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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                AMENDMENT NO. 1 TO
                                   FORM 10-K/A


(Mark one)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                   For the fiscal year ended November 30, 1999

                                       OR

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

             For the transition period from __________ to __________

                         Commission File No.: 000-24413

                                TROY GROUP, INC.
             (Exact name of registrant as specified in its charter)

                    DELAWARE                                33-0807798
 (State or other jurisdiction of incorporation            (I.R.S. Employer
                or organization)                        Identification No.)

           2331 SOUTH PULLMAN STREET
             SANTA ANA, CALIFORNIA                             92705
    (Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (949) 250-3280

        Securities registered pursuant to Section 12(b) of the Act: NONE

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

                          COMMON STOCK, $.01 PAR VALUE

                               -------------------

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

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     As of February 18, 2000, 10,740,249 shares of the Registrant's Common Stock
were outstanding. The aggregate market value of the Registrant's outstanding
Common Stock as of that date (based upon the last sale price of a share of
Common Stock on that date reported by the Nasdaq National Market), excluding
outstanding shares beneficially owned by directors and executive officers, was
$110,457,070.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Part III of this Annual Report on Form 10-K incorporates by reference
information (to the extent specific sections are referred to herein) from the
registrant's Proxy Statement for its 2000 Annual Meeting to be held on April 6,
2000 (the "2000 Proxy Statement").

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     THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE STATEMENTS CONTAINED IN
THIS REPORT THAT ARE NOT HISTORICAL IN NATURE, PARTICULARLY THOSE THAT UTILIZE
TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "EXPECTS," "ANTICIPATES,"
"ESTIMATES," "BELIEVES" OR "PLANS," OR COMPARABLE TERMINOLOGY, ARE
FORWARD-LOOKING STATEMENTS BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS.

     VARIOUS RISKS AND UNCERTAINTIES COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE EXPRESSED IN FORWARD-LOOKING STATEMENTS. THESE RISKS AND
UNCERTAINTIES INCLUDE THOSE RELATED TO THE FAILURE TO SUCCESSFULLY MARKET OUR
E-COMMERCE PAYMENT SOLUTIONS, OUR ABILITY TO GROW THROUGH ACQUISITIONS, THE
IMPACT OF COMPETITION FROM OTHER COMPANIES AND TECHNOLOGIES, THE CONTINUED
DEMAND FOR PRINTED FINANCIAL DOCUMENTS, OUR ABILITY TO DEVELOP OR RESPOND TO NEW
TECHNOLOGIES, OUR ABILITY TO MAINTAIN OUR STRATEGIC RELATIONSHIPS AND THE OTHER
FACTORS SET FORTH BELOW UNDER THE HEADING "CERTAIN IMPORTANT FACTORS" AND IN OUR
OTHER PERIODIC REPORTS AND OTHER DOCUMENTS THAT WE FILE FROM TIME TO TIME WITH
THE SECURITIES AND EXCHANGE COMMISSION.

                                     PART I

                            ------------------------
ITEM 1.    BUSINESS

GENERAL

     With new products in the rapidly growing e-commerce market and a solid base
of Fortune 1000 customers in our networked "brick-and mortar" markets, we are a
leading worldwide provider of financial payment solutions. Our software,
firmware and hardware solutions enable businesses to electronically transmit and
output financial payment information across computer networks and the Internet.

     Our products serve a wide variety of industries including e-commerce
retailers, online brokerages, telecommunications, financial services, insurance,
computer hardware, automotive, personnel and others. We distribute our solutions
in 55 countries around the world and market our products through a direct sales
force and a network of distributors and value-added resellers. More than 5,000
active customers purchase our products and services.

     Our mission is to leverage our expertise as a provider of financial payment
solutions to become a leading worldwide provider of e-commerce payment
solutions.

ORGANIZATION AND DEVELOPMENT OF BUSINESS

     We were originally incorporated in California in 1996 and reincorporated in
Delaware in May 1998. Troy Group, Inc. is the result of various mergers and
acquisitions involving a company originally founded in 1982.

     In October 1998, we merged XCD Incorporated, a leading supplier of
network connectivity solutions, into our subsidiary, Troy XCD, Inc. In May
1999 we acquired the remaining outstanding shares of Telgate Equipment
Corporation, a Canadian software development company. Now referred to as Troy
Telgate Systems, Inc., this operation is responsible for the ongoing
technical development and support for the eCheck Secure-TradeMark- product.

     On February 18, 2000, we acquired American Development (AMDev), Inc., a
Nashville, Tennessee based software development company. Troy AMDev's ACH
products are planned for integration with eCheck Secure-TradeMark- to broaden
our offering of e-commerce


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payment solutions. Today, our four subsidiaries include Troy XCD, Troy Telgate,
Troy AMDev and Troy Systems International, Inc.

     Our principal executive offices are located at 2331 South Pullman Street,
Santa Ana, California 92705, and our telephone number at that location is (949)
250-3280.

     Information regarding our reportable business segments, major customers and
geographical information is contained in Note 13 to our financial statements on
pages F-22 to F-25 of this report, and is incorporated in this item by
reference.

THE TROY GROUP FINANCIAL PAYMENT SOLUTIONS

     All worldwide commerce requires payment, in one form or another, in
exchange for the goods and services produced by businesses. Traditional payment
instruments include currency, paper checks, credit cards and wire transfers.
With the advent of the networked computer age and the Internet, payment methods
have expanded to include new forms of electronic payments that facilitate
commerce in a timely, secure, cost effective and user-friendly manner. We intend
to focus our core efforts on e-commerce payment solutions and networked computer
payment solutions.

