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)
|
|
|
Name of
each exchange
|
Title
of each class
|
Trading
Symbol
|
On
which registered
|
Common
Stock, no par value
|
TRT
|
NYSE
American
|
Large Accelerated Filer
|
☐
|
|
Accelerated Filer
|
☐
|
Non-Accelerated Filer
|
☐
|
|
Smaller reporting company
|
☒
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
Page
|
|
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||
1
|
||
|
2
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|
|
4
|
|
|
5
|
|
|
6
|
|
35
|
||
51
|
||
51
|
||
|
|
|
|
||
|
||
52
|
||
52
|
||
52
|
||
52
|
||
52
|
||
52
|
||
52
|
||
|
|
|
53
|
|
December
31,
2019
|
June
30,
2019
|
ASSETS
|
(Unaudited)
|
|
CURRENT
ASSETS:
|
|
|
Cash
and cash equivalents
|
$4,743
|
$4,863
|
Short-term
deposits
|
6,888
|
4,144
|
Trade
accounts receivable, less allowance for doubtful accounts of $306
and $263,
respectively
|
6,937
|
7,113
|
Other
receivables
|
752
|
817
|
Inventories,
less provision for obsolete inventory of $680 and $673,
respectively
|
2,182
|
2,427
|
Prepaid
expenses and other current assets
|
330
|
287
|
Assets
held for sale
|
-
|
89
|
Total current assets
|
21,832
|
19,740
|
NON-CURRENT
ASSETS:
|
|
|
Deferred
tax asset
|
421
|
390
|
Investment
properties, net
|
734
|
782
|
Property,
plant and equipment, net
|
11,651
|
12,159
|
Operating
lease right-of-use assets
|
475
|
-
|
Other
assets
|
1,626
|
1,750
|
Restricted
term deposits
|
1,716
|
1,706
|
Total
non-current assets
|
16,623
|
16,787
|
TOTAL ASSETS
|
$38,455
|
$36,527
|
|
|
|
LIABILITIES
|
|
|
CURRENT
LIABILITIES:
|
|
|
Lines
of credit
|
$810
|
$187
|
Accounts
payable
|
3,565
|
3,272
|
Accrued
expenses
|
3,176
|
3,486
|
Income
taxes payable
|
395
|
417
|
Current
portion of bank loans payable
|
422
|
488
|
Current
portion of finance leases
|
286
|
283
|
Current
portion of operating leases
|
343
|
-
|
Total current liabilities
|
8,997
|
8,133
|
NON-CURRENT
LIABILITIES:
|
|
|
Bank
loans payable, net of current portion
|
2,127
|
2,292
|
Finance leases,
net of current portion
|
570
|
442
|
Operating
leases, net of current portion
|
134
|
-
|
Deferred
tax liabilities
|
315
|
327
|
Income
taxes payable
|
430
|
439
|
Other
non-current liabilities
|
37
|
33
|
Total
non-current liabilities
|
3,613
|
3,533
|
TOTAL LIABILITIES
|
$12,610
|
$11,666
|
|
|
|
EQUITY
|
|
|
TRIO-TECH
INTERNATIONAL’S SHAREHOLDERS' EQUITY:
|
|
|
Common
stock, no par value, 15,000,000 shares authorized; 3,673,055 shares
issued
outstanding
as at December 31 and June 30, 2019, respectively
|
$11,424
|
$11,424
|
Paid-in
capital
|
3,319
|
3,305
|
Accumulated
retained earnings
|
7,769
|
7,070
|
Accumulated
other comprehensive gain-translation adjustments
|
1,818
|
1,867
|
Total Trio-Tech International shareholders'
equity
|
24,330
|
23,666
|
Non-controlling
interest
|
1,515
|
1,195
|
TOTAL
EQUITY
|
$25,845
|
$24,861
|
TOTAL LIABILITIES AND EQUITY
|
$38,455
|
$36,527
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
|
2019
|
2018
|
2019
|
2018
|
Revenue
|
|
|
|
|
Manufacturing
|
$3,045
|
$3,352
|
$6,362
|
$6,989
|
Testing
services
|
3,887
|
4,393
|
8,277
|
8,830
|
Distribution
|
2,014
|
1,916
|
4,113
|
3,860
|
Real
Estate
|
16
|
29
|
33
|
56
|
|
8,962
|
9,690
|
18,785
|
19,735
|
Cost of Sales
|
|
|
|
|
Cost
of manufactured products sold
|
2,383
|
2,646
|
4,938
|
5,503
|
Cost
of testing services rendered
|
2,918
|
3,106
|
6,109
|
6,489
|
Cost
of distribution
|
1,738
|
1,662
|
3,545
|
3,348
|
Cost
of real estate
|
18
|
18
|
36
|
36
|
|
7,057
|
7,432
|
14,628
|
15,376
|
|
|
|
|
|
Gross Margin
|
1,905
|
2,258
|
4,157
|
4,359
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
General
and administrative
|
1,777
|
1,722
|
3,565
|
3,481
|
Selling
|
176
|
187
|
366
|
334
|
Research
and development
|
125
|
122
|
201
|
194
|
Gain
on disposal of property, plant and equipment
|
-
|
-
|
(24)
|
-
|
Total
operating expenses
|
2,078
|
2,031
|
4,108
|
4,009
|
|
|
|
|
|
(Loss) / Income from Operations
|
(173)
|
227
|
49
|
350
|
|
|
|
|
|
Other Income / (Expenses)
|
|
|
|
|
Interest
expenses
|
(55)
|
(98)
|
(123)
|
(176)
|
Gain
on sale of asset held for sale
|
1,172
|
-
|
1,172
|
-
|
Other income,
net
|
40
|
49
|
150
|
92
|
Total
other income / (expenses)
|
1,157
|
(49)
|
1,199
|
(84)
|
|
|
|
|
|
Income from Continuing Operations before Income
Taxes
|
984
|
178
|
1,248
|
266
|
|
|
|
|
|
Income Tax (Expenses) / Benefits
|
(120)
|
124
|
(120)
|
50
|
|
|
|
|
|
Income
from continuing operations before non-controlling interest, net of
tax
|
864
|
302
|
1,128
|
316
|
|
|
|
|
|
Discontinued Operations
|
|
|
|
|
Income
/ (Loss) from discontinued operations, net of tax
|
1
|
4
|
-
|
(4)
|
NET INCOME
|
865
|
306
|
1,128
|
312
|
|
|
|
|
|
Less:
net income / (loss) attributable to non-controlling
interest
|
439
|
(42)
|
429
|
(101)
|
Net Income Attributable to Trio-Tech International Common
Shareholders
|
$426
|
$348
|
$699
|
$413
|
|
|
|
|
|
Amounts Attributable to Trio-Tech International Common
Shareholders:
|
|
|
|
|
Income
from continuing operations, net of tax
|
425
|
346
|
699
|
415
|
Income
/ (Loss) from discontinued operations, net of tax
|
1
|
2
|
-
|
(2)
|
Net Income Attributable to Trio-Tech International Common
Shareholders
|
$426
|
$348
|
$699
|
$413
|
|
|
|
|
|
Basic Earnings per Share:
|
|
|
|
|
Basic
per share from continuing operations attributable to Trio-Tech
International
|
$0.12
|
$0.09
|
$0.19
|
$0.11
|
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
|
$0.09
|
$0.19
|
$0.11
|
|
|
|
|
|
Diluted Earnings per Share:
|
|
|
|
|
Diluted
earnings per share from continuing operations attributable to
Trio-Tech International
|
$0.11
|
$0.09
|
$0.19
|
$0.11
|
Diluted
earnings per share from discontinued operations attributable to
Trio-Tech International
|
$-
|
$-
|
$-
|
$-
|
Diluted Earnings per Share from Net Income
|
|
|
|
|
Attributable to Trio-Tech International
|
$0.11
|
$0.09
|
$0.19
|
$0.11
|
|
|
|
|
|
Weighted
average number of common shares outstanding
|
|
|
|
|
Basic
|
3,673
|
3,673
|
3,673
|
3,673
|
Dilutive
effect of stock options
|
52
|
108
|
33
|
142
|
Number
of shares used to compute earnings per share diluted
|
3,725
|
3,781
|
3,706
|
3,815
|
|
Three Months
Ended
|
Six Months Ended
|
||
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
