SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

TRIO-TECHINTERNATIONAL

Charter

California		95-2086631
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

~~16139 Wyandotte Street~~	Block 1008 Toa Payoh North
~~Van Nuys, California~~ Unit 03-09 Singapore		~~91406~~ 318996
(Address of principal executive offices)		(Zip Code)

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller reporting company	☒
~~Non-Accelerated Filer~~	☐	~~Smaller reporting company~~	☒
~~(Do not check if a smaller reporting company)~~		Emerging growth company	☐

TRIO-TECH INTERNATIONAL

		Page

Part I.	Financial Information

Item 1.	Financial Statements	4
	(a) Condensed Consolidated Balance Sheets as of ~~December~~March 31, ~~2017~~2023 (Unaudited), and June 30, ~~2017~~2022	2 4
	(b) Condensed Consolidated Statements of Operations and Comprehensive ~~Income~~Income/(Loss) for the Three ~~Months~~ and ~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2023 (Unaudited), and ~~December~~March 31, ~~2016~~2022 (Unaudited)	3 5
	(c) Condensed Consolidated Statements of ~~Shareholders~~Shareholders’ Equity for the ~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2023 (Unaudited), and ~~December~~March 31, ~~2016~~2022 (Unaudited)	5 7
	(d) Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2023 (Unaudited), and ~~December~~March 31, ~~2016~~2022 (Unaudited)	6 7
	(e) Notes to Condensed Consolidated Financial Statements (Unaudited)	7 9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	45 41
Item 4.	Controls and Procedures	45 41

Part II.	Other Information

Item 1.	Legal Proceedings	46 42
Item 1A.	Risk Factors	46 42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46 42
Item 3.	Defaults upon Senior Securities	46 42
Item 4.	Mine Safety Disclosures	46 42
Item 5.	Other Information	46 42
Item 6.	Exhibits	46 42

Signatures		43	47

~~FORWARD-LOOKING STATEMENTS~~

FORWARD-LOOKING STATEMENTS

The discussions of Trio-Tech International’s (the “Company”) business and activities set forth in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and in other past and future reports and announcements by the Company may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and assumptions regarding future activities and results of operations of the Company. In light of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the following factors, among others, could cause actual results to differ materially from those reflected in any forward-looking statements made by or on behalf of the Company: market acceptance of Company products and services; changing business conditions or technologies and volatility in the semiconductor industry, which could affect demand for the Company’s products and services; the impact of competition; problems with technology; product development schedules; delivery schedules; changes in military or commercial testing specifications which could affect the market for the Company’s products and services; difficulties in profitably integrating acquired businesses, if any, into the Company; risks associated with conducting business internationally and especially in Asia, including currency fluctuations and devaluation, currency restrictions, local laws and restrictions and possible social, political and economic instability; changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations; ongoing public health issues related to the COVID-19 pandemic both nationally and internationally; the trade tension between U.S. and China; inflation; the war in Ukraine; other economic, financial and regulatory factors beyond the Company’s ~~control.~~control and uncertainties relating to our ability to operate our business in China; uncertainties regarding the enforcement of laws and the fact that rules and regulation in China can change quickly with little advance notice, along with the risk that the Chinese government may intervene or influence our operation at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers could result in a material change in our operations, financial performance and/or the value of our common stock, no par value (“Common Stock”) or impair our ability to raise money. Other than statements of historical fact, all statements made in this Quarterly Report are forward-looking, including, but not limited to, statements regarding industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future financial results and condition. In some cases, you can identify forward-looking statements by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential,” “believes,” “can impact,” “continue,” or the negative thereof or other comparable terminology. Forward-looking statements involve risks and uncertainties that are inherently difficult to predict, which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions.

Unless otherwise required by law, we undertake no obligation to update forward-looking statements to reflect subsequent events, changed circumstances, or the occurrence of unanticipated events. You are cautioned not to place undue reliance on such forward-looking statements.

CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT NUMBER OF SHARES)

	March 31, 2023		June 30, 2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	8,430	$	7,698
Short-term deposits		5,703		5,420
Trade accounts receivable, less allowance for doubtful accounts of $223 and $243, respectively		11,004		11,592
Other receivables		757		998
Inventories, less provision for obsolete inventories of $743 and $674, respectively		2,324		2,258
Prepaid expenses and other current assets		731		1,215
Financed sales receivable		22		21
Restricted term deposits		755		-
Total current assets		29,726		29,202
NON-CURRENT ASSETS:
Deferred tax assets		91		169
Investment properties, net		517		585
Property, plant and equipment, net		9,987		8,481
Operating lease right-of-use assets		3,059		3,152
Other assets		232		137
Financed sales receivable		-		17
Restricted term deposits		1,762		1,678
Total non-current assets		15,648		14,219
TOTAL ASSETS	$	45,374	$	43,421

LIABILITIES
CURRENT LIABILITIES:
Lines of credit	$	107	$	929
Accounts payable		1,835		2,401
Accrued expenses		6,570		6,004
Income taxes payable		390		787
Current portion of bank loans payable		513		472
Current portion of finance leases		103		118
Current portion of operating leases		1,361		1,218
Total current liabilities		10,879		11,929
NON-CURRENT LIABILITIES:
Bank loans payable, net of current portion		1,054		1,272
Finance leases, net of current portion		43		119
Operating leases, net of current portion		1,698		1,934
Income taxes payable, net of current portion		255		137
Deferred tax liabilities		17		-
Other non-current liabilities		952		28
Total non-current liabilities		4,019		3,490
TOTAL LIABILITIES	$	14,898	$	15,419

EQUITY
TRIO-TECH INTERNATIONAL’S SHAREHOLDERS’ EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 4,076,680 and 4,071,680 shares issued outstanding as at March 31, 2023 and June 30, 2022, respectively	$	12,769	$	12,750
Paid-in capital		5,045		4,708
Accumulated retained earnings		10,601		9,219
Accumulated other comprehensive income-translation adjustments		1,806		1,197
Total Trio-Tech International shareholders’ equity		30,221		27,874
Non-controlling interest		255		128
TOTAL EQUITY	$	30,476	$	28,002
TOTAL LIABILITIES AND EQUITY	$	45,374	$	43,421

December 31,
2017

June 30,
2017

ASSETS

(Unaudited)

CURRENT ASSETS:

Cash and cash equivalents
$5,059
$4,772
Short-term deposits
  642
  787
Trade accounts receivable, less allowance for doubtful accounts of $255 and $247
  9,493
  9,009
Other receivables
  548
  401
Inventories, less provision for obsolete inventory of $697 and $686
  2,972
  1,756
Prepaid expenses and other current assets
  280
  226
Asset held for sale
  91
  86
Total current assets
  19,085
  17,037
NON-CURRENT ASSETS:


Deferred tax asset
  435
  375
Investment properties, net
  1,217
  1,216
Property, plant and equipment, net
  12,385
  11,291
Other assets
  1,950
  1,922
Restricted term deposits
  1,717
  1,657
Total non-current assets
  17,704
  16,461
TOTAL ASSETS
$36,789
$33,498



LIABILITIES


CURRENT LIABILITIES:


Lines of credit
$2,189
$2,556
Accounts payable
  3,342
  3,229
Accrued expenses
  3,985
  3,043
Income taxes payable
  292
  233
Current portion of bank loans payable
  356
  260
Current portion of capital leases
  250
  228
Total current liabilities
  10,414
  9,549
NON-CURRENT LIABILITIES:


Bank loans payable, net of current portion
  1,617
  1,552
Capital  leases, net of current portion
  648
  531
Deferred tax liabilities
  328
  295
Other non-current liabilities
  46
  44
Total non-current liabilities
  2,639
  2,422
TOTAL LIABILITIES
$13,053
$11,971



EQUITY


TRIO-TECH INTERNATIONAL’S SHAREHOLDERS' EQUITY:


Common stock, no par value, 15,000,000 shares authorized; 3,548,055 shares issued outstanding as at December 31, 2017, and 3,523,055 shares as at June 30, 2017
$11,013
$10,921
Additional paid-in capital
  3,208
  3,206
Accumulated retained earnings
  5,589
  4,341
Accumulated other comprehensive income
  2,508
  1,633
Total Trio-Tech International shareholders' equity
  22,318
  20,101
Non-controlling interest
  1,418
  1,426
TOTAL EQUITY
$23,736
$21,527
TOTAL LIABILITIES AND EQUITY
$36,789
$33,498

See notes to condensed consolidated financial ~~statements.~~

statements

~~-2-~~4

	Three Months Ended						Nine Months Ended
	Mar. 31,			Mar. 31,			Mar. 31,			Mar. 31,
	2023			2022			2023			2022
Revenue
Manufacturing	$	2,963		$	3,097		$	11,592		$	10,187
Testing services		5,697			4,417			17,709			13,983
Distribution		1,179			3,620			4,855			8,038
Real estate		3			4			15			23
		9,842			11,138			34,171			32,231
Cost of Sales
Cost of manufactured products sold		2,451			2,530			8,825			7,838
Cost of testing services rendered		3,940			3,169			11,813			9,141
Cost of distribution		975			2,945			4,064			6,651
Cost of real estate		18			20			54			58
		7,384			8,664			24,756			23,688

Gross Margin		2,458			2,474			9,415			8,543

Operating Expenses:
General and administrative		2,248			2,378			6,472			6,305
Selling		160			146			526			449
Research and development		87			80			311			293
Loss on disposal of property, plant and equipment		-			-			7			-
Total operating expenses		2,495			2,604			7,316			7,047

(Loss) / Income from Operations		(37	)		(130	)		2,099			1,496

Other Income / (Expenses)
Interest expenses		(29	)		(31	)		(83	)		(87	)
Other income, net		123			127			59			669
Total other income / (expenses)		94			96			(24	)		582

Income / (Loss) from Continuing Operations before Income Taxes		57			(34	)		2,075			2,078

Income Tax Expenses		(8	)		(170	)		(474	)		(503	)

Income / (Loss) from Continuing Operations before Non-controlling Interest, Net of Tax		49			(204	)		1,601			1,575

Discontinued Operations
Income / (loss) from discontinued operations, net of tax		5			-			(4	)		5
NET INCOME / (LOSS)		54			(204	)		1,597			1,580

Less: net income / (loss) attributable to non-controlling interest		61			(37	)		215			(25	)
Net (Loss) / Income Attributable to Trio-Tech International Common Shareholders	$	(7	)	$	(167	)	$	1,382		$	1,605

Amounts Attributable to Trio-Tech International Common Shareholders:
(Loss) / Income from continuing operations, net of tax		(10	)		(167	)		1,384			1,603
Income / (Loss) from discontinued operations, net of tax		3			-			(2	)		2
Net (Loss) / Income Attributable to Trio-Tech International Common Shareholders	$	(7	)	$	(167	)	$	1,382		$	1,605

Basic Earnings per Share:
Basic (loss) / earnings per share from continuing operations attributable to Trio-Tech International	$	-		$	(0.04	)	$	0.34		$	0.40
Basic (loss) / earnings per share from discontinued operations attributable to Trio-Tech International	$	-		$	-		$	-		$	-
Basic (Loss) / Earnings per Share from Net Income Attributable to Trio-Tech International	$	-		$	(0.04	)	$	0.34		$	0.40

Diluted (Loss) / Earnings per Share:
Diluted (loss) / earnings per share from continuing operations attributable to Trio-Tech International	$	-		$	(0.04	)	$	0.33		$	0.38
Diluted (loss) / earnings per share from discontinued operations attributable to Trio-Tech International	$	-		$	-		$	-		$	-
Diluted (Loss) / Earnings per Share from Net Income Attributable to Trio-Tech International	$	-		$	(0.04	)	$	0.33		$	0.38

Weighted average number of common shares outstanding
Basic		4,075			3,949			4,075			3,949
Dilutive effect of stock options		84			272			86			191
Number of shares used to compute earnings per share diluted		4,159			4,221			4,161			4,140

Three Months Ended

Six Months Ended

Dec. 31,

Dec. 31,

Dec. 31,

Dec. 31,

2017

2016

2017

2016

Revenue

Manufacturing
$3,973
$3,320
$8,738
$6,991
Testing services
  4,936
  4,070
  9,541
  8,227
Distribution
  1,606
  1,675
  3,142
  2,779
Others
  37
  39
  76
  78

  10,552
  9,104
  21,497
  18,075
Cost of Sales




Cost of manufactured products sold
  3,068
  2,622
  6,717
  5,417
Cost of testing services rendered
  3,251
  2,658
  6,390
  5,472
Cost of distribution
  1,409
  1,501
  2,777
  2,492
Others
  29
  29
  58
  42

  7,757
  6,810
  15,942
  13,423
Gross Margin
  2,795
  2,294
  5,555
  4,652





Operating Expenses:




General and administrative
  1,727
  1,776
  3,566
  3,519
Selling
  252
  180
  431
  365
Research and development
  118
  52
  302
  105
Write off of property, plant and equipment
  -
  8
  11
  8
Total operating expenses
  2,097
  2,016
  4,310
  3,997





Income from Operations
  698
  278
  1,245
  655





Other Income / (Expenses)




Interest expenses
  (52)
  (48)
  (110)
  (106)
Other income, net
  42
  203
  200
  313
Total other (expenses) / income
  (10)
  155
  90
  207





Income from Continuing Operations before Income Taxes
  688
  433
  1,335
  862





Income Tax Expenses
  (13)
  (67)
  (55)
  (150)





Income from continuing operations before non-controlling interest, net of tax
  675
  366
  1,280
  712





Discontinued Operations (Note 19)




Loss from discontinued operations, net of tax
  (2)
  (4)
  (5)
  (3)
NET INCOME
  673
  362
  1,275
  709





Less: net income attributable to non-controlling interest
  -
  52
  27
  96
Net Income Attributable to Trio-Tech International Common Shareholders
$673
$310
$1,248
$613





Amounts Attributable to Trio-Tech International Common Shareholders:




Income from continuing operations, net of tax
  678
  316
  1,254
  619
Loss from discontinued operations, net of tax
  (5)
  (6)
  (6)
  (6)
Net Income Attributable to Trio-Tech International Common Shareholders
$673
$310
$1,248
$613





Basic Earnings per Share:




Basic per share from continuing operations attributable to Trio-Tech International
$0.19
$0.09
$0.35
$0.18

Basic earnings per share from discontinued operations attributable to Trio-Tech International
$-
$-
$-
$-
Basic Earnings per Share from Net Income




Attributable to Trio-Tech International
$0.19
$0.09
$0.35
$0.18





Diluted Earnings per Share:




Diluted earnings per share from continuing operations attributable to Trio-Tech International
$0.18
$0.09
$0.34
$0.17
Diluted earnings per share from discontinued operations attributable to Trio-Tech International
$-
$-
$-
$-
Diluted Earnings per Share from Net Income




Attributable to Trio-Tech International
$0.18
$0.09
$0.34
$0.17





Weighted average number of common shares outstanding




Basic
  3,548
  3,513
  3,548
  3,513
Dilutive effect of stock options
  245
  56
  222
  39
Number of shares used to compute earnings per share diluted
  3,793
  3,569
  3,770
  3,552

	Three Months Ended						Nine Months Ended
	Mar. 31,			Mar. 31,			Mar. 31,		Mar. 31,
	2023			2022			2023		2022
Comprehensive Income Attributable to Trio-Tech International Common Shareholders:

Net income / (loss)	$	54		$	(204	)	$	1,597	$	1,580
Foreign currency translation, net of tax		166			16			521		(22	)
Comprehensive Income / (Loss)		220			(188	)		2,118		1,558
Less: comprehensive (loss) / income attributable to non- controlling interest		(85	)		(46	)		127		(40	)
Comprehensive Income / (Loss) Attributable to Trio-Tech International Common Shareholders	$	305		$	(142	)	$	1,991	$	1,598

Three Months Ended

Six Months Ended

Dec. 31,

Dec. 31,

Dec. 31,

Dec. 31,

2017

2016

2017

2016

Comprehensive Income Attributable to Trio-Tech International Common Shareholders:

Net income
$673
$362
$1,275
$709
Foreign currency translation, net of tax
  588
  (1,094)
  963
  (1,377)
Comprehensive Income / (Loss)
  1,261
  (732)
  2,238
  (668)
Less: comprehensive income / (loss) attributable to non-controlling interest
  88
  (16)
  115
  (37)
Comprehensive Income / (Loss) Attributable to Trio-Tech International Common Shareholders
$1,173
$(716)
$2,123
$(631)

See notes to condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

	Common Stock				Paid-in		Accumulated Retained		Accumulated Other Comprehensive		Non- controlling
	Shares		Amount		Capital		Earnings		Income		Interest			Total
			$		$		$		$		$			$

Balance at June 30, 2022		4,072		12,750		4,708		9,219		1,197		128			28,002
Stock option expenses		-		-		337		-		-		-			337
Net income		-		-		-		1,382		-		215			1,597
Exercise of stock option		5		19		-		-		-		-			19
Translation adjustment		-		-		-		-		609		(88	)		521
Balance at Mar. 31, 2023		4,077		12,769		5,045		10,601		1,806		255			30,476

Common
Stock

Additional Paid-in

Accumulated Retained

Accumulated Other
Comprehensive

Non- Controlling

Shares

Amount

Capital

Earnings

Income

Interest

Total

$

$

$

$

$

$

Balance at June 30, 2017
  3,523
  10,921
  3,206
  4,341
  1,633
  1,426
  21,527
Stock option expenses
  -
  -
  2
  -
  -
  -
  2
Net income
  -
  -
  -
  1,248
  -
  27
  1,275
Dividend declared by subsidiary
  -
  -
  -
  -
  -
  (123)
  (123)
Exercise of options
  15
  41
  -
  -
  -
  -
  41
Issue of restricted shares to service provider
  10
  51
  -
  -
  -
  -
  51
Translation adjustment
  -
  -
  -
  -
  875
  88
  963
Balance at Dec. 31, 2017
  3,548
  11,013
  3,208
  5,589
  2,508
  1,418
  23,736

	Common Stock				Paid-in		Accumulated Retained		Accumulated Other Comprehensive			Non- controlling
	Shares		Amount		Capital		Earnings		Income			Interest			Total
			$		$		$		$			$			$

Balance at June 30, 2021		3,913		12,178		4,233		6,824		2,399			419			26,053
Stock option expenses		-		-		459		-		-			-			459
Net income / (loss)		-		-		-		1,605		-			(25	)		1,580
Dividend declared by subsidiary		-		-		-		-		-			(122	)		(122	)
Exercise of stock option		116		429		-		-		-			-			429
Translation adjustment		-		-		-		-		(7	)		(15	)		(22	)
Balance at Mar. 31, 2022		4,029		12,607		4,692		8,429		2,392			257			28,377

Common
Stock

Additional Paid-in

Accumulated Retained

Accumulated Other
Comprehensive

Non- Controlling

Shares

Amount

Capital

Earnings

Income

Interest

Total

$

$

$

$

$

$

Balance at June 30, 2016
  3,513
  10,882
  3,188
  3,025
  2,162
  1,614
  20,871
Stock option expenses
  -
  -
  1
  -
  -
  -
  1
Net income
  -
  -
  -
  613
  -
  96
  709
Stock option expenses
  -
  -
  -
  -
  -
  (117)
  (117)
Translation adjustment
  -
  -
  -
  -
  (1,244)
  (133)
  (1,377)
Balance at Dec. 31, 2016
  3,513
  10,882
  3,189
  3,638
  918
  1,460
  20,087

	Nine Months Ended
	Mar. 31,			Mar. 31,
	2023			2022
	(Unaudited)			(Unaudited)
Cash Flow from Operating Activities
Net income	$	1,597		$	1,580
Adjustments to reconcile net income to net cash flow provided by operating activities
Depreciation and amortization		3,641			2,263
Stock compensation		337			459
Addition of provision for obsolete inventories		49			25
Bad debt recovery, net of allowance charged		(15	)		(61	)
Accrued interest expense, net (accrued interest income)		(14	)		85
Payment of interest portion of finance lease		(8	)		(20	)
Reversal of income tax provision		8			(18	)
Warranty recovery, net		3			-
Deferred tax expenses / (benefit)		100			(7	)
Repayment of operating lease		(1,008	)		(801	)
Changes in operating assets and liabilities, net of acquisition effects
Trade accounts receivable		613			(2,214	)
Other receivables		129			(688	)
Other assets		-			134
Inventories		64			(233	)
Prepaid expenses and other current assets		442			(312	)
Accounts payable and accrued expenses		(180	)		242
Income taxes payable		(271	)		145
Other non-current liabilities		924			-
Net Cash Provided by Operating Activities	$	6,411		$	579

Cash Flow from Investing Activities
Withdrawal from unrestricted term deposits		4,888			3,761
Investment in unrestricted term deposits		(4,990	)		(2,079	)
Additions to property, plant and equipment		(4,077	)		(1,144	)
Net Cash (Used in) / Provided by Investing Activities		(4,179	)		538

Cash Flow from Financing Activities
Payment on lines of credit		(1,402	)		(1,025	)
Payment of bank loans		(359	)		(322	)
Payment of principal portion of finance leases		(92	)		(168	)
Dividends paid to non-controlling interest		-			(122	)
Proceeds from exercising stock options		19			429
Proceeds from lines of credit		580			1,463
Proceeds from bank loans		176			255
Net Cash (Used in) / Provided by Financing Activities		(1,078	)		510

Effect of Changes in Exchange Rate		417			9

Net Increase in Cash, Cash Equivalents, and Restricted Cash		1,571			1,636
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		9,376			7,577
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	10,947		$	9,213

Supplementary Information of Cash Flows
Cash paid during the period for:
Interest	$	83		$	84
Income taxes	$	489		$	342

Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash		8,430			7,478
Restricted Term-Deposits in Current Assets		755			-
Restricted Term-Deposits in Non-Current Assets		1,762			1,735
Total Cash, Cash Equivalents, and Restricted Cash Shown in Statements of Cash Flows	$	10,947		$	9,213

~~UNAUDITED (IN THOUSANDS)~~

Six Months Ended

Dec. 31,

Dec. 31,

2017

2016

(Unaudited)

(Unaudited)

Cash Flow from Operating Activities

Net income
$1,275
$709
Adjustments to reconcile net income to net cash flow provided by operating activities


Depreciation and amortization
  1,019
  916
Stock option expenses
  2
  1
Reversal of provision for obsolete inventories
  (3)
  (4)
Bad debt recovery, net
  -
  (16)
Accrued interest expense, net of accrued interest income
  95
  95
Write off of property, plant and equipment - continued operations
  11
  8
Issuance of shares to service provider
  51
  -
Warranty recovery, net
  3
  (9)
Deferred tax provision
  (25)
  51
Changes in operating assets and liabilities, net of acquisition effect


Trade accounts receivable
  (484)
  1,265
Other receivables
  (147)
  280
Other assets
  (37)
  (226)
Inventories
  (1,153)
  (275)
Prepaid expenses and other current assets
  (54)
  (99)
Accounts payable and accrued liabilities
  934
  1,001
Income tax payable
  59
  (26)
Net Cash Provided by Operating Activities
  1,546
  3,671



Cash Flow from Investing Activities


Proceeds from maturing of unrestricted and restricted term deposits and short-term deposits, net
  484
  -
Investments in restricted and unrestricted deposits
  (281)
  (421)
Additions to property, plant and equipment
  (1,507)
  (764)
Proceeds from disposal of plant, property and equipment
  -
  83
Net Cash Used in Investing Activities
  (1,304)
  (1,102)



Cash Flow from Financing Activities


Repayment on lines of credit
  (4,978)
  (4,503)
Proceeds from bank loans and capital leases
  5,045
  3,516
Proceeds from exercising of stock option
  41
  -
Dividends paid to non-controlling interest
  (123)
  (117)
Repayment of long-term bank loans and capital leases
  (373)
  (371)
Net Cash Used in by Financing Activities
  (388)
  (1,475)



Effect of Changes in Exchange Rate
  433
  (565)



NET INCREASE IN CASH AND CASH EQUIVALENTS
  287
  529
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
  4,772
  3,807
CASH AND CASH EQUIVALENTS, END OF PERIOD
$5,059
$4,336



Supplementary Information of Cash Flows


Cash paid during the period for:


Interest
$91
$91
Income taxes
$119
$83



Non-Cash Transactions


Capital lease of property, plant and equipment
$228
$49

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

	Ownership	Location
Express Test Corporation (Dormant)	100%	Van Nuys, California
Trio-Tech Reliability Services (Dormant)	100%	Van Nuys, California
KTS Incorporated, dba Universal Systems (Dormant)	100%	Van Nuys, California
European Electronic Test Centre (Dormant)	100%	Dublin, Ireland
Trio-Tech International Pte. Ltd.	100%	Singapore
Universal (Far East) Pte. Ltd.*	100%	Singapore
Trio-Tech International (Thailand) Co. Ltd. *	100%	Bangkok, Thailand
Trio-Tech (Bangkok) Co. Ltd. *	100%	Bangkok, Thailand
~~(49% owned by Trio-Tech International Pte. Ltd. and 51% owned by Trio-Tech International (Thailand) Co. Ltd.)~~
Trio-Tech (Malaysia) Sdn. Bhd. ~~(55%~~ (55% owned by Trio-Tech International Pte. Ltd.)	55%	Penang and Selangor, Malaysia
Trio-Tech (Kuala Lumpur) Sdn. Bhd.	~~55%~~	~~Selangor, Malaysia~~
~~(100%~~ (100% owned by Trio-Tech Malaysia Sdn. Bhd.)	55%	Selangor, Malaysia
Prestal Enterprise Sdn. Bhd.	~~76%~~	~~Selangor, Malaysia~~
~~(76%~~ (76% owned by Trio-Tech International Pte. Ltd.)	76%	Selangor, Malaysia
Trio-Tech (SIP) Co., Ltd. *	100%	Suzhou, China
Trio-Tech (Chongqing) Co. Ltd. *	100%	Chongqing, China
SHI International Pte. Ltd. (Dormant) ~~(55%~~ (55% owned by Trio-Tech International Pte. Ltd)	55%	Singapore
PT SHI Indonesia (Dormant) ~~(100%~~ (100% owned by SHI International Pte. Ltd.)	~~55%~~ 52%	Batam, Indonesia
Trio-Tech (Tianjin) Co., Ltd. *	100%	Tianjin, China
Trio-Tech (Jiangsu) Co., Ltd. (51% owned by Trio-Tech (SIP) Co., Ltd.)	51%	Suzhou, China

~~The following amendments in~~

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~have been adopted by the Company as of December 31, 2017.~~

~~The amendments in~~ 2022-02 updating Accounting Standards Codification (“ASC”) Topic 326:Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR") and Vintage Disclosures (“ASU ~~2015-11 ASC Topic 330:Simplifying the Measurement of Inventory(“ASC Topic 330”~~2022-02”) ~~specify~~, which require that an entity ~~should measure inventory at the lower~~disclose current-period gross write-offs by year of ~~cost~~origination for financing receivables and net ~~realizable value. Net realizable value is~~investment in leases within the ~~estimated selling prices in the ordinary course~~scope of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using Last-In-First-Out or the retail inventory method. The amendments in ASC Topic 330 are effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. A reporting entity should apply the amendments retrospectively to all periods presented.Subtopic 326-20. The Company has ~~adopted the ASU~~completed its assessment and concluded that ~~the effectiveness of this update does not have a~~ASU 2022-02 has no significant ~~effect on~~impact to the Company’s consolidated financial ~~position or results~~statements.

In November 2021, FASB issued ASU 2021-10 ASC Topic 832:Government Assistance (“Topic 832”): Disclosures by Business Entities about Government Assistance (“ASU 2021-10”), which expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of ~~operations.~~

~~The following amendments inAccounting Standards Update (“ASU”) have not been adopted by the Company as of December 31, 2017.~~

~~The amendments in~~government assistance received. ASU ~~2017-11:Earnings Per Share(Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815). For public companies, these amendments are~~2021-10 is effective for financial statements issued for annual periods beginning after December 15, ~~2018, including interim periods~~2021 for all entities except not-for-profit entities and employee benefit plans within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.

~~The amendments in ASU 2017-09 —Compensation—Stock Compensation~~(ASC Topic 718 ): Scope of Modification Accounting: These amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. For public companies, these amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.

~~The amendments in ASU 2017-08 ASC Subtopic 310-20 —'Receivables—Nonrefundable Fees and Other Costs~~(“ASC Subtopic 310-20”): These amendments shorten the amortization period for certain callable debt securities held at a premium. For public companies, these amendments are effective for annual periods beginning after December 15, 2018, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.

~~The amendments in ASU 2017-07 ASC Topic 715 —'Compensation — Retirement Benefits~~: These amendments improve the presentation of net periodic pension Cost and Net Periodic Postretirement Benefit Cost. For public companies, these amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.

~~The amendments in ASU 2017-05 ASC Subtopic 610-20 —'Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets(“ASC Subtopic 610-20”): These amendments clarify~~ the scope of ~~asset derecognition Guidance~~Topics 960,962, and Accounting for Partial Sales of Nonfinancial Assets. For public companies, these amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. While early application965 on plan accounting. The Company has completed its assessment and concluded that ASU 2021-10 is ~~permitted, including adoption in an interim period,~~applicable to the Company ~~has not elected to early adopt.~~as the Company received government grants. The ~~effectiveness of this update is not expected to have a significant effect on~~Company will make the ~~Company’s presentation of consolidated~~necessary disclosures in the financial ~~position or results of operations.~~

~~The amendments in~~statements for Fiscal 2023.

In June 2016, FASB issued ASU ~~2017-04~~2016-13 ASC Topic ~~350 —'Intangibles - Goodwill and Other~~: These amendments simplify the test for goodwill impairment. For public companies, these amendments are effective for annual periods beginning after December 15, 2019, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.

~~The amendments in ASU 2017-01 ASC Topic 805 —'Business Combinations~~: These amendments clarify the definition of a business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. For public companies, these amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position or results of operations.

~~The amendments in ASU 2016-18 ASC Topic 230 —'Statement of Cash Flows~~: These amendments provide cash flow statement classification guidance. For public business entities, these amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s presentation of consolidated financial position and statement of cash flows.

~~The amendments in ASU 2016-17 ASC Topic 810 —Consolidation~~: These amendments require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. For public business entities, these amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. While early application is permitted, including interim reporting periods within those annual reporting periods, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

~~The amendments in ASU 2016-16 ASC Topic 740 —Income Taxes~~: These amendments require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. For public business entities, these amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

~~The amendments in ASU 2016-15 ASC Topic 230 —Statement of Cash Flows~~: These amendments provide cashflow statement classification guidance. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

~~The amendments in ASU 2016-13 ASC Topic 326:~~326,Financial Instruments—Credit ~~losses~~~~are issued~~Losses (“Topic 326”) (“ASU 2016-13”) for the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ~~For public companies that are not SEC filers, ASC~~Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Topic 326 is effective for ~~fiscal years~~the Company for annual periods beginning after December 15, 2020, and interim periods within those fiscal years. While early application will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, the2022. The Company has completed its assessment and concluded that ASU 2016-03 has no significant impact to the Company’s consolidated financial statements.

Other new pronouncements issued but not yet ~~determined if it will early adopt. The effectiveness of this update is~~ effective until after March 31, 2023, are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

~~The amendments in ASU 2016-09 ASC Topic 718:Compensation~~–Stock Compensation are issued to simplify several aspects of the accounting for share-based payment award transactions, including (a) income tax consequences (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. For public business entities, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted the ASU and concluded that the effectiveness of this update does not have a significant effect on the Company’s consolidated financial position or results of operations.

~~The amendments in ASU 2016-02 ASC Topic 842:Leases~~require companies to recognize the following for all leases (with the exception of short-term leases) at the commencement date of the applicable lease: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is as an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. These amendments become effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a variety of entities including a public company. While early adoption is permitted, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

The Financial Accounting Standards Board (“FASB”) has issued converged standards on revenue recognition. Specifically, the Board has issued ASU 2014-09, ASC Topic 606 (“ASU 2014-09”). ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 will supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition (“ASC Topic 605”), and most industry-specific guidance. ASU 2014-09 also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of non-financial assets that are not in a contract with a customer (e.g., assets within the scope of ASC Topic 360, Property, Plant, and Equipment, (“ASC Topic 360”), and intangible assets within the scope of Topic 350, Intangibles—Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in ASU 2014-09. For a public entity, the amendments in ASU 2014-09 would be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. However, ASU 2015-14 ASC Topic 606:~~Deferral of the Effective Date~~(“ASC Topic 606”) defers the effective date of ASU 2014-09 for all entities by one year. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has not adopted these standards. As the new standards, will supersede substantially all existing revenue guidance affecting the Company under GAAP, it could impact revenue and cost recognition on sales across all the Company's business segments. The Company carried out an initial evaluation of the impact of this standard on its business and anticipates that the adoption of this standard will not have a significant effect on its Consolidated Financial Statements. While we are continuing to assess all potential impacts, the Company has not presently selected a transition method as we believe there will not be any significant impact of this new guidance on the Company.

Dec. 31,
2017
(Unaudited)

June 30,
2017

Short-term deposits
$598
$824
Currency translation effect on short-term deposits
  44
  (37)
Total short-term deposits
  642
  787
Restricted term deposits
  1,660
  1,722
Currency translation effect on restricted term deposits
  57
  (65)
Total restricted term deposits
  1,717
  1,657
Total Term deposits
$2,359
$2,444

Dec. 31,
2017
(Unaudited)

June 30,
2017

Beginning
$247
$270
Additions charged to expenses
  -
  65
Recovered
  (1)
  (78)
Write-off
  -
  (2)
Currency translation effect
  9
  (8)
Ending
$255
$247

Loan Expiry
Date

Loan Amount
(RMB)

Loan Amount
(U.S. Dollars)

Short-term loan receivables

JiangHuai (Project – Yu Jin Jiang An) May 31, 2013
  2,000
  325
Less: allowance for doubtful receivables
  (2,000)
  (325)
Net loan receivables from property development projects
  -
  -



Long-term loan receivables


Jun Zhou Zhi Ye Oct 31, 2016
  5,000
  814
Less: transfer – down-payment for purchase of investment property
  (5,000)
  (814)
Net loan receivables from property development projects
  -
  -

Dec. 31,

2017

(Unaudited)

Dec. 31,
2017
(Unaudited)

June 30,
2017

Beginning
$686
$697
Additions charged to expenses
  -
  6
Usage - disposition
  (3)
  (6)
Currency translation effect
  14
  (11)
Ending
$697
$686

7.~~ASSET HELD FOR SALE~~

8. ~~INVESTMENTS~~

~~Long term loan receivable RMB 5,000, or approximately $814, as disclosed in Note 5, plus the interest receivable on long term loan receivable of RMB 1,250;~~

~~Commercial units measuring 668 square meters, as mentioned above; and~~

~~RMB 5,900 for the part of the unrecognized cash consideration of RMB 8,000 relating to the disposal of the joint venture.~~

9. INVESTMENT PROPERTIES

Investment Date

Investment
Amount (RMB)

Investment Amount
(U.S. Dollars)

Purchase of rental property – Property I - MaoYe Jan 04, 2008
  5,554
  894
Purchase of rental property – Property II - JiangHuai Jan 06, 2010
  3,600
  580
Purchase of rental property – Property III - Fu Li Apr 08, 2010
  4,025
  648
Currency translation
  -
  (95)
Gross investment in rental property
  13,179
  2,027
Accumulated depreciation on rental property Dec 31, 2017
  (5,266)
  (810)
Net investment in property – China
  7,913
  1,217

Investment Date

Investment
Amount (RMB)

Investment Amount
(U.S. Dollars)

Purchase of rental property – Property I - MaoYe Jan 04, 2008
  5,554
  894
Purchase of rental property – Property II - JiangHuai Jan 06, 2010
  3,600
  580
Purchase of rental property – Property III - Fu Li Apr 08, 2010
  4,025
  648
Currency translation
  -
  (178)
Gross investment in rental property
  13,179
  1,944
Accumulated depreciation on rental property   June 30, 2017
  (4,937)
  (728)
Net investment in property – China
  8,242
  1,216

Investment Date

Investment
Amount (RM)

Investment Amount
(U.S. Dollars)

Reclassification of Penang Property I Dec 31, 2012
  681
  181
Gross investment in rental property
  681
  181



Accumulated depreciation on rental property June 30, 2015
  (310)
  (83)
Reclassified as “Assets held for sale” June 30, 2015
  (371)
  (98)
Net investment in rental property - Malaysia
  -
  -

Rental Property I ~~– Mao Ye~~

three and nine months ended March 31, 2023, as compared to $4 and $12 for the same period in Fiscal 2022.

Rental Property II - JiangHuai

~~Other Properties~~Fiscal 2022.

Rental Property III – ~~Fu Li~~

Fiscal 2022.

Summary

Fiscal 2022.

Depreciation expenses for all investment properties in China were ~~$24~~$18 and ~~$49 for~~$54 during the three and ~~six~~nine months ended ~~December~~March 31, ~~2017, respectively,~~2023, as compared to $19 and ~~were $24 and $47, respectively,~~$54 for the same ~~periods~~period in ~~the last fiscal year~~.Fiscal 2022.

~~10.~~

8.OTHER ASSETS

Other assets consisted of the following:

Dec. 31, 2017
(Unaudited)

June 30, 2017

Down payment for purchase of investment properties
$1,645
$1,645
Down payment for purchase of property, plant and equipment
  219
  280
Deposits for rental and utilities
  140
  139
Currency translation effect
  (54)
  (142)
Total
$1,950
$1,922

~~11.~~

9. LINES OF CREDIT

~~The carrying~~

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~~.

Entity with Type of Interest

Expiration

Credit

Unused

Facility Facility

Rate

Date

Limitation

Credit

Trio-Tech International Pte. Ltd., Singapore Lines of Credit Ranging from 1.6% to 5.5%
  -
$4,636
$3,368
Trio-Tech (Malaysia) Sdn. Bhd. Lines of Credit Ranging from 6.3% to 6.7%
  -
$776
$776
Trio-Tech (Tianjin) Co., Ltd. Lines of Credit Ranging from 4.9% to 6.3%
  -
$923
$2

Entity with Type of

Interest

Expiration

Credit

Unused

Facility Facility

Rate

Date

Limitation

Credit

Trio-Tech International Pte. Ltd., Singapore Lines of Credit

Ranging from 3.96% to 7.5%

  -
$4,496
$2,815

Trio-Tech (Malaysia) Sdn. Bhd. Lines of Credit

Ranging from 6.3% to 6.7%

  -
$734
$734
Trio-Tech (Tianjin) Co., Ltd. Lines of Credit
  5.22%
  -
$885
$10

~~12.~~

10.ACCRUED ~~EXPENSES~~

EXPENSE

Accrued ~~expenses~~expense consisted of the following:

Dec. 31, 2017
(Unaudited)

June 30,
2017

Payroll and related costs
$1,554
$1,568
Commissions
  143
  107
Customer deposits
  481
  218
Legal and audit
  298
  283
Sales tax
  129
  80
Utilities
  95
  142
Warranty
  52
  49
Accrued purchase of materials
  352
  33
Provision for re-instatement
  289
  295
Other accrued expenses
  476
  319
Currency translation effect
  116
  (51)
Total
$3,985
$3,043

Dec. 31,

2017

(Unaudited)

Dec. 31, 2017
(Unaudited)

June 30, 2017

Note payable denominated in RM for expansion plans in Malaysia, maturing in August 2024, bearing interest at the bank’s prime rate less 1.50% (5.25% and 5.25% at December 31, 2017 and June 30, 2017) per annum, with monthly payments of principal plus interest through August 2024, collateralized by the acquired building with a carrying value of $2,800 and 2,671, as at December 31, 2017 and June 30, 2017, respectively.
  1,518
  1,735



Note payable denominated in U.S. dollars for expansion plans in Singapore and its subsidiaries, maturing in April 2020, bearing interest at the bank’s lending rate (3.96% and 3.96% for December 31, 2017 and June 30, 2017) with monthly payments of principal plus interest through June 2020. This note payable is secured by plant and equipment with a carrying value of $215 and $224, as at December 31, 2017 and June 30, 2017, respectively.
  363
  196



      Total bank loans payable
$1,881
$1,931

Current portion of bank loans payable
  346
  271
Currency translation effect on current portion of bank loans
  10
  (11)
                              Current portion of bank loans payable
  356
  260
Long term portion of bank loans payable
  1,535
  1,660
Currency translation effect on long-term portion of bank loans
  82
  (108)
                           Long term portion of bank loans payable
$1,617
$1,552

	Mar. 31,			Jun. 30,
	2023			2022
	(Unaudited)

Note payable denominated in the Malaysian Ringgit for expansion plans in Malaysia, maturing in August 2028, bearing interest at the bank’s prime rate less 2% (4.6% and 3.791% at March 31, 2023 and June 30, 2022) per annum, with monthly payments of principal plus interest through August 2028, collateralized by the acquired building with a carrying value of $2,355 and $2,372 as at March 31, 2023 and June 30, 2022.	$	1,117		$	1,392
Financing arrangement at fixed interest rate 3.2% per annum, with monthly payments of principal plus interest through July 2025.		99			128
Financing arrangement at fixed interest rate 3.0% per annum, with monthly payments of principal plus interest through December 2026.		191			224
Financing arrangement at fixed interest rate 3.0% per annum, with monthly payments of principal plus interest through August 2027.		160			-
Total bank loans payable	$	1,567		$	1,744

Current portion of bank loans payable		517			503
Currency translation effect on current portion of bank loans		(4	)		(31	)
Current portion of bank loans payable		513			472
Long-term portion of bank loans payable		1,059			1,357
Currency translation effect on long-term portion of bank loans		(5	)		(85	)
Long-term portion of bank loans payable	$	1,054			1,272

Future minimum payments (excluding interest) as ~~at December~~of March 31, ~~2017(unaudited)~~ 2023, were as follows:

2018
$356
2019
  373
2020
  298
2021
  244
2022
  127
Thereafter
  575
Total obligations and commitments
$1,973

Remainder of Fiscal 2023	$	126
2024		509
2025		280
2026		247
2027		228
Thereafter		177
Total obligations and commitments	$	1,567

Future minimum payments (excluding interest) as at of June 30, ~~2017~~ 2022, were as follows:

2018
$260
2019
  273
2020
  274
2021
  225
2022
  236
Thereafter
  544
Total obligations and commitments
$1,812

~~16.~~

14.BUSINESS SEGMENTS

~~Business Segment Information:~~

Six months Ended Dec. 31

Net Revenue

Operating Income / (Loss)

Total Assets

Depr. and Amort.

