UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended ~~December~~March 31, ~~2017~~2021

☐

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

For the Transition Period from ___ to ___

Commission File Number 1-14523

TRIO-TECH INTERNATIONAL

(Exact name of Registrant as specified in its 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)

Registrant's Telephone Number, Including Area Code: ~~818-787-7000~~(65) 6265 3300

Securities registered pursuant to Section 12(b) of the Act:

		Name of each exchange
Title of each class	Trading Symbol	On which registered
Common Stock, no par value	TRT	NYSE American

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”,~~filer,” “smaller reporting company”, and "emerging growth company" in Rule 12b2 of the Exchange Act. (Check one):

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~February~~May 1, ~~2018,~~2021, there were ~~3,553,055~~3,913,055 shares of the issuer’s Common Stock, no par value, outstanding.

TRIO-TECH INTERNATIONAL

~~INDEX~~

INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION, OTHER INFORMATION AND SIGNATURE

		Page
Part I.	Financial Information
~~Part I.~~	~~Financial Information~~
Item 1.	Financial Statements
~~Item 1.~~	~~Financial Statements~~
	(a) Condensed Consolidated Balance Sheets as of ~~December~~March 31, ~~2017~~2021 (Unaudited) and June 30, ~~2017~~2020	21
	(b) Condensed Consolidated Statements of Operations and Comprehensive Income for the Three ~~Months~~ and ~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2021 (Unaudited) and ~~December~~March 31, ~~2016~~2020 (Unaudited)	32
	(c) Condensed Consolidated Statements of ~~Shareholders~~Shareholders’ Equity for the ~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2021 (Unaudited) and ~~December~~the March 31, ~~2016~~2020 (Unaudited)	54
	(d) Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2021 (Unaudited) and ~~December~~March 31, ~~2016~~2020 (Unaudited)	65
	(e) Notes to Condensed Consolidated Financial Statements (Unaudited)	76
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2831
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4546
Item 4.	Controls and Procedures	4546

Part II.	Other Information

Item 1.	Legal Proceedings	4647
Item 1A.	Risk Factors	4647
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4647
Item 3.	Defaults upon Senior Securities	4647
Item 4.	Mine Safety Disclosures	4647
~~Item~~ Item 5.	Other Information	4647
Item 6.	Exhibits	4647

Signatures		4748

~~-i-~~

Table of Contents

FORWARD-LOOKING STATEMENTS

The discussions of Trio-Tech International’s (the “Company”) business and activities set forth in this Form 10-Q 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; public health issues related to the COVID-19 pandemic; the trade tension between U.S. and China; and other economic, financial and regulatory factors beyond the Company’s control. 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.

Table of Contents

~~-1-~~

PART I. FINANCIAL INFORMATION

~~ITEM~~ITEM 1. FINANCIAL STATEMENTS

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

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

	December 31, 2017	June 30, 2017	March 31, 2021	June 30, 2020
ASSETS	(Unaudited)		(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$5,059	$4,772	$5,178	$4,150
Short-term deposits	642	787	7,146	6,838
Trade accounts receivable, less allowance for doubtful accounts of $255 and $247	9,493	9,009
Trade accounts receivable, less allowance for doubtful accounts of $318 and $314, respectively			6,997	5,951
Other receivables	548	401	678	998
Inventories, less provision for obsolete inventory of $697 and $686	2,972	1,756
Inventories, less provision for obsolete inventories of $676 and $678, respectively			2,602	1,922
Prepaid expenses and other current assets	280	226	367	341
Asset held for sale	91	86
Total current assets	19,085	17,037	22,968	20,200
NON-CURRENT ASSETS:
Deferred tax asset	435	375
Deferred tax assets			337	247
Investment properties, net	1,217	1,216	688	690
Property, plant and equipment, net	12,385	11,291	9,690	10,310
Operating lease right-of-use assets			1,994	944
Other assets	1,950	1,922	1,709	1,609
Restricted term deposits	1,717	1,657	1,739	1,660
Total non-current assets	17,704	16,461	16,157	15,460
TOTAL ASSETS	$36,789	$33,498	$39,125	$35,660

LIABILITIES
CURRENT LIABILITIES:
Lines of credit	$2,189	$2,556	$184	$172
Accounts payable	3,342	3,229	2,997	2,590
Accrued expenses	3,985	3,043	3,467	3,005
Income taxes payable	292	233	348	344
Current portion of bank loans payable	356	260	435	370
Current portion of capital leases	250	228
Current portion of finance leases			216	231
Current portion of operating leases			659	477
Current portion of PPP loan			121	54
Total current liabilities	10,414	9,549	8,427	7,243
NON-CURRENT LIABILITIES:
Bank loans payable, net of current portion	1,617	1,552	1,732	1,836
Capital leases, net of current portion	648	531
Deferred tax liabilities	328	295
Finance leases, net of current portion			291	435
Operating leases, net of current portion			1,335	467
Income taxes payable			385	430
PPP loan, net of current portion			-	67
Other non-current liabilities	46	44	34	36
Total non-current liabilities	2,639	2,422	3,777	3,271
TOTAL LIABILITIES	$13,053	$11,971	$12,204	$10,514

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
Common stock, no par value, 15,000,000 shares authorized; 3,913,055 shares issued outstanding as at March 31, 2021 and 3,673,055 shares as at June 30, 2020, respectively			$12,178	$11,424
Paid-in capital			3,507	3,363
Accumulated retained earnings	5,589	4,341	8,441	8,036
Accumulated other comprehensive income	2,508	1,633
Accumulated other comprehensive income-translation adjustments			2,259	1,143
Total Trio-Tech International shareholders' equity	22,318	20,101	26,385	23,966
Non-controlling interest	1,418	1,426	536	1,180
TOTAL EQUITY	$23,736	$21,527	$26,921	$25,146
TOTAL LIABILITIES AND EQUITY	$36,789	$33,498	$39,125	$35,660

See notes to condensed consolidated financial statements

- 1 -

Table of Contents

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME / (LOSS)

UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

	Three Months Ended		Nine Months Ended
	Mar. 31,	Mar. 31,	Mar. 31,	Mar. 31,
	2021	2020	2021	2020
Revenue
Manufacturing	$3,130	$2,519	$9,324	$8,881
Testing services	3,504	3,741	10,018	12,018
Distribution	1,467	2,225	3,790	6,338
Real estate	11	16	22	49
	8,112	8,501	23,154	27,286
Cost of Sales
Cost of manufactured products sold	2,148	1,851	6,855	6,789
Cost of testing services rendered	2,651	2,937	7,651	9,046
Cost of distribution	1,234	1,909	3,142	5,454
Cost of real estate	19	18	58	54
	6,052	6,715	17,706	21,343

Gross Margin	2,060	1,786	5,448	5,943

Operating Expenses:
General and administrative	1,923	1,754	5,245	5,319
Selling	123	181	356	547
Research and development	79	79	277	280
Impairment loss on long-lived assets	-	139	-	139
Gain on disposal of property, plant and equipment	-	-	(1)	(24)
Total operating expenses	2,125	2,153	5,877	6,261

Loss from Operations	(65)	(367)	(429)	(318)

Other Income / (Expenses)
Interest expenses	(25)	(63)	(96)	(186)
Gain on sale of asset held for sale	-	-	-	1,172
Other income, net	273	440	627	590
Total other income	248	377	531	1,576

Income from Continuing Operations before Income Taxes	183	10	102	1,258

Income Tax (Expenses) / Benefits	(118)	8	(125)	(112)

Income / (loss) from continuing operations before non-controlling interest, net of tax	65	18	(23)	1,146

Discontinued Operations
Income / (loss) from discontinued operations, net of tax	1	(21)	(26)	(21)
NET INCOME / (LOSS)	66	(3)	(49)	1,125

Less: net (loss) / income attributable to non-controlling interest	(112)	(73)	(454)	356
Net Income Attributable to Trio-Tech International Common Shareholders	$178	$70	$405	$769

Amounts Attributable to Trio-Tech International Common Shareholders:
Income from continuing operations, net of tax	177	81	418	780
Income / (loss) from discontinued operations, net of tax	1	(11)	(13)	(11)
Net Income Attributable to Trio-Tech International Common Shareholders	$178	$70	$405	$769

Basic Earnings per Share:
Basic per share from continuing operations attributable to Trio-Tech International	$0.05	$0.02	$0.11	$0.21
Basic earnings per share from discontinued operations attributable to Trio-Tech International		$-	$-	$-
Basic Earnings per Share from Net Income
Attributable to Trio-Tech International	$0.05	$0.02	$0.11	$0.21

Diluted Earnings per Share:
Diluted earnings per share from continuing operations attributable to Trio-Tech International	$0.04	$0.02	$0.10	$0.21
Diluted earnings per share from discontinued operations attributable to Trio-Tech International	$-	$-	$-	$-
Diluted Earnings per Share from Net Income
Attributable to Trio-Tech International	$0.04	$0.02	$0.10	$0.21

Weighted average number of common shares outstanding
Basic	3,913	3,673	3,913	3,673
Dilutive effect of stock options	133	86	117	61
Number of shares used to compute earnings per share diluted	4,046	3,759	4,030	3,734

See notes to condensed consolidated financial statements.

~~-2-~~- 2 -

Table of Contents

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS AND COMPREHENSIVE~~COMPREHENSIVE INCOME

~~UNAUDITED (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)~~ / (LOSS)

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,
	2021	2020	2021	2020
Comprehensive (Loss)/ Income Attributable to Trio-Tech International Common Shareholders:

Net income / (loss)	$66	$(3)	$(49)	$1,125
Foreign currency translation, net of tax	(468)	(1,013)	1,115	(1,051)
Comprehensive (Loss)/ Income	(402)	(1,016)	1,066	74
Less: comprehensive (loss) / income attributable to non-controlling interest	(136)	(64)	(455)	376
Comprehensive (Loss)/ Income Attributable to Trio-Tech International Common Shareholders	$(266)	$(952)	$1,521	$(302)

See notes to condensed consolidated financial statements.

~~-3-~~- 3 -

Table of Contents

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE INCOME~~SHAREHOLDERS' EQUITY

~~UNAUDITED (IN~~(IN THOUSANDS)

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)





Nine months ended March 31, 2021

	Common Stock		Paid-in	Accumulated Retained	Accumulated Other Comprehensive	Non- controlling
	Shares	Amount	Capital	Earnings	Income	Interest	Total
		$	$	$	$	$	$
Balance at June 30, 2020	3,673	11,424	3,363	8,036	1,143	1,180	25,146
Stock option expenses	-	-	144	-	-	-	144
Net income / (loss)	-	-	-	405	-	(454)	(49)
Dividend declared by subsidiary	-	-	-	-	-	(189)	(189)
Exercise of stock option	240	754	-	-	-	-	754
Translation adjustment	-	-	-	-	1,116	(1)	1,115
Balance at Mar. 31, 2021	3,913	12,178	3,507	8,441	2,259	536	26,921

Nine months ended March 31, 2020

	Common Stock		Paid-in	Accumulated Retained	Accumulated Other Comprehensive	Non- controlling
	Shares	Amount	Capital	Earnings	Income	Interest	Total
		$	$	$	$	$	$
Balance at June 30, 2019	3,673	11,424	3,305	7,070	1,867	1,195	24,861
Stock option expenses	-	-	52	-	-		52
Net income	-	-	-	769	-	356	1,125
Dividend declared by subsidiary	-	-	-	-	-	(120)	(120)
Exercise of stock options	-	-	-	-	-	-	-
Translation adjustment	-	-	-	-	(1,071)	20	(1,051)
Balance at Mar. 31, 2020	3,673	11,424	3,357	7,839	796	1,451	24,867

See notes to condensed consolidated financial statements.

~~-4-~~- 4 -

Table of Contents

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~SHAREHOLDERS' EQUITY~~

~~(IN~~CASH FLOWS (IN THOUSANDS)

~~Six Months ended December 31, 2017~~

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

	Nine Months Ended
	Mar. 31,	Mar. 31,
	2021	2020
	(Unaudited)	(Unaudited)
Cash Flow from Operating Activities
Net (loss) / income	$(49)	$1,125
Adjustments to reconcile net income to net cash flow provided by operating activities
Depreciation and amortization	2,224	2,350
Impairment loss on long-lived assets	-	139
Stock compensation	144	52
Addition / (reversal) of provision for obsolete inventories	(2)	5
Bad debt (recovery) expenses	(15)	-
Allowance for doubtful debt	-	62
Accrued interest expense, net accrued interest income	(18)	(35)
Payment of interest portion of finance lease	(32)	(43)
Gain on sale of asset held for sale	-	(1,172)
Gain on sale of property, plant and equipment	(1)	(24)
Dividend income	(32)	-
Dividend received	32	-
Deferred tax benefit	(70)	(132)
Changes in operating assets and liabilities, net of acquisition effects
Trade accounts receivable	(1,013)	664
Other receivables	320	(248)
Other assets	(33)	101
Inventories	(624)	108
Prepaid expenses and other current assets	(76)	20
Accounts payable and accrued expenses	754	(449)
Income taxes payable	(44)	(29)
Operating lease liabilities	(565)	(398)
Net Cash Provided by Operating Activities	900	2,096

Cash Flow from Investing Activities
Proceeds from disposal of property, plant and equipment	-	39
Proceeds from sale of asset held for sale	-	1,261
Withdrawal of unrestricted deposit	1,166	-
Investment in unrestricted term deposits, net	(1,370)	(2,393)
Additions to property, plant and equipment	(621)	(848)
Net Cash Used in Investing Activities	(825)	(1,941)

Cash Flow from Financing Activities
Payment on lines of credit	(174)	(1,922)
Payment of bank loans	(296)	(372)
Payment of principal portion of finance leases	(192)	(251)
Dividends paid on non-controlling interest	(189)	(120)
Proceeds from bank loans	189	-
Proceeds from exercise stock options	754	-
Proceeds from lines of credit	187	2,090
Proceeds from principal of finance leases	-	279
Net Cash Used in Financing Activities	279	(296)

Effect of Changes in Exchange Rate	753	(431)

Net Increase/(Decrease) in Cash, Cash Equivalents, and Restricted Cash	1,107	(572)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	5,810	6,569
Cash, Cash Equivalents, and Restricted Cash at End of Period	$6,917	$5,997

Supplementary Information of Cash Flows
Cash paid during the period for:
Interest	$69	$186
Income taxes	$203	$124

Non-Cash Transactions
Finance lease of property, plant and equipment	$-	$279

~~Six Months ended December 31, 2016~~

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

Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash	5,178	4,370
Restricted Term-Deposits in Non-Current Assets	1,739	1,627
Total Cash, Cash Equivalents, and Restricted Cash Shown in the Statements of Cash Flows	$6,917	$5,997

See notes to condensed consolidated financial statements.

~~-5-~~

~~TRIO-TECH INTERNATIONAL AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~UNAUDITED (IN THOUSANDS)~~Amounts included in restricted deposits represent the amount of cash pledged to secure loans payable or trade financing granted by financial institutions and serve as collateral for public utility agreements such as electricity and water, and performance bonds related to customs duty payable. Restricted deposits are classified as non-current assets as they relate to long-term obligations and will become unrestricted only upon discharge of the obligations.

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

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

~~-6-~~- 5 -

Table of Contents

TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

~~NOTES~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

1. ORGANIZATION AND BASIS OF PRESENTATION

Trio-Tech International (“the Company” or “TTI” hereafter) was incorporated in fiscal year 1958 under the laws of the State of California. TTI provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia. In addition, TTI operates testing facilities in the United States. The Company also designs, develops, manufactures and markets a broad range of equipment and systems used in the manufacturing and testing of semiconductor devices and electronic components. In the ~~second~~third quarter of fiscal year ~~2018,~~2021, TTI conducted business in four business segments: Manufacturing, Testing Services, Distribution and Real Estate. TTI has subsidiaries in the U.S., Singapore, Malaysia, Thailand, Indonesia and China as follows:

	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% owned by Trio-Tech International Pte. Ltd.)	55%	Penang and Selangor, Malaysia
Trio-Tech (Kuala Lumpur) Sdn. Bhd.	55%	Selangor, Malaysia
(100% owned by Trio-Tech Malaysia Sdn. Bhd.)
Prestal Enterprise Sdn. Bhd.	76%	Selangor, Malaysia
(76% owned by Trio-Tech International Pte. Ltd.)
Trio-Tech (SIP) Co., Ltd. *	100%	Suzhou, China
Trio-Tech (Chongqing) Co. Ltd. *	100%	Chongqing, China
SHI International Pte. Ltd. (Dormant) (55% owned by Trio-Tech International Pte. Ltd)	55%	Singapore
PT SHI Indonesia (Dormant) (100% owned by SHI International Pte. Ltd.)	55%	Batam, Indonesia
Trio-Tech (Tianjin) Co., Ltd. *	100%	Tianjin, China

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

The accompanying ~~un-audited~~unaudited condensed consolidated financial statements have been prepared in accordance with ~~generally accepted accounting principles~~United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All significant inter-company accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements are presented in U.S. dollars. The accompanying condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the ~~six~~three and nine months ended ~~December~~March 31, ~~2017~~2021 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, ~~2018.~~2021. Certain accounting matters that generally require consideration of forecasted financial information were assessed regarding impacts from the COVID-19 pandemic as of March 31, 2021 and through the Quarterly Report dated May 14, 2021 using reasonably available information as of those dates. Those accounting matters assessed included, but were not limited to, allowance for doubtful accounts, the carrying value of long-lived tangible assets and the valuation allowances for tax assets. While the assessments resulted in no material impacts to the consolidated financial statements as of and for the quarter ended March 31, 2021, the Company believes the full impact of the pandemic remains uncertain and the Company will continue to assess if ongoing developments related to the pandemic may cause future material impacts to our consolidated financial statements. As of March 31, 2021, the Company had cash and cash equivalents and short-terms deposits totaling $12,324 and unused lines of credit of $5,520. We finance operations primarily through our existing cash balances, cash collected from operations, bank borrowings and capital lease financing. We believe these sources are sufficient to fund our operations for the foreseeable future. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report for the fiscal year ended June 30, ~~2017.~~2020.

The Company’s operating results are presented based on the translation of foreign currencies using the respective quarter’s average exchange rate.

- 6 -

Table of Contents

Basis of Presentation and Summary of Significant Accounting Policies

Leases-Lessee

Accounting Standards Codification ("ASC") Topic 842 introduces new requirements to increase transparency and comparability among organizations for leasing transactions for both lessees and lessors. It requires a lessee to record a right-of-use asset and a lease liability for all leases with terms longer than 12 months. These leases will be either finance or operating, with classification affecting the pattern of expense recognition.

