-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GLke7QmVma8NijQqbNFWRyWJ8n1wuSXcSndfRokszZqHZhAuHYURX4yTlG8S+YkS mWvaPGp9Tlh8e3Mb/VuHuQ== 0001019056-97-000002.txt : 19970116 0001019056-97-000002.hdr.sgml : 19970116 ACCESSION NUMBER: 0001019056-97-000002 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19970115 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOONTON ELECTRONICS CORP CENTRAL INDEX KEY: 0000013191 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 221543137 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-02364 FILM NUMBER: 97506134 BUSINESS ADDRESS: STREET 1: 25 EASTMANS RD STREET 2: PO BOX 465 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0465 BUSINESS PHONE: 2013869696 MAIL ADDRESS: STREET 1: 25 EASTMANS RD STREET 2: P O BOX 465 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0465 10KSB 1 BOONTON ELECTRONICS 10-KSB U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the fiscal year ended September 30, 1996 Commission File Number 2-17411 BOONTON ELECTRONICS CORPORATION A New Jersey corporation IRS Employer Identification No. 22-1543137 Mailing Address: 25 Eastmans Road, Parsippany, NJ 07054-0465 (201) 386-9696 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(q) of the Exchange Act: Common Stock, par value $.10 per share Check whether the Company (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of Company's knowledge, in definitive proxy or information statements incorporated by reference in part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] The Company's net revenues for the year ended September 30, 1996 were $6,038,336. The aggregate market value of the voting stock held by nonaffiliates of the Company on December 6, 1996 was $1,385,839. The number of shares outstanding of the Company's Common Stock, par value $.10 on share on December 6, 1996 was 1,556,585. Portions of the 1996 Annual Report of Company are incorporated in Parts I,II and III of this From 10-KSB. This report consists of 43 consecutively numbered pages. The Exhibit Index appears on page 35. 1 INFORMATION REQUIRED IN REPORT PART 1 ITEM 1. DESCRIPTION OF BUSINESS. - ------- ------------------------ (a) BUSINESS DEVELOPMENT. --------------------- The Company is a New Jersey corporation organized in 1947. On September 7, 1993 the Company and its subsidiaries, Boonton International Sales Corporation and Integra, Inc., filed separate, voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey. On August 4, 1994 the Company filed a consensual Plan of Reorganization with the bankruptcy court and an Order Confirming Debtors' Plan of Reorganization was entered on November 15, 1994. The Company has accounted for all transactions related to the Chapter 11 proceedings in accordance with the Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code" issued by the American Institute of Certified Accountants in November 1990. Accordingly, all pre-petition liabilities that were impaired by the Plan of Reorganization are reported separately in the Company's consolidated balance sheet as "Chapter 11 Settlement", current and noncurrent. The success of the Companys' Plan of Reorganization was due primarily to the sale of its land and facility in Randolph, New Jersey and the termination of an overfunded employees' defined benefit pension plan. The Company has relocated its entire operation to the Township of Hanover, New Jersey. Further details regarding the lease are provided in Item 2.(a) below and "Note 8" to the accompanying consolidated financial statements. (b) BUSINESS OF COMPANY. -------------------- (1) The Company designs and produces electronic testing and measuring instruments including power meters, voltmeters and modulation meters. Recent models are microprocessor controlled and are often used in computerized automatic testing systems. The Company's equipment is marketed throughout the world to commercial and government customers in the electronics industry. (2) The Company markets and distributes its products throughout the United States and abroad through some 15 domestic sales representatives and 35 foreign distributors. Representatives sell on a commission basis, while distributors buy products for resale at discounted ex-factory prices. Its representatives and distributors also handle the products of other manufactures, although these are not generally competitive with the Company's products except that some items handled by foreign distributors may be somewhat competitive. (3) Not applicable. (4) The Company is in competition with many other manufacturers, several of which are substantially larger than the Company and have far larger professional staffs and far greater financial and technical resources. Of these, Hewlett-Packard is believed to account for approximately 60% of the domestic market and, together with other larger companies (including Tektronix, Fluke, Giga-tronics, and Keithley Instruments in the United States, and Phillips, Marconi Instruments, Mitsubishi and Anritsu abroad) accounts for approximately 90% of the worldwide market in electronic instrumentation. 2 (5) The Company obtains raw materials from a variety of sources. Neither the sources nor the availability of essential raw materials are considered to play any significant part in the Company's business. (6) During this fiscal year approximately 15% of the Company's sales were made to the United States Government and agencies thereof. The Company believes that an additional substantial portion of purchases made by its non-Governmental customers are related to the filling of orders placed with such customers by the United States Government and agencies thereof. The Company is not able to determine the percentage of sales associated with purchases from non-Governmental customers that are related to the filling of orders placed by the United States Government and agencies thereof. (7) The Company does not have any patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts. (8) Not applicable. (9) Under established United States Government contract procedures, substantially all of the Company's Government contracts are subject to cancellation, in which case the Company would be entitled to recover its costs incurred to the date of cancellation plus a reasonable profit thereon. The cancellation costs and a reasonable profit are determined in accordance with standard Government accounting practices. (10) During the fiscal year ended September 30, 1996, the Company spent $921,927 on company-sponsored research and development activities. The Company spent $783,132 on such activities during the fiscal year ended September 30, 1995. The Company does not currently have any customer-sponsored research and development activities. (11) The New Jersey Department of Environmental Protection (the "NJDEP") has conducted an investigation concerning disposal, at a facility in New Jersey previously leased by the Company, of certain materials formerly used by the Company's manufacturing operations at that site and the possible effect of such disposal on the aquifer underlying the property. The disposal practices and the use of the materials in question were discontinued in 1978. The Company has cooperated with the NJDEP investigation and has been diligently pursuing the matter in an attempt to resolve it as rapidly as NJDEP operating procedures permits. The Company and the NJDEP have agreed upon a plan to correct ground water contamination at the site, located in the Township of Parsippany-Troy Hills, pursuant to which wells have been installed at an estimated cost to the Company of $127,000. The plan contemplates that the wells will be operated and that soil and water samples will be taken and analyzed until such time (which the Company is unable to predict) as contamination levels satisfactory to the NJDEP are attained. Operating expenditures incurred by the Company during the fiscal year ended September 30, 1996 in connection with the site amounted to approximately $51,879. The Company estimates that operating expenditures in this regard during the current fiscal year, including the costs of operating the wells and taking and analyzing soil and water samples, will amount to approximately $52,000. During the year ended September 30, 1996 the Company incurred extraordinary costs of $171,772 associated