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 31, ~~2022~~2023

☐ 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-TECHINTERNATIONAL

(Exact name of Registrant as specified in its ~~Charter~~Charter)

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

Block 1008 Toa Payoh North
Unit 03-09 Singapore		318996
(Address of principal executive offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code: (65) 6265 3300

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

		Name of each exchange
Title of each class	Trading Symbol	Onon 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 every Interactive Data File required to be submitted 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 ~~non‐~~non-‐accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule ~~12b‐~~12b-‐2 of the Exchange Act. (Check one):

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller reporting 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 1, ~~2023,~~2024, there were ~~4,076,680~~4,169,555 shares of the issuer’s Common Stock, no par value, outstanding.

TRIO-TECH INTERNATIONAL

INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION, OTHER INFORMATION AND SIGNATURE

		Page
Part I.	Financial Information

Item 1.	Financial Statements	1
	(a) Condensed Consolidated Balance Sheets as of December 31, ~~2022~~2023 (Unaudited), and June 30, ~~2022~~2023	1
	(b) Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the Three and Six Months Ended December 31, ~~2022~~2023 (Unaudited), and December 31, ~~2021~~2022 (Unaudited)	2 3
	(c) Condensed Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended December 31, ~~2022~~2023 (Unaudited), and December 31, ~~2021~~2022 (Unaudited)	4
	(d) Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended December 31, ~~2022~~2023 (Unaudited), and December 31, ~~2021~~2022 (Unaudited)	5
	(e) Notes to Condensed Consolidated Financial Statements (Unaudited)	6 7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26 28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39 41
Item 4.	Controls and Procedures	39 41

Part II.	Other Information	40

Item 1.	Legal Proceedings	40 42
Item 1A.	Risk Factors	40 42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40 42
Item 3.	Defaults upon Senior Securities	40 42
Item 4.	Mine Safety Disclosures	40 42
Item 5.	Other Information	40 42
Item 6.	Exhibits	40 42

Signatures		41 43

-i-

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

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

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

December 31,
2022

June 30,
2022

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents
$ 6,379 $ 7,698
Short-term deposits
4,995 5,420
Trade accounts receivable, less allowance for doubtful accounts of $220 and $243, respectively
13,332 11,592
Other receivables
728 998
Inventories, less provision for obsolete inventories of $649 and $674, respectively
3,219 2,258
Prepaid expenses and other current assets
610 1,215
Financed sales receivable 21 21
Restricted term deposit 747 -
Total current assets
30,031 29,202
NON-CURRENT ASSETS:

Deferred tax assets
93 169
Investment properties, net
533 585
Property, plant and equipment, net
11,070 8,481
Operating lease right-of-use assets
2,580 3,152
Other assets
141 137
Financed sales receivable
6 17
Restricted term deposits
1,742 1,678
Total non-current assets
16,165 14,219
TOTAL ASSETS
$ 46,196 $ 43,421

LIABILITIES

CURRENT LIABILITIES:

Lines of credit
$ - $ 929
Accounts payable
3,067 2,401
Accrued expenses
6,807 6,004
Income taxes payable
461 787
Current portion of bank loans payable
511 472
Current portion of finance leases
101 118
Current portion of operating leases
1,140 1,218
Total current liabilities
12,087 11,929
NON-CURRENT LIABILITIES:

Bank loans payable, net of current portion
1,185 1,272
Finance leases, net of current portion
69 119
Operating leases, net of current portion
1,440 1,934
Income taxes payable, net of current portion
255 137
Deferred tax liabilities
15 -
Other non-current liabilities
1,172 28
Total non-current liabilities
4,136 3,490
TOTAL LIABILITIES
$ 16,223 $ 15,419

EQUITY

TRIO-TECH INTERNATIONAL’S SHAREHOLDERS’ EQUITY:

Common stock, no par value, 15,000,000 shares authorized; 4,076,680 and 4,071,680 shares issued outstanding as at December 31 and June 30, 2022, respectively
$ 12,769 12,750
Paid-in capital
4,762 4,708
Accumulated retained earnings
10,608 9,219
Accumulated other comprehensive income-translation adjustments
1,494 1,197
Total Trio-Tech International shareholders’ equity
29,633 27,874
Non-controlling interest
340 128
TOTAL EQUITY
$ 29,973 $ 28,002
TOTAL LIABILITIES AND EQUITY
$ 46,196 $ 43,421

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

Three Months Ended

Six Months Ended

Dec. 31,

Dec. 31,

Dec. 31,

Dec. 31,

2022

2021

2022

2021

Revenue

Manufacturing
$ 5,044 $ 3,528 $ 8,629 $ 7,090
Testing services
5,648 4,966 12,012 9,566
Distribution
1,694 2,420 3,676 4,418
Real estate
4 8 12 19
12,390 10,922 24,329 21,093
Cost of Sales

Cost of manufactured products sold
3,849 2,874 6,374 5,308
Cost of testing services rendered
3,747 3,089 7,873 5,972
Cost of distribution
1,441 2,050 3,089 3,706
Cost of real estate
18 19 36 38
9,055 8,032 17,372 15,024

Gross Margin
3,335 2,890 6,957 6,069

Operating Expenses:

General and administrative
1,919 1,947 4,224 3,927
Selling
193 156 366 303
Research and development
151 131 224 213
Loss on disposal of property, plant and equipment
3 - 7 -
Total operating expenses
2,266 2,234 4,821 4,443

Income from Operations
1,069 656 2,136 1,626

Other (Expenses) /Income

Interest expenses
(10 ) (28
)
(54 ) (56
)
Other income, net
(243 ) 381 (64 ) 542
Total other (expenses) / income
(253 ) 353 (118 ) 486

Income from Continuing Operations before Income Taxes
816 1,009 2,018 2,112

Income Tax Expenses
(241 ) (153
)
(466 ) (333
)

Income from Continuing Operations before Non-controlling Interest, Net of Tax
575 856 1,552 1,779

Discontinued Operations

(Loss) / Income from discontinued operations, net of tax
(10 ) - (9 ) 5
NET INCOME
565 856 1,543 1,784

Less: net income attributable to non-controlling interest
58 1 154 12
Net Income Attributable to Trio-Tech International Common Shareholders
$ 507 $ 855 $ 1,389 $ 1,772

Amounts Attributable to Trio-Tech International Common Shareholders:

Income from continuing operations, net of tax
512 856 1,394 1,770
(Loss) / Income from discontinued operations, net of tax
(5 ) (1
)
(5 ) 2
Net Income Attributable to Trio-Tech International Common Shareholders
$ 507 $ 855 $ 1,389 $ 1,772

Basic Earnings per Share:

Basic earnings per share from continuing operations attributable to Trio-Tech International
$ 0.12 $ 0.22 $ 0.34 $ 0.46
Basic earnings per share from discontinued operations attributable to Trio-Tech International
$ - $ - $ - $ -
Basic Earnings per Share from Net Income Attributable to Trio-Tech International
$ 0.12 $ 0.22 $ 0.34 $ 0.46
Diluted Earnings per Share:

Diluted earnings per share from continuing operations attributable to Trio-Tech International
$ 0.12 $ 0.20 $ 0.33 $ 0.43
Diluted earnings per share from discontinued operations attributable to Trio-Tech International
$ - $ - $ - $ -
Diluted Earnings per Share from Net Income Attributable to Trio-Tech International
$ 0.12 $ 0.20 $ 0.33 $ 0.43

Weighted average number of common shares outstanding

Basic
4,074 3,923 4,074 3,923
Dilutive effect of stock options
88 319 86 206
Number of shares used to compute earnings per share diluted
4,162 4,242 4,160 4,129

Three Months Ended

Six Months Ended

Dec. 31,

Dec. 31,

Dec. 31,

Dec. 31,

2022

2021

2022

2021

Comprehensive Income Attributable to Trio-Tech International Common Shareholders:

Net income
$ 565 $ 856 $ 1,543 $ 1,784
Foreign currency translation, net of tax
1,568 251 355 (38
)
Comprehensive Income
2,133 1,107 1,898 1,746
Less: comprehensive income attributable to non- controlling interest
133 2 212 6
Comprehensive Income Attributable to Trio-Tech International Common Shareholders
$ 2,000 $ 1,105 $ 1,686 $ 1,740

	December 31, 2023		June 30, 2023
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	10,966	$	7,583
Short-term deposits		5,791		6,627
Trade accounts receivable, less allowance for expected credit losses of $222 and $217, respectively		12,388		9,804
Other receivables		1,029		939
Inventories, less provision for obsolete inventories of $675 and $648, respectively		3,546		2,151
Prepaid expense and other current assets		589		694
Assets held for sale		-		274
Financed sales receivable		6		16
Restricted term deposits		762		739
Total current assets		35,077		28,827
NON-CURRENT ASSETS:
Deferred tax assets		153		100
Investment properties, net		461		474
Property, plant and equipment, net		6,601		8,344
Operating lease right-of-use assets		2,359		2,609
Other assets		169		116
Restricted term deposits		1,778		1,716
Total non-current assets		11,521		13,359
TOTAL ASSETS	$	46,598	$	42,186

LIABILITIES
CURRENT LIABILITIES:
Lines of credit	$	384	$	-
Accounts payable		2,345		1,660
Accrued expense		4,506		4,291
Contract liabilities		3,808		1,277
Income taxes payable		257		418
Current portion of bank loans payable		375		475
Current portion of finance leases		81		107
Current portion of operating leases		1,119		1,098
Total current liabilities		12,875		9,326
NON-CURRENT LIABILITIES:
Bank loans payable, net of current portion		762		877
Finance leases, net of current portion		15		42
Operating leases, net of current portion		1,240		1,511
Income taxes payable, net of current portion		141		255
Deferred tax liabilities		7		10
Other non-current liabilities		30		594
Total non-current liabilities		2,195		3,289
TOTAL LIABILITIES	$	15,070	$	12,615

EQUITY
TRIO-TECH INTERNATIONAL’S SHAREHOLDERS’ EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 4,160,555 and 4,096,680 shares issued outstanding as at December 31 and June 30, 2023, respectively	$	13,018		12,819
Paid-in capital		5,156		5,066
Accumulated retained earnings		11,500		10,763
Accumulated other comprehensive income-translation adjustments		1,763		758
Total Trio-Tech International shareholders’ equity		31,437		29,406
Non-controlling interest		91		165
TOTAL EQUITY	$	31,528	$	29,571
TOTAL LIABILITIES AND EQUITY	$	46,598	$	42,186

	Three Months Ended						Six Months Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2023			2022			2023			2022
Revenue
Manufacturing	$	4,790		$	5,044		$	7,675		$	8,629
Testing services		4,646			5,648			9,810			12,012
Distribution		2,760			1,694			4,670			3,676
Real estate		6			4			13			12
		12,202			12,390			22,168			24,329
Cost of Sales
Cost of manufactured products sold		3,609			3,849			5,658			6,374
Cost of testing services rendered		3,464			3,747			7,248			7,873
Cost of distribution		2,256			1,441			3,852			3,089
Cost of real estate		19			18			36			36
		9,348			9,055			16,794			17,372

Gross Margin		2,854			3,335			5,374			6,957

Operating Expenses:
General and administrative		1,817			1,919			3,975			4,224
Selling		248			193			435			366
Research and development		131			151			216			224
(Gain) / Loss on disposal of property, plant and equipment		(19	)		3			72			7
Total operating expense		2,177			2,266			4,698			4,821

Income from Operations		677			1,069			676			2,136

Other (Expenses) / Income
Interest expense		(22	)		(10	)		(46	)		(54	)
Other (expense) / income, net		(82	)		(264	)		114			(106	)
Government grant		4			21			77			42
Total other (expense) / income		(100	)		(253	)		145			(118	)

Income from Continuing Operations before Income Taxes		577			816			821			2,018

Income Tax Expenses		(95	)		(241	)		(132	)		(466	)

Income from Continuing Operations before Non-controlling Interest, Net of Tax		482			575			689			1,552

Discontinued Operations
Income / (Loss) from discontinued operations, net of tax		4			(10	)		4			(9	)
Net Income		486			565			693			1,543

Less: net (loss) / income attributable to non-controlling interest		(21	)		58			(44	)		154
Net Income Attributable to Trio-Tech International Common Shareholders	$	507		$	507		$	737		$	1,389

Amounts Attributable to Trio-Tech International Common Shareholders:
Income from continuing operations, net of tax		503			512			730			1,394
Income / (Loss) from discontinued operations, net of tax		4			(5	)		7			(5	)
Net Income Attributable to Trio-Tech International Common Shareholders	$	507		$	507		$	737		$	1,389

Basic Earnings per Share:
Basic earnings per share from continuing operations attributable to Trio-Tech International	$	0.12		$	0.12		$	0.18		$	0.34
Basic earnings per share from discontinued operations attributable to Trio-Tech International	$	-		$	-		$	-		$	-
Basic Earnings per Share from Net Income Attributable to Trio-Tech International	$	0.12		$	0.12		$	0.18		$	0.34

Diluted Earnings per Share:
Diluted earnings per share from continuing operations attributable to Trio-Tech International	$	0.12		$	0.12		$	0.17		$	0.33
Diluted earnings per share from discontinued operations attributable to Trio-Tech International	$	-		$	-		$	-		$	-
Diluted Earnings per Share from Net Income Attributable to Trio-Tech International	$	0.12		$	0.12		$	0.17		$	0.33

Weighted average number of common shares outstanding
Basic		4,120			4,074			4,109			4,074
Dilutive effect of stock options		139			88			161			86
Number of shares used to compute earnings per share diluted		4,259			4,162			4,270			4,160

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

Balance at June 30, 2023		4,097		12,819		5,066		10,763		758		165			29,571
Stock option expense		-		-		90		-		-		-			90
Net income / (loss)		-		-		-		737		-		(44	)		693
Exercise of stock option		64		199		-		-		-		-			199
Translation adjustment		-		-		-		-		1,005		(30	)		975
Balance at Dec. 31, 2023		4,161		13,018		5,156		11,500		1,763		91			31,528

Common Stock

Paid-in

Accumulated Retained

Accumulated Other
Comprehensive

Non- controlling

Shares

Amount

Capital

Earnings

Income

Interest

Total

$

$

$

$

$

$

Balance at June 30, 2022
4,072 12,750 4,708 9,219 1,197 128 28,002
Stock option expenses
- - 54 - - - 54
Net income
- - - 1,389 - 154 1,543
Exercise of stock option
5 19 - - - - 19
Translation adjustment
- - - - 297 58 355
Balance at Dec. 31, 2022
4,077 12,769 4,762 10,608 1,494 340 29,973

Common Stock

Paid-in

Accumulated Retained

Accumulated Other
Comprehensive

Non- controlling

Shares

Amount

Capital

Earnings

Income

Interest

Total

$ $ $ $ $ $

Balance at June 30, 2021
3,913 12,178 4,233 6,824 2,399 419 26,053
Stock option expenses
- - 22 - - - 22
Net income
- - - 1,772 - 12 1,784
Dividend declared by subsidiary
- - - - - (119
)
(119
)
Exercise of stock option
41 118 - - - - 118
Translation adjustment
- - - (32
)
(6
)
(38
)
Balance at Dec. 31, 2021
3,954 12,296 4,255 8,596 2,367 306 27,820

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

Balance at June 30, 2022		4,072		12,750		4,708		9,219		1,197		128		28,002
Stock option expense		-		-		54		-		-		-		54
Net income		-		-		-		1,389		-		154		1,543
Exercise of stock option		5		19		-		-		-		-		19
Translation adjustment		-		-		-		-		297		58		355
Balance at Dec. 31, 2022		4,077		12,769		4,762		10,608		1,494		340		29,973