Comprehensive Income Attributable to Trio-Tech
International Common Shareholders:
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Net
income
|
$865
|
$306
|
$1,128
|
$312
|
Foreign
currency translation, net of tax
|
525
|
(51)
|
(38)
|
(590)
|
Comprehensive Income / (Loss)
|
1,390
|
255
|
1,090
|
(278)
|
Less:
comprehensive income / (loss) attributable to non-controlling
interest
|
431
|
(57)
|
440
|
(192)
|
Comprehensive Income / (Loss) Attributable to Trio-Tech
International Common Shareholders
|
$959
|
$312
|
$650
|
$(86)
|
|
|
|
|
|
|
Common
Stock
|
Additional Paid-in
|
Accumulated Retained
|
Accumulated Other
Comprehensive
|
Non- Controlling
|
|
|
|
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Interest
|
Total
|
|
$
|
$
|
$
|
$
|
$
|
$
|
|
Balance
at June 30, 2019
|
3,673
|
11,424
|
3,305
|
7,070
|
1,867
|
1,195
|
24,861
|
Stock
option expenses
|
-
|
-
|
14
|
-
|
-
|
-
|
14
|
Net
income
|
-
|
-
|
-
|
699
|
-
|
429
|
1,128
|
Dividend declared
by subsidiary
|
-
|
-
|
-
|
-
|
-
|
(120)
|
(120)
|
Exercise of stock
option
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Translation
adjustment
|
-
|
-
|
-
|
-
|
(49)
|
11
|
(38)
|
Balance
at Dec. 31, 2019
|
3,673
|
11,424
|
3,319
|
7,769
|
1,818
|
1,515
|
25,845
|
|
Common
Stock
|
Additional Paid-in
|
Accumulated Retained
|
Accumulated Other
Comprehensive
|
Non- Controlling
|
|
|
|
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Interest
|
Total
|
|
$
|
$
|
$
|
$
|
$
|
$
|
|
Balance
at June 30, 2018
|
3,553
|
11,023
|
3,249
|
5,525
|
2,182
|
1,522
|
23,501
|
Stock
option expenses
|
-
|
-
|
9
|
-
|
-
|
-
|
9
|
Net
income / (loss)
|
-
|
-
|
-
|
413
|
-
|
(101)
|
312
|
Dividend declared
by subsidiary
|
-
|
-
|
-
|
-
|
-
|
(122)
|
(122)
|
Exercise of stock
option
|
120
|
401
|
-
|
-
|
-
|
-
|
401
|
Translation
adjustment
|
-
|
-
|
-
|
-
|
(499)
|
(91)
|
(590)
|
Balance
at Dec. 31, 2018
|
3,673
|
11,424
|
3,258
|
5,938
|
1,683
|
1,208
|
23,511
|
|
Six Months
Ended
|
|
|
Dec.
31,
|
Dec.
31,
|
|
2019
|
2018
|
|
(Unaudited)
|
(Unaudited)
|
Cash Flow from Operating Activities
|
|
|
Net
income
|
$1,128
|
$312
|
Adjustments
to reconcile net income to net cash flow provided by operating
activities
|
|
|
Gain
on sale of asset held for sale
|
(1,172)
|
-
|
Gain
on sale of property, plant and equipment
|
(24)
|
-
|
Depreciation
and amortization
|
1,576
|
1,145
|
Stock
compensation
|
14
|
9
|
Reversal
of provision for obsolete inventory
|
(5)
|
-
|
Reversal
of income tax provision
|
-
|
(145)
|
Repayment
of operating leases
|
(359)
|
-
|
Repayment
of interest portion of finance leases (Note 1b)
|
(24)
|
(24)
|
Bad
debt expenses (recovery)
|
45
|
(2)
|
Accrued
interest expense, net accrued interest income
|
(20)
|
26
|
Warranty
recovery, net
|
-
|
(22)
|
Deferred
tax (provision) / benefit
|
(47)
|
29
|
Changes
in operating assets and liabilities, net of acquisition
effects
|
|
|
Trade
accounts receivable
|
132
|
753
|
Other receivables
|
65
|
(110)
|
Other assets
|
97
|
428
|
Inventories
|
247
|
294
|
Prepaid expenses and other current assets
|
(43)
|
(71)
|
Accounts payable and accrued expenses
|
(6)
|
(287)
|
Income taxes payable
|
(31)
|
(84)
|
Net Cash Provided by Operating Activities
|
1,573
|
2,251
|
|
|
|
Cash Flow from Investing Activities
|
|
|
Proceeds
from disposal of property, plant and
equipment
|
39
|
3
|
Proceeds
from sale of asset held for sale
|
1,261
|
-
|
Investments
in unrestricted deposits
|
(2,672)
|
(1,461)
|
Addition
to property, plant and equipment
|
(744)
|
(2,297)
|
Net Cash Used in Investing Activities
|
(2,116)
|
(3,755)
|
|
|
|
Cash Flow from Financing Activities
|
|
|
Repayment
on lines of credit
|
(729)
|
(5,908)
|
Repayment
of bank loans
|
(245)
|
(265)
|
Repayment
of principal portion of finance leases
|
(127)
|
(121)
|
Dividends
paid on non-controlling interest
|
(120)
|
(122)
|
Proceeds
from exercising stock options
|
-
|
401
|
Proceeds
from lines of credit
|
1,337
|
5,962
|
Proceeds
from bank loans
|
-
|
1,475
|
Proceeds
from finance leases
|
279
|
|
Net Cash Generated from Financing Activities
|
395
|
1,422
|
|
|
|
Effect of Changes in Exchange Rate
|
38
|
(272)
|
|
|
|
Net decrease in cash, cash equivalents, and restricted
cash
|
$(110)
|
$(354)
|
Cash, cash equivalents, and restricted cash at beginning of
period
|
6,569
|
8,234
|
Cash, cash equivalents, and restricted cash at end of
period
|
$6,459
|
$7,880
|
|
|
|
Supplementary Information of Cash Flows
|
|
|
Cash
paid during the period for:
|
|
|
Interest
|
124
|
150
|
Income
taxes
|
$109
|
$104
|
|
|
|
Non-Cash Transactions
|
|
|
Finance lease of property, plant and equipment
|
279
|
-
|
Reconciliation of Cash, cash
equivalents, and restricted cash (Note 1a)
|
|
|
Cash
|
4,743
|
6,192
|
Short-term deposits
|
6,888
|
2,121
|
Restricted term-deposits in non-current assets
|
1,716
|
1,688
|
Total Cash, cash equivalents, and restricted cash shown in
statement of cash flows
|
$13,347
|
$10,001
|
|
|
|
See
notes to condensed consolidated financial statements.
|
|
Ownership
|
Location
|
Express Test Corporation (Dormant)
|
100%
|
Van Nuys, California
|
Trio-Tech Reliability Services (Dormant)
|
100%
|
Van Nuys, California
|
KTS Incorporated, dba Universal Systems (Dormant)
|
100%
|
Van Nuys, California
|
European Electronic Test Centre (Dormant)
|
100%
|
Dublin, Ireland
|
Trio-Tech International Pte. Ltd.
|
100%
|
Singapore
|
Universal (Far East) Pte. Ltd. *
|
100%
|
Singapore
|
Trio-Tech International (Thailand) Co. Ltd. *
|
100%
|
Bangkok, Thailand
|
Trio-Tech (Bangkok) Co. Ltd. *
|
100%
|
Bangkok, Thailand
|
Trio-Tech (Malaysia) Sdn. Bhd.
(55% owned by Trio-Tech International Pte. Ltd.)
|
55%
|
Penang and Selangor, Malaysia
|
Trio-Tech (Kuala Lumpur) Sdn. Bhd.
|
55%
|
Selangor, Malaysia
|
(100% owned by Trio-Tech Malaysia Sdn. Bhd.)
|
|
|
Prestal Enterprise Sdn. Bhd.
|
76%
|
Selangor, Malaysia
|
(76% owned by Trio-Tech International Pte. Ltd.)
|
|
|
Trio-Tech (SIP) Co., Ltd. *
|
100%
|
Suzhou, China
|
Trio-Tech (Chongqing) Co. Ltd. *
|
100%
|
Chongqing, China
|
SHI International Pte. Ltd. (Dormant)
(55% owned by Trio-Tech International Pte. Ltd)
|
55%
|
Singapore
|
PT SHI Indonesia (Dormant)
(100% owned by SHI International Pte. Ltd.)
|
55%
|
Batam, Indonesia
|
Trio-Tech (Tianjin) Co., Ltd. *
|
100%
|
Tianjin, China
|
|
Dec.
