TRIO-TECH INTERNATIONAL

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT EARNINGS PER SHARE AND NUMBER OF SHARES)

Trio-Tech International (the “Company”, or “TTI”) was incorporated in fiscal year ended* June 30, 1958*under the laws of the State of California. The Company has traditionally been a provider of reliability test equipment and services to the semiconductor and other industries. The Company provides comprehensive electrical, environmental, and burn-in testing services to semiconductor manufacturers in Asia. The Company designs and manufactures an extensive range of burn-in and reliability test equipment used in the “back-end” manufacturing processes of semiconductors. The Company also designs, manufactures and distributes 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. The Company also acts as a design-in reseller of a wide range of camera modules, LCD displays and touch screen panels.

In thefirst quarter of fiscal year ended* June 30, 2025 (“Fiscal2025”), we made changes in our business strategy in an effort to better align with our focus areas and to streamline operations. While the semiconductor industry is and will remain a major market for Trio-Tech, an important component of our strategy is to reduce our historic concentration on this industry. As a result, we organized our operating businesses based on the markets that we serve. Beginning infiscal2025,* we report our financial performance based on our new segments, Semiconductor Back-end Solutions and Industrial Electronics.

TTI has subsidiaries in the U.S., Singapore, Malaysia, Thailand, Indonesia, Cayman Islands and China as follows:

*100% owned by Trio-Tech International Pte. Ltd.

Trio-Tech (Kuala Lumpur) Sdn. Bhd. has been gazetted and formally removed from the register following the completion of the strike-off process.

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The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form10-Q and Article10 of Regulation S-X. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements are presented in U.S. dollars unless otherwise stated. The accompanying condensed consolidated financial statements donot include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report for the fiscal year ended* June 30, 2024* (“Fiscal2024”). The Company’s operating results are presented based on the translation of foreign currencies using the respective quarter’s average exchange rate.

The results of operations for thenine months ended* March 31, 2025* arenot necessarily indicative of the results that* maybe expected for any other interim period or for the full year ending June 30, 2025*.

Use of Estimates—* *The preparation of consolidated financial statements in conformity with GAAP requires management 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 consolidated financial statements and the reported amounts of revenues and expense during the reporting period. Among the more significant estimates included in these consolidated financial statements are the estimated allowance for credit losses on account receivables, reserve for obsolete inventory, impairments, provision of income tax, stock options and the deferred income tax asset allowance. Actual results could materially differ from those estimates.

Significant Accounting Policies. There have beenno material changes to our significant accounting policies summarized in Note1 “Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated Financial Statements included in our Annual Report on Form10-K for Fiscal2024.* *

Recasting of Certain Prior Period Information -In response to changes in our business strategy, during thefirst quarter offiscal2025, the Company’s chief operating decision maker, who is also our Chief Executive Officer, requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, beginning infiscal2025, we report our financial performance based on our new segments described in Note14 – Segment Information. We have recast certain prior period amounts to conform to the way we internally manage and monitor segment performance duringf iscal2025. This change primarily impacted Note14 – Segment Information, withno impact on consolidated net income or cash flows.

Comparative figures -Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications haveno effect on previously reported net income.

In* November 2023,the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")2023-07, Segment Reporting (Topic280*),Improvements to Reportable Segment Disclosures. The new guidance requires enhanced disclosures about significant segment expense. This standard update is effective for Company beginning in the fiscal year ending* June 30, 2025and interim period reports beginning in thefirst* quarter of the fiscal year ending* June 30, 2026.*Early adoption is permitted on a retrospective basis. The Company is currently evaluating the impact of this ASU on segment disclosure.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740),Improvements to Income Tax Disclosures. The new guidance requires enhanced disclosures about income tax expense. This standard update is effective for 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 released ASUNo.* 2024-03, Disaggregation of Income Statement Expenses. This ASU’s purpose is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. Early adoption is permitted. This standard update is effective for Company beginning in the fiscal year ending* June 30, 2029.*

New pronouncements issued butnot yet effective until after* March 31, 2025*, arenot expected to have a significant effect on the Company’s consolidated financial position or results of operations.

