What changed in TRIO-TECH INTERNATIONAL's 2023 10-K compared to 2022?

Across the narrative sections we track, TRIO-TECH INTERNATIONAL (TRT) added 327 paragraphs, removed 353, and edited 270 between the 2022 and 2023 10-K filings. The biggest movers are Item 1. Business (+327/−353).

Where does this TRT 10-K diff come from?

The source filings are TRIO-TECH INTERNATIONAL's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in TRIO-TECH INTERNATIONAL's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of TRIO-TECH INTERNATIONAL's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+327 added−353 removedSource: 10-K (2023-09-27) vs 10-K (2022-09-23)

Top changes in TRIO-TECH INTERNATIONAL's 2023 10-K

327 paragraphs added · 353 removed · 270 edited across 1 sections

Item 1. Business+327 / −353 · 270 edited

Item 1. Business

Business — how the company describes what it does

270 edited+57 added−83 removed156 unchanged

2022 filing

2023 filing

Biggest changeF-5 TRIO-TECH INTERNATIONAL AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) Year Ended June 30, June 30, 2022 2021 Cash Flow from Operating Activities Net income / (loss) $ 2,299 $ (1,155 ) Adjustments to reconcile net income to net cash flow provided by operating activities Depreciation and amortization 3,075 3,059 Impairment on other assets - 1,580 Stock option expense 475 249 Reversal of obsolete inventories 4 (15 ) Payment of interest portion of finance leases (21 ) (40 ) Bad debt recovery (58 ) (9 ) Accrued interest expense, net accrued (interest income) 78 29 PPP loan forgiveness income - (121 ) Dividend income (10 ) (32 ) Dividend received 10 32 Gain / (loss) on sale of property, plant and equipment 76 (1 ) Warranty addition, net - 3 Reversal of income tax provision (7 ) - Deferred tax expense / (benefit) 40 (139 ) Changes in operating assets and liabilities, net of acquisition effects Trade account receivables (3,246 ) (2,347 ) Other receivables (336 ) 336 Other assets 118 (327 ) Inventories (252 ) (98 ) Prepaid expense and other current assets (826 ) (97 ) Accounts payable and accrued expense 1,532 1,377 Income taxes payable 323 118 Operating leases liabilities (1,151 ) (764 ) Net Cash Provided by Operating Activities 2,123 1,638 Cash Flow from Investing Activities Withdrawal of unrestricted deposit 3,103 2,335 Investments in restricted and unrestricted deposits (2,079 ) (1,790 ) Addition to property, plant and equipment (1,468 ) (1,112 ) Net Cash Used in Investing Activities (444 ) (567 ) Cash Flow from Financing Activities Payment on lines of credit (1,543 ) (589 ) Payment of bank loans (451 ) (412 ) Payment of principal portion of finance leases (193 ) (253 ) Dividends paid on noncontrolling interest (125 ) (189 ) Proceeds from exercising stock options 572 754 Proceeds from bank loans 248 205 Proceeds from lines of credit 2,403 482 Net Cash Provided / (Used) in Financing Activities 911 (2 ) Effect of Changes in Exchange Rate (791 ) 698 Net Increase in Cash, Cash Equivalents, and Restricted Cash 1,799 1,767 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 7,577 5,810 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 9,376 $ 7,577 Supplementary Information of Cash Flows Cash paid during the period for: Interest $ 121 $ 122 Income taxes $ 403 $ 207 See accompanying notes to consolidated financial statements.