Capital Expenditures

Manufacturing

2017

$8,738
$293
$8,837
$56
$37

2016
$6,991
$(322)
$8,114
$99
$78








Testing Services

2017
  9,541
  853
  23,591
  913
  1,558

2016
  8,227
  790
  18,325
  765
  686








Distribution

2017
  3,142
  220
  621
  -
  -

2016
  2,779
  134
  651
  2
  -








Real Estate

2017
  76
  (19)
  3,624
  50
  -

2016
  78
  (6)
  3,147
  50
  -








Fabrication *

2017
  -
  -
  28
  -
  -

Services

2016
  -
  -
  29
  -
  -








Corporate &

2017
  -
  (102)
  88
  -
  -

Unallocated

2016
  -
  59
  430
  -
  -








Total

2017
$21,497
$1,245
$36,789
$1,019
$1,595

2016
$18,075
$655
$30,696
$916
$764

~~Business Segment Information:~~

Three months Ended Dec. 31

Net Revenue

Operating Income / (Loss)

Total Assets

Depr. and Amort.

Capital Expenditures

Manufacturing

2017

$3,973
$107
$8,837
$28
$2

2016
$3,320
$(229)
$8,114
$49
$67








Testing Services

2017
  4,936
  517
  23,591
  466
  976

2016
  4,070
  388
  18,325
  377
  336








Distribution

2017
  1,606
  119
  621
  -
  -

2016
  1,675
  100
  651
  1
  -








Real Estate

2017
  37
  (9)
  3,624
  25
  -

2016
  39
  (8)
  3,147
  25
  -








Fabrication *

2017
  -
  -
  28
  -
  -

Services

2016
  -
  -
  29
  -
  -








Corporate &

2017
  -
  (36)
  88
  -
  -

Unallocated

2016
  -
  27
  430
  -
  -








Total

2017
$10,552
$698
$36,789
$519
$1,066

2016
$9,104
$278
$30,696
$452
$403

* Fabrication services is a discontinued operation (Note 19)

15.

~~17.~~ OTHER INCOME ~~NET~~

Other income ~~/ (expenses)~~ consisted of the following:

	Three Months Ended						Nine Months Ended
	Mar. 31,			Mar. 31,			Mar. 31,			Mar. 31,
	2023			2022			2023			2022
	Unaudited			Unaudited			Unaudited			Unaudited
Interest income	$	49		$	13		$	104		$	51
Other rental income		30			30			85			88
Exchange gain / (loss)		(47	)		(9	)		(326	)		(13	)
Bad debt recovery		-			-			-			104
Commission income		-			-			-			200
Government grant		83			62			108			160
Other miscellaneous income		8			31			88			79
Total	$	123		$	127		$	59		$	669

Three Months Ended

Six Months Ended

Dec. 31,

Dec. 31,

Dec. 31,

Dec. 31,

2017

2016

2017

2016

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Interest income
  12
  8
  20
  12
Other rental income
  27
  25
  53
  50
Exchange (loss) / gain
  (25)
  120
  (31)
  182
Other miscellaneous income
  28
  50
  158
  69
      Total
$42
$203
$200
$313

~~18.~~

16.INCOME TAX

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. The statute of limitations, in general, is open for years ~~2004~~2016 to ~~2017~~2022 for tax authorities in those jurisdictions to audit or examine income tax returns. The Company is under annual review by the tax authorities of the respective jurisdiction to which the subsidiaries belong.

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017, and permanently reduces the U.S. federal corporate tax rate from 35% to 21%, eliminated corporate Alternative Minimum Tax, modified rules for expensing capital investment, and limits the deduction of interest expense for certain companies. The Act is a fundamental change

Due to the taxation of multinational companies, including a shift from a system of worldwide taxation with some deferral elements to a territorial system, current taxation of certain foreign income, a minimum tax on low-tax foreign earnings, and new measures to curtail base erosion and promote U.S. production.

As the Company has a June 30 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a lower US statutory federal rate. Accounting Standard Codification (“ASC”) 740 requires filers to record the effect of tax law changes in the period enacted. However, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), that permits filers to record provisional amounts during a measurement period ending no later than one year from the date of enactment. We have estimated the net impact on the 2018 effective tax rate and tax expense is not material due to our existing net operating loss carryforwards and other tax credits. We have not made any provisional adjustments as a result of the Tax Act.

The Tax Act includes a one-time mandatory repatriation transition tax on certain net accumulated earnings and profits of our foreign subsidiaries. We are still in the process of analyzing the earnings and profits and tax pools of our foreign subsidiaries to reasonably estimate the effects of the one-time transition tax and, therefore, have not recorded a provisional impact. The tax expense impact of the one-time transition tax to be determined may be partially or fully offset by a release of valuation allowance for the utilization of existing net operating losses and tax credits that may reduce the amount of related taxes payable. We expect the accounting for this aspectenactment of the Tax Act, the Company is subject to ~~be complete by~~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 ~~end of fiscal 2018.~~

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 ~~had no material adjustments~~has elected to ~~its liabilities~~account for ~~unrecognized income tax benefits according~~GILTI as a period cost. GILTI expense was $Nil and $83 for three and nine months ended March 31, 2023, as compared to $Nil for the ~~provisions of ASC Topic 740 Income Tax.~~

same period in fiscal 2022.

The ~~Company had an~~Company's income tax expense ~~of $13~~was $8 and ~~$55~~$474 for ~~the~~ three and ~~six~~nine months ended ~~December~~March 31, ~~2017, respectively,~~ 2023, as compared to ~~income tax expense of $67~~$170 and ~~$150, respectively,~~$503 for the same ~~periods~~period in Fiscal 2022. Our effective tax rate (“ETR”) from continuing operations was 14% and 500% for the ~~last fiscal year.~~quarters ended March 31, 2023 and March 31, 2022, respectively. The decrease in income tax ~~expenses~~expense and effective tax rate was ~~mainly~~ due to ~~higher incomes generated by~~ the subsidiaries which has carry forward tax losses which was partially offset by increase in deferred tax for timing differences recorded by Singapore and Malaysia operation. The income tax expenses included with-holding tax held by related companies that were not recoverable from the Inland Revenue Board in Singapore.

following:

1.	A $81 reduction relating to GILTI tax provisions pursuant to final tax filings for Fiscal 2022.

2.	Tax expense for three months ending March 31, 2022 included additional tax arising from tax assessments of prior periods.

The Company accrues penalties and interest related to unrecognized tax benefits when necessary, as a component of penalties and interest ~~expenses,~~expense, respectively. The Company had ~~not~~no unrecognized tax benefits or related accrued ~~any~~ penalties or interest ~~expenses relating~~expense at March 31, 2023.

In assessing the ability to ~~unrecognized~~realize the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not 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 than not the Company will not realize the benefits ~~at December 31, 2017~~of the federal, state, and ~~June 30, 2017.~~

foreign deductible differences. Accordingly, a valuation allowance has been established against deferred tax assets recorded in the U.S. and various foreign jurisdictions.

17.REVENUE

The Company generates revenue primarily from 3 different segments: Manufacturing, Testing and Distribution. 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 of third 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.

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.

~~-20-~~18

~~19. DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN~~

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 is not probable in subsequent periods. The Company’s ~~Indonesia operation~~products and services are generally not sold with a right of return, nor has the Company experienced significant returns from or refunds to its customers.

Manufacturing

The Company primarily derives revenue from the sale of both front-end and back-end semiconductor test equipment and related peripherals, maintenance and support of all these products, installation and training services and the ~~Indonesia operation’s immediate holding company, which comprise~~sale of spare parts. The Company’s revenues are measured based on consideration stipulated in the ~~fabrication services segment, suffered continued operating losses from fiscal year 2010 to 2014,~~arrangement with each customer, net of any sales incentives and ~~the cash flow was minimal from fiscal year 2009 to 2014.~~ amounts collected on behalf of third parties, such as sales taxes.

The Company ~~established~~recognizes revenue at a ~~restructuring plan to close the fabrication services operation, and~~point in ~~accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations (“ASC Topic 205”), from fiscal year 2015 onwards,~~time when the Company ~~presented~~has satisfied its performance obligation by transferring control of the ~~operation results from fabrication~~product to the customer. The Company uses judgment to evaluate whether the control has transferred by considering several indicators, including:

●	whether the Company has a present right to payment;

●	the customer has legal title;

●	the customer has physical possession;

●	the customer has significant risk and rewards of ownership; and

●

the customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products (for example, when the customer has previously accepted the same equipment, with the same specifications, and when we can objectively demonstrate that the tool meets all the required acceptance criteria, and when the installation of the system is deemed perfunctory).

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.

The majority of sales under the Manufacturing segment include a standard 12-month warranty which are mainly assurance warranty and are not separate performance obligations. Warranty provided for some customized products may be classified as ~~a discontinued operation~~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 ~~Company believed that no continued cash flow would be generated~~customer simultaneously receives and consumes the benefits of warranty services provided by the ~~discontinued component~~Company.

Testing

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 testing revenue from burn-in services, manpower supply and other associated services. 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 is no other performance obligation other than what has been stated inside the sales order for each of these sales.

Terms of contract thatmay indicate potential variable consideration include warranty, late delivery penalty and reimbursement to solve nonconformance issues for rejected products. Based on historical and recent data trends, it is concluded that these terms of the contract do not represent potential variable consideration. The transaction price is not contingent on the occurrence of any future event.

Distribution

The Company distributes complementary products made by manufacturers around the world. The Company recognizes revenue from product sales at a point in time when the Company ~~would have no significant continuing involvement in the operations~~has satisfied its performance obligation by transferring control of the ~~discontinued component.~~

~~In accordance~~product to the customer. The Company uses judgment to evaluate whether control has transferred by considering several indicators discussed above. The Company recognizes the revenue at a point in time, generally upon shipment or delivery of the products to the customer or distributors, depending upon terms of the sales order.

Contract Balances

The timing of revenue recognition, billings and collections may result 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 of 70% to 90% of total contract consideration within 30 to 60 days of shipment with the ~~restructuring plan,~~remainder payable within 30 days of acceptance. In instances where the ~~Company’s Indonesia operation is negotiating with~~timing of revenue recognition differs from the timing of invoicing, the Company has determined that its suppliers to settle the outstanding balance of accounts payable of $57 and has no collection for accounts receivable. The Company’s fabrication operation in Batam, Indonesia is in the process of winding up the operations. Management has assessed the costs and expenses to be immaterial, thus no accrual has been made.

~~The discontinued operations in Indonesia did~~ contracts generally do not ~~incur general and administrative expenses for both three and six months ended December 31, 2017 and 2016.~~ The Company anticipates that it may incur additional costs and expenses when the winding up of the business of the subsidiary through which the facilities operated takes place. Management has assessed the costs and expenses to be immaterial, thus no accrual has been made.

~~Loss from discontinued operations was as follows:~~

Three Months Ended

Six Months Ended

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2017

Dec. 31, 2016

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenue
$-
$-
$-
$-
Cost of sales
  -
  -
  -
  -
Gross margin
  -
  -
  -
  -





Operating expenses:




  General and administrative
  -
  1
  -
  -
      Total
  -
  1
  -
  -





Other expenses
  (2)
  (3)
  (5)
  (3)





Loss from discontinued operations
  (2)
  (4)
  (5)
  (3)





Less: Loss attributable to Non-controlling interest
  (3)
  (2)
  (1)
  (3)





Loss from discontinued operations
$(5)
$(6)
$(6)
$(6)

~~The Company does not provide~~ include a ~~separate cash flow statement for the discontinued operation, as the impact of the discontinued operation was immaterial.~~

significant financing component.

~~-21-~~19

~~20.~~

18.EARNINGS PER SHARE

~~The Company adopted ASC Topic 260,Earnings Per Share.Basic~~

Options to purchase 656,375 shares of Common Stock at exercise prices ranging from $2.53 to $7.76 per share were outstanding as of March 31, 2023. 285,500 stock options were excluded in the computation of diluted earnings per share (“EPS”) ~~are computed by dividing net income available~~for the three and nine months ended March 31, 2023, because they were anti-dilutive.

Options to ~~common shareholders (numerator) by~~purchase 698,875 shares of Common Stock at exercise prices ranging from $3.28 to $7.76 per share were outstanding as of March 31, 2022. 140,500 stock options were excluded in the ~~weighted average number~~computation of ~~common shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during a period. In, computing~~ diluted EPS ~~the average price~~ for the ~~period is used in determining the number of shares assumed to be purchased from the exercise of stock options~~three and ~~warrants.~~

nine months ended March 31, 2022, because they were anti-dilutive.

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

Three Months Ended

Six Months Ended

Dec. 31,

Dec. 31,

Dec. 31,

Dec. 31,

2017

2016

2017

2016

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Income attributable to Trio-Tech International common shareholders from continuing operations, net of tax
$678
$316
$1,254
$619
(Loss) / income attributable to Trio-Tech International common shareholders from discontinued operations, net of tax
  (5)
  (6)
  (6)
  (6)
Net Income Attributable to Trio-Tech International Common Shareholders
$673
$310
$1,248
$613





Weighted average number of common shares outstanding - basic
  3,548
  3,513
  3,548
  3,513





Dilutive effect of stock options
  245
  56
  222
  39
Number of shares used to compute earnings per share - diluted
  3,793
  3,569
  3,770
  3,552





Basic earnings per share from continuing operations attributable to Trio-Tech International
$0.19
  0.09
  0.35
  0.18
Basic earnings per share from discontinued operations attributable to Trio-Tech International
  -
  -
  -
  -
Basic earnings per share from net income attributable to Trio-Tech International
$0.19
$0.09
$0.35
$0.18





Diluted earnings per share from continuing operations attributable to Trio-Tech International
$0.18
  0.09
  0.34
  0.17
Diluted earnings per share from discontinued operations attributable to Trio-Tech International
  -
  -
  -
  -
Diluted earnings per share from net income attributable to Trio-Tech International
$0.18
$0.09
$0.34
$0.17

~~21.~~

19.STOCK OPTIONS

On September 24, 2007, the Company’s Board of Directors unanimously adopted the 2007 Employee Stock Option Plan (the ~~“2007~~“2007 Employee Plan”) and the 2007 Directors Equity Incentive Plan (the ~~“2007~~“2007 Directors Plan” and, together with the 2007 Employee Plan, the “2007 Plans”), each of which was approved by the shareholders on December 3, 2007. Each of the 2007 Plans were amended during the term of such plan to increase the number of shares covered thereby. Each of the 2007 Plans terminated by their respective terms on September 24, 2017.

On September 14, 2017, the Company’s Board of Directors unanimously adopted the 2017 Employee Stock Option Plan (the “2017 Employee Plan”) and the 2017 Directors Equity Incentive Plan (the “2017 Directors Plan”) each of which was approved by the shareholders on December 3, 2007. Each of those plans was amended by the Board in 2010 to increase the number of shares covered thereby, which amendments were approved by the shareholders on December 14, 2010. The Board also amended the 2007 Directors Plan in November 2013 to further increase the number of shares covered thereby from 400,000 shares to 500,000 shares, which amendment was approved by the shareholders on December 9, 2013. These two plans are administered by the Board, which also establishes the terms of the awards.

On September 14, 2017, the Company’s Board of Directors unanimously adopted the 2017 Employee Stock Option Plan (the “2017 Employee Plan”) and the 2017 Directors Equity Incentive Plan (the “2017 Directors Plan”) each of which was approved by the shareholders on December 4, 2017. At present, the 2017 Employee Plan provides for awards of up to 300,000 shares of the Company’s Common Stock to its employees, consultants and advisors. At present, the 2017 Directors Plan provides for awards of up to 300,000 shares of the Company’s Common Stock to the members of the Company’s Board of Directors in the form of non-qualified options and restricted stock. These two plans are administered by the Board, which also establishes the terms of the awards.

The fair value for the stock options granted ~~were~~to both employees and directors was estimated using the Black-Scholes option pricing model with the following weighted average assumptions, ~~assuming no expected dividends:~~

Six Months Ended
December 31,

2017 2016

Expected volatility 60.41% to 104.94% 62.05% to 104.94%
Risk-free interest rate 0.30% to 0.78% 0.30% to 0.78%
Expected life (years) 2.50 2.50

The expected volatilities are based on the historical volatility of the Company’s stock. Due to higher volatility, the observation is made on a daily basis. The observation period covered is consistent with the expected life of options. The expected life of the options granted to employees has been determined utilizing the “simplified” method as prescribed by ASC Topic 718 ~~Stock Based Compensation~~, which, among other provisions, allows companies without access to adequate historical data about employee exercise behavior to use a simplified approach for estimating the expected life of a "plain vanilla" option grant. The simplified rule for estimating the expected life of such an option is the average of the time to vesting and the full term of the option. The risk-free rate is consistent with the expected life of the stock options and is based on the United States Treasury yield curve in effect at the time of grant.

assuming:

●

An expected life varying from 2.50 to 3.25 years, calculated in accordance with the guidance provided in SEC Staff bulletin No.110 for plain vanilla options using the simplified method, since our equity shares have been publicly traded for only a limited period of time and we did not have sufficient historical exercise data at the grant date of the options;

●	A risk-free interest rate varying from 0.11% to 4.17% (2022: 0.11% to 2.35%);

●	No expected dividend payments and;

●	Expected volatility of 47.3% to 73.85% (2022: 45.38% to 55.59%).

2017 Employee Stock Option Plan

The Company’s 2017 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 300,000 shares of Common Stock. The Company’s Board of Directors approved an amendment to the 2017 Employee Plan in December, 2021 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 the 2017 Employee Plan, all options must be granted with an exercise price of not less than fair value as of the grant date and the options granted must be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options may be 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 of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2017 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 next three 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 the 2017 Employee Plan). ~~Company did not grant any~~

During the third quarter of Fiscal 2023, 40,000 stock options ~~pursuant to~~were granted under the 2017 Employee ~~plan~~Plan. There were 5,000 stock options exercised during the ~~six~~nine-month period ended March 31, 2023. The Company recognized $70 and $124 in stock-based compensation expense during the three and nine months ended ~~December~~March 31, ~~2017.~~

The Company’s 2007 Employee Plan permitted the issuance of options to employees. As of the last amendment thereof, the 2007 Employee Plan covered an aggregate of 600,000 shares of the Company’s Common Stock. The 2007 Employee Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. ~~However, the options~~Options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The Employee Plan permitted the grant of stock options to its employees covering up to an aggregate of 600,000 shares of Common Stock. Under the 2007 Employee Plan, all options were required to be granted with an exercise price of not less than fair value as of the grant date and the options granted were required to exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options were permitted to be 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 of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2007 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 next three 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 the 2007 Employee Plan).

~~The Company did not grant any options pursuant to the 2007 Employee Plan during the six months ended December 31, 2017.~~

There were no options exercised during the ~~six~~nine months ended ~~December~~March 31, ~~2017.~~ 2023, and March 31, 2022. The Company ~~recognized~~did not recognize any stock-based compensation ~~expenses of $3 in~~expense during the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023, and March 31, 2022.

As of July 1, 2022 and March 31, 2023, there were no vested or unvested stock options outstanding under the 2007 Employee Plan. ~~The balance unamortized stock-based compensation~~

As of ~~$3 based on fair value on the grant date related to~~March 31, 2022, there were no vested or unvested stock options granted under the 2007 ~~Employee Plan is to be recognized over a period of three years. The weighted-average remaining contractual term for non-vested options was 3.77 years.~~

The Company did not grant any options pursuant to the 2007 Employee Plan during the six months ended December 31, 2016. There were no options exercised during the six months ended December 31, 2016. The Company recognized stock-based compensation expenses of $1 in the six months ended December 31, 2016 under the 2007 Employee Plan. The balance unamortized stock-based compensation of $3 based on fair value on the grant date related to options granted under the 2007 Employee Plan is to be recognized over a period of three years. The weighted-average remaining contractual term for non-vested options was 4.22 years.

As of December 31, 2017, there were vested employee stock options covering a total of 79,375 shares of Common Stock. The weighted-average exercise price was $3.36 and the weighted average contractual term was 1.86 years.

As of December 31, 2016, there were vested employee stock options covering a total of 60,000 shares of Common Stock. The weighted-average exercise price was $3.26 and the weighted average contractual term was 2.26 years.

A summary of option activities under the 2007 Employee Plan during the ~~six-month period~~nine months ended ~~December~~March 31, ~~2017~~ 2022, is presented as follows:

Options

Weighted Average
Exercise
Price

Weighted Average Remaining
Contractual
Term (Years)

Aggregate
Intrinsic
Value

Outstanding at July 1, 2017
  127,500
$3.52
  3.10
$187
Granted
  -
  -
  -
  -
Exercised
  -
  -
  -
  -
Forfeited or expired
  -
  -
  -
  -
Outstanding at December 31, 2017
  127,500
$3.52
  2.60
$445
Exercisable at December 31, 2017
  79,375
$3.36
  1.86
$290

~~A summary~~

				Weighted Average		Weighted Average Remaining Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(Years)		Value

Outstanding at July 1, 2021		37,500		$	4.14		0.75	$	34
Granted		-			-		-		-
Exercised		(37,500	)		4.14		-		-
Forfeited or expired		-			-		-		-
Outstanding at March 31, 2022		-		$	-		-	$	-

2017 Directors Equity Incentive Plan

The 2017 Directors Plan initially covered an aggregate of ~~option activities under the 2007 Employee Plan during the six-month period ended December 31, 2016 is presented as follows:~~

Options

Weighted Average
Exercise
Price

Weighted Average Remaining
Contractual
Term (Years)

Aggregate
Intrinsic
Value

Outstanding at July 1, 2016
  90,000
$3.26
  3.42
$30
Granted
  -
  -
  -
  -
Exercised
  -
  -
  -
  -
Forfeited or expired
  -
  -
  -
  -
Outstanding at December 31, 2016
  90,000
$3.26
  2.91
$10
Exercisable at December 31, 2016
  60,000
$3.26
  2.26
$8

~~A summary of the status~~300,000 shares of the Company’s ~~non-vested employee stock options during~~common stock. The Company’s Board of Directors approved an amendment to the ~~six months ended December 31,~~ 2017 ~~is presented below:~~

Options

Weighted Average Grant-Date
Fair Value

Non-vested at July 1, 2017
  48,125
$3.77
Granted
  -
  -
Vested
  -
  -
Forfeited
  -
  -
Non-vested at December 31, 2017
  48,125
$3.77

~~A summary~~ Directors Plan in September 2020 to increase the shares covered thereby from 300,000 shares to an aggregate of ~~the status of~~600,000 shares, which amendment was approved by the Company’s ~~non-vested employee stock options during~~shareholders at the ~~six months ended~~ annual meeting held in December ~~31, 2016 is presented below:~~

Options

Weighted Average Grant-Date
Fair Value

Non-vested at July 1, 2016
  38,750
$3.22
Granted
  -
  -
Vested
  (8,750)
  (3.10)
Forfeited
  -
  -
Non-vested at December 31, 2016
  30,000
$3.26

~~2017 Directors Equity Incentive Plan~~

2020. The 2017 Directors Plan permits the grant of options ~~covering up to an aggregate of 300,000 shares of Common Stock~~ to its directors in the form of ~~non-qualified~~nonqualified options and restricted stock. The exercise price of the ~~non-qualified~~nonqualified options is required to be 100% of the fair value of the underlying shares on the grant date. The options have ~~five-year~~five-year contractual terms and are ~~generally~~ exercisable immediately as of the grant date.