The standard provided an alternative modified retrospective transition method. Under this method, the cumulative effect adjustment to the opening balance of retained earnings is recognized on the date of adoption (July 1, 2019). The Company adopted ASC 842as of July 1, 2019, and applied the alternative modified retrospective transition method requiring application of the new guidance to all leases existing at, or entered into on or after, the date of adoption i.e. July 1, 2019.

The Company applies the guidance in ASC 842 to individual leases of assets. When the Company receives substantially all the economic benefits from and directs the use of specified property, plant and equipment, transactions give rise to leases. The Company’s classes of assets include real estate leases.

Operating leases are included in operating lease right-of-use ("ROU") assets, current portion and long-term portion of operating leases in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Finance leases are included in plant and equipment, current portion and long-term portion of finance leases in our consolidated balance sheets.

The Company has elected the practical expedient within ASC 842 to not separate lease and non-lease components within lease transactions for all classes of assets. Additionally, the Company has elected the short-term lease exception for all classes of assets, does not apply the recognition requirements for leases of 12 months or less, and recognizes lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.

As part of applying the transition method, the Company has elected to apply the package of transition practical expedients within the new guidance. As required by the new standard, these expedients have been elected as a package and are consistently applied across the Company’s lease portfolio. Given this election, the Company need not reassess:

●

whether any expired or existing contracts are or contain leases;

●

the lease classification for any expired or existing leases;

●

treatment of initial direct costs relating to any existing leases.

When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and ROU assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads commensurate with the Company’s secured borrowing rate over a similar term. At each reporting period when there is a new lease initiated, the rates established for that quarter will be used.

In applying the alternative modified retrospective transition method, the Company measured lease liabilities at the present value of the sum of remaining minimum rental payments (as defined under ASC Topic 840). The present value of lease liabilities has been measured using the Company’s incremental borrowing rates as of July 1, 2019 (the date of initial application). Additionally, ROU assets for these operating leases have been measured as the initial measurement of application lease liabilities adjusted for reinstatement liabilities.

Leases-Lessor

For the Company as lessor, all our leases will continue to be classified as operating leases under the new standard. We do not expect the new standard to have a material effect on our financial statements and we do not expect a significant change in our leasing activities between now and adoption.

~~-7-~~

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Table of Contents

2. NEW ACCOUNTING PRONOUNCEMENTS

In October 2020, FASB issued ASU2020-10:Codification Improvements.This update contains amendments that improve the consistency of the Codification by including all disclosure guidance in the appropriate Disclosure Section (Section 50). Many of the amendments arose because the Board provided an option to give certain information either on the face of the financial statements or in the notes to financial statements and that option only was included in the Other Presentation Matters Section (Section 45) of the Codification. The ~~following~~option to disclose information in the notes to financial statements should have been codified in the Disclosure Section as well as the Other Presentation Matters Section (or other Section of the Codification in which the option to disclose in the notes to financial statements appears). The amendments in this update do not change GAAP and, therefore, are not expected to result in a significant change in practice. ~~Accounting Standards Update (“ASU”) have been adopted by~~The amendments are effective for the Company asfor fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Adoption shall be applied retrospectively. The Company is currently evaluating the impacts of ~~December 31, 2017.~~the provisions of ASU 2020-10 on its consolidated financial statements and related disclosures.

In December 2019, FASB issued ASU 2019-12 ASC Topic 740: Income Taxes: Simplifying Accounting for Income Taxes, which removes specific exceptions to the general principles in topic 740 in US GAAP. The amendments eliminate the need for an organization to analyze whether the specific exceptions apply in ~~ASU 2015-11 ASC Topic 330:Simplifying the Measurement~~a given period, improve financial statement preparers’ application of ~~Inventory(“ASC Topic 330”) specify that an entity should measure inventory at the lower of cost~~income tax related guidance and net realizable value. Net realizable value is the estimated selling prices in the ordinary course 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.simplify GAAP. The amendments ~~in ASC Topic 330~~ are effective for ~~public business~~all entities for fiscal years beginning after December 15, ~~2016,~~2020 and interim periods within those fiscal years. ~~A reporting entity should apply the amendments retrospectively to all periods presented.~~ The Company ~~has adopted~~is currently evaluating the impacts of the provisions of ASU ~~and concluded that the effectiveness of this update does not have a significant effect~~2019-12 on ~~the Company’s~~its consolidated financial ~~position or results of operations.~~statements and related disclosures.

In March 2020, FASB issued ASU 2020-04 ASC Topic 848: ~~The following amendments in~~Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~Accounting Standards Update (“ASU”) have not been adopted~~, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the ~~Company as~~discontinuation of ~~December 31, 2017.~~

the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The ~~amendments in 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 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,~~all entities as of March 12, 2020, and the Company ~~has not elected~~may elect to ~~early adopt.~~apply the amendments prospectively through December 31, 2022. The ~~effectiveness~~Company is currently evaluating the impacts of ~~this update is not expected to have a significant effect~~the provisions of ASU 2020-04 on ~~the Company’s presentation of~~its consolidated financial ~~position or results of operations.~~statements and related disclosures.

~~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 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 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 2017-04 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.

~~-8-~~

~~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~~In June 2016, FASB issued ASU 2016-13 ASC Topic 326: Financial Instruments — Credit Losses —~~Credit lossesare issued~~(“ASC Topic 326”) 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,~~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. ASC Topic 326 is effective for the Company for annual periods beginning after December 15, 2022. The Company is currently evaluating the potential impact of this accounting standard update on its consolidated financial statements.

In May 2021, FASB issued ASU 2021-04 ASC Topic 260: Earnings Per Share, Subtopic 470-50: Debt—Modifications and Extinguishments, ASC Topic 718: Compensation-Stock Compensation and Subtopic 815-40: Derivatives and Hedging- Contracts in Entity’s Own Equity for the Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) How an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; (2) How an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) How an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASC Topic 326 is effective for the Company for fiscal years beginning after December 15, ~~2020, and~~2021including 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, the Company has not yet determined if it will 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 2016-09 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,An entity should apply the amendments ~~are effective for annual periods beginning~~prospectively to modifications or exchanges occurring on or 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.

~~-9-~~

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~~the amendments. Early adoption is permitted for all entities, ~~by one year. Earlier application is permitted only~~including adoption in an interim period. If an entity elects to early adopt the amendments in an interim period, the guidance should be applied as of ~~annual reporting periods~~the beginning ~~after December 15, 2016, including~~of the fiscal year that includes that interim ~~reporting periods within that reporting~~ period. The Company ~~has not adopted these standards. As~~is currently evaluating 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 thepotential impact of this accounting standard update 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.consolidated financial statements.

Other new pronouncements issued but not yet effective until after ~~December~~March 31, ~~2017~~2021 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

- 8 -

Table of Contents

3. TERM DEPOSITS

	Dec. 31, 2017 (Unaudited)	June 30, 2017	Mar. 31, 2021 (Unaudited)	June 30, 2020

Short-term deposits	$598	$824	$7,285	$7028
Currency translation effect on short-term deposits	44	(37)	(139)	(190)
Total short-term deposits	642	787	7,146	6,838
Restricted term deposits	1,660	1,722	1,772	1,712
Currency translation effect on restricted term deposits	57	(65)	(33)	(52)
Total restricted term deposits	1,717	1,657	1,739	1,660
Total Term deposits	$2,359	$2,444
Total term deposits			$8,885	$8,498

Restricted deposits represent the amount of cash pledged to secure loans payable ~~granted by~~to financial institutions and serve as collateral for public utility agreements such as electricity and water, and performance bonds related to customs duty payable. Restricted deposits are classified as non-current assets, as they relate to long-term obligations and will become unrestricted only upon discharge of the obligations. Short-term deposits represent bank deposits, ~~that~~which do not qualify as cash equivalents.

~~-10-~~

4. TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable ~~consists of~~are customer obligations due under normal trade terms. ~~Although~~The Company performs continuing credit evaluations of its customers’ financial conditions, and although management generally does not require collateral, letters of credit may be required from the customers in certain circumstances. ~~Management periodically performs credit evaluations of customers’ financial conditions.~~

Senior management reviews accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible. Management includes any accounts receivable balances that are determined to be uncollectible in the allowance for doubtful accounts. After all reasonable attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, management believed the allowance for doubtful accounts as of ~~December~~March 31, ~~2017~~2021 and June 30, ~~2017~~2020 was adequate.

The following table represents the changes in the allowance for doubtful accounts:

	Dec. 31, 2017 (Unaudited)	June 30, 2017	Mar. 31, 2021 (Unaudited)	June 30, 2020
Beginning	$247	$270	$314	$263
Additions charged to expenses	-	65	-	351
Recovered	(1)	(78)	-	(284)
Write-off	-	(2)	(15)	(9)
Currency translation effect	9	(8)	19	(7)
Ending	$255	$247	$318	$314

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Table of Contents

5. LOANS RECEIVABLE FROM PROPERTY DEVELOPMENT PROJECTS

The following table presents Trio-Tech (Chongqing) Co. Ltd ~~(‘TTCQ’~~(“TTCQ”)’s loan receivable from property development projects in China as of ~~December 31, 2017. The exchange rate is based on the date published by the Monetary Authority of Singapore as of~~ March 31, ~~2015, since the net loan receivable was “nil” as at December 31, 2017.~~2021.

	Loan Expiry Date	Loan Amount (RMB)	Loan Amount (U.S. Dollars)	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	May 31, 2013		2,000			304
Less: allowance for doubtful receivables		(2,000)	(325)			(2,000	)		(304	)
Net loan receivables from property development projects		-				-			-

Long-term loan receivables
Jun Zhou Zhi Ye	Oct 31, 2016	5,000	814	Oct. 31, 2016		5,000			760
Less: transfer – down-payment for purchase of investment property		(5,000)	(814)			(5,000	)		(760	)
Net loan receivables from property development projects		-				-			-

The ~~following table presents TTCQ’s~~short-term loan receivable from property development projects in China as of June 30, 2017. The exchange rate is based on the date published by the Monetary Authority of Singapore as of March 31, 2015, since the net loan receivable was “nil” as at June 30, 2017.

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
  -
  -

~~-11-~~

~~On November 1, 2010,~~receivables amounting to renminbi (“RMB”) 2,000, or approximately $304, arose due to TTCQ ~~entered~~entering into a Memorandum Agreement with JiangHuai Property Development Co. Ltd. (“JiangHuai”) to invest in their property development projects (Project - Yu Jin Jiang An) located in Chongqing City, ~~China. Due to the short-term nature~~China in fiscal 2011. Based on TTI’s financial policy, a provision for doubtful receivables of $294 on the investment in JiangHuai was recorded during fiscal 2014. TTCQ did not generate other income from JiangHuai for the ~~amount was classified as a loan based on ASC Topic 310-10-25 Receivables, amounting to Renminbi (“RMB”) 2,000,~~quarter ended March 31, 2021 or ~~approximately $325. The loan was renewed, but expired on May 31, 2013.~~for the fiscal year ended June 30, 2020. TTCQ is in the legal process of recovering the outstanding amount of $325. TTCQ did not generate other income from JiangHuai for the quarter ended December 31, 2017, or for the fiscal year ended June 30, 2017. Based on TTI’s financial policy, a provision for doubtful receivables of $325 on the investment in JiangHuai was recorded during the second quarter of fiscal 2014 based on TTI’s financial policy. TTCQ is in the legal process of recovering the outstanding amount of $325.approximately $304.

~~On November 1, 2010,~~The loan amounting to RMB 5,000, or approximately $760, arose due to TTCQ ~~entered~~entering into a Memorandum Agreement with JiaSheng Property Development Co. Ltd. (“JiaSheng”) to invest in their property development projects (Project B-48 Phase 2) located in Chongqing City, China. Due to the short-term nature of the investment, the amount was classified as a loan based on ASC Topic 310, amounting to RMB 5,000, or approximately $814 based on the exchange rate as at March 31, 2015 published by the Monetary Authority of Singapore.China in fiscal 2011. The amount was unsecured and repayable at the end of the term. The loan was renewed in November 2011 for a period of one year, which expired on October 31, 2012 and was again renewed in November 2012 and expired in November 2013. On November 1, 2013 the loan was transferred by JiaSheng to, and is now payable by, Chong Qing Jun Zhou Zhi Ye Co. Ltd. (“Jun Zhou Zhi Ye”), and the transferred agreement expired on October 31, 2016. Prior to the second quarter of fiscal year 2015, the loan receivable was classified as a long-term receivable. The book value of the loan receivable approximates its fair value. ~~In the second quarter of~~During fiscal year 2015, the loan receivable was transferred to down payment for purchase of investment property that is being developed in the Singapore Themed Resort Project ~~(see~~(See Note 8).

6. INVENTORIES

Inventories consisted of the following:

	Dec. 31, 2017 (Unaudited)	June 30, 2017	Mar. 31, 2021 (Unaudited)	June 30, 2020

Raw materials	$1,107	$1,047	$1,157	$1,281
Work in progress	1,890	1,045	1,785	968
Finished goods	598	365	281	422
Currency translation effect			55	(71)
Less: provision for obsolete inventories	(697)	(686)	(676)	(678)
Currency translation effect	74	(15)
	$2,972	$1,756	$2,602	$1,922

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

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~~

During the fourth quarter of 2015, Trio-Tech (Malaysia) Sdn. Bhd. (‘TTM’) planned to sell its factory building in Penang, Malaysia. In May 2015, TTM was approached by a potential buyer to purchase the factory building. Negotiation is still ongoing and is subject to approval by Penang Development Corporation. In accordance with ASC Topic 360, during fiscal year 2015, the property was reclassified from investment property, which had a net book value of RM 371, or approximately $92, to assets held for sale, since there was an intention to sell the factory building. The net book values of the building were RM371, or approximately $91, as at December 31, 2017 and RM 371, or approximately $86, as at June 30, 2017. As at end of December 31, 2017, management is still actively looking for a suitable buyer.

	Mar. 31, 2021 (Unaudited)	June 30, 2020

Beginning	$678	$673
Additions charged to expenses	6	26
Usage – disposition	(23)	(8)
Currency translation effect	15	(13)
Ending	$676	$678

~~-12-~~- 10 -

Table of Contents

8.7. ~~INVESTMENTS~~

~~Investments were nil as at December 31, 2017 and June 30, 2017.~~

During the second quarter of fiscal year 2011, the Company entered into a joint-venture agreement with JiaSheng to develop real estate projects in China. The Company invested RMB 10,000, or approximately $1,606 based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore, for a 10% interest in the newly formed joint venture, which was incorporated as a limited liability company, Chong Qing Jun Zhou Zhi Ye Co. Ltd. (the “joint venture”), in China. The agreement stipulated that the Company would nominate two of the five members of the Board of Directors of the joint venture and had the ability to assign two members of management to the joint venture. The agreement also stipulated that the Company would receive a fee of RMB 10,000, or approximately $1,606 based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore, for the services rendered in connection with obtaining priority to bid in certain real estate projects from the local government. Upon signing of the agreement, JiaSheng paid the Company RMB 5,000 in cash, or approximately $803 based on the exchange rate published by the Monetary Authority of Singapore as of March 31, 2014. The remaining RMB 5,000, which was not recorded as a receivable as the Company considered the collectability uncertain, would be paid over 72 months commencing in 36 months from the date of the agreement when the joint venture secured a property development project stated inside the joint venture agreement. The Company considered the RMB 5,000, or approximately $803 based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore, received in cash from JiaSheng, the controlling venturer in the joint venture, as a partial return of the Company’s initial investment of RMB10,000, or approximately $1,606 based on the exchange rate as of March 31, 2014 published by the Monetary Authority of Singapore. Therefore, the RMB 5,000 received in cash was offset against the initial investment of RMB 10,000, resulting in a net investment of RMB 5,000 as of March 31, 2014. The Company further reduced its investments by RMB 137, or approximately $22, towards the losses from operations incurred by the joint-venture, resulting in a net investment of RMB 4,863, or approximately $781 based on exchange rates published by the Monetary Authority of Singapore as of March 31, 2014.

“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 had 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.~~

~~-13-~~

~~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.~~

9. INVESTMENT PROPERTIES

The following table presents the Company’s investment in properties in China as of ~~December~~March 31, ~~2017.~~2021. The exchange rate is based on the market rate as of ~~December~~March 31, ~~2017.~~2021.

	Investment Date	Investment Amount (RMB)	Investment Amount (U.S. Dollars)	Investment Date / Reclassification 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 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	Jan. 06, 2010	3,600	580
Purchase of rental property – Property III - Fu Li	Apr 08, 2010	4,025	648
Purchase of rental property – Property III - FuLi				Apr. 08, 2010	4,025	648
Currency translation		-	(95)		-	(55)
Gross investment in rental property		13,179	2,027		9,649	1,474
Accumulated depreciation on rental property	Dec 31, 2017	(5,266)	(810)	Mar. 31, 2021	(6,920)	(1,053)
Reclassified as “Assets held for sale”- Mao Ye Property				July 01, 2018	2,822	410
Reclassification from “Assets held for sale”- Mao Ye Property				Mar. 31, 2019	(1,029)	(143)
					(5,127)	(786)
Net investment in property – China		7,913	1,217		4,522	688

The following table presents the Company’s investment in properties in China as of June 30, ~~2017.~~2020. The exchange rate is based on the market rate as of June 30, ~~2017.~~2020.

	Investment Date	Investment Amount (RMB)	Investment Amount (U.S. Dollars)	Investment Date / Reclassification 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 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	Jan. 06, 2010	3,600	580
Purchase of rental property – Property III - Fu Li	Apr 08, 2010	4,025	648
Purchase of rental property – Property III - FuLi				Apr. 08, 2010	4,025	648
Currency translation		-	(178)		-	(166)
Gross investment in rental property		13,179	1,944		9,649	1,363
Accumulated depreciation on rental property	June 30, 2017	(4,937)	(728)	June 30, 2020	(6,558)	(940)
Reclassified as “Assets held for sale”-Mao Ye Property				July 01, 2018	2,822	410
Reclassification from “Assets held for sale”- Mao Ye Property				Mar. 31, 2019	(1,029)	(143)
					(4,765)	(673)
Net investment in property – China		8,242	1,216		4,884	690

The following table presents the Company’s investment properties in Malaysia as of December 31, 2017 and June 30, 2017. The exchange rate is based on the exchange rate as of June 30, 2015 published by the Monetary Authority of Singapore.