Biggest changeF-5 Table of Contents TRIO-TECH INTERNATIONAL AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) For the Year Ended June 30, 2023 2022 Cash Flow from Operating Activities Net income $ 1,758 $ 2,299 Adjustments to reconcile net income to net cash flow provided by operating activities Depreciation and amortization 5,088 3,075 Stock compensation 358 475 Addition of provision for obsolete inventories 61 - Reversal of obsolete inventories (40 ) 4 Payment of interest portion of finance lease (10 ) (21 ) Bad debt recovery, net of allowance charged (11 ) (58 ) (Accrued interest income), net accrued interest expense (12 ) 78 Reversal of income tax provision 93 (7 ) Assurance warranty recovery, net 5 - Deferred tax (benefit) / expenses 106 40 Loss on sale of property, plant and equipment 7 76 Repayment of operating lease (1,300 ) (1,151 ) Changes in operating assets and liabilities, net of acquisition effects Trade accounts receivable 1,812 (3,246 ) Other receivables 59 (336 ) Other assets (10 ) 118 Inventories 230 (252 ) Prepaid expenses and other current assets 511 (826 ) Accounts payable and accrued expenses (811 ) 1,532 Income taxes payable (350 ) 323 Other non-current liabilities 566 - Net Cash Provided by Operating Activities $ 8,110 $ 2,123 Cash Flow from Investing Activities Withdrawal from unrestricted term deposits 5,140 3,103 Investment in unrestricted term deposits (6,794 ) (2,079 ) Proceeds from disposal of property, plant and equipment 78 - Additions to property, plant and equipment (4,498 ) (1,468 ) Net Cash Used in Investing Activities (6,074 ) (444 ) Cash Flow from Financing Activities Payment on lines of credit (1,502 ) (1,543 ) Payment of bank loans (480 ) (451 ) Payment of principal portion of finance leases (120 ) (193 ) Dividends paid to non-controlling interest - (125 ) Proceeds from exercising stock options 69 572 Proceeds from lines of credit 580 2,403 Proceeds from bank loans 210 248 Net Cash (Used in) / Provided by Financing Activities (1,243 ) 911 Effect of Changes in Exchange Rate (130 ) (791 ) Net Increase in Cash, Cash Equivalents, and Restricted Cash 662 1,799 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 9,376 7,577 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 10,038 $ 9,376 Supplementary Information of Cash Flows Cash paid during the period for: Interest $ 104 $ 121 Income taxes $ 558 $ 403 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash 7,583 7,698 Restricted Term-Deposits in Current Assets 739 - Restricted Term-Deposits in Non-Current Assets 1,716 1,678 Total Cash, Cash Equivalents, and Restricted Cash Shown in Statements of Cash Flows $ 10,038 $ 9,376 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.

These highlights are not intended to be a full discussion of our results for the year, and should be read in conjunction with the discussion of these items in this Item 7 and with our consolidated financial statements and footnotes accompanying this Annual Report.

These highlights are not intended to be a full discussion of our results for the year, and should be read in conjunction with the discussion of these items in Item 7 and with our consolidated financial statements and footnotes accompanying this Annual Report.

We apply a five -step approach as defined in ASC Topic 606 in determining the amount and timing of revenue to be recognized: ( 1 ) identifying the contract with customer; ( 2 ) identifying the performance obligations in the contracts; ( 3 ) determining the transaction price; ( 4 ) allocating the transaction price to the performance obligations in the contract; and ( 5 ) recognizing revenue when the corresponding performance obligation is satisfied.

Revenue derived from testing services is recognized when testing services are rendered.

Revenue derived from Testing is recognized when testing services are rendered.

Certain customers can request for installation and training services to be performed for certain products sold in the manufacturing segment. These services are mainly for helping customers with the test runs of the machines sold and are considered a separate performance obligation. Such services can be provided by other entities as well and these do not significantly modify the product.

Certain customers can request for installation and training services to be performed for certain products sold in the Manufacturing segment. These services are mainly for helping customers with the test runs of the machines sold and are considered a separate performance obligation. Such services can be provided by other entities as well and these do not significantly modify the product.

In the real estate segment: ( 1 ) revenue from property development is earned and recognized on the earlier of the dates when the underlying property is sold or upon the maturity of the agreement; if this amount is uncollectible, the agreement empowers the repossession of the property, and ( 2 ) rental revenue is recognized on a straight-line basis over the terms of the respective leases.