31,
2019
(Unaudited)
|
June
30,
2019
|
|
|
|
Short-term
deposits
|
$6,844
|
$4,143
|
Currency
translation effect on short-term deposits
|
44
|
1
|
Total short-term deposits
|
6,888
|
4,144
|
Restricted
term deposits
|
1,754
|
1,701
|
Currency
translation effect on restricted term deposits
|
(38)
|
5
|
Total restricted term deposits
|
1,716
|
1,706
|
Total term deposits
|
$8,604
|
$5,850
|
|
Dec.
31,
2019
(Unaudited)
|
June
30,
2019
|
Beginning
|
$263
|
$259
|
Additions charged
to expenses
|
315
|
94
|
Recovered
|
(270)
|
(84)
|
Currency
translation effect
|
(2)
|
(6)
|
Ending
|
$306
|
$263
|
|
Loan Expiry
Date
|
Loan Amount
(RMB)
|
Loan Amount
(U.S. Dollars)
|
Short-term loan receivables
|
|
|
|
JiangHuai
(Project – Yu Jin Jiang An)
|
May
31, 2013
|
2,000
|
325
|
Less:
allowance for doubtful receivables
|
|
(2,000)
|
(325)
|
Net loan receivables from property development
projects
|
|
-
|
-
|
|
|
|
|
Long-term loan receivables
|
|
|
|
Jun
Zhou Zhi Ye
|
Oct
31, 2016
|
5,000
|
814
|
Less:
transfer – down-payment for purchase of investment
property
|
|
(5,000)
|
(814)
|
Net loan receivables from property development
projects
|
|
-
|
-
|
|
Dec.
31,
2019
(Unaudited)
|
June
30,
2019
|
|
|
|
Raw
materials
|
$1,326
|
$1,190
|
Work
in progress
|
1,047
|
1,306
|
Finished
goods
|
486
|
591
|
Currency
translation effect
|
3
|
13
|
Less:
provision for obsolete inventory
|
(680)
|
(673)
|
|
$2,182
|
$2,427
|
|
Dec.
31,
2019
(Unaudited)
|
June
30,
2019
|
|
|
|
Beginning
|
$673
|
$695
|
Additions
charged to expenses
|
9
|
17
|
Usage
– disposition
|
(4)
|
(42)
|
Currency
translation effect
|
2
|
3
|
Ending
|
$680
|
$673
|
|
|
|
Dec. 31,
2019
(Unaudited)
|
June 30,
2019
|
|
Reclassification
Date
/ |
Investment
Amount
|
Investment
Amount
|
Investment
Amount
|
|
Sale
Date
|
(RM)
|
(U.S. Dollars)
|
(U.S. Dollars)
|
Penang Property
|
|
|
|
|
Reclassification
from investment property
|
June
30, 2015
|
681
|
181*
|
181*
|
Currency
translation
|
|
-
|
-
|
(15)
|
Derecognition
|
Dec
19,2019
|
(681)
|
(181)
|
-
|
|
-
|
-
|
166
|
|
Accumulated
depreciation on rental property
|
June
30, 2015
|
(310)
|
(83)*
|
(83)*
|
Currency
translation
|
|
-
|
-
|
6
|
Derecognition
|
Dec
19,2019
|
310
|
(83)
|
-
|
|
-
|
-
|
(77)
|
|
Net
investment in rental property - Malaysia
|
|
-
|
-
|
89
|
|
Investment Date /
Reclassification Date
|
Investment
Amount
(RMB)
|
Investment
Amount
(U.S. Dollars)
|
Purchase
of rental property – Property I – MaoYe
Property
|
Jan
04, 2008
|
5,554
|
894
|
Currency
translation
|
|
-
|
(87)
|
Reclassification
as “Assets held for sale”
|
July
01, 2018
|
(5,554)
|
(807)
|
Reclassification
from “Assets held for sale”
|
Mar
31, 2019
|
2,024
|
301
|
|
2,024
|
301
|
|
Purchase
of rental property – Property II -
JiangHuai
|
Jan
06, 2010
|
3,600
|
580
|
Purchase
of rental property – Property III - Fu Li
|
Apr
08, 2010
|
4,025
|
648
|
Currency
translation
|
|
-
|
(148)
|
Gross
investment in rental property
|
|
9,649
|
1,381
|
Accumulated
depreciation on rental property
|
Dec
31, 2019
|
(6,317)
|
(914)
|
Reclassified
as “Assets held for sale”-Mao Ye Property
|
July
01, 2018
|
2,822
|
410
|
Reclassification
from “Assets held for sale”-Mao Ye
Property
|
Mar
31, 2019
|
(1,029)
|
(143)
|
|
(4,524)
|
(647)
|
|
Net investment in property – China
|
|
5,125
|
734
|
|
Investment Date /
Reclassification Date
|
Investment
Amount
(RMB)
|
Investment
Amount
(U.S. Dollars)
|
Purchase
of rental property – Property I – MaoYe
Property
|
Jan
04, 2008
|
5,554
|
894
|
Currency
translation
|
|
-
|
(87)
|
Reclassification
as “Assets held for sale”
|
July
01, 2018
|
(5,554)
|
(807)
|
Reclassification
from “Assets held for sale”
|
Mar
31, 2019
|
2,024
|
301
|
|
2,024
|
301
|
|
Purchase
of rental property – Property II -
JiangHuai
|
Jan
06, 2010
|
3,600
|
580
|
Purchase
of rental property – Property III - Fu Li
|
Apr
08, 2010
|
4,025
|
648
|
Currency
translation
|
|
-
|
(124)
|
Gross
investment in rental property
|
|
9,649
|
1,405
|
Accumulated
depreciation on rental property
|
June
30, 2019
|
(6,075)
|
(890)
|
Reclassified
as “Assets held for sale”-Mao Ye Property
|
July
01, 2018
|
2,822
|
410
|
Reclassification
from “Assets held for sale”-Mao Ye
Property
|
Mar
31, 2019
|
(1,029)
|
(143)
|
|
(4,282)
|
(623)
|
|
Net investment in property – China
|
|
5,367
|
782
|
|
Dec.
31, 2019
(Unaudited)
|
June
30,
2019
|
Down
payment for purchase of investment properties *
|
$1,645
|
$1,645
|
Down
payment for purchase of property, plant and equipment
|
-
|
100
|
Deposits
for rental and utilities
|
169
|
169
|
Currency
translation effect
|
(188)
|
(164)
|
Total
|
$1,626
|
$1,750
|
|
RMB
|
US
Dollars
|
Original
investment (10% if Junzhou equity)
|
$10,000
|
$1,606
|
Less:
Management Fee
|
(5,000)
|
(803)
|
Net
Investment
|
5,000
|
803
|
Less:
Share of loss on Joint Venture
|
(137)
|
(22)
|
Net Investment as down payment(Note *a)
|
4,863
|
781
|
Loans
Receivable
|
5,000
|
814
|
Interest
Receivable
|
1,250
|
200
|
Less:Impairment
of Interest
|
(906)
|
(150)
|
Transferred to down payment(Note *b)
|
5,344
|
864
|
* Down payment for purchase of investment properties
|
10,207
|
1,645
|
Entity with
|
Type of
|
Interest
|
Expiration
|
Credit
|
Unused
|
Facility
|
Facility
|
Rate
|
Date
|
Limitation
|
Credit
|
|
|
|
|
|
|
Trio-Tech
International Pte. Ltd., Singapore
|
Lines
of Credit
|
Ranging
from 1.83% to 5.5%
and
SIBOR rate +1.25%
|
-
|
$4,968
|
$4,472
|
Trio-Tech
(Tianjin) Co., Ltd.
|
Lines
of Credit
|
5.22%
to 6.3%
|
-
|
$1,431
|
$1,431
|
Universal (Far
East) Pte. Ltd
|
Lines
of Credit
|
Ranging
from 1.85% to 5.5%
|
-
|
$371
|
$57
|
Trio-Tech
Malaysia Sdn. Bhd.
