contingent consideration liability was $194 and $0 at June 30, 2024and December 31, 2023,*respectively, and was included in Other Current Liabilities on our consolidated balance sheets. Ther non-current portion of the liability is included in Other Liabilities on our consolidated balance sheets.

The following fair value hierarchy table presents information about assets and (liabilities) measured at fair value on a recurring basis:

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Changes in the fair value of our Level3 contingent consideration liabilities for thesix months ended* June 30, 2024*were as follows:

We havethree operating segments which are also our reporting units: Electronic Test, Environmental Technologies and Process Technologies. Goodwill and intangible assets on our balance sheets are the result of our acquisitions.

Goodwill

Changes in the amount of the carrying value of goodwill for thesix months ended* June 30, 2024*are as follows:

Goodwill was comprised of the following at* June 30, 2024and December 31, 2023:*

Intangible Assets

Changes in the amount of the carrying value of indefinite-lived intangible assets for thesix months ended* June 30, 2024*are as follows:

Changes in the amount of the carrying value of finite-lived intangible assets for thesix months ended* June 30, 2024*are as follows:

Intangible assets were allocated to our reporting segments at* June 30, 2024and December 31, 2023*as follows:

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The following tables provide further detail about our intangible assets as of* June 30, 2024and December 31, 2023:*

We generally amortize our finite-lived intangible assets over their estimated useful lives based on the pattern in which the economic benefits of the intangible assets are expected to be consumed, or on a straight-line basis, if an alternate amortization method cannot be reliably determined. Any such alternate amortization method would be based on the pattern in which the economic benefits of the intangible asset are expected to be consumed.None of our intangible assets have any residual value.

The following table sets forth the estimated annual amortization expense for each of the nextfive years:

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The following tables provide additional information about our revenue from contracts with customers, including revenue by customer and product type and revenue by market. See also Note14 for information about revenue by operating segment and geographic region.

During thesecond quarter of2024, we recognized $1,385 of revenue for systems sold toone of our customers which remained at our location as of* June 30, 2024under the terms of a bill-and-hold arrangement with this customer. The customer informed us that they didnot* have space for these systems and requested that we invoice them on the originally agreed upon delivery date but hold them at our location until they have sufficient space to accept delivery. Under our agreement with this customer they will provide a shipment date that isnot more than90 days from the date of invoicing. As of the date we invoiced our customer, the systems were packaged and ready for physical transfer to our customer as soon as we receive direction from our customer to do so. These systems cannot be used to fulfill any other customer’s order. Control of the systems transferred to our customer on the date we invoiced them. We haveno remaining performance obligations other than the obligation to store these systems until shipment, which we have determined to be a de-minimis performance obligation.

During thesix months ended* June 30, 2024,one customer accounted for 11% of our consolidated revenue. This revenue was primarily generated by our Electronic Test segment.No other customers accounted for10%* or more of our consolidated revenue during thesix months ended* June 30, 2024.During thesix* months ended* June 30, 2023,one customer accounted for 14% of our consolidated revenue. This revenue was primarily generated by our Electronic Test segment.No other customers accounted for10%* or more of our consolidated revenue during thesix months ended* June 30, 2023.*

Inventories held at* June 30, 2024and December 31, 2023*were comprised of the following:

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As previously discussed in Note2, we account for our leases in accordance with the guidance in ASC Topic842. We lease our offices, warehouse facilities and certain equipment under non-cancellable operating leases that expire at various dates through2032. Total operating lease and short-term lease costs for thethree andsix months ended* June 30, 2024and2023,* respectively, were as follows:

The following is additional information about our leases as of* June 30, 2024:*

Maturities of lease liabilities as of* June 30, 2024*were as follows:

Cash Flow Information

Total amortization of ROU assets was $282 and $685 for thethree months andsix months ended* June 30, 2024,respectively, and $391 and $782 for thethree* months andsix months ended* June 30, 2023,*respectively.

During thesix months ended* June 30, 2024we acquired several auto leases in connection with our acquisition of Alfamation. The acquisition is discussed further in Note3.* We also entered into the Lease Agreement, described in Note3, for the facility where Alfamation has its principal operations. This facility is owned by the seller. The leased premises include warehouse and office space totaling approximately 51,817 square feet. The yearly lease payment is EUR 260. The impact of the acquisition of these leases was a non-cash increase in our ROU assets and operating lease liabilities of approximately $1,758 at the date of the acquisition.