E-COMMERCE PAYMENT PROCESSES

     The phenomenal growth of the Internet is one of the most significant
industry trends affecting information processing today. The Gartner Group has
reported that by 2004, "the Internet will become the predominant mechanism for
conducting business, whether it be business-to-consumer or business-to-
business." As a result, many organizations are now looking for entirely new
solutions that enable distribution of financial payment information using the
Internet.

     The growth of the Internet has resulted in the rapid rise in e-commerce.
The Gartner Group reported in 1999 that e-commerce exhibited accelerated growth
over the prior two years, exceeding most market projections and expectations.
Forrester Research predicts $3.2 trillion in Internet commerce in 2003.
According to the Boston Consulting Group, revenue from online retailing is
growing much faster than expected. The explosion of new web sites equipped with
"shopping carts" continues at a high pace, and more and more Internet shoppers
are surfing the Web to conveniently order products and services. As the number
of online merchants and customers increase, we believe the potential customer
base for us will also experience commensurate growth. Virtually every online
merchant is a potential customer.

     To date, businesses and consumers have generally used credit cards as the
primary method of payment in e-commerce transactions. Yet research indicates
that over 80 million Americans have checking accounts and no credit cards. Most
online merchants have very limited or no options for those purchasers who desire
to pay for goods and services by check. Even when payment by check is permitted,
a purchaser must send the check, which then must clear through the banking
system before the goods or services are received. This process often takes 7-10
days. As a result, online merchants are not offering their customers the same
level of convenience and payment options available in traditional stores.

     According to Forrester Research, the number of online retail merchants will
increase from 17,500 in 1998 to 400,000 by 2003. Businesses that decide to
market and distribute products and services over the Internet will need to
establish a web site that includes an online store. The vast majority of firms
do not possess the capability to set up their own online store internally and
will solicit assistance from a web site development firm. The online store will
need to be equipped with payment processes and services, and we believe it
should include both credit cards and checking accounts. During this site
development


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process, we believe merchants will be concerned with the speed and
cost of the development process, the security measures taken to protect the
site, convenience features for the online shopper, and as a result will be
motivated to select a firm that offers the convenience of a complete solution.

     The growth of the Internet has also resulted in the development and rapid
growth of online brokerages. Forrester Research estimates the online brokerage
industry to be a $120 billion market and predicts that active online brokerage
accounts are expected to grow to 40 million by 2002. Because of regulatory
restrictions, online brokerages cannot accept credit cards as payment for
opening and funding an account. Payment options available to online brokerage
clients have generally been limited to direct debit, wire transfer or payment by
mailed or delivered check. As a result, clients who choose to pay by check face
the inconvenience and delay associated with delivery and clearing. We believe
that these issues are a concern to online brokerages and their clients.

E-COMMERCE PAYMENT SOLUTIONS

     In December 1999, we released our eCheck Secure-TradeMark- product, which
enables Internet merchants to accept payments from their customers' checking
accounts as an alternative to credit cards. The product is a combination of
Internet software, which resides on our server, and a financial document printer
located at the merchant site. This combination allows e-consumers to send a MICR
encoded check remotely over the Internet for printing at the merchant site. The
remotely printed check has all of the same attributes of a traditional check and
is presented by a merchant through normal banking channels.

     During the payment process, which begins with a shopper on the merchant's
online store, the customer's checking account information is approved in
real-time by Equifax, an eCheck Secure-TradeMark- solutions partner and a world
leader in risk management services. When e-merchants set up their online store
to accept checking account payments, they can contract with us for one of two
levels of risk management:

     -    Verification - The customer information is verified through the
          Equifax risk management database against any negative information that
          increases risk of accepting the payment transaction.

     -    Guarantee - Alternatively, the merchant can opt for a higher level of
          risk management control, and Equifax will actually guarantee the
          customer payment to the e-merchant. If the transaction is rejected due
          to non-sufficient funds or another reason, Equifax will manage the
          collection process. The merchant is fully warranted and will receive
          the full amount of the disputed funds. The guarantee service enables
          the merchant to treat the customer checking account payment similar to
          a credit card, and the merchant no longer has to wait for the funds to
          clear the bank.

     Consumers benefit from eCheck Secure-TradeMark- because it:

     -    Provides a payment alternative to credit cards with comparable speed
          and security

     -    Eliminates the inconvenience of having to mail in a check

     -    Allows the consumer to obtain same-day shipping rather than waiting up
          to 14 days for a traditional check to clear

     -    Provides a checking account record that is convenient for managing
          finances, budgeting and/or account reconciliation

     E-merchants benefit from eCheck Secure-TradeMark- because it:

     -    Provides a complete, verified or guaranteed check transaction ready
          for deposit

     -    Broadens their market by offering 80 million check writers, who do not
          carry credit cards, the convenience of paying by check

     -    Avoids the risks associated with check acceptance


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     -    Captures the 25-35% of buyers who place orders, but change their minds
          about sending funds

     -    Minimizes open orders that are waiting for mailed-in payments

     We believe that the eCheck Secure-TradeMark- technology offers us a
significant new growth opportunity due to the rapid rise in e-commerce and the
limited payment methods available to today's e-commerce consumer. While there
are several online payment options offered by today's Internet merchants, most
of the top trafficked sites (including eToys, eBay and CDNow) do not accept
Internet checks as a form of payment and there is no strong brand identification
for a printed Internet check. By positioning an "eCheck Secure-TradeMark-" icon
option adjacent to Visa, MasterCard and American Express at the merchant's
e-commerce check-out location, we intend to develop strong brand identification
due to early market entry and our current reputation as a world leader in
financial payment solutions.

     In addition to e-commerce retail applications, we have experienced
significant market acceptance in the online brokerage market. In this market,
the vast majority of firms only accept payments by mail, overnight delivery or
wire transfer. With eCheck Secure-TradeMark-, brokerage firms can accept online
funding from their clients. The funds are verified in real time, and the
brokerage firm can authorize trading immediately. The eCheck Secure-TradeMark-
product can be a convenient and quick process for clients funding a new account
or replenishing funds for an existing account.