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
  -
  -

~~-14-~~- 11 -

Table of Contents

Rental Property I –- Mao Ye Property

In fiscal 2008, TTCQ purchased an office in Chongqing, China from MaoYe Property Ltd. (“MaoYe”), for a total cash purchase price of RMB 5,554, or approximately $894. TTCQ identified a new tenant and signed a new rental agreement (653 square meters at a monthly rental of RMB 39, or approximately $6) on August 1, 2015. This rental agreement provides for a rent increase of 5% every year on January 31, commencing with 2017 until the rental agreement expires on July 31, 2020. TTCQ signed a new rental agreement (451 square meters at a monthly rental of RMB 27, or approximately $4) on January 29, 2016. This rental agreement provides for a rent increase of 5% every year on January 29, commencing with 2017 until the rental agreement expires on February 28, 2019.

Property purchased from MaoYe generated a rental income of ~~$26~~$6 and ~~$53~~$9 during the three and nine months ended March 31, 2021 as compared to $8 and $24 for the same periods, respectively, in last fiscal year.

Depreciation expense for MaoYe was $4 and $11 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively as compared to $4 and ~~$26 and $52~~$12 for the same periods in the last fiscal ~~year, respectively.~~year.

Rental Property II - JiangHuai

In fiscal year 2010, TTCQ purchased eight units of commercial property in Chongqing, China from Chongqing JiangHuai Real Estate Development Co. Ltd. (“JiangHuai”) for a total purchase price of RMB 3,600, or approximately $580. TTCQ rented all of these commercial units to a third party until the agreement expired in January 2012. TTCQ then rented three of the eight commercial units to another party during the fourth quarter of fiscal year 2013 under a rental agreement that expired on March 31, 2014. Currently all the units are vacant and TTCQ is working with the developer to find a suitable buyer to purchase all the commercial units. TTCQ has yet to receive the title deed for these ~~properties; however,~~properties. TTCQ ~~has the vacancies in possession with the exception of two units, which are in the process of clarification. TTCQ is~~was in the legal process ~~to obtain~~of obtaining the title deed ~~which~~until the developer encountered cash flow difficulties in recent years. Since fiscal year 2018, JiangHuai has been under liquidation and is ~~dependent on JiangHuai completing~~now undergoing asset distribution. Nonetheless, this is not expected to affect the ~~entire project. In August 2016, TTCQ performed a valuation on one~~property’s market value but, in view of the ~~commercial units~~COVID-19 pandemic and ~~its market value was higher than~~current economic situation, it is likely to be more tedious and time-consuming for the ~~carrying amount.~~Court in their execution of the sale.

Property purchased from JiangHuai did not generate any rental income ~~during~~for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2021 and 2020.

Depreciation expense for JiangHuai was $6 and $19 for the three and nine months ended March 31, 2021, respectively as compared to $6 and $20 for the same periods in ~~the~~ last fiscal ~~year.~~year.

~~Other Properties~~Rental Property III – ~~Fu Li~~FuLi

In fiscal 2010, TTCQ entered into a Memorandum of Agreement with Chongqing FuLi Real Estate Development Co. Ltd. (“FuLi”) to purchase two commercial properties totaling 311.99 square meters (“office space”) located in Jiang Bei District Chongqing. ~~Although TTCQ currently rents its office premises from a third party, it intends to use the office space as its office premises.~~ The total purchase price committed and paid was RMB 4,025, or approximately ~~$649.~~$648. The development was completed, ~~and~~ the property was handed over ~~during~~to TTCQ in April 2013 and the title deed was received during the third quarter of fiscal 2014.

~~The~~One of the two commercial properties ~~were~~was leased by TTCQ to a third ~~parties~~party under a two ~~separate rental agreements, one~~years lease to rent out the 154.49 square meter at a monthly rate of RMB9, or approximately $1, commencing from May 21, 2021 to May 23, 2023.

For the other leased property, TTCQ renewed the lease agreement to rent out the 161 square meter space at a monthly rate of RMB 10, or approximately $1, from November 1, 2019 to October 31, 2020. After which, ~~will expire in~~TTCQ renewed the lease agreement at a monthly rate of RMB 10, or approximately $1, from November 1, 2020 to April ~~2019 which provides for a rent increase of 5% every year on~~30, 2021 and May 1, ~~commencing with 2017 until the rental agreement expires on April 30, 2019 and the other of which will expire in March~~2021 to October 31, ~~2018 which provides for a rent increase of 5% every year on April 1, commencing with 2016 until the rental agreement will expire on March 31, 2018.~~2021.

Properties purchased from ~~Fu Li~~FuLi generated a rental income of ~~$11~~$5 and ~~$23~~$12 for the three and nine months ended March 31, 2021, respectively, as compared to $8 and $25 for the same periods in the last fiscal year.

Depreciation expense for FuLi was $7 and $22 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, ~~while it generated a rental income of $13~~as compared to $7 and ~~$26, respectively,~~$20 for the same periods in the last fiscal year.

~~Penang Property I~~

During the fourth quarter of 2015, TTM planned to sell its factory building in Penang, Malaysia. In accordance to ASC Topic 360, the property was reclassified from investment property, which had a net book value of RM 371, or approximately $98, to assets held for sale since there was an intention to sell the factory building. In May 2015, TTM was approached by a potential buyer to purchase the factory building. On September 14, 2015, application to sell the property was rejected by Penang Development Corporation (‘PDC’). The rejection was based on the business activity of the purchaser not suitable to the industry that is being promoted on the said property. PDC made an offer to purchase the property, which was not at the expected value and the offer expired on March 28, 2016. However, management is still actively looking for a suitable buyer. As of December 31, 2017 the net book value was RM 369, or approximately $91.

~~-15-~~

Summary

Total rental income for all investment properties in China was ~~$37~~$11 and ~~$76~~$21 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, as compared to $16 and ~~was $39 and $78, respectively,~~$49 for the same periods, respectively, in the last fiscal year.

Depreciation expenses for all investment properties in China were ~~$24~~$17 and ~~$49~~$52 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, as compared to $17 and ~~were $24 and $47, respectively, for the~~$52 same periods, respectively, in the last fiscal ~~year~~year.

~~10.~~

- 12 -

Table of Contents

8. OTHER ASSETS

Other assets consisted of the following:

	Dec. 31, 2017 (Unaudited)	June 30, 2017	Mar. 31, 2021 (Unaudited)	June 30, 2020
Down payment for purchase of investment properties	$1,645
Down payment for purchase of investment properties *			$1,645
Down payment for purchase of property, plant and equipment	219	280	82	8
Deposits for rental and utilities	140	139	117	171
Currency translation effect	(54)	(142)	(135)	(215)
Total	$1,950	$1,922	$1,709	$1,609

~~11.~~

Down payment for purchase of investment properties included:

	RMB	U.S. Dollars
Original Investment (10% of Jun Zhou 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	814
Interest Receivable	1,250	200
Less: Impairment of Interest	(906)	(150)
Transferred to Down Payment (Note *b)	5,344	864
* Down Payment for Purchase of Investment Properties	$10,207	$1,645

On December 2, 2010, the Company signed a Joint Venture agreement (“agreement”) with Jia Sheng Property Development Co. Ltd. (“Developer”) to form a new company, Jun Zhou Co., Limited (“Joint Venture” or “Jun Zhou”) to joint develop the “Singapore Themed Park” project (the “project”), where the Company paid RMB 10 million for the 10% investment in the joint venture. The Developer paid the Company a management fee of RMB 5 million in cash upon signing of the agreement with a remaining fee of RMB 5 million payable upon fulfilment of certain conditions in accordance with the agreement. The Company further reduced its investment by RMB 137, or approximately $22, towards the losses from operations incurred by the joint venture.

On October 2, 2013, the Company disposed of its entire 10% interest in the joint venture. The Company recognized the disposal of its 10% investment in Jun Zhou based on the recorded net book value of RMB 5 million or equivalent to U.S. $803K, from net considerations paid, in accordance with U.S. GAAP under ASC Topic 845Non-monetary Consideration. It’s presented under “Other Assets” as non-current assets to defer the recognition of the gain on the disposal of the 10% interest in joint venture investment until such time that the consideration is paid, so that the gain can be ascertained.

Amounts of RMB 5,000, or approximately $760, as disclosed in Note 5, plus the interest receivable on long term loan receivable of RMB 1,250, or approximately $200, and impairment on interest of RMB 906, or approximately $150.

The shop lots are to be delivered to TTCQ upon completion of the construction of the shop lots in Singapore Themed Resort Project. The initial targeted date of completion was December 31, 2016. Based on discussion with the developers, the completion date is currently estimated to be December 31, 2022. The delay was primarily due to the time needed by the developers to work with various parties to inject sufficient funds into this project.

- 13 -

Table of Contents

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~~.maturities.

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

As of ~~December~~March 31, ~~2017,~~2021, the Company had certain lines of credit that are collateralized by restricted deposits.

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 1.85% to 5.5%, SIBOR rate +1.25% and LIBOR rate +1.30%	-	$4,230	$4,230
Universal (Far East) Pte. Ltd.	Lines of Credit	Ranging from 1.85% to 5.5%	-	$1,113	$929
Trio-Tech Malaysia Sdn. Bhd.	Revolving Credit	Cost of Funds Rate +2%	-	$361	$361

As of June 30, 2020, the Company had certain lines of credit that are collateralized by restricted deposits.

Entity with	Type of	Interest	Expiration	Credit	Unused	Type of	Interest	Expiration	Credit	Unused
Facility	Facility	Rate	Date	Limitation	Credit	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	Lines of Credit	Ranging from 1.85% to 5.5%, SIBOR rate +1.25% and LIBOR rate +1.30%	-	$4,806
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
Universal (Far East) Pte. Ltd.						Lines of Credit	Ranging from 1.85% to 5.5%	-	$359	$187
Trio-Tech Malaysia Sdn. Bhd.						Revolving Credit	Cost of Funds Rate +2%	-	$350

~~As of June 30, 2017, the Company had certain lines of credit that are collateralized by restricted deposits.~~

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

~~-16-~~

~~12.~~10. ACCRUED EXPENSES

Accrued expenses consisted of the following:

	Dec. 31, 2017 (Unaudited)	June 30, 2017	Mar. 30, 2021 (Unaudited)	June 30, 2020
Payroll and related costs	$1,554	$1,568	$1,131	$1,185
Commissions	143	107	76	104
Customer deposits	481	218	38	30
Legal and audit	298	283	284	315
Sales tax	129	80	(2)	19
Utilities	95	142	78	80
Warranty	52	49	12	12
Accrued purchase of materials	352	33
Accrued purchase of materials and property, plant and equipment			549	186
Provision for re-instatement	289	295	290	300
Deferred income			85	88
Contract liabilities			584	476
Other accrued expenses	476	319	256	287
Currency translation effect	116	(51)	86	(77)
Total	$3,985	$3,043	$3,467	$3,005

~~13.~~

- 14 -

Table of Contents

11. WARRANTY ACCRUAL

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

	Dec. 31, 2017 (Unaudited)	June 30, 2017	Mar. 31, 2021 (Unaudited)	June 30, 2020
Beginning	$48	$76	$12	$39
Additions charged to cost and expenses	19	46	2	1
Utilization/reversal	(15)	(73)
Reversal			(2)	(27)
Currency translation effect	1	(1)	-	(1)
Ending	$53	$48	$12	$12

~~14.~~12. BANK LOANS PAYABLE

Bank loans payable consisted of the following:

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

	Mar. 31, 2021 (Unaudited)	June 30, 2020
Note payable denominated in RM for expansion plans in Malaysia, maturing in August 2028, bearing interest at the bank’s prime rate less 2.00% (3.85% for both March 31, 2021 and June 30, 2020) per annum, with monthly payments of principal plus interest through August 2028, collateralized by the acquired building with a carrying value of $2,591 and $2,543, as at March 31, 2021 and June 30, 2020, respectively.	1,982	2,206

Financing arrangement at fixed interest rate 3.2% per annum, with monthly payments of principal plus interest through July 2025.	185	-
Total bank loans payable	$2,167	$2,206

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

~~-17-~~

Current portion of bank loans payable	424	384
Currency translation effect on current portion of bank loans	11	(14)
Current portion of bank loans payable	435	370
Long-term portion of bank loans payable	1,675	1,911
Currency translation effect on long-term portion of bank loans	57	(75)
Long-term portion of bank loans payable	$1,732	$1,836

Future minimum payments (excluding interest) as at ~~December~~March 31, ~~2017(unaudited)~~2021 were as follows:

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

Remainder of fiscal 2021	$108
2022	439
2023	457
2024	461
2025	208
Thereafter	494
Total obligations and commitments	$2,167

- 15 -

Table of Contents

Future minimum payments (excluding interest) as at June 30, ~~2017~~2020 were as follows:

2018	$260
2019	273
2020	274
2021	225	$370
2022	236	384
2023		400
2024		403
2025		158
Thereafter	544	491
Total obligations and commitments	$1,812	$2,206

~~15.~~13. COMMITMENTS AND CONTINGENCIES

~~TTM has~~The Company had capital commitments for the purchase of equipment and other related infrastructure costs amounting to RM 409, or approximately $101, based on the exchange rate as at December 31, 2017 published by the Monetary Authority of Singapore, as compared to the capital commitment as at June 30, 2017 amounting to RM 684, or approximately $159.

~~Trio-Tech (Tianjin) Co. Ltd.~~ in China ~~has capital commitments~~and Malaysia for the purchase of equipment and other related infrastructure costs amounting to RMB ~~5,174,~~1,469, or approximately ~~$796, based on the exchange rate~~$224, and MYR 5, or approximately $1, respectively as ~~on December~~at March 31, ~~2017 published by the Monetary Authority of Singapore,~~2021, as compared to ~~the~~no capital commitment as at June 30, ~~2017 amounting to RMB 1,260, or approximately $186.~~2020.

Deposits with banks in China are not insured by the local government or agency, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote.

The Company is, from time to time, the subject of litigation claims and assessments arising out of matters occurring in its normal business operations. In the opinion of management, resolution of these matters will not have a material adverse effect on the Company’s financial statements.

~~16.~~14. BUSINESS SEGMENTS

~~In fiscal year 2018,~~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 ~~Company operates~~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 ~~four segments;~~ the ~~testing~~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 ~~industry (which performs structural and electronic tests of semiconductor devices),~~to the designing and manufacturing of equipment (which equipment tests the structural integrity of integrated circuits and other products), distribution of various products from other manufacturers in Singapore and Southeast Asia and the real estate segment in China.customer.

The revenue allocated to individual countries was based on where the customers were located. The allocation of the cost of equipment, the current year investment in new equipment and depreciation expense have been made based on ~~the basis of~~ the primary purpose for which the equipment was acquired.

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.

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 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 sale of spare parts. 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.

- 16 -

Table of Contents

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

●

whether 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. The Company has concluded that the warranty provided for standard products are assurance type warranties and are not separate performance obligations. Warranty provided for customized products are service warranties and are separate performance obligations. Transaction prices are allocated to this performance obligation using cost plus method. The portion of revenue associated with warranty service is deferred and recognized as revenue over the warranty period, as the customer simultaneously receives and consumes the benefits of warranty services provided by the Company.

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 that may indicate potential variable consideration include warranty, late delivery penalty and reimbursement to solve non-conformance issues for rejected products. Based on historical and recent data trends, it is concluded that these terms of the contract 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, particularly equipment, industrial products and components by manufacturers mainly from the U.S., Europe, Taiwan and Japan. The Company recognizes revenue from product sales at a point in time when the Company has satisfied its performance obligation by transferring control of the product to the customer. The Company uses judgment to evaluate whether 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.

All inter-segment revenue was from the manufacturing segment to the testing and distribution segments. Total inter-segment revenue was ~~$587 and $681~~$194 for the three ~~and six~~ months ended ~~December~~March 31, ~~2017, respectively,~~2021, as compared to ~~$20 and $302, respectively,~~$373 for the same ~~periods~~period in the last fiscal year. Corporate assets mainly consisted of cash and prepaid expenses. Corporate expenses mainly consisted of stock option expenses, salaries, insurance, professional expenses and directors' fees. Corporate expenses are allocated to the four segments. The following segment information table includes segment operating income or loss after including the corporate expenses allocated to the segments, which gets eliminated in the consolidation.

~~-18-~~- 17 -

Table of Contents

The following segment information is unaudited for the nine months ended March 31, 2021 and March 31, 2020:

Business Segment Information:

	Nine Months Ended Mar. 31,	Net Revenue	Operating Income / (Loss)	Total Assets	Depr. And Amort.	Capital Expenditures
Manufacturing	2021	$9,324	277	12,576	310	214
	2020	$8,881	(201)	9,871	297	124

Testing Services	2021	10,018	(993)	21,364	1,859	407
	2020	12,018	(540)	22,332	1,999	724

Distribution	2021	3,790	407	983	-	-
	2020	6,338	599	869	3	-

Real Estate	2021	22	(84)	3,784	55	-
	2020	49	(82)	3,584	51

Fabrication	2021	-	-	-	-	-
Services *	2020	-	-	23	-	-

Corporate &	2021	-	(36)	418	-	-
Unallocated	2020	-	(94)	117	-	-

Total Company	2021	$23,154	(429)	39,125	2,224	621
	2020	$27,286	$(318)	$36,796	$2,350	$848

The following segment information is unaudited for the ~~period referenced below:~~three months ended March 31, 2021 and March 31, 2020:

Business Segment Information:

	Six months Ended Dec. 31	Net Revenue	Operating Income / (Loss)	Total Assets	Depr. and Amort.	Capital Expenditures
							Three Months Ended Mar. 31,	Net Revenue	Operating Income / (Loss)	Total Assets	Depr. And Amort.	Capital Expenditures
Manufacturing	2017	$8,738	$293	$8,837	$56	$37	2021	$3,130	214	12,576	98	60
	2016	$6,991	$(322)	$8,114	$99	$78	2020	$2,519	(102)	9,871	101	89

Testing Services	2017	9,541	853	23,591	913	1,558	2021	3,504	(320)	21,364	637	344
	2016	8,227	790	18,325	765	686	2020	3,741	(447)	22,332	655	15

Distribution	2017	3,142	220	621	-		2021	1,467	163	983	-
	2016	2,779	134	651	2	-	2020	2,225	207	869	1	-

Real Estate	2017	76	(19)	3,624	50	-	2021	11	(23)	3,784	20	-
	2016	78	(6)	3,147	50	-	2020	16	(30)	3,584	17

Fabrication *	2017	-		28	-
Services	2016	-		29	-
Fabrication							2021	-		-	-
Services *							2020	-		23	-

Corporate &	2017	-	(102)	88	-		2021	-	(99)	418	-
Unallocated	2016	-	59	430	-		2020	-	5	117	-

Total	2017	$21,497	$1,245	$36,789	$1,019	$1,595
Total Company							2021	$8,112	(65)	39,125	755	404
	2016	$18,075	$655	$30,696	$916	$764	2020	$8,501	$(367)	$36,796	$774	$104

~~The following segment information is unaudited for the period referenced below:~~

~~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).~~operation.