During thesix months ended* June 30, 2024*we also extended several building leases for certain of our facilities located in the U.S., the Netherlands and Singapore. At the effective dates of these extensions, we recorded non-cash increases in our ROU assets and operating lease liabilities totaling approximately $5,568.

During thesix months ended* June 30, 2023,we entered into a 25-month lease for a facility for our Environmental Technologies segment’s operation in Germany. At the effective date of this lease, we recorded a non-cash increase in our ROU assets and operating lease liabilities of approximately $90. During this same period, we entered intotwo* auto leases,one with a 36-month term andone with a 48-month term, for employees of our Process Technologies segment both of whom are based in Europe. At the effective date of these leases, we recorded non-cash increases in our ROU assets and operating lease liabilities totaling approximately $71.

Letters of Credit

We have issued letters of credit as the security deposits for certain of our domestic leases. These letters of credit are secured by pledged certificates of deposit which are classified as Restricted Certificates of Deposit on our balance sheets. The terms of our leases require us to renew these letters of credit at least30 days prior to their expiration dates for successive terms ofnot less thanone year until lease expiration. Our outstanding letters of credit at* June 30, 2024and December 31, 2023*consisted of the following:

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Credit Facility

On* October 15, 2021 (the “Closing Date”), we entered into an Amended and Restated Loan and Security Agreement with M&T Bank (“M&T”) which, on October 28, 2021,was amended by the Joinder and Amendment to Amended and Restated Loan and Security Agreement and which, on December 30, 2021,was further amended by the Joinder and Second Amendment to Amended and Restated Loan and Security Agreement (as amended, the “Loan Agreement”). The Loan Agreement included a $25,000 non-revolving delayed draw term note (the “Term Note”) and a $10,000 revolving credit facility (the “Revolving Facility” and together with the Term Note, the “Credit Facility”). The Credit Facility had afive-year contract period that began on the Closing Date and expired on October 15, 2026,*and draws under the Term Note were permissible fortwo years.

Since* December 30, 2021,we have further amended the Loan Agreement on several occasions. The latest amendment occurred on May 2, 2024,when we entered into a Fourth Amendment to the Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”). Under the Amended Loan Agreement, the maximum loan amount that we mayborrow under the Term Note was raised to $50,500. The available funding at June 30, 2024under the Term Note was $30,000. In addition, the period during which we mayrequest advances under the Term Note was extended until May 2, 2026,and the Term Note and revolving credit facility maturity date was extended from September 19, 2027to May 2, 2031.*

At* June 30, 2024,*we hadnot borrowed any amounts under the $10 million Revolving Facility. Our borrowings under the Term Note are discussed below and occurred prior to entering into the Amended Loan Agreement.

The principal balance of the Revolving Facility and the principal balance of any amount drawn under the Term Note accrues interest based on the secured overnight financing rate for U.S. government securities (“SOFR”) or a bank-defined base rate plus an applicable margin, depending on leverage. Each draw under the Term Note will have an option for us of either (i) up to afive year amortizing term loan with a balloon due at maturity, or (ii) up to afive year term with up toseven years amortization with a balloon due at maturity. Any amortization greater thanfive years will be subject to an excess cash flow recapture. The Amended Loan Agreement also allows us to enter into hedging contracts with M&T, including interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, or any other agreements or that are designed to protect us against fluctuations in interest rates or currency exchange rates.

The Amended Loan Agreement contains customary default provisions, including butnot limited to the failure by us to repay obligations when due, violation of provisions or representations provided in the Amended Loan Agreement, bankruptcy by us, suspension of our business or any of our subsidiaries and certain material judgments. After expiration of the Contract Period or if a continued event of default occurs, interest will accrue on the principal balance at a rate of 2% in excess of the then applicable nondefault interest rate. The Amended Loan Agreement includes customary affirmative, negative and financial covenants, including a maximum ratio of consolidated funded debt to consolidated EBITDA ofnot more than 3.0 to1.0 and a fixed charge coverage ratio ofnot less than 1.25 to1.0. Our obligations under the Amended Loan Agreement are secured by liens on substantially all of our tangible and intangible assets that are owned as of the Closing Date or acquired thereafter. At* June 30, 2024,we were in compliance with all of the covenants included in the Credit Facility, except for the fixed charge coverage ratio financial covenant which was 1.16 to1.0* for the quarter ended* June 30, 2024,for which we have received aone*-time waiver from M&T.