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Restricted deposits represent the amount of cash pledged to secure loans payable or trade financing granted by financial institutions, serve as collateral for public utility agreements such as electricity and water, and performance bonds related to customs duty payable. Restricted deposits are classified as current and non-current depending on whether they relate to long-term or short-term obligations. Restricted deposits of $776 as at* March 31, 2025* are classified as current assets as they relate to short-term trade financing. On the other hand, restricted deposits of $1,822 as at* March 31, 2025* are classified as non-current assets as they relate to long-term obligations and will become unrestricted only upon discharge of the obligations.

Accounts receivable are customer obligations due under normal trade terms. The Company performs continuing credit evaluations of its customers’ financial conditions, and although management generally doesnot require collateral, letters of credit* may*be required from the customers in certain circumstances.

The allowance for trade receivable represents management’s expected credit losses in our trade receivables as of the date of the financial statements. The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be inherent in the trade receivables, but that havenot been specifically identified.

The following table represents the changes in the allowance for expected credit losses:

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The following table presents Trio-Tech (Chongqing) Co. Ltd (“TTCQ”)’s loan receivables from property development projects in China as of* March 31, 2025*.

The short-term loan receivables amounting to renminbi (“RMB”)2,000, or approximately $274 arose due to TTCQ entering into a Memorandum Agreement with JiangHuai Property Development Co. Ltd. (“JiangHuai”) to invest in their property development projects (Project - Yu Jin Jiang An) located in Chongqing City, China in the fiscal year ended* June 30, 2011 (“Fiscal2011”). Based on TTI’s financial policy, an allowance for expected credit losses of $274 on the investment in JiangHuai was recorded during the fiscal year ended June 30, 2014 (“Fiscal2014”). TTCQ didnot* generate other income from JiangHuai for thethree months ended* March 31, 2025and2024*. TTCQ is in the legal process of recovering the outstanding amount of approximately $274.

Inventories consisted of the following:

The following table represents the changes in provision for obsolete inventories:

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The following table presents the Company’s investment in properties in China as of* March 31, 2025*. The exchange rate is based on the market rate as of* March 31, 2025*.

Rental Property I–** MaoYe Property**

MaoYe Property generated a rental income of $6 and $19 during thethree andnine months ended* March 31, 2025*, as compared to $6 and $18 for the same period in Fiscal2024.

A lease agreement was entered into on* February 1, 2023for a period of4* years at a monthly rate of RMB15, or approximately $2. Pursuant to the agreement, monthly rental will increase by5% after thesecond year.

Depreciation expense for MaoYe Property was $3 and $10 for thethree andnine months ended* March 31, 2025*, as compared to $4 and $12 for the same period in Fiscal2024.

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Rental Property II–** JiangHuai**

During the year ended* June 30, 2010 (“Fiscal2010”), TTCQ purchasedeight* units of commercial property in Chongqing, China, from JiangHuai for RMB 3,600, or approximately $580. The title deeds for these properties hadnot been received by TTCQ since the entire project hadnot been completed by JiangHuai. JiangHuai is currently in liquidation and the local court had appointed a Management Company to manage the liquidation process and address claims from stakeholders. To expedite the resolution, TTCQ agreed to settle the claims through an asset exchange. The court directed the Management Company to engage athird-party valuer to assess the assets involved. Based on the valuation, the court determined that TTCQ would receive title deeds for5 shop units having a total area of547.67 m² in exchange of the claim made for the8 units without title deeds. In* July 2024,the court concluded that the value of these5* shop units was equivalent to the original purchase price of8 shop units of RMB 3,600 and issued a court order to process title deeds for the5 units in the name of TTCQ. The carrying value of the JiangHuai asset group as at* June 30, 2024* was RMB 990. Applying the guidance in FASB Accounting Standards Codification ("ASC") Topic845, Nonmonetary transactions, this transaction lacks commercial substance and hence, the JiangHuai asset group will continue to be accounted based on the carrying value of the exchanged investment properties. The title deeds have been received as of* September 2024.*

JiangHuai Property didnot generate any rental income for thethree andnine months ended* March 31, 2025and2024*.