During the third quarter of Fiscal 2023, the Company ~~did not grant any~~granted options to purchase 100,000 shares of its Common Stock pursuant to the 2017 ~~Employee plan~~ Directors Plan. There were no stock options exercised during the ~~six~~nine months ended ~~December~~March 31, ~~2017.~~

A summary of option activities under the 2017 Directors Plan during the nine months ended March 31, 2022, is presented as follows:

			Weighted Average		Weighted Average Remaining Contractual		Aggregate
			Exercise		Term		Intrinsic
	Options		Price		(Years)		Value

Outstanding at July 1, 2021		320,000	$	4.27		3.22	$	340
Granted		100,000		7.76		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at March 31, 2022		420,000		5.10		0.60		942
Exercisable at March 31, 2022		420,000		5.10		3.07		942

2007 Directors Equity Incentive Plan

The Company’s 2007 Directors Plan permitted the grant of stock options to its directors in the form of nonqualified options and restricted stock. As of the last amendment thereof, the 2007 Directors Plan covered an aggregate of 500,000 shares of the Company’s Common Stock. The 2007 Directors Plan terminated by its terms on September 24, 2017, and no further options may be granted thereunder. ~~However, the options~~Options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The Director Plan permitted the grant of options covering up to an aggregate of 500,000 shares of Common Stock to its directors in the form of non-qualified options and restricted stock. The exercise price of the non-qualified options is 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are generally exercisable immediately as of the grant date.

During the first two quarters of fiscal year 2018, the Company did not grant any options pursuant to the 2007 Directors Plan. There were 15,000 worth of stock options exercised during the six-month period ended December 31, 2017. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2017.

2022.

As of March 31, 2023 and March 31, 2022, there were no vested stock options granted under the 2007 Directors Plan.

A summary of option activities under the 2007 Directors Plan during the ~~six~~nine months ended ~~December~~March 31, ~~2017~~ 2022 is presented as follows:

Options

Weighted Average
Exercise
Price

Weighted Average Remaining
Contractual
Term (Years)

Aggregate
Intrinsic
Value

Outstanding at July 1, 2017
  415,000
$3.36
  2.93
$673
Granted
  -
  -
  -
  -
Exercised
  (15,000)
  2.76
  -
  -
Forfeited or expired
  -
  -
  -
  -
Outstanding at December 31, 2017
  400,000
$3.38
  2.49
$1,452
Exercisable at December 31, 2017
  400,000
$3.38
  2.49
$1,452

~~A summary~~

20.LEASES

Company as Lessor

Operating leases under which the Company is the lessor arise from leasing the Company’s commercial real estate investment property to third parties. Initial lease terms generally range from 12 to 60 months. Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of ~~option activities under~~twenty years in amounts necessary to reduce the ~~2007 Directors Plan during~~carrying amount of the ~~six~~asset to its estimated residual value. Depreciation expense relating to the property held as investments in operating leases were $54 and $58 for the nine months ended ~~December~~March 31, ~~2016 is presented as follows:~~

Options

Weighted Average
Exercise
Price

Weighted Average Remaining
Contractual
Term (Years)

Aggregate
Intrinsic
Value

Outstanding at July 1, 2016
  415,000
$3.14
  3.29
$198
Granted
  -
  -
  -
  -
Exercised
  -
  -
  -
  -
Forfeited or expired
  (50,000)
  2.30
  -
  -
Outstanding at December 31, 2016
  365,000
$3.25
  3.18
$68
Exercisable at December 31, 2016
  365,000
$3.25
  3.18
$68

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following should be read in conjunction with the condensed consolidated ~~unaudited~~ financial statements and notes in Item I above and with the audited consolidated financial statements and notes, ~~and~~ the information under the headings ~~“Risk Factors”~~“Management’s discussion and ~~“Management’s Discussion~~analysis of financial condition and ~~Analysis~~results of ~~Financial Condition and Results of Operations”~~operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017.~~

2022.

Trio-Tech International (“TTI”) was incorporated in 1958 under the laws of the State of California. As used herein, the term “Trio-Tech” or “Company” or “we” or “us” or “Registrant” includes Trio-Tech International and its subsidiaries unless the context otherwise indicates. Our mailing address and executive offices are located at ~~16139 Wyandotte Street, Van Nuys, California 91406,~~Block 1008 Toa Payoh North, Unit 03-09 Singapore 318996, and our telephone number is ~~(818) 787-7000.~~

(65) 6265 3300.

The Company is a provider of reliability test equipment and services to the semiconductor industry. Our customers rely on us to verify that their semiconductor components meet or exceed the rigorous reliability standards demanded for ~~aerospace, communications~~automotive electronics, industrial electronics, computing and ~~other~~data storage, consumer electronics, ~~products.~~

TTI develops and manufactures an extensive range of test equipment used in the ~~"front end"~~“front-end” and the ~~"back end"~~“back-end” manufacturing processes of semiconductors. Our equipment includes leak detectors, autoclaves, centrifuges, burn-in systems and boards, HAST testers, ~~temperature controlled~~temperature-controlled chucks, ~~wet benches~~ and more.

We also act as an extended development team of Integrated Device Manufacturers (IDMs) and Fabless semiconductor companies in the testing processes with our expert technical skills, especially in the New Product Introduction (NPI) process.

Testing

TTI provides comprehensive electrical, environmental, and burn-in testing services to semiconductor manufacturers in our testing laboratories in Asia and the United States (“U.S.”). Our customers include both manufacturers and ~~end-users~~end users of ~~semiconductor~~semiconductors and electronic components who look to us when they ~~do not want~~decide to ~~establish~~outsource their ~~own facilities.~~testing process. We also support the asset-light strategy of our customers by setting up test facilities and providing component level, package level and system level testing services with expert technology that improves the productivity of our customers. The independent tests are performed to industry and customer specific standards.

the needs of our customers through our expert engineering, integration, and sub-assembly services. We also support our customers as their extended research & development arm in product designing, by leveraging the expert skills of our component engineers and design engineers.

Real Estate

~~Second~~

There have been no material changes in our critical accounting estimates and policies since our Annual Report on Form 10-K for the fiscal year ended June 30, 2022. Refer to Note 1 “Basis of Presentation and Summary of significant Accounting Policies” to our Condensed Consolidated Financial Statements for additional details. In addition, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of our Annual Report on Form 10-K for our fiscal year ended June 30, 2022 for a complete description of our critical accounting policies and estimates.

Third Quarter Fiscal ~~2018~~Year 2023 Highlights

●

~~Total revenue increased by $1,448, or 15.9%, to $10,552 for the second quarter of fiscal 2018, as compared to $9,104 for the same period in fiscal 2017.~~

●

~~Manufacturing segment revenue increased by $653, or 19.7%, to $3,973 for the second quarter of fiscal 2018, as compared to $3,320 for the same period in fiscal 2017.~~

●

~~Testing segment revenue increased by $866, or 21.3%, to $4,936 for the second quarter of fiscal 2018, as compared to $4,070 for the same period in fiscal 2017.~~

●

~~Distribution segment revenue decreased by $69, or 4.1%, to $1,606 for the second quarter of fiscal 2018, as compared to $1,675 for the same period in fiscal 2017.~~

●

~~Real estate segment revenue decreased by $2, or 5.1%, to $37 for the second quarter of fiscal 2018, as compared to $39 for the same period in fiscal 2017.~~

●

~~Gross profit margin in absolute dollars increased by $501, or 21.8%, to $2,795 for the second quarter of fiscal 2018, as compared to $2,294 for the same period in fiscal 2017.~~

●

~~The overall gross profit margin increased by 1.3% to 26.5% for the second quarter of fiscal 2018, from 25.2% for the same period in fiscal 2017.~~

●

~~Income from operations for the second quarter of fiscal 2018 was $698, an increase of $420 or 151.1%, as compared to $278 for the same period in fiscal 2017.~~

●

~~General and administrative expenses decreased by $49, or 2.8%, to $1,727 for the second quarter of fiscal year 2018, from $1,776 for the same period in fiscal year 2017.~~

●

~~Selling expenses increased by $72, or 40.0%, to $252 for the second quarter of fiscal year 2018, from $180 for the same period in fiscal year 2017.~~

●

~~Other income decreased by $161 to $42 in the second quarter of fiscal year 2018 compared to $203 in the same period in fiscal year 2017.~~

●

~~Tax expense for the second quarter of fiscal year 2018 was $13, a decrease of $54, as compared to $67 in the same period in fiscal year 2017.~~

●

During the second quarter of fiscal year 2018, income from continuing operations before non-controlling interest, net of tax was $675, an increase of $309, as compared to $366 for the same period in fiscal year 2017.

●

~~Net income attributable to non-controlling interest for the second quarter of fiscal year 2018 was nil, as compared to $52 in the same period in fiscal year 2017.~~

●

~~Working capital increased by $1,183, or 15.8%, to $8,671 as of December 31, 2017, compared to $7,488 as of June 30, 2017.~~

●

~~Earnings per share for the three months ended December 31, 2017 was $0.19, an increase of $0.10, as compared to $0.09 for the same period in fiscal year 2017.~~

●

~~Total assets increased by $3,291 or 9.8% to $36,789 as of December 31, 2017, compared to $33,498 as of June 30, 2017.~~

●

~~Total liabilities increased by $1,082 or 9.0% to $13,053 as of December 31, 2017, compared to $11,971 as of June 30, 2017.~~

Three Months Ended

Six Months Ended

Dec. 31,

Dec. 31,

Dec. 31,

Dec. 31,

2017

2016

2017

2016

Manufacturing
  37.7%
  36.5%
  40.6%
  38.7%
Testing Services
  46.8
  44.7
  44.4
  45.5
Distribution
  15.2
  18.4
  14.6
  15.4
Real Estate
  0.3
  0.4
  0.4
  0.4
Total
  100.0%
  100.0%
  100.0%
  100.0%

●

an increase in ~~the manufacturing segment~~revenue in the ~~U.S.~~Testing segment when compared to the same period of Fiscal 2022. The Manufacturing and ~~Singapore operations; and~~

●

Distribution segment’s revenue decreased compared to the same period of Fiscal 2022. For the nine months ended March 31, 2023, there was an increase in ~~the testing segment~~revenue in the ~~Singapore, Malaysia~~Manufacturing and ~~Tianjin, China operations.~~Testing segments when compared to the same period of Fiscal 2022. The Distribution segment’s revenue decreased compared to the same period of Fiscal 2022.

~~These increases were partially offset by the~~

●

~~decrease in the manufacturing segment in the Suzhou, China operations;~~

●

~~decrease in the testing segment in the Suzhou, China and Bangkok, Thailand operations;~~

●

~~decrease in the distribution segment in the Singapore and Suzhou, China operations; and~~

●

~~decrease in the real estate segment in China.~~

~~For the six months ended December 31, 2017, the $3,422 increase in overall~~

Total revenue ~~was primarily due to~~

●

~~an increase in the manufacturing segment in the U.S., Singapore and Suzhou, China operations;~~

●

~~an increase in the testing segment in the Singapore, Malaysia and Tianjin, China operations;~~

●

~~an increase in the distribution segment in the Singapore operations.~~

~~These increases were partially offset by the~~

●

~~decrease in the testing segment in the Bangkok, Thailand operations;~~

●

~~decrease in the distribution segment in the Suzhou, China operations; and~~

●

~~decrease in the testing segment in China.~~

~~Revenue~~ into and within China, the Southeast Asia regions and other countries (except revenue into and within the U.S. decreased by $1,208 (or 11%), to $9,719 and increased by ~~$1,294~~$1,970 (or ~~14.5%~~6.3%) to ~~$10,200, and by $3,287 (or 18.9%) to $20,619~~$33,232 for the three ~~months~~ and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, respectively, as compared with ~~$8,906~~$10,927 and ~~$17,332, respectively,~~$31,262 for the same ~~periods~~period of ~~last fiscal year.~~

~~Revenue~~Fiscal 2022, respectively.

Total revenue into and within the U.S. was ~~$352~~$123 and ~~$878~~$937 for the three ~~months~~ and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, respectively, ~~an increase~~a decrease of ~~$154~~$99 and ~~$135, respectively,~~$51 from ~~$198~~$222 and ~~$743~~$988 for the same periods of ~~last fiscal year,~~Fiscal 2022, respectively.

Revenue within our four current segments for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023, is discussed ~~within the four segments as follows:~~

below.

Manufacturing Segment

Revenue in the ~~manufacturing~~Manufacturing segment as a percentage of total revenue was ~~37.7%~~30.1% and ~~40.6%~~33.9% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, respectively, an increase of ~~1.2% and 1.9%~~2.3% of total revenue ~~respectively,~~ when compared to 27.8% and 31.6% in the same period of Fiscal 2022. The absolute amount of revenue decreased by $134 to $2,963 from $3,097 for three months ended March 31, 2023 due to decrease in burn-in-board sales in Singapore operation. On the other hand, the absolute amount of revenue increased by $1,405 to $11,592 from $10,187 for the nine months ended March 31, 2023 mainly attributed to increased board and system sales in the first half of Fiscal 2023 compared to the same ~~periods~~period of Fiscal 2022.

Revenue in the ~~last fiscal year.~~Manufacturing segment from one customer accounted for 44.6% and 55.8% of our total revenue in the Manufacturing segment for the three months ended March 31, 2023, and 2022, respectively, and 32.4% and 46.2% of our total revenue in the Manufacturing segment for the nine months ended March 31, 2023, and 2022, respectively.

Testing Services Segment

The Testing segment's revenue was 57.9% for the three months ended March 31, 2023, representing an increase of 18.3%, compared to 39.6% for the same period of Fiscal 2022. Revenue in the Testing segment was 51.8% as a percentage of total revenue for the nine months ended March 31, 2023, an increase of 8.4% compared to the same period of Fiscal 2022. The absolute amount of revenue increased by ~~$653~~$1,280 to ~~$3,973 from $3,320~~$5,697 and increased by ~~$1,747~~$3,726 to ~~$8,738~~$17,709 from ~~$6,991~~$4,417 and $13,983 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, respectively, as compared to the same periods of Fiscal 2022. The increase is mainly attributed to the ~~last fiscal year.~~

new subsidiary in China which was not yet operational in the same period of Fiscal 2022. The increase was partially offset by a drop in volume in other test plants due to the lower demand resulting from weakening of global semiconductor industry.

The revenue in the ~~manufacturing~~Testing segment from ~~a major~~one customer accounted for ~~47.5%~~41.6% and ~~55.7%~~59.5% of our revenue in the Testing segment for the three months ended March 31, 2023 and 2022, respectively, and 44.3% and 62.1% of our total revenue in the ~~manufacturing~~Testing segment for the ~~three~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016, respectively, and 42.3% and 57.0% of our total revenue in the manufacturing segment for the six months ended December 31, 2017 and 2016,~~2022, respectively.

The future revenue in ~~our manufacturing~~the Testing segment will be ~~significantly~~ affected by the ~~purchase and capital expenditure plans~~demands of this ~~major~~ customer if the customer base cannot be increased.

~~-30-~~

~~Testing Services Segment~~

Revenue in the testing segment as a percentage of total revenue was 46.8% and 44.4% for the three and six months ended December 31, 2017, an increase of 2.1% and a decrease of 1.1%, respectively, of total revenue when compared to the same periods of the last fiscal year. The absolute amount of revenue increased by $866 to $4,936 from $4,070 and by $1,314 to $9,541 from $8,227 for the three and six months ended December 31, 2017, respectively, compared to the same periods of the last fiscal year.

Demand for testing services varies from country to country, depending on any changes taking place in the market and our customers’ forecasts. As it is ~~difficult~~challenging to ~~accurately~~ forecast fluctuations in the market accurately, management believes it is necessary to maintain testing facilities in close proximity to ~~our~~the customers in order to make it convenient for them to send us their newly manufactured parts for testing and to enable us to maintain a share of the market.

Distribution Segment

Revenue in the ~~distribution~~Distribution segment was 12.0% and 14.2% as a percentage of total revenue ~~was 15.2% and 14.6%~~ for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, respectively, a decrease of ~~3.2%~~20.5% and ~~0.8%~~10.7%, ~~respectively, when~~ compared to the same ~~periods~~period of ~~the prior fiscal year.~~Fiscal 2022. The absolute amount of revenue decreased by ~~$69~~$2,441 to ~~$1,606~~$1,179 and by $3,183 to $4,855 from ~~$1,675,~~$3,620 and ~~increased by $363 to $3,142 from $2,779~~$8,038 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, respectively, compared to the same ~~periods~~period of ~~the last~~Fiscal 2022. The decrease is mainly due to inventory adjustments made by our end customers who are currently carrying excess inventory, due to which demand is weak and deliveries are being pushed out to next fiscal year.

~~Demand~~

The revenue in the ~~distribution~~Distribution segment from one customer accounted for 66.8% and 82.2% of our revenue in the Distribution segment for the three months ended March 31, 2023 and 2022, respectively, and 78.7% and 77.9% of our total revenue in the Distribution segment for the nine months ended March 31, 2023 and 2022, respectively. Demand for the Distribution segment varies depending on the demand for our customers’ products, ~~and~~ the changes taking place in the market, and our customers’ forecasts. Hence it is difficult to ~~accurately~~ forecast fluctuations in the ~~market.~~

market accurately.

Real Estate Segment

The ~~real estate~~Real Estate segment ~~accounted for 0.3%~~revenue decreased to $3 and ~~0.4% of total net revenue~~$15 from $4 and $23 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017. The absolute amount of revenue in the real estate segment decreased by $2 to $37 from $39 and by $2 to $76 from $78 for the three and six months ended December 31, 2017, respectively,~~2023, compared to the same ~~periods~~period of ~~the last fiscal year. The decrease was primarily due to a decrease in rental income in the real estate segment for the three and six months ended December 31, 2017.~~

During fiscal year 2007, TTI invested in real estate property in Chongqing, China, which has generated investment income from rental revenue and investment returns from deemed loan receivables, which are classified as other income. The rental income is generated from the rental properties in MaoYe, JiangHuai and FuLi in Chongqing, China. In the second quarter of fiscal 2015, the investment in JiaSheng, which was deemed as loans receivable, was transferred to down payment for purchase of investment property in China.

Trio-Tech Chongqing Co., Ltd. (“TTCQ”) invested RMB 5,554 in rental properties in Maoye during fiscal year 2008, RMB 3,600 in rental properties in JiangHuai during fiscal year 2010 and RMB 4,025 in rental properties in FuLi during fiscal year 2010. The total investment in properties in China was RMB 13,179, or approximately $2,027 and $1,944 as at December 31, 2017 and June 30, 2017, respectively. The carrying value of these investment properties in China was RMB 7,913 and RMB 8,242, or approximately $1,217 and $1,216 as at December 31, 2017 and June 30, 2017, respectively. ~~For the three and six months ended December 31, 2017,~~ these properties generated a total rental income of $37 and $76, respectively, as compared to $39 and $78, respectively, for the same periods of the last fiscal year. TTCQ’s investment in properties that generated rental income is discussed further in this Form 10-Q.

TTCQ has yet to receive the title deed for properties purchased from JiangHuai. TTCQ is in the legal process of obtaining the title deed, which is dependent on JiangHuai completing the entire project. JiangHuai property did not generate any income during the three and six months ended December 31, 2017, and 2016.

Fiscal 2022.

~~-31-~~30

“Investments” in the real estate segment were the cost of an investment in a joint venture in which we had a 10% interest. During the second quarter of fiscal year 2014, TTCQ disposed of its 10% interest in the joint venture. The joint venture had to raise funds for the development of the project. As a joint-venture partner, TTCQ was required to stand guarantee for the funds to be borrowed; considering the amount of borrowing, the risk involved was higher than the investment made and hence TTCQ decided to dispose of the 10% interest in the joint venture investment. On October 2, 2013, TTCQ entered into a share transfer agreement with Zhu Shu. Based on the agreement, the purchase price was to be paid by (1) RMB 10,000 worth of commercial property in Chongqing China, or approximately $1,634 based on exchange rates published by the Monetary Authority of Singapore as of October 2, 2013, by non-monetary consideration and (2) the remaining RMB 8,000, or approximately $1,307 based on exchange rates published by the Monetary Authority of Singapore as of October 2, 2013, by cash consideration. The consideration consisted of (1) commercial units measuring 668 square meters to be delivered in June 2016 and (2) sixteen quarterly equal installments of RMB500 per quarter commencing from January 2014. Based on ASC Topic 845 Non-monetary Consideration, the Company deferred the recognition of the gain on disposal of the 10% interest in joint venture investment until such time that the consideration is paid, so that the gain can be ascertained. The recorded value of the disposed investment amounting to $783, based on exchange rates published by the Monetary Authority of Singapore as of June 30, 2014, is classified as “other assets” under non-current assets, because it is considered a down payment for the purchase of the commercial property in Chongqing. TTCQ performed a valuation on a certain commercial unit and its market value was higher than the carrying amount. The first three installment amounts of RMB 500 each due in January 2014, April 2014 and July 2014 were all outstanding until the date of disposal of the investment in the joint venture. Out of the outstanding RMB 8,000, TTCQ received RMB 100 during May 2014.