with this location. These costs were to further delineate the extent of the contamination in order to obtain a "Classified Exception Area" designation for the site and a "Conditional No Further Action" letter from the NJDEP. The Company 3 has accrued an additional $100,000 for work to be performed in its 1997 fiscal year that is expected to complete this process. The funding for this work has been provided by General Electronique Mesure (GEM) through the purchase of the Company's common stock. (12) As of September 30, 1996 the Company had 63 employees of which 60 were full-time and 3 were part-time employees. ITEM 2. DESCRIPTION OF PROPERTY. ------------------------ (a) On September 28, 1994, the Company sold its facility in Randolph, New Jersey to NTV Realty, Inc. The proceeds of the sale of the land and building, $2,300,000, were immediately transferred to United Jersey Bank in accordance with the Company's Plan of Reorganization. The Company entered into a lease agreement, effective October 1, 1994, with 25 Eastmans Road Associates, Ltd. to lease approximately 30,000 square feet of a facility located in Hanover Township, New Jersey. The term of the lease agreement is for seven years beginning on October 1, 1994 and ending on September 30, 2001. The lease also contains an option to extend the term of the lease by five years. (b) and (c) Not applicable. ITEM 3. LEGAL PROCEEDINGS. ------------------ (a) Reference is made to the discussion in Item 1.(a) above regarding the status of the Company's Chapter 11 Plan of Reorganization. The principal parties are the Company, its subsidiaries and its creditors. As noted, the Company's Plan of Reorganization was confirmed on November 15, 1994. Reference is made to the discussion in Item 1.(b)(11) above regarding an investigation by the NJDEP concerning certain discontinued disposal practices of the Company and their effect on the soil and ground water at a certain facility formerly occupied by the Company. No administrative or judicial proceedings have been commenced in connection with such investigation. The owner of the Parsippany-Troy Hills facility has notified the Company, that if the investigation proves to interfere with the sale of the property, it may seek to hold the Company liable for any resulting damages. Since May 1983, the owner has been on notice of this problem and has failed to institute any legal proceedings with respect thereto. While this does not bar the owner from instituting a suit, it is the opinion of the Company's legal counsel that it is doubtful that the owner would prevail on any claim due to the fact that such a claim would be barred by the statute of limitations. (b) Not applicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. ---------------------------------------------------- Not applicable. PART II Item 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. -------------------------------------------------------------- (a) MARKET INFORMATION. ------------------- (1) The Company's common stock is traded (symbol "BOON") on the NASD OTC Bulletin Board. The following is the range of high and low bid information for the Company's common stock for each quarterly period within the two most recent 4 fiscal years. These prices represent inter-dealer quotations, do not include markups, markdowns or commissions, and do not necessarily represent actual transactions. FOR THE QUARTER ENDED HIGH LOW --------------------- ---- --- 12/31/94 1 7/32 1 7/32 3/31/95 1 1 6/30/95 1 1/8 1 1/8 9/30/95 2 7/8 2 5/16 12/31/95 3 1 5/8 3/31/96 3 2 1/8 6/30/96 2 7/16 1 13/16 9/30/96 2 1 1/2 (2) Not applicable. (b) HOLDER. ------- There were 688 record holders of the Company's common stock as of November 20, 1996. (c) DIVIDENDS. ---------- (1) There were no cash dividends declared on the Company's common stock for the fiscal years ended September 30, 1996 and 1995. (2) Not applicable. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. ------------------------------------- (A) RESULTS OF OPERATIONS. ---------------------- (i) 1996 versus 1995 ---------------- Net sales of $6,038,336 for the fiscal year 1996 were $798,912 or 11.7% below the prior year. Domestic sales decreased $655,547 which, as noted in the Form 10-QSB filed for June 30, 1996, was attributable to an overall decline in the industry in the United States. It is significant to note that there was a $271,169 increase in military contract revenues during the year. In addition the Company received two significant contract awards from the United States Air Force in August 1996 which will total approximately $1.7 million in revenues upon completion. International sales declined by $143,365 below the prior year. This trend is not expected to continue in fiscal 1997 as greater emphasis will be placed on the Southeast Asia region which has shown recent indications of development. The Company had a gross profit of $2,629,756 or 43.6% of sales versus a prior year gross profit of $2,948,485 or 43.1% of sales. Commission expense increased to 10.6% of sales versus 8.5% of sales for the prior year primarily due to international sales, which carry a high commission rate and were 42.3% of revenues in fiscal 1996 versus 39.5% of sales in fiscal 1995. There was a loss from operations of $448,315 versus an income from operations of $163,032 for the prior year. The loss in 1996 was partially attributable to the reduced volume but was also impacted by certain costs that were non-recurring in nature. These costs, which represent 46.2% of the loss from operations, were "CE" mark audit fees of $108,525, funds provided for new technology research at the New Jersey Institute of Technology totaling $65,000, and severance expense for the former president of $33,920. Management of the Company has already instituted steps to reduce operating costs in fiscal 5 1997 which steps include reductions in wages and payroll taxes due to personnel reductions. Further cost reductions will be implemented as identified by management as fiscal 1997 progresses. Other expenses of $25,886 were below the prior years $245,527. This decrease was primarily because there were no moving expenses or Chapter 11 expenses in fiscal 1996. The loss before taxes and special charges was $474,201 versus a loss of $82,495 for the prior year. The special charges of $350,405 were primarily a result of costs, and accrued costs for work to be performed in 1997, associated with further environmental delineation work performed at a site formerly leased by the Company. This work is being performed in order to obtain a "Conditional No Further Action Letter" from the New Jersey Department of Environmental Protection (NJDEP) which would allow the Company to finalize the groundwater remediation program as discussed at Item 1.(b) (11) above. The loss per share before special charges was $.48 versus earnings per share of $.17 for the prior year. The net loss per share was $.72. Accounts receivable decreased to $971,342 from a prior years $1,011,980 and the average collection period increased to 59.9 days from 53.8 days for the prior year. Inventory of $1,210,940 was comparable to the prior year. The average inventory turnover decreased, due to the reduced sales volume, to 2.8 versus a prior years 3.6. The current ratio was 2.3 to 1 versus a prior years 3.0 to 1. Working capital declined to $1,495,987 versus a prior years $1,827,718. The decline in working capital was due primarily to the accrued environmental costs for the work to be performed in fiscal 1997, reduction of deferred tax assets and increased accounts payable balances. The Company's backlog at September 30, 1996 was $1,362,193 which included $512,000 for the military contracts. The Company has incurred losses from operations during the last three fiscal years. Management does not expect this to continue based on its operating plan for fiscal 1997 which anticipates a 19% increase in revenue and a net income of approximately $200,000. The 1997 first quarter revenues were approximately $1.8 million which supports, on an annualized basis, the expected increase in revenues. The military contracts awarded in fiscal 1996, which will total $1.7 million in revenues upon completion, contributed approximately $265,000 to the first quarter 1997 revenues. The Company's backlog as of December 31, 