Depreciation expense for JiangHuai was $7 and $20 for thethree andnine months ended* March 31, 2025*, as compared to $6 and $18 for the same period in Fiscal2024.

Rental Property III–** FuLi**

FuLi Property generated a rental income of $3 and $6 for thethree andnine months ended* March 31, 2025*, as compared to$nil and $1 for the same period in Fiscal2024.

A lease agreement was entered into* October 10, 2024for a period of4* years at a monthly rate ofRMB9, or approximately $1. Pursuant to the agreement, monthly rental will increase by5% after thesecond year.

Depreciation expense for FuLi was $7 and $21 for thethree andnine months ended* March 31, 2025*, as compared to $7 and $21 for the same period in Fiscal2024.

Summary

Total rental income for all investment properties in China was $9 and $25 for thethree andnine months ended* March 31, 2025*, as compared to$6 and $19 for the same period in Fiscal2024.

Depreciation expense for all investment properties in China was $17 and $51 for thethree andnine months ended* March 31, 2025*, as compared to$17 and $51 for the same period in Fiscal2024.

Other assets consisted of the following:

Down payment for purchase of investment properties included downpayment relating to shop lots in Singapore Themed Resort Project in Chongqing, China. The shop lots are to be delivered to TTCQ upon completion of the construction. The initial targeted date of completion was in Fiscal2017.* However, progress has stalled because the developer is currently reorganizing assets and renegotiating with the creditors to complete the project.

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During thefourth quarter of Fiscal2021, the Company accrued an impairment charge of $1,580 related to the doubtful recovery of the down payment on property in the Singapore Themed Resort Project in Chongqing, China. The Company elected to take this non-cash impairment charge due to increased uncertainties regarding the project’s viability, given the developers’ weakening financial condition as well as uncertainties arising from the negative real-estate environment in China, implementation of control measures on real-estate lending in China and its relevant government policies.

The carrying value of the Company’s lines of credit approximates its fair value because the interest rates associated with the lines of credit are adjustable in accordance with market situations when the Company borrowed funds with similar terms and remaining maturities.

The Company’s credit rating provides it with ready and adequate access to funds in global markets.

As of* March 31, 2025*, the Company had certain lines of credit that are collateralized by restricted deposits.

As of* June 30, 2024*, the Company had certain lines of credit that are collateralized by restricted deposits.

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Accrued expense consisted of the following:

The Company provides for the estimated costs that* maybe incurred under its warranty program at the time the sale is recorded. The warranty period of the products manufactured by the Company is generallyone* year or the warranty period agreed upon with the customer. The Company estimates the warranty costs based on the historical rates of warranty returns. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.

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Bank loans payable consisted of the following:

Future minimum payments (excluding interest) as at* March 31, 2025*, were as follows:

Future minimum payments (excluding interest) as at* June 30, 2024*, were as follows:

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As at* March 31, 2025*, the Company has capital commitment of $320 related to the relocation of its China facilities to enhance operational synergies and align with a more space-efficient business model, as compared to capital commitment of $65 as at* June 30, 2024*.

Deposits with banks arenot fully insured by the local government or agency and are consequently exposed to risk of loss. The Company believes that the probability of bank failure, causing loss to the Company, is remote.

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 willnot have a material adverse effect on the Company’s consolidated financial statements.

ASC Topic280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of a reporting entity, the operating results of which are reviewed regularly by the chief operating decision maker (“CODM”) to make decisions about resource allocation and to assess performance. Our CODM is our Chief Executive Officer.

In response to changes in our business strategy in an effort to better align with our focus areas and to streamline operations, during thefirst quarter of Fiscal2025, our CODM requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, we have updated our reporting and beginning in Fiscal2025, we report our financial performance based on our new segments, “Semiconductor Back-end Solutions” (“SBS”) and “Industrial Electronics” (“IE”), and analyze gross profit and operating income as the measure of segment profitability. We have recast certain prior period amounts to conform to the way we internally manage and monitor segment performance during Fiscal2025.