     CASE STUDY - Ameritrade Inc., one of the leading online brokerage firms, is
currently utilizing eCheck Secure-TradeMark- to provide its customers the option
of funding new accounts online. Funds are verified in real time, the customer
experiences the convenience of online funding and is able to execute trades in a
compressed time frame over traditional funding methods.

     We are currently expanding the eCheck Secure-TradeMark- product to offer
e-merchants and customers the payment alternative of a printed check draft or a
fully automated electronic file transfer of the payment information. On February
18, 2000, we acquired a software development business that offers a completely
automated payments solution utilizing the Automated Clearing House (ACH)
network. The ACH network is a nationwide system utilized by over 20,000
financial institutions, 725,000 corporations and millions of consumers to
transmit fully automated checking account transactions. We intend to integrate
the ACH solution with eCheck Secure-TradeMark- to offer online merchants and
consumers the option of a printed check or a fully automated ACH transaction.

     Additionally, we intend to expand the product further by offering credit
card services and processing, and web site development for companies that are
considering entry into the e-commerce marketplace. Our intent is to provide new
and existing e-merchants with a one-stop-shop approach to establishing or
improving their online store.

     We believe that MICR (magnetic ink character recognition) line
information will continue to be the controlling number for bank account
payments and transfers and that our expertise in MICR since 1971 (as
discussed below) will lead us to a strong position as a leader in e-commerce
payment solutions.


NETWORKED COMPUTER PAYMENT PROCESSES

     To succeed in an increasingly competitive and global marketplace, an
organization must make effective business decisions and respond to customers'
needs in a timely and efficient manner. In the payments arena, this depends to a
large extent upon the organization's ability to rapidly and accurately collect,
organize and distribute its financial payment information. Historically, most of
this payment information was created using legacy computer systems, then printed
and delivered to users through delivery services or the U.S. mail. These methods
now seem inefficient, labor intensive, expensive, and slow.

     Over the past decade there has been a dramatic shift from mainframe
computer systems to networked computing environments. Due to this fundamental
shift in the way corporations store and manage financial payment data, IT
departments are now faced with the challenge of providing users with secure
access to financial payment information which resides in a broad range of
distributed and fragmented systems. Technologies are now available to
effectively distribute payment information electronically to multiple end users
both within and outside an organization.

     The emergence and adoption of enterprise software applications is also
changing the way organizations generate and distribute financial payment
information. Although many enterprise software applications include basic
financial reporting functionality, they generally do not adequately address an
enterprise's need to electronically transmit and output financial payment
information across networked computing environments.

     Current methods of payment information distribution have limitations.
Inexpensive laser printers have the ability to print most common business
documents but cannot produce unique output such as MICR (magnetic ink character
recognition) lines, on the bottom of a check without customized software and
specialty toners. MICR lines are printed with a magnetic ink or toner that, when
magnetized, emits a magnetic signal that identifies each unique character. If
the shape and/or the magnetics of the characters do not meet specified
standards, the banking system will reject the document, which could require
costly manual handling. Due to the difficulties in printing high quality MICR
lines, financial documents have historically been produced by third party
commercial printers.

     As a result of the limitations of traditional information distribution
methods, we believe that there is significant growing demand for payment
solutions that allow organizations to electronically transmit and output
information across networked computing environments.


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NETWORKED COMPUTER PAYMENT SOLUTIONS

     We first entered the payment systems marketplace in 1971 and soon became a
worldwide leader in financial payment systems. It is our expertise in networked
computer payment solutions that uniquely qualified us to enter the e-commerce
payments arena in 1999.

     In 1984 we began installing payment systems for the U.S. Treasury that are
still in operation today. Our networked computer payment solutions include
software, firmware, hardware and imaging


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supplies that provide customers with functions not offered by most major
original equipment manufacturers. Our technologies enable standard laser
printers to print MICR lines, graphics, barcodes and forms. They also enable a
printer to perform other functions not offered by most printer manufacturers,
such as auditing, status checking and security. These features increase an
enterprise's flexibility and customer service, eliminate costs associated with
form obsolescence and enhance document security. This technology works over
networks and the Internet.

     Our strategic alliance with Hewlett-Packard provides our customers with all
of the benefits of high-quality payment solutions combined with the features,
functionality, and reliability provided by HP printers. We offer three levels of
high-quality MICR payment solutions based on laser technology. Our laser
solutions range in print speeds from 8 to 40 pages per minute and combine
laser-quality business documents with high-quality MICR.

     Our most advanced MICR printers incorporate added security features such as
built-in MICR sensors, password protection, keylocks and other important
security features. This high quality line of MICR printers is ideal for
customers who require a more dedicated and fully secure financial payment
solution.

     For those customers whose software does not support MICR printing, we offer
our own MICR software solution. This solution is currently offered as a part of
our strategic relationship with Hewlett-Packard as a PeopleSoft Alliance
Solution Center partner and enables PeopleSoft users to distribute and print
financial documents. We also offer a MICR solution based on impact technology.
Our impact MICR printers are designed to run in tandem with high-speed laser
printers manufactured by IBM and Xerox.

     Laser payment solutions require ongoing imaging supplies. We develop and
market imaging supplies that are uniquely formulated for specific output
devices. As new output devices are developed, our chemical engineers combine
their expertise with our advanced research and development equipment to design
proprietary formulations. Our imaging supplies are then produced in a
sophisticated, computerized manufacturing facility.