1996 was $1,296,718 which included an additional $546,000 for the military contracts. An additional $299,000 was released by the Air Force in November 1996 against these contracts. (ii) 1995 VERSUS 1994 ---------------- Net sales of $6,837,248 for the fiscal year 1995 were $836,693 or 13.9% over prior year. Domestic sales increased $311,575 primarily due to a $252,088 increase in military contract business. Export sales increased $525,118 over prior year as an increased emphasis was placed on developing foreign distributors contributions to overall revenues. The Company had a gross profit of $2,948,485 or 43% of sales versus a prior year gross profit of $1,991,227 or 33% of sales. There was an income from operations of $163,032 versus a prior year loss of ($326,845). Commission expense decreased as a percentage of sales to 8.6% from the prior year 11.6% due to increased domestic military sales which carry a significantly lower commission rate. All other categories of operating expense were $577,349 above prior year as the Company emerged from bankruptcy on November 15, 1994 and began to rebuild the work force to accommodate the increasing volume of business. The loss before benefit from taxes was $(82,495) versus a prior year loss before benefit from taxes and special charges of $(216,576). 6 It is important to note that, in accordance with Financial Accounting Standards No. 87, Employers Accounting for Pensions, the Company recorded a $216,657 charge to operations (50% to cost of sales and 50% to operating expense) as a result of the termination of its defined benefit pension plan. The plan's termination also required a $33,522 charge to other expense for the 20% excise tax required on the excess of funds returnable to the Company. The pension plan termination was a requirement of the Company's Plan of Reorganization which, as reported in fiscal 1994, was confirmed on November 15, 1994. Furthermore, the Company incurred moving expenses of $98,516 and other expenses of $14,758 also related to the requirements of the Plan of Reorganization and to the final accounting for Chapter 11. The Company would have reported income before benefit for taxes of $280,958 had the recording of these items of nonrecurring expense not been required. The benefit from income taxes, recorded in accordance with financial Accounting Standards No. 109, Accounting for Income Taxes, was $316,339. The reported credit was due to a decrease in the valuation allowance which thereby increased the deferred tax asset required by FAS No. 109. The earnings per share from continuing operations was $.17 versus a prior year loss per share of $(.14). The earnings per share for fiscal 1995 would have been $.38 had the nonrecurring items discussed in the paragraph above not been required. Accounts receivable was $7,616 above the prior year however the average collection period was reduced to 53.8 days versus a prior years 63.5 days. Inventories of $1,203,358 were $251,438 above the prior years $951,920 due to increased volume of business. The average inventory turnover increased to 3.6 from the prior years 2.2 indicating the Company has improved its efficiency in managing this important asset. The current ratio at September 30, 1995 was 3.01 to 1 versus 2.64 to 1 the prior year. Also, the Company's working capital increased $190,375 to $1,827,718 from a prior years $1,637,343. In October 1995 the Company, in accordance with the Plan of Reorganization, made the first payment of $101,515 in total to the unsecured creditors and made the final payment of $73,052 in total for Chapter 11 professional costs as included in the Company's September 30, 1995 consolidated balance sheet. (b) LIQUIDITY AND CAPITAL RESOURCES. -------------------------------- The Company's working capital for the fiscal years ended September 30, 1996 and 1995 was $1,495,987 and $1,827,718, respectively. Under the conditions set forth in the Plan of Reorganization (see Item 1.(a) above), the Revolving Credit and Loan Agreement, dated August 15, 1990, as amended by Letter Agreement dated May 1, 1992, secured by assets and/or collateral as set forth in such agreement, between the Company and United Jersey Bank was satisfied by payments totaling $3,000,000. The $3,000,000 in payments consist of the following: $2,300,000 from the proceeds the Company realized from the sale of the facility and land in Randolph, New Jersey; $150,000 realized from the sale of excess inventory and assets; $150,000 consisting of three $50,000 payments in June, July and August of 1994; and a $400,00 note payable, at 8% interest, payable in $25,000 monthly installments of principal and interest commencing September 1994 and continuing until January 1996. As of January 1996, the commitment to United Jersey Bank was completed. The second payment to the unsecured creditors was 7 made in October 1996. The Company expects to finance the $201,505 balance due unsecured creditors from operations in fiscal 1997 and 1998. On February 6, 1995, The Board of Directors loaned $300,000 at 14% interest per annum to the Company. Initially these loans were to be repaid by April 1995 however due to the Company's need to maintain the use of the proceeds from these loans, repayment was waived. Effective September 1, 1995, the interest rate for these loans was reduced to 9% per annum. Repayment of these loans is now covered by a Subordination Agreement by and between the Directors and the New Jersey Economic Development Authority (NJEDA) in accordance with the terms of a loan the Company has with NJEDA which is discussed below. On July 31, 1996, the Company executed a Direct Loan Agreement by and between the Company and the NJEDA. The agreement provides for a direct loan of $500,000 at 6 3/4% per annum. The proceeds of the loan are to be used primarily for the acquisition of capital assets. As of September 30, 1996, the Company had used $90,019 of the loan amount and had repaid principal of $1,679. The Company will use the balance of the available loan amount in the first half of the fiscal 1997. During fiscal 1996 the net cash provided by the reissued treasury shares of $563,438 was used principally to fund the cash used by operations of $483,889 and the acquisition of capital assets of $89,024. Due to the net loss in fiscal 1996, total debt-to-capital at September 30, 1996 was 72.5% compared to 53.3% the prior year end. During 1997 the Company expects to finance capital spending and working capital requirements with funds from NJEDA borrowings, with cash provided from operations and with the funds invested on December 9, 1996 by G.E.M. USA, Inc. (see Note 12 - Subsequent Event). ITEM 7. FINANCIAL STATEMENTS. --------------------- Reference is made to the financial statements and supplementary data appearing on the pages of this report set forth below. PAGE(S) ------- Independent Auditors' Report 15 Consolidated Balance Sheet as of September 30, 1996 and 1995 16 Consolidated Statements of Operations for the Years Ended September 30, 1996, 1995 and 1994 17 Consolidated Statements of Changes in Stockholders' Equity for the Years Ended September 30, 1996, 1995 and 1994 18 Consolidated Statements for Cash Flows for the Years Ended September 30, 1996, 1995 and 1994 19 Notes to Consolidated Financial Statements 21 8 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. -------------------------------------------------------------- Not applicable. PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. ------------------------------------------------ Listed below are the names and ages of the directors of the Company, all positions and offices held by each such person and the period or periods during which he has served in such positions and offices. All are now directors and were elected to their present term of office at Annual Meetings of Shareholders as set forth in the table below. The By-Laws of the Company provide for a Board of Directors consisting of up to seven members. The candidacy of none of the directors is the subject of any arrangement or understanding between such director and any other person or persons, except the directors and officers of the Company acting solely in that capacity. All directors listed below have been engaged for the past five years in the "Principal Occupation" listed below.
