DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN

12 Months Ended

Jun. 30, 2012

Discontinued Operation And Corresponding Restructuring Plan

Note 21. DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN (In Thousands)

The Company’s Shanghai operation, as a component of the testing services segment, suffered continued operating losses in the past three fiscal years and the cash flow was minimal for the past three years.  In January 2010, the Company established a restructuring plan to close the Testing operation in Shanghai, China. Based on the restructuring plan and in accordance with ASC Topic 205-20, Presentation of Financial Statement Discontinued Operations, the Company presented the operation results from Shanghai as a discontinued operation, as the Company believed that no continued cash flow would be generated by the discontinued component (Shanghai subsidiary) and that the Company would have no significant continuing involvement in the operations of the discontinued component. In accordance with the restructuring plan, the Company would pay off the outstanding balance of accounts payable of $39 and collect accounts receivable of $2.

During the process of winding up the Company’s operation in Shanghai, China, the Company incurred general and administrative expenses of approximately $4 for both the year ended June 30, 2012 and June 30, 2011. The Company anticipates that it may incur additional costs and expenses in winding up the business of the subsidiary through which the China facility was operated.

Under the provision of ASC Topic 830, translation adjustments that result when a foreign entity’s financial statements are translated into a parent company’s or an investor’s reporting currency are separately reported in the parent company’s other comprehensive income.  Foreign currency translation adjustments that are accumulated in other comprehensive income are reclassified to income only when they are realized, if the investment in the foreign entity is sold or is substantially or completely liquidated.  The foreign currency translation adjustments on the balance sheet of the Shanghai, China subsidiary as of June 30, 2012 were insignificant.

Loss from discontinued operations for the year ended June 30, 2012 and 2011 was as follows:

	For the Year Ended June 30.
	2012			2011
Revenue	$	-		$	-
Cost of sales		-			-
Gross loss		-			-
Operating expenses
General and administrative expenses		4			4
Total		4			4
Loss from discontinued operation		(4	)		(4	)
Other income		-			-
Loss from discontinued operation	$	(4	)	$	(  4	)

The Company does not provide a separate cash flow statement for the discontinued operation because the impact of this discontinued operation was immaterial.