In the Real Estate segment: ( 1 ) revenue from property development is earned and recognized on the earlier of the dates when the underlying property is sold or upon the maturity of the agreement; if this amount is uncollectible, the agreement empowers the repossession of the property, and ( 2 ) rental revenue is recognized on a straight-line basis over the terms of the respective leases.

This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period. Straight-line rental revenue is commenced when the tenant assumes possession of the leased premises.

The Company’s management considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. The Company includes any account balances that are determined to be uncollectible, along with a general reserve, in the overall allowance for doubtful accounts.

Depreciation is provided for over the estimated useful lives of the assets using the straight-line method. Amortization of leasehold improvements is provided for over the lease terms or the estimated useful lives of the assets, whichever is shorter, using the straight-line method. Maintenance, repairs and minor renewals are charged directly to expense as incurred.

Impairment is recognized based on the difference between the fair value of the asset and its carrying value, and fair value is generally measured based on discounted cash flow analysis, if there is significant adverse change.

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

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

Leases - Company as Lessor All of the leases under which the Company is the lessor will continue to be classified as operating leases and sales-type lease under the new standard. The new standard did not have a material effect on our consolidated financial statements and will not have a significant change in our leasing activities.

All of the leases under which the Company is the lessor will continue to be classified as operating leases and sales-type lease under the new standard. The new standard did not have a material effect on our consolidated financial statements and will not have a significant change in our leasing activities.

The determination of the grant date fair value of stock-based awards using the Black-Scholes option-pricing model is affected by our estimated common stock fair value as well as other subjective assumptions including the expected term of the awards, the expected volatility over the expected term of the awards, expected dividend yield and risk-free interest rates.

The assumptions used in our option-pricing model represent management’s best estimates and are as follows: • Fair Value of Common Stock. We determined the fair value of each share of underlying common stock based on the closing price of our common stock on the date of grant. • Expected Term.

The allowance for loan losses reflects management’s best estimate of probable losses determined principally on the basis of historical experience and specific allowances for known loan accounts. All loans or portions thereof deemed to be uncollectible or to require an excessive collection cost are written off to the allowance for losses.

The allowance for loan losses reflects management’s best estimate of probable losses determined principally on the basis of historical experience and specific allowances for known loan accounts. All loans or portions thereof deemed to be uncollectible or require an excessive collection cost are written off to the allowance for losses.

Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.

The cost of equipment, current year investment in new equipment and depreciation expense are allocated into respective segments based on primary purpose for which the equipment was acquired. All intersegment sales were sales from the manufacturing segment to the testing and distribution segment.

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.

The Company uses judgment to evaluate whether the control has transferred by considering several indicators, including: ● whether the Company has a present right to payment; ● whether the customer has legal title; ● whether the customer has physical possession; ● whether the customer has significant risk and rewards of ownership; and ● whether the customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products (for example, when the customer has previously accepted the same equipment, with the same specifications, and when we can objectively demonstrate that the tool meets all of the required acceptance criteria, and when the installation of the system is deemed perfunctory).

The Company uses judgment to evaluate whether the control has transferred by considering several indicators, including whether: ● the Company has a present right to payment; ● the customer has legal title; ● the customer has physical possession; ● the customer has significant risk and rewards of ownership; and ● the customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products (for example, when the customer has previously accepted the same equipment, with the same specifications, and when we can objectively demonstrate that the tool meets all of the required acceptance criteria, and when the installation of the system is deemed perfunctory).

Not all of the 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.

Not all the 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.

Basis of Presentation and Principles of Consolidation - Trio-Tech International (the “Company” or “TTI” hereafter) was incorporated in fiscal 1958 under the laws of the State of California. TTI provides third -party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia. In addition, TTI operates testing facilities in the United States.

The shop lots are to be delivered to TTCQ upon completion of the construction of the shop lots in Singapore Themed Resort Project. The initial targeted date of completion was in fiscal year 2017. However, the progress has been delayed as the developer is currently undergoing asset reorganization process, to re-negotiate with their creditors to complete the project.