     We are recognized by our customers as a high quality developer and
manufacturer of proprietary imaging supplies. We are the only authorized MICR
toner manufacturer for Hewlett-Packard LaserJet printers and are the only
authorized MICR toner manufacturer for the IBM 3900 and InfoPrint 4000 family of
high-speed laser printers. The majority of our products require our proprietary
imaging supplies.

     In addition to our MICR toners that support our laser printers, we also
offer other toners, ribbons and accessories for use by other printing devices.
These additional supplies include fluorescent and indelible ribbons,
post-encoding ribbons, jumbo rolls, standard toner, paper handling accessories
and check security paper.

     CASE STUDY - Automatic Data Processing Inc. (ADP) formed a strategic
alliance with us in February 1997 to offer onsite, client-based payroll check
printing for their 425,000 clients nationwide. ADP is recognized as one of the
largest independent computing service organizations in the United States. ADP
software programs provide flexibility and control in issuing payroll checks at
the client site while our financial payment solutions ensure the quality and
security of those checks. In addition to printing only at issuance time to
better control funds, the benefits of in-house check printing include
eliminating delays and deliveries for faster printing and distribution, and
eliminating manual check writing to prevent errors, incorrect checks and bank
charges.


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THE TROY GROUP CONNECTIVITY PRODUCTS

     In addition to our e-commerce payment solutions and our networked computer
payment solutions, we are also investing in products to enhance the connectivity
of devices that transmit information over computer networks and the Internet.

     Our existing Internet output capability, PRINTRANET-TradeMark-, is a
software and firmware solution that enables a user at one location to print to
another location over the Internet. PrintraNet-TradeMark- requires
PrintraNet-TradeMark- software and firmware on both the sending and receiving
device. However, our Internet connectivity products under development are being
designed to allow customers' printers and fax machines to seamlessly receive
documents over the Internet, regardless of the protocol used by the sending
device. We believe that we will have significant competitive advantages in this
market because we were one of the first to develop and market Internet printing
technology and have extensive protocol experience.

     Our NETSEND-TradeMark- Internet output products enable output devices,
including currently installed printers manufactured by Hewlett-Packard, IBM,
Lexmark and Xerox, to communicate over the Internet regardless of the sending
device's protocol. Such devices could potentially include printers, fax
machines, scanners, copiers, digital cameras and more. For example, a scanner
that uses Hewlett-Packard's JetSend protocol could send a document to a printer
that uses another Internet printing protocol.

     Our SOFT PRINT SERVER, a software-only print server, allows printer
manufacturers and other OEM customers to significantly reduce manufacturing
costs by incorporating networking capabilities directly in the processor on
their printer controller, rather than requiring a separate processor, memory and
interface logic. Our soft print server runs on printers with Wind River VxWorks,
a commonly used embedded real-time operating system.

     Our PRINT SERVER PRODUCTS are recognized worldwide for supporting a large
number of protocols and network operating systems. This support makes our
products especially well-suited to enterprise networks that have many different
kinds of computers and network operating systems over a wide geographic area.
These print servers enable printers, plotters and other output devices to be
shared by many different kinds of computers on a network and support Windows NT,
Windows 2000, Linux and UNIX in addition to legacy systems such as Digital
Equipment Corporation VAX computers, Banyan VINES networks, HP 3000 computers
and IBM AS/400 computers. In addition to supporting printers, our print servers
can be used to connect a wide variety of other devices, such as electronic
signs, security systems, uninterruptable power supplies, and heart monitors to
networks and the Internet.

BUSINESS STRATEGIES

     Our objective is to leverage our expertise as a provider of financial
payment solutions to become a leading worldwide provider of e-commerce payment
solutions. Our strategies for achieving this objective include:

     CONTINUING TO DEVELOP AND MARKET E-COMMERCE PAYMENT SOLUTIONS. As current
industry trends indicate that the Internet will play a significant role in
future commerce, we intend to focus significant technical effort toward the
continued development and marketing of e-commerce payment solutions, such as
eCheck Secure-TradeMark-. By enhancing our current products, we believe that we
will have significant competitive advantages in this market.

     ACQUIRING RELATED BUSINESSES, PRODUCTS AND TECHNOLOGIES. A significant
aspect of our growth strategy has been the acquisition of complementary
businesses in order to achieve market presence,


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increase our customer base and expand our product offerings to our customers and
business partners. We intend to acquire businesses or license products and
technologies in the e-commerce payment and networked computer payment solutions,
credit card services and processing and web development markets. We currently
have an experienced team, both internal and external, executing and implementing
our acquisition strategy.

     INTRODUCING AND ENHANCING PRODUCTS THROUGH RESEARCH AND DEVELOPMENT. We
achieved a leadership position in our networked financial payment solutions by
investing in research and development, introducing higher quality products and
focusing on satisfying the needs of both our OEM customers and end users. We
intend to continue to invest in research and development to enhance our current
technologies and introduce new products.

     EXPANDING AND SEEKING NEW OEM RELATIONSHIPS. We intend to aggressively
expand our existing OEM relationships and seek new OEM relationships. One way to
expand our relationships with Hewlett-Packard, IBM, Equifax, Brother and
Standard Register is to develop solutions that support their products. We
believe that this strategy provides us with the opportunity to expand our market
share and maintain and enhance our technological position and expertise.

     LEVERAGING STRATEGIC ALLIANCES. We currently partner with various software,
firmware, hardware and financial service companies offering solutions that
assist us in meeting our customers' financial payment needs. We intend to
continue to aggressively pursue new strategic alliances that we believe will
enable us to enter new markets, expand our distribution channels and enhance our
product and service offerings. We currently have management resources dedicated
to developing strategic alliances.