POSITION WITH ISSUER PERIOD AS NAME AGE AND PRINCIPAL OCCUPATION DIRECTOR - ---- --- ------------------------ -------- ELECTED 1996 WITH THE TERM EXPIRING IN 1999: - ------------------------------------------- OTTO H. YORK 86 Director, Vice Chairman of the 1969 - Present Board; President, York Resources, Inc. DANIEL AUZAN 53 Director, Chairman of the Board; 1996 - Present President, Directeur General, General de Mesure et de Maintenance Electronique, S.A. VICTOR TOLAN 43 Director; Vice President Sales and 1996 - Present Marketing, Metrix U.S.A. ELECTED 1995 WITH TERMS EXPIRING IN 1998: - ---------------------------------------- JACK FRUCHT 82 Director; retired Chairman 1947 - Present of the Board and Chief Executive Officer of the Corporation RONALD T. DEBLIS 72 Director; President and CEO of 1981 - Present the Corporation, retired Dun & Bradstreet
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POSITION WITH ISSUER PERIOD AS NAME AGE AND PRINCIPAL OCCUPATION DIRECTOR - ---- --- ------------------------ -------- ELECTED 1994 WITH TERMS EXPIRING IN 1997: - ---------------------------------------- JOHN M. YOUNG 78 Director; retired Vice 1947 - Present President and Operations Manager of the Corporation
- -------------------------------------------------------------------------------- Listed below are the names and ages of the executive officers of the Company and the period during which they have served as such. Each such officer generally serves for a term of one year at the pleasure of the Board of Directors. The selection of none of the officers is the subject of any arrangement or understanding between such officer and any other person or persons, except the directors and officers of the Company acting solely in that capacity.
POSITION WITH ISSUER PERIOD AS NAME AGE AND PRINCIPAL OCCUPATION DIRECTOR - ---- --- ------------------------ -------- RONALD T. DEBLIS 72 President and Chief Executive 1996 - Present Officer JOHN E. TITTERTON 46 Vice President Finance and 1986 - Present Secretary/Treasurer
- -------------------------------------------------------------------------------- Mr. DeBlis retired from Dun & Bradstreet June 19, 1987 after 42 years as a Senior Account manager. He has been President and CEO of the Company since July 1996. Mr. Titterton was employed as Vice President and Controller of Ruesch Machine Company, a wholly-owned subsidiary of Met-Coil Systems Corporation, prior to his entering the employ of the Company in October 1986. Prior thereto, he was employed as a Senior Accountant by Price Waterhouse. Mr. Titterton holds a Bachelor of Arts degree in Economics/Accounting from Rutgers University, Newark College of Arts and Sciences. Item 10. EXECUTIVE COMPENSATION. ----------------------- (a) EXECUTIVE COMPENSATION: The following table sets forth, for the fiscal years indicated, all compensation awarded to, earned by or paid to the Chief Executive Officer ("CEO") of the Company. There were no executive officers of the Company other than the CEO whose compensation exceeded $100,000 with respect to the fiscal years ended September 30, 1996, 1995, 1994.
SUMMARY COMPENSATION TABLE LONG-TERM NAME AND ANNUAL COMPENSATION COMPENSATION ALL OTHER PRINCIPAL POSITION YEAR SALARY BONUS OTHER AWARDS COMPENSATION - ------------------ ---- ------ ----- ----- ------ ------------ RONALD T. DEBLIS 1996 N/A N/A N/A N/A N/A President & CEO OTTO H. YORK 1996 N/A N/A N/A N/A N/A President & CEO HOLMES BAILEY 1996 $ 72,962 N/A N/A N/A $32,308 President & CEO
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SUMMARY COMPENSATION TABLE (CONTINUED) LONG-TERM NAME AND ANNUAL COMPENSATION COMPENSATION ALL OTHER PRINCIPAL POSITION YEAR SALARY BONUS OTHER AWARDS COMPENSATION - ------------------ ---- ------ ----- ----- ------ ------------ HOLMES BAILEY 1995 $140,000 N/A N/A N/A $13,124 President & CEO HOLMES BAILEY 1994 $ 57,948 30,000 N/A N/A $17,624 President & CEO
Note: Pre-requisites and other personal benefits, securities or property conveyed to each officer did not exceed either $50,000 or 10% of such executives salary and bonus. Effective March 31, 1996, Mr. Bailey's employment agreement was not renewed and under the terms of his contract he was paid $32,308 of severance pay. (b) BOARD OF DIRECTORS COMPENSATION: ------------------------------- Those Directors of the Company who are not salaried officers (Messrs. Auzan, DeBlis, Frucht, Tolan, York and Young) are paid Directors' fees at the rate of $10,000 per year, in quarterly installments, plus $500 per scheduled meeting of the Board or any committee. The Board has, by resolution, agreed to be paid fifty percent (50%) and seventy-five percent (75%) of their fees for fiscal year 1996 and 1995 respectively. (c) AGGREGATED FISCAL YEAR-END OPTION VALUES: ----------------------------------------- Not applicable. Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. --------------------------------------------------------------- The following tabulation lists, as to (i) each present Director of the Company, (ii) each other person known to the Company to be the beneficial owner of more than five percent of the voting common stock of the Company, and (iii) all Directors and officers as a group, the number and percentage of the Company's voting common stock owned by each beneficial owner, Director and group on the date indicated. Except as reflected in the tabulation, all shares of common stock are directly owned by the named individual and group members, and such individuals and group member possess sole voting and investment power with respect to such shares. NUMBER OF SHARES BENEFICIALLY OWNED PERCENTAGE BENEFICIAL OWNER ON DECEMBER 6, 1996 OF OWNERSHIP - -------------------------------------------------------------------------------- DANIEL AUZAN (DIRECTOR) * c/o Metrix, S.A. Parc Les Glaisins BP 330-74943 Annecy Cedex, France RONALD T. DEBLIS (DIRECTOR) 63,648 4.09% 37 Farmstead Road Short Hills, NJ 07087 JACK FRUCHT (DIRECTOR) 36,782 2.36% 380 Mountain Road, Apt #512 Union City, NJ 07087 11 (CONTINUED) NUMBER OF SHARES BENEFICIALLY OWNED PERCENTAGE BENEFICIAL OWNER ON DECEMBER 6, 1996 OF OWNERSHIP - -------------------------------------------------------------------------------- OTTO H. YORK (DIRECTOR) 181,087 11.63% 130 Hempstead Court Madison, NJ 07940 JOHN M. YOUNG (DIRECTOR) 130,606** 8.39% 9749 Maplecrest Circle, S.E Lehigh Acres, FL 33936 G.E.M. USA, INC. 180,300* 11.58% SIDCO INVESTMENT, INC. 134,859 8.66% Holmes Bailey 215,000 13.81% 44 Nottingham Road Short Hills, NJ 07078 All directors and officers 605,023*** 