On October 14, 2014, TTCQ and Jun Zhou Zhi Ye entered into a memorandum of understanding. Based on the memorandum of understanding, both parties have agreed to register a sales and purchase agreement upon Jun Zhou Zhi Ye obtaining the license to sell the commercial property (the Singapore Themed Resort Project) located in Chongqing, China. The proposed agreement is for the sale of shop lots with a total area of 1,484.55 square meters as consideration for the outstanding amounts owed to TTCQ by Jun Zhou Zhi Ye as follows:

~~Long term loan receivable RMB 5,000, or approximately $814, as disclosed in Note 5, plus the interest receivable on long term loan receivable of RMB 1,250;~~

~~Commercial units measuring 668 square meters, as mentioned above; and~~

~~RMB 5,900 for the part of the unrecognized cash consideration of RMB 8,000 relating to the disposal of the joint venture.~~

~~The consideration does not include the remaining outstanding amount of RMB 2,000, or approximately $326, which will be paid to TTCQ in cash.~~

The shop lots are to be delivered to TTCQ upon completion of the construction of the shop lots in the Singapore Themed Resort Project. The initial targeted date of completion was December 31, 2016. Based on subsequent discussions with the developer and the overall China market outlook, the completion date is currently estimated to be December 31, 2019.

~~The share transfer (10% interest in the joint venture) was registered with the relevant authorities in China as of end October 2016.~~

Uncertainties and Remedies

There are several influencing factors which create uncertainties when forecasting performance, such as the constantly changing nature of technology, specific requirements from the customer, decline in demand for certain types of burn-in devices or equipment, decline in demand for testing services and fabrication services, and other similar factors. One factor that influences uncertainty is the highly competitive nature of the semiconductor industry. Another is that some customers are unable to provide a forecast of the products required in the upcoming weeks; hence it is difficult to plan for the resources needed to meet these customers’ requirements due to short lead time and ~~last minute~~last-minute order confirmation. This will normally result in a lower margin for these products as it is more expensive to purchase materials in a short time frame. However, the Company has taken certain actions and formulated certain plans to deal with and to help mitigate these unpredictable factors. For example, in order to meet manufacturing customers’ demands upon short notice, the Company maintains higher inventories but continues to work closely with its customers to avoid ~~stock piling.~~stockpiling. We believe that we have improved customer service ~~from staff by keeping our staff~~ through our efforts to keep our staff up to date on the newest technology and stressing the importance of understanding and meeting the stringent requirements of our customers. Finally, the Company is exploring new markets and products, looking for new customers, and upgrading and improving burn-in technology while at the same time searching for improved testing methods offor higher technology chips.

~~-32-~~

We are in the process of implementing an Enterprise Resource Planning (“ERP”) system, as part of a multi-year plan to integrate and upgrade our systems and processes. The implementation of this ERP system is scheduled to occur in phases over the next few years, and began with the migration of certain of our operational and financial systems in our Singapore operations to the new ERP system during the second quarter of fiscal 2017. This implementation effort continues in fiscal 2018, when the operational and financial systems in Singapore will be substantially transitioned to the new system. Implementation of a new ERP system involves risks and uncertainties. Any disruptions, delays or deficiencies in the design or implementation of the new system could result in increased costs and adversely affect our ability to timely report our financial results, which could negatively impact our business and results of operations.

The Company’s primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar-denominated sales and operating ~~expenses~~expense in its subsidiaries. Strengthening of the United States dollar (“U.S. ~~dollar~~Dollar”) relative to foreign currencies adversely affects the U.S. ~~dollar~~Dollar value of the Company’s foreign currency-denominated sales and earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Company’s products. Margins on sales of the Company’s products in foreign countries and on sales of products that include components obtained from foreign suppliers could be materially adversely affected by foreign currency exchange rate fluctuations. In some circumstances, for competitive or other reasons, the Company may decide not to raise local prices to fully offset the ~~dollar’s~~U.S. Dollar’s strengthening, or at all, which would adversely affect the U.S. ~~dollar~~Dollar value of the Company’s foreign currency-denominated sales and earnings. Conversely, a strengthening of foreign currencies relative to the U.S. ~~dollar,~~Dollar, while generally beneficial to the Company’s foreign currency denominated sales and earnings, could cause the Company to reduce international pricing, thereby limiting the benefit. Additionally, strengthening of foreign currencies may also increase the Company’s cost of product components denominated in those currencies, thus adversely affecting gross margins.

As of March 2023, although we have seen improvements in both our operations and those of our suppliers, we may continue to experience supply shortages as well as inflationary cost pressures in at least the near term. Risks and uncertainties related to the COVID-19 pandemic, supply chain challenges, and inflationary pressures may continue to negatively impact our revenue and gross margin. We continue to monitor and evaluate the business impact to react proactively.

On August 9, 2022, the CHIPS and Science Act of 2022 (CHIPS Act) was enacted in the United States. The CHIPS Act will provide financial incentives to the semiconductor industry which are primarily directed at manufacturing activities within the United States. We continue to evaluate the business impact and potential opportunities related to the CHIPS Act. As of date, we do not see any direct effect of the CHIPS Act on the Company in the foreseeable future.

There are ~~several influencing factors which create uncertainties when forecasting performance~~legal and operational risks associated with having operations in China. These risks could result in a material change in our operations and/or the value of our ~~real estate segment,~~common stock or could limit or hinder our ability to offer or continue to offer securities to investors and cause the value of such ~~as obtaining~~securities to significantly decline or be worthless. In recent past, the ~~rights by the joint venture~~Peoples Republic of China (“PRC”) government initiated a series of regulatory actions and statements to ~~develop the real estate projects~~regulate business operations in China ~~inflation~~with little advance notice, including cracking down on illegal activities in ~~China, currency fluctuations~~the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and ~~devaluation,~~expanding the efforts in anti-monopoly enforcement.

The Company and ~~changes~~its subsidiaries do not have any variable interest entities based in China. Our business primarily consists of semiconductor testing and burn-in services for the automotive industry, avionics, and others. Our businesses are not impacted by anti-monopoly policies, variable interest entities policies, or data security policies, nor are our businesses subject to extraordinary oversight from the Chinese ~~laws, regulations, or their interpretation.~~government.

Comparison of the Three Months Ended ~~December~~March 31, ~~2017~~2023, and ~~December~~March 31, ~~2016~~

2022

The following table sets forth certain consolidated statements of income data as a percentage of revenue for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016,~~2022 respectively:

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

Revenue
  100.0%
  100.0%
Cost of sales
  73.5
  74.8
Gross Margin
  26.5%
  25.2%
Operating expenses


General and administrative
  16.4%
  19.5%
Selling
  2.4
  2.0
Research and development
  1.1
  0.6
Loss on disposal of property, plant and equipment
  -
  0.1
Total operating expenses
  19.9%
  22.2%
Income from Operations
  6.6%
  3.0%

	Three Months Ended
	March 31,
	2023			2022
	(Unaudited)			(Unaudited)
Revenue		100.0	%		100.0	%
Cost of sales		75.0	%		77.8	%
Gross Margin		25.0	%		22.2	%
Operating expense
General and administrative		22.8	%		21.4	%
Selling		1.6	%		1.3	%
Research and development		0.9	%		0.7	%
Total operating expense		25.3	%		23.4	%
Income from Operations		(0.3	)%		(1.2	)%

Overall Gross Margin

Overall gross margin as a percentage of revenue increased by ~~1.3%~~2.8% to ~~26.5%~~25% for the three months ended ~~December~~March 31, ~~2017,~~2023, from ~~25.2% in~~22.2% for the same period of ~~the last fiscal year. In terms of absolute dollar amounts, gross~~Fiscal 2022. Gross profits ~~increased~~decreased by ~~$501~~$14 to ~~$2,795~~$2,458 for the three months ended ~~December~~March 31, ~~2017,~~2023, from ~~$2,294 as compared to~~$2,474 for the same period ~~of the last fiscal year. There was an increase~~ in ~~gross profit margin, in absolute dollars, across all segments except for real estate.~~

~~-33-~~

Fiscal 2022.

Gross profit margin as a percentage of revenue in the ~~manufacturing~~Manufacturing segment ~~increased~~decreased by ~~1.8%~~1.0% to ~~22.8%~~17.3% for the three months ended ~~December~~March 31, ~~2017, from 21.0% in~~2023, as compared to 18.3% for the same period ofin Fiscal 2022. Gross profits in the ~~last fiscal year.~~Manufacturing segment decreased by $55 to $512 for the three months ended March 31, 2023, from $567 for the same period in Fiscal 2022. The ~~increase~~decrease in gross profit margin was primarily due to a lower sales for the change in product mix in the U.S. and Singapore operations, where there was an increase in sales of products that had higher profit margins and a decrease in sales of products that had lower profit margins asthree months ended March 31, 2023 compared to the same period of last fiscal year. As a result, the increase in cost was lower than the increase in manufacturing revenue for the three months ended December 31, 2017, as compared to the same period last fiscal year. In absolute dollar amounts, gross profits in the manufacturing segment increased by $207 to $905 for the three months ended December 31, 2017 from $698 for the same period of last fiscal year.

Fiscal 2022.

Gross profit margin as a percentage of revenue in the ~~testing~~Testing segment ~~decreased~~increased by ~~0.6%~~2.5% to ~~34.1%~~30.8% for the three months ended ~~December~~March 31, ~~2017, from 34.7%~~2023, compared to 28.3% in the same period of ~~the last fiscal year.~~Fiscal 2022. The ~~decrease~~increase in gross profit margin ~~as a~~ percentage ~~of revenue~~ was mainly due to ~~a decrease~~higher proportion of high-margin services coupled with effective cost control measures, mainly in ~~high margin testing revenue the Bangkok,~~Malaysia, China, and Thailand operations. Furthermore, there was an increase in compliance costs in the Malaysia operations which increased in the cost of sales. This decrease in gross margin as a percentage of revenue was partially offset by the increase in the Singapore and Tianjin, China operations where significant portions of our cost of goods sold are fixed and as the demand of services and factory utilization increase, the fixed costs are spread over the increased output, which increases the gross profit margin. In absolute dollar amounts, gross profit in the testing segment increased by ~~$273~~$519 to ~~$1,685~~$1,757 for the three months ended ~~December~~March 31, ~~2017~~2023, from ~~$1,412~~$1,248 for the sameperiod of ~~the last fiscal year.~~

Fiscal 2022.

Gross profit margin of the ~~distribution~~Distribution segment is not only affected by the market price of ~~our~~the products we distribute, but also ~~by our product~~the mix of products we distribute, which frequently changes ~~frequently~~ as a result of ~~changes~~fluctuations in market demand. Gross profit margin as a percentage of revenue in the ~~distribution~~Distribution segment ~~increased~~decreased by ~~1.9%~~1.3% to ~~12.3%~~17.3% for the three months ended ~~December~~March 31, ~~2017,~~2023, from ~~10.4%~~18.6% in the same period of Fiscal 2022. Gross profit in the ~~last fiscal year.~~Distribution segment for the three months ended March 31, 2023, was $204, a decrease of $472, compared to $675 in the same period of Fiscal 2022. The ~~increase~~decrease in gross ~~margin as a percentage of revenue~~profit was primarily due to a lower sales for the change in product mix in the distribution segment of the Singapore and Suzhou, China operations resulting in an increase in sales of products that had higher profit margin and a decline in sales of products that had lower profit margin, asthree months ended March 31, 2023 compared to the same period of ~~last fiscal year. In terms of absolute dollar amounts,~~Fiscal 2022, due to inventory adjustments by customers.

For the three months ended March 31, 2023, gross ~~profit~~loss in the ~~distribution~~Real Estate segment was $15, as compared to $16 for the same period of Fiscal 2022.

Operating Expense

Operating expense for the three months ended ~~December~~March 31, ~~2017~~2023 and 2022 was ~~$197, an increase of $23~~ as ~~compared~~follows:

	Three Months Ended
	March 31,
	2023		2022
	(Unaudited)		(Unaudited)
General and administrative	$	2,248	$	2,378
Selling		160		146
Research and development		87		80
Gain on disposal of property, plant and equipment		-		-
Total	$	2,495	$	2,604

General and administrative expense decreased by $130 or 5.5%, from $2,378 to ~~$174 in the same period of last fiscal year.~~

~~Gross profit margin as a percentage of revenue in the real estate segment was 21.6%~~$2,248 for the three months ended ~~December~~March 31, 2017, as compared to 25.6% in the same period of the last fiscal year. In absolute dollar amounts, gross profit in the real estate segment for the three months ended December 31, 2017 was $8, a decrease of $2 from $10 in the same period of last fiscal year. The decrease was primarily due to a decrease in rental income from the MaoYe investment property, as compared to the same period in the last fiscal year.

~~Operating Expenses~~

~~Operating expenses for the three months ended December 31, 2017 and 2016 were as follows:~~

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

General and administrative
$1,727
$1,776
Selling
  252
  180
Research and development
  118
  52
Loss on disposal of property, plant and equipment
  -
  8
Total
$2,097
$2,016

~~General and administrative expenses decreased by $49, or 2.8%, from $1,776 to $1,727 for the three months ended December 31, 2017~~2023, compared to the same period of ~~last fiscal year.~~Fiscal 2022. The decrease in ~~the~~ general and administrative ~~expenses~~expense was mainly attributable to the decrease in ~~the Singapore, Malaysia~~stock compensation costs and ~~Suzhou,~~effective cost control in China ~~operations, which was partially offset~~operations.

Selling expense increased by ~~the increase in the Tianjin, China operations.~~

~~The decrease in general and administrative expenses was primarily due~~$14 or 9.6%, from $146 to the decrease in payroll related expenses in the Singapore and Suzhou, China operations and decrease in bonus expenses in the Malaysia operations. This decrease was partially offset by an increase in the Tianjin, China operations as a result of wage increment in$160 for the three months ended ~~December~~March 31, ~~2016 as~~2023, compared to the same period of ~~last fiscal year.~~

~~-34-~~

~~Selling expenses~~Fiscal 2022. The increase in selling expense was primarily attributable to an increase in commission costs in the Manufacturing segment of the Singapore operations as a result of an increase in commissionable revenue, and an increase in travel costs due to increased ~~by $72, or 40.0%,~~business travel in the third quarter of Fiscal 2023, compared to the same quarter of Fiscal 2022.

Loss from Operations

Loss from operations was $37 for the three months ended ~~December~~March 31, ~~2017,~~2023, a decrease of $93, compared to loss of $130 from ~~$180 to $252, as compared to~~operations for the same period of ~~the last fiscal year. The increase~~Fiscal 2022. This was mainly due to ~~an increase~~a decrease in ~~commission expenses in the U.S~~general and Singapore operations as the commissionable revenue increased, and an increase in travel expenses in the Singapore, Malaysia and Tianjin, China in the three months ended December 31, 2017 as compared to the same period of last fiscal year.

~~Research and development expenses increased by $66,~~administrative expenses.

Interest Expense

Interest expense for the three months ended ~~December~~March 31, ~~2017, from $52 to $118,~~2023 and 2022 were as ~~compared to the same period of the last fiscal year. The increase~~follows:

	Three Months Ended
	March 31,
	2023		2022
	(Unaudited)		(Unaudited)
Interest expense	$	29	$	31

Interest expense was ~~mainly due to a change in cost allocation in the three months ended December 31, 2017 as compared to the same period of last fiscal year.~~

~~Income from Operations~~

~~Income from operations was $698~~$29 for the three months ended ~~December~~March 31, ~~2017, as~~2023, a decrease of $2, or 6.4%, compared to ~~$278~~$31 for the same period of ~~last fiscal year. The increase was mainly due to the increase in gross profit margin being greater than the increase in operating expenses, as discussed earlier.~~

~~Interest Expense~~

~~Interest expense for the second quarter of fiscal years 2018 and 2017 were as follows:~~

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Interest expense
$52
$48

~~Interest expense increased by $4 to $52 from $48 for the three months ended December 31, 2017. We are trying to keep our debt at a minimum in order to save financing costs.~~Fiscal 2022. As of ~~December~~March 31, ~~2017,~~2023, the Company had an unused ~~lines~~line of credit of ~~$4,146.~~

$5,806 as compared to $5,158 at March 31, 2022.

Other Income

Other income for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016~~2022 were as follows:

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Interest income
$12
$8
Other rental income
  27
  25
Exchange (loss)/ gain
  (24)
  120
Other miscellaneous income
  27
  50
Total
$42
$203

	Three Months Ended
	March 31,
	2023			2022
	(Unaudited)			(Unaudited)

Interest income	$	49		$	13
Other rental income		30			30
Exchange loss		(47	)		(9	)
Government grant		83			62
Other miscellaneous income		8			31
Total	$	123		$	127

Other income decreased marginally by $4 from $127 to other expenses of $123 for the three months ended ~~December~~March 31, ~~2017 was $42, a decrease of $161 as~~2023 compared to ~~$203 for~~ the same period ~~last fiscal year. This~~in Fiscal 2022. The decrease was mainly ~~attributable to~~contributed by a negative foreign currency ~~exchange difference between functional currency~~impact in the third quarter of Fiscal 2023, partially offset by an increase in interest income compared to the same period in Fiscal 2022.

Income Tax Expense

The Company's income tax expense was $8 and ~~U.S. dollars contributing to an exchange loss of $24~~$170 for the three months ended ~~December~~March 31, ~~2017 as compared to an exchange gain of $120 for the same period in last fiscal year.~~

~~Income Tax Expenses~~

~~Income tax expenses for the three months ended December 31, 2017 were $13, a decrease of $54 as compared to $67 for the same period last fiscal year.~~2023 and 2022, respectively. The decrease ~~in income tax expenses~~ was ~~mainly~~primarily due to ~~an increase in withholding~~ tax ~~payment by the Singapore operation and a decrease in deferred~~provision adjustments made pursuant to tax filings for ~~timing differences recorded by the Malaysia operation.~~

~~-35-~~

Fiscal 2022.

Non-controlling Interest

As of ~~December~~March 31, ~~2017,~~2023, we held a 55% interest in Trio-Tech (Malaysia) Sdn. Bhd., Trio-Tech (Kuala Lumpur) Sdn. Bhd., SHI International Pte. Ltd., and ~~PTSHI Indonesia, and~~52% interest in PT. SHI Indonesia. We also held a 76% interest in Prestal Enterprise Sdn. ~~Bhd.~~Bhd and 51% interest in Trio-Tech JiangSu Co. Ltd. The share of non-controlling interest in the net profit from the subsidiaries for the three months ended ~~December~~March 31, ~~2017,~~2023 was $61, an increase of $98 compared to the share of non-controlling interest in the net ~~income~~loss from the subsidiaries of ~~subsidiaries was nil, compared to $52~~$37 for the same period of ~~the previous fiscal year.~~Fiscal 2022. The ~~decrease~~increase in the net income shared by non-controlling interest in the ~~net income of~~ subsidiaries was attributable to the ~~decrease~~increase in net income generated by the ~~Malaysia testing operation due~~China operation.

Net Loss Attributable to ~~a decrease in other income and increase in corporate overhead allocation as compared~~Trio-Tech International Common Shareholders

Net loss attributable to ~~the same period in the last fiscal year.~~

~~Loss from Discontinued Operations~~

~~Loss from discontinued operations was $2~~Trio-Tech International common shareholders for the three months ended ~~December~~March 31, ~~2017, as~~2023, was $7, a change of $160, compared to a net loss of $4$167 for the same period ~~of the last fiscal year.~~in Fiscal 2022.

~~Net Income~~

Net income was $673 for the three months ended December 31, 2017, an increase of $363 as compared to net income of $310 for the three months ended December 31, 2016. The increase in net income was mainly due to the increase operating income, as discussed earlier.

Earnings / (Losses) per Share

Basic earnings per share from continuing operations ~~was $0.19~~were $nil for the three months ended ~~December~~March 31, ~~2017 as~~2023, compared to ~~$0.09~~basic losses per share from continuing operations of $0.04 for the same period in ~~the last fiscal year.~~Fiscal 2022. Basic earnings per share from discontinued operations were ~~nil~~$nil for both the three months ended ~~December~~March 31, ~~2017~~2023, and ~~2016.~~

2022.

Diluted earnings per share from continuing operations ~~was $0.18~~were $nil for the three months ended ~~December~~March 31, ~~2017~~2023, as compared to ~~$0.09~~diluted losses per share from continuing operations of $0.04 for the same period in ~~the last fiscal year.~~Fiscal 2022. Diluted earnings per share from discontinued operations were ~~nil~~$nil for both the three months ended ~~December~~March 31, ~~2017~~2023, and ~~2016.~~

2022.

Segment Information

The revenue, gross margin and income or loss from operations for each segment ~~for~~during the ~~second~~third quarter of ~~fiscal years 2018~~Fiscal 2023 and ~~2017, respectively,~~Fiscal 2022 are presented below. As the revenue and gross margin for each segment have been discussed in the previous section, only the comparison of income or loss from operations is discussed below.