|
Revolving
Credit
|
Cost
of Funds Rate +2%
|
-
|
$365
|
$365
|
Entity with
|
Type of
|
Interest
|
Expiration
|
Credit
|
Unused
|
Facility
|
Facility
|
Rate
|
Date
|
Limitation
|
Credit
|
|
|
|
|
|
|
Trio-Tech
International Pte. Ltd., Singapore
|
Lines
of Credit
|
Ranging
from 1.85% to 5.5%
|
-
|
$4,213
|
$4,213
|
Trio-Tech
(Tianjin) Co., Ltd.
|
Lines
of Credit
|
5.22%
to 6.3%
|
-
|
$1,492
|
$1,492
|
Universal (Far
East) Pte. Ltd
|
Lines
of Credit
|
Ranging
from 1.85% to 5.5%
|
-
|
$370
|
$183
|
Trio-Tech
Malaysia Sdn. Bhd.
|
Revolving
Credit
|
Cost
of Funds Rate +2%
|
-
|
$363
|
$363
|
|
Dec
31,
2019
(Unaudited)
|
June
30,
2019
|
Payroll
and related costs
|
$1,138
|
$1,354
|
Commissions
|
73
|
107
|
Customer
deposits
|
42
|
46
|
Legal
and audit
|
334
|
299
|
Sales
tax
|
10
|
9
|
Utilities
|
106
|
120
|
Warranty
|
39
|
39
|
Accrued
purchase of materials and property, plant and
equipment
|
230
|
362
|
Provision
for re-instatement
|
300
|
302
|
Deferred
income
|
95
|
61
|
Contract
liabilities
|
733
|
501
|
Other
accrued expenses
|
81
|
293
|
Currency
translation effect
|
(5)
|
(7)
|
Total
|
$3,176
|
$3,486
|
|
Dec.
31,
2019
(Unaudited)
|
June
30,
2019
|
Beginning
|
$39
|
$82
|
Additions
charged to cost and expenses
|
1
|
15
|
Reversal
|
(1)
|
(58)
|
Currency
translation effect
|
-
|
-
|
Ending
|
$39
|
$39
|
|
Dec.
31, 2019
(Unaudited)
|
June
30, 2019
|
Note
payable denominated in RM for expansion plans in Malaysia, maturing
in August 2028, bearing interest at the bank’s prime rate
less 2.00% (4.85% and 5.00% at December 31, 2019 and June 30, 2019,
respectively) per annum, with monthly payments of principal plus
interest through August 2028, collateralized by the acquired
building with a carrying value of $2,677 and $2,683, as at December
31, 2019 and June 30, 2019, respectively.
|
2,483
|
2,638
|
|
|
|
Note
payable denominated in U.S. dollars for expansion plans in
Singapore and its subsidiaries, maturing in June 2020, bearing
interest at the bank’s lending rate (3.96% for December 31,
2019 and June 30, 2019) with monthly payments of principal plus
interest through June 2020. This note payable is secured by plant
and equipment with a carrying value of $128 and $148, as at
December 31, 2019 and June 30, 2019, respectively.
|
66
|
142
|
|
|
|
Total bank loans
payable
|
$2,549
|
$2,780
|
Current
portion of bank loan payable
|
419
|
494
|
Currency
translation effect on current portion of bank loan
|
3
|
(6)
|
Current
portion of bank loan payable
|
422
|
488
|
Long
term portion of bank loan payable
|
2,116
|
2,344
|
Currency
translation effect on long-term portion of bank loan
|
11
|
(52)
|
Long
term portion of bank loans payable
|
$2,127
|
$2,292
|
Remainder of fiscal
2020
|
$304
|
2021
|
368
|
2022
|
386
|
2023
|
405
|
2024
|
413
|
Thereafter
|
673
|
Total obligations and commitments
|
$2,549
|
2020
|
$488
|
2021
|
362
|
2022
|
380
|
2023
|
399
|
2024
|
407
|
Thereafter
|
744
|
Total
obligations and commitments
|
$2,780
|
|
Six
Months Ended
Dec.
31,
|
Net
Revenue
|
Operating
Income
/ (Loss)
|
Total
Assets
|
Depr.
and
Amort.
|
Capital
Expenditures
|
Manufacturing
|
2019
|
$6,362
|
(99)
|
10,542
|
196
|
35
|
|
2018
|
$6,989
|
183
|
8,835
|
58
|
1
|
|
|
|
|
|
|
|
Testing
Services
|
2019
|
8,277
|
(93)
|
23,314
|
1,344
|
709
|
|
2018
|
8,830
|
(117)
|
23,750
|
1,059
|
2,296
|
|
|
|
|
|
|
|
Distribution
|
2019
|
4,113
|
392
|
802
|
2
|
-
|
|
2018
|
3,860
|
342
|
759
|
-
|
-
|
|
|
|
|
|
|
|
Real
Estate
|
2019
|
33
|
(52)
|
3,650
|
34
|
-
|
|
2018
|
56
|
(17)
|
3,449
|
28
|
-
|
|
|
|
|
|
|
|
Fabrication
|
2019
|
-
|
-
|
27
|
-
|
-
|
Services
*
|
2018
|
-
|
-
|
26
|
-
|
-
|
|
|
|
|
|
|
|
Corporate
&
|
2019
|
-
|
(99)
|
120
|
-
|
-
|
Unallocated
|
2018
|
-
|
(41)
|
76
|
-
|
-
|
|
|
|
|
|
|
|
Total
Company
|
2019
|
$18,785
|
49
|
38,455
|
1,576
|
744
|
|
2018
|
$19,735
|
350
|
36,895
|
1,145
|
2,297
|
|
Three
Months Ended
Dec.
31,
|
Net
Revenue
|
Operating
Income
/ (Loss)
|
Total
Assets
|
Depr.
and
Amort.
|
Capital
Expenditures
|
Manufacturing
|
2019
|
$3,045
|
(87)
|
10,542
|
110
|
16
|
|
2018
|
$3,352
|
76
|
8,835
|
29
|
-
|
|
|
|
|
|
|
|
Testing
Services
|
2019
|
3,887
|
(161)
|
23,314
|
663
|
189
|
|
2018
|
4,393
|
21
|
23,750
|
547
|
1,083
|
|
|
|
|
|
|
|
Distribution
|
2019
|
2,014
|
188
|
802
|
1
|
-
|
|
2018
|
1,916
|
170
|
759
|
-
|
-
|
|
|
|
|
|
|
|
Real
Estate
|
2019
|
16
|
(35)
|
3,650
|
17
|
-
|
|
2018
|
29
|
(5)
|
3,449
|
14
|
-
|
|
|
|
|
|
|
|
Fabrication
|
2019
|
-
|
-
|
27
|
-
|
-
|
Services
*
|
2018
|
-
|
-
|
26
|
-
|
-
|
|
|
|
|
|
|
|
Corporate
&
|
2019
|
-
|
(78)
|
120
|
-
|
-
|
Unallocated
|
2018
|
-
|
(35)
|
76
|
-
|
-
|
|
|
|
|
|
|
|
Total
Company
|
2019
|
$8,962
|
(173)
|
38,455
|
791
|
205
|
|
2018
|
$9,690
|
227
|
36,895
|
590
|
1,083
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
|
2019
|
2018
|
2019
|
2018
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Interest
income
|
52
|
26
|
84
|
36
|
Other
rental income
|
30
|
29
|
60
|
56
|
Exchange
loss
|
(66)
|
(28)
|
(61)
|
(67)
|
Bad
debt recovery
|
-
|
-
|
11
|
2
|
Other
miscellaneous income
|
24
|
22
|
56
|
65
|
Total
|
$40
|
$49
|
$150
|
$92
|
|
Dec.
31,
2019
(Unaudited)
|
Jun.
