Cirtek Holdings Philippines CorporationTECH

Update on the Preferred Shares of Cirtek Holdings Philippines Corporation

We write in response to your correspondence dated October 28, 2026, regarding Cirtek Holdings Philippines Corporation’s (“TECH” or the “Company”) payment of dividends and redemption of its Preferred Shares, specifically the Preferred B-2 Subseries A Shares (“TCB2A”), Preferred B-2 Subseries B Shares (“TCB2B”), Preferred B-2 Subseries C Shares (“TCB2C”) and Preferred B-2 Subseries D Shares (“TCB2D”) (collectively referred to as the “Preferred Shares”).
As we have previously reported to the Exchange through various disclosures on March 7, 2025 (PSE EDGE Report No. C01474-2025), October 10, 2025 (PSE EDGE Report No. C07178-2025), January 21,2026 (PSE EDGE Report No. C00373-2026), and August 06,2026 (PSE EDGE Report No. C05960-2026) the Company’s Board of Directors approved the suspension of dividend payments on the Preferred Shares until further notice, as part of the Company’s strategy to manage liquidity and to preserve its resources to ensure long-term sustainability of its business.
In compliance with the Exchange's directive to provide an update on the foregoing matter, the Company hereby informs the Exchange and the investing public that it continues to operate in a challenging business environment. The semiconductor industry in the Philippines remains highly competitive and continues to face increasing pressure from regional markets, resulting in a more demanding operating landscape and heightened challenges in sustaining growth and profitability.
In response to these conditions, the Company has undertaken several strategic initiatives aimed at strengthening its balance sheet, enhancing liquidity, improving operational capacity, and creating a more sustainable platform for future growth. As previously disclosed, the Company completed the disposition of its Quintel business on 15 June 2026, a transaction that improved liquidity and enabled Management to concentrate resources on the Company's core business segments.
In addition, on 23 October 2026, the Company disclosed the approval by its Board of Directors of the Company’s entire equity interest in its wholly-owned subsidiary, Cirtek Electronics Corporation ("CEC"), to Sancode Technologies Private Limited. The transaction, which is subject to satisfaction of closing conditions, forms part of the Company's broader strategic transformation initiatives, allowing the Company to realise value from its investment in CEC, streamline its corporate structure, and further strengthen its financial position through the divestment of its entire ownership interest in CEC.
The proceeds from the said transaction are expected to significantly enhance the Company's liquidity position, reduce outstanding debt obligations, and provide financial flexibility to support future corporate requirements and strategic initiatives. As disclosed, a portion of the proceeds will be utilised to partially settle the Company's existing bank loans, while the remaining proceeds will be allocated to support the working capital requirements, operational needs, and growth initiatives of Cirtek Advanced Technologies and Solutions, Inc. ("CATSI"), the Company's remaining operating subsidiary.

The anticipated benefits of the said transaction include the following:
• Debt Reduction – The proceeds are expected to be applied primarily toward the repayment of existing bank borrowings, thereby reducing leverage and strengthening the Company's balance sheet.
• Enhanced Liquidity – The transaction provides additional cash resources that improve the Company's liquidity profile and financial flexibility.
• Support for Future Operations and Growth – The remaining proceeds will support CATSI's working capital requirements, operational initiatives, business development efforts, and future expansion opportunities.
• Value Realisation and Strategic Focus – The transaction enables the Company to unlock value from its investment in CEC while allowing Management to focus on the growth and development of its continuing businesses.
Management believes that these strategic initiatives represent important milestones in the Company's efforts to build a stronger and more sustainable organisation. Through the reduction of debt, enhancement of liquidity, and renewed focus on its remaining core business, the Company is establishing a more resilient foundation from which to pursue long-term opportunities. While prevailing industry challenges remain, Management is optimistic that these initiatives will contribute to improve operational performance, enhanced competitiveness, and stronger financial results over time. It is Management's expectation that the successful execution of these initiatives will position the Company to generate sustainable growth and create greater value for its shareholders and other stakeholders in the future.
While these initiatives are expected to improve the Company's overall financial position, no allocation has been made at this stage toward the settlement of dividend arrears on the issued and outstanding Preferred Shares. The resumption of dividend distributions remains dependent upon the restoration of sustainable positive operating cash flows, the availability of sufficient unrestricted retained earnings, and the Company's ongoing assessment of its capital and liquidity requirements.
After careful consideration of the Company's current financial condition, including the continuing insufficiency of unrestricted retained earnings and the need to preserve financial resources for operational and strategic requirements, Management has recommended the continued suspension of cash dividend payments on all Preferred Shares until further notice. Accordingly, the Company is unable to provide at this time a definitive timeline for the resumption of dividend payments.
Notwithstanding the foregoing, the Company reiterates that dividends on the Preferred Shares are cumulative in nature. The Company remains fully committed to fulfilling its obligations under the Terms and Conditions of the Preferred Shares as set forth in their respective Prospectuses. As previously disclosed, this commitment includes the payment of all accrued and unpaid dividends, including dividend arrears arising from the suspension, on future dates to be determined and approved by the Board of Directors after due consideration of, among others, the restoration of sustainable positive operating cash flows, the availability of sufficient unrestricted retained earnings, and the Company's ongoing assessment of its capital and liquidity requirements.
We trust that the foregoing sufficiently addresses the Exchange's directive. The Company shall continue to keep the Exchange and the investing public informed of any material developments relating to this matter and shall make the appropriate disclosures as and when necessary.
Please see the attached SEC 17-C,