Manufacturing Segment

The revenue, gross margin and loss from operations for the Manufacturing segment for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended
	March 31,
	2023			2022
	(Unaudited)			(Unaudited)
Revenue	$	2,963		$	3,097
Gross margin		17.3	%		18.3	%
Loss from operations	$	(104	)	$	(145	)

Loss from operations from the Manufacturing segment was $104 compared to loss from operations of $145 in the same period of Fiscal 2022, primarily due to decrease in operating expense of $97. Operating expense for the Manufacturing segment were $615 and $712 for the three months ended March 31, 2023 and 2022, respectively. The decrease in operating expense was mainly due to a decrease of $216 in corporate overhead expense partially offset by an increase in general and administrative and selling expenses.

Testing Segment

The revenue, gross margin and income / (loss) from operations for the ~~manufacturing~~Testing segment for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016~~2022 were as follows:

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$3,973
$3,320
Gross margin
22.8%
21.0%
Income / (loss) from operations
$107
$(229)

~~-36-~~

	Three Months Ended
	March 31,
	2023			2022
	(Unaudited)			(Unaudited)
Revenue	$	5,697		$	4,417
Gross margin		30.8	%		28.3	%
Income / (Loss) from operations	$	37		$	(124	)

Income from operations in the ~~manufacturing~~Testing segment ~~was $107~~ for the three months ended ~~December~~March 31, ~~2017, an improvement of $336, as~~2023 was $37 compared to a loss from operations of ~~$229~~$124 in the same period of ~~the last fiscal year. The improvement~~Fiscal 2022. It was ~~primarily due~~mainly attributable to an increase ~~of $207~~ in ~~the gross margin, as discussed earlier,~~revenue coupled with effective cost control. Operating expense was $1,720 and ~~a decrease of $129 in operating expenses. Operating expenses for the manufacturing segment were $798 and $927~~$1,372 for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016,~~2022, respectively. The ~~decrease~~increase of $348 in operating expenses was ~~mainly~~ due to ~~a decrease~~increase in general and administrative expenses ~~of $349, which was partially~~and corporate expenses mainly relating to the new subsidiary in China, while offset by ~~an increase~~decrease in selling expenses of $50, increase in corporate overhead by $141, as compared to the same period of last fiscal year. The decrease in general and administrative expenses was primarily due to a revision in the method of allocation of payroll related expenses between segments in the Singapore operations, fixed assets being fully depreciated and absence of provision for doubtful debt expenses in the Singapore operations. The increase in selling expenses was due to an increase in commission expenses in the U.S. and Singapore operations as the commissionable revenue increased as compared to the same period last fiscal year. The increase in corporate overhead expenses was due to a change in the corporate overhead allocation as compared to the same period last fiscal year. Corporate charges are allocated on a pre-determined fixed charge basis.expenses.

~~Testing~~

Distribution Segment

The revenue, gross margin and income from operations for the ~~testing~~Distribution segment for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016~~2022 were as follows:

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$4,936
$4,070
Gross margin
34.1%
34.7%
Income from operations
$517
$388

	Three Months Ended
	March 31,
	2023			2022
	(Unaudited)			(Unaudited)
Revenue	$	1,179		$	3,620
Gross margin		17.3	%		18.6	%
Income from operations	$	151		$	576

Income from operations in the ~~testing~~Distribution segment for three months ended March 31, 2023 was $151, compared to $576 for the same period of Fiscal 2022. The decrease of $425 was mainly due to lower sales. Operating expense were $53 and $99 for the three months ended ~~December~~March 31, 2017 was $517, an increase of $129 compared to $388 in the same period of last fiscal year. The increase in operating income was mainly attributable to an increase of $273 in gross margin, as discussed earlier, which was partially offset by an increase of $144 in operating expenses. Operating expenses were $1,1682023 and ~~$1,024 for the three months ended December 31, 2017 and 2016,~~2022, respectively. The increase in operating expenses was mainly attributable to an increase in general and administrative expenses by $222, which was partially offset by a decrease in corporate overhead expenses by $127. The increase in general and administrative expenses was due to a revision in the method of allocation of payroll related expenses between segments in the Singapore operations and payroll related expenses in the Tianjin, China operations. The decrease in corporate overhead expenses was due to a change in the corporate overhead allocation as compared to the same period last fiscal year. Corporate charges are allocated on a pre-determined fixed charge basis.

~~Distribution Segment~~

~~The revenue, gross margin and income from operations for the distribution segment for the three months ended December 31, 2017 and 2016 were as follows:~~

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$1,606
$1,675
Gross margin
12.3%
10.4%
Income from operations
$119
$100

Income from operations in the distribution segment increased by $19 to $119 for the three months ended December 31, 2017, as compared to $100 in the same period of last fiscal year. The increase in operating income was primarily due to an increase in gross margin as discussed earlier, which was partially offset by an increase in operating expenses of $4. Operating expenses were $78 and $74 for the three months ended December 31, 2017 and 2016, respectively.

~~-37-~~

Real Estate Segment

The revenue, gross margin and loss from operations for the ~~real estate~~Real Estate segment for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016~~2022 were as follows:

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$37
$39
Gross margin
21.6%
25.6%
Loss from operations
$(9)
$(8)

	Three Months Ended
	March 31,
	2023			2022
	(Unaudited)			(Unaudited)
Revenue	$	3		$	4
Gross margin		(500	)%		(400	)%
Loss from operations	$	(34	)	$	(35	)

Loss from operations in the ~~real estate~~Real Estate segment was $34 for the three months ended ~~December~~March 31, ~~2017 was $9, an increase of $1, as~~2023 compared to ~~$38~~$35 for the same period of ~~the last fiscal year. The decrease in operating loss~~Fiscal 2022. Operating expense was ~~mainly due to a decrease in gross margin as discussed earlier, which was partially offset by a decrease in operating expenses of $1. Operating expenses were $17 and $18~~$19 for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016, respectively.~~

2022.

Corporate

The ~~(loss) / income~~loss from operations for ~~corporate~~Corporate for the three months ended ~~December~~March 31, ~~2017~~2023 and ~~2016 were~~2022 was as follows:

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

(Loss) / income from operations
$(36)
$27

	Three Months Ended
	March 31,
	2023			2022
	(Unaudited)			(Unaudited)
Loss from operations	$	(87	)	$	(402	)

Corporate operating ~~income changed by $63 to a~~ loss ~~of $36~~was $87 for the three months ended ~~December~~March 31, ~~2017 from an income~~2023, compared to loss of ~~$27~~$402 in the same period of the last fiscal year. The change from an operating income to an operating loss was mainly attributable to an increase in general and administrative expenses by $74 due to an increase in payroll related expenses and professional fees during the three months ended December 31, 2017, ~~as compared to the same period last fiscal year.~~Fiscal 2022.

Comparison of the ~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2023 and ~~December~~March 31, ~~2016~~

2022

The following table sets forth certain consolidated statements of income data as a percentage of revenue for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016,~~2022, respectively:

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

Revenue
  100.0%
  100.0%
Cost of sales
  74.2
  74.3
Gross Margin
  25.8%
  25.7%
Operating expenses:


General and administrative
  16.6%
  19.6%
Selling
  2.0
  2.0
Research and development
  1.4
  0.6
Total operating expenses
  20.0%
  22.2%
Income from Operations
  5.8%
  3.5%

	Nine Months Ended
	Mar. 31, 2023			Mar. 31, 2022
	(Unaudited)			(Unaudited)
Revenue		100.0	%		100.0	%
Cost of sales		72.4			73.5
Gross Margin		27.6	%		26.5	%
Operating expenses:
General and administrative		18.9	%		19.6	%
Selling		1.5			1.4
Research and development		0.9			0.9
Total operating expenses		21.3	%		21.9	%
Income from Operations		6.3	%		4.6	%

Overall Gross Margin

Overall gross margin as a percentage of revenue increased marginally by ~~0.1%~~1.1% to ~~25.8%~~27.6% for the ~~six~~nine months ended ~~December~~March 31, ~~2017, from 25.7%~~2023, compared to 26.5% in the same period of last fiscal year, primarily due to an increase in the gross profit margin in the manufacturing and distribution segments, which was partially offset by a decrease in the gross profit margin in the testing and real estate segments. In terms of absolute dollar amounts, grossFiscal 2022. Gross profits increased by ~~$903~~$872 to ~~$5,555~~$9,415 for the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, from ~~$4,652~~$8,543 for the same period of ~~the last fiscal year.~~

~~-38-~~

Fiscal 2022.

Gross profit margin as a percentage of revenue in the ~~manufacturing~~Manufacturing segment increased by ~~0.6%~~0.8% to ~~23.1%~~23.9% for the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, from ~~22.5%~~23.1% in the same period of ~~the last fiscal year. In absolute dollar amounts, gross~~Fiscal 2022. Gross profit increased by ~~$447~~$418 to ~~$2,021~~$2,767 for the ~~six~~nine months ended ~~December~~March 31, ~~2017 as~~2023 compared to ~~$1,574~~$2,349 for the same period ~~in last fiscal year.~~of Fiscal 2022. The ~~increase in absolute dollar amount of~~ gross margin increase was primarily due to ~~the change in product mix in the Singapore and Suzhou, China operations, where there was~~ an increase in ~~sales of products that had higher profit margins and a decrease~~Manufacturing segment revenue in ~~sales of products that had lower profit margins as~~the nine months ended March 31, 2023, compared to the same period of last fiscal year. In our U.S. operations, a delay in orders from a customer while also contributed to a decrease in the gross margin. As a result, the increase in manufacturing revenue was higher than the increase in cost for the six months ended December 31, 2017, as compared to the same period last fiscal year.

Fiscal 2022.

Gross profit margin as a percentage of revenue in the ~~testing~~Testing segment decreased by ~~0.5%~~1.3% to ~~33.0%~~33.3% for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023, from ~~33.5%~~34.6% in the same period of Fiscal 2022. Gross profit in the ~~last fiscal year. The decrease in profit margin as a percentage~~Testing segment increased by $1,054 to $5,896 for the nine months ended March 31, 2023, from $4,842 for the same period of ~~revenue was mainly~~Fiscal 2022 due to ~~a decrease in high margin testing revenue the Bangkok, Thailand operations. Furthermore, there was~~ an increase in ~~compliance costs~~testing services revenue, mainly contributed by the new subsidiary in China which was not yet operational in the ~~Malaysia operations which increased~~same period of Fiscal 2022. The drop in margin resulted from lower demand due to inventory corrections made by customers in the ~~cost~~second and third quarters of sales. This decrease in gross margin as a percentage of revenue was partially offset by the increase in the Singapore, Suzhou, China and Tianjin, China operations where significant portions of our cost of goods sold are fixed and as the demand of services and factory utilization increase, the fixed costs are spread over the increased output, which increases the gross profit margin. In terms of absolute dollar amounts, gross profit in the testing segment increased by $396 to $3,151 for the six months ended December 31, 2017, from $2,755 for the same~~period of the last fiscal year.~~

Fiscal 2023.

Gross profit margin as a percentage of revenue in the ~~distribution~~Distribution segment ~~increased by 1.3% to 11.6%~~was 16.3% for the ~~six~~nine months ended ~~December~~March 31, ~~2017, from 10.3%~~2023, compared to 17.3% in the same period of ~~the last fiscal year. In terms of absolute dollar amounts, gross~~Fiscal 2022. Gross profit in the ~~distribution~~Distribution segment for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023, was ~~$365, an increase~~$791, a decrease of ~~$78 as~~$595 compared to ~~$287~~$1,386 in the same period of ~~the last fiscal year.~~Fiscal 2022. The ~~increase~~decrease in gross ~~margin~~profit was due to the ~~change~~decrease in ~~product mix, as this segment had fewer~~distribution sales ~~of products with a lower profit margin as~~in our Singapore operation compared to the same period of ~~last fiscal year. The gross profit margin of the distribution segment was not only affected~~Fiscal 2022 resulting from inventory corrections made by ~~the market price of our products, but also our product mix, which changes frequently as a result of changes in market demand~~.

customers.

Gross ~~profit margin as a percentage of revenue~~loss in the ~~real estate~~Real Estate segment ~~decreased~~increased by ~~22.5%~~$3 to ~~23.7%~~$39 for the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2023, from ~~46.2%~~$36 in the same period of the last fiscal year. In terms of absolute dollar amounts, gross profit decreased by $18 to $18 for the six months ended December 31, 2017 as compared to $36 for the same period in last fiscal year. The decrease was due to the a reversal of overprovision for taxes in the six months ended December 31, 2016 while there was none in the same period this fiscal year. an increase in rental income from both investment properties, MaoYe and FuLi, due to an increase in space rented during the period, and a decrease in cost of sales, due to a reversal of overprovision for taxes, as compared to the same period in the last fiscal year. In addition, there was decrease in rental income from the MaoYe investment property in the six months ended December 31, 2017, as compared to the same period in the last fiscal year.Fiscal 2022.

Operating Expenses

Operating expenses for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016~~2022 were as follows:

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

General and administrative
$3,566
$3,519
Selling
  431
  365
Research and development
  302
  105
Loss on disposal of property, plant and equipment
  11
  8
Total
$4,310
$3,997

	Nine Months Ended
	Mar. 31, 2023		Mar. 31, 2022
	(Unaudited)		(Unaudited)
General and administrative	$	6,472	$	6,305
Selling		526		449
Research and development		311		293
Loss on disposal of plant and equipment		7		-
Total	$	7,316	$	7,047

General and administrative expenses increased by ~~$47,~~$167 or ~~1.3%~~2.6%, from ~~$3,519~~$6,305 to ~~$3,566~~$6,472 for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023, compared to the same period of the last fiscal year. There was an increase in general and administrative expenses in the U.S. and Tianjin, China operations, which was partially offset by the decrease in general and administrative expenses in all other operations.

~~-39-~~

Fiscal 2022. The increase in general and administrative expenses was primarily due to the ~~increase in payroll related~~general and ~~bonus expenses~~administrative expense relating to the Company’s new subsidiary Trio-Tech Jiangsu, which was setup in the ~~U.S. and Tianjin, China operations.This increase was partially offset mainly~~third quarter of Fiscal 2022, coupled with inflationary impact on costs.

Selling expenses increased by ~~a decrease in payroll related expenses in the Singapore operations~~$107 or 23.8%, for the ~~six~~nine months ended ~~December~~March 31, ~~2017, as~~2023, from $449 to $556 compared to the same period of ~~last fiscal year.~~

~~Selling expenses increased by $66, or 18.1%, for the six months ended December 31, 2017, from $365 to $431 compared to the same period of the last fiscal year,~~Fiscal 2022. The increase in selling expenses was ~~mainly due~~primarily attributable to an increase in commission expenses in the ~~U.S and~~Manufacturing segment of Singapore ~~operations~~operation as ~~the commissionable revenue increased, and~~a result of an increase in commissionable revenue and increased travel ~~expenses in the Singapore, Malaysia and Tianjin, China in the six months ended December 31, 2017, as compared to the same period of last fiscal year.~~

Research and development expenses increased by $197, for the six months ended December 31, 2017, from $105 to $302, as compared to the same period of the last fiscal year. The increase was mainly due to a change in cost allocation in the six months ended December 31, 2017 as compared to the same period of last fiscal year, as well as a oneoff project in the Suzhou, China operations.

costs.

Income from Operations

Income from operations was ~~$1,245~~$2,099 for the ~~six~~nine months ended ~~December~~March 31, ~~2017 as~~2023, compared to ~~$655~~$1,496 for the same period of ~~the last fiscal year.~~Fiscal 2022. The increase was mainly due to the increase in gross profit margin, ~~being greater than the~~partially offset by an increase in operating expenses, as discussed earlier.

Interest Expense

Interest expense for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016~~2022 were as follows:

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Interest expense
$110
$106

	Nine Months Ended
	Mar. 31, 2023		Mar. 31, 2022
	(Unaudited)		(Unaudited)
Interest expense	$	83	$	87

Interest expense ~~increased~~decreased marginally by $4 to ~~$110~~$83 from ~~$106~~$87 for the ~~six~~nine months ended ~~December~~March 31, ~~2017 as~~2023, compared to the same period of Fiscal 2022. The decrease was mainly due to lower utilization of lines of credit in the ~~last fiscal year.~~

Singapore operations.

Other Income

Other income for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016 were~~2022 was as follows:

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Interest income
$20
$12
Other rental income
  53
  50
Exchange (loss)/ gain
  (30)
  182
Other miscellaneous income
  157
  69
Total
$200
$313

	Nine Months Ended
	Mar. 31, 2023			Mar. 31, 2022
	(Unaudited)			(Unaudited)
Interest income	$	104		$	51
Other rental income		85			88
Exchange loss		(326	)		(13	)
Bad debt recovery		-			104
Government grant		108			160
Commission income		-			200
Other miscellaneous income		88			79
Total	$	59		$	669

Other income for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 was ~~$200,~~$59, a decrease of ~~$113 as~~$610 compared to ~~$313~~other income of $669 for the same period ~~last fiscal year. This~~of Fiscal 2022. The decrease was mainly ~~attributable to~~contributed by a negative foreign currency ~~exchange difference between functional currency~~impact in the second quarter of Fiscal 2023 and ~~U.S. dollars contributing to an exchange loss~~the absence of ~~$30 for the six months ended December 31, 2017 as compared to an exchange gain of $182 for~~one-time commission income that was earned in the same period ~~last fiscal year,~~in Fiscal 2022.

Our net income is impacted by the overall strengthening or weakening of the US dollars since the functional currency of our foreign subsidiaries is not the U.S. Dollars. During the second quarter in Fiscal 2023, exchange rate movement negatively impacted our net income due to the strengthening of Singapore dollars against the U.S. Dollar which was partially offset by ~~a non-recurring reimbursement income.~~

~~-40-~~

the exchange gain that arose in the first quarter of fiscal 2023.

Income Tax Expenses

Income tax ~~expense~~expenses for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 was ~~$55,~~$474, a decrease of ~~$95, as~~$29 compared to ~~$150~~of $503 for the same period of ~~last fiscal year.~~Fiscal 2022. The marginal decrease ~~in income~~was contributed by tax ~~expense was mainly due~~provision adjustments made pursuant to ~~a change from deferred~~the tax ~~benefit in the same period last fiscal year to deferred tax expense~~filings for ~~timing differences recorded by the Malaysia operation.~~

Fiscal 2022.

Non-controlling Interest

As of ~~December~~March 31, ~~2016,~~2023, we held a 55% interest in Trio-Tech ~~Malaysia,~~(Malaysia) Sdn. Bhd., Trio-Tech (Kuala Lumpur) Sdn. Bhd., SHI International Pte. Ltd., and ~~PTSHI Indonesia, and~~52% interest in PT. SHI Indonesia. We also held a 76% interest in Prestal Enterprise Sdn. ~~Bhd.~~Bhd and 51% interest in Trio-Tech JiangSu Co. Ltd. The net income attributable to ~~our~~the non-controlling interest in these subsidiaries for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023, was ~~$27,~~$215, a ~~decrease~~change of ~~$69, as~~$240, compared to ~~$96~~a net loss of $25 for the same period of ~~last fiscal year.~~Fiscal 2022. The ~~decrease~~increase was attributable to the ~~decrease~~increase in net income generated by the ~~Malaysia testing operations due~~China operation.

Net Income Attributable to ~~a decrease in operating income, other income and increase in corporate overhead allocation as compared to the same period in the last fiscal year~~

~~Loss from Discontinued Operations~~

~~Loss from discontinued operations was $5 for the six months ended December 31, 2017, an increase of $2 as compared to a loss of $3 for the same period of the last fiscal year.~~

~~Net Income~~

Trio-Tech International Common Shareholders

Net income was ~~$1,248~~$1,382 for the ~~six~~nine months ended ~~December~~March 31, ~~2017, an increase~~2023, a decrease of ~~$635, as~~$223 compared to a net income of ~~$613~~$1,605 for the same period ~~in the last fiscal year.~~of Fiscal 2022. The ~~improvement~~decrease was mainly due to ~~an increase~~the lower demand from customers in ~~operating income, as discussed earlier.~~

the second and third quarter of Fiscal 2023 in response to the overall inventory corrections in the semiconductor industry.

Earnings per Share

Basic earnings per share from continuing operations was $0.35 for the six months ended December 31, 2017 as compared to $0.18 for the same period in the last fiscal year. Basic earnings per share from discontinued operations were nil for both the six months ended December 31, 2017 and 2016.

~~Diluted~~ earnings per share from continuing operations was $0.34 for the ~~six~~nine months ended ~~December~~March 31, ~~2017 as~~2023, compared to ~~$0.17~~$0.40 for the same period in Fiscal 2022. Basic earnings per share from discontinued operations were $nil for both the ~~last fiscal year.~~nine months ended March 31, 2023 and 2022.

Diluted earnings per share from continuing operations was $0.33 for the nine months ended March 31, 2023, compared to $0.38 for the same period of Fiscal 2022. Diluted earnings per share from discontinued operations were ~~nil~~$nil for both the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016.~~

2022.

Segment Information

The revenue, gross profit margin, and income ~~or loss~~/ (loss) from operations in each segment for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016,~~2022, respectively, are presented below. As the segment revenue and gross margin for each segment have been discussed in the previous section, only the comparison of income / (loss) from operations is discussed below.