~~-19-~~- 18 -

Table of Contents

~~17.~~ 15.OTHER INCOME ~~NET~~

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

	Three Months Ended		Nine Months Ended
	Mar. 31,	Mar. 31,	Mar. 31,	Mar. 31,
	2021	2020	2021	2020
	Unaudited	Unaudited	Unaudited	Unaudited
Interest income	$26	$46	$96	$130
Other rental income	25	30	70	90
Exchange loss	58	94	(79)	33
Bad debt recovery	-	-	10	11
Dividend income	-	-	32	-
Government grant	152	266	412	295
Other miscellaneous income	12	4	86	31
Total	$273	$440	$627	$590

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

The Company received financial assistance in the form of government grants from the Singapore and Malaysia governments amid the COVID-19 pandemic. The grants amounted to $107 and $350 for the three and nine months ended March 31, 2021, respectively, compared to the government grants received amounting to $263 for the same period in the previous fiscal year.

~~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~~2014 to ~~2017~~2020 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~~reduced the U.S. federal corporate tax rate from 35% to 21%, eliminated corporate Alternative Minimum Tax, modified rules for expensing capital investment, and ~~limits~~limited the deduction of interest expense for certain companies. The Act is a fundamental change 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~~low tax foreign earnings, and new measures to curtail base erosion and promote U.S. production.

AsDue to 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 has elected to account for GILTI as a period cost. GILTI expense was $13 for the period ended Mar 31, 2021.

The ~~Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC Topic 740 Income Tax.~~

~~The Company had an~~Company's income tax expense ~~of $13 and $55~~was $118 for the three ~~and six~~ months ended ~~December~~March 31, ~~2017, respectively,~~2021, as compared to income tax ~~expense~~benefit of ~~$67 and $150, respectively,~~$8 for the ~~same periods in~~three months ended March 31, 2020. Our effective tax rate (“ETR”) from continuing operations was 64.5% and (80.0%) for the ~~last fiscal year.~~quarters ended March 31, 2021 and March 31, 2020, respectively. The ~~decrease~~increase in income tax ~~expenses~~expense and effective tax rate was ~~mainly~~due to the following:

1) The Company recorded a tax reversal of $70 due to reversal of provision for the GILTI tax coupled with the tax loss incurred from the adverse impact from COVID-19 during the three months ended March 31, 2020.

2) The Singapore operations incurred higher income tax due to higher ~~incomes~~income generated ~~by the subsidiaries which has carry forward~~coupled with tax ~~losses~~benefit, which was ~~partially offset by~~fully utilized during three months ended March 31, 2021

- 19 -

Table of Contents

The Company's income tax expense was $125 for the nine months ended March 31, 2021, as compared to of $112 for the nine months ended March 31, 2020. Our effective tax rate (“ETR”) from continuing operations was 123% and 9% for the nine months ended March 31, 2021 and March 31, 2020, respectively. The increase in ~~deferred~~effective tax ~~for timing differences recorded by~~rate was due to the following:

The Singapore ~~and Malaysia operation. The~~operations incurred higher income tax ~~expenses included with-holding~~due to higher income generated coupled with a tax ~~held by related companies that were not recoverable~~benefit, which was fully utilized during the nine months ended March 31, 2021.

The Company incurred tax loss resulting from the ~~Inland Revenue Board~~adverse impact from COVID-19 during nine months ended March 31, 2020.

The Company recorded a income tax benefit of $35 as a result of a tax refund in ~~Singapore.~~the China operation during nine months ended March 31, 2020.

The Company accrues penalties and interest related to unrecognized tax benefits when necessary as a component of penalties and interest expenses, respectively. The Company had ~~not~~no unrecognized tax benefits or related accrued ~~any~~ penalties or interest expenses ~~relating to unrecognized benefits~~ at ~~December~~March 31, ~~2017 and June 30, 2017.~~2021.

In assessing the ability to 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 of the federal, state, and foreign deductible differences. Accordingly, a full valuation allowance has been established.

~~-20-~~

~~19. DISCONTINUED OPERATION AND CORRESPONDING RESTRUCTURING PLAN~~17. CONTRACT BALANCES

The timing of revenue recognition, billings and collections may result in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities). The Company’s ~~Indonesia operation~~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 ~~Indonesia operation’s immediate holding company, which comprise~~remainder payable within 30 days of acceptance. In instances where the ~~fabrication services segment, suffered continued operating losses~~timing of revenue recognition differs from ~~fiscal year 2010 to 2014, and~~ the ~~cash flow was minimal from fiscal year 2009 to 2014. The Company established a restructuring plan to close the fabrication services operation, and in accordance with ASC Topic 205, Presentation~~timing of ~~Financial Statement Discontinued Operations (“ASC Topic 205”), from fiscal year 2015 onwards,~~invoicing, the Company ~~presented the operation results from fabrication services as~~has determined that its contracts generally do not include a ~~discontinued operation as the Company believed that no continued cash flow would be generated by the discontinued component and that the Company would have no~~ significant ~~continuing involvement in the operations of the discontinued~~financing component.

In accordance with the restructuring plan, the Company’s Indonesia operation is negotiating with 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 isContract assets were recorded under other receivable while contract liabilities were recorded under accrued expenses in the ~~process~~balance sheet.

The following table is the reconciliation of ~~winding up the operations. Management has assessed the costs and expenses to be immaterial, thus no accrual has been made.~~contract balances.

	Mar. 31, 2021 (Unaudited)		June 30, 2020
Trade Accounts Receivable		6,997		5,951
Accounts Payable		2,997		2,590
Contract Assets		308		216
Contract Liabilities		584		476

Remaining Performance Obligation

~~The discontinued operations~~As at March 31, 2021, the Company had $600 in ~~Indonesia did not incur general~~remaining performance obligations, which represents our obligation to deliver products and ~~administrative expenses for both~~services.Given the profile of contract terms, approximately 80.0% of this amount is expected to be recognized as revenue over the next two years, with the remaining amount expected to be recognized between 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.five years.

~~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 a separate cash flow statement for the discontinued operation, as the impact~~Refer to note 14 “Business Segments” of the ~~discontinued operation was immaterial.~~ Notes to Condensed Consolidated Financial Statements for information related to revenue.

~~-21-~~- 20 -

Table of Contents

~~20.~~18. EARNINGS PER SHARE

The Company adopted ASC Topic 260, Earnings Per Share. Basic ~~earnings per share~~Earnings Per Share (“EPS”) ~~are~~is computed by dividing net income available to common shareholders (numerator) by the weighted average number 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 and warrants.

Options to purchase 674,500 shares of Common Stock at exercise prices ranging from $2.53 to $5.98 per share were outstanding as of March 31, 2021. 140,000 stock options were excluded in the computation of diluted EPS for the three months ended March 31, 2021 because they were anti-dilutive.

Options to purchase 763,500 shares of Common Stock at exercise prices ranging from $2.53 to $5.98 per share were outstanding as of March 31, 2020. 212,500 stock options were excluded in the computation of diluted EPS for the three months ended March 31, 2020 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		Three Months Ended		Nine Months Ended
	Dec. 31,		Dec. 31,		Mar. 31,		Mar. 31,
	2017	2016	2017	2016	2021	2020	2021	2020
	(Unaudited)		(Unaudited)	(Unaudited)	(Unaudited)		(Unaudited)

Income attributable to Trio-Tech International common shareholders from continuing operations, net of tax	$678	$316	$1,254	$619	$177	$81	$418	$780
(Loss) / income attributable to Trio-Tech International common shareholders from discontinued operations, net of tax	(5)	(6)
Net Income Attributable to Trio-Tech International Common Shareholders	$673	$310	$1,248	$613
Income / (loss) attributable to Trio-Tech International common shareholders from discontinued operations, net of tax					1	(11)	(13)	(11)
Net income attributable to Trio-Tech International Common Shareholders					$178	$70	$405	$769

Weighted average number of common shares outstanding - basic	3,548	3,513	3,548	3,513	3,913	3,673	3,913	3,673

Dilutive effect of stock options	245	56	222	39	133	86	117	61
Number of shares used to compute earnings per share - diluted	3,793	3,569	3,770	3,552	4,046	3,759	4,030	3,734

Basic earnings per share from continuing operations attributable to Trio-Tech International	$0.19	0.09	0.35	0.18	$0.05	0.02	0.11	0.21
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	$0.05	$0.02	$0.11	$0.21

Diluted earnings per share from continuing operations attributable to Trio-Tech International	$0.18	0.09	0.34	0.17	$0.04	0.02	0.10	0.21
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	$0.04	$0.02	$0.10	$0.21

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~~21.~~19. STOCK OPTIONS

On September 24, 2007, the Company’s Board of Directors unanimously adopted the 2007 Employee Stock Option Plan (the “2007 Employee Plan”) and the 2007 Directors Equity Incentive Plan (the “2007 Directors Plan”), each of which was approved by the shareholders on December 3, 2007. Each of those plans was amended byduring the ~~Board in 2010~~term of such plan to increase the number of shares covered ~~thereby, which amendments were approved by~~thereby. As of the ~~shareholders on December 14, 2010. The Board also amended~~last amendment thereof, the 2007 Employee Plan covered an aggregate of 600,000 shares of the Company’s Common Stock and the 2007 Directors Plan ~~in November 2013 to further increase the number~~covered an aggregate of ~~shares covered thereby from 400,000 shares to~~ 500,000 shares ~~which amendment was approved~~of the Company’s Common Stock. Each of those plans terminated by ~~the shareholders~~its respective terms on ~~December 9, 2013.~~September 24, 2017. These two plans ~~are~~were administered by the Board, which also ~~establishes~~established 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~~Each 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 twothese plans ~~are~~is administered by the Board ~~which also establishes the terms~~of Directors of the ~~awards.~~Company.

Assumptions

The fair value for the options granted were 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

Nine Months Ended

March 31,

2021

2020

Expected volatility

60.41% to 104.94%

62.05% to 104.94%

45.38% to 81.97%

45.38% to 65.49%

Risk-free interest rate

0.30% to 0.78%

0.14% to 2.35%

0.30% to 2.35%

Expected life (years)

2.50

0.25 -4.51

2.5-3.25

The expected volatilities are based on the historical volatility of the Company’s stock. Due to ~~higher~~lower volatility, the observation is made on a daily ~~basis.~~basis for the nine months ended March 31, 2021. 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.

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. 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).

During the second and third quarter of fiscal year 2021, the Company ~~did not grant any~~granted options to purchase 11,000 and 60,000 shares of its Common Stock to employees pursuant to the 2017 Employee ~~plan~~Plan, respectively. There were no stock options granted under the 2017 Employee Plan exercised during the ~~six~~nine-month period ended March 31, 2021. The Company recognized $45 stock-based compensation expenses during the nine months ended ~~December~~March 31, ~~2017.~~2021.

During the third quarter of fiscal year 2020, the Company granted options to purchase 60,000 shares of its Common Stock to employees pursuant to the 2017 Employee Plan. There were no stock options exercised during the nine-month period ended March 31, 2020. The Company recognized $28 stock-based compensation expenses during the nine months ended March 31, 2020.

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Table of Contents

As of March 31, 2021, there were vested stock options granted under the 2017 Employee Plan covering a total of 149,750 shares of Common Stock. The weighted-average exercise price was $4.46 and the weighted average remaining contractual term was 2.99 years.

As of March 31, 2020, there were vested stock options granted under the 2017 Employee Plan covering a total of 83,000 shares of Common Stock. The weighted-average exercise price was $4.65 and the weighted average remaining contractual term was 3.60 years.

A summary of option activities under the 2017 Employee Plan during the nine months ended March 31, 2021 is presented as follows:

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

Outstanding at July 1, 2020	196,000	$3.92	3.72	$36.00
Granted	71,000	5.03	-	-
Exercised	-	-	-	-
Forfeited or expired	-	-	-	-
Outstanding at March 31, 2021	267,000	$4.21	3.47	$210.40
Exercisable at March 31, 2021	149,750	$4.46	2.99	$106.07

A summary of the status of the Company’s non-vested employee stock options during the nine months ended March 31, 2021 is presented below:

	Options	Weighted Average Grant-Date Fair Value

Non-vested at July 1, 2020	98,000	$3.39
Granted	71,000	-
Vested	(51,750)	-
Forfeited	-	-
Non-vested at March 31, 2021	117,250	$3.90

A summary of option activities under the 2017 Employee Plan during the nine months ended March 31, 2020 is presented as follows:

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

Outstanding at July 1, 2019	136,000	$4.53	4.28	$-
Granted	60,000	2.53	4.98	-
Exercised	-	-	-	-
Forfeited or expired	-	-	-	-
Outstanding at March 31, 2020	196,000	$3.91	3.97	$9.6
Exercisable at March 31, 2020	83,000	$4.65	3.60	$2.4

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A summary of the status of the Company’s non-vested employee stock options during the nine months ended March 31, 2020 is presented below:

	Options	Weighted Average Grant-Date Fair Value

Non-vested at July 1, 2019	87,000	$4.28
Granted	60,000	2.53
Vested	(34,000)	4.19
Forfeited	-	-
Non-vested at March 31, 2020	113,000	$3.37

2007 Employee Stock Option Plan

The ~~Company’s~~ 2007 Employee Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The 2007 Employee Plan permitted the ~~grant~~issuance of ~~stock~~ options to ~~its employees covering up to an aggregate of 600,000 shares of Common Stock. Under~~employees.

As the 2007 ~~Employee~~ Plan ~~all options were required to be granted with an exercise price of not less than fair value as of~~has terminated, 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 either the ~~six~~nine months ended ~~December~~March 31, ~~2017.~~ 2021 or March 31, 2020

There were no40,000 and 0 stock options exercised during the ~~six~~nine months ended ~~December~~March 31, ~~2017.~~2021 and March 31, 2020, respectively. The Company ~~recognized~~did not recognize any stock-based compensation expenses ~~of $3 in~~during the ~~six~~nine months ended ~~December~~March 31, ~~2017 under the 2007 Employee Plan. The balance unamortized stock-based compensation~~2021 and March 31, 2020.

As of ~~$3 based on fair value on the grant date related to~~March 31, 2021, there were vested 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~~37,500 shares of Common Stock. The weighted-average exercise price was ~~$3.36~~$4.14 and the weighted average remaining contractual term was ~~1.86~~0.99 years.

As of ~~December~~March 31, ~~2016,~~2020, there were vested ~~employee~~ stock options granted under the 2007 Employee Plan covering a total of ~~60,000~~77,500 shares of Common Stock. The weighted-average exercise price was ~~$3.26~~$3.69 and the weighted average remaining contractual term was ~~2.26~~1.46 years.

A summary of option activities under the 2007 Employee Plan during the ~~six-month period~~nine months ended ~~December~~March 31, ~~2017~~2021 is presented as follows:

	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value	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
Outstanding at July 1, 2020					77,500	$3.69	1.22	$-
Granted	-				-	-		-
Exercised	-				(40,000)	3.26	-	-
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
Outstanding at March 31, 2021					37,500	$4.14	0.99	$13.13
Exercisable at March 31, 2021					37,500	$4.14	0.99	$13.13

There were no non-vested employee stock options under the 2007 Employee Plan during the nine months ended March 31, 2021.

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A summary of option activities under the 2007 Employee Plan during the ~~six-month period~~nine months ended ~~December~~March 31, ~~2016~~2020 is presented as follows:

	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value	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
Outstanding at July 1, 2019					77,500	$3.69	2.22	$-
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
Outstanding at March 31, 2020					77,500	3.69	1.46	-
Exercisable at March 31, 2020					77,500	$3.69	1.46	$-

A summary of the status of the Company’s non-vested employee stock options under the 2007 Employee Plan during the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2020 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 of the status of the Company’s non-vested employee stock options during the six months ended December 31, 2016 is presented below:~~

	Options	Weighted Average Grant-Date Fair Value	Options	Weighted Average Grant-Date Fair Value

Non-vested at July 1, 2016	38,750	$3.22
Non-vested at July 1, 2019			9,375	$4.14
Granted	-		-
Vested	(8,750)	(3.10)	(9,375)	-
Forfeited	-		-	-
Non-vested at December 31, 2016	30,000	$3.26

Non-vested at March 31, 2020			-	$-

2017 Directors Equity Incentive Plan

The 2017 Directors Plan ~~permits the grant of options covering up to~~initially covered an aggregate of 300,000 shares of ~~Common Stock~~the Company’s common stock. The Company’s board of directors approved an amendment to the 2017 Directors Plan in September 2020 to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2020. The 2017 Directors Plan permits the grant of options to its directors in the form of non-qualified options and restricted stock. The exercise price of the non-qualified options is required to be 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 third quarter of fiscal year 2021, the Company ~~did not grant any~~granted options to purchase 80,000 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.~~2021. The Company recognized $99 stock-based compensation expenses during the nine months ended March 31, 2021.

During the third quarter of fiscal year 2020, the Company granted options to purchase 80,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan. There were no stock options exercised during the nine months ended March 31, 2020. The Company recognized stock-based compensation expenses of $24 in the nine months ended March 31, 2020 under the 2017 Directors Plan.

As all the stock options granted under the 2017 Directors Plan vest immediately on the date of grant, there were no unvested stock options granted under the 2017 Directors Plan as of March 31, 2021 or March 31, 2020.

As of March 31, 2021, there were vested stock options granted under the 2017 Directors Plan covering a total of 320,000 shares of Common Stock. The weighted-average exercise price was $4.27 and the weighted average remaining contractual term was 3.47 years.

As of March 31, 2020, there were vested stock options granted under the 2017 Directors Plan covering a total of 240,000 shares of Common Stock. The weighted-average exercise price was $3.93 and the weighted average remaining contractual term was 4 years.

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Table of Contents

A summary of option activities under the 2017 Directors Plan during the nine months ended March 31, 2021 is presented as follows:

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

Outstanding at July 1, 2020	240,000	$3.93	3.75	$48.00
Granted	80,000	5.27	4.89	-
Exercised	-	-	-	-
Forfeited or expired	-	-	-	-
Outstanding at March 31, 2021	320,000	$4.27	3.47	$253.6
Exercisable at March 31, 2021	320,000	$4.27	3.47	$253.6

A summary of option activities under the 2017 Directors Plan during the nine months ended March 31, 2020 is presented as follows:

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

Outstanding at July 1, 2019	160,000	$4.63	4.25	$-
Granted	80,000	2.53	4.98	-
Exercised	-	-	-	-
Forfeited or expired	-	-	-	-
Outstanding at March 31, 2020	240,000	$3.93	4.00	$12.80
Exercisable at March 31, 2020	240,000	$3.93	4.00	$12.80

2007 Directors Equity Incentive Plan

The 2007 Directors Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The ~~Director~~2007 Directors Plan permitted the ~~grant~~issuance 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.directors.