38.56% as a group (5 persons) - -------------------------------------------------------------------------------- * Mr. Auzan is the indirect beneficial owner of the shares owned by G.E.M. USA, Inc. ** Includes 6,000 shares owned by his wife, to which Mr. Young disclaims any beneficial ownership. *** Includes 12, 500 shares which may be acquired on exercise of outstanding options. - -------------------------------------------------------------------------------- Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. ----------------------------------------------- None. Item 13. EXHIBITS AND REPORTS ON FORM 8-K. --------------------------------- Exhibits: (See Page 35 for Index to Exhibits filed in the Annual Report on Form 10-KSB for the year ended September 30, 1996.) Exhibit 3.1 Certificate of Amendment of the Certificate of Incorporation of the Company filed February 28, 1991. Filed as an Exhibit in the Annual Report on Form 10-K for the year ended September 30, 1991, and incorporated herein by reference. 3.2 Articles of Incorporation of the Company as amended to date. Filed as an Exhibit in the Annual Report on Form 10-K for the year ended September 30, 1991, and incorporated herein by reference. 3.3 By-Laws of the Company as amended to date. Filed as an Exhibit in the Annual Report 10-K for the year ended September 30, 1991, and incorporated herein by reference. 10.1 1987 Incentive Stock Option Plan, 1987 Employee Stock Purchase Plan and 1987 Stock Option Program for Non-Employee Directors and form of option grant(s) thereunder. Filed as an Exhibit in the Annual Report on 12 Form 10-K for the year ended September 30, 1988, and incorporated herein by reference. 10.2 Employment Agreement with Holmes Bailey dated August 1, 1994. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1994, and incorporated herein by reference. 10.3 Report on Form 8-K dated December 23, 1994 for "Other Events", "Order Confirming Debtors' Plan of Reorganization", effective November 15, 1994. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1994, and incorporated herein by reference. 10.4 Lease Agreement with Eastmans Road Associates, Ltd. Effective October 1, 1994. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1994, and incorporated herein by reference. 10.5 Employment Agreement with Holmes Bailey dated January 1, 1995. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1995, and incorporated herein by reference. 10.6 Report on Form 8-K dated September 27, 1995 for "Other Events", "Letter of Intent", effective September 25, 1995. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1995, and incorporated herein by reference. 10.7 Report on Form 8-K dated December 15, 1995 for "Other Events", "Letter of Intent", effective December 5, 1995. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. 10.8 "Purchase of Treasury Stock", effective February 23, 1996. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. 10.9 Report on Form 8-K dated March 18, 1996 for "Other Events", "Purchase of Treasury Stock", effective March 7, 1996. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. 10.10 Report on Form 8-K dated January 7, 1997 for "Other Events", "Purchase of Stock", effective December 9, 1996. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. 21. Subsidiaries of Company. 27. Financial Data Schedule Exhibits (2),(4), (9), (13), (16),(18),(19),(22),(23),(24) and (28), as defined in Regulation S-B, Item 601, are omitted because they are not applicable. Exhibit (11) is omitted because the computation can be readily determined from the financial statements in Item 7. Above. 13 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Company has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BOONTON ELECTRONICS CORPORATION (Company) By/s/Ronald T. DeBlis --------------------- Ronald T. DeBlis, President and Chief Executive Officer Date: December 20, 1996 Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------- ----- ---- By /s/ Daniel Auzan Director, Chairman of December 20, 1996 ---------------- the Board Daniel Auzan By /s/ Ronald T. DeBlis Director, President December 20, 1996 ---------------- and Chief Executive Ronald T. DeBlis Officer (principal executive officer) By /s/ Jack Frucht Director December 20, 1996 ---------------- Jack Frucht By /s/ Otto H. York Director, Vice Chairman December 20, 1996 ---------------- of the Board Otto H. York By /s/ John E. Titterton Secretary and December 20, 1996 ----------------- Treasurer (principal John E. Titterton financial and accounting officer)
14 INDEPENDENT AUDITORS REPORT TO THE BOARD OF DIRECTORS AND SHAREHOLDERS BOONTON ELECTRONICS CORPORATION AND SUBSIDIARIES We have audited the accompanying Consolidated Balance Sheets of Boonton Electronics Corporation and Subsidiaries as of September 30, 1996 and 1995, and the related Consolidated Statements of Income, Changes in Stockholders' Equity and Cash Flows for the years in the three year period ended September 30, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Boonton Electronics Corporation and Subsidiaries as of September 30, 1996 and 1995, and the results of its operations and cash flows for the years in the three year period ended September 30, 1996 in conformity with generally accepted accounting principles. By /s/ I. Weismann Associates ---------------------- CERTIFIED PUBLIC ACCOUNTANTS January 2, 1997 15 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, ------------- 1996 1995 ---- ---- Assets: Current assets: Cash and cash equivalents $ 113,041 $ 146,568 Trade receivable (Note 1) 971,342 1,011,980 Inventories (Notes 1 & 3) 1,210,940 1,203,358 Deferred tax benefit (Note 10) 81,058 107,412 Prepaid expenses 230,340 263,570 ----------- ----------- Total current assets 2,606,721 2,732,888 ----------- ----------- Property and equipment - net (Notes 1 & 4) 163,858 102,169 ----------- ----------- Other assets: Deferred tax benefit (Note 10) 988,651 1,186,170 Deposits 67,768 67,768 ----------- ----------- Total other assets 1,056,419 1,253,938 ----------- ----------- Total assets $ 3,826,998 $ 4,088,995 =========== =========== Liabilities and Stockholders' Equity: Current liabilities: Note payable (Note 6) $ 10,503 $ 97,765 Related party loans (Note 6) 43,530 -- Accounts payable 469,882 288,128 Accrued expenses 538,328 417,762 Unsecured claims payable (Chapter 11 settlement) - Current (Notes 2) 48,491 101,515 ----------- ----------- Total current liabilities 1,110,734 905,170 Note payable - noncurrent (Note 6) 77,837 -- Related party loans - noncurrent (Note 6) 218,970 262,500 Unsecured claims payable (Chapter 11 settlement) noncurrent (Note 2) 201,505 253,788 Total liabilities 1,609,046 1,421,458 Commitments and Contingencies (Note 8) Stockholders' equity: Common stock (Note 9) 155,659 152,209 Capital in excess of par 4,421,637 4,388,431 Deficit (2,359,344) (904,812) ----------- ----------- 2,217,952 3,599,828 Less: Treasury stock (Note 9) -- (932,291) ----------- ----------- Total stockholders' equity 2,217,952 2,667,537 ----------- ----------- Total liabilities and stockholders' equity $3,826,998 $4,088,995 =========== ===========