The shop lots are to be delivered to TTCQ upon completion of the construction of the shop lots in Singapore Themed Resort Project. The initial targeted date of completion was in Fiscal 2017. However, the progress has been delayed as the developer is currently undergoing asset reorganization process, to re-negotiate with their creditors to complete the project.

To the extent that the investment does not qualify as VIE, the Company further assesses the existence of a controlling financial interest under a voting interest model to determine whether the venture should be consolidated. -11- Equity Method The Company analyzes its investments in joint ventures to determine if the joint venture should be accounted for using the equity method.

To the extent that the investment does not qualify as VIE, the Company further assesses the existence of a controlling financial interest under a voting interest model to determine whether the venture should be consolidated. Equity Method The Company analyzes its investments in joint ventures to determine if the joint venture should be accounted for using the equity method.

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, and use or disposition of the Company’s assets that could have a material effect on the financial statements. -20- Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, and use or disposition of the Company’s assets that could have a material effect on the financial statements. Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.

These estimates and assumptions may change as new events occur and additional information is obtained. Actual results may differ from these estimates under different assumptions or conditions. In response to the SEC’s Release No. 33-8040, Cautionary Advice Regarding Disclosure about Critical Accounting Policy, we have identified the most critical accounting policies upon which our financial status depends.

ITEM 9A – CONTROLS AND PROCEDURES An evaluation was carried out by the Company’s Chief Executive Officer and Chief Financial Officer (the principal executive and principal financial officers, respectively, of the Company) of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of June 30, 2022, the end of the period covered by this Form 10-K.

ITEM 9A – CONTROLS AND PROCEDURES An evaluation was carried out by the Company’s Chief Executive Officer and Chief Financial Officer (the principal executive and principal financial officers, respectively, of the Company) of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of June 30, 2023, the end of the period covered by this Form 10-K.

Changes in Internal Control Over Financial Reporting There has been no change in the Company’s internal control over financial reporting during the fourth quarter of Fiscal 2022, which were identified in connection with management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Changes in Internal Control Over Financial Reporting There has been no change in the Company’s internal control over financial reporting during the fourth quarter of Fiscal 2023, which were identified in connection with management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Ltd. 100% Singapore Universal (Far East) Pte. Ltd. * 100% Singapore Trio-Tech International (Thailand) Co. Ltd. * 100% Bangkok, Thailand Trio-Tech (Bangkok) Co. Ltd.* 100% Bangkok, Thailand Trio-Tech (Malaysia) Sdn. Bhd. (50% owned by Trio-Tech International Pte. Ltd.) 55% Penang and Selangor, Malaysia Trio-Tech (Kuala Lumpur) Sdn. Bhd. 55% Selangor, Malaysia (100% owned by Trio-Tech Malaysia Sdn.

Ltd. 100% Singapore Universal (Far East) Pte. Ltd.* 100% Singapore Trio-Tech International (Thailand) Co. Ltd. * 100% Bangkok, Thailand Trio-Tech (Bangkok) Co. Ltd. * 100% Bangkok, Thailand Trio-Tech (Malaysia) Sdn. Bhd. (55% owned by Trio-Tech International Pte. Ltd.) 55% Penang and Selangor, Malaysia Trio-Tech (Kuala Lumpur) Sdn. Bhd. 55% Selangor, Malaysia (100% owned by Trio-Tech Malaysia Sdn.

The Company elected to take this non-cash impairment charge because of increased uncertainties regarding the project’s viability given the developers weakening financial condition as well as uncertainties arising from the negative real-estate environment in China, implementation of control measures on real-estate lending and its relevant government policies, together with effects of the ongoing pandemic.

The Company elected to take this non-cash impairment charge due to increased uncertainties regarding the project’s viability, given the developers weakening financial condition as well as uncertainties arising from the negative real-estate environment in China, implementation of control measures on real-estate lending in China and its relevant government policies, together with effects of the ongoing pandemic.

The Company recognizes stock-based compensation expense in the consolidated statements of shareholders' equity based on awards ultimately expected to vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. F- 10 Determining the fair value of stock-based awards at the grant date requires significant judgment.