~~During~~As the ~~first two quarters of fiscal year 2018,~~2007 Plan has terminated, the Company did not grant any options pursuant to the 2007 Directors ~~Plan. There were 15,000 worth~~Plan during the nine months ended March 31, 2021 and March 31, 2020.

200,000 shares of stock options were exercised during the ~~six-month period~~nine months ended ~~December~~March 31, ~~2017.~~2021. The Company did not recognize any stock-based compensation expenses during the ~~six~~nine months ended ~~December~~March 31, ~~2017.~~2021.

~~During the first two quarters of fiscal year 2017, the Company did not grant any options pursuant to the 2007 Directors Plan.~~ There were no stock options exercised during the ~~six-month period~~nine months ended ~~December~~March 31, ~~2016.~~2020. The Company did not recognize any stock-based compensation expenses during the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2020.

As of March 31, 2021, there were vested stock options granted under the 2007 Directors Plan covering a total of 50,000 shares of Common Stock. The weighted-average exercise price was $4.14 and the weighted average remaining contractual term was 0.99 years.

As of March 31, 2020, there were vested stock options granted under the 2007 Directors Plan covering a total of 250,000 shares of Common Stock. The weighted-average exercise price was $3.32 and the weighted average remaining contractual term was 1.08 years

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A summary of option activities under the 2007 Directors Plan during the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2021 is presented as follows:

	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value	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
Outstanding at July 1, 2020					250,000	$3.32	0.83	$22.00
Granted	-				-
Exercised	(15,000)	2.76	-		(200,000)	3.12	-
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
Outstanding at March 31, 2021					50,000	$4.14	0.99	$17.50
Exercisable at March 31, 2021					50,000	$4.14	0.99	$17.50

A summary of option activities under the 2007 Directors Plan during the ~~six~~nine months ended ~~December~~March 31, ~~2016~~2020 is presented as follows:

	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value	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
Outstanding at July 1, 2019					300,000	$3.40	1.58	$9.50
Granted	-				-
Exercised	-				-
Forfeited or expired	(50,000)	2.30	-		(50,000)	(3.81)	-
Outstanding at December 31, 2016	365,000	$3.25	3.18	$68
Exercisable at December 31, 2016	365,000	$3.25	3.18	$68
Outstanding at March 31, 2020					250,000	3.32	1.08	-
Exercisable at March 31, 2020					250,000	$3.32	1.08	$-

20. LEASES

Company as Lessor

Operating leases under which we are the lessor arise from the leasing of the Company’s commercial and residential real estate investment property. 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 twenty years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value. Depreciation expenses relating to the property held as investments in operating leases was $17 for both the three months ended March 31, 2021 and March 31, 2020.

Future minimum rental income in China and Thailand to be received from fiscal year 2021 to fiscal year 2022 on non-cancelable operating leases is contractually due as follows as of March 31, 2021:

2021	$33
2022	122
	$155

Future minimum rental income in China and Thailand to be received from fiscal year 2021 to fiscal year 2022 on non-cancelable operating leases is contractually due as follows as of June 30, 2020:

2021	$120
2022	114
	$234

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Company as Lessee

The Company is the lessee under operating leases for corporate offices and research and development facilities with remaining lease terms of 1 year to 3 years and finance leases for plant and equipment.

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

	Mar. 31, 2021 (Unaudited)	June 30, 2020
Finance Leases (Plant and Equipment)
Plant and equipment, at cost	1,838	1,372
Accumulated depreciation	(955)	(526)
Plant and Equipment, Net	883	846

Current portion of finance leases	216	231
Net of current portion of finance leases	291	435
Total Finance Lease Liabilities	507	666

Operating Leases (Corporate Offices, Research and Development Facilities)
Operating lease right-of-use assets	1,994	944

Current portion of operating leases	659	477
Net of current portion of operating leases	1335	467
Total Operating Lease Liabilities	1,994	944

	Three Months Ended		Nine Months Ended
	Mar. 31,	Mar. 31,	Mar. 31,	Mar. 31,
	2021	2020	2021	2020
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited
Lease Cost
Finance lease cost:
Interest on finance lease	$15	$13	$35	$37
Amortization of right-of -use assets	135	76	260	212
Total finance lease cost	150	89	295	249

Operating Lease Costs	$191	$167	$566	$526

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

	Nine months ended
	Mar. 31,	Mar. 31,
	2021	2020
	(Unaudited)	(Unaudited)
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	$(32)	$(43)
Operating cash flows from operating leases	(565)	(398)
Finance cash flows from finance leases	(192)	(251)
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities	2,070	780

Weighted-Average Remaining Lease Term:
Finance leases	2.85	3.55
Operating leases	3.36	1.89
Weighted-Average Discount Rate:
Finance leases	3.35%	3.40%
Operating leases	4.83%	4.59%

~~22.~~

As of March 31, 2021, future minimum lease payments under finance leases and non-cancelable operating leases were as follows :

	Operating Lease Liabilities	Finance Lease Liabilities
Fiscal Year
Remainder of 2021	$216	64
2022	$712	218
2023	516	137
2024	308	111
2025 and thereafter	425	22
Total future minimum lease payments	$2,177	552
Less: amount representing interest	(183)	(45)
Present value of net minimum lease payments	1,994	507

Presentation on statement of financial position
Current	$659	216
Non-current	$1335	291

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As of June 30, 2020, future minimum lease payments under finance leases and non-cancelable operating leases were as follows:

	Operating Lease Liabilities	Finance Lease Liabilities
Fiscal Year
2021	$509	265
2022	$317	211
2023	168	133
2024	-	107
2025	-	20
Total future minimum lease payments	$994	736
Less: amount representing interest	(50)	(70)
Present value of net minimum lease payments	944	666
Presentation on statement of financial position
Current	$477	231
Non-current	$467	435

21. FAIR VALUE OF FINANCIAL INSTRUMENTS APPROXIMATE CARRYING VALUE

In accordance with ~~the~~ ASC ~~Topic~~Topics 825 and 820, the following presents assets and liabilities measured and carried at fair value and classified by level of ~~the following~~ fair value measurement ~~hierarchy in accordance to ASC 820:~~hierarchy:

There were no transfers between Levels 1 and 2 during the three ~~and six~~ months ended ~~December~~March 31, ~~2017~~2021 and ~~2016.~~2020.

Term deposits (Level 2) – The carrying amount approximates fair value because of the short maturity of these instruments.

Restricted term deposits (Level 2) – The carrying amount approximates fair value because of the short maturity of these instruments.

PPP loan (Level 2) – The carrying amount approximates its fair value based on similar short-term debt issues available to the Company.

Lines of credit (Level 3) – The carrying value of the lines of credit approximates fair value due to the short-term nature of the obligations.

Bank loans payable (Level 3) – The carrying value of the Company’s bank ~~loan payables~~loans payable approximates its fair value as the interest rates associated with long-term debt is adjustable in accordance with market situations when the Company borrowed funds with similar terms and remaining maturities.

22. PAYCHECK PROTECTION PROGRAM LOAN

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created the Paycheck Protection Program (PPP) to provide certain small businesses with liquidity to support their operations during the COVID-19 pandemic. The PPP is a loan program designed to provide a direct incentive for small businesses to keep their employees on payroll.

The loans have a 1% fixed interest rate and are due in two years with payment deferred for the first six months. However, they are eligible for forgiveness (in full or in part, including any accrued interest) under certain conditions and are subject to audit by the U.S. government. The loans will be forgiven if the loan proceeds were used for eligible purposes, including payroll, benefits, rent and utilities, and the Company maintained its payroll levels for eight weeks.

In May 2020, the Company received loan proceeds in the amount of approximately $121 under the PPP. The Company accounted for the PPP loan as a financial liability in accordance with Accounting Standards Codification (ASC) 470 Debt after considering the following aspects: (1) the legal form of a PPP loan is debt regardless of whether the Company expects the loan to be forgiven and (2) given the degree of uncertainty and complexity surrounding the PPP loan forgiveness process, this may impact a Company’s initial assessment.

Under ASC 470, the Company recognizes a liability for the full amount of PPP proceeds received and accrues interest over the term of the loan. No additional interest was imputed at a market rate because the guidance on imputing interest in ASC 835-30 excludes transactions where interest rates are prescribed by a government agency. If any amount is ultimately forgiven (i.e., the Company is legally released from being the loan’s primary obligor in accordance with ASC 405-20), income from the extinguishment of the liability would be recognized in the income statement as a gain on loan extinguishment. The Company intended to use the proceeds for purposes consistent with the PPP. Hence, the Company expects that its use of the loan proceeds will meet the conditions for forgiveness of the loan. In considering the term of the loan and payment deferred portion, the Company determined that the loan would be presented as a current portion of $121 in the balance sheet. Subsequent to the quarterly end, the Company received the full loan forgiveness.

~~-27-~~- 30 -

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TRIO-TECH INTERNATIONAL AND SUBSIDIARIES

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

Overview

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” and “Management’s ~~Discussion~~discussion and ~~Analysis~~analysis of ~~Financial Condition~~financial condition and ~~Results~~results of ~~Operations”~~operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017.~~2020.

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 and other electronics products.

TTI generated approximately ~~99.7%~~99.9% of its revenue from its three core business segments in the test and measurement industry, i.e. manufacturing of test equipment, testing services and distribution of test equipment during the three months ended ~~December~~March 31, 2017. To reduce our risks associated with sole industry focus and customer concentration, the Company expanded its business into the real estate investment and oil and gas equipment fabrication businesses in 2007 and 2009, respectively. The Company’s Indonesia operation and the Indonesia operation’s immediate holding company, which comprised the fabrication services segment, suffered continued operating losses since it commenced its operations, and the cash flow was minimal in the past years. The Company established a restructuring plan to close the fabrication services operation, and in accordance with ASC Topic 205, Presentation of Financial Statement Discontinued Operations (“ASC Topic 205”), the Company presented the operation results from fabrication services as a discontinued operation.2021. The Real Estate segment contributed only ~~0.3%~~0.1% to the total revenue ~~and has been insignificant since~~during the ~~property market in China has slowed down due to control measures in China.~~three months ended March 31, 2021.

Manufacturing

TTI develops and manufactures an extensive range of test equipment used in the "front end" and the "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.

Testing

TTI provides comprehensive electrical, environmental, and burn-in testing services to semiconductor manufacturers in our testing laboratories in Asia and the U.S. Our customers include both manufacturers and end-users of semiconductor and electronic components who look to us when they do not want to establish their own facilities. The independent tests are performed to industry and customer specific standards.

Distribution

In addition to marketing our proprietary products, we distribute complementary products made by manufacturers mainly from the U.S., Europe, Taiwan and Japan. The products include environmental chambers, handlers, interface systems, vibration systems, shaker systems, solderability testers and other semiconductor equipment. Besides equipment, we also distribute a wide range of components such as connectors, sockets, LCD display panels and touch-screen panels. Furthermore, our range of products are mainly targeted for industrial products rather than consumer products whereby the life cycle of the industrial products can last from 3 years to 7 years.

Real Estate

Beginning in 2007, TTI has invested in real estate property in Chongqing, China, which has generated investment income from ~~the~~ rental revenue, ~~from real estate we purchased in Chongqing, China,~~ and investment returns from deemed loan receivables, which are classified as other income. The rental income is generated from the rental properties in MaoYe 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.

~~-28-~~- 31 -

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~~Second Quarter Fiscal 2018 Highlights~~Impact of COVID-19 on our Business

●In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in China, resulting in shutdowns of manufacturing and commerce in the months that followed. Since then, the COVID-19 pandemic has spread to multiple countries worldwide and has resulted in authorities implementing numerous measures to try to contain the disease and slow its spread, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns. These measures have created significant uncertainty and economic disruption, both short-term and potentially long-term.

~~Total revenue increased by $1,448,~~

The health and safety of our employees and our customers are a top priority for us. In an effort to protect our employees, we took and continue to take proactive and aggressive actions, starting with the earliest signs of the outbreak, to adopt social distancing policies at our locations, including working from home and suspending employee travel. Our operations have been classified as part of the global supply chain and essential businesses in many jurisdictions, and employees who are working onsite are required to adhere to strict safety measures, including the use of masks and sanitizer, wellness screenings prior to accessing work sites, staggered break times to prevent congregation, prohibitions on physical contact with co-workers or ~~15.9%,~~customers, restrictions on access through only a single point of entry and exit, and utilizing video conferencing. We have also incorporated other rules such as restricting visitors to ~~$10,552~~any of our facilities that remain open and proactively providing employees with hand sanitizer.

The most significant near-term impacts of the ongoing COVID-19 pandemic on our financial performance are declines in customers’ orders in our distribution segment, and a delay in deliveries for our manufacturing segment. We are seeing signs of recovery as there was an improvement in the manufacturing segments’ financial performance beginning with the second quarter of fiscal ~~2018,~~2021, which continued in the third quarter of fiscal 2021.

The Company received an aggregate of $350 from government assistance in the Singapore and Malaysia operations to mitigate the adverse impact on the business from the pandemic for the nine months ended March 31, 2021. The Company also received a PPP loan of $121 in the U.S. operations to support the business amid the pandemic. Subsequent to the quarterly end, the Company received the full loan forgiveness.

As of March 31, 2021, the Company had cash and cash equivalents and short-term deposits totaling $12,324 and an unused line of credit aggregating $5,520. We finance operations primarily through our existing cash balances, cash collected from operations, bank borrowings and capital lease financing. We believe these sources are sufficient to fund our operations for the foreseeable future.

While we have implemented safeguards and procedures to counter the impact of the COVID-19 pandemic, the full extent to which the pandemic has and will directly or indirectly impact us, including our business, financial condition, and result of operations, will depend on future developments that are highly uncertain and cannot be accurately predicted. This may include further mitigation efforts taken to contain the virus or treat its impact and the economic impact on local, regional, national and international markets. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by governments or that we determine are in the best interests of our employees, customers, suppliers and stockholders.

Third Quarter Fiscal Year 2021 Highlights

●

Total revenue decreased by $389, or 4.6%, to $8,112 in the third quarter of fiscal year 2021, compared to ~~$9,104~~$8,501 for the same period in fiscal ~~2017.~~year 2020.

●

Manufacturing segment revenue increased by ~~$653,~~$611, or ~~19.7%~~24.3%, to ~~$3,973~~$3,130 for the ~~second~~third quarter of fiscal ~~2018, as~~year 2021, compared to ~~$3,320~~$2,519 for the same period in fiscal ~~2017.~~year 2020.

●

Testing segment revenue ~~increased~~decreased by ~~$866,~~$237, or ~~21.3%~~6.3%, to ~~$4,936~~$3,504 for the ~~second~~third quarter of fiscal ~~2018, as~~year 2021, compared to ~~$4,070~~$3,741 for the same period in fiscal ~~2017.~~year 2020.

●

Distribution segment revenue decreased by ~~$69,~~$758, or ~~4.1%~~34.1%, to ~~$1,606~~$1,467 for the ~~second~~third quarter of fiscal ~~2018, as~~year 2021, compared to ~~$1,675~~$2,225 for the same period in fiscal ~~2017.~~year 2020.

●

Real estate segment rental revenue decreased by ~~$2,~~$5, or ~~5.1%~~31.3%, to ~~$37~~$11 for the ~~second~~third quarter of fiscal ~~2018, as~~year 2021, compared to ~~$39~~$16 for the same period in fiscal ~~2017.~~year 2020.

●

~~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%~~4.4% to ~~26.5%~~25.4% 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~~third quarter of fiscal year ~~2018,~~2021, from ~~$1,776~~21.0% for the same period in fiscal year ~~2017.~~2020.

●

~~Selling~~General and administrative expenses increased by ~~$72,~~$169, or ~~40.0%~~9.6%, to ~~$252~~$1,923 for the ~~second~~third quarter of fiscal year ~~2018,~~2021, from ~~$180~~$1,754 for the same period in fiscal year ~~2017.~~2020.

●

Selling expenses decreased by $58, or 32.0%, to $123 for the third quarter of fiscal year 2021, from $181 for the same period in fiscal year 2020.

●

Other income decreased by ~~$161~~$167 to ~~$42~~$273 in the ~~second~~third quarter of fiscal year ~~2018~~2021, compared to ~~$203~~$440 in the same period in fiscal year ~~2017.~~2020.

●

~~Tax expense~~- 32 -

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●

Loss from operations was $65 for the ~~second~~third quarter of fiscal year ~~2018 was $13,~~2021, a decrease of ~~$54,~~$302 as compared to ~~$67~~$367 for the same period in fiscal year 2020.

●

Income tax expenses were $118 in the third quarter of fiscal year 2021, a change of $126 as compared to an income tax benefit of $8 in the same period in fiscal year ~~2017.~~2020.

●

During the ~~second~~third quarter of fiscal year ~~2018, income~~2021, profit from continuing operations before non-controlling interest, net of tax was ~~$675, an increase of $309,~~$65, as compared to ~~$366~~income from continuing operations before non-controlling interest of $18 for the same period in fiscal year ~~2017.~~2020.

●

Net ~~income~~loss attributable to non-controlling interest for the ~~second~~third quarter of fiscal year ~~2018~~2021 was ~~nil,~~$112, an increase of $39 as compared to ~~$52~~$73 in the same period in fiscal year ~~2017.~~2020.

●

~~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~~Basic earnings per share for the ~~three months ended December 31, 2017 was $0.19, an increase~~third quarter of ~~$0.10,~~fiscal year 2021 were $0.05, as compared to ~~$0.09~~earnings per share of $0.02 for the same period in fiscal year ~~2017.~~2020.

●

Dilutive earnings per share for the third quarter of fiscal year 2021 were $0.04, as compared to earnings per share of $0.02 for the same period in fiscal year 2020.

●

Total assets increased by ~~$3,291 or 9.8%~~$3,465 to ~~$36,789~~$39,125 as of ~~December~~March 31, ~~2017,~~2021, compared to ~~$33,498~~$35,660 as of June 30, ~~2017.~~2020.

●

Total liabilities increased by ~~$1,082 or 9.0%~~$1,690 to ~~$13,053~~$12,204 as of ~~December~~March 31, ~~2017,~~2021, compared to ~~$11,971~~$10,514 as of June 30, ~~2017.~~2020.

Results of Operations and Business Outlook

The following table sets forth our revenue components for both the three months and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2021 and ~~2016,~~2020, respectively.