Our operating businesses are organized based on the nature of markets. The SBS segment comprises our core semiconductor back-end equipment 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 are being reported together in our IE segment. A detailed description of our operating segments as of* March 31, 2025* can be found in the overview section of Item2 of this Quarterly Report, entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations". A mapping of our previous presentation and the new segments is presented below:

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Our CODM uses total revenue, gross profit, operating income and total assets in assessing segment performance and deciding how to allocate resources. Segment operating income includes corporate allocations. Segment revenues include sales of equipment and services by our segments. Total intersegment sales were $3 and $37 in thethree months ended* March 31, 2025* and* March 31, 2024* respectively. Certain corporate costs, including those related to legal, information technology, human resources and shared services are allocated to our segments based on their relative revenues, manpower costs and fixed assets.

The amounts related to revenue and earnings presented as Others include the results of an immaterial real estate business that ceased to be a reportable segment in Fiscal2025 and includes certain costs incurred at the corporate-level, including the cost of our stock compensation plansnot allocated to our reportable segments. Assets presented under Others segment consisted primarily of cash and cash equivalents, prepaid expenses and investment properties.

The cost of equipment, current year investment in new equipment and depreciation expense is allocated into respective reportable segments based on the primary purpose for which the equipment was acquired.

The following Segment Information is unaudited for thenine months ended* March 31, 2025*, and* March 31, 2024*:

Business Segment Information:

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The following Segment Information is unaudited for thethree months ended* March 31, 2025*, and* March 31, 2024*:

Business Segment Information:

Management periodically evaluates the ongoing contributions of each of its business segments to its current and future revenue and prospects. As a result, it* maydivestone* or more business segments in the future to enable management to concentrate on segments where it anticipates opportunities for future revenue growth, thereby maximizing shareholder value.

Other (expense) / income consisted of the following:

In thethree months ended* March 31, 2025*, the Company received government grants amoun ting to$22,$19 of which was an incentive from the Singapore government for local resident recruitment, and $3 related to capital expenditure subsidy received from the China government. During the same period in2024, the Company received government grants amounting to$12,$7 of which was an incentive from the Singapore government for local resident recruitment, and $5 related to capital expenditure subsidy received from the China government.

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In thenine months ended* March 31, 2025*, the Company received government grants amounting to$93,$81 of which was financial assistance received from the Singapore government for local resident recruitment, and the remaining$12, which was related to capital expenditure subsidy received from the China government. During the same period in Fiscal2024, the Company received government grants amounting to$89, $19 of which was an incentive from the Singapore government for local resident recruitment, $12 related to capital expenditure subsidy received from the China government and $57 from the U.S. government related to Employee Retention Credit (“ERC”).

The provision for income taxes has been determined based upon the tax laws and rates in the countries in which we operate. The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining the provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

Due to the enactment of the Tax Cuts and Jobs Act, the Company is subject to a tax on global intangible low-taxed income (“GILTI”). GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. Companies subject to GILTI have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for temporary differences including outside basis differences expected to reverse as GILTI. The Company has elected to account for GILTI as a period cost. GILTI expense was$nil for thethree andnine months ended* March 31, 2025*, as compared to $15 and $30 for thethree andnine months ended* March 31, 2024*, respectively.

The Company's income tax expense was $6 and $196 for thethree andnine months ended* March 31, 2025*, as compared to $142 and $274 for the same period in Fiscal2024. Income tax expense decreased due to lower chargeable income. Our effective tax rate (“ETR”) from continuing operations was 933.3% and 24.3% for thenine months ended* March 31, 2025* and* March 31, 2024*, respectively. ETR was higher for thenine months ended* March 31, 2025*, due to lower deferred tax assets in our Singapore operation, driven by lower provisions, which reduced the deductible temporary differences. The income tax expense that resulted from lower deferred tax assets was partially offset by lower GILTI tax due to lower chargeable income derived from controlled foreign corporation.

The Company accrues penalties and interest related to unrecognized tax benefits when necessary, as a component of penalties and interest expense, respectively. The Company hadno unrecognized tax benefits or related accrued penalties or interest expense at* March 31, 2025* and* March 31, 2024*, respectively.