The accompanying notes are an integral part of these statements. 16 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, ------------------------- 1996 1995 1994 ---- ---- ---- DIP Net sales $6,038,336 $6,837,248 $6,000,555 Cost of sales 3,408,580 3,888,763 4,009,328 ------------ ------------ --------- Gross income 2,629,756 2,948,485 1,991,227 ------------ ------------ --------- Operating expenses: Commissions 640,517 586,969 696,937 Research and development 921,827 783,132 550,521 Other operating expenses 1,515,727 1,415,352 1,070,614 ------------ ------------ --------- Total operating expenses 3,078,071 2,785,453 2,318,072 ------------ ------------ --------- Income (loss) from operations (448,315) 163,032 (326,845) ------------ ------------ --------- Other income (expense): Interest expense (27,709) (44,181) (252,630) Chapter 11 expense - (34,037) (290,236) Gain on sale of assets - 21,771 979,763 Loss on disposal of equipment - - (173,322) Moving expense - (98,516) - Other income (expense) 1,823 (90,564) (153,306) ------------ ------------ --------- Total other income (expense) (25,886) (245,527) 110,269 ------------ ------------ --------- Income (loss) before taxes and special charges (474,201) (82,495) (216,576) Income taxes (benefit) 225,073 (316,339) (36,371) ------------ ------------ --------- Income/ (loss) before special charges (699,274) 233,844 (180,205) Special charges (Notes 2 & 13) (350,405) - 1,487,552 ------------ -------- --------- Net income (loss) $ (1,049,679) $ 233,844 $1,307,347 ============ ============= ========== Weighted average number of common shares outstanding 1,460,730 1,341,785 1,296,785 ============ ============= ========== Earnings (Loss) per common share: Earnings (loss) from continuing operations $(.48) $.17 $(.14) Special charges (.24) - 1.15 --- --- ---- Net income (loss) $(.72) $.17 $1.01 === ==== =====
The accompanying notes are an integral part of these statements. 17 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED SEPTEMBER 30, 1996, 1995, AND 1994
COMMON STOCK ADDITIONAL RETAINED TREASURY NUMBER OF PAID-IN EARNINGS/ SHARES AT SHARES PAR VALUE CAPITAL (DEFICIT) COST TOTAL ------ --------- ------- --------- ---- ----- Balance 9/30/93* 1,492,085 $ 149,209 $ 4,359,556 $(2,424,689) $(1,002,729) $ 1,081,347 Net income - year ended 9/30/94 -- -- -- 1,307,347 -- 1,307,347 ---------- ---------- ----------- ----------- ----------- ----------- Balance 9/30/94* 1,492,085 149,209 4,359,556 (1,117,342) (1,002,729) 2,388,694 Exercise of Stock Options 30,000 3,000 28,875 -- -- 31,875 Treasury Stock Reissued -- -- -- (57,314) 70,438 13,124 Net income - year ended 9/30/95 -- -- -- 233,844 -- 233,844 ---------- ---------- ----------- ----------- ----------- ----------- Balance 9/30/95 1,522,085 152,209 4,388,431 (940,812) (932,291) 2,667,537 Exercise of Stock Options 34,500 3,450 33,206 -- -- 36,656 Treasury Stock Reissued -- -- -- (368,853) 932,291 563,438 Net (loss) - year ended 9/30/96 -- -- -- (1,049,679) -- (1,049,679) ---------- ---------- ----------- ----------- ----------- ----------- 1,556,585 $ 155,659 $ 4,421,637 $(2,359,344) $ -- $ 2,217,952 ========== ========== =========== =========== =========== ===========
*DEBTOR-IN-POSSESSION The accompanying notes are an integral part of these statements. 18 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, ------------------------- 1996 1995 1994 ---- ---- ---- Cash flows from operating activities: DIP --- Net income (loss) $(1,049,679) $ 233,844 $ 1,307,347 Adjustments to reconcile net income: Depreciation and amortization 27,335 26,294 201,944 Deferred taxes 223,873 (316,339) (61,771) Gain on sale of land and building -- -- (979,763) (Gain)/loss on sale of equipment (1,000) (21,771) 173,322 Gain on secured debt restructure -- -- (889,685) Accrued interest on debt structure -- -- 300,867 Decrease (increase) in current assets: Accounts receivable 40,638 (7,616) 81,276 Inventories (7,582) (251,438) 1,195,184 Prepaid expenses 33,230 281,904 (381,176) Increase (decrease) in current liabilities: Accounts payable 181,754 159,953 87,151 Accrued expenses 120,566 (58,320) 42,053 Chapter 11 settlement-current (53,024) (10,854) 112,369 Liabilities subject to compromise -- -- (1,028,243) ----------- --------- ----------- Net cash provided (used) by operating activities (483,889) 35,657 160,875 ----------- --------- ----------- Cash flows from investing activities: Proceeds from sale of assets 1,000 21,771 2,442,000 Purchase of equipment (89,024) (71,647) (21,221) Proceeds from cash surrender of life insurance policies -- 245,190 -- Other -- (421) 5,675 ----------- --------- ----------- Net cash provided (used) by investing activities $ (88,024) $ 194,893 $ 2,426,454 ----------- --------- -----------
The accompanying notes are an integral part of these statements. 19 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, ------------------------- 1996 1995 1994 ---- ---- ---- Cash flows from financing activities: DIP --- Treasury stock reissued $ 932,291 $ 70,438 $ -- Excess cost of treasury stock reissued (368,853) (57,314) -- Increase in notes payable 90,019 -- 400,000 Payments on bank loans (99,444) (279,902) (3,372,333) Borrowings from Board of Directors loans -- 300,000 -- Payments on Board of Directors loans -- (37,500) -- Chapter 11 settlement-noncurrent (52,283) (13,771) 267,559 Payment of borrowings on life insurance policies -- (229,921) -- Proceeds from stock options exercised 36,656 31,875 -- --------- --------- ----------- Net cash provided (used) by financing activities 538,386 (216,095) (2,704,774) --------- --------- ----------- Increase (decrease) in cash and cash equivalents (33,527) 14,455 (117,445) Cash and cash equivalents at beginning of period 146,568 132,113 249,558 --------- --------- ----------- Cash and cash equivalents at end of period $ 113,041 $ 146,568 $ 132,113 ========= ========= =========== Supplemental schedule of non-cash transaction: Gain on unsecured claims payable-(Chapter 11 settlement) -- -- $ 597,867 ========= ========= =========== Supplemental disclosures of cash flow information: Income taxes paid $ 1,025 $ 7,125 $ 13,347 ========= ========= =========== Interest paid $ 33,082 $ 38,808 $ 233,088 ========= ========= ===========