	Three Months Ended		Six Months Ended
Revenue Components					Three Months Ended		Nine Months Ended
	Dec. 31,				Mar. 31,
	2017	2016	2017	2016	2021	2020	2021	2020

Manufacturing	37.7%	36.5%	40.6%	38.7%	38.6%	29.6%	40.3%	32.6%
Testing Services	46.8	44.7	44.4	45.5	43.2	44.0	43.3	44.0
Distribution	15.2	18.4	14.6	15.4	18.1	26.2	16.3	23.2
Real Estate	0.3	0.4			0.1	0.2	0.1	0.2

Total	100.0%				100.0%

~~-29-~~

Revenue for the three ~~months~~ and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2021 was ~~$10,552~~$8,112 and ~~$21,497,~~$23,154, respectively, ~~an increase~~a decrease of ~~$1,448~~$389 and ~~$3,422,~~$4,132, respectively, when compared to the revenue for the same periods of the prior fiscal year. As a percentage, revenue ~~increased~~decreased by ~~15.9%~~4.6% and ~~18.9%~~15.1% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, when compared to ~~total~~ revenue for the same periods of the prior year.

For the three months ended ~~December~~March 31, ~~2017,~~2021, the ~~$1,448 increase~~$389 decrease in overall revenue was primarily due toto:

●

a decrease in the testing segment in the China and Malaysia operation; and

●

a decrease in the distribution segment in the Singapore operation.

These decreases were partially offset by:

●

an increase in the manufacturing segment in the ~~U.S. and~~Singapore operations.

For the nine months ended March 31, 2021, the $4,132 decrease in overall revenue was primarily due to:

●

a decrease in the manufacturing segment in the Singapore operations; ~~and~~

●

~~an increase~~a decrease in the testing segment in the Singapore, Malaysia and ~~Tianjin, China operations.~~

~~These increases were partially offset by the~~

●

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

●

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

●

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

●

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

~~For the six months ended December 31, 2017, the $3,422 increase in overall revenue was primarily due to~~These decreases were partially offset by:

●

~~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.~~
Thailand operation.

~~These increases were partially offset by the~~

●

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

- 33 -

●

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

●Table of Contents

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

~~Revenue~~Total revenue into and within China, the Southeast Asia regions and other countries (except revenue into and within the ~~U.S.) increased~~United States) decreased by ~~$1,294~~$372 (or ~~14.5%~~4.6%), to $7,713 and by $4,159 (or 15.9%) to ~~$10,200, and by $3,287 (or 18.9%) to $20,619~~$21,944 for the three ~~months~~ and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, as compared with ~~$8,906~~$8,085 and ~~$17,332,~~$26,103, respectively, for the same periods of last fiscal year.

~~Revenue~~Total revenue into and within the U.S. was ~~$352~~$399 and ~~$878~~$1,210 for the three ~~months~~ and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, a decrease of $17 and an increase of ~~$154~~$27 from $416 and ~~$135, respectively, from $198 and $743~~$1,183 for the same periods of ~~last fiscal~~the prior year, respectively.

Revenue within our four current segments for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2021 is discussed ~~within the four segments as follows:~~below.

Manufacturing Segment

Revenue in the manufacturing segment was 38.6% and 40.3% as a percentage of total revenue ~~was 37.7% and 40.6%~~ for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, ~~an increase~~a decrease of ~~1.2%~~9.0% and ~~1.9%~~7.7% of total revenue, respectively, when compared to the same periods of the last fiscal year. The absolute amount of revenue increased by ~~$653~~$611 to ~~$3,973~~$3,130 from ~~$3,320~~$2,519 and increased by ~~$1,747~~$443 to ~~$8,738~~$9,324 from ~~$6,991~~$8,881 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, compared to the same periods of the last fiscal year.

Revenue in the manufacturing segment for the three months ended March 31, 2021 increased primarily due to an increase in orders by customers in the Singapore operation in the third quarter. Despite substantial headwinds caused by the pandemic and customer requested delays in shipment, the demand for our equipment was strong in this quarter.

Revenue in the manufacturing segment from one customer accounted for 23.1% and 24.3% of our total revenue in the manufacturing segment for the three months ended March 31, 2021 and 2020, respectively, and 27.5% and 35.2% of our total revenue in the manufacturing segment for the nine months ended March 31, 2021, and 2020, respectively.

The future revenue in our manufacturing segment will be affected by this one customer's purchase and capital expenditure plans if the customer base cannot be increased.

Testing Services Segment

The testing segment's revenue was 43.2% of total revenue for the three months ended March 31, 2021, a decrease of 0.8% as compared to 44% for the same period of the last fiscal year. Revenue in the testing segment was 43.3% as a percentage of total revenue for the nine months ended March 31, 2021, a decrease of 0.7% compared to 44.0% for the same period of the last fiscal year. The absolute amount of revenue decreased by $237 to $3,504 from $3,741 and decreased by $2,000 to $10,018 from $12,018 for the three and nine months ended March 31, 2021, respectively, as compared to the same periods of the last fiscal year.

The revenue in the ~~manufacturing~~testing segment from ~~a major~~the one customer noted above accounted for ~~47.5%~~58.6% and ~~55.7%~~56.1% of our revenue in the testing segment for the three months ended March 31, 2021 and 2020, respectively, and 58.8% and 61.6% of our total revenue in the ~~manufacturing~~testing segment for the ~~three~~nine months ended ~~December~~March 31, ~~2017~~2021 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,~~2020, 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 segment was 18.1% and 16.3% as a percentage of total revenue ~~was 15.2% and 14.6%~~ for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, a decrease of ~~3.2%~~8.1% and ~~0.8%~~6.9%, respectively, when compared to the same periods of the prior fiscal year. The absolute amount of revenue decreased by $69 to $1,606 from $1,675, and increased by $363 to $3,142 from $2,779 for the three and six months ended December 31, 2017, respectively, compared to the same periods of the last fiscal year. The absolute amount of revenue decreased by $758 to $1,467 from $2,225 and decreased by $2,548 to $3,790 from $6,338 for the three and nine months ended March 31, 2021, respectively, compared to the same periods of the last fiscal year.

Demand infor 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.

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Real Estate Segment

The real estate segment accounted for ~~0.3% and 0.4%~~0.1% of total ~~net~~ revenue for both the three and ~~six~~nine months ended ~~December~~March 31, ~~2017.~~2021, respectively. The absolute amount of revenue in the real estate segment decreased by $2$5 to ~~$37~~$11 from ~~$39~~$16 and decreased by $2$27 to ~~$76~~$22 from ~~$78~~$49 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021, respectively, compared to the same periods of the last fiscal year. The decrease in rental income was ~~primarily~~mainly due to a decrease in ~~rental income in~~demand amid 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.

~~-31-~~

“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 publisheduncertainties brought 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.

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

Uncertainties and Remedies

~~There are several~~Several influencing factors ~~which~~ create uncertainties when forecasting performance, such as ~~the constantly changing nature of~~new innovations in technology, specific customer requirements, ~~from the customer,~~a decline in demand for certain types of burn-in devices or equipment, ~~decline in~~fluctuating 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~~industry in general. Additionally, some customers are unable to provide a forecast of the products required in the upcoming ~~weeks; hence~~weeks, making 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~~generally 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~~particular actions and formulated ~~certain~~specific 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~~stress the importance of understanding and meeting ~~the~~our customers' stringent ~~requirements of our customers.~~requirements. 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,~~ERP System, as part of a multi-year plan to integrate and upgrade our systems and processes. The implementation of this ERP system iswas scheduled to occur in phases over ~~the next~~a few ~~years, and began with the migration of certain of our~~years. The operational and financial systems in our Singapore and Malaysia operations were transitioned to the new ~~ERP~~system in fiscal 2018 and fiscal 2019, respectively.

The operational and financial systems in our Tianjin and Suzhou operations were fully transitioned to the new system during the second quarter of fiscal ~~2017.~~2021. This implementation effort ~~continues in fiscal 2018, when~~will continue until the ~~operational and financial systems in Singapore will be~~Company's consolidation process is substantially ~~transitioned to~~automated using the new system. ~~Implementation~~

As a phased implementation of athis 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 ~~involves risks~~to strengthen our internal financial controls by automating certain manual processes and ~~uncertainties. Any disruptions, delays or deficiencies~~standardizing business processes and reporting across our organization, management will continue to evaluate and monitor our internal controls as processes and procedures in ~~the design or implementation~~each 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.~~affected areas evolve.

The Company’s primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar-denominated sales and operating expenses in its subsidiaries. Strengthening of the U.S. dollar relative to foreign currencies adversely affects the U.S. dollar value of the Company’s foreign currency-denominated sales and ~~earnings, and generally~~earnings. Generally, it 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 strengthening, or at all, which would adversely affect the U.S. dollar value of the Company’s foreign currency-denominated sales and earnings. Conversely, a strengthening of foreign currencies relative to the U.S. 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.

In December 2019, COVID-19 was reported to have surfaced in China, resulting in shutdowns of manufacturing and commerce in the months that followed. Since then, the COVID-19 pandemic has spread to multiple countries worldwide and has resulted in authorities implementing numerous measures to try to contain the disease and slow its spread, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns. These measures have created significant uncertainty and economic disruption, both short-term and potentially long-term.

The spread of COVID-19 has caused us to modify our business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events, and conferences), and we may take further actions as may be required by government authorities or that we determine are in the best interest of our employees, customers, partners, and suppliers. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus and our ability to perform critical functions could be harmed.

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The degree to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to, the duration and spread of the pandemic, its severity, the action to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, we may experience material adverse impacts on our business as a result of the global economic impact and any recession that has occurred or may occur in the future. There are ~~several influencing factors which create uncertainties when forecasting performance~~no comparable recent events that provide guidance as to the effect the spread of COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of the pandemic on our ~~real estate segment, such as obtaining the rights by the joint venture~~operations and financial results is highly uncertain and subject to ~~develop the real estate projects in China, inflation in China, currency fluctuations and devaluation, and changes in Chinese laws, regulations, or their interpretation.~~change.

Comparison of the Three Months Ended ~~December~~March 31, ~~2017~~2021 and ~~December~~March 31, ~~2016~~2020

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~~2021 and ~~2016,~~2020 respectively:

	Three Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Three Months Ended March 31,
			2021	2020
Revenue	100.0%		100.0%
Cost of sales	73.5	74.8	74.6	79.0
Gross Margin	26.5%	25.2%	25.4%	21.0%
Operating expenses
General and administrative	16.4%	19.5%	23.7%	20.6%
Selling	2.4	2.0	1.5	2.2
Research and development	1.1	0.6	1.0	0.9
Loss on disposal of property, plant and equipment	-	0.1
Impairment loss on long-lived assets				1.6
Total operating expenses	19.9%	22.2%	26.2%	25.3%
Income from Operations	6.6%	3.0%
Loss from Operations			(0.8)%	(4.3)%

Overall Gross Margin

Overall gross margin as a percentage of revenue increased by ~~1.3%~~4.4% to ~~26.5%~~25.4% for the three months ended ~~December~~March 31, ~~2017,~~2021, from ~~25.2% in~~21.0% for the same period of the last fiscal year. In terms of absolute dollar amounts, gross profits increased by $501 to $2,795 for the three months ended December 31, 2017, from $2,294 as compared to 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-~~

Gross profit margin as a percentage of revenue in the manufacturing segment increased by ~~1.8%~~4.9% to ~~22.8%~~31.4% for the three months ended ~~December~~March 31, ~~2017,~~2021, as compared to 26.5% for the same period in the last fiscal year. In absolute dollar amounts, gross profits in the manufacturing segment increased by $314 to $982 for the three months ended March 31, 2021, from ~~21.0%~~$668 for the same period in the last fiscal year. This was due to an improved product mix in the third quarter of fiscal year 2021 compared to the same period in the last fiscal year.

Gross profit margin as a percentage of revenue in the testing segment increased by 2.8% to 24.3% for the three months ended March 31, 2021, compared to 21.5% in the same period of the last fiscal year. Significant portions of our cost of goods sold are fixed in the testing segment. Thus, as the demand for services and factory utilization decreases, the fixed costs are spread over the decreased output, which decreases the gross profit margin. Despite a decrease in the testing revenue, we improved the testing segment’s gross margin as a result of cost control measures in the China and Malaysia operations. In absolute dollar amounts, gross profit in the testing segment increased by $49 to $853 for the three months ended March 31, 2021 from $804 for the same period of the last fiscal year.

Gross profit margin of the distribution segment is not only affected by the market price of the products we distribute, but also the mix of products we distribute, which frequently changes as a result of fluctuations in market demand. Gross profit margin as a percentage of revenue in the distribution segment increased by 1.7% to 15.9% for the three months ended March 31, 2021, from 14.2% in the same period of the last fiscal year. The increase in gross margin was due to the ~~change in product mix in the U.S. and Singapore operations, where there was an~~ increase in sales of high-profit margin products ~~that had higher profit margins and a decrease~~ in ~~sales of products that had lower profit margins as~~our Singapore operation 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.~~

Gross profit margin as a percentage of revenue in the testing segment decreased by 0.6% to 34.1% for the three months ended December 31, 2017, from 34.7% in the same period of the last fiscal year. The decrease in profit margin as a percentage of revenue was mainly due to a decrease in high margin testing revenue the Bangkok, 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 to $1,685 for the three months ended December 31, 2017 from $1,412 for the same~~period of the last fiscal year.~~

Gross profit margin of the distribution segment is not only affected by the market price of our products, but also by our product mix, which changes frequently as a result of changes in market demand. Gross profit margin as a percentage of revenue in the distribution segment increased by 1.9% to 12.3% for the three months ended December 31, 2017, from 10.4% in the same period of the last fiscal year. The increase in gross margin as a percentage of revenue was due to 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, as compared to the same period of last fiscal year. In terms of absolute dollar amounts, gross profit in the distribution segment for the three months ended ~~December~~March 31, ~~2017~~2021 was ~~$197, an increase of $23 as~~$233 compared 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% for the three months ended December 31, 2017, as compared to 25.6%~~$316 in the same period of the last fiscal year.

In absolute dollar amounts, for the three months ended March 31, 2021, gross ~~profit~~loss in the real estate segment ~~for the three months ended December 31, 2017~~ was $8, ~~a decrease of~~as compared to $2 ~~from $10 in~~for the same period of last fiscal year. The ~~decrease~~increase in gross loss was ~~primarily~~mainly due to a decrease in rental income ~~from~~amid the ~~MaoYe investment property, as compared to the same period in the last fiscal year.~~pandemic.

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Operating Expenses

Operating expenses for the three months ended ~~December~~March 31, ~~2017~~2021 and ~~2016~~2020 were as follows:

	Three Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Three Months Ended March 31,
(Unaudited)			2021	2020
General and administrative	$1,727	$1,776	$1,923	$1,754
Selling	252	180	123	181
Research and development	118	52	79
Loss on disposal of property, plant and equipment	-	8
Impairment loss on the long-lived assets			-	139
Total	$2,097	$2,016	$2,125	$2,153

General and administrative expenses ~~decreased~~increased by ~~$49,~~$169, or ~~2.8%~~9.6%, from ~~$1,776~~$1,754 to ~~$1,727~~$1,923 for the three months ended ~~December~~March 31, ~~2017~~2021 compared to the same period of last fiscal year. The ~~decrease~~increase in ~~the~~ general and administrative expenses was mainly attributable to ~~the decrease in the Singapore, Malaysia and Suzhou, China operations, which was partially offset by the~~an increase in ~~the Tianjin, China operations.~~

~~The decrease in general~~payroll-related expenses and ~~administrative expenses was primarily due to the decrease in payroll related~~stock compensation expenses in the Singapore and ~~Suzhou, China operations and decrease in bonus expenses in the Malaysia~~U.S. operations. This decrease was partially offset by an increase in the Tianjin, China operations as a result of wage increment in the three months ended December 31, 2016 as compared to the same period of last fiscal year.

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Selling expenses ~~increased~~decreased by ~~$72,~~$58, or ~~40.0%~~32.0%, from $181 to $123 for the three months ended ~~December~~March 31, ~~2017, from $180 to $252, as~~2021 compared to the same period of the last fiscal year. The ~~increase~~decrease in selling expenses was mainly due to an increase in commission expenses in the U.S 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 comparedprimarily attributable to the ~~same period of last fiscal year.~~worldwide travel restrictions imposed to contain the pandemic's spread, which resulted in lower traveling expenses.

~~Research and development expenses increased by $66,~~Loss from Operations

Loss from operations was $65 for the three months ended ~~December~~March 31, ~~2017, from $52 to $118, as~~2021, a decrease of $302, compared to ~~the same period of the last fiscal year. The increase 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 for the three months ended December 31, 2017, as compared to $278~~$367 for the same period of last fiscal year. The ~~increase~~result was mainly due to the increase in gross profit margin, ~~being greater than the increase in operating expenses,~~ as ~~discussed earlier.~~previously discussed.

Interest Expense

Interest expense for the ~~second quarter of fiscal years 2018~~three months ended March 31, 2021 and ~~2017~~2020 were as follows:

	Three Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Three Months Ended March 31,
(Unaudited)			2021	2020
Interest expense	$52	$48
Interest expenses			$25	$63

Interest expense ~~increased by $4 to $52 from $48~~was $25 for the three months ended ~~December~~March 31, ~~2017. We are trying~~2021, a decrease of $38, or 60.3%, compared to ~~keep our debt at~~$63 for the three months ended March 31, 2020. The decrease was primarily due to a ~~minimum~~decrease in ~~order to save financing costs.~~the utilization of short-term loans in the Singapore operations. As of ~~December~~March 31, ~~2017,~~2021, the Company had a few unused lines of credit ~~of $4,146.~~aggregating $5,520 as compared to $5,897 at March 31, 2020.

Other Income

Other income for the three months ended ~~December~~March 31, ~~2017~~2021 and ~~2016~~2020 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

Other income for the three months ended December 31, 2017 was $42, a decrease of $161 as compared to $203 for the same period last fiscal year. This decrease was mainly attributable to foreign currency exchange difference between functional currency and U.S. dollars contributing to an exchange loss of $24 for the three months ended December 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. The decrease in income tax expenses was mainly due to an increase in withholding tax payment by the Singapore operation and a decrease in deferred tax for timing differences recorded by the Malaysia operation.

	Three Months Ended March 31,
(Unaudited)	2021	2020
Interest income	$26	46
Other rental income	25	30
Exchange loss	58	94
Government grant	152	266
Other miscellaneous income	12	4
Total	$273	$440

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Other income decreased by $167 from $440 to $273 for the three months ended March 31, 2021 compared to the same period in the last fiscal year. The decrease was primarily due to a decrease in the government grant received amounting to $114. The Company received government grants of $152 in aggregate from the local governments in the Singapore and Malaysia operations, of which $107 reflects financial assistance to mitigate the negative impact on businesses amid the pandemic, compared to the government grant received amounting to $263 for the same period of the last fiscal year.