On* October 28, 2021,we drew $12,000 under the Term Note to finance the acquisition of Videology as discussed above. We also entered into an interest rate swap agreement with M&T as of this date which is designed to protect us against fluctuations in interest rates during thefive* year repayment and amortization period. As a result, the annual interest rate we expect to pay for this draw under the Term Note is fixed at approximately 3.2% based on current leverage.

On* December 29, 2021,we drew $8,500 under the Term Note to finance the acquisition of Acculogic as discussed above. We didnot* enter into an interest rate swap agreement with M&T related to this draw. The annual interest rate we expect to pay for this draw under the Term Note is variable. At* June 30, 2024,it was approximately 7.4% based on current leverage. Effective August 1, 2024,*this rate was 7.5%.

The following table sets forth the annual maturities for the balance of the Term Note:

Alfamation Debt

At* June 30, 2024,the total debt assumed in connection with the acquisition of Alfamation was valued at $11,106. The acquisition is discussed further in Note3.* This debt is comprised of both fixed and variable rate bank issued term loans as well as $4,788 of short-term variable rate financing backed by Alfamation’s accounts receivable. This debt is spread across a number of different institutions with monthly, quarterly or half-yearly repayment schedules. The average interest rate being paid at* June 30, 2024was 2.8% for fixed rate debt and 5.0% for variable rate debt. The average rate for total debt at June 30, 2024*was 4.2%.

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The following table sets forth the maturities of this debt for each of the nextfive years:

Total interest expense for thesix months ended* June 30, 2024and2023* related to our various debt arrangements was $393 and $358, respectively.

As of* June 30, 2024,we had unvested restricted stock awards and stock options granted under stock-based compensation plans that are described more fully in Note13* to the consolidated financial statements in our2023 Form10-K.

Our unvested restricted stock awards and stock options are accounted for based on their grant date fair value. As of* June**30,* 2024, total compensation expense to be recognized in future periods was $4,249. The weighted average period over which this expense is expected to be recognized was 2.5 years.

The following table summarizes the compensation expense we recorded during thethree andsix months ended* June 30, 2024and2023* related to unvested shares of restricted stock and stock options:

There wasno compensation expense capitalized inthree andsix months ended* June 30, 2024or2023.*

Stock Options

We record compensation expense for stock options based on the fair market value of the options as of the grant date.No option* may*be granted with an exercise period in excess often years from the date of grant. Generally, stock options will be granted with an exercise price equal to the fair market value of our stock on the date of grant and will vest over four years.

The fair value for stock options granted during thesix months ended* June 30, 2024and2023* was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

The per share weighted average fair value of stock options issued during thesix months ended* June 30, 2024and2023* was $6.55 and $9.43, respectively.

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The following table summarizes the activity related to stock options for thesix months ended* June 30, 2024:*

Restricted Stock Awards

We record compensation expense for restricted stock awards based on the quoted market price of our stock at the grant date and amortize the expense over the vesting period. Restricted stock awards generally vest over four years for employees and overone year for our independent directors (25% at each of* March 31,** June 30,** September 30,and December 31*of the year in which they were granted).

Since* August 2020,*we have increasingly granted performance-based restricted stock awards where the ultimate number of shares that vest can vary between 0% and 150% of the amount of the original award and is based on the achievement of specified performance metrics. Vesting for these awards is generally cliff vesting at the end of the period over which the performance metrics are measured. Compensation expense for these awards is recorded on a straight-line basis over the vesting period and is based on the expected final vesting percentage, which is re-assessed at the end of each reporting period and adjusted with a catch-up adjustment, as needed. Our initial assumption at the grant date of these awards is that the award will vest at the 100% level.

On* March 10, 2021,we issued restricted stock awards totaling 18,000 shares to members of senior management within our operating segments. During thefirst* quarter of2023, 6,000 of these shares were forfeited when the individual to whom they had been granted resigned from his position with us. The remaining 12,000 shares vested on thethird anniversary of the grant date at vesting percentages of 75% for 6,000 of the shares and 100% for the remaining 6,000 shares. The final vesting percentages were based on the achievement of certain performance metrics related to the operating results of the business units for which these members of management are responsible.