Manufacturing Segment

~~The revenue, gross margin and income or loss from operations for the manufacturing segment for the six months ended December 31, 2017 and 2016 were as follows:~~

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$8,738
$6,991
Gross margin
23.1%
22.5%
Income / (loss) from operations
$293
$(322)

~~-41-~~

Income from operations from the manufacturing segment was $293 for the six months ended December 31, 2017, an improvement of $615 as compared to a loss of $322 in the same period of the last fiscal year, due to an increase in gross margin by $396 coupled with a decrease in operating expenses. Operating expenses for the manufacturing segment were $1,728 and $1,896 for the six months ended December 31, 2017 and 2016, respectively. The decrease in operating expenses of $168 was mainly due to a decrease in general and administrative expenses of $637, which was partially offset by an increase in corporate overhead of $269 and increase in research and development expenses of $160 as discussed earlier, as compared to the same period of last fiscal year. The decrease in general and administrative expenses was primarily due to a revision in the method of allocation of payroll related expenses between segments in the Singapore operations, fixed assets being fully depreciated and absence of provision for doubtful debt expenses in the Singapore operations. The increase in corporate overhead expenses is due to increase in allocation in corporate expenses which is charged on a predetermined fixed basis, which is higher as compared to the same period last fiscal year.

~~Testing Segment~~

The revenue, gross margin and income from operations for the ~~testing~~Manufacturing segment for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016~~2022 were as follows:

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$9,541
$8,227
Gross margin
33.0%
33.5%
Income from operations
$853
$790

	Nine Months Ended
	Mar. 31, 2023			Mar. 31, 2022
	(Unaudited)			(Unaudited)
Revenue	$	11,592		$	10,187
Gross margin		23.9	%		23.1	%
Income from operations	$	373		$	107

Income from operations infrom the ~~testing~~Manufacturing segment was $373 for the ~~six~~nine months ended ~~December~~March 31, ~~2017 was $853,~~2023, an increase of ~~$63~~$266 as compared to ~~$790~~$107 in the same period of ~~the last fiscal year. The increase in operating income was attributable~~Fiscal 2022 due to an increase in gross ~~profit of $396, which~~margin. The increase in gross margin was partially offset bywith an increase in operating ~~expenses of $333. Operating~~expenses. The Manufacturing segment's operating expenses were ~~$2,298~~$2,392 and ~~$1,965~~$2,242 for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2023 and ~~2016,~~2022, respectively. The increase in operating expenses of $150 was mainly ~~attributable~~due to an increase in general and administrative expenses by ~~$521, which was partially offset by a decrease in corporate overheads by $250.~~$150, compared to the same period of Fiscal 2022. The increase in general and administrative expenses was ~~due~~mainly attributable to ~~a revision~~an increase in ~~the method of allocation of payroll related~~payroll-related expenses ~~between segments~~ in the Singapore ~~operations, and~~operations. The increase in selling expenses was primarily attributable to an increase in ~~payroll related~~commission expenses in the ~~Tianjin, China operations.~~ Manufacturing segment of Singapore operation because of an increase in commissionable revenue and increase in business travel.

Testing Segment

The ~~decrease~~revenue, gross margin and income from operations for the Testing segment for the nine months ended March 31, 2023 and 2022 were as follows:

	Nine Months Ended
	Mar. 31, 2023			Mar. 31, 2022
	(Unaudited)			(Unaudited)
Revenue	$	17,709		$	13,983
Gross margin		33.3	%		34.6	%
Income from operations	$	1,445		$	999

Income from operations in the Testing segment for the nine months ended March 31, 2023, was $1,445, an increase of $446 compared to $999 in the same period of Fiscal 2022 mainly because of increase in revenue and gross profits. Operating expenses was $4,730 and $3,843 for the nine months ended March 31, 2023 and 2022, respectively. The higher operating expenses was mainly attributed to an increase in corporate overheads of $567.

The increase in corporate overhead expenses was due to a change in the corporate overhead allocation compared to the same period of Fiscal 2022. Corporate charges are allocated on a predetermined fixed charge basis.

Distribution Segment

The revenue, gross margin and income from operations for the Distribution segment for the nine months ended March 31, 2023 and 2022 were as follows:

	Nine Months Ended
	Mar. 31, 2023			Mar. 31, 2022
	(Unaudited)			(Unaudited)
Revenue	$	4,855		$	8,038
Gross margin		16.3	%		17.2	%
Income from operations	$	633		$	1,107

Income from operations in the Distribution segment for the nine months ended March 31, 2023 was $633, a decrease of $474 compared to $1,107 in the same period of Fiscal 2022. The decrease in operating income was primarily due to a decrease in gross margin of $596, which was partially offset with a decrease in operating expenses of $121. Operating expenses were $158 and $279 for the nine months ended March 31, 2023 and 2022, respectively. The decrease in operating expenses was mainly contributed by a decrease in general and administrative expenses of $86.

Real Estate Segment

The revenue, gross margin and loss from operations for the Real Estate segment for the nine months ended March 31, 2023 and 2022 were as follows:

	Nine Months Ended
	Mar. 31, 2023			Mar. 31, 2022
	(Unaudited)			(Unaudited)
Revenue	$	15		$	23
Gross margin		260	%		163.6	%
Loss from operations	$	(76	)	$	(86	)

Loss from operations in the Real Estate segment for the nine months ended March 31, 2023 was $76, a decrease of $10 compared to $86 for the same period of Fiscal 2022. The decrease in operating loss was mainly due to a decrease in operating expenses. Operating expenses was $37 and $51 for the nine months ended March 31, 2023 and 2022, respectively.

Corporate

The loss from operations for corporate for the nine months ended March 31, 2023 and 2022 were as follows:

	Nine Months Ended
	Mar. 31, 2023			Mar. 31, 2022
	(Unaudited)			(Unaudited)
Loss from operations	$	(276	)	$	(632	)

The improvement of $356 was mainly due to a change in the corporate overhead allocation as compared to the same period last fiscal year. Corporate charges are allocated on a ~~pre-determined~~predetermined fixed charge basis.

~~Distribution Segment~~

~~The revenue, gross margin and income from operations for~~

Financial Condition

During the ~~distribution segment for the six~~nine months ended ~~December~~March 31, ~~2017 and 2016 were as follows:~~

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$3,142
$2,779
Gross margin
11.6%
10.3%
Income from operations
$220
$134

~~Income from operations in the distribution segment for the six months ended December 31, 2017 was $220, an increase of $86 as~~2023, total assets increased by $1,953 to $45,374 compared to ~~$134 in the same period~~$43,421 as of ~~the last fiscal year.~~June 30, 2022. The increase ~~in operating income~~ was primarily due to an increase in ~~gross margin as discussed earlier, together with a decrease in operating expenses of $8. Operating expenses were $145 and $153 for the six months ended December 31, 2017 and 2016, respectively.~~

~~-42-~~

~~Real Estate Segment~~

~~The revenue, gross loss or margin and loss from operations for the real estate segment for the six months ended December 31, 2017 and 2016 were as follows:~~

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Revenue
$76
$78
Gross margin / (loss)
23.7%
46.2%
Loss from operations
$(19)
$(6)

Loss from operations in the real estate segment for the six months ended December 31, 2017 was $19, an increase of $13 as compared to a loss of $6 for the same period of the last fiscal year. The increase in operating loss was mainly due to an increase in gross loss, as discussed earlier, partially offset by a decrease in operating expenses of $5. Operating expenses were $37 and $42 for the six months ended December 31, 2017 and 2016, respectively.

~~Corporate~~

~~The (loss) / income from operations for corporate for the six months ended December 31, 2017 and 2016 were as follows:~~

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

(Loss) / income from operations
$(102)
$59

Operating loss in the corporate office for the six months ended December 31, 2017 was $102, change of $161, as compared to an income of $59 for the same period of the last fiscal year. The change from an operating income to an operating loss was mainly attributable to an increase in general and administrative expenses by $171 due to an increase in payroll related expenses and professional fees during the six months ended December 31, 2017, as compared to the same period last fiscal year.

~~Financial Condition~~

~~During the six months ended December 31, 2017 total assets increased by $3,291 from $33,498 as at June 30, 2017 to $36,789. The increase in total assets was primarily due to an increase in~~inventories, cash and cash equivalents, ~~trade accounts receivable, other receivables, inventory, prepaid expenses,~~term deposits, and property, plant and equipment, ~~other assets, and restricted term deposits, which were~~ partially offset by a decrease in ~~short term deposits.~~

trade receivables, other receivables and prepaid expenses.

Cash and cash equivalents were ~~$5,059~~$8,430 as at ~~December~~March 31, ~~2017,~~2023, reflecting an increase of ~~$287~~$732 from ~~$4,772~~$7,698 as at June 30, ~~2017, mainly~~2022, primarily due to ~~improved~~increased collections ~~in the U.S.~~from customers.

Short-term deposits and ~~Suzhou, China operations and uplift of deposit in the Malaysia operation. This was partially offset by the lower utilization of credit facilities in our Singapore operation.~~

~~Short~~restricted term deposits were ~~$642~~$8,220 as at ~~December~~March 31, ~~2017,~~2023, reflecting ~~a decrease~~an increase of ~~$145~~$1,122 from ~~$787~~$7,098 as at June 30, ~~2017,~~2022. The increase was primarily due to ~~uplift~~increased placement of ~~deposit by the Malaysia operation.~~

term deposits.

As at ~~December~~March 31, ~~2017,~~2023, the trade accounts receivable balance ~~increased~~decreased by ~~$484~~$588 to ~~$9,493~~$11,004, from ~~$9,009~~$11,592 as at June 30, ~~2017, mainly~~2022, primarily due to ~~longer collection cycles~~a decrease in overall revenue of all entities on a consolidated basis in the ~~Singapore and Tianjin, China operations and foreign currency exchange difference between the functional currency and U.S. dollars for the six months ended December 31, 2017.~~third quarter of Fiscal 2023. The number of days’ sales outstanding in accounts receivables for the Group was 7787 days and 8381 days at the end of the ~~second~~third quarter of ~~fiscal year 2018~~Fiscal 2023 and ~~for~~ the ~~fiscal year ended 2017,~~end of Fiscal 2022, respectively.

~~-43-~~

Other receivables as at ~~December~~March 31, ~~2017 other receivables~~2023 mainly comprised of advance payments made to suppliers.

Inventories as at March 31, 2023, were ~~$548, reflecting~~$2,324, an increase of ~~$147 from $401~~$66, compared to $2,258 as at June 30, ~~2017.~~2022. The ~~increase was~~inventories are primarily ~~due~~held for fulfilling sales backlog and are expected to ~~input tax and tax incentives in~~be delivered within the ~~Tianjin, China operations in the second quarter of fiscal year 2018.~~

~~Inventories~~next two quarters.

Prepaid expenses were $731 as at ~~December~~March 31, ~~2017 were $2,972, an increase of $1,216, as~~2023 compared to ~~$1,756~~$1,215 as at June 30, ~~2017. The increase in inventory was mainly due to a delay in shipment as a result of external factors and higher inventory turnover days in the Singapore operations.~~

Prepaid expenses were $280 as at December 31, 2017 compared to $226 as at June 30, 2017. The increase of $54 was primarily due to prepayment for software related expenses in the Singapore operation and insurance in the Singapore and Tianjin, China operations.

Property, plant and equipment, net increased by $1,094 from $11,291 as at June 30, 2017, to $12,385 as at December 31, 2017, mainly due to higher capital expenditure in the Singapore and Tianjin, China operations and foreign currency exchange difference between the functional currency and U.S. dollars for the six months ended December 31, 2017.

Other assets increased by $28 to $1,950 as at December 31, 2017, as compared to $1,922 as at June 30, 2017. This was mainly due to and foreign currency exchange difference between functional currency and U.S. dollars from June 30, 2017 to December 31, 2017.

Restricted term deposits increased by $60 to $1,717 as at December 31, 2017, as compared to $1,657 as at June 30, 2017. This was primarily due to foreign currency exchange difference between functional currency and U.S. dollars from June 30, 2017 to December 31, 2017.

Utilized lines of credit decreased by $367 to $2,189 as at December 31, 2017 compared to $2,556 as at June 30, 2017, which was mainly due to lower utilization of lines of credit by the Singapore operation in the first quarter of fiscal year 2018.

~~Accounts payable increased by $113 to $3,342 as at December 31, 2017, as compared to $3,229 as at June 30, 2017.~~2022. This was mainly due to the ~~foreign currency exchange difference between the functional currency and U.S. dollars~~asset capitalization of down payments made for the ~~six months ended December 31, 2017.~~

~~Accrued expenses increased by $942 to $3,985~~purchase of equipment in the China operation.

Investment properties (net) in China was $517 as at ~~December~~March 31, ~~2017, as compared to $3,043~~2023 and $585 as at June 30, ~~2017.~~2022. The decrease was primarily due to the foreign currency exchange movement between June 30, 2022 and March 31, 2023.

Property, plant and equipment increased by $1,506 from $8,481 as at June 30, 2022, to $9,987 as at March 31, 2023, mainly due to the acquisition of new property, plant and equipment in the China operations. The increase was partially offset by the depreciation charged for the period and the foreign currency exchange movement between June 30, 2022 and March 31, 2023.

Other assets increased by $95 to $232 as at March 31, 2023 compared to $137 as at June 30, 2022. This was primarily due to rental deposits and foreign currency exchange movement between June 30, 2022 and March 31, 2023.

Lines of credit was $107 as at March 31, 2023 as compared to $929 as at June 30, 2022. This was due to lower utilization of the lines of credit in the Singapore Operations as of March 31, 2023.

Accounts payable decreased by $566 to $1,835 as at March 31, 2023 as compared to $2,401 as at June 30, 2022 which was in line with the decrease in sales.

Accrued expense increased by $566 to $6,570 as at March 31, 2023, as compared to $6,004 as at June 30, 2022. The increase in accrued ~~expenses~~expense was mainly due to an increase in ~~purchase~~ accruals relating to acquisition of property, plant and equipment in the China operations, and increase in contract liabilities in Singapore operation.

Bank loans payable decreased by $177 to $1,567 as at March 31, 2023, as compared to $1,744 as of June 30, 2022. This was due to the repayments made in the Malaysia operations.

Finance leases decreased by $91 to $146 as at March 31, 2023, as compared to $237 as at June 30, 2022. This was due to the repayments made in the Singapore and ~~Tianjin, China~~Malaysia operations.

~~Bank loans payable increased~~

Operating lease right-of-use assets and the corresponding lease liability decreased by ~~$161~~$93 to ~~$1,973~~$3,059 as at ~~December~~March 31, ~~2017,~~2023, as compared to ~~$1,812~~$3,152 as at June 30, ~~2017.~~2022. This was due to ~~an additional loan~~the repayment made byand the ~~Singapore operation, partially offset by repayment of bank loans by~~operating lease expenses charged for the ~~Malaysia operation.~~period.

~~Capital leases~~

Other non-current liabilities increased by ~~$139~~$924 to ~~$898~~$952 as at ~~December~~March 31, ~~2017,~~2023, as compared to ~~$759~~$28 as at June 30, ~~2017. This~~2022. The increase was mainly due to ~~new leases~~an increase in accruals relating to acquisition of property, plant and equipment in the ~~Malaysia~~China operations ~~partially offset by repayment of capital leases by~~where the ~~Singapore operations.~~

payments term is more than 12 months.

Liquidity Comparison

Net cash provided by operating activities ~~decreased~~increased by ~~$2,125~~$5,832 to ~~$1,546~~an inflow of $6,411 for the ~~six~~nine months ended ~~December~~March 31, ~~2017, compared to $3,671 during~~2023, from an inflow of $579 for the same period of ~~the last fiscal year.~~Fiscal 2022. The ~~decrease~~increase in net cash ~~generated~~provided by operating activities was primarily due to ~~a decrease~~an increase of $7,104 in cash inflow ~~of $1,749~~ from ~~accounts~~changes in depreciation, deferred tax benefit, trade receivables, ~~and $427 from~~ other receivables, inventories, prepaid expenses and ~~an increase~~other current assets and other non-current liabilities in ~~cash outflow~~third quarter of ~~$878 in inventories. These were partially offset by an increase in net income of $117 and decrease in other assets of $189.~~

~~Net cash used in investing activities increased by $202 to $1,304 for the six months ended December 31, 2017,~~Fiscal 2023 as compared to ~~$1,102 during the~~ same period of the last fiscal year. The increase was primarily due to $743 in capital spending and a decrease of $83 in proceeds from disposal of property, plant and equipment. This increase in net cash used in investing activities was partially offset by the $484 increase in proceeds from maturing of restricted and unrestricted deposits and a $140 decrease in investments in restricted and unrestricted deposits.

~~-44-~~

Net cash used in financing activities decreased by $1,087 to $388 for the six months ended December 31, 2017, compared to $1,475 during the same period of the last fiscal year. The decrease was mainly due to an increase in cash generated through borrowings from bank loans and capital leases by $1,529, whichFiscal 2022. It was partially offset by an increase of $1,400 in ~~repayment~~cash outflow from changes in stock compensation expense, accrued interest, other assets, account payable and accrued expenses, income tax payable and operating lease in third quarter of Fiscal 2023 as compared to same period of Fiscal 2022.

Net cash provided by investing activities decreased by $4,717 to an outflow of $4,179 for the nine months ended March 31, 2023, from an inflow of $538 for the same period of Fiscal 2022. The increase in cash outflow was primarily due to an additions to property, plant and equipment of $2,933..

Net cash outflow from financing activities for the nine months ended March 31, 2023, was $1,078, representing a decrease of $1,588, as compared to cash inflow of $510 during the nine months ended March 31, 2022. The decrease was mainly attributable to a higher payment on lines of credit by $377, lower proceeds from exercising of ~~$475.~~

~~We believe that our projected cash flows~~stock options $410 and lower proceeds from ~~operations, borrowing availability under our revolving~~ lines of ~~credit, cash on hand, trade credit and the secured bank loan will provide the necessary financial resources to meet our projected cash requirements for at least the next 12 months.~~

~~Critical Accounting Estimates & Policies~~

~~The Company has adopted ASU 2015-11 ASC Topic 330:Simplifying the Measurement of Inventory~~(“ASC Topic 330”) for the financial year beginning after December 15, 2016 and interim periods within those fiscal years, and concluded that the effectiveness of this update does not have a significant effect oncredits $883.

On March 1, 2022, the Company’s ~~consolidated financial position or results of operations.~~

There have been no significant changes in the critical accounting policies, except as disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the most recent Annual ReportRegistration Statement on Form ~~10-K.~~

S-3 (File No. 333-261485) was declared effective by the SEC, pursuant to which we may raise capital of S$10,000,000 USD of any combination of securities (common stock, warrants, debt securities or units) for expansion of the Company’s testing capacity and working capital purposes if necessary.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.CONTROLS AND PROCEDURES

An evaluation was carried out by the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of ~~December~~March 31, ~~2017,~~2023, the end of the period covered by this Form 10-Q. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective at a reasonable level.

~~Except as discussed below, there~~

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the fiscal quarter ended ~~December~~March 31, ~~2017~~2023, that ~~has~~have materially affected, or are reasonably likely to materially affect, the Company’s internal control ~~over~~ ~~financial reporting.~~

~~Enterprise Resource Planning (ERP) Implementation~~

We are in the process of implementing an ERP System, as part of a multi-year plan to integrate and upgrade our systems and processes. The implementation of this ERP system is scheduled to occur in phases over the next few years, and began with the migration of certain of our operational and financial systems in our Singapore operations to the new ERP system during the second quarter of fiscal 2017. This implementation effort continues in fiscal 2018, when the operational and financial systems in Singapore will be substantially transitioned to the new system.

~~As a phased implementation of this system occurs, we are experiencing certain changes to our processes and procedures which, in turn, result in changes to our internal control~~ over financial reporting. While we expect the new ERP system to strengthen our internal financial controls by automating certain manual processes and standardizing business processes and reporting across our organization, management will continue to evaluate and monitor our internal controls as processes and procedures in each of the affected areas evolve.

~~Enhancement of Automated Manufacturing System~~

During the first quarter of fiscal 2018, we enhanced the automated manufacturing system used by our Malaysia operation resulting in a material change in internal controls over financial reporting. The enhancement automates the process of invoice generation and matching of customer payments against invoices. We believe the enhancement was necessary to support increased volumes and transaction complexities related to our business as well to reduce the number of manual processes employed by the Company.

~~-45-~~

TRIO-TECH INTERNATIONAL

PART II. OTHER INFORMATION

~~Item~~

ITEM1. ~~Legal Proceedings~~

LEGAL PROCEEDINGS

Not applicable.

~~Item~~

ITEM 1A. ~~Risk Factors~~

RISK FACTORS

Not applicable.

~~Item~~

ITEM 2. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~

Malaysia and Singapore regulations prohibit the payment of dividends if the Company does not have sufficient retained earnings and tax credit. In addition, the payment of dividends can only be made after making deductions for income tax pursuant to the regulations. Furthermore, the cash movements from the Company’s 55% owned Malaysian subsidiary to overseas are restricted and must be authorized by the Central Bank of Malaysia. California law also prohibits the payment of dividends if the Company does not have sufficient retained earnings or cannot meet certain asset to liability ratios.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

~~Item~~

ITEM 3. ~~Defaults Upon Senior Securities~~

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

~~Item~~

ITEM 4. ~~Mine Safety Disclosures~~

MINE SAFETY DISCLOSURES

Not applicable.

~~Item~~

ITEM 5. ~~Other Information~~

OTHER INFORMATION

Not applicable.