	Six Months Ended						Six Months Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Cash Flow from Operating Activities
Net income	$	1,543		$	1,784		$	693		$	1,543
Adjustments to reconcile net income/(loss) to net cash flow provided by operating activities
Adjustments to reconcile net income to net cash flow provided by operating activities
Depreciation and amortization		2,143			1,502			2,784			2,143
(Reversal) / Addition of provision for obsolete inventories		(41	)		26
Addition / (Reversal) of provision for obsolete inventories								14			(41	)
Stock option expense		54			22			90			54
Bad debt provision		(17	)		(62	)
Bad debt recovery								(3	)		(17	)
Accrued interest expense, net accrued interest income		(8	)		51			(35	)		(8	)
Payment of interest portion of finance lease		(6	)		(13	)		(3	)		(6	)
Loss on sale of property, plant and equipment - continuing operations		8			-			71			8
Warranty recovery, net		2			-			15			2
Deferred tax expense		94			62
Reversal of income tax provision								(7	)		-
Deferred tax (benefits) / expense								(51	)		94
Changes in operating assets and liabilities, net of acquisition effects
Trade accounts receivable		(1,507	)		(1,501	)		(2,562	)		(1,507	)
Other receivables		60			(1,725	)		(90	)		60
Other assets		(4	)		125			(58	)		(4	)
Inventories		(821	)		(525	)		(1,342	)		(821	)
Prepaid expenses and other current assets		588			(79	)
Accounts payable and accrued expenses		1,338			1,638
Prepaid expense and other current assets								129			588
Accounts payable, accrued expense and contract liabilities								3,147			1,338
Income taxes payable		(197	)		2			(259	)		(197	)
Other non-current liabilities		1,144			-			(564	)		1,144
Operating lease liabilities		(594	)		(470	)		(693	)		(594	)
Net Cash Provided by Operating Activities	$	3,779		$	837		$	1,276		$	3,779

Cash Flow from Investing Activities
Withdrawal from unrestricted term deposits, net		2,841			1,957			2,666			2,841
Investment in unrestricted term deposits, net		(2,275	)		(320	)		(1,641	)		(2,275	)
Additions to property, plant and equipment		(3,994	)		(795	)		(158	)		(3,994	)
Net Cash (Used in) / Provided by Investing Activities		(3,428	)		842
Proceeds from disposal of assets held-for-sale								269			-
Net Cash Provided by Investing Activities								1,136			(3,428	)

Cash Flow from Financing Activities
Payment on lines of credit		(1,402	)		(546	)		(575	)		(1,402	)
Payment of bank loans		(234	)		(216	)		(241	)		(234	)
Payment of finance leases		(67	)		(106	)		(55	)		(67	)
Dividends paid to non-controlling interest		-			(119	)
Proceeds from exercising stock options		19			118			199			19
Proceeds from lines of credit		476			942			952			476
Proceeds from bank loans		176			-			-			176
Net Cash (Used in) / Provided by Financing Activities		(1,032	)		73
Net Cash Provided by Financing Activities								280			(1,032	)

Effect of Changes in Exchange Rate		173			(68	)		776			173

Net (Decrease) / Increase in Cash, Cash Equivalents, and Restricted Cash		(508	)		1,684
Net Increase / (Decrease) in Cash, Cash Equivalents, and Restricted Cash								3,468			(508	)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period		9,376			7,577			10,038			9,376
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	8,868		$	9,261		$	13,506		$	8,868

Supplementary Information of Cash Flows
Cash paid during the period for:
Interest	$	53		$	56		$	21		$	53
Income taxes	$	346		$	281		$	371		$	346

Reconciliation of Cash, Cash Equivalents, and Restricted Cash
Cash		6,379			7,526			10,966			6,379
Restricted Term-Deposits in Current Assets		747			-			762			747
Restricted Term-Deposits in Non-Current Assets		1,742			1,735			1,778			1,742
Total Cash, Cash Equivalents, and Restricted Cash Shown in Statements of Cash Flows	$	8,868		$	9,261		$	13,506		$	8,868

Restricted deposits represent the amount of cash pledged to secure loans payable or trade financing granted by financial institutions, 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 current and non-current depending on whether they relate to ~~long term~~long-term or short-term obligations. Restricted ~~deposit~~deposits of ~~$747 is~~$762 as at December 31, 2023 are classified as current assets as ~~it relates~~they relate to short-term trade financing. On the other hand, restricted deposits of ~~$1,742 is~~$1,778 as at December 31, 2023 are classified as non-current assets as they relate to long-term obligations and will become unrestricted only upon discharge of the obligations.

Trio-Tech International (the “Company”, or “TTI”) was incorporated in fiscal year ended June 30, 1958 under the laws of the State of California. TTI provides ~~third~~~~-party~~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 (“U.S.”). 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 quarter of the fiscal year ended June 30, ~~2023 (~~“2024 (“Fiscal ~~2023”~~2024”), 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, Ireland and China as follows:

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q10-Q and Article 10 of Regulation S-X.S-X. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements are presented in U.S. dollars unless otherwise stated. The accompanying condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. 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, ~~2022 (~~“2023 (“Fiscal ~~2022”~~2023”). The Company’s operating results are presented based on the translation of foreign currencies using the respective quarter’s average exchange rate.

The results of operations for the six months ended December 31, ~~2022~~ 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the full year ending June 30, ~~2023.~~2024.

Use of Estimates — The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and ~~expenses~~expense during the reporting period. Among the more significant estimates included in these consolidated financial statements are the estimated allowance for ~~doubtful~~credit losses on account receivables, reserve for obsolete inventory, impairments, provision of income tax, stock options and the deferred income tax asset allowance. Actual results could materially differ from those estimates.

Significant Accounting Policies. There have been no material changes to our significant accounting policies summarized in Note 1 “Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated Financial Statements included in our Annual Report on Form 10-K10-K for Fiscal ~~2022.~~

In ~~March 2022,~~ ~~the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)~~ ~~2022~~-02 ~~updating Accounting Standards Codification (“ASC”) Topic~~ ~~326:~~~~Financial Instruments~~—~~Credit Losses~~ ~~(Topic~~ ~~326~~): ~~Troubled Debt Restructurings~~ ~~(“TDR")~~ ~~and Vintage Disclosures~~ ~~(“ASU~~ ~~2022~~-~~02”~~~~), which require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases within the scope of Subtopic~~ ~~326~~-~~20.~~ ~~The Company has completed its assessment and concluded that ASU~~ ~~2022~~-02 ~~has~~ no ~~significant impact to the Company’s consolidated financial statements.~~

In ~~November 2021,~~ June 2016, FASB issued ASU ~~2021~~-102016-13 ASC Topic ~~832:~~~~Government Assistance~~326: Financial Instruments — Credit Losses (“~~Topic~~ ~~832”~~~~): Disclosures by Business Entities about Government Assistance~~ ~~(“ASU~~ ~~2021~~-~~10”~~~~), which expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance received. ASU~~ ~~2021~~-10 ~~is effective for financial statements issued for annual periods beginning after~~ ~~December 15, 2021~~ ~~for all entities except~~ ~~not~~~~-for-profit entities and employee benefit plans within the scope of Topics~~ ~~960,~~~~962,~~ ~~and~~ ~~965~~ ~~on plan accounting. The Company has completed its assessment and concluded that ASU~~ ~~2021~~-10 ~~is applicable to the Company as the Company received government grants. The Company will make the necessary disclosures in the financial statements for Fiscal~~ ~~2023.~~

In ~~June 2016,~~ ~~FASB issued ASU~~ ~~2016~~-13ASC Topic ~~326,~~~~Financial Instruments~~ — ~~Credit Losses~~ ~~(“Topic~~ 326”~~) (“ASU~~ ~~2016~~-~~13”~~) for the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ~~Financial institutions and other organizations~~This guidance modifies the impairment model for certain financial assets by requiring use of an expected loss methodology, which will ~~now use forward-looking information to better inform their credit loss estimates. Many~~result in more timely recognition of ~~the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected~~ credit losses. ~~Topic~~ ~~326~~ ~~is effective for the Company for annual periods beginning after~~ ~~December 15, 2022.~~ The Company ~~has completed its assessment and concluded that ASU~~ ~~2016~~-03 ~~has~~ noadopted this guidance in the first quarter in fiscal 2024 under the modified retrospective basis. The adoption of this guidance did not have a significant impact toon the ~~Company’s~~Company's consolidated condensed financial statements.

~~Other~~In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The new guidance requires enhanced disclosures about significant segment expense. This standard update is effective for Company beginning in the fiscal year ending June 30, 2025 and interim period reports beginning in the first quarter of the fiscal year ending June 30, 2026. Early adoption is permitted on a retrospective basis. The Company is currently evaluating the impact of this ASU on segment disclosure.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The new guidance requires enhanced disclosures about income tax expense. This standard update is effective for Company beginning in the fiscal year ending June 30, 2026. Early adoption is permitted on a prospective basis. The Company is currently evaluating the impact of this ASU on annual income tax disclosures.

New pronouncements issued but not yet effective until after December 31, ~~2022,~~ 2023, are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

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 current and non-current depending on whether they relate to ~~long term~~long-term or short-term obligations. Restricted ~~deposit~~deposits of ~~$747 is~~$762 as at December 31, 2023 are classified as current assets as ~~it relates~~they relate to short-term trade financing. On the other hand, restricted deposits of ~~$1,742 is~~$1,778 as at December 31, 2023 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, which do not qualify as cash equivalents.~~

Accounts receivable are customer obligations due under normal trade terms. 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.

~~Senior management reviews accounts~~The allowance for trade receivable ~~on a periodic basis to determine if any~~represents management’s expected credit losses in our trade receivables ~~will potentially be uncollectible. Management includes any accounts receivable balances~~as of the date of the financial statements. The allowance provides for probable losses that ~~are determined~~have been identified with specific customer relationships and for probable losses believed to be ~~uncollectible~~inherent in the ~~allowance for doubtful accounts. After all reasonable attempts to collect a receivable~~trade receivables, but that 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 31, 2022,~~ ~~and~~ ~~June 30, 2022,~~ ~~was adequate.~~ not been specifically identified.

The following table represents the changes in the allowance for ~~doubtful accounts:~~expected credit losses:

	Dec. 31,			June 30,			Dec. 31,			June 30,
	2022			2022			2023			2023
	(Unaudited)						(Unaudited)

Beginning	$	243		$	311		$	217		$	243
Additions charged to expenses		-			48
Additions charged to expense								12			9
Recovered		(17	)		(106	)		(15	)		(20	)
Currency translation effect		(6	)		(10	)		8			(15	)
Ending	$	220		$	243		$	222		$	217

The following table presents Trio-Tech (Chongqing) Co. Ltd (“TTCQ”)’s loan receivables from property development projects in China as of December 31, ~~2022.~~2023.

	Loan Expiry	Loan Amount			Loan Amount			Loan Expiry	Loan Amount			Loan Amount
	Date	(RMB)			(U.S. Dollars)			Date	(RMB)			(U.S. Dollars)
Short-term loan receivables
JiangHuai (Project – Yu Jin Jiang An)	May 31, 2013		2,000			290		May 31, 2013		2,000			289
Less: allowance for doubtful receivables			(2,000	)		(290	)
Less: allowance for expected credit losses								Less: allowance for expected credit losses		(2,000	)		(289	)
Net loan receivables from property development projects	Net loan receivables from property development projects		-			-		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			722
Less: transfer – down-payment for purchase of investment property	Less: transfer – down-payment for purchase of investment property		(5,000	)		(814	)	Less: transfer – down-payment for purchase of investment property		(5,000	)		(722	)
Net loan receivables from property development projects	Net loan receivables from property development projects		-			-		Net loan receivables from property development projects		-			-

The short-term loan receivables amounting to renminbi (“RMB”) 2,000, or approximately ~~$290~~$289 arose due to TTCQ 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 ~~during~~in the fiscal year ended June 30, ~~2011.~~ 2011 (“Fiscal 2011”). Based on TTI’s financial policy, an allowance for expected credit losses of $289 on the investment in JiangHuai was recorded during the fiscal year ended June 30, 2014 (“Fiscal 2014”). TTCQ did not generate other income from JiangHuai for the quarter ended December 31, ~~2022~~ 2023 or for Fiscal ~~2022.~~2024. TTCQ is in the legal process of recovering the outstanding amount of approximately ~~$290.~~$289.

The ~~loan-term~~ loan amounting to RMB 5,000, or approximately ~~$814,~~$722, arose ~~from~~due to TTCQ entering into a Memorandum Agreement with JiaSheng Property Development Co. Ltd. (“JiaSheng”) to invest in ~~JiaSheng’s~~their property development projects (Project B-48B-48 Phase 2)2) located in Chongqing City, China ~~during the year ended~~ ~~June 30,~~in Fiscal 2011. The ~~loan receivable~~amount was unsecured and repayable at the end of the term. During the fiscal year ended June 30, 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 Note 8)8).

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

The following table presents the Company’s investment in properties in China as of December 31, ~~2022.~~ 2023. The exchange rate is based on the market rate as of December 31, ~~2022.~~2023.

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

Purchase of rental property – Property I – MaoYe Property	Jan 04, 2008		5,554			894		Jan 04, 2008		5,554			894
Currency translation	Currency translation		-			(87	)	Currency translation		-			(87	)
Reclassification as “Assets held for sale”	July 01, 2018		(5,554	)		(807	)	July 01, 2018		(5,554	)		(807	)
Reclassification from “Assets held for sale”	Mar 31, 2019		2,024			301		Mar 31, 2019		2,024			301
			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 - FuLi	Apr 08, 2010		4,025			648		Apr 08, 2010		4,025			647
Currency translation	Currency translation		-			(130	)	Currency translation		-			(136	)
Gross investment in rental property	Gross investment in rental property		9,649			1,399		Gross investment in rental property		9,649			1,392

Accumulated depreciation on rental property	Dec 31, 2022		(7,764	)		(1,133	)	Sep 30, 2023		(8,246	)		(1,198	)
Reclassified as “Assets held for sale”- MaoYe Property	July 01, 2018		2,822			410		July 01, 2018		2,822			410
Reclassification from “Assets held for sale”- MaoYe Property	Mar 31, 2019		(1,029	)		(143	)	Mar 31, 2019		(1,029	)		(143	)
			(5,971	)		(866	)			(6,453	)		(931	)
Net investment in property – China	Net investment in property – China		3,678			533		Net investment in property – China		3,196			461

The following table presents the Company’s investment in properties in China as of June 30, ~~2022.~~ 2023. The exchange rate is based on the market rate as of June 30, ~~2022.~~2023.

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

Purchase of rental property – Property I – MaoYe Property	Jan 04, 2008		5,554			894		Jan 04, 2008		5,554			894
Currency translation	Currency translation		-			(87	)	Currency translation		-			(87	)
Reclassification as “Assets held for sale”	July 01, 2018		(5,554	)		(807	)	July 01, 2018		(5,554	)		(807	)
Reclassification from “Assets held for sale”	Mar 31, 2019		2,024			301		Mar 31, 2019		2,024			301
			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 - FuLi	Apr 08, 2010		4,025			648		Apr 08, 2010		4,025			648
Currency translation	Currency translation		-			(89	)	Currency translation		-			(199	)
Gross investment in rental property	Gross investment in rental property		9,649			1,440		Gross investment in rental property		9,649			1,330

Accumulated depreciation on rental property	Jun 30, 2022		(7,523	)		(1,122	)	Jun 30, 2023		(7,884	)		(1,123	)
Reclassified as “Assets held for sale”- MaoYe Property	July 01, 2018		2,822			410		July 01, 2018		2,822			410
Reclassification from “Assets held for sale”- MaoYe Property	Mar 31, 2019		(1,029	)		(143	)	Mar 31, 2019		(1,029	)		(143	)
			(5,730	)		(855	)			(6,091	)		(856	)
Net investment in property – China	Net investment in property – China		3,919			585		Net investment in property – China		3,558			474

InDuring the fiscal year ended June 30, 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. During the year ended June 30, 2019, the Company sold thirteen of the fifteen units constituting the MaoYe Property. Management has decided not to sell the remaining two units of MaoYe properties in the near future, due to current conditions of the property market in China. ~~The~~A new lease agreement ~~which~~ was entered into on ~~February 10, 2022~~ ~~has been terminated on~~ ~~October 2022.~~ ~~A new agreement has been secured and will be effective from~~ February 1, 2023 for a period of 4 years at a monthly rate of ~~RMB15,~~RMB14, or approximately $2, after termination of the previous agreement. Pursuant to the agreement, monthly rental will increase by 5% each ~~year from~~ ~~third~~ ~~year onwards.~~year.