On* October 1, 2021,we issued restricted stock awards totaling 5,000 shares to a member of senior management. These shares will vest on January 1, 2025at a vesting percentage that could range from 0% to 150% of the number of shares awarded on October 1, 2021.The final vesting percentage will be based on the achievement of certain performance metrics related to our consolidated operating results. At December 31, 2023,we reduced the estimate of the final vesting percentage to 50%. At June 30, 2024,*this estimate has been further reduced to 0% based on our current assessment of the probable achievement against the relevant performance metrics.

On* March 9, 2022,our CEO and CFO received restricted stock awards totaling 20,493 shares valued at $200 as of the date of grant. These shares vest on thethird* anniversary of the grant date at a vesting percentage that could range from 0% to 150% of the number of shares awarded on* March 9, 2022.The final vesting percentage will be based on the achievement of certain performance metrics, including revenue compound annual growth rate and diluted earnings per share excluding amortization of intangibles, for specified time periods as determined by the Compensation Committee of our Board of Directors. At December 31, 2023,we reduced the estimate of the final vesting percentage to 50%. At June 30, 2024,*this estimate has been further reduced to 0% based on our current assessment of the probable achievement against the relevant performance metrics.

On* March 8, 2023,our CEO, CFO and the Division Presidents oftwo of our operating segments received restricted stock awards totaling 18,888 shares valued at $303 as of the date of grant. These shares vest on thethird* anniversary of the grant date at a vesting percentage that could range from 0% to 150% of the number of shares awarded on* March 8, 2023.The final vesting percentage will be based on the achievement of certain performance metrics related to revenue for the year ending December 31, 2025as determined by the Compensation Committee of our Board of Directors. At June 30, 2024,*we have estimated that these shares will vest at 100% of the original amount based on our assessment of the probable achievement against the relevant performance metrics.

On* May 8, 2023the newly appointed president of our Environmental Technologies segment received performance-based restricted stock awards totaling 5,081 shares valued at $108 as of the date of grant. These shares vest on thethird* anniversary of the grant date at a vesting percentage that could range from 0% to 150% of the number of shares of restricted stock awarded on* May 8, 2023.The final vesting percentage will be based on the achievement of certain performance metrics including revenue and income from operations for specified time periods. As of June 30, 2024,*we have estimated that these shares will vest at 100% of the original amount.

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On* January 16, 2024the newly appointed president of our Process Technologies segment received performance-based restricted stock awards totaling 8,231 shares valued at $100 as of the date of grant. These shares vest on thethird* anniversary of the grant date at a vesting percentage that could range from 0% to 150% of the number of shares of restricted stock awarded on* January 16, 2024.The final vesting percentage will be based on the achievement of certain performance metrics including revenue and income from operations for specified time periods. As of June 30, 2024,*we have estimated that these shares will vest at 100% of the original amount.

On* March 6, 2024,our CEO, CFO and the Division Presidents of ourthree* operating segments received restricted stock awards totaling 33,539 shares valued at $380 as of the date of grant. These shares vest on thethird anniversary of the grant date at a vesting percentage that could range from 0% to 150% of the number of shares awarded on* March 6, 2024.The final vesting percentage will be based on the achievement of certain performance metrics related to adjusted EBITDA for the year ended December 31, 2026as determined by the Compensation Committee of our Board of Directors. At June 30, 2024,*we have estimated that these shares will vest at 100% of the original amount based on our assessment of the probable achievement against the relevant performance metrics.

The following table summarizes the activity related to unvested restricted stock awards for thesix months ended* June**30,* 2024:

The total fair value of the restricted stock awards that vested during thesix months ended* June 30, 2024and2023* was $552 and $1,153, respectively, as of the vesting dates of these awards.

The inTEST Corporation Employee Stock Purchase Plan (the “ESPP”) was adopted by the Board in* April 2021subject to approval by our stockholders, which occurred on June 23, 2021at our Annual Meeting of Stockholders. The ESPP provides our eligible employees with an opportunity to purchase common stock through accumulated payroll deductions at a discounted purchase price. The ESPP became effective on October 1, 2021.*

The ESPP provides that an aggregate of up to 250,000 shares of our common stock will be available for issuance under the ESPP. The shares of our common stock purchasable under the ESPP will be shares of authorized but unissued or reacquired shares, including shares repurchased by us on the open market.