     EXPANDING DISTRIBUTION CHANNELS TO INCREASE OUR FOCUS ON SELLING TO
MID-SIZE BUSINESSES AND SMALLER BUSINESSES. We believe that an increasing number
of small and mid-sized businesses will begin to use networks, the Internet and
enhanced financial payment solutions to facilitate their business needs. We
intend to continue to expand our distribution channels to increase our sales to
these businesses.

RESEARCH AND PRODUCT DEVELOPMENT

     We are committed to growing our business through research and development,
and it is one of our major business strategies. As such, we seek customer
feedback in the product design process in order to meet changing requirements
and are committed to developing functional and integrated solutions in a rapid
and efficient manner. In addition, we invest significantly in highly
sophisticated research and development equipment.

     As of February 18, 2000, we employed approximately 40 persons in our
research and development efforts. Our highly trained staff of software,
electrical, mechanical and chemical engineers are focusing on principal research
and development activities such as:

     -    developing e-commerce payment solutions;

     -    developing software and firmware solutions for connecting output
          devices to networks and the Internet;

     -    developing new products that provide solutions for our strategic
          business partners; and

     -    creating proprietary imaging supplies.

     Our products under development include:


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     INTERNET PRINTING PROTOCOL (IPP). IPP is a new industry standard for
printing across the Internet that has been endorsed by all of the major printer
manufacturers. We anticipate beginning delivery of IPP products in the first
half of 2000. With the addition of IPP, we will simultaneously support three
different Internet printing-related protocols, namely IPP, JetSend, and our
proprietary PrintraNet-TradeMark-. This is a critical capability, because there
is no dominant standard today for printing across the Internet. Our ability to
work with multiple Internet protocols will allow a printer to receive jobs from
a variety of different sources without regard to the protocol of the sending
device.

     OTHER FINANCIAL PAYMENT PRODUCTS. We also have audit function, barcoding
and electronic forms enhancements in various stages of release. These
enhancements will reside on the printer DIMM (dual in-line memory module). The
DIMM is either bundled with the printer or sold separately. The audit features
will monitor any check data printed, including the account on which the check is
drawn, the amount of the check, and the check number and date. This feature
allows for easy reconciliation, specific user monitoring, check authorization,
batch run summaries and specific timeframe totals. The barcode feature will
support UPC symbol barcodes as well as newer, intelligent barcode standards.
These codes are considered "intelligent" barcodes because they are
two-dimensional, compacting many times the amount of data of more simple
barcodes in very limited space. Other output enhancement features include
electronic forms. This feature stores forms on the DIMM resident on the printer.
These stored forms decrease processing time and allow continued use of the
forms, regardless of changes in application software.

SUPPORT SERVICES

     We offer TECHNICAL SUPPORT, MAINTENANCE AND ON SITE SERVICES, portions of
which are provided by third parties. We provide technical support through an 800
line from 7:00 AM to 5:00 PM (PST) and through our web sites. We also provide on
site service through yearly maintenance contracts or on a time and material
basis.

     In addition to our technical support, maintenance and on site services, for
over five years we have maintained the MICR TECHNOLOGY CENTER, a research group
dedicated to providing solutions for MICR document processing problems. Members
of the testing facility for this research group have the ability to examine all
aspects of the MICR printing process to pinpoint where improvements can be made
and to ensure the highest quality MICR line.

SALES AND MARKETING

     We market products to Fortune 1000 companies through our direct sales force
of approximately 50 persons and market products to small and mid-size businesses
primarily through our network of distributors and value-added resellers. Our
products are represented internationally in 55 countries primarily through a
distributor network.

     Our base of more than 5,000 active customers includes e-commerce retail and
brokerage firms, financial institutions, insurance companies, payroll processing
companies, corporations and government agencies. In 1984 the U.S. Treasury chose
TROY to produce its financial document printers. Still today, U.S. Treasury
checks are printed on our equipment. Ameritrade, Inc., AT&T Corporation,
BankAmerica Corporation, Brother Industries, Eastman Kodak, Farmer's Insurance
Group, Ford Motor Company, IBM, Manpower, Mydiscountbroker.com, Shopsports.com,
and Wells Fargo & Company are among our customers who purchased products during
the last 12 months.


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     We market our e-commerce payment solutions directly to Internet merchants,
and virtually every Internet web site that offers e-commerce is a potential
client. Our research has identified two strong markets that will be targeted:
business-to-consumer retail and brokerage firms. Also, we currently have strong
access to many Fortune 1000 companies and the U.S. Treasury.

     We have increased the number of sales and support staff dedicated to
recruiting and training additional distributors and value-added resellers. This
supports our strategy to increase focus on mid-size and smaller companies that
will increasingly use the Internet and networks to facilitate their business
needs. We also have management resources dedicated to recruiting and developing
new OEM relationships and leveraging strategic alliances in support of our key
business strategies.

     We promote our products through our web sites, trade shows, advertising and
direct marketing materials as well as referrals from our strategic business
partners, including Equifax, Hewlett-Packard, IBM, ADP, Standard Register and
Wind River.

STRATEGIC RELATIONSHIPS

     In September 1999, we entered into a joint marketing agreement related to
our eCheck Secure-TradeMark- product with Equifax Inc., a $1.7 billion world
leader in consumer information management and transaction processing. The
arrangement combines our eCheck Secure-TradeMark- software with Equifax's
verification/guarantee in order to provide e-commerce merchants with a complete
check transaction ready for deposit.

     Since 1993, we have maintained a strategic relationship with
Hewlett-Packard, a $42 billion leading global provider of computing and imaging
solutions and services. We purchase Hewlett-Packard laser printers and modify
and enhance the printers. We then repackage, relabel and sell the printers as
MICR-enabled financial document printers under the TROY name. In addition, we
are a member of Hewlett-Packard's Engineering Support Partner Group, a select
group of third party solutions partners. As a member of this group, we work with
Hewlett-Packard on architecture issues for new product development and with
Hewlett-Packard's marketing group to implement joint marketing programs. We
believe that our current relationship with Hewlett-Packard gives us a
competitive advantage in marketing our products, primarily because of their
reputation as the leading provider of laser printers throughout the world.