30,
2019
|
Trade
Accounts Receivable
|
6,937
|
7,113
|
Accounts
Payable
|
3,565
|
3,272
|
Contract
Assets
|
431
|
419
|
Contract
Liabilities
|
733
|
501
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
|
2019
|
2018
|
2019
|
2018
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
Income
attributable to Trio-Tech International common shareholders from
continuing operations, net of tax
|
$425
|
$346
|
$699
|
$415
|
Income
/ (loss) attributable to Trio-Tech International common
shareholders from discontinued operations, net of tax
|
1
|
2
|
-
|
(2)
|
Net Income Attributable to Trio-Tech International Common
Shareholders
|
$426
|
$348
|
$699
|
$413
|
|
|
|
|
|
Weighted
average number of common shares outstanding - basic
|
3,673
|
3,673
|
3,673
|
3,673
|
|
|
|
|
|
Dilutive
effect of stock options
|
52
|
108
|
33
|
142
|
Number
of shares used to compute earnings per share - diluted
|
3,725
|
3,781
|
3,706
|
3,815
|
|
|
|
|
|
Basic
earnings per share from continuing operations attributable to
Trio-Tech International
|
$0.12
|
0.09
|
0.19
|
0.11
|
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
|
$0.09
|
$0.19
|
$0.11
|
|
|
|
|
|
Diluted
earnings per share from continuing operations attributable to
Trio-Tech International
|
$0.11
|
0.09
|
0.19
|
0.11
|
Diluted
earnings per share from discontinued operations attributable to
Trio-Tech International
|
-
|
-
|
-
|
-
|
Diluted earnings per share from net income attributable to
Trio-Tech International
|
$0.11
|
$0.09
|
$0.19
|
$0.11
|
|
Six
Months Ended
December
31,
|
|
|
2019
|
2018
|
Expected
volatility
|
45.38%to
97.48%
|
47.29%
to 104.94 %
|
Risk-free interest
rate
|
0.30% to
2.35%
|
0.30%
to 0.78 %
|
Expected life
(years)
|
2.5 -3.25
|
2.50
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2019
|
136,000
|
$4.53
|
4.28
|
$-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at December 31,
2019
|
136,000
|
$4.53
|
3.77
|
$46.44
|
Exercisable at December 31,
2019
|
53,000
|
$4.88
|
3.63
|
$12.57
|
|
Options
|
Weighted
Average
Grant-Date
Fair
Value
|
|
|
|
Non-vested
at July 1, 2019
|
87,000
|
$4.28
|
Granted
|
-
|
-
|
Vested
|
(4,000)
|
-
|
Forfeited
|
-
|
-
|
Non-vested
at December 31, 2019
|
83,000
|
$4.30
|
|
|
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2018
|
60,000
|
$5.98
|
4.73
|
$-
|
Granted
|
16,000
|
3.75
|
4.93
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at December 31,
2018
|
76,000
|
$5.51
|
4.37
|
$-
|
Exercisable at December 31,
2018
|
19,000
|
$5.51
|
4.37
|
$-
|
|
Options
|
Weighted
Average
Grant-Date
Fair
Value
|
|
|
|
Non-vested
at July 1, 2018
|
45,000
|
$5.98
|
Granted
|
16,000
|
3.75
|
Vested
|
(4,000)
|
(5.51)
|
Forfeited
|
-
|
-
|
Non-vested
at December 31, 2018
|
57,000
|
$5.51
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2019
|
77,500
|
$3.69
|
2.22
|
$-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at December 31,
2019
|
77,500
|
3.69
|
1.71
|
29.20
|
Exercisable at December 31,
2019
|
68,125
|
$3.62
|
1.64
|
$29.20
|
|
Options
|
Weighted
Average
Grant-Date
Fair
Value
|
|
|
|
Non-vested
at July 1, 2019
|
9,375
|
$4.14
|
Granted
|
-
|
-
|
Vested
|
-
|
-
|
Forfeited
|
-
|
-
|
Non-vested
at December 31, 2019
|
9,375
|
$4.14
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
Outstanding
at July 1, 2018
|
127,500
|
$3.52
|
2.10
|
$121
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
(50,000)
|
3.25
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding
at December 31, 2018
|
77,500
|
$3.68
|
2.71
|
$-
|
Exercisable
at December 31, 2018
|
48,750
|
$3.59
|
2.61
|
$-
|
|
Options
|
Weighted
Average
Grant-Date
Fair
Value
|
|
|
|
Non-vested
at July 1, 2018
|
28,750
|
$3.83
|
Granted
|
-
|
-
|
Vested
|
-
|
-
|
Forfeited
|
-
|
-
|
Non-vested
at December 31, 2018
|
28,750
|
$3.83
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2019
|
160,000
|
$4.63
|
4.25
|
$-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at December 31,
2019
|
160,000
|
$4.63
|
3.75
|
$56.80
|
Exercisable at December 31,
2019
|
160,000
|
$4.63
|
3.75
|
$56.80
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2018
|
80,000
|
$5.98
|
4.73
|
$-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
-
|
-
|
-
|
-
|
Outstanding at December 31,
2018
|
80,000
|
$5.98
|
4.22
|
$-
|
Exercisable at December 31,
2018
|
80,000
|
$5.98
|
4.22
|
$-
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2019
|
300,000
|
$3.40
|
1.58
|
$9
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
Forfeited
or expired
|
(50,000)
|
(3.81)
|
-
|
-
|
Outstanding
at December 31, 2019
|
250,000
|
3.32
|
1.33
|
174.50
|
Exercisable
at December 31, 2019
|
250,000
|
$3.32
|
1.33
|
$174.50
|
|
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
Outstanding
at July 1, 2018
|
390,000
|
$3.41
|
2.05
|
$412
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
(70,000)
|
3.39
|
-
|
-
|
Forfeited
or expired
|
(20,000)
|
(3.62)
|
-
|
-
|
Outstanding
at December 31, 2018
|
300,000
|
3.40
|
2.08
|
-
|
Exercisable
at December 31, 2018
|
300,000
|
$3.40
|
2.08
|
-
|
Remainder of fiscal
2020
|
$34
|
2021
|
$20
|
|
$54
|
2020
|
$72
|
2021
|
$6
|
|
$78
|
|
|
Dec.
31,
|
|
|
2019
|
Components of Lease Balances
|
Classification
|
(Unaudited)
|
Assets
|
|
|
Operating
Lease Assets
|
Right-of-use
asset-operating, net
|
$475
|
Finance
Lease Assets
|
Property,
plant & equipment
|
1,998
|
Accumulated
Amortization ROU
|
|
751
|
Assets
|
Property,
plant & equipment
|
$1,247
|
Total leased assets
|
|
$1,722
|
|
|
|
Liabilities
|
|
|
Operating Lease Liabilities
|
|
|
Current
Portion
|
Current
portion of lease liability-operating
|
$343
|
Long-term
portion
|
Lease
liability- Operating, net of Current portion
|
134
|
Total operating lease
liabilities
|
|
$477
|
Finance Lease Liabilities
|
|
|
Current
portion of finance leases
|
Current
portion of lease liability-finance
|
$286
|
Net
of current portion of finance leases
|
Lease
liability- Finance, net of Current portion
|
570
|
Total finance lease
liabilities
|
|
$856
|
|
|
|
Total lease liabilities
|
|
$1,333
|
|
3 Months Ended
|
6 Months Ended
|
|
Dec. 31, 2019
|
|
Lease Cost
|
|
|
Finance
Lease Cost:
|
|
|
Interest
on Lease Liability
|
3
|
$24
|
Amortisation
of Right-of-use Asset
|
69
|
136
|
Total
Finance Lease Cost
|
72
|
150
|
|
|
|
Operating
Lease Costs $
|
184
|
$359
|
|
|
|
|
Dec.