During thesix months ended* June 30, 2024,employees purchased 8,587 shares of our common stock through the ESPP at a cost of $84. The closing market price of our common stock on the dates of purchase were $13.25 and $9.88, respectively. The prices paid by employees were $11.26 and $8.40, respectively, which represented a 15% discount. The total amount of the discount of $15 was recorded as compensation expense in our consolidated statements of operations. During thesix* months ended* June 30, 2023,employees purchased 4,162 shares of our common stock through the ESPP at a cost of $82. The closing market price of our common stock on the dates of purchase were $20.74 and $26.26, respectively. The prices paid by employees were $17.63 and $22.32, respectively, which represented a 15% discount. The total amount of the discount of $15 was recorded as compensation expense in our consolidated statements of operations. From the effective date of the ESPP through June 30, 2024,*a total of 51,519 shares of stock have been purchased by employees through the ESPP at a cost of $498. We have recorded a total of $88 of compensation expense in our consolidated statements of operations related to these shares.

We have defined contribution401(k) plans for our employees who work in the U.S. These plans include the inTEST Corporation Incentive Savings Plan (the “inTEST Plan”) and the Ambrell Corporation Savings & Profit Sharing Plan (the "Ambrell Plan"). During the quarter ended* September 30, 2023,*the Ambrell Plan, which is discussed further below, was merged into the inTEST Plan.

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As of* June 30, 2024,all permanent employees of Acculogic Ltd, Ambrell, inTEST Corporation, inTEST EMS LLC, Temptronic Corporation and Videology, who are at least18* years of age, are eligible to participate in the inTEST Plan. We match employee contributions dollar for dollar up to 10% of the employee's annual compensation, with a maximum limit of $5. Employer contributions vest ratably over four years. Matching contributions are discretionary. Prior to the merger with the inTEST Plan, all permanent employees of Ambrell were immediately eligible to participate in the Ambrell Plan upon employment and were eligible for employer matching contributions after completingsix months of service, as defined in the Ambrell Plan. The Ambrell Plan allowed eligible employees to make voluntary contributions up to 100% of compensation, up to the federal government contribution limits. We made a matching contribution of 50% of each employee's contributions up to a maximum of 10% of the employee's deferral with a maximum limit of $5.

For thethree andsix months ended* June 30, 2024,we recorded expense for matching contributions to both plans of $219 and $608, respectively. For thethree* andsix months ended* June 30, 2023,*we recorded expense for matching contributions to both plans of $199 and $571, respectively.

Employees of Alfamation in Italy are entitled to Trattamento di Fine Rapporto (“TFR”), commonly referred to as an employee leaving indemnity, which represents deferred compensation for employees. Under Italian law, an entity is obligated to accrue for TFR on an individual employee basis payable to each individual upon termination of employment (including both voluntary and involuntary dismissal). The expense is recognized in personnel costs in our consolidated statements of operations and the required accrual is included in Other Liabilities on our consolidated balance sheets. At* June 30, 2024,*the amount recorded in Other Liabilities for TFR was $1,435.

We have three operating segments which are also our reportable segments and reporting units: Electronic Test (which includes our semiconductor test equipment, flying probe and in-circuit testers and the operations of Alfamation which we acquired on* March 12, 2024as discussed further in Note3*), Environmental Technologies (which includes our thermal test, process and storage products) and Process Technologies (which includes our induction heating and video imaging products). We operate our business worldwide and sell our products both domestically and internationally. All of our segments sell to semiconductor manufacturers,third-party test and assembly houses and ATE manufacturers and to a variety of markets outside of the semi market, including the automotive, defense/aerospace, industrial, life sciences, security and other markets.

Our management team, including our CEO who is also our Chief Operating Decision Maker as defined under U.S. GAAP, evaluates the performance of our operating segments primarily on income from divisional operations which represents earnings before income tax expense and excludes interest expense, other income (expense), corporate expenses and acquired intangible amortization.

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The following table provides information about our geographic areas of operation. Revenue is based on the location to which the goods are shipped.

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