     Hewlett-Packard and TROY Group recently announced the availability of our
NetSend-TradeMark- family of Internet print servers, allowing a wide range of
non-HP printers, HP LaserJet printers and the 100 million HP inkjet peripherals
already in the marketplace to communicate utilizing HP's JetSend capabilities.
NetSend-TradeMark- Internet print servers enable JetSend communication with
these printing devices. JetSend is an easy-to-use communications protocol that
allows two devices to communicate directly over the Internet without the need of
a PC or software drivers. For example, a user can scan a document using a
JetSend-enabled image capture device and share the information with a
JetSend-enabled printer, achieving printing output that far exceeds the best of
current-day facsimile machines.

     Our strategic alliance with Hewlett-Packard also includes our appointment
as a PeopleSoft Alliance Solution Center partner. PeopleSoft's Alliance Solution
Center (ASC), located in their new Pleasanton, CA headquarters, opened in 1998
to develop global, enterprise-wide software solutions and services. One of the
primary functions of the ASC is to execute joint research and development
projects between Hewlett-Packard, PeopleSoft and other strategic partners such
as TROY. Under our current agreement, we will provide MICR and multi-purpose
printers and software that will enable PeopleSoft customers to print financial
documents, barcodes, labels and standard business documents.


                                       10
<PAGE>

     We have a joint marketing relationship with IBM, the $8l billion world
leader in the development and manufacture of advanced information technology. In
an agreement with TROY, IBM has agreed to purchase all of its MICR toner
requirements for the IBM 3900 and InfoPrint 4000 family of high speed laser
printers.

     We are a Wind River, WindLink partner. Wind River is a worldwide leader in
embedded software. Wind River is promoting our soft print server on its web
site, in its third party catalog and with its marketing literature. We have
participated in Wind River international sales meetings and expect to
participate in additional joint marketing activities with Wind River in the
future.

     Our strategic alliance with ADP was formed to offer a printer and software
solution for onsite, client-based payroll check printing to ADP's 425,000
clients worldwide. ADP is one of the largest independent computing service
organizations in the world. ADP's payroll software is fully compatible with our
MICR printers. We offer ADP-approved MICR laser printers, toll-free technical
support, accessories, imaging supplies, product warranties and maintenance
agreements.

     We are an OEM supplier to Standard Register. Standard Register is a
recognized leader in delivering document management systems, products and
services to healthcare, financial and general business markets. We private label
MICR and multi-purpose printers for Standard Register to be used in conjunction
with their various document management solutions including LINKUP-TradeMark-, a
check printing software system, and PATIENT LINKUP-TradeMark-, a hospital
admissions and document routing system.

COMPETITION

     The market for our products is highly competitive and subject to rapid
technological change. We compete principally on the basis of the quality,
flexibility, convenience and security of our financial payment solutions.
Overall, we believe that we are well positioned in our industry and compete
favorably as a result of:

     -    our highly trained team of software, firmware, electrical, mechanical
          and chemical engineers and programmers;

     -    our commitment to understanding the changing needs of our marketplace;

     -    our ability to develop new solutions to meet those needs;

     -    the breadth of our products' features;

     -    our reputation for knowledge, technical expertise and professionalism;

     -    the strength and scope of our strategic relationships;

     -    capable and reliable technical support; and

     -    a historical and on-going commitment to quality.

     E-COMMERCE PAYMENT SOLUTIONS. After reviewing many direct and indirect
competitors as well as substitute offerings, we believe that eCheck
Secure-TradeMark- fills a unique niche in the e-commerce payments marketplace.
Various electronic payment companies do exist, but none to our knowledge
currently offer a software/printed check solution with the same unique benefits.
Our current competitors for e-commerce


                                       11
<PAGE>

financial payment solutions include major credit card companies and financial
institutions and other providers of direct debit, wire transfer or ACH services.

     NETWORKED COMPUTER PAYMENT SOLUTIONS. Our primary competitors in networked
computer payment solutions are ACOM Computer, Inc., Delphax Systems, IBM,
Lexmark International, Inc., Oce, Source Technologies and Xerox. We also compete
with companies who provide a MICR font and toner solution without a printer. We
believe that our current relationship with Hewlett-Packard gives us a
competitive advantage in the MICR printing market primarily because of
Hewlett-Packard's reputation as the leading provider of laser printers to
companies throughout the world.

     IMAGING SUPPLIES. We compete in the toner and ribbon market primarily on
the basis of quality and service. Color Image is our most significant competitor
with respect to toner products. Our significant competitors with respect to
ribbons are Nu-Kote International, Commander Imaging Products Inc. and Fuji
Copian Corporation. We position ourselves with a pricing strategy that reflects
our quality, reliability, precision of formulation and available customer
support. Many small companies also offer remanufactured MICR cartridges that are
typically lower priced but less reliable than new MICR cartridges such as those
offered by us.

     We also have several indirect competitors that offer certain products as an
alternative to our financial payment solutions, such as pre-printed checks,
check printing services and electronic payment systems, outsourcing for payroll,
on-line banking and payment systems for their clients. These companies tend to
provide an alternative to internal printing of checks and other financial
documents.