The Company recognizes stock-based compensation expense in the consolidated statements of shareholders' equity based on awards ultimately expected to vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. Determining the fair value of stock-based awards at the grant date requires significant judgment.

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. Contract assets were recorded under other receivable while contract liabilities were recorded under accrued expense in the balance sheet. F- 25 The following table is the reconciliation of contract balances.

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. Contract assets were recorded under other receivable while contract liabilities were recorded under accrued expense in the balance sheet. The following table is the reconciliation of contract balances.

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2022 and 2021, and the consolidated results of its operations and its cash flows for each of the two years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2023 and 2022, and the consolidated results of its operations and its cash flows for each of the two years in the period ended June 30, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

BUSINESS SEGMENTS In Fiscal 2022, the Company operated in four 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 and the real estate segment in China.

BUSINESS SEGMENTS In Fiscal 2023, the Company operated in four 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 and the real estate segment in China.

The Company had no unrecognized tax benefits or related accrued penalties or interest expenses at June 30, 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 Company had no unrecognized tax benefits or related accrued penalties or interest expenses at June 30, 2023. 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.

F- 24 Testing The Company renders testing services to manufacturers and purchasers of semiconductors and other entities who either lack testing capabilities or whose in-house screening facilities are insufficient. The Company primarily derives testing revenue from burn-in services, manpower supply and other associated services. SSP is directly observable from the sales orders.

Testing The Company renders testing services to manufacturers and purchasers of semiconductors and other entities who either lack testing capabilities or whose in-house screening facilities are insufficient. The Company primarily derives testing revenue from burn-in services, manpower supply and other associated services. SSP is directly observable from the sales orders.

The Developer paid the Company a management fee of RMB 5 million in cash upon signing of the Agreement, with a remaining fee of RMB 5 million payable upon fulfilment of certain conditions in accordance with the Agreement. The Company further reduced its investment by RMB 137, or approximately $22, through the losses from operations incurred by the Joint Venture.

The Developer paid the Company a management fee of RMB 5,000 in cash upon signing of the Agreement, with a remaining fee of RMB 5,000 payable upon fulfilment of certain conditions in accordance with the Agreement. The Company further reduced its investment by RMB 137, or approximately $22, through the losses from operations incurred by the Joint Venture.

The Company has elected to account for GILTI as a period cost, and therefore has included GILTI expense in its effective tax rate calculation for the year ended June 30, 2022. The Company accrues penalties and interest related to unrecognized tax benefits when necessary as a component of penalties and interest expenses, respectively.

The Company has elected to account for GILTI as a period cost, and therefore has included GILTI expense in its effective tax rate calculation for the year ended June 30, 2023. The Company accrues penalties and interest related to unrecognized tax benefits when necessary as a component of penalties and interest expenses, respectively.

To the extent that the investment does not qualify as VIE, the Company further assesses the existence of a controlling financial interest under a voting interest model to determine whether the investment should be consolidated. F- 11 Equity Method — The Company analyzes its investments to determine if they should be accounted for using the equity method.

To the extent that the investment does not qualify as VIE, the Company further assesses the existence of a controlling financial interest under a voting interest model to determine whether the investment should be consolidated. Equity Method — The Company analyzes its investments to determine if they should be accounted for using the equity method.

F- 12 In June 2016, FASB issued ASU 2016 - 13 ASC Topic 326: Financial Instruments — Credit Losses (“ASC Topic 326” ) for the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

In June 2016, FASB issued ASU 2016 - 13 ASC Topic 326: Financial Instruments — Credit Losses (“ASC Topic 326” ) for the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

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. During the year ended June 30, 2022, TTI conducted business in four business segments: manufacturing, testing services, distribution and real estate.

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. During the year ended June 30, 2023, TTI conducted business in four business segments: Manufacturing, Testing Services, Distribution and Real Estate.

Bank loans payable (Level 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. 16.

After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to management, the Company believed that its allowance for doubtful accounts was adequate as of June 30, 2022 and 2021.

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.