Income Tax (Expenses)/Benefits

The Company's income tax expense was $118 for the three months ended March 31, 2021, a change of $126 as compared to income tax benefit of $8 for the same period in the last fiscal year. The change was primarily because the Company had fully utilized the tax benefits and was subject to tax in the Singapore operation.

Non-controlling Interest

As of ~~December~~March 31, ~~2017,~~2021, 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~~PT. SHI Indonesia. We also held a 76% interest in Prestal Enterprise Sdn. Bhd. The share of net loss from the subsidiaries by the non-controlling interest for the three months ended ~~December~~March 31, ~~2017, in the net income~~2021 was $112, an increase of ~~subsidiaries was nil,~~$39 compared to ~~$52~~$73 for the same period of the previous fiscal year. The ~~decrease~~increase in the net loss of the non-controlling interest in the ~~net income of~~ subsidiaries was attributable to the ~~decrease~~increase in net ~~income~~loss generated by the Malaysia ~~testing operation due to a decrease in other income and increase in corporate overhead allocation as compared to the same period in the last fiscal year.~~operation.

~~Loss from Discontinued Operations~~Net Income Attributable to Trio-Tech International Common Shareholders

~~Loss from discontinued operations was $2~~Net income attributable to Trio-Tech International common shareholders for the three months ended ~~December~~March 31, ~~2017, as~~2021 was $178, an increase of $108, compared to a ~~loss~~net income of $4$70 for the same period ~~of the~~ last fiscal year.

~~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 per Share

Basic earnings per share from continuing operations ~~was $0.19~~were $0.05 for the three months ended ~~December~~March 31, ~~2017 as~~2021 compared to ~~$0.09~~$0.02 for the same period in the last fiscal year. Basic earnings per share from discontinued operations were ~~nil~~$nil for both the three months ended ~~December~~March 31, ~~2017~~2021 and ~~2016.~~2020.

Diluted earnings per share from continuing operations ~~was $0.18~~were $0.04 for the three months ended ~~December~~March 31, ~~2017~~2021 as compared to ~~$0.09~~$0.02 for the same period in the last fiscal year. Diluted earnings per share from discontinued operations were ~~nil~~$nil for both the three months ended ~~December~~March 31, ~~2017~~2021 and ~~2016.~~2020.

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~~year 2021 and ~~2017, respectively,~~fiscal year 2020 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 income / (loss) from operations for the manufacturing segment for the three months ended ~~December~~March 31, ~~2017~~2021 and ~~2016~~2020 were as ~~follows:~~follows

	Three Months Ended March 31,
(Unaudited)	2021	2020
Revenue	$3,130	$2,519
Gross margin	31.4%	26.5%
Income / (loss) from operations	$214	$(102)

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)
Income from operations from the manufacturing segment was $214 compared to a loss from operations of $102 in the same period of the last fiscal year, primarily due to an increase in gross margin of $314. Operating expenses for the manufacturing segment were $768 and $769 for the three months ended March 31, 2021 and 2020, respectively.

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~~Income~~Testing Segment

The revenue, gross margin and loss from operations infor the ~~manufacturing~~testing segment ~~was $107~~ for the three months ended ~~December~~March 31, ~~2017, an improvement~~2021 and 2020 were as follows:

	Three Months Ended March 31,
(Unaudited)	2021	2020
Revenue	$3,504	$3,741
Gross margin	24.3%	21.5%
Loss from operations	$(320)	$(447)

Loss from operations in the testing segment for the three months ended March 31, 2021 was $320, a decrease of ~~$336, as compared to a loss of $229~~$127 from $447 in the same period of the last fiscal year. The ~~improvement~~decrease in the loss from operations was ~~primarily due~~mainly attributable to an increase in gross profit, as discussed earlier, and a decrease in operating expenses. Operating expenses were $1,173 and $1,251 for the three months ended March 31, 2021 and 2020, respectively.The decrease of $78 in operating expenses was mainly due to a decrease in selling expenses amounting to $40, coupled with the absence of the impairment loss of long-lived asset amounting to $139. These decreases were offset with an increase of $99 from corporate overhead expenses. The decrease in selling expenses was primarily attributable to the worldwide travel restrictions imposed to contain the pandemic's spread, which resulted in lower traveling expenses. The increase in corporate overhead expenses was due to a change in the corporate overhead allocation compared to the same period in the 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 March 31, 2021 and 2020 were as follows:

	Three Months Ended March 31,
(Unaudited)	2021	2020
Revenue	$1,467	$2,225
Gross margin	15.9%	14.2%
Income from operations	$163	$207

Income from operations was $163 for the three months ended March 31, 2021, compared to $207 for the same period of last fiscal year. The decrease of $44 was mainly due to a decrease of $83 in the gross margin, as discussed earlier, ~~and~~offset against a decrease of ~~$129 in~~$30 from the operating expenses. Operating expenses ~~for the manufacturing segment~~ were ~~$798~~$70 and ~~$927~~$110 for the three months ended ~~December~~March 31, ~~2017~~2021 and ~~2016,~~2020, respectively. The decrease in operating expenses was mainly due to a decrease in the payroll expenses in the Singapore operation, which resulted in a decrease in general and administrative ~~expenses of $349, which~~expenses.

Real Estate Segment

The revenue, gross margin and loss from operations for the real estate segment for the three months ended March 31, 2021 and 2020 were as follows:

	Three Months Ended March 31,
(Unaudited)	2021	2020
Revenue	$11	$16
Gross margin	(82.0)%	(12.5)%
Loss from operations	$(23)	$(30)

Loss from operations in the real estate segment for the three months ended March 31, 2021 was ~~partially offset by an increase in selling expenses of $50, increase in corporate overhead by $141, as~~$23 compared to $30 for the same period of last fiscal year. Operating expenses were $15 and $28 for the three months ended March 31, 2021 and 2020, respectively. The decrease in ~~general and administrative~~operating expenses by $13 was ~~primarily~~mainly 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~~of doubtful debt ~~expenses~~for the three months ended March 31, 2021.

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Corporate

The (loss) / income from operations for Corporate for the three months ended March 31, 2021 and 2020 was as follows:

	Three Months Ended March 31,
(Unaudited)	2021	2020
(Loss) / Income from operations	$(99)	$5

Corporate operating loss was $99 for the three months ended March 31, 2021, an increase of $104 from the corporate operating income of $5 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 of the last fiscal year. The increase ~~in corporate overhead expenses~~ was ~~due~~mainly attributable 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.

Comparison of the Nine Months Ended March 31, 2021 and March 31, 2020

The following table sets forth certain consolidated statements of income data as a percentage of revenue for the nine months ended March 31, 2021 and 2020, respectively:

	Nine Months Ended
	Mar. 31, 2021	Mar. 31, 2020

Revenue	100.0%	100.0%
Cost of sales	76.5	78.2
Gross Margin	23.5%	21.8%
Operating expenses:
General and administrative	22.7%	19.5%
Selling	1.5	2.0
Research and development	1.2	1.0
Impairment loss on long-lived assets		0.5
Gain on disposal of plant and equipment	-	(0.1)
Total operating expenses	25.4%	22.9%
(Loss)/ Income from Operations	(1.9)%	(1.1)%

Overall Gross Margin

Overall gross margin as a percentage of revenue increased by 1.7% to 23.5% for the nine months ended March 31, 2021, compared to 21.8% in the same period of last fiscal year. In terms of absolute dollar amounts, gross profit decreased by $495 to $5,448 for the nine months ended March 31, 2021 from $5,943 for the same period of the last fiscal year.

Gross profit margin as a percentage of revenue in the manufacturing segment increased by 2.9% to 26.5% for the nine months ended March 31, 2021, from 23.6% in the same period of the last fiscal year. In absolute dollar amounts, gross profit increased by $377 to $2,469 for the nine months ended March 31, 2021 compared to $2,092 for the same period in the last fiscal year. The gross margin increase as a percentage of revenue was primarily because more orders were received for the nine months ended March 31, 2021, coupled with a higher margin than those in the same period of the prior fiscal year.

Gross profit margin as a percentage of revenue in the testing segment decreased by 1.1% to 23.6% for the nine months ended March 31, 2021 from 24.7% in the same period of the last fiscal year. There was a further deterioration in testing revenue in the Malaysia and China operations where significant portions of our cost of goods sold are fixed. As the demand for services and factory utilization decrease, the fixed costs are spread over the decreased output, which decreases the gross profit margin. However, this negative impact was partially mitigated by management’s efforts at reducing costs in the China and Malaysia operations. In terms of absolute dollar amounts, gross profit in the testing segment decreased by $605 to $2,367 for the nine months ended March 31, 2021, from $2,972 for the sameperiod of the last fiscal year.

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Gross profit margin as a percentage of revenue in the distribution segment increased by 3.2% to 17.1% for the nine months ended March 31, 2021, from 13.9% in the same period of the last fiscal year. In terms of absolute dollar amounts, gross profit in the distribution segment for the nine months ended March 31, 2021 was $648, a decrease of $236 compared to $884 in the same period of the last fiscal year. The decrease in the absolute dollar amount of gross margin resulted from a decrease in distribution revenue in the Singapore operation. The gross profit margin of the distribution segment was affected not only by the market price of our products but also by our product mix, which frequently changes due to fluctuations in market demand.

Gross loss margin as a percentage of revenue in the real estate segment increased by 153.4% to 163.6% for the nine months ended March 31, 2021, from 10.2% in the same period of the last fiscal year. In terms of absolute dollar amounts, gross loss increased by $31 to $36 for the nine months ended March 31, 2021 compared to $5 for the same period in the last fiscal year. The increase in gross loss mainly resulted from a decrease in rental income amid the pandemic.

Operating Expenses

Operating expenses for the nine months ended March 31, 2021 and 2020 were as follows:

	Nine Months Ended
	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
General and administrative	$5,245	$5,319
Selling	356	547
Research and development	277	280
Impairment loss on long-lived asset	-	139
Gain on disposal of plant and equipment	(1)	(24)
Total	$5,877	$6,261

General and administrative expenses decreased by $74, or 1.4%, from $5,319 to $5,245 for the nine months ended March 31, 2021 compared to the same period of the last fiscal year.

Selling expenses decreased by $191, or 34.9%, for the nine months ended March 31, 2021, from $547 to $356 compared to the same period of the last fiscal year. The decrease in selling expenses was primarily attributable to lower traveling expenses due to the worldwide travel restrictions imposed to contain the spread of the pandemic.

There was no impairment loss on long-lived assets recorded for the nine months ended March 31, 2021, compared to $139 for the same period of the last fiscal year.

Loss from Operations

Loss from operations was $429 for the nine months ended March 31, 2021 compared to $318 for the same period of the last fiscal year. The increase was mainly due to the decrease in gross profit margin, offset with a decrease in operating expenses, as discussed earlier.

Interest Expense

Interest expense for the nine months ended March 31, 2021 and 2020 were as follows:

	Nine Months Ended
	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
Interest expense	$96	$186

Interest expense decreased by $90 to $96 for the nine months ended March 31, 2021 compared to $186 for the same period of the last fiscal year. The decrease was mainly due to lower utilization of lines of credit in the Singapore operations. Additionally, the bank loans payables decreased by $139 to $2,167 as at March 31, 2021 compared to $2,206 as of June 30, 2020.

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Other Income

Other income for the nine months ended March 31, 2021 and 2020 was as follows:

	Nine Months Ended
	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
Interest income	$96	$130
Other rental income	70	90
Exchange loss	(79)	33
Bad debt recovery	10	11
Dividend Income	32	-
Government grant	412	295
Other miscellaneous income	86	31
Total	$627	$590

Other income for the nine months ended March 31, 2021 was $627, an increase of $37 compared to $590 for the same period of last fiscal year. The increase was primarily due to the Company receiving government grants of $412 from the local governments in the Singapore and Malaysia operations, of which $350 reflects financial assistance to mitigate the negative impact on the businesses amid the pandemic, compared to the government grant received of $263 for the same period of last fiscal year. The increase was partially offset with the unfavorable foreign exchange movement for the nine months ended March 31, 2021.

Income Tax Expenses

Income tax expenses for the nine months ended March 31, 2021 were $125 compared to $112 in the same period last fiscal year.

Non-controlling Interest

As of March 31, 2021, we held a 55% interest in Trio-Tech Malaysia, Trio-Tech (Kuala Lumpur) Sdn. Bhd., SHI International Pte. Ltd. and PTSHI Indonesia, and a 76% interest in Prestal Enterprise Sdn. Bhd. The net loss attributable to the non-controlling interest in these subsidiaries for the nine months ended March 31, 2021 was $454, a deterioration of $810, compared to a net income of $356 for the same period of last fiscal year. The deterioration was attributable to the absence of gain from the sale of assets held for sale by the Malaysia operation in the nine months ended March 31, 2021.

Net Income Attributable to Trio-Tech International Common Shareholders

Net income was $405 for the nine months ended March 31, 2021, a decrease of $364 compared to a net income of $769 for the same period in the last fiscal year. The decrease was mainly due to the decrease in revenue and gross margin, coupled with the absence of the gain on the sale of assets held for sale in the Malaysia operation. However, the decrease was partially offset with a decrease in operating expenses, as discussed earlier.

Earnings per Share

Basic earnings per share from continuing operations was $0.11 for the nine months ended March 31, 2021 compared to $0.21 for the same period in the last fiscal year. Basic earnings per share from discontinued operations were nil for both the nine months ended March 31, 2021 and 2020.

Diluted earnings per share from continuing operations was $0.10 for the nine months ended March 31, 2021 compared to $0.21 for the same period in the last fiscal year. Diluted earnings per share from discontinued operations were nil for both the nine months ended March 31, 2021 and 2020.

Segment Information

The revenue, gross profit margin, and income or loss from operations in each segment for the nine months ended March 31, 2021 and 2020, 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.

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Manufacturing Segment

The revenue, gross margin and income / (loss) from operations for the manufacturing segment for the nine months ended March 31, 2021 and 2020 were as follows:

	Nine Months Ended
	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
Revenue	$9,324	$8,881
Gross margin	26.5%	23.6%
Income / (loss) from operations	$277	$(201)

Income from operations from the manufacturing segment was $277 for the nine months ended March 31, 2021, a change of $478 as compared to a loss from operations of $201 in the same period of the last fiscal year due to an increase in gross margin and a decrease in operating expenses. The manufacturing segment's operating expenses were $2,192 and $2,293 for the nine months ended March 31, 2021 and 2020, respectively. The decrease in operating expenses of $101 was mainly due to a $28 decrease in general and administrative expenses, a $56 decrease in selling expenses, and a $17 decrease in corporate overhead compared to the same period of last fiscal year. The decrease in general and administrative expenses was mainly attributable to a decrease in staff benefit expenses in the Singapore operations. The decrease in selling expenses was primarily due to traveling expenses incurred for the nine months ended March 31, 2021, as a result of worldwide travel restrictions to contain the spread of the pandemic.

Testing Segment

The revenue, gross margin and ~~income~~loss from operations for the testing segment for the ~~three~~nine months ended ~~December~~March 31, ~~2017~~2021 and ~~2016~~2020 were as follows:

	Three Months Ended		Nine Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
Revenue	$4,936	$4,070	$10,018	$12,018
Gross margin	34.1%	34.7%	23.6%	24.7%
Income from operations	$517	$388
Loss from operations			$(993)	$(540)

~~Income~~Loss from operations in the testing segment for the ~~three~~nine months ended ~~December~~March 31, ~~2017~~2021 was ~~$517, an increase~~$993, a deterioration of ~~$129~~$453 compared to ~~$388~~$540 in the same period of the last fiscal year. The decrease in gross margin of $605 offset with a decrease in operating expenses of $152, also contributed to the increase in operating ~~income was~~loss. Operating expenses were $3,361 and $3,512 for the nine months ended March 31, 2021 and 2020, respectively. The lower operating expenses were 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 $1,168 and $1,024 for the three months ended December 31, 2017 and 2016, respectively. The increase in operating expenses was mainly attributable to an increasea decrease in general and administrative expenses and selling expenses by ~~$222, which was partially offset by~~$226 and $111, respectively, together with a decrease in the impairment loss by $139. The decrease was offset by an increase in corporate ~~overhead expenses by $127.~~overheads of $303 and a decrease in the gain from the sales of property, plant and equipment of $23. The ~~increase~~decrease in general and administrative expenses was due to a ~~revision~~decrease in ~~the method of allocation of payroll related expenses between segments in the Singapore operations and payroll related~~staff benefit expenses in the ~~Tianjin,~~Malaysia and China ~~operations.~~operations as part of our cost-savings measures. The decrease in selling expenses was primarily due to a reduction in traveling expenses for the nine months ended March 31, 2021, due to worldwide travel restrictions to contain the spread of the pandemic. 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.

Distribution Segment

The revenue, gross margin and income from operations for the distribution segment for the ~~three~~nine months ended ~~December~~March 31, ~~2017~~2021 and ~~2016~~2020 were as follows:

	Three Months Ended		Nine Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
Revenue	$1,606	$1,675	$3,790	$6,338
Gross margin	12.3%	10.4%	17.1%	13.9%
Income from operations	$119	$100	$407	$599

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Table of Contents

Income from operations in the distribution segment ~~increased by $19 to $119~~ for the ~~three~~nine months ended ~~December~~March 31, ~~2017, as~~2021 was $407, a decrease of $192 compared to ~~$100~~$599 in the same period of the last fiscal year. The ~~increase~~decrease in operating income was primarily due to ~~an increase~~a decrease in gross margin ~~as discussed earlier,~~by $236, which was partially offset ~~by an increase~~with a decrease in operating expenses of ~~$4.~~$44. Operating expenses were ~~$78~~$241 and ~~$74~~$285 for the ~~three~~nine months ended ~~December~~March 31, ~~2017~~2021 and ~~2016,~~2020, respectively.

~~-37-~~

The decrease in operating expenses were mainly due to lower general and administrative expenses and selling expenses by $29 and $23, respectively. The decrease in general and administrative expenses was mainly due to fewer professional fees incurred for the nine months ended March 31 2021, compared to the same period of the last fiscal year and a decrease in selling expenses was mainly due to a decrease in a sales-related commission.