Property purchased from MaoYe generated a rental income of $2$6 and $8$12 during the three and six months ended December 31, ~~2022,~~ 2023, as compared to $2 and $4$8 for the same period in Fiscal ~~2022.~~2023.

Depreciation expense for MaoYe was $4 and $8 during the three and six months ended December 31, ~~2022,~~ 2023, as compared to $4 and $8 for the same period in Fiscal ~~2022.~~2023.

During the year ended June 30, 2010 (“(“Fiscal 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. As of December 31, ~~2022,~~ 2023, TTCQ had not received the title deed for properties purchased from JiangHuai. While the above is not expected to affect the property’s market value, the ~~COVID-~~19 ~~pandemic and~~ current economic situation is likely to cause delays in court to consummate the ~~execution~~acquisition of ~~the sale.~~properties.

Property purchased from JiangHuai did not generate any rental income for the three and six months ended December 31, ~~2022~~ 2023 and ~~2021.~~2022.

Depreciation expense for JiangHuai was $7$6 and ~~$14~~$12 for the three and six months ended December 31, ~~2022,~~ 2023, as compared to $7 and $14 for the same period in last Fiscal ~~2022.~~2023.

In Fiscal 2010, TTCQ entered into a Memorandum 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. The total purchase price committed and paid was RMB 4,025, or approximately $648. The development was completed, the property was transferred to TTCQ in April 2013 and the title deed was received during the third quarter of Fiscal 2014.

~~As of mid~~ ~~August 2022,~~ ~~TTCQ had found a new tenant for~~ ~~one~~ ~~of the~~ ~~two~~ ~~commercial properties for a period of~~ 1 ~~year at a monthly rate of~~ ~~RMB6,~~ ~~or approximately $1.~~ TTCQ is actively searching for tenants to occupy the ~~other~~ commercial ~~property,~~properties, which isare vacant as of the date of this Report.

Properties purchased from FuLi generated a rental income of $2$Nil and $4$1 for the three and six months ended December 31, ~~2022,~~ 2023, as compared to $5$2 and ~~$14~~$4 for the same period in Fiscal ~~2022.~~2023.

Depreciation expense for FuLi was $7 and ~~$15~~$14 for the three and six months ended December 31, ~~2022,~~ 2023, as compared to $8$7 and ~~$16~~$15 for the same period in Fiscal ~~2022.~~2023.

Total rental income for all investment properties in China was $4$6 and ~~$12~~$13 for the three and six months ended December 31, ~~2022,~~ 2023, as compared to $8$4 and ~~$19~~$12 for the same period in Fiscal ~~2022.~~2023.

Depreciation ~~expenses~~expense for all investment properties in China were ~~$18~~$17 and ~~$36~~$34 for the three and six months ended December 31, ~~2022,~~ 2023, as compared to ~~$19~~$18 and ~~$38~~$36 for the same period in Fiscal ~~2022.~~

	Dec. 31,		June 30,			Dec. 31,		June 30,
	2022		2022			2023		2023
	(Unaudited)					(Unaudited)
Down payment for purchase of investment properties *	$	-	$	-
Deposits for rental and utilities and others		134		142			164		117
Currency translation effect		7		(5	)		5		(1	)
Total	$	141	$	137		$	169	$	116

							2023
	RMB			U.S. Dollars			RMB			U.S. Dollars
Original Investment (10% of Junzhou equity)	$	10,000		$	1,606		$	10,000		$	1,606
Less: Management Fee		(5,000	)		(803	)		(5,000	)		(803	)
Net Investment		5,000			803			5,000			803
Less: Share of Loss on Joint Venture		(137	)		(22	)		(137	)		(22	)
Net Investment as Down Payment (Note *a)		4,863			781			4,863			781
Loans Receivable		5,000			814			5,000			722
Interest Receivable		1,250			200			1,250			180
Less: Impairment of Interest		(906	)		(150	)		(906	)		(131	)
Transferred to Down Payment (Note *b)		5,344			864			5,344			771
* Down Payment for Purchase of Investment Properties		10,207			1,645			10,207			1,552
Less: Effect of foreign currency exchange		-			(65	)
Add: Effect of foreign currency exchange								-			28
Less: Provision of Impairment loss on other assets		(10,207	)		(1,580	)		(10,207	)		(1,580	)
* Down Payment for Purchase of Investment Properties	$	-		$	-		$	-		$	-

~~Carrying~~The 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.

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

As of December 31, ~~2022,~~ 2023, the Company had certain lines of credit that are collateralized by restricted deposits.

Entity with	Type of	Interest			Credit		Unused		Type of	Interest	Credit		Unused
Facility	Facility	Rate			Limitation		Credit		Facility	Rate	Limitation		Credit
Trio-Tech International Pte. Ltd., Singapore	Lines of Credit	Ranging from 1.85%	to	5.5%	$	3,957	$	3,957	Lines of Credit	Cost of Funds Rate +1.25%	$	4,013	$	3,724
Universal (Far East) Pte. Ltd.	Lines of Credit	Ranging from 1.85%	to	5.5%	$	1,867	$	1,841	Lines of Credit	Cost of Funds Rate +1.25%	$	1,893	$	1,206
Trio-Tech Malaysia Sdn. Bhd.	Revolving credit	Cost of Funds Rate +2%			$	341	$	341	Revolving credit	Cost of Funds Rate +2%	$	326	$	326

As of June 30, ~~2022,~~ 2023, the Company had certain lines of credit that are collateralized by restricted deposits.

Entity with	Type of	Interest			Credit		Unused		Type of	Interest	Credit		Unused
Facility	Facility	Rate			Limitation		Credit		Facility	Rate	Limitation		Credit
Trio-Tech International Pte. Ltd., Singapore	Lines of Credit	Ranging from 1.85%	to	5.5%	$	4,090	$	3,651	Lines of Credit	Cost of Funds Rate +1.25% to +1.3%	$	3,907	$	3,701
Universal (Far East) Pte. Ltd.	Lines of Credit	Ranging from 1.85%	to	5.5%	$	1,076	$	586	Lines of Credit	Cost of Funds Rate +1.25% to +1.3%	$	1,843	$	1,559
Trio-Tech Malaysia Sdn. Bhd.	Revolving credit	Cost of Funds Rate +2%			$	338	$	338	Revolving credit	Cost of Funds Rate +2%	$	319	$	319

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 upon 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,		June 30,			Dec. 31,		June 30,
	2022		2022			2023		2023
	(Unaudited)					(Unaudited)

Note payable denominated in the Malaysian Ringgit for expansion plans in Malaysia, maturing in April 2028, bearing interest at the bank’s prime rate less 2.00% (4.6% and 3.791% at December 31, 2022 and June 30, 2022) per annum, with monthly payments of principal plus interest through August 2028, collateralized by the acquired building with a carrying value of $2,372 as at December 31, 2022 and June 30, 2022.	$	1,215	$	1,392
Financing arrangement at fixed interest rate 3.2% per annum, with monthly payments of principal plus interest through July 2025.		109		128
Financing arrangement at fixed interest rate 3.0% per annum, with monthly payments of principal plus interest through December 2026.		204		224
Financing arrangement at fixed interest rate 3.0% per annum, with monthly payments of principal plus interest through August 2027.		168		-
Note payable denominated in the Malaysian Ringgit for expansion plans in Malaysia, maturing in August 2028, bearing interest at the bank’s prime rate less 2.00% (4.85% and 4.6% at December 31, 2023 and June 30, 2023) per annum, with monthly payments of principal plus interest through August 2028, collateralized by the acquired building with a carrying value of $2,246 and $2,208, as at December 31, 2023 and June 30, 2023, respectively.						$	792	$	957
Financing arrangement at fixed interest rate 3.2% per annum, with monthly payments of principal plus interest through July 2025.							65		84
Financing arrangement at fixed interest rate 3.0% per annum, with monthly payments of principal plus interest through December 2026.							150		169
Financing arrangement at fixed interest rate 3.0% per annum, with monthly payments of principal plus interest through August 2027.							130		142
Total bank loans payable	$	1,696	$	1,744		$	1,137	$	1,352

Current portion of bank loans payable		506		503			354		503
Currency translation effect on current portion of bank loans		5		(31	)		21		(28	)
Current portion of bank loans payable		511		472			375		475
Long-term portion of bank loans payable		1,179		1,357			721		933
Currency translation effect on long-term portion of bank loans		6		(85	)		41		(56	)
Long-term portion of bank loans payable	$	1,185		1,272		$	762		877

Future minimum payments (excluding interest) as of at December 31, ~~2022,~~ 2023, were as follows:

Remainder of Fiscal 2023	$	269
2024		513
Remainder of Fiscal 2024			$	241
2025		283		268
2026		251		236
2027		216		217
Thereafter		164		175
Total obligations and commitments	$	1,696	$	1,137

Future minimum payments (excluding interest) as of at June 30, ~~2022,~~ 2023, were as follows:

2023	$	472
2024		481	$	475
2025		246		262
2026		214		231
2027		190		212
Thereafter		141		172
Total obligations and commitments	$	1,744	$	1,352

Deposits with banks are not fully insured by the local government or agency and are consequently exposed to risk of loss. The Company believes that the probability of 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 consolidated financial statements.

The Company operated in four ~~segments;~~segments: the testing service industry (which performs structural and electronic tests of semiconductor devices),; the designing and manufacturing of equipment (assembly of equipment that tests the structural integrity of integrated circuits and other products),; distribution of various products from other manufacturers in Singapore and ~~Asia~~Asia; and the real estate segment in China.

The cost of equipment, current year investment in new equipment and depreciation expense are allocated into respective segments based on the primary purpose for which the equipment was acquired.

~~All intersegment sales were sales from the manufacturing segment to the testing and distribution segment. Total intersegment sales were $115 and $669 for~~ ~~three~~ ~~and~~ ~~six~~ ~~months ended~~ ~~December 31, 2022,~~ ~~as compared to $232 and $820 for the same period in fiscal~~ ~~2022.~~ ~~Corporate assets consisted primarily of cash and prepaid expenses. Corporate expenses consisted primarily of stock option expense, salaries, insurance, professional expenses and directors' fees.~~ Corporate expenses are allocated to the four segments on a ~~predetermined~~combination of factors involving revenue, manpower costs and fixed ~~amount calculated based on the annual budgeted sales,~~assets investments, except the Malaysia ~~operation,~~and China operations, which is calculated based on actual sales. The following segment information table includes segment operating income or loss after including corporate ~~expenses~~expense allocated to the segments, which gets eliminated in the consolidation.

The following segment Information is unaudited for the six months ended December 31, ~~2022,~~ 2023, and December 31, ~~2021:~~2022:

	Six Months			Operating									Six Months			Operating
	Ended	Net		Income /			Total		Depr. And		Capital		Ended	Net		Income /			Total		Depr. And		Capital
	Dec. 31,	Revenue		(Loss)			Assets		Amort.		Expenditures		Dec. 31,	Revenue		(Loss)			Assets		Amort.		Expenditures
Manufacturing	2022	$	8,629	$	477		$	15,345	$	230	$	15	2023	$	7,675	$	149		$	19,242	$	214	$	38
	2021	$	7,090	$	252		$	14,799	$	208	$	95	2022	$	8,629	$	477		$	15,345	$	230	$	15

Testing Services	2022		12,012		1,129			27,757		1,875		3,967	2023		9,810		(280	)		22,690		2,507		120
	2021		9,566		1,124			24,546		1,251		699	2022		12,012		1,129			27,757		1,875		3,967

Distribution	2022		3,676		482			1,437		-		-	2023		4,670		646			1,976		-		-
	2021		4,418		531			1,850		2		-	2022		3,676		482			1,437		-		-

Real Estate	2022		12		(42	)		1,580		38		-	2023		13		(53	)		2,502		36		-
	2021		19		(51	)		1,283		41		1	2022		12		(42	)		1,580		38		-

Corporate & Unallocated	2022		-		90			77		-		12	2023		-		214			188		27		-
	2021		-		(230	)		74		-		-	2022		-		90			77		-		12

Total Company	2022	$	24,329	$	2,136		$	46,196	$	2,143	$	3,994	2023	$	22,168	$	676		$	46,598	$	2,784	$	158
	2021	$	21,093	$	1,626		$	42,552	$	1,502	$	795	2022	$	24,329	$	2,136		$	46,196	$	2,143	$	3,994

The following segment Information is unaudited for the three months ended December 31, ~~2022,~~ 2023, and December 31, ~~2021:~~2022:

Management is currently evaluating the ongoing contributions of each of its business segments to its current and future revenue and prospects, including its testing segment. As a result, it may divest one or more business segments in the future, including its testing segment, to enable management to concentrate on segments where it anticipates opportunities for future revenue growth, thereby maximizing shareholder value.

In the three months ended December 31, 2023, the Company received government grants amounting to $4, related to capital expenditure subsidy received from the China government. During the same period in 2022, the Company received government grants amounting to $21, $17 of which was an incentive from the Singapore government for local resident recruitment, and the remaining $4 related to capital expenditure subsidy received from the China government.

In the six months ended December 31, 2023, the Company received government grants amounting to $77, $16 of which was an incentive from the Singapore government for local resident recruitment, and the $57 from the U.S. government related to Employee Retention Credit (“ERC”). During the same period in 2022, the Company received government grants amounting to $42, with $10 from the Singapore government for Covid-19, $17 from the Singapore government for local resident recruitment and the remaining $15 related to capital expenditure subsidy received from the China government.

The provision for income taxes has been determined based upon the tax laws and rates in the countries in which we operate. 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~~ ~~2016~~ to ~~2022~~ for tax authorities in those jurisdictions to audit or examine income tax returns. The Company is under annual review by the tax authorities of the respective jurisdiction to which the subsidiaries belong.

Due to the enactment of the Tax Cuts and Jobs Act, the Company is subject to 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 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 $15 and $30 for the three and six months ended December 31, 2023, as compared to $41 and $83 for the ~~three~~ ~~and~~ ~~six~~ ~~months ended~~ ~~December 31, 2022,~~ ~~as compared to $23 and $46 for the~~ same period in ~~Fiscal~~ ~~2022.~~fiscal 2023.

The Company's income tax expense was ~~$241~~$95 and ~~$466~~$132 for the three and six months ended December 31, ~~2022,~~ 2023, as compared to ~~$153~~$241 and ~~$333~~$466 for the same period in Fiscal ~~2022.~~2023. Our effective tax rate (“ETR”) from continuing operations was ~~30.2%~~16.5% and ~~15.16%~~29.5% for the quarters ended December 31, 2023 and December 31, 2022, ~~and~~ ~~December 31, 2021,~~ respectively. The ~~increase in~~decrease of income tax expense ~~and effective tax rate~~ was ~~due~~attributable to the following:

The Company accrues penalties and interest related to unrecognized tax benefits when necessary, as a component of penalties and interest expense, respectively. The Company had no unrecognized tax benefits or related accrued penalties or interest expense at December 31, ~~2022.~~

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

The Company generates revenue primarily from 3three different segments: ~~Manufacturing, Testing~~manufacturing, testing and ~~Distribution.~~distribution. The Company accounts for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf of third parties, such as sales taxes. The revenues are recognized as separate performance obligations that are satisfied by transferring control of the product or service to the customer.

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.

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.