The accompanying notes are an integral part of these statements. 20 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES AND DESCRIPTION OF BUSINESS: A. The Company is a New Jersey corporation organized in 1947. The Company designs and produces electronic testing and measuring instruments including power meters, voltmeters and modulation meters. Recent models are microprocessor controlled and are often used in computerized automatic testing systems. The Company's equipment is marketed throughout the world to commercial and government customers in the electronics industry. The Company markets and distributes its products throughout the United States and abroad through some 15 domestic sales representatives and 35 foreign distributors. Representatives sell on a commission basis, while distributors buy products for resale at discounted ex-factory prices. Its representatives and distributors also handle the products of other manufactures, although these are not generally competitive with the Company's products except that some items handled by foreign distributors may be somewhat competitive. B. The consolidated financial statements include the accounts of Boonton Electronics Corporation and its wholly-owned subsidiaries, Boonton International Sales Corporation and Integra, Inc. All material intercompany accounts and transactions have been eliminated in consolidation. The wholly-owned subsidiaries ceased operations effective October 1, 1994. C. Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. D. The company accounts for uncollectible accounts under the direct write-off method whereas generally accepted accounting principals require provision for such expenses under the allowance method. The effect of using this method approximates the allowance method as all amounts are deemed to be fully collectible. E. Inventories - stated at the lower of cost or market determined by the first-in, first-out (FIFO) method. F. Property, plant and equipment - Depreciation and amortization is calculated by the straight-line method for financial reporting purposes at rates based on the following estimated useful lives: Building and improvement 39 Machinery and equipment 5-10 Office furniture and fixtures 5-10 Transportation equipment 3 The accelerated cost recovery system and modified accelerated cost recovery system is used for income tax purposes. Cost of major renewals and betterments that extend the life of the property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred. G. Financial risk - The Company regularly maintains bank account balances in excess of FDIC insurable limit. 21 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 H. Income Taxes - The Company adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" which requires a company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in a Company's financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and tax basis of assets and liabilities using expected tax rates in effect in the years in which the differences are expected to reverse. The Company recognized the benefit of net operating loss carryforwards applying the valuation allowance which requires that the tax benefit be limited bases on the weight of available evidence and the probability that some portion of the deferred tax asset will be realized. I. Financial Instruments - The Company's financial instruments include cash, cash equivalents, trade receivables and payable, long-term debt and loans from related parties for which carrying amounts approximate fair value. It is not practicable to estimate the fair value of related party loans and long-term debt. NOTE 2 - PROCEEDINGS UNDER CHAPTER 11 AND GOING CONCERN PRESENTATION: The Company operated under Chapter 11 proceedings for the period September 7, 1993 through November 15, 1994 when, on the later date, the order confirming the Plan of Reorganization was entered by the United States Bankruptcy Court, District of New Jersey subject to the court closing the case 180 days after said entry (Local Rule 25(a)) cause for extension of time in closing case (Local Rule 25(b)) and filing of application for allowance of fees and allowance within 90 days after entry of final order confirming plan (Local Rule 25(c)). 22 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 In accordance with S.A.S. Sections 560.03, the Company has adjusted downward all liability accounts that were affected by the confirmed Plan of Reorganization entered on November 15, 1994. Therefore, the financial statements reflect the maximum liabilities to creditors under the Chapter 11 proceedings and the Plan of Reorganization. As a result of the Plan of Reorganization, $1,487,552 of indebtedness was forgiven and has been included as an special charges in the accompanying financial statements for the fiscal year ended September 30, 1994. The settlement of unsecured claims under the confirmed Plan of Reorganization totaling 35% of allowed claims for accounts payable and accrued expenses which is reflected in the financial statements, provided for the following payments to be made subsequent to November 15, 1994: % -- 10 From after tax proceeds from termination of the company's pension plan 5 One year after initial payout 5 Two years after initial payout 15 Three years after initial payout Pre-petition liabilities in accordance with the November 15, 1994 confirmed plan of reorganization were compromised of the following: Accounts payable $ 702,233 Accrued expenses: Commissions payable 126,370 Vacation pay 96,250 Severance pay 25,108 Other 78,282 ----------- Total September 30, 1994 1,028,243 Court authorized payments/adjustments (75,073) ----------- Balance subject to settlement 953,170 Amount discharged 703,174 ----------- Balance of Chapter 11 settlement - September 30, 1996 $ 249,996 =========== 23 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 NOTE 3 - INVENTORIES SEPTEMBER 30, ------------- 1996 1995 ---- ---- Raw material $ 468,619 $ 496,238 Work in process 688,273 649,284 Finished Goods 54,048 57,836 ---------- ---------- Total $1,210,940 $1,203,358 ========== ========== NOTE 4 - PROPERTY, PLANT AND EQUIPMENT: SEPTEMBER 30, ------------- 1996 1995 ---- ---- Leasehold improvements $ 61,054 $ 61,054 Machinery and equipment 1,512,488 1,436,087 Office furniture and fixtures 444,959 432,336 Transportation equipment 13,188 13,188 ---------- ---------- Total 2,031,689 1,942,665 Less: Accumulated depreciation and amortization 1,867,831 1,840,496 ---------- ---------- Net depreciated cost $ 163,858 $ 102,169 ========== ========== Management has removed $1,868,423 of fully depreciated machinery, equipment and office furniture and fixtures disposed of and/or abandoned during the relocation of the Company's operations to the Township of Hanover. 