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 instalments on the next three succeeding anniversaries of the grant date.

Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of twenty years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value.

Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of 20 years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value.

Basic earnings per share (“EPS”) are computed by dividing net income available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during a period.

Basic earnings per share (“ EPS ”) are computed by dividing net income available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during a period.

NEW ACCOUNTING PRONOUNCEMENTS In March 2022, FASB issued ASU 2022 - 02 ASC Topic 326: Financial Instruments — Credit Losses (Topic 326 ): Troubled Debt Restructurings ( “ TDR") and Vintage Disclosures , which require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investment in leases within the scope of Subtopic 326 - 20.

NEW ACCOUNTING PRONOUNCEMENTS In March 2022, FASB issued ASU 2022 - 02 ASC Topic 326: Financial Instruments — Credit Losses (Topic 326 ): Troubled Debt Restructurings ( “ TDR") and Vintage Disclosures , 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.

Costs to obtain a contract are not material, and the Company generally expenses such costs as incurred because the amortization period is one year or less. 22. EARNINGS PER SHARE The Company follows ASC Topic 260, Earnings Per Share.

Costs to obtain a contract are not material, and the Company generally expenses such costs as incurred because the amortization period is one year or less. 23. EARNINGS PER SHARE The Company follows ASC Topic 260, Earnings Per Share.

Other new pronouncements issued but not yet effective until after June 30, 2022 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations. 3.

Other new pronouncements issued but not yet effective until after June 30, 2023 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations. 3.

F- 22 Due to the enactment of 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.

Due to the enactment of 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.

COMPARATIVE FIGURES 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. F-35

We recognize stock-based compensation expense in the consolidated statements of shareholders' equity based on awards ultimately expected to vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. Determining the fair value of stock-based awards at the grant date requires significant judgment.

We recognize stock-based compensation expense in the consolidated statements of shareholders' equity based on awards ultimately expected to vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. 11 Table of Contents Determining the fair value of stock-based awards at the grant date requires significant judgment.

Additionally, management has the responsibility for establishing and maintaining adequate internal control over financial reporting for the Company and thus also assessed the effectiveness of our internal controls over financial reporting as of June 30, 2022.

If so, the net income of the joint venture will be reported as “Equity in earnings of unconsolidated joint ventures, net of tax” in the Company’s consolidated statements of operations and comprehensive income or loss. Cost Method Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting.

If so, the net income of the joint venture will be reported as “Equity in earnings of unconsolidated joint ventures, net of tax” in the Company’s consolidated statements of operations and comprehensive income or loss. 10 Table of Contents Cost Method Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting.

INVESTMENT PROPERTIES The following table presents the Company’s investment in properties in China as of June 30, 2022. The exchange rate is based on the market rate as of June 30, 2022. Investment Date / Reclassification Date Investment Amount (RMB) Investment Amount (U.S.

INVESTMENT PROPERTIES The following table presents the Company’s investment in properties in China as of June 30, 2023. The exchange rate is based on the market rate as of June 30, 2023. Investment Date / Reclassification Investment Amount Investment Amount Date (RMB) (U.S.

Comprehensive income or loss is comprised of net income or loss and all changes to shareholders’ equity except those due to investments by owners and distributions to owners. Income Taxes — The Company accounts for income taxes using the liability method in accordance with ASC Topic 740, Accounting for Income Taxes (“ASC Topic 740” ) .

In addition to write-downs based on newly introduced parts, statistics and judgments are used for assessing provisions of the remaining inventory based on salability and obsolescence. -10- Property, Plant and Equipment & Investment Properties Property, plant and equipment and investment properties are stated at cost, less accumulated depreciation and amortization.

In addition to write-downs based on newly introduced parts, statistics and judgments are used for assessing provisions of the remaining inventory based on saleability and obsolescence. Property, Plant and Equipment & Investment Properties Property, plant and equipment and investment properties are stated at cost, less accumulated depreciation and amortization.