31,
|
|
2019
|
|
(Unaudited)
|
Cash Paid for amounts included in the measurement of lease
liabilities
|
|
Operating
cash flows from finance leases
|
$24
|
Operating
cash flows from operating leases
|
$359
|
Finance
cash flows from finance leases
|
$127
|
Right-of-use assets obtained in exchange for new operating lease
liabilities
|
|
|
|
Weighted-average remaining lease term:
|
|
Finance
leases
|
3.67
|
Operating
leases
|
0.97
|
Weighted-average Discount Rate:
|
|
Finance
leases
|
3.43%
|
Operating
leases
|
3.25%
|
|
Operating lease Liabilities
|
Finance Lease Liabilities
|
Fiscal Year
|
|
|
Remainder
of 2020
|
$309
|
$199
|
2021
|
155
|
276
|
2022
|
29
|
220
|
2023
|
-
|
139
|
2024
|
-
|
99
|
Thereafter
|
|
22
|
Total
future minimum lease payments
|
$493
|
$955
|
Less:
amount representing interest
|
(16)
|
(99)
|
Present
value of net minimum lease payments
|
477
|
856
|
|
|
|
Presentation
on statement of financial position
|
|
|
Current
|
$343
|
$286
|
Non
Current
|
$134
|
$570
|
|
Operating lease Liabilities
|
Finance Lease Liabilities
|
Fiscal Year
|
|
|
2020
|
$620
|
$283
|
2021
|
216
|
187
|
2022
|
47
|
143
|
2023
|
1
|
68
|
2024
|
-
|
44
|
Total
future minimum lease payments
|
$884
|
$725
|
Revenue
Components
|
Three
Months Ended
|
Six
Months Ended
|
||
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Manufacturing
|
34.0%
|
34.6%
|
33.9%
|
35.4%
|
Testing
Services
|
43.4
|
45.3
|
44.1
|
44.7
|
Distribution
|
22.4
|
19.8
|
21.8
|
19.6
|
Real
Estate
|
0.2
|
0.3
|
0.2
|
0.3
|
|
|
|
|
|
Total
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|
Three
Months Ended
December
31,
|
|
|
2019
|
2018
|
Revenue
|
100.0%
|
100.0%
|
Cost
of sales
|
78.7
|
76.7
|
Gross Margin
|
21.3%
|
23.3%
|
Operating
expenses
|
|
|
General
and administrative
|
19.8%
|
17.8%
|
Selling
|
2.0
|
1.9
|
Research
and development
|
1.4
|
1.3
|
Total
operating expenses
|
23.2%
|
21.0%
|
(Loss)/Income from Operations
|
(1.9)%
|
2.3%
|
|
Three Months
Ended
December
31,
|
|
(Unaudited)
|
2019
|
2018
|
General
and administrative
|
$1,777
|
$1,722
|
Selling
|
176
|
187
|
Research
and development
|
125
|
122
|
Total
|
$2,078
|
$2,031
|
|
Three
Months Ended
December
31,
|
|
(Unaudited)
|
2019
|
2018
|
Interest expenses
|
$55
|
$98
|
|
Three
Months Ended December 31,
|
|
|
2019
|
2018
|
Interest
income
|
52
|
26
|
Other
rental income
|
30
|
29
|
Exchange
loss
|
(66)
|
(28)
|
Other
miscellaneous income
|
24
|
22
|
Total
|
$40
|
$49
|
|
Three
Months Ended
December
31,
|
|
(Unaudited)
|
2019
|
2018
|
Revenue
|
$3,045
|
$3,352
|
Gross margin
|
21.7%
|
21.1%
|
(Loss)/Income from operations
|
$(87)
|
$76
|
|
Three
Months Ended
December
31,
|
|
(Unaudited)
|
2019
|
2018
|
Revenue
|
$3,887
|
$4,393
|
Gross margin
|
24.9%
|
29.3%
|
(Loss)/Income from operations
|
$(161)
|
$21
|
|
Three
Months Ended
December
31,
|
|
(Unaudited)
|
2019
|
2018
|
Revenue
|
$2,014
|
$1,916
|
Gross margin
|
13.7%
|
13.3%
|
Income from operations
|
$188
|
$170
|
|
Three
Months Ended
December
31,
|
|
(Unaudited)
|
2019
|
2018
|
Revenue
|
$16
|
$29
|
Gross (loss)/margin
|
(12.5)%
|
37.9%
|
Loss from operations
|
$(35)
|
$(5)
|
|
Three
Months Ended
December
31,
|
|
(Unaudited)
|
2019
|
2018
|
Loss from operations
|
$(78)
|
$(35)
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
|
|
|
Revenue
|
100.0%
|
100.0%
|
Cost
of sales
|
77.9
|
77.9
|
Gross Margin
|
22.1%
|
22.1%
|
Operating
expenses:
|
|
|
General
and administrative
|
19.0%
|
17.6%
|
Selling
|
1.9
|
1.7
|
Research
and development
|
1.0
|
1.0
|
Gain
on disposal of plant and equipment
|
(0.1)
|
-
|
Total
operating expenses
|
21.8%
|
20.3%
|
Income from Operations
|
0.3%
|
1.8%
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
General
and administrative
|
$3,565
|
$3,481
|
Selling
|
366
|
334
|
Research
and development
|
201
|
194
|
Gain
on disposal of plant and equipment
|
(24)
|
-
|
Total
|
$4,108
|
$4,009
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
Interest expense
|
$123
|
$176
|
|
Six Months
Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
Interest
income
|
$84
|
$36
|
Other
rental income
|
60
|
56
|
Exchange
loss
|
(61)
|
(67)
|
Bad
debt recovery
|
11
|
2
|
Other
miscellaneous income
|
56
|
65
|
Total
|
$150
|
$92
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$6,362
|
$6,989
|
Gross margin
|
22.4%
|
21.3%
|
(Loss)/Income from operations
|
$(99)
|
$183
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$8,277
|
$8,830
|
Gross margin
|
26.2%
|
26.5%
|
Loss from operations
|
$93
|
$117
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$4,113
|
$3,860
|
Gross margin
|
13.8%
|
13.3%
|
Income from operations
|
$392
|
$342
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
Revenue
|
$33
|
$56
|
Gross margin
|
(9.1)%
|
35.7%
|
Loss from operations
|
$(52)
|
$(17)
|
|
Six
Months Ended
|
|
|
Dec.
31,
2019
|
Dec.
31,
2018
|
(Unaudited)
|
|
|
Loss from operations
|
$(99)
|
$(41)
|
10.1 |
|
The
Sale and Purchase agreement between Trio-tech Malaysia Sdn Bhd and
Cortex Robotics Sdn Bhd
|
|
Rule 13a-14(a) Certification of Principal Executive Officer of
Registrant
|
|
|
Rule 13a-14(a) Certification of Principal Financial Officer of
Registrant
|
|
|
Section 1350 Certification
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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TRIO-TECH INTERNATIONAL
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By:
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/s/
Victor H.M. Ting
VICTOR H.M. TING
Vice President and Chief Financial Officer
(Principal Financial Officer)
Dated: February 13, 2020
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Balance
Purchase Price
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the
sum of Ringgit Malaysia Five Million and Forty Thousand
(RM5,040,000.00) only, being the Purchase Price less the
Deposit;
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Business
Day
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a
day (excluding gazetted public holidays, Saturdays and Sundays) on
which banks are open for business in Penang, Selangor and Kuala
Lumpur;
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Completion
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the
full performance by both parties of their respective obligations in
respect of the sale and purchase of the Sale Property hereunder as
set out in Clause 10 hereof;
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Completion
Date
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a
day falling within the Completion Period or the Extended Completion
Period on which the Purchaser pays the Balance Purchase Price and
interest (if any) in accordance with Clause 3;
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Completion
Period
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the period of three (3) months from the
Unconditional Date;the
period of three (3) months from the Unconditional
Date;
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Conditions
Precedent
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means
the receipt by the Vendor's Solicitor of (a) PDC
Consent; (b) the State Authority Consent;
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Cut
Off Date
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the
date which is six (6) months from the date of this Agreement or
such other longer period as may be agreed between the
parties;
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Deposit
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Ringgit
Malaysia Five Hundred and Sixty Thousand (RM560,000.00) only which
sum shall include the Earnest Deposit earlier paid and the RPGT
Retention Sum equivalent to ten per cent (10%) of the Purchase
Price;
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DGIR
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Director General of Inland Revenue Board of
Malaysia;
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Earnest
Deposit
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Ringgit
Malaysia One Hundred and Twelve Thousand (RM112,000.00) only
equivalent to two per cent (2%) of the Purchase Price;
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Encumbrances
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any
mortgage, pledge, lien, charge (whether fixed or floating), caveats
or assignment, tenants, occupiers, squatters and/or any other
person(s), but shall not include any caveat lodged by the Purchaser
or any person claiming under the Purchaser;
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Extended
Completion Period
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has
the meaning ascribed to it in Clause 3.5 hereof;
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Indirect
Taxes
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goods
and services tax, sales tax, value added tax or any other
form
of indirect taxes levied on the sale and purchase of the Sale
Property;
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Land Code
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the National Land Code, 1965;
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Land Title
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the original issue document of title for the Sale
Property registered
in the name of the Vendor;
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Outgoings
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has the meaning ascribed to it in Clause 11
hereof;
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PDC
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is
as defined in Recital (F) above;
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PDC
Consent
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is the letter of support or consent of the PDC to
the sale and transfer
of the Sale Property to the Purchaser;
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Purchase
Price
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Ringgit Malaysia Five Million Six Hundred
Thousand (RM5,600,000.00)
only excluding any Indirect Taxes;
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Purchaser
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CORTEX ROBOTICS SDN. BHD.