In assessing the ability to realize the deferred tax assets, management considers whether it is more likely thannot that some portion or all of the deferred tax assets willnot 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 thannot the Company willnot realize all of the benefits of the federal, state, and foreign deductible differences. Accordingly, a valuation allowance has been established against portion of the deferred tax assets recorded in the U.S. and various foreign jurisdictions.

The Company generates revenue primarily fromtwo segments: Semiconductor Back-end Solutions ("SBS") and Industrial Electronics ("IE"). The Company accounts for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf ofthird parties, such as sales taxes. The revenues are recognized as separate performance obligations that are satisfied by transferring control of the product or service to the customer.

Significant Judgments

The Company’s arrangements with its customers include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. A product or service is considered distinct if it is separately identifiable from other deliverables in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

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The Company allocates the transaction price to each performance obligation on a relative standalone selling price basis (“SSP”). Determining the SSP for each distinct performance obligation and allocation of consideration from an arrangement to the individual performance obligations and the appropriate timing of revenue recognition are significant judgments with respect to these arrangements. The Company typically establishes the SSP based on observable prices of products or services sold separately in comparable circumstances to similar clients. The Company* may*estimate SSP by considering internal costs, profit objectives and pricing practices in certain circumstances.

Warranties, discounts and allowances are estimated using historical and recent data trends. The Company includes estimates in the transaction price only to the extent that a significant reversal of revenue isnot probable in subsequent periods. The Company’s products and services are generallynot sold with a right of return, nor has the Company experienced significant returns from or refunds to its customers.

Products

The Company derives SBS segment revenue from the sale 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.

Under the IE segment, the Company designs, manufactures and distributes 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. The Company also acts as a design-in reseller of a wide range of camera module, LCD displays and touch screen panels.

The Company recognizes revenue at a point in time when the Company has satisfied its performance obligation by transferring control of the product to the customer. The Company uses judgment to evaluate whether the control has transferred by considering several indicators, including whether:

Not all indicators need to be met for the Company to conclude that control has transferred to the customer. In circumstances in which revenue is recognized prior to the product acceptance, the portion of revenue associated with its performance obligations of product installation and training services are deferred and recognized upon acceptance.

Majority of equipment sales include a12-month warranty. The Company generally provides a limited warranty that our products comply with applicable specifications at the time of delivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair or replacement of defective parts. The Company has concluded that the warranty provided for standard products are assurance type warranties and arenot separate performance obligations.

Customized products are generally more complex and, as a result,* may*contain unforeseen faults that could lead to additional costs for us, including increased servicing or the need to provide product modifications. Warranty provided for customized products are service warranties and are separate performance obligations. Transaction prices are allocated to this performance obligation using cost plus method. The portion of revenue associated with warranty service is deferred and recognized as revenue over the warranty period, as the customer simultaneously receives and consumes the benefits of warranty services provided by the Company.

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Services

The Company renders testing services to manufacturers and purchasers of semiconductors and other entities who either lack testing capabilities or whose in-house screening facilities are insufficient. The Company primarily derives services revenue from burn-in test services, manpower supply and other associated services and also from equipment maintenance. SSP is directly observable from the sales orders. Revenue is allocated to performance obligations satisfied at a point in time depending upon terms of the sales order. Generally, there isno other performance obligation other than what has been stated inside the sales order for each of these sales.

Terms of contract that* mayindicate potential variable consideration include warranty, late delivery penalty and reimbursement to solve non-conformance issues for rejected products. Based on historical and recent data trends, it is concluded that these terms of the contract donot* represent potential variable consideration. The transaction price isnot contingent on the occurrence of any future event.

Contract Balances

The timing of revenue recognition, billings and collections* mayresult in billed accounts receivable, unbilled receivables, contract assets, customer advances, deposits and contract liabilities. The Company’s payment terms and conditions vary by contract type, although terms generally include a requirement of payment of70%* to90% of total contract consideration within30 to60 days of shipment with the remainder payable within30 days of acceptance. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally donot include a significant financing component.

The following table is the reconciliation of contract balances.