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:~~including whether:

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~~Majority of sales under the ~~Manufacturing~~manufacturing segment include a 12-month warranty. The Company generally provides a limited warranty that our products comply with applicable specifications at the time of delivery. Under our standard 12~~-month~~terms and conditions of sale, liability for certain failures of product during a stated warranty ~~which~~period is usually limited to repair or replacement of defective parts. The Company has concluded that the warranty provided for standard products are ~~mainly~~ assurance ~~warranty~~type warranties and are not separate performance obligations.

Customized products are generally more complex and, as a result, may contain unforeseen faults that could lead to additional costs for us, including increased servicing or the need to provide product modifications. Warranty provided for ~~some~~ customized products ~~may~~ ~~be classified as~~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.

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 nonconformance issues for rejected products. Based on historical and recent data trends, it is concluded that these terms of the contract do not represent potential variable consideration. The transaction price is not contingent on the occurrence of any future event.

The Company distributes complementary products, ~~particularly equipment, industrial products and components~~made by manufacturers ~~mainly from~~around the ~~U.S., Europe and Taiwan.~~world. 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.

The timing of revenue recognition, billings and collections may result in billed accounts receivable, unbilled receivables, contract assets, customer advances, deposits and contract liabilities. The Company’s payment terms and conditions vary by contract type, although terms generally include a requirement of payment of 70% to 90% of total contract consideration within 30 to 60 days of shipment with the remainder payable within 30 days of acceptance. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component.

	Dec. 31,		June 30,		Dec. 31		June 30
	2022		2022		2023		2023
	(Unaudited)				(Unaudited)

Trade Accounts Receivable		13,332		11,592		12,388		9,804
Accounts Payable		3,067		2,401		2,345		1,660
Contract Liabilities		1,282		988		3,808		1,277

~~As at~~ ~~December 31, 2022,~~ ~~the~~The Company had ~~$296 of~~$nil and $55 remaining performance obligations, which represents our obligation to deliver products and services ~~within~~ ~~two~~ ~~years.~~as at December 31, 2023 and June 30, 2023 respectively.

~~As at~~ ~~June 30, 2022,~~ ~~the Company had $326 of remaining performance obligations, which represents our obligation to deliver products and services.~~

Options to purchase 617,000 shares of Common Stock at exercise prices ranging from $2.53 to $7.76 per share were outstanding as of December 31, 2023. 284,500 stock options were excluded in the computation of diluted earnings per share (“EPS”) for the three months ended December 31, 2023, because they were anti-dilutive.

Options to purchase 636,375 shares of Common Stock at exercise prices ranging from $2.53 to $7.76 per share were outstanding as of December 31, 2022. 405,500 ~~stock options were excluded in the computation of diluted earnings per share (“EPS”) for the~~ ~~three~~ ~~months ended~~ ~~December 31, 2022,~~ ~~because they were anti-dilutive.~~

~~Options to purchase 724,500 shares of Common Stock at exercise prices ranging from $2.53 to $5.98 per share were outstanding as of~~ ~~December 31, 2021.~~ ~~212,500~~ stock options were excluded in the computation of diluted EPS for the three months ended December 31, ~~2021,~~ 2022, because they were anti-dilutive.

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

	Three Months Ended						Six Months Ended					Three Months Ended					Six Months Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,		Dec. 31,
	2022			2021			2022			2021		2023		2022			2023		2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)

Income attributable to Trio-Tech International common shareholders from continuing operations, net of tax	$	512		$	856		$	1,394		$	1,770	$	503	$	512		$	730	$	1,394
Income / (loss) attributable to Trio-Tech International common shareholders from discontinued operations, net of tax		(5	)		(1	)		(5	)		2		4		(5	)		7		(5	)
Net income attributable to Trio-Tech International Common Shareholders	$	507		$	855		$	1,389		$	1,772	$	507	$	507		$	737	$	1,389

Weighted average number of common shares outstanding - basic		4,074			3,923			4,074			3,923		4,120		4,074			4,109		4,074

Dilutive effect of stock options		88			319			86			206		139		88			161		86
Number of shares used to compute earnings per share - diluted		4,162			4,242			4,160			4,129		4,259		4,162			4,270		4,160

Basic earnings per share from continuing operations attributable to Trio-Tech International	$	0.12			0.22			0.34			0.46	$	0.12		0.12			0.18		0.34
Basic earnings per share from discontinued operations attributable to Trio-Tech International		-			-			-			-		-		-			-		-
Basic earnings per share from net income attributable to Trio-Tech International	$	0.12		$	0.22		$	0.34		$	0.46	$	0.12	$	0.12		$	0.18	$	0.34

Diluted earnings per share from continuing operations attributable to Trio-Tech International	$	0.12			0.20			0.33			0.43	$	0.12		0.12			0.17		0.33
Diluted earnings per share from discontinued operations attributable to Trio-Tech International		-			-			-			-		-		-			-		-
Diluted earnings per share from net income attributable to Trio-Tech International	$	0.12		$	0.20		$	0.33		$	0.43	$	0.12	$	0.12		$	0.17	$	0.33

On September ~~24, 2007,~~ 14, 2017, the Company’s Board of Directors unanimously adopted the ~~2007~~2017 Employee Stock Option Plan (the ~~“2007~~“2017 Employee Plan”) and the ~~2007~~2017 Directors Equity Incentive Plan (the ~~“2007~~ ~~Directors Plan” and, together with the~~ ~~2007~~ ~~Employee Plan, the~~ ~~“2007~~ ~~Plans”), each of which was approved by the shareholders on~~ ~~December 3, 2007.~~ ~~Each of the~~ ~~2007~~ ~~Plans were amended during the term of such plan to increase the number of shares covered thereby. Each of the~~ ~~2007~~ ~~Plans terminated by their respective terms on~~ ~~September 24, 2017.~~

On ~~September 14, 2017,~~ ~~the Company’s Board of Directors unanimously adopted the~~ ~~2017~~ ~~Employee Stock Option Plan (the~~ ~~“2017~~ ~~Employee Plan”) and the~~ ~~2017~~ ~~Directors Equity Incentive Plan (the~~ ~~“2017~~“2017 Directors Plan”) each of which was approved by the shareholders on December 4, 2017.

The fair value for the stock options granted to both employees and directors was estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming:

The Company’s 2017 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 300,000 shares of Common Stock. ~~The~~In December 2021, the Company’s Board of Directors approved an amendment to the 2017 Employee Plan in ~~December, 2021~~ to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2021.

Under the 2017 Employee Plan, all options must be granted with an exercise price of ~~not~~no 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 firsttwo quarters of Fiscal 2024, 48,000 stock options were granted under the 2017 Employee Plan. There were 63,875 stock options exercised during the six-month period ended December 31, 2023. The Company recognized $90 in stock-based compensation expense during the six months ended December 31, 2023.

During the first two quarters of Fiscal 2023, 25,000 stock options were granted under the 2017 Employee Plan. There were 5,000 stock options exercised during the ~~six~~~~-month~~six-month period ended December 31, 2022. The Company recognized $54 in stock-based compensation expense during the six months ended December 31, 2022.

~~During the~~ ~~first~~~~two~~ ~~quarters of Fiscal~~ ~~2022,~~ ~~there were~~ no ~~stock options granted under the~~ ~~2017~~ ~~Employee Plan. There were 41,125 stock options exercised during the~~ ~~six~~~~-month period ended~~ ~~December 31, 2021.~~ ~~The Company recognized $22 stock-based compensation expenses during the~~ ~~six~~ ~~months ended~~ ~~December 31, 2021.~~

As of December 31, ~~2022,~~ 2023, there were vested stock options granted under the 2017 Employee Plan covering a total of 88,250 shares of Common Stock. The weighted-average exercise price was $5.59 and the weighted average remaining contractual term was 3.08 years.

As of December 31, 2022, there were vested stock options granted under the 2017 Employee Plan covering a total of 134,500 shares of Common Stock. The weighted-average exercise price was $4.78 and the weighted average remaining contractual term was 1.73 years.

~~As of~~ ~~December 31, 2021,~~ ~~there were vested stock options granted under the~~ ~~2017~~ ~~Employee Plan covering a total of 130,375 shares of Common Stock. The weighted-average exercise price was $4.79 and the weighted average remaining contractual term was 2.00 years.~~

A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, ~~2022,~~ 2023, is presented as follows:

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

Outstanding at July 1, 2022		236,375		$	5.21		2.61	$	87
Outstanding at July 1, 2023											216,375		$	4.89		2.92	$	140
Granted		25,000			5.18		-		-		48,000			4.88		-		-
Exercised		(5,000	)		3.75		-		-		(63,875	)		3.12		-		-
Forfeited or expired		(40,000	)		-		-		-		(3,500	)		3.75		-		-
Outstanding at December 31, 2022		216,375		$	5.16		2.49	$	96
Exercisable at December 31, 2022		134,500		$	4.78		1.73	$	75
Outstanding at December 31, 2023											197,000		$	5.48		3.51	$	39
Exercisable at December 31, 2023											88,250		$	5.59		3.08	$	16

A summary of the status of the Company’s non-vested employee stock options during the six months ended December 31, ~~2022,~~ 2023, is presented below:

A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, ~~2021,~~ 2022, is presented as follows:

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

Outstanding at July 1, 2021		267,000		$	4.21		3.22	$	290
Outstanding at July 1, 2022											236,375		$	5.21		2.61	$	87
Granted		-			-		-		-		25,000			5.18		-		-
Exercised		(41,125	)		2.87		-		-		(5,000	)		3.75		-		-
Forfeited or expired		-			-		-		-		(40,000	)		-		-		-
Outstanding at December 31, 2021		225,875		$	4.46		2.66	$	2,026
Exercisable at December 31, 2021		130,375		$	4.79		2.00	$	1,127
Outstanding at December 31, 2022											216,375		$	5.16		2.49	$	96
Exercisable at December 31, 2022											134,500		$	4.78		1.73	$	75

A summary of the status of the Company’s non-vested employee stock options during the six months ~~period~~ ended December 31, ~~2021,~~ 2022, is presented below:

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

Non-vested at July 1, 2021		102,250		$	2.29
Non-vested at July 1, 2022							75,875		$	5.98
Granted		-			-		25,000			5.18
Vested		(6,750	)		-		(9,000	)		-
Forfeited		-			-		(10,000	)		-
Non-vested at December 31, 2021		95,500		$	2.29
Non-vested at December 31, 2022							81,875		$	5.79

~~The Company’s~~ ~~2007~~ ~~Employee Plan permitted the issuance of options to employees. As of the last amendment thereof, the~~ ~~2007~~ ~~Employee Plan covered an aggregate of 600,000 shares of the Company’s Common Stock. The~~ ~~2007~~ ~~Employee Plan terminated by its terms on~~ ~~September 24,~~ 2017~~and no further options~~ ~~may~~ ~~be granted thereunder. Options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms.~~

~~There were no options exercised during the~~ ~~six~~ ~~months ended~~ ~~December 31, 2022,~~ ~~and~~ ~~December 31, 2021.~~ ~~The Company did~~ ~~not~~ ~~recognize any stock-based compensation expense during the~~ ~~six~~ ~~months ended~~ ~~December 31, 2022,~~ ~~and~~ ~~December 31, 2021.~~

~~As of~~ ~~July 1, 2022~~ ~~and~~ ~~December 31, 2022,~~ ~~there were no vested or unvested stock options outstanding under the~~ ~~2007~~ ~~Employee Plan.~~

~~As of~~ ~~December 31, 2021,~~ ~~there were vested stock options granted under the~~ ~~2007~~ ~~Employee Plan covering a total of 37,500 shares of Common Stock. The weighted average exercise price was $4.14 and the weighted average remaining contractual term was 0.24 years.~~

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

The 2017 Directors Plan permits the grant of options to its directors in the form of non-qualified options and restricted stock, and initially covered up to an aggregate of 300,000 shares of Common Stock. In September 2020, 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~~ In October 2023, the Company’s Board of Directors approved an amendment to the 2017 Directors Plan ~~permits~~to increase the ~~grant~~shares covered thereby from 600,000 shares to an aggregate of ~~options to its directors~~900,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2023.

Under the ~~form of nonqualified options and restricted stock. The~~2017 Directors Plan, the exercise price of the ~~nonqualified~~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 exercisable immediately as of the grant date.

During the firsttwo quarters of Fiscal ~~2023~~ ~~and Fiscal~~ ~~2022,~~2024, the Company did not grant any options pursuant to the 2017 Directors Plan. There were no stock options exercised and the Company did not recognize any stock-based compensation expense during the six months ended December 31, ~~2022~~ 2023 and ~~2021.~~2022.

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 December 31, ~~2022,~~ 2023, or December 31, ~~2021.~~2022.

As of December 31, ~~2022,~~ 2023, there were vested stock options granted under the 2017 Directors Plan covering a total of 420,000 shares of Common Stock. The weighted average exercise price was $4.91 and the weighted average remaining contractual term was 2.41 years.

As of December 31, 2022, there were vested stock options granted under the 2017 Director Plan covering a total of 420,000 shares of Common Stock. The weighted-average exercise price was $5.10 and the weighted average remaining contractual term was 2.34 years.

~~As of~~ ~~December 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 2.72 years.~~

A summary of option activities under the 2017 Directors Plan during the six months ended December 31, ~~2022,~~ 2023, is presented as follows:

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

Outstanding at July 1, 2022		420,000	$	5.10		2.85	$	228
Outstanding at July 1, 2023										420,000	$	4.91		2.91	$	309
Granted		-		-				-		-		-		-		-
Exercised		-		-		-		-		-		-		-		-
Forfeited or expired		-		-		-		-		-		-		-		-
Outstanding at December 31, 2022		420,000	$	5.10	$	2.34	$	255
Exercisable at December 31, 2022		420,000	$	5.10	$	2.34	$	255
Outstanding at December 31, 2023										420,000	$	4.91		2.41	$	352
Exercisable at December 31, 2023										420,000	$	4.91		2.41	$	352

A summary of option activities under the 2017 Directors Plan during the six months period ended December 31, ~~2021,~~ 2022, is presented as follows:

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

Outstanding at July 1, 2021		320,000	$	4.27		3.22	$	340
Outstanding at July 1, 2022										420,000	$	5.10		2.85	$	228
Granted		-		-		-		-		-		-				-
Exercised		-		-		-		-		-		-		-		-
Forfeited or expired		-		-		-		-		-		-		-		-
Outstanding at December 31, 2021		320,000		4.27		2.97	$	2,933
Exercisable at December 31, 2021		320,000		4.27		2.97	$	2,933
Outstanding at December 31, 2022										420,000	$	5.10	$	2.34	$	255
Exercisable at December 31, 2022										420,000	$	5.10	$	2.34	$	255

~~The Company’s~~ ~~2007~~ ~~Directors Plan permitted the grant of stock options to its directors in the form of nonqualified options and restricted stock. As of the last amendment thereof, the~~ ~~2007~~ ~~Directors Plan covered an aggregate of 500,000 shares of the Company’s Common Stock. The~~ ~~2007~~ ~~Directors Plan terminated by its terms on~~ ~~September 24, 2017,~~ ~~and~~ no ~~further options~~ ~~may~~ ~~be granted thereunder. Options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms.~~

~~There were~~ no ~~stock options exercised during the~~ ~~six~~ ~~months ended~~ ~~December 31, 2022~~ ~~and~~ ~~2021.~~ ~~The Company did~~ ~~not~~ ~~recognize any stock-based compensation expense during the~~ ~~six~~ ~~months ended~~ ~~December 31, 2022~~ ~~and~~ ~~2021.~~

~~As of~~ ~~July 1, 2022~~ ~~and~~ ~~December 31, 2022,~~ ~~there were no vested stock options granted under the~~ ~~2007~~ ~~Directors Plan.~~

~~As of~~ ~~December 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 0.24 years.~~

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

Operating leases under which the Company is the lessor arise from leasing the Company’s commercial real estate investment property to third parties. Initial lease terms generally range from 12 to 60 months. Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of ~~twenty~~20 years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value. Depreciation expense relating to the property held as investments in operating leases ~~were~~was $34 and $38 ~~and $41~~ for the three months ended December 31, 2023, and December 31, 2022, ~~and~~ ~~December 31, 2021,~~ respectively.