     NETWORK AND INTERNET CONNECTIVITY SOLUTIONS. The market for network and
Internet printing is still emerging. There are some competitors like
Hewlett-Packard, i-data, Axis, and Peerless that support the IPP protocol, but
none to our knowledge are focusing on supporting multiple Internet protocols
simultaneously. The market for our network products is highly competitive and
subject to rapid technological change. We currently compete principally on the
basis of the extensive multiprotocol capabilities, functionality and high
performance of our products. In the print server market, Intel, Osicom/DPI, Axis
Communications, Emulex and Lantronix offer competing products that are suitable
for multiprotocol enterprise network printing applications. There are many other
commodity print servers, including very low-cost Taiwanese products, but such
commodity print servers are not usually suitable for enterprise networks due to
inadequate protocol support and features, limited customer support and low
performance. Although Hewlett-Packard makes print servers, we do not generally
consider them a direct competitor. This is because we are a Hewlett-Packard
partner who provides the DEC and Banyan VINES connectivity solutions that are
not available on Hewlett-Packard products. As a result, Hewlett-Packard often
calls upon us to help them close printer sales at customer sites that require
DEC or Banyan VINES connectivity.

     To our knowledge, the only direct competitors for our new soft print server
are Peerless and NETsilicon. Other competition for soft print servers are
individual protocol stacks available from a number of companies and in the
public domain, but such protocol stacks require a significant amount of
additional software development by the OEM in order to provide similar
functionality to our soft print server.

     Although the prices of our MICR printers and imaging supplies are generally
higher than those of our competitors, we have been able to maintain these prices
as a result of advanced technological features (including security), higher
levels of quality and value-added services.


                                       12
<PAGE>

     Both the multi-protocol Internet document distribution market and the
e-commerce checking account payments market are just emerging. Because of the
projected growth of this market, we will most likely experience increased
competition in the future.

INTELLECTUAL PROPERTY

     We have certain proprietary printing system components, manufacturing
processes, information, knowledge, trademarks and tradenames. We rely on a
combination of patent, trademark, trade secret and other intellectual property
laws, nondisclosure agreements with employees and internal confidentiality
measures to protect our intellectual property rights and confidential
information. We seek patents from time to time on our products and processes.
The decision to seek additional patents is based on our analysis of various
business considerations such as the cost of obtaining a patent, the likely scope
of patent protection and the benefits of patent protection relative to relying
on trade secrets and other protection. We also rely on know-how and continuing
technological innovations to develop and maintain our competitive position.

     As of February 18, 2000, we held nine United States patents. Our existing
patents primarily cover components of our impact printing systems. We have also
filed applications for one additional United States patent and six foreign
patents which are currently pending. There can be no assurance that our issued
patents will provide meaningful protection of our products and technologies. In
addition, patent applications can be denied or significantly reduced before
issuance. Moreover, there can be no assurance that third parties will not assert
intellectual property infringement claims against us or that, if asserted, that
we would prevail or be able to obtain any necessary licenses.

     We believe that our proprietary manufacturing processes and techniques,
materials expertise and trade secrets may provide us with a competitive
advantage as important, if not more important, than patent protection. We seek
to maintain the confidentiality of this proprietary information by requiring
employees who have access to proprietary information to sign confidentiality
agreements and by limiting its disclosure to outside parties. There can be no
assurance, however, that these measures will provide us with adequate protection
of our proprietary information or with adequate remedies in the event of
unauthorized use or disclosure. In addition, there can be no assurance that our
competitors will not independently develop or otherwise gain access to
processes, techniques or trade secrets that are similar or superior to ours.
Finally, as with patent rights, legal action to enforce trade secret rights can
be lengthy and costly, with no guarantee of success.

ENVIRONMENTAL AND REGULATORY MATTERS

     Our MICR printer and imaging supplies manufacturing operations are subject
to numerous domestic and international laws and regulations, particularly
relating to environmental matters that impose limitations on the discharge of
pollutants into the air, water and soil and establish standards for the
treatment, storage and disposal of solid and hazardous wastes. We are also
required to have permits from a number of governmental agencies in order to
conduct various aspects of our business. Compliance with these laws and
regulations is not expected to have a material adverse effect on our capital
expenditures, earnings or our competitive position. There can be no assurance,
however, that future changes in environmental laws or regulations, or in the
criteria required to obtain or maintain necessary permits, will not have a
material adverse effect on our operations.



                                       13
<PAGE>

EMPLOYEES

     As of February 18, 2000, we employed approximately 210 persons. None of our
employees are represented by a labor union or covered by a collective bargaining
agreement. We have not experienced any work stoppages and consider relations
with our employees to be good.









                                       14
<PAGE>


                                   SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to
Annual Report on Form 10-K/A to be signed on its behalf by the undersigned,
thereunto duly authorized.

Dated:   March 1, 2000                      TROY GROUP, INC.

                                            By  /s/ Del L. Conrad
                                               -----------------------------
                                               Del L. Conrad
                                               Chief Financial Officer
                                               Treasurer and Secretary





<PAGE>

                                TROY GROUP, INC.

                         EXHIBIT INDEX TO ANNUAL REPORT
                                  ON FORM 10-K

                   For the fiscal year ended November 30, 1999

<TABLE>
<CAPTION>
ITEM
NO.      DESCRIPTION                                                               METHOD OF FILING
---      -----------                                                               ----------------
 <S>     <C>                                                       <C>
 2.1     Merger Purchase Agreement dated October 28, 1998
         between the Company, Troy Merger Subsidiary, Inc. and
         XCD Incorporated and its stockholders...................  Incorporated by reference to Exhibit 2.1 to the
                                                                   Company's Registration Statement on Form S-1
                                                                   (File No.  333-51523).

 3.1     Certificate of Incorporation of the Company.............  Incorporated by reference to Exhibit 3.1 to the
                                                                   Company's Registration Statement on Form S-1
                                                                   (File No.  333-51523).

 3.2     Bylaws of the Company...................................  Incorporated by reference to Exhibit 3.2 to the
                                                                   Company's Registration Statement on Form S-1
                                                                   (File No.  333-51523).