~~Item~~

ITEM 6. ~~Exhibits~~

EXHIBITS

31.1		Rule 13a-14(a) Certification of Principal Executive Officer of Registrant
31.2
~~31.2~~		Rule 13a-14(a) Certification of Principal Financial Officer of Registrant
32
32		Section 1350 Certification
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~101.INS XBRL Instance Document~~

~~101.SCH XBRL Taxonomy Extension Schema~~

~~101.CAL XBRL Taxonomy Extension Calculation Linkbase~~

~~101.DEF XBRL Taxonomy Extension Definition Linkbase~~

~~101.LAB XBRL Taxonomy Extension Label Linkbase~~

~~101.PRE XBRL Taxonomy Extension Presentation Linkbase~~

~~-46-~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TRIO-TECH INTERNATIONAL
	By:	/s/ ~~Victor H.M. Ting~~ ~~VICTOR H.M. TING~~ ~~Vice President and~~ Srinivasan Anitha SRINIVASAN ANITHA Chief Financial Officer (Principal Financial Officer) Dated: ~~February 12, 2018~~ May 15, 2023

~~-47-~~43

	Mar. 31, 2023			Jun. 30, 2022
	(Unaudited)

Raw materials	$	1,356		$	1,764
Work in progress		836			683
Finished goods		727			238
Less: provision for obsolete inventories		(743	)		(674	)
Currency translation effect		148			247
	$	2,324		$	2,258

	Dec. 31, 2017 (Unaudited)	June 30, 2017

Raw materials	$1,107	$1,047
Work in progress	1,890	1,045
Finished goods	598	365
Less: provision for obsolete inventories	(697)	(686)
Currency translation effect	74	(15)
	$2,972	$1,756

	Investment Date / Reclassification	Investment Amount			Investment Amount
	Date	(RMB)			(U.S. Dollars)

Purchase of rental property – Property I – MaoYe Property	Jan 04, 2008		5,554			894
Currency translation			-			(87	)
Reclassification as “Assets held for sale”	July 01, 2018		(5,554	)		(807	)
Reclassification from “Assets held for sale”	Mar 31, 2019		2,024			301
			2,024			301
Purchase of rental property – Property II - JiangHuai	Jan 06, 2010		3,600			580
Purchase of rental property – Property III - FuLi	Apr 08, 2010		4,025			648
Currency translation			-			(125	)
Gross investment in rental property			9,649			1,404

Accumulated depreciation on rental property	Mar 31, 2023		(7,884	)		(1,153	)
Reclassified as “Assets held for sale”- MaoYe Property	July 01, 2018		2,822			410
Reclassification from “Assets held for sale”- MaoYe Property	Mar 31, 2019		(1,029	)		(143	)
			(6,091	)		(886	)
Net investment in property – China			3,558			517

	Investment Date / Reclassification	Investment Amount			Investment Amount
	Date	(RMB)			(U.S. Dollars)

Purchase of rental property – Property I – MaoYe Property	Jan 04, 2008		5,554			894
Currency translation			-			(87	)
Reclassification as “Assets held for sale”	July 01, 2018		(5,554	)		(807	)
Reclassification from “Assets held for sale”	Mar 31, 2019		2,024			301
			2,024			301
Purchase of rental property – Property II - JiangHuai	Jan 06, 2010		3,600			580
Purchase of rental property – Property III - FuLi	Apr 08, 2010		4,025			648
Currency translation			-			(89	)
Gross investment in rental property			9,649			1,440

Accumulated depreciation on rental property	Jun 30, 2022		(7,523	)		(1,122	)
Reclassified as “Assets held for sale”- MaoYe Property	July 01, 2018		2,822			410
Reclassification from “Assets held for sale”- MaoYe Property	Mar 31, 2019		(1,029	)		(143	)
			(5,730	)		(855	)
Net investment in property – China			3,919			585

	RMB			U.S. Dollars
Original Investment (10% of Junzhou equity)	$	10,000		$	1,606
Less: Management Fee		(5,000	)		(803	)
Net Investment		5,000			803
Less: Share of Loss on Joint Venture		(137	)		(22	)
Net Investment as Down Payment (Note *a)		4,863			781
Loans Receivable		5,000			728
Interest Receivable		1,250			182
Less: Impairment of Interest		(906	)		(132	)
Transferred to Down Payment (Note *b)		5,344			778
* Down Payment for Purchase of Investment Properties		10,207			1,486
Add: Effect of foreign currency exchange		-			94
Less: Provision of Impairment loss on other assets		(10,207	)		(1,580	)
* Down Payment for Purchase of Investment Properties	$	-		$	-

	December 31, 2017	June 30, 2017
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$5,059	$4,772
Short-term deposits	642	787
Trade accounts receivable, less allowance for doubtful accounts of $255 and $247	9,493	9,009
Other receivables	548	401
Inventories, less provision for obsolete inventory of $697 and $686	2,972	1,756
Prepaid expenses and other current assets	280	226
Asset held for sale	91	86
Total current assets	19,085	17,037
NON-CURRENT ASSETS:
Deferred tax asset	435	375
Investment properties, net	1,217	1,216
Property, plant and equipment, net	12,385	11,291
Other assets	1,950	1,922
Restricted term deposits	1,717	1,657
Total non-current assets	17,704	16,461
TOTAL ASSETS	$36,789	$33,498

LIABILITIES
CURRENT LIABILITIES:
Lines of credit	$2,189	$2,556
Accounts payable	3,342	3,229
Accrued expenses	3,985	3,043
Income taxes payable	292	233
Current portion of bank loans payable	356	260
Current portion of capital leases	250	228
Total current liabilities	10,414	9,549
NON-CURRENT LIABILITIES:
Bank loans payable, net of current portion	1,617	1,552
Capital leases, net of current portion	648	531
Deferred tax liabilities	328	295
Other non-current liabilities	46	44
Total non-current liabilities	2,639	2,422
TOTAL LIABILITIES	$13,053	$11,971

EQUITY
TRIO-TECH INTERNATIONAL’S SHAREHOLDERS' EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 3,548,055 shares issued outstanding as at December 31, 2017, and 3,523,055 shares as at June 30, 2017	$11,013	$10,921
Additional paid-in capital	3,208	3,206
Accumulated retained earnings	5,589	4,341
Accumulated other comprehensive income	2,508	1,633
Total Trio-Tech International shareholders' equity	22,318	20,101
Non-controlling interest	1,418	1,426
TOTAL EQUITY	$23,736	$21,527
TOTAL LIABILITIES AND EQUITY	$36,789	$33,498

	Three Months Ended		Six Months Ended
	Dec. 31,	Dec. 31,	Dec. 31,	Dec. 31,
	2017	2016	2017	2016
Revenue
Manufacturing	$3,973	$3,320	$8,738	$6,991
Testing services	4,936	4,070	9,541	8,227
Distribution	1,606	1,675	3,142	2,779
Others	37	39	76	78
	10,552	9,104	21,497	18,075
Cost of Sales
Cost of manufactured products sold	3,068	2,622	6,717	5,417
Cost of testing services rendered	3,251	2,658	6,390	5,472
Cost of distribution	1,409	1,501	2,777	2,492
Others	29	29	58	42
	7,757	6,810	15,942	13,423
Gross Margin	2,795	2,294	5,555	4,652

Operating Expenses:
General and administrative	1,727	1,776	3,566	3,519
Selling	252	180	431	365
Research and development	118	52	302	105
Write off of property, plant and equipment	-	8	11	8
Total operating expenses	2,097	2,016	4,310	3,997

Income from Operations	698	278	1,245	655

Other Income / (Expenses)
Interest expenses	(52)	(48)	(110)	(106)
Other income, net	42	203	200	313
Total other (expenses) / income	(10)	155	90	207

Income from Continuing Operations before Income Taxes	688	433	1,335	862

Income Tax Expenses	(13)	(67)	(55)	(150)

Income from continuing operations before non-controlling interest, net of tax	675	366	1,280	712

Discontinued Operations (Note 19)
Loss from discontinued operations, net of tax	(2)	(4)	(5)	(3)
NET INCOME	673	362	1,275	709

Less: net income attributable to non-controlling interest	-	52	27	96
Net Income Attributable to Trio-Tech International Common Shareholders	$673	$310	$1,248	$613

Amounts Attributable to Trio-Tech International Common Shareholders:
Income from continuing operations, net of tax	678	316	1,254	619
Loss from discontinued operations, net of tax	(5)	(6)	(6)	(6)
Net Income Attributable to Trio-Tech International Common Shareholders	$673	$310	$1,248	$613

Basic Earnings per Share:
Basic per share from continuing operations attributable to Trio-Tech International	$0.19	$0.09	$0.35	$0.18

Basic earnings per share from discontinued operations attributable to Trio-Tech International	$-	$-	$-	$-
Basic Earnings per Share from Net Income
Attributable to Trio-Tech International	$0.19	$0.09	$0.35	$0.18

Diluted Earnings per Share:
Diluted earnings per share from continuing operations attributable to Trio-Tech International	$0.18	$0.09	$0.34	$0.17
Diluted earnings per share from discontinued operations attributable to Trio-Tech International	$-	$-	$-	$-
Diluted Earnings per Share from Net Income
Attributable to Trio-Tech International	$0.18	$0.09	$0.34	$0.17

Weighted average number of common shares outstanding
Basic	3,548	3,513	3,548	3,513
Dilutive effect of stock options	245	56	222	39
Number of shares used to compute earnings per share diluted	3,793	3,569	3,770	3,552

	Common Stock		Additional Paid-in	Accumulated Retained	Accumulated Other Comprehensive	Non- Controlling
	Shares	Amount	Capital	Earnings	Income	Interest	Total
		$	$	$	$	$	$
Balance at June 30, 2017	3,523	10,921	3,206	4,341	1,633	1,426	21,527
Stock option expenses	-	-	2	-	-	-	2
Net income	-	-	-	1,248	-	27	1,275
Dividend declared by subsidiary	-	-	-	-	-	(123)	(123)
Exercise of options	15	41	-	-	-	-	41
Issue of restricted shares to service provider	10	51	-	-	-	-	51
Translation adjustment	-	-	-	-	875	88	963
Balance at Dec. 31, 2017	3,548	11,013	3,208	5,589	2,508	1,418	23,736

	Dec. 31, 2017 (Unaudited)	June 30, 2017
Beginning	$247	$270
Additions charged to expenses	-	65
Recovered	(1)	(78)
Write-off	-	(2)
Currency translation effect	9	(8)
Ending	$255	$247

	Loan Expiry	Loan Amount			Loan Amount
	Date	(RMB)			(U.S. Dollars)
Short-term loan receivables
JiangHuai (Project – Yu Jin Jiang An)	May 31, 2013		2,000			291
Less: allowance for doubtful receivables			(2,000	)		(291	)
Net loan receivables from property development projects			-			-

Long-term loan receivables
Jun Zhou Zhi Ye	Oct 31, 2016		5,000			728
Less: transfer – down-payment for purchase of investment property			(5,000	)		(728	)
Net loan receivables from property development projects			-			-

	Loan Expiry Date	Loan Amount (RMB)	Loan Amount (U.S. Dollars)
Short-term loan receivables
JiangHuai (Project – Yu Jin Jiang An)	May 31, 2013	2,000	325
Less: allowance for doubtful receivables		(2,000)	(325)
Net loan receivables from property development projects		-	-

Long-term loan receivables
Jun Zhou Zhi Ye	Oct 31, 2016	5,000	814
Less: transfer – down-payment for purchase of investment property		(5,000)	(814)
Net loan receivables from property development projects		-	-

	Investment Date	Investment Amount (RMB)	Investment Amount (U.S. Dollars)
Purchase of rental property – Property I - MaoYe	Jan 04, 2008	5,554	894
Purchase of rental property – Property II - JiangHuai	Jan 06, 2010	3,600	580
Purchase of rental property – Property III - Fu Li	Apr 08, 2010	4,025	648
Currency translation		-	(95)
Gross investment in rental property		13,179	2,027
Accumulated depreciation on rental property	Dec 31, 2017	(5,266)	(810)
Net investment in property – China		7,913	1,217

	Investment Date	Investment Amount (RM)	Investment Amount (U.S. Dollars)
Reclassification of Penang Property I	Dec 31, 2012	681	181
Gross investment in rental property		681	181

Accumulated depreciation on rental property	June 30, 2015	(310)	(83)
Reclassified as “Assets held for sale”	June 30, 2015	(371)	(98)
Net investment in rental property - Malaysia		-	-

	Dec. 31, 2017 (Unaudited)	June 30, 2017
Down payment for purchase of investment properties	$1,645	$1,645
Down payment for purchase of property, plant and equipment	219	280
Deposits for rental and utilities	140	139
Currency translation effect	(54)	(142)
Total	$1,950	$1,922

Entity with	Type of	Interest			Credit		Unused
Facility	Facility	Rate			Limitation		Credit
Trio-Tech International Pte. Ltd., Singapore	Lines of Credit	Ranging from 1.85%	to	5.5%	$	3,991	$	3,781
Universal (Far East) Pte. Ltd.	Lines of Credit	Ranging from 1.85%	to	5.5%	$	1,883	$	1,486
Trio-Tech Malaysia Sdn. Bhd.	Revolving credit Bank guarantee	Cost of Funds Rate +2% 0.15% per month			$	485	$	341

	Dec. 31, 2017 (Unaudited)	June 30, 2017
Payroll and related costs	$1,554	$1,568
Commissions	143	107
Customer deposits	481	218
Legal and audit	298	283
Sales tax	129	80
Utilities	95	142
Warranty	52	49
Accrued purchase of materials	352	33
Provision for re-instatement	289	295
Other accrued expenses	476	319
Currency translation effect	116	(51)
Total	$3,985	$3,043

	Dec. 31, 2017 (Unaudited)	June 30, 2017
Note payable denominated in RM for expansion plans in Malaysia, maturing in August 2024, bearing interest at the bank’s prime rate less 1.50% (5.25% and 5.25% at December 31, 2017 and June 30, 2017) per annum, with monthly payments of principal plus interest through August 2024, collateralized by the acquired building with a carrying value of $2,800 and 2,671, as at December 31, 2017 and June 30, 2017, respectively.	1,518	1,735

Note payable denominated in U.S. dollars for expansion plans in Singapore and its subsidiaries, maturing in April 2020, bearing interest at the bank’s lending rate (3.96% and 3.96% for December 31, 2017 and June 30, 2017) with monthly payments of principal plus interest through June 2020. This note payable is secured by plant and equipment with a carrying value of $215 and $224, as at December 31, 2017 and June 30, 2017, respectively.	363	196

Total bank loans payable	$1,881	$1,931

Current portion of bank loans payable	346	271
Currency translation effect on current portion of bank loans	10	(11)
Current portion of bank loans payable	356	260
Long term portion of bank loans payable	1,535	1,660
Currency translation effect on long-term portion of bank loans	82	(108)
Long term portion of bank loans payable	$1,617	$1,552

2018	$356
2019	373
2020	298
2021	244
2022	127
Thereafter	575
Total obligations and commitments	$1,973

2018	$260
2019	273
2020	274
2021	225
2022	236
Thereafter	544
Total obligations and commitments	$1,812

	Six months Ended Dec. 31	Net Revenue	Operating Income / (Loss)	Total Assets	Depr. and Amort.	Capital Expenditures

Manufacturing	2017	$8,738	$293	$8,837	$56	$37
	2016	$6,991	$(322)	$8,114	$99	$78

Testing Services	2017	9,541	853	23,591	913	1,558
	2016	8,227	790	18,325	765	686

Distribution	2017	3,142	220	621	-	-
	2016	2,779	134	651	2	-

Real Estate	2017	76	(19)	3,624	50	-
	2016	78	(6)	3,147	50	-

Fabrication *	2017	-	-	28	-	-
Services	2016	-	-	29	-	-

Corporate &	2017	-	(102)	88	-	-
Unallocated	2016	-	59	430	-	-

Total	2017	$21,497	$1,245	$36,789	$1,019	$1,595
	2016	$18,075	$655	$30,696	$916	$764

	Nine Months			Operating
	Ended			Income /			Total		Depr. And		Capital
	Mar. 31,	Revenue		(Loss)			Assets		Amort.		Expenditures
Manufacturing	2023	$	11,592	$	373		$	15,056	$	365	$	18
	2022	$	10,187	$	108		$	14,204	$	318	$	103

Testing Services	2023		17,709		1,445			26,522		3,218		4,033
	2022		13,983		999			24,030		1,884		1,040

Distribution	2023		4,855		633			1,283		-		-
	2022		8,038		1,107			1,601		-		-

Real Estate	2023		15		(76	)		1,872		58		-
	2022		23		(86	)		1,730		61		1

Corporate & Unallocated	2023		-		(276	)		641		-		26
	2022		-		(632	)		238		-		-

Total Company	2023	$	34,171	$	2,099		$	45,374	$	3,641	$	4,077
	2022	$	32,231	$	1,496		$	41,803	$	2,263	$	1,144

	Three Months			Operating
	Ended			Income /			Total		Depr. And			Capital
	Mar. 31,	Revenue		(Loss)			Assets		Amort.			Expenditures
Manufacturing	2023	$	2,963	$	(104	)	$	15,056	$	135		$	3
	2022	$	3,097	$	(145	)	$	14,204	$	110		$	8

Testing Services	2023		5,697		37			26,522		1,343			66
	2022		4,417		(124	)		24,030		633			341

Distribution	2023		1,179		151			1,283		-			-
	2022		3,620		576			1,601		(2	)		-

Real Estate	2023		3		(34	)		1,872		20			-
	2022		4		(35	)		1,730		20			-

Corporate & Unallocated	2023		-		(87	)		641		-			14
	2022		-		(402	)		238		-			-

Total Company	2023	$	9,842	$	(37	)	$	45,374	$	1,498		$	83
	2022	$	11,138		(130	)		41,803		761			349

	Three months Ended Dec. 31	Net Revenue	Operating Income / (Loss)	Total Assets	Depr. and Amort.	Capital Expenditures

Manufacturing	2017	$3,973	$107	$8,837	$28	$2
	2016	$3,320	$(229)	$8,114	$49	$67

Testing Services	2017	4,936	517	23,591	466	976
	2016	4,070	388	18,325	377	336

Distribution	2017	1,606	119	621	-	-
	2016	1,675	100	651	1	-

Real Estate	2017	37	(9)	3,624	25	-
	2016	39	(8)	3,147	25	-

Fabrication *	2017	-	-	28	-	-
Services	2016	-	-	29	-	-

Corporate &	2017	-	(36)	88	-	-
Unallocated	2016	-	27	430	-	-

Total	2017	$10,552	$698	$36,789	$519	$1,066
	2016	$9,104	$278	$30,696	$452	$403

	Three Months Ended		Six Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)

Revenue	$-	$-	$-	$-
Cost of sales	-	-	-	-
Gross margin	-	-	-	-

Operating expenses:
General and administrative	-	1	-	-
Total	-	1	-	-

Other expenses	(2)	(3)	(5)	(3)

Loss from discontinued operations	(2)	(4)	(5)	(3)

Less: Loss attributable to Non-controlling interest	(3)	(2)	(1)	(3)

Loss from discontinued operations	$(5)	$(6)	$(6)	$(6)

				Weighted Average
	Options			Grant-Date Fair Value

Non-vested at July 1, 2022		75,875		$	5.98
Granted		65,000			4.77
Vested		(49,125	)		-
Forfeited		(10,000	)		-
Non-vested at March 31, 2023		81,750		$	5.53

				Weighted Average
	Options			Grant-Date Fair Value

Non-vested at July 1, 2021		102,250		$	2.29
Granted		40,500			-
Vested		(46,875	)		-
Forfeited		-			-
Non-vested at March 31, 2022		95,875		$	2.29

	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value

Outstanding at July 1, 2017	127,500	$3.52	3.10	$187
Granted	-	-	-	-
Exercised	-	-	-	-
Forfeited or expired	-	-	-	-
Outstanding at December 31, 2017	127,500	$3.52	2.60	$445
Exercisable at December 31, 2017	79,375	$3.36	1.86	$290

	Options	Weighted Average Grant-Date Fair Value

Non-vested at July 1, 2017	48,125	$3.77
Granted	-	-
Vested	-	-
Forfeited	-	-
Non-vested at December 31, 2017	48,125	$3.77

	Options	Weighted Average Grant-Date Fair Value

Non-vested at July 1, 2016	38,750	$3.22
Granted	-	-
Vested	(8,750)	(3.10)
Forfeited	-	-
Non-vested at December 31, 2016	30,000	$3.26

Remainder of Fiscal 2023	$	36
Fiscal 2024		141
Fiscal 2025		141
Fiscal 2026		46
Fiscal 2027		16
	$	380

Components of Lease Balances	Mar. 31,
	2023
Assets
Gross financial sales receivable	$	23
Unearned finance income		(1	)
Financed sales receivable	$	22

Net financed sales receivables due within one year	$	22
Net financed sales receivables due after one year	$	-

	Operating Lease Liabilities			Finance Lease Liabilities
Fiscal Year
Remainder of Fiscal 2023	$	449		$	27
2024		1,376			105
2025		876			21
2026		531			-
Thereafter		67			-
Total future minimum lease payments	$	3,299		$	153
Less: amount representing interest		(240	)		(7	)
Present value of net minimum lease payments	$	3,059		$	146

Presentation on statement of financial position
Current		1,361			103
Non-Current		1,698			43

Revenue Components	Three Months Ended						Nine Months Ended
	Mar. 31,			Mar. 31,			Mar. 31,			Mar. 31,
	2023			2022			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Manufacturing		30.1	%		27.8	%		33.9	%		31.6	%
Testing Services		57.9	%		39.6	%		51.8	%		43.4	%
Distribution		12.0	%		32.5	%		14.2	%		24.9	%
Real Estate		0.0	%		0.1	%		0.0	%		0.1	%

Total		100.0.	%		100.0	%		100.0	%		100.0	%