Future minimum rental income in China and Thailand to be received from Fiscal ~~2023~~2024 to the fiscal year ended June 30, 2027 (“(“Fiscal 2027”) on ~~noncancelable~~non-cancelable operating leases is contractually due as follows as of December 31, ~~2022:~~2023:

Future minimum rental income in China and Thailand to be received from Fiscal ~~2023~~2024 to Fiscal 2027 on non-cancelable operating leases is contractually due as follows as of June 30, ~~2022:~~2023:

2023		$	6
2024	��	$	27	$	141
2025		$	28		141
2026		$	29		46
2027		$	10		16
		$	100	$	344

Sales-type leases under which the Company is the lessor arise from the lease of four units of chiller systems. The Company classifies its lease arrangements at inception of the arrangement. The lease term is three years, contains an automatic transfer of title at the end of the lease term and a guarantee of residual value at the end of the lease term. The customer is required to pay for executory ~~costs~~cost such as taxes.

Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales of ~~four~~4 units of chiller systems are as follows:

Components of Lease Balances	Dec. 31,			Dec. 31,		June 30,
				2023		2023
	2022			(Unaudited)
Assets
Gross financial sales receivable	$	28		$	6	$	17
Unearned finance income		(1	)		-		(1	)
Financed sales receivable	$	27		$	6	$	16

Net financed sales receivables due within one year	$	21		$	6	$	16
Net financed sales receivables due after one year	$	6		$	-	$	-
					6		16

As of December 31, ~~2022,~~ 2023, the financed sale receivables had a weighted average effective interest rate of 11.16% and weighted average remaining lease term of ~~1.25~~0.25 years.

As of June 30, 2023, the financed sale receivables had a weighted average effective interest rate of 11.16% and weighted average remaining lease term of 0.75 years.

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

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

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

	Six Months Ended						Six Months Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases	$	6		$	13		$	3		$	6
Operating cash flows from operating leases		594			470			693			594
Finance cash flows from finance leases								55			67
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities		-			-

Weighted-Average Remaining Lease Term:
Finance leases		1.59			2.69			0.80			1.59
Operating leases		2.67			3.57			2.08			2.67
Weighted-Average Discount Rate:
Finance leases		3.22	%		3.50	%		2.89	%		3.22	%
Operating leases		5.54	%		4.81	%		5.51	%		5.54	%

As of December 31, ~~2022,~~ 2023, the maturities of the Company’s operating and finance lease liabilities are as follow:

	Operating Lease Liabilities			Finance Lease Liabilities			Operating Lease Liabilities			Finance Lease Liabilities
Fiscal Year
Remainder of Fiscal 2023	$	650		$	54
2024		1,074			105
Remainder of Fiscal 2024
2025		577			21			712			57
2026		414			-			1,019			35
Thereafter		67			-			772			12
Total future minimum lease payments	$	2,782		$	180		$	2,503		$	104
Less: amount representing interest		(202	)		(10	)		(144	)		(8	)
Present value of net minimum lease payments	$	2,580		$	170		$	2,359		$	96

Presentation on statement of financial position
Current		1,140			101			1,119			81
Non-Current		1,440			69			1,240			15

As of June 30, ~~2022,~~ 2023, future minimum lease payments under finance leases and noncancelable operating leases were as follows:

~~21.~~~~FAIR VALUE OF FINANCIAL INSTRUMENTS~~

22.	FAIR VALUE OF FINANCIAL INSTRUMENTS APPROXIMATE CARRYING VALUE

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

There were no transfers between Levels 1 and 2 during the six months ended December 31, ~~2022~~ 2023 and ~~2021.~~2022.

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

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

Lines of credit (Level 3)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)3) – The carrying value of the Company’s bank 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.

The Company had ~~two~~three major customers ~~mainly contributed to manufacturing and testing segments~~ that accounted for the following revenue and trade account receivables:

	Six Months Ended Dec. 31,						For the Six Months Ended Dec. 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue
- Customer A		34.7	%		42.8	%		21.8	%		34.7	%
- Customer B		15.3	%		5.3	%		17.7	%		13.3	%
- Customer C		13.3	%		15.6	%		13.9	%		15.3	%
Trade Account Receivables
- Customer A		32.1	%		40.1	%		21.0	%		32.1	%
- Customer B		15.6	%		6.1	%		24.4	%		17.3	%
- Customer C		17.3	%		16.7	%		22.8	%		15.6	%

Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net income.

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

The following should be read in conjunction with the condensed consolidated financial statements and notes in Item I above and with the audited consolidated financial statements and notes, the information under the headings “Management’s discussion and analysis of financial condition and results of operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2022.~~2023 (“Fiscal 2023”).

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 Block 1008 Toa Payoh North, Unit 03-09 Singapore 318996, and our telephone number is (65) 6265 3300.

The Company is a provider of reliability test equipment and services to the semiconductor industry. Our customers rely on us to verify that their semiconductor components meet or exceed the rigorous reliability standards demanded for ~~aerospace, communications~~automotive electronics, industrial electronics, computing and ~~other~~data storage, consumer electronics, ~~products.~~and communication markets. We act as a global one-stop solution for our customers by designing and building reliability test solutions and offering comprehensive testing services through our testing laboratories in Asia and the United States (“U.S.”).

During the six months ended December 31, ~~2022,~~2023, TTI generated approximately ~~99.9%~~100% of its revenue from its three core business segments in the test and measurement industry, i.e., manufacturing of test equipment (“Manufacturing”), testing services (“Testing”) and distribution of test equipment and electronic components (“Distribution”). ~~The Real Estate~~Management is currently evaluating the ongoing contributions of each of its business segments to its current and future revenue and prospects, including its Testing segment. As a result, it may divest one or more business segments in the future, including its testing segment, ~~contributed only 0.01%~~ to ~~the total~~enable management to concentrate on segments where it anticipates opportunities for future revenue ~~during the six months ended December 31, 2022.~~growth, thereby maximizing shareholder value.

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

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

In addition to marketing our proprietary products, we distribute complementary products made by manufacturers ~~mainly from~~around the ~~U.S., Europe, and Taiwan.~~world. The products include environmental chambers, ~~handlers, interface systems,~~mechanical shock and vibration ~~systems, shaker systems, solderability~~ testers, and other semiconductor equipment. ~~Besides equipment, we~~We also distribute a wide range of components such as connectors, sockets, cables, LCD ~~display panels~~displays and touch screen panels. ~~Furthermore, our range of products are mainly targeted for industrial products rather than consumer products whereby~~We act as value-added resellers by enhancing the ~~life cycle~~value of the ~~industrial~~distributed products ~~can last from three years~~by customizing each to ~~seven years.~~the needs of our customers through our expert engineering, integration, and sub-assembly services. We also support our customers as their extended research & development arm in product design, leveraging the expert skills of our component engineers and design engineers.

Our real estate segment generates rental income and investment income from ~~the~~real estate investments made ~~and rental revenue received from real estate that we purchased~~ in Chongqing, China.

The preparation of our Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in applying our accounting policies that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base these estimates and assumptions on historical experience and evaluate them on an ongoing basis to ensure that they remain reasonable under current conditions. Actual results could differ from those estimates. We discuss the development and selection of the critical accounting estimates with the Audit Committee of our Board of Directors on a quarterly basis, and the Audit Committee has reviewed our related disclosure in this Quarterly Report on Form 10-Q.

There have been no material changes in our critical accounting estimates and policies since our Annual Report on Form 10-K for ~~the fiscal year ended June 30, 2022.~~Fiscal 2023. Refer to Note 1 “Basis of Presentation and Summary of ~~significant~~Significant Accounting Policies” to our Condensed Consolidated Financial Statements for additional details. In addition, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of our Annual Report on Form 10-K for ~~our fiscal year ended June 30, 2022~~Fiscal 2023 for a complete description of our critical accounting policies and estimates.

The following table sets forth our revenue components for both three and six months ended December 31, ~~2022~~2023 and ~~2021.~~2022.

Revenue Components	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2022			2021			2022			2021			2023			2022			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Manufacturing		40.7	%		32.3	%		35.5	%		33.6	%		39.3	%		40.7	%		34.6	%		35.5	%
Testing Services		45.6			45.4			49.4			45.4			38.1			45.6			44.2			49.4
Distribution		13.7			22.2			15.1			20.9			22.6			13.7			21.1			15.1
Real Estate		-			0.1			-			0.1			-			-			0.1			-
Total		100	%		100.0	%		100	%		100.0	%		100	%		100.0	%		100	%		100.0	%

Revenue for the three and six months ended December 31, ~~2022,~~2023, was ~~$12,390~~$12,202 and ~~$24,329,~~$22,168, respectively, ~~an increase~~a decrease of ~~$1,468~~$188 and ~~$3,236,~~$2,161, respectively, when compared to the revenue of $12,390 and $24,329 for the same period of Fiscal ~~2022.~~2023. As a percentage, revenue ~~increased~~decreased by ~~13.4%~~1.5% and ~~15.3%~~8.9% for the three and six months ended December 31, ~~2022,~~2023, when compared to revenue for the same period of Fiscal ~~2022.~~

For the three and six months ended December 31, 2022, there was an increase in revenue in the Testing and Manufacturing segments when compared to the same period of Fiscal 2022. The Distribution segment’s revenue decreased compared to the same period of Fiscal 2022.

Total revenue into and within China, the Southeast Asia regions and other countries (except revenue into and within the U.S.) increased by $1,413 (or 13.2%), to $12,067 and by $3,187 (or 15.7%) to $23,513 for the three and six months ended December 31, 2022, respectively, as compared with $10,654 and $20,326 for the same period of Fiscal 2022, respectively.

Total revenue into and within the U.S. was $321 and $814 for the three and six months ended December 31, 2022, respectively, an increase of $53 and $47 from $268 and $767 for the same periods of Fiscal 2022, respectively.2023.

Revenue within our four current segments for the three and six months ended December 31, ~~2022,~~2023, is discussed below.

Revenue in the Manufacturing segment as a percentage of total revenue was ~~40.7%~~39.3% and ~~35.5%~~34.6% for the three and six months ended December 31, ~~2022,~~2023, respectively, ~~an increase~~a decrease of ~~8.4%~~1.4% and ~~1.9%~~0.9% of total revenue when compared to ~~32.3%~~40.7% and ~~33.6%~~35.5% in the same period of Fiscal ~~2022.~~2023. The revenue ~~increased~~decreased by ~~$1,516~~$254 to $4,790 from $5,044 and decreased by $954 to $7,675 from ~~$3,528 and increased by $1,539 to~~ $8,629 ~~from $7,090~~ for the three and six months ended December 31, ~~2022,~~2023, respectively.

Revenue in the Manufacturing segment ~~from one customer accounted for 38.0% and 50.9%~~has been on a downward trend since the beginning of ~~our total revenue~~the calendar year 2023 due to a decline in semiconductor industry capital spending. Demand recovery was noted in the first quarter of Fiscal 2024, resulting in a strong backlog in the Manufacturing segment. Part of these orders has been delivered in the quarter ended December 31, 2023, and the balance is expected to be delivered in the next two quarters.

During the three and six months ended December 31, 2023, one customer contributed 26.5% and 24.0%, respectively, to the total Manufacturing segment revenue.

Revenue in the Testing segment as a percentage of total revenue was 38.1% for the three months ended December 31, ~~2022 and 2021, respectively, and 28.2% and 42.0% of our total revenue in the Manufacturing segment for the six months ended December 31, 2022, and 2021, respectively.~~

~~The Testing segment's revenue was 45.6% for the three months ended December 31, 2022,~~2023, representing a ~~marginal increase~~decrease of ~~0.2%,~~7.5% compared to ~~45.4% for~~45.6% in the same period of Fiscal ~~2022.~~2023. Revenue in the Testing segment was ~~49.4%~~44.2% as a percentage of total revenue for the six months ended December 31, ~~2022, an increase~~2023, a decrease of 4%5.2% compared to the same period of Fiscal ~~2022.~~2023. Total revenue ~~increased~~decreased by ~~$682~~$1,002 and $2,202 to ~~$5,648~~$4,646 and ~~increased by $2,446 to $12,012 from $4,966 and $9,566~~$9,810 for the three and six months ended December 31, ~~2022,~~2023, respectively, as compared to the same periods of Fiscal ~~2022.~~2023.

The decrease in revenue in the Testing segment reflects the weak demand environment in the semiconductor industry in calendar year 2023.

The revenue in the Testing segment from one customer accounted for ~~40.9%~~34.1% and ~~63.0%~~40.9% of our revenue in the Testing segment for the three months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~45.6%~~34.9% and ~~63.3%~~45.6% of our total revenue in the Testing segment for the six months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The future revenue in the Testing segment will be affected by the demands of this customer if the customer base cannot be increased. 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 challenging to forecast fluctuations in the market accurately, management believes it is necessary to maintain testing facilities in close proximity to 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.

Revenue in the Distribution segment was ~~13.7%~~22.6% and ~~15.1%~~21.1% as a percentage of total revenue for the three and six months ended December 31, ~~2022,~~2023, respectively, ~~a decrease~~an increase of ~~8.5%~~8.9% and ~~5.8%~~6.0%, compared to the same period of Fiscal ~~2022.~~2023. Total revenue ~~decreased~~increased by ~~$726~~$1,066 to $2,760 and increased by $994 to $4,670 from $1,694 and ~~decreased by $742 to~~ $3,676 ~~from $2,420 and $4,418~~ for the three and six months ended December 31, ~~2022,~~2023, respectively, compared to the same period of Fiscal ~~2022.~~ 2023.

In the Distribution segment, there has been a demand recovery in the electronics components and display products from our customers compared to the same period of Fiscal 2023.

The revenue in the Distribution segment from one customer accounted for ~~78.9%~~84.7% and ~~80.8%~~78.9% of our revenue in the Distribution segment for the three months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~82.4%~~84.0% and ~~74.4%~~82.5% of our total revenue in the Distribution segment for the six months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. Demand for the Distribution segment varies depending on the demand for our customers’ products, the changes taking place in the market, and our customers’ forecasts. Hence it is difficult to forecast fluctuations in the market accurately.

~~The Real Estate segment revenue decreased~~Revenue increased to $6 and $13 from $4 and $12 ~~from $8 and $19~~ for the three and six months ended December 31, ~~2022,~~2023, compared to the same period of Fiscal ~~2022.~~2023. Our real estate (“Real Estate”) segment saw an increase in rental income due to occupancy in MaoYe properties.

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

The Company’s primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar-denominated sales and operating expense in its subsidiaries. Strengthening of the United States dollar (“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 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 U.S. 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.

As of December ~~2022,~~2023, although we have seen improvements in both our operations and those of our suppliers, we may continue to experience supply shortages as well as inflationary cost pressures in at least the near term. Risks and uncertainties related to ~~the COVID-19 pandemic,~~ supply chain challenges, and inflationary pressures may continue to negatively impact our revenue and gross margin. We continue to monitor and evaluate the business impact to react proactively.

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

There are legal and operational risks associated with having operations in China. These risks could result in a material change in our operations and/or the value of our common stock or could limit or hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. In recent past, the Peoples Republic of China (“PRC”) government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

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

Comparison of the Three Months Ended December 31, ~~2022,~~2023, and December 31, ~~2021~~2022

The following table sets forth certain consolidated statements of income data as a percentage of revenue for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022 respectively:

	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		73.1	%		73.5	%		76.6	%		73.1	%
Gross Margin		26.9	%		26.5	%		23.4	%		26.9	%
Operating expense
General and administrative		15.5	%		17.8	%		14.9	%		15.5	%
Selling		1.6	%		1.4	%		2.0	%		1.6	%
Research and development		1.2	%		1.2	%		1.1	%		1.2	%
Loss on disposal of property, plant and equipment								(0.1	)%		-	%
Total operating expense		18.3	%		20.4	%		17.9	%		18.3	%
Income from Operations		8.6	%		6.1	%		5.5	%		8.6	%

Overall gross margin as a percentage of revenue ~~increased~~decreased by ~~0.4%~~3.5% to ~~26.9%~~23.4% for the three months ended December 31, ~~2022,~~2023, from ~~26.5%~~26.9% for the same period of Fiscal ~~2022.~~2023. Gross profits ~~increased~~decreased by ~~$445~~$481 to ~~$3,335~~$2,854 for the three months ended December 31, ~~2022,~~2023, from ~~$2,890~~$3,335 for the same period in Fiscal ~~2022.~~2023.