NONCONTROLLING INTEREST In accordance with the provisions of ASC Topic 810, the Company has classified the noncontrolling interest as a component of stockholders’ equity in the accompanying consolidated balance sheets. Additionally, the Company has presented the net income attributable to the Company and the noncontrolling ownership interests separately in the accompanying consolidated financial statements.

NON-CONTROLLING INTEREST In accordance with the provisions of ASC Topic 810, the Company has classified the non-controlling interest as a component of stockholders’ equity in the accompanying consolidated balance sheets. Additionally, the Company has presented the net income attributable to the Company and the non-controlling ownership interests separately in the accompanying consolidated financial statements.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal controls over financial reporting were effective as of June 30, 2022.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal controls over financial reporting were effective as of June 30, 2023.

ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. -21- PART III The information required by Items 10 through 14 of Part III of this Form 10-K (information regarding our directors and executive officers, executive compensation, security ownership of certain beneficial owners, management, related stockholder matters, and certain relationships and related transactions and principal accountant fees and services) is hereby incorporated by reference from the Company's Proxy Statement to be filed with the Securities and Exchange Commission within 120 days of Fiscal 2022.

ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 19 Table of Contents PART III The information required by Items 10 through 14 of Part III of this Form 10-K (information regarding our directors and executive officers, executive compensation, security ownership of certain beneficial owners, management, related stockholder matters, and certain relationships and related transactions and principal accountant fees and services) is hereby incorporated by reference from the Company's Proxy Statement to be filed with the Securities and Exchange Commission within 120 days of Fiscal 2023.

Bhd., Malaysia Revolving Credit Cost of Funds Rate +2% - $ 350 $ 350 Off-Balance Sheet Arrangements We do not consider the Company to have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expense, results of operations, liquidity, capital expenditures or capital resources.

Revolving credit Cost of Funds Rate +2% $ 338 $ 338 Off-Balance Sheet Arrangements We do not consider the Company to have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expense, results of operations, liquidity, capital expenditures or capital resources.

Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2022.

Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2023.

Based on the information available to us, management believed the allowance for doubtful accounts as of June 30, 2022 and June 30, 2021 was adequate.

Based on the information available to us, management believed the allowance for doubtful accounts as of June 30, 2023 and June 30, 2022 was adequate.

Revenue Recognition — The Company follows ASU No. 2014 - 09, ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606” ). This standard update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.

Revenue Recognition — The Company follows ASU No. 2014 - 09, ASC Topic 606, Revenue from Contracts with Customers (“ ASC Topic 606 ”). This standard update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.

F- 8 Warranty Costs — The Company provides for the estimated costs that may be incurred under its warranty program at the time the sale is recorded in its manufacturing segment. The Company estimates warranty costs based on the historical rates of warranty returns.

F- 8 Table of Contents Assurance Warranty Costs — The Company provides for the estimated costs that may be incurred under its warranty program at the time the sale is recorded in its Manufacturing segment. The Company estimates warranty costs based on the historical rates of warranty returns.

As of June 30, 2022, 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 it is likely to cause delays in court to consummate the execution of the sale.

As of June 30, 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 are likely to cause delays in court to consummate the execution of the sale.

Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales of four units of chiller systems are as follows: Components of Lease Balances June 30, 2022 Assets Gross financial sales receivable $ 41 Unearned finance income (3 ) Financed Sales Receivable $ 38 Net financed sales receivables due within one year $ 21 Net financed sales receivables due after one year $ 17 As of June 30, 2022, the financed sale receivables had a weighted average effective interest rate of 11.16% and weighted average remaining lease term of 1.75 years.

Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales of 4 units of chiller systems are as follows: Components of Lease Balances For the Year Ended June 30, 2023 2022 Assets Gross financial sales receivable $ 17 $ 41 Unearned finance income (1 ) (3 ) Financed sales receivable $ 16 $ 38 Net financed sales receivables due within one year $ 16 $ 21 Net financed sales receivables due after one year $ - $ 17 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.