(Company No. 1284575-
A),
a company incorporated in Malaysia and having its registered office
at Suite 18.01, 18th Floor, MWE Plaza, No. 8, Lebuh Farquhar, 10200
Georgetown, Penang and a business address at No. 72-2-5, Arena
Curve, Jalan Mahsuri, 11950 Bayan Lepas, Penang and shall include
its respective successors-in-title and assigns;
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Purchaser's Solicitors |
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Messrs
Chambers of Cheong & Law, Advocates & Solicitors, 1-2-15
Tingkat Kenari 5,Kenari Avenue, 11900 Bayan Lepas, Penang and shall
include such other firm of solicitors as may from time to time be
appointed by the Purchaser in substitution thereof;
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RPGT
Retention Sum
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the
sum of Ringgit Malaysia Three Hundred and Ninety Two Thousand
(RM392,000.00) only equivalent to seven per cent (7%) of the
Purchase Price;
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RPGT
Termination Letter
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a
letter from the Purchaser addressed to the DGIR confirming
the
termination of this Agreement;
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State
Authority
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the
state authority or any other relevant
authority;
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State
Authority Consent
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the
consent of the State Authority (or such other relevant authority)
for the acquisition of the Sale Property by the Purchaser as
required in the restriction in interest on the issue document of
title;
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Sale
Property
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as
is described in Recital (A);
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Transfer
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a
valid, executed and registrable (save for stamp duty payable by the
Purchaser thereon) instrument of transfer in the form as prescribed
by the Land Code in respect of the Sale Property duly executed by
the Vendor in favour of the Purchaser;
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Transfer
Documents
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shall
mean:-
(i) the
Transfer; and/or
(ii) Land
Title whichever shall be applicable;
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Unconditional
Date
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the
date of fulfilment of the last of the Conditions
Precedent;
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Vendor
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TRIO-TECH (MALAYSIA) SDN. BHD. (Company No.
105390-V), a company incorporated in Malaysia with its
registered address at Suite 18.05, MWE Plaza, 8, Lebuh Farquhar,
10400 Georgetown, Pulau Pinang and having a place of business at
Lot 11A, Jalan SS8/2, Sungai Way Free Industrial Zone, 47300
Petaling Jaya, Selangor Darul Ehsan and shall include its
successors-in-title and assigns;
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Vendor's
Solicitors
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Messrs
Wong Lu Peen & Tunku Mina, Advocates and Solicitors of 21-6
& 23-6, Block B, The Boulevard, Mid Valley City, Lingkaran Syed
Putra, 59200 Kuala Lumpur and shall include such other firm of
solicitors as may from time to time be appointed by the Vendor in
substitution thereof; and
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Unconditional
Date
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the
date on which the PDC Consent & State Authority Consent
is
obtained and fulfilled, whichever is later.
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s/Ting Hock
Ming
Director
Name:
Ting Hock Ming
Nric
No.S0117093G
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s/Soon Siew
Kuan
Director
Name:
Soon Siew Kuan
Nric
No. S1298989Z
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s/Tan Wei Wei
Director
Name
: Tan Wei Wei
Nric
No. 791227-07-5108
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S/Vincent Leong Wai Shun
Director
Name:
Vincent
Leong Shun
Nric
No. 771212-14-5283
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Sale and Purchase of No. 1A, Jalan
Sultan Azlan Shah,
Bayan Lepas
FTZ Zone 1, 11900 Penang
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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Jun. 30, 2019 |
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Trio-Tech SIP | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | $ 17 | $ 0 |
Yuan RMB | Trio-Tech SIP | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 117 | 0 |
Malaysia | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 4 | 4 |
Malaysia | Ringgit RM | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 18 | 18 |
Tianjin | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | 12 | 58 |
Tianjin | Yuan RMB | ||
Capital commitments for the purchase of equipment and other related infrastructure costs | $ 87 | $ 397 |
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Jun. 30, 2019 |
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Payables and Accruals [Abstract] | ||
Payroll and related costs | $ 1,138 | $ 1,354 |
Commissions | 73 | 107 |
Customer deposits | 42 | 46 |
Legal and audit | 334 | 299 |
Sales tax | 10 | 9 |
Utilities | 106 | 120 |
Warranty | 39 | 39 |
Accrued purchase of materials and property, plant and equipment | 230 | 362 |
Provision for re-instatement | 300 | 302 |
Deferred income | 95 | 61 |
Contract liabilities | 733 | 501 |
Other accrued expenses | 81 | 293 |
Currency translation effect | (5) | (7) |
Total | $ 3,176 | $ 3,486 |
CONTRACT BALANCES (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Jun. 30, 2019 |
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Revenue | ||
Trade Accounts Receivable | $ 6,937 | $ 7,113 |
Accounts Payable | 3,565 | 3,272 |
Contract Assets | 431 | 419 |
Contract Liabilities | $ 733 | $ 501 |
BANK LOANS PAYABLE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank loans payable |
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Future minimum payments | Future minimum payments (excluding interest) as at December 31, 2019 were as follows:
Future minimum payments (excluding interest) as at June 30, 2019 were as follows:
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EARNINGS PER SHARE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the weighted average shares |
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STOCK OPTIONS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK OPTIONS | On September 24, 2007, the Company’s Board of Directors unanimously adopted the 2007 Employee Stock Option Plan (the “2007 Employee Plan”) and the 2007 Directors Equity Incentive Plan (the “2007 Directors Plan”) each of which was approved by the shareholders on December 3, 2007. Each of those plans was amended during the term of such plan to increase the number of shares covered thereby. As of the last amendment thereof, the 2007 Employee Plan covered an aggregate of 600,000 shares of the Company’s Common Stock and the 2007 Directors Plan covered an aggregate of 500,000 shares of the Company’s Common Stock. Each of those plans terminated by its respective terms on September 24, 2017. These two plans were administered by the Board, which also established the terms of the awards.
On September 14, 2017, the Company’s Board of Directors unanimously adopted the 2017 Employee Stock Option Plan (the “2017 Employee Plan”) and the 2017 Directors Equity Incentive Plan (the “2017 Directors Plan”) each of which was approved by the shareholders on December 4, 2017. Each of these plans is administered by the Board of Directors of the Company.
Assumptions
The fair value for the options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming no expected dividends:
The expected volatilities are based on the historical volatility of the Company’s stock. Due to higher volatility, the observation is made on a daily basis for the three months ended December 31, 2019. The observation period covered is consistent with the expected life of options. The expected life of the options granted to employees has been determined utilizing the “simplified” method as prescribed by ASC Topic 718 Stock Based Compensation, which, among other provisions, allows companies without access to adequate historical data about employee exercise behavior to use a simplified approach for estimating the expected life of a "plain vanilla" option grant. The simplified rule for estimating the expected life of such an option is the average of the time to vesting and the full term of the option. The risk-free rate is consistent with the expected life of the stock options and is based on the United States Treasury yield curve in effect at the time of grant.
2017 Employee Stock Option Plan
The Company’s 2017 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 300,000 shares of Common Stock. Under the 2017 Employee Plan, all options must be granted with an exercise price of not less than fair value as of the grant date and the options granted must be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options may be exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2017 Employee Plan are exercisable within five years after the date of grant, and vest over the period as follows: 25% vesting on the grant date and the remaining balance vesting in equal installments on the next three succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2017 Employee Plan).
During the second quarter of fiscal year 2020, the Company did not grant any options pursuant to the 2017 Employee Plan. There were no stock options exercised during the six-month period ended December 31, 2019. The Company recognized $14 stock-based compensation expenses during the six months ended December 31, 2019.
During the second quarter of fiscal year 2019, the Company did not grant any options pursuant to the 2017 Employee Plan. There were no stock options exercised during the six-month period ended December 31, 2018. The Company recognized $8 stock-based compensation expenses during the three months ended December 31, 2018.
As of December 31, 2019, there were vested stock options granted under the 2017 Employee Plan covering a total of 53,000 shares of Common Stock. The weighted-average exercise price was $4.88 and the weighted average remaining contractual term was 3.63 years.
As of December 31, 2018, there were vested stock options granted under the 2017 Employee Plan covering a total of 19,000 shares of Common Stock. The weighted-average exercise price was $5.51 and the weighted average remaining contractual term was 4.37 years.
