PART I Key Information This section details significant business, industry, and investment risks, including net losses, debt reliance, and Singapore market dependence - The company reported a net loss of $2.22 million in FY 2025, an improvement from $3.223 million in FY 2024 - The company's revenue is almost entirely derived from its operations in Singapore, making it highly susceptible to adverse economic or regulatory changes in that market41 - A majority of the company's revenue comes from facilities services, which accounted for 78.8% of total revenue in FY 2025 and 77.2% in FY 2024, with non-renewal posing a significant risk55 - The business is highly labor-intensive, with labor costs constituting approximately 85.4% of direct costs for both FY 2025 and FY 2024, making it vulnerable to labor shortages and wage inflation117 - The company is a "controlled company" under Nasdaq Listing Rules, as its major shareholder, Sapphire Universe, owns more than 50% of the total voting power, allowing reliance on certain corporate governance exemptions159 Singapore Government Grants | Metric | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Singapore Government Grants | $4.6 million | $2.8 million | Information on the Company This section provides an overview of Primech Holdings, a Singapore-based facilities services provider, detailing its history, operations, and strategic direction History and Development of the Company Traces Primech Holdings' evolution through acquisitions, IPO, and the launch of robotic cleaning solutions - The company was formed through a series of acquisitions by Sapphire Universe, starting in 2018, to consolidate several established cleaning service companies189 - Key corporate actions include the amalgamation of A&P Maintenance and Primech Services & Engrg in 2020, the acquisition of CSG and Princeston International in 2021, and the completion of its IPO in October 2023191193199 - In 2024, the company launched Primech AI Pte. Ltd., an operating subsidiary focused on creating robotic-based cleaning technology solutions199 Business Overview Describes Primech as a technology-focused facilities services provider in Singapore, highlighting its revenue streams, competitive strengths, and future strategies - The company's Singapore operations are its primary revenue source, contributing 99.6% of total revenue in FY 2025 and 99.3% in FY 2024204 - Key competitive strengths include a long track record, high accreditation (Clean Mark Gold Award), the ability to bundle services, a trained workforce, and an experienced management team211215217219 - Future strategies focus on improving efficiency with technology (IoT, robotics, EVs), expanding services into areas like landscaping and security, and exploring business opportunities in Southeast Asia222230235 - The company operates in a highly regulated Singaporean market, requiring compliance with the Environmental Public Health Act (EPHA), the Progressive Wage Model (PWM), and the Contractors Registration System (CRS) to tender for public projects345361370 Revenue by Stream | Revenue Stream | FY 2025 Revenue | % of Total | FY 2024 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | Facilities services | $58.6 million | 78.8% | $56.0 million | 77.2% | | Stewarding services | $8.4 million | 11.2% | $10.2 million | 14.0% | | Cleaning services to offices | $7.1 million | 9.5% | $5.9 million | 8.1% | Key Customer Revenue Contribution | Customer | Service | FY 2025 Revenue % | FY 2024 Revenue % | | :--- | :--- | :--- | :--- | | Changi Airport | Facilities services | 15.5% | 10.0% | | The Ministry of Education of Singapore | Facilities services | 9.1% | 9.6% | | National Environment Agency | Facilities services | 7.7% | 8.0% | | A Singapore multinational bank | Facilities services | 5.9% | 5.8% | Operating and Financial Review and Prospects Reviews FY2025 performance, noting revenue growth, narrowed net loss, and sufficient liquidity for future operations Operating Results Details FY2025 financial performance, including revenue growth, reduced direct costs, and increased general and administrative expenses - Revenue from facilities services grew to $58.6 million in FY2025 from $56.0 million in FY2024, driven by new commercial clients and increased services at Singapore Changi Airport422 - Direct costs decreased despite rising minimum wages under the Progressive Wage Model, as government grants received and netted against salary expenses increased by approximately $1.5 million year-over-year427 - The 31.6% increase in salaries under general and administrative expenses was due to salary adjustments for back-office staff to align with market rates431 Financial Performance Summary (in thousands) | (in thousands) | FY 2025 | FY 2024 | Change % | | :--- | :--- | :--- | :--- | | Revenue | $74,349 | $72,524 | 2.5% | | Direct Costs and Expenses | ($56,823) | ($59,915) | (5.2)% | | General and administrative Expenses | ($16,176) | ($13,160) | 22.9% | | Net loss | ($2,220) | ($3,223) | (31.1)% | Liquidity and Capital Resources Assesses the company's financial flexibility through cash, working capital, and credit facilities, confirming compliance with debt covenants - The company relies on various bank facilities, including overdrafts, term loans, and a mortgage, which are secured by company assets and personal guarantees from executive officers and major shareholders437438441 - The company is required to maintain a minimum adjusted tangible net worth of S$10.0 million and a gearing ratio of not more than 2.2 for its subsidiary Primech A&P, and was in compliance as of March 31, 2025442 Liquidity Metrics (as of March 31, 2025) | Liquidity Metric (as of March 31, 2025) | Amount (USD) | | :--- | :--- | | Cash | ~$10.1 million | | Working Capital | ~$8.1 million | | Available Loans/Overdraft Facilities | ~$4.8 million | Directors, Senior Management and Employees Outlines leadership, compensation, board structure, and share ownership, noting the company's "controlled company" status Compensation Discloses executive and director compensation for FY2025 and FY2024, including CEO Kin Wai Ho's $680,000 total compensation in FY2025 Executive Compensation (in thousands) | Name and Position | Year | Total Compensation ($'000) | | :--- | :--- | :--- | | Kin Wai Ho (CEO) | 2025 | 680 | | | 2024 | 485 | | Kit Yu Lee (CFO) | 2025 | 176 | | | 2024 | 183 | Board Practices Describes the five-member Board, its independent committees, and the rectification