Gross profit margin as a percentage of revenue in the Manufacturing segment increased marginally by ~~5.2%~~1% to ~~23.7%~~24.7% for the three months ended December 31, ~~2022,~~2023, as compared to ~~18.5%~~23.7% for the same period in Fiscal ~~2022. Gross profits~~2023. In absolute dollar amounts, gross profit in the Manufacturing segment ~~increased by $541 to $1,195~~ for the three months ended December 31, ~~2022, from $654 for~~2023, was $1,181, indicating a decrease of $14, compared to $1,195 in the same period in Fiscal ~~2022. The increase in gross~~2023. Gross profit margin ~~was primarily~~as a percentage increased despite a decline in revenue due to a ~~higher proportion of high profit margin product~~favourable sales ~~for the three months ended December 31, 2022 compared to the same period of Fiscal 2022.~~mix.

Gross profit margin as a percentage of revenue in the Testing segment decreased by ~~4.1%~~8.3% to ~~33.7%~~25.4% for the three months ended December 31, ~~2022,~~2023, compared to ~~37.8%~~33.7% in the same period ofin Fiscal ~~2022.~~2023. The decrease in gross profit margin percentage was mainly due to lower ~~margins~~volume across all test operations. A significant portion of the cost of sales in Testing segment are fixed costs. As the ~~Singapore~~demand for services and ~~Tianjin testing operations resulting from lower demand due to inventory corrections made by customers in~~factory utilization decrease, the ~~second quarter of Fiscal 2023.~~fixed costs are spread over the decreased output, which decreases the gross profit margin. In absolute dollar amounts, gross profit in the ~~testing~~Testing segment ~~increased~~decreased by ~~$24~~$719 to ~~$1,901~~$1,182 for the three months ended December 31, ~~2022,~~2023, from ~~$1,877~~$1,901 for the same period ofin Fiscal ~~2022.~~2023.

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~~because of fluctuations in market demand. Gross profit margin as a percentage of revenue in the Distribution segment ~~decreased~~increased by ~~0.4%~~3.4% to ~~14.9%~~18.3% for the three months ended December 31, ~~2022,~~2023, from ~~15.3%~~14.9% in the same period ofin Fiscal ~~2022. Gross~~2023. In absolute dollar amounts, gross profit in the Distribution segment for the three months ended December 31, ~~2022,~~2023, was ~~$253, a decrease~~$504, indicating an increase of ~~$117,~~$251, compared to ~~$370~~$253 in the same period in Fiscal 2023. The strong demand for electronics components and display products from our customers has contributed to the increase of ~~Fiscal 2022.~~ gross profit margin.

~~For the three months ended December 31, 2022,~~In absolute dollar amounts, gross loss in the Real Estate segment was ~~$14,~~$13 for three months ended December 31, 2023, as compared to ~~$11~~$14 for the same period ofin Fiscal ~~2022.~~2023.

Operating expense for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022 was as follows:

	Three Months Ended				Three Months Ended
	December 31,				December 31,
	2022		2021		2023			2022
	(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
General and administrative	$	1,919	$	1,947	$	1,817		$	1,919
Selling		193		156		248			193
Research and development		151		131		131			151
Gain on disposal of property, plant and equipment		3		-
Loss on disposal of property, plant and equipment						(19	)		3
Total	$	2,266	$	2,234	$	2,177		$	2,266

General and administrative expense decreased by ~~$28~~$102, or ~~1.5%~~5.3%, from ~~$1,947~~$1,919 to ~~$1,919~~$1,817 for the three months ended December 31, ~~2022,~~2023, compared to the same period ofin Fiscal ~~2022.~~2023. The decrease in general and administrative expense was mainly attributable to the ~~bonus provision adjustments in this quarter that offset~~lower remuneration related expense resulting from the ~~increase of administrative expense relating~~unfavorable financial performance compared to ~~the Company’s new subsidiary Trio-Tech Jiangsu, which was setup in the third quarter~~same period of Fiscal ~~2022.~~2023.

Selling expense increased by ~~$37,~~$55, or ~~23.7%~~28.5%, from ~~$156~~$193 to ~~$193~~$248 for the three months ended December 31, ~~2022,~~2023, compared to the same period ofin Fiscal ~~2022.~~2023. The increase in selling expense was primarily attributable to an increase in commission costs in the ~~Manufacturing segment of the~~ Singapore and U.S. operations ~~as a result~~because of an increase in commissionable revenue, and an increase in travel costs due to increased business travel in the second quarter of Fiscal ~~2023,~~2024, compared to the same quarter of Fiscal ~~2022.~~

Income from operations was ~~$1,052~~$677 for the three months ended December 31, ~~2022, an increase~~2023, a decrease of ~~$396,~~$392, compared to ~~profit~~income of ~~$656~~$1,069 from operations for the same period ofin Fiscal ~~2022. This~~2023. The decrease was mainly due to ~~higher~~the decreased revenue and ~~improved~~ gross profit ~~margin from Manufacturing and~~in absolute dollars amount in the Testing ~~segments.~~segment.

Interest expense for the three months ended December 31, 2023 and 2022 ~~and 2021 were~~was as follows:

Interest expense was ~~$10~~$22 for the three months ended December 31, ~~2022, a decrease~~2023, an increase of ~~$18,~~$12, or ~~64.3%~~120.0%, compared to ~~$28~~$10 for the same period of Fiscal ~~2022.~~2023 due to utilization of credit facilities. As of December 31, ~~2022,~~2023, the Company had an unused line of credit of ~~$6,139~~$5,256 as compared to ~~$5,207~~$6,139 at December 31, ~~2021.~~2022.

Other ~~(expense) / income~~expense for the three months ended December 31, 2023 and 2022 ~~and 2021 were~~was as follows:

	Three Months Ended
	December 31,						Three Months Ended
	2022			2021			December 31,
	(Unaudited)			(Unaudited)			2023			2022
							(Unaudited)			(Unaudited)
Interest income	$	37		$	16		$	96		$	37
Other rental income		27			29			36			27
Exchange loss		(349	)		(38	)		(236	)		(349	)
Bad debt recovery		-			102
Commission income		-			200
Government grant		21			28
Other miscellaneous income		21			44			22			21
Total	$	(243	)	$	381		$	(82	)	$	(264	)

Other ~~income~~expense decreased by ~~$624~~$182 from ~~$381~~$264 to ~~other expense of $243~~$82 for the three months ended December 31, ~~2022~~2023 compared to the same period in Fiscal ~~2022.~~2023. The decrease was ~~mainly~~primarily contributed by alower negative foreign currency impact and an increase in ~~the second quarter of Fiscal 2023 and the absence of one-time commission~~interest income ~~that was~~ earned in ~~the same period in Fiscal 2022.~~

~~Our net income is impacted by the overall strengthening or weakening of the U.S. Dollars since the functional currency of our foreign subsidiaries is not U.S. Dollars. During~~ the three months ended December 31, ~~2022, exchange rate movement negatively impacted our net income due~~2023 compared to the ~~strengthening~~same period in Fiscal 2023.

In the three months ended December 31, 2023, the Company received government grants amounting to $4, related to capital expenditure subsidy received from the China government. During the same period in 2022, the Company received government grants amounting to $21, $17 of which was an incentive from the Singapore ~~dollars against~~government for local resident recruitment, and the ~~U.S. Dollars.~~remaining $4 related to capital expenditure subsidy received from the China government.

The Company's income tax expense was ~~$241~~$95 and ~~$153~~$241 for the three months ended December 31, 2023, and 2022, ~~and 2021,~~ respectively. ~~The increase was primarily~~Income tax expense decreased due to ~~the increase~~lower net income resulting from decrease in ~~taxable income.~~revenue discussed above.

As of December 31, ~~2022,~~2023, we held a 55% interest in Trio-Tech (Malaysia) Sdn. Bhd., Trio-Tech (Kuala Lumpur) Sdn. Bhd., SHI International Pte. Ltd., and 52% interest in PT. SHI Indonesia. We also held a 76% interest in Prestal Enterprise Sdn. Bhd and 51% interest in ~~Trio-Tech~~Trio-tech JiangSu Co. Ltd. The share of non-controlling interest in the net ~~profit~~loss from the subsidiaries for the three months ended December 31, ~~2022~~2023 was ~~$58, an increase~~$21, a decrease of ~~$57~~$79 compared to the share of non-controlling interest in the net income from the subsidiaries of $1$58 for the same period of Fiscal ~~2022.~~2023. The ~~increase~~decrease in the net income shared by non-controlling interest in the subsidiaries was attributable to the ~~increase~~decrease in net income generated by the Company’s Malaysia and China ~~operation.~~operations.

Net income attributable to ~~Trio-Tech International~~Company’s common shareholders were $507 for both the three months ended December 31, ~~2022, was $507, a change of $348, compared to a net income of $855 for the same period Fiscal~~2023 and December 31, 2022.

Basic earnings per share from continuing operations were $0.12 for both the three months ended December 31, ~~2022, compared to $0.22 for the same period in Fiscal~~2023 and December 31, 2022. Basic earnings per share from discontinued operations were $nil for both the three months ended December 31, ~~2022~~2023 and ~~2021.~~2022.

Diluted earnings per share from continuing operations were $0.12 for both the three months ended December 31, ~~2022, as compared to $0.20 for the same period in Fiscal~~2023 and December 31, 2022. Diluted earnings per share from discontinued operations were $nil for both the three months ended December 31, ~~2022~~2023 and ~~2021.~~2022.

The revenue, gross margin, and income ~~or loss~~/ (loss) from operations for each segment during the first quarter of Fiscal ~~2023~~2024 and Fiscal ~~2022~~2023 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~~/ (loss) from operations is discussed below.

The revenue, gross margin and income from operations for the Manufacturing segment for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	5,044		$	3,528		$	4,790		$	5,044
Gross margin		23.7	%		18.5	%		24.9	%		23.7	%
Income / (loss) from operations	$	301		$	(48	)
Income from operations							$	191		$	301

Income from operations from the Manufacturing segment was ~~$301~~$191 compared to ~~loss~~income from operations of ~~$48~~$301 in the same period ofin Fiscal ~~2022, primarily~~2023. The decrease in income from operations was mainly due to an increase in ~~gross profit margin offset by an increase in~~ operating ~~expense of $315.~~expense. Operating expense ~~for the Manufacturing segment were $894~~was $990 and ~~$701~~$892 for the three months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The increase in operating expense was mainly due to ~~an increase of $76 in general and administrative~~higher commission expense ~~$52 in selling expense~~resulting from higher commissionable revenue, and an increase ~~of $29~~ in ~~corporate overhead expense.~~travel and entertainment expense incurred in three months ended December 31, 2023 compared to same period in Fiscal 2023.

The revenue, gross margin, and (loss)/ income from operations for the Testing segment for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	5,648		$	4,966		$	4,646		$	5,648
Gross margin		33.7	%		37.8	%		25.4	%		33.7	%
Income from operations	$	547		$	588
(Loss) / Income from operations							$	(152	)	$	547

~~Income~~Loss from operations in the Testing segment for the three months ended December 31, ~~2022~~2023, was $152, a decrease of $699 from income from operations of $547 ~~compared to $588~~ in the same period ofin Fiscal ~~2022,~~2023. The decrease was mainly attributable to ~~an increase of operating expenses.~~a decrease in gross profit due to lower revenue. Operating expense was ~~$1,354~~$1,334 and ~~$1,290~~$1,354 for the three months ended December 31, 2023 and 2022, ~~and 2021,~~ respectively. ~~The increase of $64 in operating expense was mainly due to an increase of $124 in general and administrative expense while offset by decrease in selling expense and corporate expense.~~

The revenue, gross margin, and income from operations for the Distribution segment for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	1,694		$	2,420		$	2,760		$	1,694
Gross margin		14.9	%		15.3	%		18.3	%		14.9	%
Income from operations	$	217		$	277		$	401		$	217

Income from operations in the Distribution segment for three months ended December 31, ~~2022~~2023 was ~~$217,~~$401, compared to ~~$277~~$217 for the same period in Fiscal 2023. The increase of ~~Fiscal 2022. The decrease of $60~~$184 was mainly due to ~~lower sales, thereby reducing the~~an increase in gross ~~profit.~~profit margin. Operating expense ~~were~~was $103 and $36 ~~and $92~~ for the three months ended December 31, 2023 and 2022, ~~and 2021,~~ respectively. The increase in operating expense primarily resulted from an increase in business travel.

The revenue, gross margin and loss from operations for the Real Estate segment for the three months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2022			2021			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	4		$	8		$	6		$	4
Gross margin		(350.0	)%		(137.5	)%		(216.7	)%		(350.0	)%
Loss from operations	$	(28	)	$	(28	)	$	(27	)	$	(28	)

Loss from operations in the Real Estate segment ~~was $28~~ for the three months ended December 31, ~~2022 and~~2023, was $27 compared to $28 for the same period of Fiscal ~~2022.~~2023. Operating expense was $14 ~~and $17~~ for both the three months ended December 31, ~~2022~~2023 and ~~2021, respectively.~~2022.

The income ~~/ (loss)~~ from operations for ~~Corporate~~corporate for the three months ended December 31, ~~2022,~~2023, and ~~2021~~2022 was as follows:

Corporate operating ~~profit~~income was ~~$32~~$264 for the three months ended December 31, ~~2022,~~2023, compared to ~~loss~~profit of ~~$133~~$32 in the same period in Fiscal 2023. Corporate expense is allocated to the four segments on a combination of ~~Fiscal 2022.~~

factors involving revenue, manpower costs and fixed assets investments, except the Malaysia and China operations, which is calculated based on actual sales. Corporate operating income was higher for the three months ended December 31, 2023 since the allocation to the individual segments was based on budgeted corporate expense for the quarter. Any excess/under allocation to each segment is reviewed and adjusted over the last two quarters of the fiscal year.

Comparison of the Six Months Ended December 31, ~~2022,~~2023, and December 31, ~~2021~~2022

The following table sets forth certain consolidated statements of income data as a percentage of revenue for the six months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively:

	Six Months Ended						Six Months Ended
	Dec. 31, 2022			Dec. 31, 2021			Dec. 31, 2023			Dec. 31, 2022

Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		71.4			71.2			75.8			71.4
Gross Margin		28.6	%		28.8	%		24.2	%		28.6	%
Operating expenses:
Operating expense:
General and administrative		17.4	%		18.6	%		17.9	%		17.4	%
Selling		1.5			1.4			2.0			1.5
Research and development		0.9			1.0			1.0			0.9
Total operating expenses	19.8		%		21.0	%
(Gain) / Loss on disposal of property, plant and equipment								0.3			-
Total operating expense								21.2	%		19.8	%
Income from Operations		8.8	%		7.8	%		3.0	%		8.8	%

Overall gross margin as a percentage of revenue decreased ~~marginally~~ by ~~0.2%~~4.4% to ~~28.6%~~24.2% for the six months ended December 31, ~~2022,~~2023, compared to ~~28.8%~~28.6% in the same period of Fiscal ~~2022.~~2023. Gross ~~profit increased~~profits decreased by ~~$888~~$1,583 to ~~$6,957~~$5,374 for the six months ended December 31, ~~2022,~~2023, from ~~$6,069~~$6,957 for the same period of Fiscal ~~2022.~~2023.