A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, 2019 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options granted under the 2017 Employee Plan during the six months ended December 31, 2019 is presented below:
A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, 2018 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options granted under the 2017 Employee Plan during the six months ended December 31, 2018 is presented below:
2007 Employee Stock Option Plan
The 2007 Employee Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The 2007 Employee Plan permitted the issuance of options to employees.
As the 2007 Plan has terminated, the Company did not grant any options pursuant to the 2007 Employee Plan during the six months ended December 31, 2019 and December 31, 2018 respectively.
There were no options exercised during the six months ended December 31, 2019. There were 50,000 of options exercised during the six months ended December 31, 2018. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2019. The Company recognized stock-based compensation expenses of $1 in the six months ended December 31, 2018 under the Employee Plan.
As of December 31, 2019, there were vested stock options granted under the 2007 Employee Plan covering a total of 68,125 shares of Common Stock. The weighted-average exercise price was $3.62 and the weighted average remaining contractual term was 1.64 years.
As of December 31, 2018, there were vested employee stock options covering a total of 48,750 shares of Common Stock. The weighted-average exercise price was $3.59 and the weighted average contractual term was 2.61 years.
A summary of option activities under the 2007 Employee Plan during the six months ended December 31, 2019 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options under the 2007 Employee Plan during the six months ended December 31, 2019 is presented below:
A summary of option activities under the 2007 Employee Plan during the six months ended December 31, 2018 is presented as follows:
A summary of the status of the Company’s non-vested employee stock options under the 2007 Employee Plan during the three months ended December 31, 2018 is presented below:
2017 Directors Equity Incentive Plan
The 2017 Directors Plan permits the grant of options covering up to an aggregate of 300,000 shares of Common Stock to its directors in the form of non-qualified options and restricted stock. The exercise price of the non-qualified options is 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are exercisable immediately as of the grant date.
During the first two quarters of fiscal year 2020, the Company did not grant any options pursuant to the 2017 Directors Plan. There were no stock options exercised during the six months ended December 31, 2019. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2019.
During the first two quarters of fiscal year 2019, the Company did not grant any options pursuant to the 2017 Directors Plan. There were no stock options exercised during the six months ended December 31, 2018. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2018.
As all of 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, 2019.
As of December 31, 2019, there were vested stock options granted under the 2017 Directors Plan covering a total of 160,000 shares of Common Stock. The weighted-average exercise price was $4.63 and the weighted average remaining contractual term was 3.75 years.
As of December 31, 2018, there were vested stock options granted under the 2017 Directors Plan covering a total of 80,000 shares of Common Stock. The weighted-average exercise price was $5.98 and the weighted average remaining contractual term was 4.22 years.
A summary of option activities under the 2017 Directors Plan during the six months ended December 31, 2019 is presented as follows:
A summary of option activities under the 2017 Directors Plan during the six months ended December 31, 2018 is presented as follows:
2007 Directors Equity Incentive Plan
The 2007 Directors Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The 2007 Employee Plan permitted the issuance of options to employees.
As the 2007 Plan has terminated, the Company did not grant any options pursuant to the 2007 Employee Plan during the six months ended December 31, 2019 and December 31, 2018.
There were no stock options exercised during the six months ended December 31, 2019. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2019.
There were no stock options exercised during the six months ended December 31, 2018. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2018.
As of December 31, 2019, there were vested stock options granted under the 2007 Directors Plan covering a total of 250,000 shares of Common Stock. The weighted-average exercise price was $3.32 and the weighted average remaining contractual term was 1.33 years.
As of December 31, 2018, there were vested stock options granted under the 2007 Directors Plan covering a total of 300,000 shares of Common Stock. The weighted-average exercise price was $3.40 and the weighted average remaining contractual term was 2.08 years.
A summary of option activities under the 2007 Directors Plan during the six months ended December 31, 2019 is presented as follows:
A summary of option activities under the 2007 Directors Plan during the six months ended December 31, 2018 is presented as follows:
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OTHER INCOME |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER INCOME | Other income consisted of the following:
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ORGANIZATION AND BASIS OF PRESENTATION |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND BASIS OF PRESENTATION | Trio-Tech International (“the Company” or “TTI” hereafter) was incorporated in fiscal year 1958 under the laws of the State of California. TTI provides third-party semiconductor testing and burn-in services primarily through its laboratories in Southeast Asia. In addition, TTI operates testing facilities in the United States. The Company also designs, develops, manufactures and markets a broad range of equipment and systems used in the manufacturing and testing of semiconductor devices and electronic components. In the second quarter of fiscal year 2020, TTI conducted business in four business segments: Manufacturing, Testing Services, Distribution and Real Estate. TTI has subsidiaries in the U.S., Singapore, Malaysia, Thailand, Indonesia and China as follows:
* 100% owned by Trio-Tech International Pte. Ltd.
The accompanying un-audited 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-Q and Article 10 of Regulation S-X. All significant inter-company accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements are presented in U.S. dollars. The accompanying condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three and six months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2020. 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, 2019.
Except as otherwise specifically noted in this form 10-Q, the Company’s operating results are presented based on the translation of foreign currencies using the respective quarter’s average exchange rate.
Certain reclassifications have been made to prior period amounts to conform to the current presentation.
Basis of Presentation and Summary of Significant Accounting Policies
Comparability
Effective on the first day of fiscal 2020, the company adopted Accounting Standards Update 2016-02, Leases (“ASC 842”). Prior periods were not retrospectively restated, and accordingly, the consolidated balance sheet as of June 30, 2019, and the condensed consolidated statements of operations for the six months ended December 31, 2018 were prepared using accounting standards that were different than those in effect for the six months ended December 31, 2019.
Leases-Company as Lessee
Accounting Standards Codification ("ASC") Topic 842 introduced new requirements to increase transparency and comparability among organizations for leasing transactions for both lessees and lessors. It requires a lessee to record a right-of-use asset and a lease liability for all leases with terms longer than 12 months. These leases will be either finance or operating, with classification affecting the pattern of expense recognition.
The standard provides an alternative modified retrospective transition method. Under this method, the cumulative effect adjustment to the opening balance of retained earnings is recognized on the date of adoption (July 1, 2019). The Company adopted ASC 842 as of July 1, 2019, and applied the alternative modified retrospective transition method requiring application of the new guidance to all leases existing at, or entered into on or after, the date of adoption, i.e. July 1, 2019.
The Company applies the guidance in ASC 842 to its individual leases of assets. 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.
Operating leases are included in operating lease right-of-use ("ROU") assets under the non-current asset portion of our consolidated balance sheets and under this current portion and non-current liabilities portion of our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the related lease. Finance leases are included in property, plant and equipment under the non-current asset portion of our consolidated balance sheets and under the current portion and non-current liabilities portion of our consolidated balance sheets.
The Company has elected the practical expedient within ASC 842 to not separate lease and non-lease components within lease transactions for all classes of assets. Additionally, the Company has elected the short-term lease exception for all classes of assets, does not apply the recognition requirements for leases of 12 months or less, and recognizes lease payments for short-term leases as expense either straight-line over the lease term or as incurred depending on whether the lease payments are fixed or variable. These elections are applied consistently for all leases.
As part of applying the transition method, the Company has elected to apply the package of transition practical expedients within the new guidance. As required by the new standard, these expedients have been elected as a package and are consistently applied across the Company’s lease portfolio. Given this election, the Company need not reassess:
When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and to measure lease liabilities and ROU assets. The incremental borrowing rate used by the Company was based on baseline rates and adjusted by the credit spreads commensurate with the Company’s secured borrowing rate, over a similar term. At each reporting period when there is a new lease initiated, the rates established for that quarter will be used.
In applying the alternative modified retrospective transition method, the Company measured lease liabilities at the present value of the sum of remaining minimum rental payments (as defined under ASC Topic 840). The present value of lease liabilities has been measured using the Company’s incremental borrowing rates as of July 1, 2019 (the date of initial application). Additionally, ROU assets for these operating leases have been measured as the initial measurement of application lease liabilities adjusted for reinstatement liabilities.
The adoption of this new standard at July 1, 2019, and the application of the modified retrospective transition approach resulted in the following changes in the Company’s financial report:
Leases- Company as Lessor
All of the leases under which the Company is the lessor will continue to be classified as operating leases under the new standard. The new standard did not have a material effect on our financial statements and will not have significant change in our leasing activities.
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