of past technical non-compliance with Singapore's EFMA - The Board of Directors consists of five members, with three independent directors, satisfying Nasdaq's majority independence requirement476 - The company's CEO, Kin Wai Ho, and CFO, Kit Yu Lee, were in technical breach of Singapore's Employment of Foreign Manpower Act (EFMA) for holding directorships in affiliate companies without required Letters of Consent, which were subsequently obtained in late 2021 and 2022492494 Share Ownership Details the concentrated ownership structure, with Sapphire Universe holding 81.44% and CEO Kin Wai Ho beneficially owning 52.12% Shareholder Ownership | Shareholder | Shares Beneficially Owned | Percentage (%) | | :--- | :--- | :--- | | Sapphire Universe | 31,287,500 | 81.44% | | Mr. Kin Wai Ho (CEO) | 20,024,000 | 52.12% | | Mr. Cyrus Jun Ming Wen | 11,263,500 | 29.32% | | Directors and Executive Officers as a group | 20,099,951 | 52.32% | Major Shareholders and Related Party Transactions Focuses on related party transactions, primarily bank facilities and performance bonds secured by personal and corporate guarantees - Numerous bank facilities for the company and its subsidiaries are secured by personal guarantees from CEO Ho Kin Wai, major shareholder Kwek Jin Ngee Vernon, and SVP Yew Jin Sng, as well as corporate guarantees from parent company Sapphire Universe516517520 - As of March 31, 2025, key executives and an indirect major shareholder had provided personal guarantees for performance bonds totaling approximately $6.4 million, which are required for certain customer service contracts531 - During FY2024, the company fully settled a contingent consideration of approximately $791,000 payable to SVP of Operations, Mr. Hansel Loo, related to the 2020 acquisition of Maint-Kleen532 Financial Information References consolidated financial statements, confirms no material legal proceedings, and states no anticipated dividends due to growth and debt repayment focus - The company has no formal dividend policy and does not expect to pay cash dividends in the foreseeable future, prioritizing the use of funds for business development and debt repayment541 Additional Information Covers supplementary corporate information, including Singaporean tax implications for dividends and capital gains, and the company's PFIC status for U.S. Holders - Under Singapore's one-tier corporate tax system, dividends paid by the company are exempt from Singapore income tax in the hands of its shareholders560 - Singapore does not impose a tax on capital gains; however, gains from the disposal of shares could be considered income and subject to tax if they arise from activities deemed to be carrying on a trade or business561562 - For U.S. federal income tax purposes, the company does not expect to be classified as a Passive Foreign Investment Company (PFIC), but this determination is made annually and is not guaranteed587 Quantitative and Qualitative Disclosures about Market Risk Identifies key market risks as inflation, interest rate fluctuations on variable-rate debt, credit risk, liquidity risk, and unhedged foreign exchange risk - The company is exposed to interest rate risk as its bank loans and overdraft facilities have variable rates tied to the Singapore Overnight Rate Average (SORA) and lenders' prime rates607608 - Foreign exchange risk is a key concern as almost all revenues and costs are in Singapore dollars (SGD), while financial statements are reported in U.S. dollars (USD), and the company does not currently use hedging instruments to mitigate this risk612 PART II Material Modifications to the Rights of Security Holders and Use of Proceeds Details the utilization of approximately $9.5 million net proceeds from the October 2023 IPO for business expansion and working capital - The company completed its IPO on October 10, 2023, raising net proceeds of approximately $9.5 million after offering costs of $2.7 million618620 - The net proceeds are being used for business growth, marketing, building a team for robot development, and general corporate purposes620 Controls and Procedures Concludes that disclosure controls and internal control over financial reporting were effective as of March 31, 2025 - Based on an evaluation as of March 31, 2025, the company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective622 - Management concluded that the company's internal control over financial reporting was effective as of March 31, 2025625 Corporate Governance and Other Matters Addresses corporate governance, including audit committee expertise, code of ethics, auditor fees, and cybersecurity risk management - The company follows its home country (Singapore) practice in lieu of Nasdaq's shareholder approval rule (Rule 5635(d)) for certain capital raising transactions636 - The Board of Directors, through its audit committee, has oversight responsibility for cybersecurity risks, while the CFO is primarily responsible for assessing and managing these threats643644 - The company is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition642645 Principal Accountant Fees | Fee Type | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Audit fees | $235,000 | $204,000 | | Audit-Related fees | $89,000 | $150,000 | | Total | $324,000 | $354,000 | PART III Financial Statements Presents audited consolidated financial statements for FY2025 and FY2024, prepared under U.S. GAAP, showing key financial performance and position Consolidated Balance Sheet Highlights (as of March 31) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total Current Assets | $29,007 | $31,333 | | Total Assets | $41,200 | $45,509 | | Total Current Liabilities | $20,867 | $22,742 | | Total Liabilities | $26,521 | $30,450 | | Total Shareholders' Equity | $14,679 | $15,059 | Consolidated Statement of Operations Highlights (for the year ended March 31) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Revenues, net | $74,349 | $72,524 | | Loss from operations | ($948) | ($2,782) | | Net loss | ($2,220) | ($3,223) | | Net loss attributable to Primech | ($1,942) | ($3,239) | | Loss per share (Basic & Diluted) | ($0.05) | ($0.10) | Consolidated Statement of Cash Flows Highlights (for the year ended March 31) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $7,382 | ($9,082) | | Net cash used in investing activities | ($1,031) | ($807) | | Net cash (used in) provided by financing activities | ($4,387) | $8,181 |
Primech .(PMEC) - 2025 Q4 - Annual Report