Gross profit margin as a percentage of revenue in the Manufacturing segment increased marginally by ~~1.0%~~0.2% to ~~26.1%~~26.3% for the six months ended December 31, ~~2022,~~2023, from ~~25.1%~~26.1% in the same period of Fiscal ~~2022.~~2023. Gross profit ~~increased~~in absolute value decreased by ~~$473~~$238 to ~~$2,255~~$2,017 for the six months ended December 31, ~~2021~~2023 compared to ~~$1,782~~$2,255 for the same period of Fiscal ~~2022.~~2023. The gross ~~margin increase~~profit decrease was primarily due to ~~an increase~~a decrease in Manufacturing segment revenue in the ~~first half of Fiscal~~six months ended December 31, 2023 compared to the same period of Fiscal ~~2022.~~2023.

Gross profit margin as a percentage of revenue in the Testing segment decreased by ~~3.1%~~8.4% to ~~34.5%~~26.1% for the six months ended December 31, ~~2022,~~2023, from ~~37.6%~~34.5% in the same period of Fiscal ~~2022.~~2023. Gross profit in the Testing segment ~~increased~~decreased by ~~$545~~$1,577 to ~~$4,139~~$2,562 for the six months ended December 31, ~~2022,~~2023, from ~~$3,594~~$4,139 for the same period of Fiscal ~~2022 due to improved performance in the first quarter of Fiscal 2023. The decrease in gross profit margin was mainly~~2023 due to lower margins in the Testing segment resulting from lower demand. The gross margin was negatively impacted by the decrease in revenue across all test operations where a significant portion of our cost of goods sold are fixed, and as the demand ~~due to inventory corrections made by customers in~~for services and factory utilization decrease, the ~~second quarter of Fiscal 2023.~~fixed costs are spread over the decreased output, which reduces the gross profit margin.

Gross profit margin as a percentage of revenue in the Distribution segment was ~~16.0%~~17.5% for the six months ended December 31, ~~2022,~~2023, compared to ~~16.1%~~16.0% in the same period of Fiscal ~~2022.~~2023. Gross profit in the Distribution segment for the six months ended December 31, ~~2022,~~2023, was ~~$587, a decrease~~$818, an increase of ~~$125~~$231 compared to ~~$712~~$587 in the same period of Fiscal ~~2022.~~2023. The ~~decrease~~increase in gross profit was due to the ~~decrease~~increase in distribution sales, coupled with an increase in ~~our Singapore operation~~gross margin compared to the same period of Fiscal ~~2022.~~2023.

Gross loss in the Real Estate segment ~~increased~~decreased by $5$1 to $23 for the six months ended December 31, ~~2022,~~2023, from ~~$19~~$24 in the same period of Fiscal ~~2022.~~

Operating expense for the six months ended December 31, 2023 and 2022 ~~and 2021 were~~was as follows:

	Six Months Ended				Six Months Ended
	Dec. 31, 2022		Dec. 31, 2021		Dec. 31, 2023		Dec. 31, 2022
(Unaudited)
					(Unaudited)		(Unaudited)
General and administrative	$	4,224	$	3,927	$	3,975	$	4,224
Selling		366		303		435		366
Research and development		224		213		216		224
Gain on disposal of plant and equipment		7		-		72		7
Total	$	4,821	$	4,443	$	4,698	$	4,821

General and administrative expense ~~increased~~decreased by ~~$297,~~$249, or ~~18.2%~~5.9%, from ~~$3,927~~$4,224 to ~~$4,224~~$3975 for the six months ended December 31, ~~2022,~~2023, compared to the same period of Fiscal ~~2022.~~2023. The ~~increase~~decrease in general and administrative expense was ~~primarily due~~mainly attributable to the ~~general~~implementation of the cost cutting initiative from Malaysia and ~~administrative~~China operation in view of lower testing demand, and lower remuneration related expense ~~relating to the Company’s new subsidiary Trio-Tech Jiangsu, which was setup~~resulting from unfavorable financial performance in ~~the third quarter of Fiscal 2022, coupled with increased manpower costs.~~six months ended December 31, 2023.

Selling expense increased by ~~$63,~~$69, or ~~20.8%~~18.9%, for the six months ended December 31, ~~2022,~~2023, from ~~$303~~$366 to ~~$366~~$435 compared to the same period of Fiscal ~~2022.~~2023. The increase in selling expense was primarily attributable to an increase in commission ~~expense in the Manufacturing segment of Singapore operation as a result~~because of an increase in commissionable revenue and increased ~~travel costs.~~business travel.

Income from operations was ~~$2,136~~$690 for the six months ended December 31, ~~2022,~~2023, compared to ~~$1,626~~$2,136 for the same period of Fiscal ~~2022.~~2023. The ~~increase~~decrease was mainly due to the ~~increase~~decrease in revenue, coupled with a decrease in gross profit margin ~~offset by an increase~~ in ~~operating expense,~~the Testing segment, as discussed earlier.

Interest expense for the six months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

Interest expense decreased ~~marginally~~ by $2$8 to ~~$54~~$46 from ~~$56~~$54 for the six months ended December 31, ~~2022,~~2023, compared to the same period of Fiscal ~~2022. The decrease was mainly due to lower utilization of lines of credit in Singapore operation.~~2023.

Other income / (expense) /for the six months ended December 31, 2023 and 2022 was as follows:

Other income for the six months ended December 31, ~~2022~~2023 was $114, a decrease of $220 compared to other expense of $106 for the same period of Fiscal 2023. The decrease was mainly contributed by lower negative foreign currency impact and ~~2021 was as follows:~~an increase in interest income.

~~Other expense for~~In the six months ended December 31, ~~2022~~2023, the Company received government grants amounting to $77, $16 of which was ~~$64, a decrease of $606 compared to other income of $542~~an incentive from the Singapore government for ~~the same period of Fiscal 2022. The decrease was mainly contributed by a negative foreign currency impact in the second quarter of Fiscal 2023~~local resident recruitment, and the ~~absence of one-time commission income that was earned in~~$57 from the U.S. government related to Employee Retention Credit (“ERC”). During the same period in ~~Fiscal 2022.~~2022, the Company received government grants amounting to $42, with $10 from the Singapore government for Covid-19, $17 from the Singapore government for local resident recruitment and the remaining $15 related to capital expenditure subsidy received from the China government.

Our net income is impacted by the overall strengthening or weakening of the U.S. Dollar since the functional currency of our foreign subsidiaries is not the U.S. Dollar. During the second quarter in Fiscal 2023, exchange rate movement negatively impacted our net income due to the strengthening of Singapore dollars against the U.S. Dollar which was partially offset by the exchange gain that arose in the first quarter of Fiscal 2023.

Income tax expense for the six months ended December 31, ~~2021~~2023 was ~~$466, an increase~~$132, a decrease of ~~$133~~$334 compared to of ~~$333~~$466 for the same period of Fiscal ~~2022.~~2023. The ~~increase~~decrease in income tax expense was primarily due to ~~increase~~decrease in the taxable income across the Company in the six months ended December 31, ~~2022.~~2023.

As of December 31, ~~2022,~~2023, we held a 55% interest in Trio-Tech (Malaysia) Sdn. Bhd., Trio-Tech (Kuala Lumpur) Sdn. Bhd., SHI International Pte. Ltd., and 52% interest in PT. SHI Indonesia. We also held a 76% interest in Prestal Enterprise Sdn. Bhd and 51% interest in Trio-Tech JiangSu Co. Ltd. The net ~~income~~loss attributable to the ~~noncontrolling~~non-controlling interest in these subsidiaries for the six months ended December 31, ~~2022,~~2023, was ~~$154,~~$44, a change of ~~$142,~~$198, compared to a net income of ~~$12~~$154 for the same period of Fiscal ~~2022.~~2023. The ~~increase~~decrease was attributable to the ~~increase~~decrease in net income generated by the China operation.

Net income was ~~$1,389~~$751 for the six months ended December 31, ~~2022,~~2023, a decrease of ~~$383~~$638 compared to a net income of ~~$1,772~~$1,389 for the same period of Fiscal ~~2022.~~2023. The ~~increase~~decrease was mainly due to the ~~increase~~decrease in revenue and gross margin. However, the ~~increase~~decrease was partially offset by ~~an increase~~a decrease in operating expense and other expense.

Basic earnings per share from continuing operations was ~~$0.34~~$0.18 for the six months ended December 31, ~~2022,~~2023, compared to ~~$0.46~~$0.34 for the same period in Fiscal ~~2022.~~2023. Basic earnings per share from discontinued operations were $nil for both the six months ended December 31, ~~2022~~2023 and ~~2021.~~2022.

Diluted earnings per share from continuing operations was ~~$0.33~~$0.17 for the six months ended December 31, ~~2022,~~2023, compared to ~~$0.43~~$0.33 for the same period of Fiscal ~~2022.~~2023. Diluted earnings per share from discontinued operations were $nil for both the six months ended December 31, ~~2022~~2023 and ~~2021.~~2022.

The revenue, gross profit margin, and income ~~or loss~~/ (loss) from operations in each segment for the six months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively, are presented below. As the segment revenue and gross margin for each segment have been discussed in the previous section, only the comparison of income / (loss) from operations is discussed below.

The revenue, gross margin and income from operations for the Manufacturing segment for the six months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Six Months Ended						Six Months Ended
	Dec. 31, 2022			Dec. 31, 2021			Dec. 31, 2023			Dec. 31, 2022
(Unaudited)
							(Unaudited)			(Unaudited)
Revenue	$	8,629		$	7,090		$	7,675		$	8,629
Gross margin		26.1	%		25.1	%		26.3	%		26.1	%
Income from operations	$	477		$	252		$	149		$	477

Income from operations from the Manufacturing segment was ~~$477~~$149 for the six months ended December 31, ~~2022, an increase~~2023, a decrease of ~~$225~~$328 as compared to ~~$252~~$477 in the same period of Fiscal ~~2022~~2023 due to ~~an increase~~a decrease in gross ~~margin. The increase in gross margin was partially offset with~~profit resulting from lower revenue and an increase in operating expense. The Manufacturing segment's operating expense ~~were~~was $1,868 and $1,778 ~~and $1,529~~ for the six months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The increase in operating expense of $249 was mainly due to an increase in general and administrative expense by $75, and an increase in selling expense by $82 compared to the same period of Fiscal 2022. The increase in general and administrative expense was mainly attributable to an increase in payroll-related expenses in the Singapore operations. The increase in selling expense$92 was primarily attributable to an increase in commission ~~expenses in the Manufacturing segment of Singapore operation~~expense because of an increase in commissionable revenue.

The revenue, gross margin and ~~loss~~(loss) / income from operations for the Testing segment for the six months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Six Months Ended						Six Months Ended
	Dec. 31, 2022			Dec. 31, 2021			Dec. 31, 2023			Dec. 31, 2022
(Unaudited)
							(Unaudited)			(Unaudited)
Revenue	$	12,012		$	9,566		$	9,810		$	12,012
Gross margin		34.5	%		37.6	%		26.1	%		34.5	%
Income from operations	$	1,129		$	1,124
(Loss) / Income from operations							$	(280	)	$	1,129

~~Income~~Loss from operations in the Testing segment for the six months ended December 31, ~~2022,~~2023, was ~~$1,129,~~$280, a ~~slight improvement~~decrease of $5$1,409 compared to ~~$1,124~~an income from operations of $1,129 in the same period of Fiscal ~~2022.~~2023 mainly due to lower gross profit resulting from lower revenue. The ~~increase~~decrease in gross profit of ~~$545~~$1,577 was partially offset by ~~an increase~~a decrease in operating expense ~~by $540.~~of $169. Operating expense was ~~$3,011~~$2,842 and ~~$2,471~~$3,011 for the six months ended December 31, 2023 and 2022, ~~and 2021,~~ respectively. ~~The higher operating expense was mainly attributed to an increase in general and administrative expense and corporate overhead by $356 and $234, respectively.~~

The increase in general and administrative expense was mainly due to costs incurred in Company’s new subsidiary Trio-Tech Jiangsu, which was setup in the third quarter of Fiscal 2022, coupled with increased manpower costs. The increase in corporate overhead expense was due to a change in the corporate overhead allocation compared to the same period of Fiscal 2022. Corporate charges are allocated on a predetermined fixed charge basis.

The revenue, gross margin and income from operations for the Distribution segment for the six months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Six Months Ended						Six Months Ended
	Dec. 31, 2022			Dec. 31, 2021			Dec. 31, 2023			Dec. 31, 2022
(Unaudited)
							(Unaudited)			(Unaudited)
Revenue	$	3,676		$	4,418		$	4,670		$	3,676
Gross margin		16.0	%		16.1	%		18.3	%		16.0	%
Income from operations	$	482		$	531		$	646		$	482

Income from operations in the Distribution segment for the six months ended December 31, ~~2022~~2023 was ~~$482, a decrease~~$646, an increase of ~~$49~~$164 compared to ~~$531~~$482 in the same period of Fiscal ~~2022.~~2023. The ~~decrease~~increase in operating income was primarily due to ~~a decrease~~an increase in gross margin by ~~$125,~~$231, which was partially offset with ~~a decrease~~an increase in operating expense of ~~$76.~~$66. Operating expense ~~were~~was $172 and $106 ~~and $180~~ for the six months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~decrease~~increase in operating expense was mainly contributed by ~~decrease~~increase in general and administrative expense ~~of $60.~~

The revenue, gross ~~loss~~ margin and loss from operations for the Real Estate segment for the six months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

	Six Months Ended						Six Months Ended
	Dec. 31, 2022			Dec. 31, 2021			Dec. 31, 2023			Dec. 31, 2022
(Unaudited)
							(Unaudited)			(Unaudited)
Revenue	$	12		$	19		$	13		$	12
Gross loss margin		200.0	%		100.0	%
Gross margin								(216.7	)%		(200.0	)%
Loss from operations	$	(42	)	$	(51	)	$	(53	)	$	(42	)

Loss from operations in the Real Estate segment for the six months ended December 31, ~~2022~~2023 was ~~$42, a decrease~~$53, an increase of $9$11 compared to ~~$51~~$42 for the same period of Fiscal ~~2022.~~2023. The ~~decrease~~increase in operating loss was mainly due to ~~a decrease~~an increase in operating expense. Operating expense was ~~$18~~$30 and ~~$32~~$18 for the six months ended December 31, 2023 and 2022, ~~and 2021,~~ respectively.

The ~~income/(loss)~~income from operations for corporate for the six months ended December 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

The improvement of ~~$320~~$124 was mainly due to ~~a change in the~~allocation of corporate ~~overhead allocation as compared~~expense to the ~~same period~~individual segments was based on budgeted expense for the quarter as mentioned earlier. Any excess/under allocation to each segment is reviewed and adjusted over the last two quarters of the fiscal year. ~~Corporate charges are allocated on a predetermined fixed charge basis.~~.

During the six months ended December 31, ~~2022~~2023, total assets increased by ~~$2,775~~$4,412 to ~~$46,196~~$46,598 compared to ~~$43,421~~$42,186 as of June 30, ~~2022.~~2023. The increase was primarily due to an increase in inventories, cash and cash equivalents, other receivables, other assets, trade ~~receivables and property, plant and equipment~~account receivable, deferred tax assets and restricted term deposits partially offset by a decrease in ~~cash and cash equivalents, short-term deposit, other receivables,~~short term deposits, prepaid expense, ~~deferred tax~~ assets ~~investment properties, right-of-use assets~~held for sale and operating right-of-use assets.

Cash and cash equivalents were ~~$6,379 as~~$10,966 at December 31, ~~2022,~~2023, reflecting an ~~decrease~~increase of ~~$1,319~~$3,383 from ~~$7,698~~$7,583 as at June 30, ~~2022,~~2023. This increase is attributed primarily due to ~~placement~~cash generated from operations, and the collection of ~~additional term~~customer deposits in Singapore and ~~repayment in lines of credit for~~China operations during the six months ended December 31, ~~2022.~~2023.