Remaining Performance Obligation

The Company had$nil remaining performance obligations, which represents our obligation to deliver products and services for both period ended* March 31, 2025* and* March 31, 2024*.

Options to purchase 819,250 shares of Common Stock at exercise prices ranging from $3.73 to $7.76 per share were outstanding as of* March 31, 2025*.140,706 stock options were excluded in the computation of diluted earnings per share (“EPS”) for thethree andnine months ended* March 31, 2025*, because they were anti-dilutive.

Options to purchase 741,750 shares of Common Stock at exercise prices ranging from $2.53 to $7.76 per share were outstanding as of* March 31, 2024*.140,500 stock options were excluded in the computation of EPS for thethree andnine months ended* March 31, 2024*, because they were anti-dilutive.

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The following table is a reconciliation of the weighted average shares used in the computation of basic and diluted EPS for the period presented herein:

(1) For periods in which the Company has reported net loss, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because dilutive common shares arenot assumed to have been issued if their effect is anti-dilutive.*

On* September 14, 2017,the Company’s Board of Directors unanimously adopted the2017* Employee Stock Option Plan (the*“2017* Employee Plan”) and the2017 Directors Equity Incentive Plan (the*“2017* Directors Plan”) each of which was approved by the shareholders on* December 4, 2017.*

Assumptions

The fair value for the stock options granted to both employees and directors was estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming:

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2017 Employee Stock Option Plan

The Company’s2017 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 300,000 shares of Common Stock. In* December 2021,the Company’s Board of Directors approved an amendment to the2017* Employee Plan to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in* December 2021.*

Under the2017 Employee Plan, all options must be granted with an exercise price ofno less than fair value as of the grant date and the options granted must be exercisable within a maximum often years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options* maybe exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date offirst* employment, or such other date as* maybe set by the Compensation Committee. Generally, options granted under the2017* Employee Plan are exercisable within five years after the date of grant and vest over the period as follows:25% vesting on the grant date and the remaining balance vesting in equal installments on the nextthree succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the2017 Employee Plan).

During thenine-month period ended* March 31, 2025*, there were 80,000 stock options granted and 2,500 stock options were exercised under2017 Employee Plan. The Company recognized $209 in stock-based compensation expense during thenine months ended* March 31, 2025*.

During thenine-month period ended* March 31, 2024*, there were 122,500 stock options granted and 64,625 stock options were exercised under2017 Employee Plan. The Company recognized $208 in stock-based compensation expense during thenine months ended* March 31, 2024*.

As of* March 31, 2025*, there were vested stock options granted under the2017 Employee Plan covering a total of 210,750 shares of Common Stock. The weighted-average exercise price was $5.59 and the weighted average remaining contractual term was 2.60 years.

As of* March 31, 2024*, there were vested stock options granted under the2017 Employee Plan covering a total of 136,250 shares of Common Stock. The weighted-average exercise price was $5.57 and the weighted average remaining contractual term was 3.12 years.

A summary of option activities under the2017 Employee Plan during thenine months ended* March 31, 2025*, is presented as follows:

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A summary of the status of the Company’s non-vested employee stock options during thenine months ended* March 31, 2025*, is presented below:

A summary of option activities under the2017 Employee Plan during thenine months ended* March 31, 2024*, is presented as follows:

A summary of the status of the Company’s non-vested employee stock options during thenine months ended* March 31, 2024*, is presented below:

2017 Directors Equity Incentive Plan

The2017 Directors Plan permits the grant of options to its directors in the form of non-qualified options and restricted stock, and initially covered up to an aggregate of 300,000 shares of Common Stock. In* September 2020,the Company’s Board of Directors approved an amendment to the2017* Directors Plan to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in* December 2020.In October 2023,the Company’s Board of Directors approved an amendment to the2017* Directors Plan to increase the shares covered thereby from 600,000 shares to an aggregate of 900,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in* December 2023.*

Under the2017 Directors Plan, the exercise price of the non-qualified options is required to be100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are exercisable immediately as of the grant date.

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During thenine-month period ended* March 31, 2025*, the Company granted 100,000 stock options under the2017 Directors Plan. There were 60,000 stock options exercised and the Company recognized $204 in stock-based compensation expense during thenine months ended* March 31, 2025*.