Real Estate Segment

The revenue, gross loss margin and loss from operations for the real estate segment for the ~~three~~nine months ended ~~December~~March 31, ~~2017~~2021 and ~~2016~~2020 were as follows:

	Three Months Ended		Nine Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
Revenue	$37	$39	$22	$49
Gross margin	21.6%	25.6%
Gross loss margin			(163.6%)	(10.2)%
Loss from operations	$(9)	$(8)	$(84)	$(82)

Loss from operations in the real estate segment for the ~~three~~nine months ended ~~December~~March 31, ~~2017 was $9, an increase of $1, as~~2021 remained comparable at $84 compared to ~~$38~~$82 for the same period of the last fiscal year. The decrease in operating loss 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 for the three months ended December 31, 2017 and 2016, respectively.

~~Corporate~~

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

Three Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

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

Corporate operating income changed by $63 to a loss of $36 for the three months ended December 31, 2017 from an income of $27 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.~~

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

~~The following table sets forth certain consolidated statements of income data as a percentage of revenue for the six months ended December 31, 2017 and 2016, 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%

~~Overall Gross Margin~~

Overall gross margin as a percentage of revenue increased by 0.1% to 25.8% for the six months ended December 31, 2017, from 25.7% 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, gross profits increased by $903 to $5,555 for the six months ended December 31, 2017, from $4,652 for the same period of the last fiscal year.

~~-38-~~

Gross profit margin as a percentage of revenue in the manufacturing segment increased by 0.6% to 23.1% for the six months ended December 31, 2017, from 22.5% in the same period of the last fiscal year. In absolute dollar amounts, gross profit increased by $447 to $2,021 for the six months ended December 31, 2017 as compared to $1,574 for the same period in last fiscal year. The increase in absolute dollar amount of gross margin 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 in sales of products that had lower profit margins as 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.

Gross profit margin as a percentage of revenue in the testing segment decreased by 0.5% to 33.0% for the six months ended December 31, 2017 from 33.5% in the same period of the last fiscal year. The decrease in profit margin as a percentage of revenue was mainly due to a decrease in high margin testing revenue the Bangkok, 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, 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.~~

Gross profit margin as a percentage of revenue in the distribution segment increased by 1.3% to 11.6% for the six months ended December 31, 2017, from 10.3% in the same period of the last fiscal year. In terms of absolute dollar amounts, gross profit in the distribution segment for the six months ended December 31, 2017 was $365, an increase of $78 as compared to $287 in the same period of the last fiscal year. The increase in gross margin was due to the change in product mix, as this segment had fewer sales of products with a lower profit margin as compared to the same period of last fiscal year. The gross profit margin of the distribution segment was not only affected by the market price of our products, but also our product mix, which changes frequently as a result of changes in market demand.

Gross profit margin as a percentage of revenue in the real estate segment decreased by 22.5% to 23.7% for the six months ended December 31, 2017, from 46.2% 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.

~~Operating Expenses~~

~~Operating expenses for the six months ended December 31, 2017 and 2016 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

General and administrative expenses increased by $47, or 1.3%, from $3,519 to $3,566 for the six months ended December 31, 2017 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-~~

~~The increase in general and administrative expenses was primarily due to the increase in payroll related and bonus expenses in the U.S. and Tianjin, China operations.~~This increase was partially offset mainly by a decrease in payroll related expenses in the Singapore operations for the six months ended December 31, 2017, as 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, The increase was mainly due to an increase in commission expenses in the U.S and Singapore operations as the commissionable revenue increased, and an increase in 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.

~~Income from Operations~~

Income from operations was $1,245 for the six months ended December 31, 2017 as compared to $655 for the same period of the 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 six months ended December 31, 2017 and 2016 were as follows:~~

Six Months Ended

Dec. 31,
2017

Dec. 31,
2016

(Unaudited)

Interest expense
$110
$106

~~Interest expense increased by $4 to $110 from $106 for the six months ended December 31, 2017 as compared to the same period of the last fiscal year.~~

~~Other Income~~

~~Other income for the six months ended December 31, 2017 and 2016 were 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

Other income for the six months ended December 31, 2017 was $200, a decrease of $113 as compared to $313 for the same period last fiscal year. This decrease was mainly attributable to foreign currency exchange difference between functional currency and U.S. dollars contributing to an exchange loss of $30 for the six months ended December 31, 2017 as compared to an exchange gain of $182 for the same period last fiscal year, which was partially offset by a non-recurring reimbursement income.

~~-40-~~

~~Income Tax Expenses~~

Income tax expense for the six months ended December 31, 2017 was $55, a decrease of $95, as compared to $150 for the same period of last fiscal year. The decrease in income tax expense was mainly due to a change from deferred tax benefit in the same period last fiscal year to deferred tax expense for timing differences recorded by the Malaysia operation.

~~Non-controlling Interest~~

As of December 31, 2016, we held a 55% interest in Trio-Tech Malaysia, Trio-Tech (Kuala Lumpur) Sdn. Bhd., SHI International Pte. Ltd. and PTSHI Indonesia, and a 76% interest in Prestal Enterprise Sdn. Bhd. The net income attributable to our non-controlling interest in these subsidiaries for the six months ended December 31, 2017 was $27, a decrease of $69, as compared to $96 for the same period of last fiscal year. The decrease was attributable to the decrease in net income generated by the Malaysia testing operations due 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~~

Net income was $1,248 for the six months ended December 31, 2017, an increase of $635, as compared to a net income of $613 for the same period in the last fiscal year. The improvement was mainly due to an increase in operating income, as discussed earlier.

~~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 months ended December 31, 2017 as compared to $0.17 for the same period in the last fiscal year. Diluted earnings per share from discontinued operations were nil for both the six months ended December 31, 2017 and 2016.

~~Segment Information~~

The revenue, gross profit margin, and income or loss from each segment for the six months ended December 31, 2017 and 2016, 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 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 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
$9,541
$8,227
Gross margin
33.0%
33.5%
Income from operations
$853
$790

~~Income from operations in the testing segment for the six months ended December 31, 2017 was $853, an increase of $63 compared to $790 in~~ the same period of the last fiscal year. The increase in operating ~~income~~loss was ~~attributable~~mainly due to an increase in gross ~~profit of $396, which was partially offset by an increase in operating expenses of $333.~~loss margin, as discussed earlier. Operating expenses were ~~$2,298~~$48 and ~~$1,965~~$77 for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2021 and ~~2016,~~2020, respectively. The ~~increase~~decrease in operating expenses was mainly attributable to an increase in general and administrative expenses by $521, which was partially offset by a decrease in corporate overheads by $250. The increase in general and administrative expenses was due to ~~a revision~~the absence of one-off payroll-related expenses, and doubtful debts provision, which occurred in the ~~method~~same period of ~~allocation of payroll related expenses between segments in~~ the ~~Singapore~~prior fiscal year.

Corporate

The loss from operations for corporate for the nine months ended March 31, 2021 and ~~an increase in payroll related expenses in the Tianjin, China operations.~~ 2020 were as follows:

	Nine Months Ended
	Mar. 31, 2021	Mar. 31, 2020
(Unaudited)
Loss from operations	$(36)	$(94)

The decrease ~~in corporate overhead expenses~~of $58 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 fixed charge basis.

~~Distribution Segment~~

~~The revenue, gross margin and income from operations for the distribution 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
$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 compared to $134 in the same period of the last fiscal year. 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~~nine months ended ~~December~~March 31, ~~2017~~2021 total assets increased by ~~$3,291 from $33,498~~$3,465 to $39,125 compared to $35,660 as atof June 30, ~~2017 to $36,789.~~2020. The increase in total assets was primarily due to an increase in cash and cash equivalents, short-term deposits, trade ~~accounts receivable, other~~account receivables, ~~inventory,~~inventories, prepaid expenses ~~property, plant~~ and ~~equipment,~~other current assets, deferred tax assets, operating lease right-of-use, other assets and restricted term ~~deposits, which were~~deposits. This was partially offset by a decrease in ~~short term deposits.~~other receivables, investment properties and property, plant and equipment.

Cash and cash equivalents were ~~$5,059~~$5,178 as at ~~December~~March 31, ~~2017,~~2021, reflecting an increase of ~~$287~~$1,028 from ~~$4,772~~$4,150 as at June 30, ~~2017, mainly~~2020, primarily because the Company generated cash inflow from the operating activities for the nine months ended March 31, 2021.

Short-term deposits were $7,146 as at March 31, 2021, reflecting an increase of $308 from $6,838 as at June 30, 2020. The increase was primarily due to ~~improved collections~~an increase in deposits in the ~~U.S. and Suzhou, China operations and uplift of deposit in the Malaysia~~Singapore operation. ~~This~~The increase was partially offset by the ~~lower utilization of credit facilities~~withdrawal in ~~our Singapore operation.~~

~~Short term~~ deposits ~~were $642 as at December 31, 2017, reflecting a decrease of $145 from $787 as at June 30, 2017, primarily due to uplift of deposit by~~in the Malaysia operation.

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Table of Contents

As at ~~December~~March 31, ~~2017,~~2021, the trade accounts receivable balance increased by ~~$484~~$1,046 to ~~$9,493~~$6,997, from ~~$9,009~~$5,951 as at June 30, ~~2017, mainly~~2020 primarily due to ~~longer collection cycles~~the increase in revenue in the Malaysia, China, Singapore, and ~~Tianjin, China operations and foreign currency exchange difference between~~U.S. operations. This increase was partially offset by the ~~functional currency and U.S. dollars for~~decrease in the ~~six months ended December 31, 2017.~~Thailand operations. The number of days’ sales outstanding in accounts receivables for the Group was 7775 and 8368 days at the end of the ~~second~~third quarter of fiscal year ~~2018~~2021 and ~~for~~ the end of the last fiscal year, ~~ended 2017,~~ respectively.

~~-43-~~

As at ~~December~~March 31, ~~2017~~2021 other receivables were ~~$548,~~$678, reflecting ~~an increase~~a decrease of ~~$147~~$320 from ~~$401~~$998 as at June 30, ~~2017.~~2020. The ~~increase~~decrease was primarily due to ~~input tax and tax incentives~~a decrease in ~~the Tianjin, China operations in the second quarter of fiscal year 2018.~~

~~Inventories as at December 31, 2017 were $2,972, an increase of $1,216, as compared~~advance payments made to ~~$1,756 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~~suppliers in the Singapore operations.

~~Prepaid expenses were $280~~Inventories as at ~~December~~March 31, ~~2017 compared to $226 as at June 30, 2017. The~~2021 were $2,602, an 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~~$680 compared to $1,922 as at June 30, ~~2017. This~~2020. The increase in inventories was in line with an increase in orders by customers in the manufacturing segment of the Singapore and U.S. operations, coupled with the delays in shipment requested by some of our customers.

Prepaid expenses and other current assets were $367 as at March 31, 2021 compared to $341 as at June 30, 2020.The increase was primarily due to additional prepaid expenses made in the Singapore and China operations.

Investment properties’ net in China was $688 as at March 31, 2021 and $690 as at June 30, 2020.

Property, plant and equipment decreased by $620 from $10,310 as at June 30, 2020, to $9,690 as at March 31, 2021, mainly due to depreciation charged for the period and the foreign currency exchange ~~difference~~movement between ~~functional currency and U.S. dollars from~~ June 30, ~~2017 to December~~2020 and March 31, ~~2017.~~2021. The decrease was partially offset by the new property, plant, and equipment acquisition in the Singapore, Malaysia and China operations.

Restricted term deposits increased by ~~$60~~$79 to ~~$1,717~~$1,739 as at ~~December~~March 31, ~~2017,~~2021 as compared to ~~$1,657~~$1,660 as at June 30, ~~2017.~~2020. This was primarily due to the foreign currency exchange ~~difference~~movement between ~~functional currency and U.S. dollars from~~ June 30, ~~2017 to December~~2020 and March 31, ~~2017.~~2021.

~~Utilized lines of credit decreased~~Other assets increased by ~~$367~~$100 to ~~$2,189~~$1,709 as at ~~December~~March 31, ~~2017~~2021 compared to ~~$2,556~~$1,609 as at June 30, ~~2017, which~~2020. This was mainly due to ~~lower utilization of lines~~an asset in transit recorded in the China operation as at March 31, 2021.

Lines of credit increased by ~~the Singapore operation in the first quarter of fiscal year 2018.~~$12 to $184 as at March 31, 2021 as compared to $172 as at June 30, 2020.

Accounts payable increased by ~~$113~~$407 to ~~$3,342~~$2,997 as at ~~December~~March 31, ~~2017,~~2021 as compared to ~~$3,229~~$2,590 as at June 30, ~~2017.~~2020. This was ~~mainly~~ due to an increase in sales, which lead to more materials purchased to meet customer requirements in the ~~foreign currency exchange difference between the functional currency and U.S. dollars for the six months ended December 31, 2017.~~Singapore operation.

Accrued expenses increased by ~~$942~~$462 to ~~$3,985~~$3,467 as at ~~December~~March 31, ~~2017,~~2021 as compared to ~~$3,043~~$3,005 as at June 30, ~~2017.~~2020. The increase in accrued expenses was mainly due to an increase in ~~purchase accruals~~the accrued purchases in the Singapore and ~~Tianjin,~~ China operations.

Bank loans payable ~~increased~~decreased by ~~$161~~$39 to ~~$1,973~~$2,167 as at ~~December~~March 31, ~~2017,~~2021 as compared to ~~$1,812~~$2,206 as at June 30, ~~2017.~~2020. This was due to ~~an additional loan~~the repayments made ~~by the Singapore operation, partially offset by repayment of bank loans by~~in the Malaysia operation.

~~Capital~~Finance leases ~~increased~~decreased by ~~$139~~$159 to ~~$898~~$507 as at ~~December~~March 31, ~~2017,~~2021 as compared to ~~$759~~$666 as at June 30, ~~2017.~~2020. This was due to ~~new leases~~the repayments made in the Singapore and Malaysia ~~operations,~~operation.

Operating lease right-of-use assets and the corresponding lease liability increased by $1,050 to $1,994 as of March 31, 2021, as compared to $944 as at June 30, 2020. This was due to the renewal of the lease agreements in the Singapore and China operations. The increase was partially offset bywith the repayment made and the operating lease expenses charged for the period.

As of ~~capital leases~~March 31, 2021 and June 30, 2020, the Company accounted $121 for the Paycheck Protection Program which was created by the ~~Singapore operations.~~United States Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Liquidity Comparison

Net cash provided by operating activities decreased by ~~$2,125~~$1,196 to ~~$1,546~~an inflow of $900 for the ~~six~~nine months ended ~~December~~March 31, ~~2017, compared to $3,671 during~~2021 from an inflow of $2,096 for the same period of the last fiscal year. The decrease in net cash ~~generated~~inflow provided by operating activities was primarily due to a decrease in ~~cash inflow of $1,749 from accounts receivables and $427 from other receivables, and an increase in cash outflow of $878 in inventories. These were partially offset by an increase in~~ net income ~~of $117~~by $1,174 and a decrease in ~~other~~impairment loss on long-lived assets of ~~$189.~~$139.

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Net cash used in investing activities ~~increased~~decreased by ~~$202~~$1,116 to ~~$1,304~~an outflow of $825 for the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2021 from an outflow of $1,941 for the same period of the last fiscal year. The decrease in cash outflow was primarily due to a decrease in investment in unrestricted term deposits by $1,023 and $227 in capital expenditures, coupled with an increase in cash inflow of $1,166 from the withdrawal of unrestricted deposit. These decreases were partially offset by a decrease in cash inflow of $1,261 from proceed from sale of assets held for sale.

Net cash generated from financing activities for the nine months ended March 31, 2021 was $279, representing a change of $575 as compared to ~~$1,102 during~~an outflow of $296 for the same period of the last fiscal year. The increase in cash flow was ~~primarily due~~mainly attributable to ~~$743 in capital spending and~~ a decrease in cash outflow of ~~$83~~$1,748 from the payments of lines of credit and an increase in ~~proceeds~~cash flow by $754 from ~~disposal of property, plant and equipment.~~the stock option exercise proceeds. 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~~inflow by ~~$1,087 to $388 for~~$1,903 from 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, which was partially offset by an increase in repayment of lines of credit ~~of $475.~~

We believe that our projected cash flows 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. proceeds.

Critical Accounting Estimates & Policies

~~The~~Effective as of July 1, 2019, the Company has adopted ASU ~~2015-11 ASC Topic 330:~~2016-02, Leases (Topic 842)~~Simplifying~~, and its related amendments using the ~~Measurement of Inventory~~modified retrospective transition method. We have completed our adoption and implemented policies, processes and controls to support the standard’s measurement and disclosure requirements ~~(“ASC Topic 330”) for~~as described in note 1 to the financial ~~year beginning after December 15, 2016 and interim periods within those fiscal years, and concluded that the effectiveness~~statements included in item 1 of this ~~update does not have a significant effect on the Company’s consolidated financial position or results of operations.~~Form 10-Q.

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 Report on Form 10-K.

ITEM 3. ~~QUANTITATIVE~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. ~~CONTROLS~~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,~~2021, 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.

Changes in Internal Control Over Financial Reporting

Except as discussed below, there has been no change in the Company’s internal control over financial reporting during the fiscal quarter ended ~~December~~March 31, ~~2017~~2021, 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 iswas scheduled to occur in phases over ~~the next~~a few ~~years, and began with the migration of certain of our~~years. The operational and financial systems in our Singapore and Malaysia operations were transitioned to the new ~~ERP~~system in fiscal 2018 and fiscal 2019, respectively.

The operational and financial systems in our Tianjin and Suzhou operations were fully transitioned to the new system during the second quarter of fiscal ~~2017.~~2021. This implementation effort ~~continues in fiscal 2018, when~~will continue till the ~~operational and financial systems in Singapore will be~~Company's consolidation process is substantially ~~transitioned to~~automated using 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.

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TRIO-TECH INTERNATIONAL

~~PART~~PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 1A. Risk Factors

Not ~~applicable.~~applicable

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.

Item 3. ~~Defaults~~Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. ~~Exhibits~~Exhibits

31.1		Rule 13a-14(a) Certification of Principal Executive Officer of Registrant

31.2		Rule 13a-14(a) Certification of Principal Financial Officer of Registrant

32		Section 1350 Certification

~~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~~ 101.INSXBRL Instance Document101.SCHXBRL Taxonomy Extension Schema101.CALXBRL Taxonomy Extension Calculation Linkbase101.DEFXBRL Taxonomy Extension Definition Linkbase101.LABXBRL Taxonomy Extension Label Linkbase101.PREXBRL Taxonomy Extension Presentation Linkbase

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~~SIGNATURES~~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 Chief Financial Officer (Principal Financial Officer) Dated: ~~February 12, 2018~~May 14, 2021

~~-47-~~- 48 -

	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

	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		-	-

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

	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)

	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