 3.3     Certificate of Ownership and Merger dated May 18, 1998,
         between Troy Group Newco, Inc. and Troy Systems, Inc....  Incorporated by reference to Exhibit 3.3 to the
                                                                   Company's Registration Statement on Form S-1
                                                                   (File No.  333-51523).

 3.4     Agreement and Plan of Merger dated May 18, 1998 between
         Troy Group Newco, Inc. and Troy Systems, Inc............  Incorporated by reference to Exhibit 3.4 to the
                                                                   Company's Registration Statement on Form S-1
                                                                   (File No.  333-51523).

 4.1     Warrant dated December 30, 1998 issued to Broadland
         Capital Partners, as amended through November 1, 1999...  Filed herewith.*

 4.2     Warrant dated October 30, 1998 issued to Steve
         Holmes..................................................  Incorporated by reference to Exhibit 4.2 to the
                                                                   Company's Registration Statement on Form S-1
                                                                   (File No.  333-51523).

 4.3     Warrant dated June 1, 1998 issued to Raymond F.
         Schuler, as amended through June 8, 1999................  Incorporated by reference to Exhibit 4.3 to the
                                                                   Company's Registration Statement on Form S-1
                                                                   (File No.  333-51523).

                                      E-1
<PAGE>


10.1     Lease dated March 16, 1995 between the Company and
         RAGCO, as amended on May 18, 1998.......................  Incorporated by reference to Exhibit 10.1 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.2     Lease dated July 28, 1993 between Dirk Investments,
         Inc. and the Company....................................  Incorporated by reference to Exhibit 10.2 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.3     Lease Amendment to Lease dated July 28, 1993 between
         Dirk Investments, Inc. and the Company..................  Incorporated by reference to Exhibit 10.3 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.4     Addendum to Lease dated March 16, 1995 between Dirk
         Investments, Inc. and the Company.......................  Incorporated by reference to Exhibit 10.4 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.5     Lease Amendment to Lease dated September 1, 1996
         between Dirk Investments, Inc. and the Company..........  Incorporated by reference to Exhibit 10.5 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.6     Lease dated March 1, 1998 between Sanwa Bank California
         and XCD, Inc. and a Consent to Assignment of Lease,
         Assignment and Acceptance dated October 23, 1998
         between Sanwa Bank California, XCD, Inc. and Troy XCD,
         Inc.....................................................  Incorporated by reference to Exhibit 10.6 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.7     1996 Stock Option Plan..................................  Incorporated by reference to Exhibit 10.7 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.8     1998 Stock Incentive Plan...............................  Incorporated by reference to Exhibit 10.8 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.9     1998 Employee Stock Purchase Plan.......................  Incorporated by reference to Exhibit 10.9 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).


                                      E-2
<PAGE>


10.10    Non-Competition Agreement dated November 27, 1996
         between Robert Messina and the Company..................  Incorporated by reference to Exhibit 10.12 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.11    Restated Consulting Agreement dated October 1, 1997
         between the Company and Broadland Capital Partners, as
         amended through November 1, 1999........................  Filed herewith.*

10.12    Form of Indemnification Agreement for directors and
         executive officers of the Company.......................  Incorporated by reference to Exhibit 10.14 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.13    MICR Supplies Agreement dated February 6, 1998 between
         the Company and IBM Printing Systems Company (1)........  Incorporated by reference to Exhibit 10.15 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.14    Form of Tax Agreement Relating to S
         Corporation Distributions by and
         between the Company and the Dirk
         Stockholders............................................  Incorporated by reference to Exhibit 10.16 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.15    Loan Agreement and Security Agreement dated October 20,
         1998 between the Company and Comerica Bank-California...  Incorporated by reference to Exhibit 10.17 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.16    Amendment No. 1 to Loan and Security Agreement
         (Accounts and Inventory) dated October 28, 1999 between
         the Company and Comerica Bank - California..............  Filed herewith.*

10.17    Variable Rate Installment Note dated October 20, 1998
         in favor of Comerica Bank-California....................  Incorporated by reference to Exhibit 10.18 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.18    Variable Rate Installment Note dated October 20, 1998
         in favor of Comerica Bank-California....................  Incorporated by reference to Exhibit 10.19 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.19    Acquisition Note dated October 28, 1999 in favor of
         Comerica Bank - California .............................  Filed herewith.*


                                      E-3
<PAGE>


10.20    Guaranty dated October 20, 1998 by the majority
         stockholders............................................  Incorporated by reference to Exhibit 10.20 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.21    Letter dated October 3, 1997 to RAGCO from the Company..
                                                                   Incorporated by reference to Exhibit 10.21 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.22    Bill of Sale and Assignment and Assumption Agreement
         dated May 31, 1998 between Troy Group, Inc. and Troy
         Systems International, Inc..............................  Incorporated by reference to Exhibit 10.22 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.23    Form of Subscription Agreement..........................  Incorporated by reference to Exhibit 10.23 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

10.24    Reseller Agreement dated April 1, 1996 between the
         Company and Hewlett-Packard Company (1).................  Incorporated by reference to Exhibit 10.24 to
                                                                   the Company's Registration Statement on Form
                                                                   S-1 (File No.  333-51523).

21.1     Subsidiaries of the Registrant..........................  Filed herewith.*

23.1     Consent of McGladrey & Pullen, LLP,
         Independent Auditors ...................................  Filed herewith.*

27.1     Financial Data Schedule.................................  Filed herewith.*

</TABLE>


----------------
*    Indicates item filed with the Company's Form 10-K on February 28, 2000.
(1)  Confidential treatment has been requested with respect to designated
     portions contained within such document. Such portions have been omitted
     and filed separately with the Commission pursuant to Rule 406 of the
     Securities Act of 1933, as amended.


                                      E-4