During thenine-month period ended* March 31, 2024*, the Company granted 100,000 stock options and 49,000 stock options were exercised under the2017 Directors Plan. The Company recognized $220 in stock-based compensation expense during thenine months ended* March 31, 2024*.

As all the stock options granted under the2017 Directors Plan vest immediately on the date of grant, there wereno unvested stock options granted under the2017 Directors Plan as of* March 31, 2025*, or* March 31, 2024*.

As of* March 31, 2025*, there were vested stock options granted under the2017 Directors Plan covering a total of 471,000 shares of Common Stock. The weighted average exercise price was $5.80 and the weighted average remaining contractual term was 3.01 years.

As of* March 31, 2024*, there were vested stock options granted under the2017 Directors Plan covering a total of 471,000 shares of Common Stock. The weighted average exercise price was $5.08 and the weighted average remaining contractual term was 2.87 years.

A summary of option activities under the2017 Directors Plan during thenine months ended* March 31, 2025*, is presented as follows:

A summary of option activities under the2017 Directors Plan during thenine months ended* March 31, 2024*, is presented as follows:

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Company as Lessor

Operating leases under which the Company is the lessor arise from leasing the Company’s commercial real estate investment property tothird parties. Initial lease terms generally range from 12 to 48 months. Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of 20 years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value. Depreciation expense relating to the property held as investments in operating leases was $17 and $34 for thethree months ended* March 31, 2025*, and* March 31, 2024*, respectively.

Future minimum rental income in China and Thailand to be received from Fiscal2025 to the fiscal year ended* June 30, 2029 (“Fiscal2029”) on non-cancelable operating leases is contractually due as follows as of March 31, 2025*:

Future minimum rental income in China and Thailand to be received from Fiscal2025 to Fiscal2027 on non-cancelable operating leases is contractually due as follows as of* June 30, 2024*:

Company as Lessee

The Company is the lessee under operating leases for corporate offices and manufacturing and testing facilities with remaining lease terms ofone year tofive years and finance leases for plant and equipment.

Supplemental balance sheet information related to leases was as follows (in thousands):

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As of* March 31, 2025,the Company has entered into lease agreements for properties that have been signed but havenot* yet commenced. The leases agreements are expected to begin on* June 1, 2025.The future minimum lease payments are $5 for the remainder of Fiscal2025,* $62 for Fiscal2026, $62 for Fiscal2027 and $123 thereafter. Since the lease terms have yet to commence, the Company hasnot recognized a Right-of-Use (ROU) asset and its corresponding lease liability in the balance sheet as of* March 31, 2025.*The ROU asset and lease liabilities will be recognized in the financial statements when the lease term commences.

Other information related to leases was as follows (in thousands except lease term and discount rate):

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As of* March 31, 2025*, the maturities of the Company’s operating and finance lease liabilities are as follow:

As of* June 30, 2024*, future minimum lease payments under finance leases and noncancelable operating leases were as follows:

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In accordance with ASC Topics825 and820, the following presents assets and liabilities measured and carried at fair value and classified by level of fair value measurement hierarchy:

There wereno transfers between Levels1 and2 during thethree months ended* March 31, 2025* and year ended* June 30, 2024*.

Term deposits (Level2) – The carrying amount approximates fair value because of the short maturity of these instruments.

Restricted term deposits (Level2) – The carrying amount approximates fair value because of the short maturity of these instruments.

Lines of credit (Level3) – The carrying value of the lines of credit approximates fair value due to the short-term nature of the obligations.

Bank loans payable (Level3) – The carrying value of the Company’s bank loans payable approximates its fair value as the interest rates associated with long-term debt is adjustable in accordance with market situations when the Company borrowed funds with similar terms and remaining maturities.

The Company hadthree major customers that accounted for the following revenue and trade account receivables:

On* May 8, 2025,the Company’s Board of Directors authorized a share repurchase program under which the Company may*repurchase up to $1 million of its issued and outstanding common stock over a period oftwo years. Any and all share repurchase transactions are subject to market condition and applicable legal requirements.

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