Short-term deposits ~~and restricted term deposits~~ were ~~$7,484 as~~$5,791 at December 31, ~~2022,~~2023, reflecting ~~an increase~~a decrease of ~~$386~~$836 from ~~$7,098~~$6,627 as at June 30, ~~2022.~~2023. The ~~increase~~decrease was ~~primarily due~~mainly attributed to ~~additional term~~the maturity of short-term deposits ~~placement~~in the Singapore operation during the six months ended December 31, 2023 which is reflected in the cash and ~~also foreign currency movement.~~cash equivalents.

~~As at December 31, 2022, the~~The trade accounts receivable balance as of December 31, 2023 increased by ~~$1,740~~$2,584 to ~~$13,332,~~$12,388, from ~~$11,592~~$9,804 as at June 30, ~~2022,~~2023, primarily due to an increase in ~~overall~~ revenue ~~of all entities on a consolidated basis.~~from customers that have longer credit term in Singapore, Malaysia and China operations. The number of days’ sales outstanding in accounts receivables for the ~~Group~~group was 91116 days and 8182 days at the end of the second quarter of Fiscal ~~2023~~2024 and the end of Fiscal ~~2022,~~2023, respectively.

Other receivables as at December 31, ~~2022~~2023, were $1,029, an increase of $90, compared to $939 as at June 30, 2023. The increase was mainly ~~comprised of~~due to higher advance payments made to suppliers and refundable services taxes in the Singapore ~~operations.~~operation.

Inventories as at December 31, ~~2022,~~2023, were ~~$3,219,~~$3,546, an increase of ~~$961,~~$1,395, compared to ~~$2,258~~$2,151 as at June 30, ~~2022.~~2023. The increase in inventories ~~was in line with~~mainly attributed to the increased backlog in the ~~manufacturing and distribution segments of~~Manufacturing segment attributable to our Singapore ~~operations.~~operations which are expected to be delivered over the next quarter.

Prepaid ~~expenses were $610 as~~expense was $589 at December 31, ~~2022~~2023 compared to ~~$1,215 as~~$105 at June 30, ~~2022.~~2023. This was mainly due to the ~~asset capitalization of down payments made~~prepayment for ~~the purchase of equipment in the China operation.~~insurance, rental and software license fee.

Investment properties’ net in China was ~~$533 as~~$461 at December 31, ~~2022~~2023 and ~~$585~~$474 as at June 30, ~~2022.~~2023. The decrease was primarily due to the foreign currency exchange movement between June 30, ~~2022~~2023 and December 31, ~~2022.~~2023.

Property, plant and equipment ~~increased~~decreased by ~~$2,589~~$1,743 from ~~$8,481 as~~$8,344 at June 30, ~~2022,~~2023, to ~~$11,070~~$6,601 as at December 31, ~~2022,~~2023, mainly due to ~~the acquisition of new property, plant and equipment in the China operations. The increase was partially offset by~~ the depreciation charged for the period and the foreign currency exchange movement between June 30, ~~2022~~2023 and December 31, ~~2022.~~2023.

Other assets increased by $4$53 to ~~$141~~$169 as at December 31, ~~2022~~2023 compared to ~~$137 as~~$116 at June 30, ~~2022.~~2023. This was primarily due to ~~the foreign currency exchange movement between June 30, 2022 and December 31, 2022.~~an increase in utilities deposits in our Singapore operation.

Lines of credit ~~was $nil as~~increased to $384 at December 31, ~~2022~~2023 as compared to ~~$929~~$Nil as at June 30, ~~2022. This~~2023. The increase in lines of credit was ~~because~~due to a drawdown of ~~repayment of~~the lines of credit in ~~the~~our Singapore ~~Operation with no new utilization as of December 31, 2022.~~operation for working capital purposes.

Accounts payable increased by ~~$666~~$685 to ~~$3,067 as~~$2,345 at December 31, ~~2022 as~~2023, compared to ~~$2,401 as~~$1,660 at June 30, ~~2022~~2023 which was in line with the increase ~~of sales and~~in inventories.

Accrued expense increased by ~~$803~~$215 to ~~$6,807 as~~$4,506 at December 31, ~~2022,~~2023, as compared to ~~$6,004 as~~$4,291 at June 30, ~~2022.~~2023. The increase in accrued expense was mainly due to an increase in ~~accruals relating~~the accrued purchases.

Contract liabilities increased by $2,531 to ~~acquisition pf property, plant and equipment~~$3,808 at December 31, 2023 as compared to $1,277 at June 30, 2023 due to the increase in customers’ deposits received in the Singapore and China operations.

Bank loans payable decreased by $215 to $1,137 at December 31, 2023, as compared to $1,352 as of June 30, 2023. The decrease in bank loans payable ~~as it decreased by $48 to $1,696 as at December 31, 2022, as compared to $1,744 as of June 30, 2022. This~~ was mainly due to the ~~repayments made~~repayment of bank loans in ~~the~~our Malaysia operations.

Finance leases decreased by ~~$67~~$53 to ~~$170 as~~$96 at December 31, ~~2022,~~2023, as compared to ~~$237 as~~$149 at June 30, ~~2022.~~2023. This was due to the repayments ~~made~~of leases in ~~the~~our Singapore and Malaysia operations.

Operating lease right-of-use assets and the corresponding lease liability decreased by ~~$572~~$250 to ~~$2,580 as~~$2,359 at December 31, ~~2022,~~2023, as compared to ~~$3,152 as~~$2,609 at June 30, ~~2022.~~2023. This was due to the repayment made and the operating lease ~~expenses~~expense charged for the ~~period.~~period partially offset by a new lease arrangement entered by Malaysia operation.

Other non-current liabilities ~~increased~~decreased by ~~$1,144~~$564 to ~~$1,172~~$30 as at December 31, 2022, as compared to ~~$28~~$594 as at June 30, 2022. The ~~increase~~decrease was mainly due to ~~an increase~~a decrease in accruals relating to acquisition of property, plant and equipment in the China ~~operations where the payments~~operations. The remaining accrual has a term ~~is more~~of less than 12 ~~months.~~months as at December 31, 2022, thereby being reclassified to current liabilities.

Net cash ~~provided by~~used in operating activities ~~increased~~decreased by ~~$2,942~~$2,503 to an inflow of ~~$3,779~~$1,276 for the six months ended December 31, ~~2022,~~2023, from an inflow of ~~$837~~$3,779 for the same period ofin Fiscal ~~2022.~~2023. The ~~increase~~decrease in net cash flow provided by operating activities was primarily due to ~~an increase~~lower net income generated of ~~$3,393 in cash inflow from changes in depreciation, other receivables, prepaid expense and other current assets and account payables and accrued expense in first half of Fiscal 2023 as~~$693 compared to the same period of Fiscal ~~2022. It was~~2023 and lower receipts from trade receivables and other receivables by $1,205, higher cash outflow for inventories by $521, lower prepaid expense by $459, and higher cash outflow from other non-current liabilities by $1,708. These are partially offset by ~~an increase of $420 in~~lower cash outflow ~~from changes in inventories~~for accounts payables, accrued expense and ~~operating lease in first half~~contract liabilities of ~~Fiscal 2023 as compared to same period of Fiscal 2022.~~$1,809.

Net cash provided by investing activities ~~decreased~~increased by ~~$4,270~~$4,564 to ~~an outflow of $3,428~~$1,136 for the six months ended December 31, ~~2022, from an inflow of $842 for~~2023 compared with the same period ofin Fiscal ~~2022.~~2023. The increase in cash ~~outflow~~inflow was primarily due to ~~an additions to property, plant and equipment~~cash inflow of ~~$3,994.~~$634 from maturity of unrestricted term deposits coupled with lower capital expenditure of $3,836 for six months ended December 31, 2023.

Net cash ~~outflow from~~provided by financing activities for the six months ended December 31, ~~2022,~~2023, was ~~$1,032,~~$280, representing ~~a decrease~~an increase of ~~$1,105, as~~$1,312, compared to cash ~~inflow~~outflow of ~~$73~~$1,032 during the six months ended December 31, ~~2021.~~2022. The ~~decrease~~increase was mainly attributable to ~~a higher payment on~~increase in utilization of lines of credit by ~~$856.~~$476 during the six months ended December 31, 2022. Furthermore, the Company also incurred higher cash outflow for settling lines of credit in the same period of Fiscal 2023.

~~On March 1, 2022,~~The Company filed a shelf registration statement with the ~~Company’s Registration Statement on Form S-3 (File No. 333-261485) was declared effective by the SEC,~~Securities and Exchange Commission, pursuant to which we may raise capital of $10,000,000 ~~USD~~ of any combination of securities (common stock, warrants, debt securities or units) for expansion of the Company’s testing capacity and working capital purposes if necessary.

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 31, ~~2022,~~2023, the end of the period covered by this Form 10-Q. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective at a reasonable level.

There has been no change in the Company’s internal control over financial reporting during the fiscal quarter ended December 31, ~~2022,~~2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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.

		Ownership			Location
Express Test Corporation (Dormant)	~~100%~~		100	%	Van Nuys, California
Trio-Tech Reliability Services (Dormant)	~~100%~~		100	%	Van Nuys, California
KTS Incorporated, dba Universal Systems (Dormant)	~~100%~~		100	%	Van Nuys, California
European Electronic Test Centre (Dormant)	~~100%~~		100	%	Dublin, Ireland
Trio-Tech International Pte. Ltd.	~~100%~~		100	%	Singapore
Universal (Far East) Pte. Ltd.*	~~100%~~		100	%	Singapore
Trio-Tech International (Thailand) Co. Ltd. *	~~100%~~		100	%	Bangkok, Thailand
Trio-Tech (Bangkok) Co. Ltd. *	~~100%~~		100	%	Bangkok, Thailand
Trio-Tech (Malaysia) Sdn. Bhd. ~~(55%~~ (55% owned by Trio-Tech International Pte. Ltd.)	~~55%~~		55	%	Penang and Selangor, Malaysia
Trio-Tech (Kuala Lumpur) Sdn. Bhd.	~~55%~~	~~Selangor, Malaysia~~
~~(100%~~ (100% owned by Trio-Tech Malaysia Sdn. Bhd.)			55	%	Selangor, Malaysia
Prestal Enterprise Sdn. Bhd.	~~76%~~	~~Selangor, Malaysia~~
~~(76%~~ (76% owned by Trio-Tech International Pte. Ltd.)			76	%	Selangor, Malaysia
Trio-Tech (SIP) Co., Ltd. *	~~100%~~		100	%	Suzhou, China
Trio-Tech (Chongqing) Co. Ltd. *	~~100%~~		100	%	Chongqing, China
SHI International Pte. Ltd. (Dormant) ~~(55%~~ (55% owned by Trio-Tech International Pte. Ltd)	~~55%~~		55	%	Singapore
PT SHI Indonesia (Dormant) ~~(100%~~ (95% owned by SHI International Pte. Ltd.)	~~52%~~		52	%	Batam, Indonesia
Trio-Tech (Tianjin) Co., Ltd. *	~~100%~~		100	%	Tianjin, China
Trio-Tech (Jiangsu) Co., Ltd. ~~(51%~~ (51% owned by Trio-Tech (SIP) Co., Ltd.)	~~51%~~		51	%	Suzhou, China

	Dec. 31,		June 30,
	2023		2023
	(Unaudited)

Short-term deposits	$	5,620	$	6,901
Currency translation effect on short-term deposits		171		(274	)
Total short-term deposits		5,791		6,627
Restricted term deposits - Current		737		755
Currency translation effect on restricted term deposits		25		(16	)
Total restricted term deposits - Current		762		739
Restricted term deposits – Non-current		1,721		1,763
Currency translation effect on restricted term deposits		57		(47	)
Total restricted term deposits - Non-current		1,778		1,716
Total term deposits	$	8,331	$	9,082

	Dec. 31, 2022			June 30, 2022
	(Unaudited)

Raw materials	$	1,261		$	1,764
Work in progress		1,669			683
Finished goods		821			238
Less: provision for obsolete inventories		(649	)		(674	)
Currency translation effect		117			247
	$	3,219		$	2,258

	December 31, 2022		June 30, 2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,379	$	7,698
Short-term deposits		4,995		5,420
Trade accounts receivable, less allowance for doubtful accounts of $220 and $243, respectively		13,332		11,592
Other receivables		728		998
Inventories, less provision for obsolete inventories of $649 and $674, respectively		3,219		2,258
Prepaid expenses and other current assets		610		1,215
Financed sales receivable		21		21
Restricted term deposit		747		-
Total current assets		30,031		29,202
NON-CURRENT ASSETS:
Deferred tax assets		93		169
Investment properties, net		533		585
Property, plant and equipment, net		11,070		8,481
Operating lease right-of-use assets		2,580		3,152
Other assets		141		137
Financed sales receivable		6		17
Restricted term deposits		1,742		1,678
Total non-current assets		16,165		14,219
TOTAL ASSETS	$	46,196	$	43,421

LIABILITIES
CURRENT LIABILITIES:
Lines of credit	$	-	$	929
Accounts payable		3,067		2,401
Accrued expenses		6,807		6,004
Income taxes payable		461		787
Current portion of bank loans payable		511		472
Current portion of finance leases		101		118
Current portion of operating leases		1,140		1,218
Total current liabilities		12,087		11,929
NON-CURRENT LIABILITIES:
Bank loans payable, net of current portion		1,185		1,272
Finance leases, net of current portion		69		119
Operating leases, net of current portion		1,440		1,934
Income taxes payable, net of current portion		255		137
Deferred tax liabilities		15		-
Other non-current liabilities		1,172		28
Total non-current liabilities		4,136		3,490
TOTAL LIABILITIES	$	16,223	$	15,419

EQUITY
TRIO-TECH INTERNATIONAL’S SHAREHOLDERS’ EQUITY:
Common stock, no par value, 15,000,000 shares authorized; 4,076,680 and 4,071,680 shares issued outstanding as at December 31 and June 30, 2022, respectively	$	12,769		12,750
Paid-in capital		4,762		4,708
Accumulated retained earnings		10,608		9,219
Accumulated other comprehensive income-translation adjustments		1,494		1,197
Total Trio-Tech International shareholders’ equity		29,633		27,874
Non-controlling interest		340		128
TOTAL EQUITY	$	29,973	$	28,002
TOTAL LIABILITIES AND EQUITY	$	46,196	$	43,421

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

Balance at June 30, 2022		4,072		12,750		4,708		9,219		1,197		128		28,002
Stock option expenses		-		-		54		-		-		-		54
Net income		-		-		-		1,389		-		154		1,543
Exercise of stock option		5		19		-		-		-		-		19
Translation adjustment		-		-		-		-		297		58		355
Balance at Dec. 31, 2022		4,077		12,769		4,762		10,608		1,494		340		29,973

	Three Months			Operating
	Ended	Net		Income /			Total		Depr. And		Capital
	Dec. 31,	Revenue		(Loss)			Assets		Amort.		Expenditures
Manufacturing	2023	$	4,790	$	191		$	19,242	$	101	$	19
	2022	$	5,044	$	301		$	15,345	$	99	$	15

Testing Services	2023		4,646		(152	)		22,690		1,181		62
	2022		5,648		547			27,757		1,111		2,811

Distribution	2023		2,760		401			1,976		-		-
	2022		1,694		217			1,437		-		-

Real Estate	2023		6		(27	)		2,502		18		-
	2022		4		(28	)		1,580		20		-

Corporate & Unallocated	2023				264			188		15		-
	2022		-		32			77		6		12

Total Company	2023	$	12,202	$	677		$	46,598	$	1,315	$	81
	2022	$	12,390	$	1,069		$	46,196	$	1,236	$	2,838

Remainder of Fiscal 2023	$	60
Fiscal 2024		130
Fiscal 2025		131
Fiscal 2026		44
Fiscal 2027		15
	$	380

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		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)