At June 30, 2022, the Company had no federal net operating loss carry-forwards and state net operating loss carryforward of $1,940, which expire through 2033. These carryovers may be subject to limitations under I.R.C. Section 382. Management of the Company is uncertain whether it is more likely than not that these future benefits will be realized.

At June 30, 2023, the Company had no federal net operating loss carry-forward and state net operating loss carry-forward of $1,940, which expire through 2033. These carryovers may be subject to limitations under I.R.C. Section 382. Management of the Company is uncertain whether it is more likely than not that these future benefits will be realized.

ITEM 16 – FORM 10-K SUMMARY Not applicable. -22- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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.

ITEM 16 – FORM 10-K SUMMARY Not applicable. 20 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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.

Corporate expenses are allocated to the four segments on a predetermined fixed amount calculated based on the annual budgeted sales, except the Malaysia operation, which is calculated based on actual sales. The following segment information table includes segment operating income or loss after including corporate expenses allocated to the segments, which gets eliminated in the consolidation.

Corporate expenses are allocated to the four segments on a predetermined fixed amount calculated based on the annual budgeted sales, except the Malaysia 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 allocated to the segments, which gets eliminated in the consolidation.

The exchange rate is based on the market rate as of June 30, 2021. Investment Date / Reclassification Date Investment Amount (RMB) Investment Amount (U.S.

The exchange rate is based on the market rate as of June 30, 2022. Investment Date / Reclassification Investment Amount Investment Amount Date (RMB) (U.S.

As of June 30, 2022, there were no vested or unvested stock options outstanding under 2007 Directors Plan.

As of June 30, 2023 and 2022, there were no vested or unvested stock options outstanding under 2007 Directors Plan.

FAIR VALUE OF FINANCIAL INSTRUMENTS ’ APPROXIMATE CARRYING VALUE In accordance with ASC Topic 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 year ended June 30, 2022, or for the same period in the prior year.

FAIR VALUE OF FINANCIAL INSTRUMENTS In accordance with ASC Topic 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 year ended June 30, 2023, or for the same period in the prior year.

Contingent Liabilities — Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

F- 11 Table of Contents Contingent Liabilities — Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

F- 7 Foreign Currency Translation and Transactions — The U.S. dollar is the functional currency of the U.S. parent company. The Singapore dollar, the national currency of Singapore, is the primary currency of the economic environment in which the operations in Singapore are conducted.

F- 7 Table of Contents Foreign Currency Translation and Transactions — The U.S. dollar is the functional currency of the U.S. parent company. The Singapore dollar ( “SGD” ), the national currency of Singapore, is the primary currency of the economic environment in which the operations in Singapore are conducted.

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

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

Restricted term deposits are classified as noncurrent 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. 4. TRADE ACCOUNT RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Account receivables are customer obligations due under normal trade terms.

Restricted deposits of $1,716 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. 4. TRADE ACCOUNT RECEIVABLES AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Account receivables are customer obligations due under normal trade terms.

The Company translates assets and liabilities of its subsidiaries outside the U.S. into U.S. dollars using the rate of exchange prevailing at the balance sheet date, and the statement of operations is measured using average rates in effect for the reporting period.

The Company uses the U.S. dollar for financial reporting purposes. The Company translates assets and liabilities of its subsidiaries outside the U.S. into U.S. dollars using the rate of exchange prevailing at the balance sheet date, and the statement of operations is measured using average rates in effect for the reporting period.

The highlights above are intended to identify certain of the Company’s significant events and transactions during Fiscal 2022.

The highlights above are intended to identify certain of the Company’s significant events and transactions during Fiscal 2023.

The hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.

During the year ended June 30, 2022, the Company granted options to purchase 100,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan, with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant, and a fair value of approximately $353, based on the fair value of $3.53 per share determined by the Black-Scholes option pricing model.

During the year ended June 30, 2023, the Company granted options to purchase 100,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan, with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant, and a fair value of approximately $213, based on the fair value of $2.13 per share determined by the Black-Scholes option pricing model.

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Top changes in TRIO-TECH INTERNATIONAL's 2023 10-K

Item 1. Business

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