24 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 NOTE 5 - RESULTS OF OPERATIONS: The Company has incurred losses from operations during the last three fiscal years. Management does not expect this to continue based on its operating plan for fiscal 1997 which anticipates a 19% increase in revenue and a net income of approximately $200,000. The 1997 first quarter revenues were approximately $1.8 million which supports, on an annualized basis, the expected increase in revenues. The military contracts awarded in fiscal 1996, which will total $1.7 million in revenues upon completion, contributed approximately $265,000 to the first quarter 1997 revenues. The Company's backlog as of December 31, 1996 was $1,296,718 which included an additional $546,000 for the military contracts. An additional $299,000 was released by the Air Force in November 1996 against these contracts. The loss in 1996 was partially attributable to the reduced volume but was also impacted by certain costs that were non-recurring in nature. These costs, which represent 46.2% of the loss from operations, were "CE" mark audit fees of $108,525, funds provided for new technology research at the New Jersey Institute of Technology totaling $65,000, and severance expense for the former president of $33,920. Management of the Company has already instituted steps to reduce operating costs in fiscal 1997 which steps include reductions in wages and payroll taxes due to personnel reductions. Further cost reductions will be implemented as identified by management as fiscal 1997 progresses. The special charges of $350,405 was primarily a result of costs, and accrued costs for work to be performed in 1997, associated with further environmental delineation work performed at a site formerly leased by the Company. This work is being performed in order to obtain a "Conditional No Further Action Letter" from the New Jersey Department of Environmental Protection (NJDEP) which would allow the Company to finalize its groundwater remediation program. 25 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 NOTE 6 - NOTES PAYABLE SEPTEMBER 30, ------------- 1996 1995 ---- ---- A. BANK: United Jersey Bank: Unsecured note payable (as part of secured debt restructure with bank) in monthly installments of $25,000 including interest at 8% per annum through January 1996: $ -- $ 97,765 Less current portion $ -- 97,765 ---------- ---------- Noncurrent portion $ -- $ -- ========== ========== Interest expense for the years ended September 30, 1996 and 1995 amounted to $2,649 and $20,098, respectively. SEPTEMBER 30, ------------- 1996 1995 ---- ---- B. BOARD OF DIRECTORS: Notes, subordinated to NJEDA loan, dated February 6, 1995, payable in monthly installments of $5,449 including interest at 9% per annum through September 30, 2001: $ 262,500 $ 262,500 Less: current portion $ 43,530 -- ----------- ----------- Noncurrent portion $ 218,970 $ 262,500 =========== =========== Interest expense for the fiscal year ended September 30, 1996 and 1995 amounted to $24,019 and $23,844, respectively. SEPTEMBER 30, ------------- 1996 1995 ---- ---- C. NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY: Note, dated July 31, 1996, payable in monthly installments of $1,352 including interest at 6.75% per annum through June 30, 2003: $ 88,342 $ -- Less: current portion $ 10,503 -- ----------- ------------ Noncurrent portion $ 77,837 $ -- =========== ============ Interest expense for the fiscal year ended September 30, 1996 amounted to $1,042. Under the provisions of this loan agreement, the Company will borrow a total of $500,000. 26 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 NOTE 7 - CONCENTRATION OF CREDIT RISK: The Company maintains cash and cash equivalents at three financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) and/or Securities Investor Protection Corporation (SIPC). The Company at times during the year had amounts in these institutions that exceeded insurable limits of $100,000 FDIC and $500,000 SIPC. In the normal course of business, the Company extends unsecured credit to customers in the United States and Asia. NOTE 8 - COMMITMENTS AND CONTINGENCIES: COMMITMENTS: A. RETIREMENT PLANS: The Company adopted a non-contributory employee pension plan which became effective January 1, 1972 and was consequently revised to meet the requirements of the ERISA pension law. Substantially, all employees were eligible to participate. Under the plan, the Company was obligated to contribute such amounts as were actuarially required to fund the plan. Effective October 1, 1987, the Company adopted Statement of Financial Accounting Standards No. 87, Employers' Accounting for Pensions (FAS No. 87, for its non-contributory defined benefit employee pension plan). Effective September 9, 1994, The Company terminated the plan pending approval of the Internal Revenue Service and the Pension Benefit Guaranty Corporation. Benefits provided by the plan ceased accruing on the same date. As stated in Note 2, 10% of unsecured claims in accordance with the confirmed plan of reorganization will be provided from the after tax proceeds of the terminated plan. The termination of the plan was finalized and the plan assets were distributed on October 13, 1995. The 10% payments to the unsecured creditors were made October 27, 1995. Effective July 1, 1989, the Company adopted a defined contribution plan for all eligible employees. In accordance with Internal Revenue Code Section 401(k), the plan provides for elective deferral of up to 15% of total compensation. The plan further provided for a Company matching contribution of 25% of the elective deferral amount of each participant that did not exceed 6% of total compensation. Effective January 1, 1994, the matching Company contribution was suspended due to the company's financial condition and pending reorganization. Effective October 1, 1995, the Company reinstated a matching contribution at 50% of the elective 27 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 deferral amount for each participant that does not exceed 6% of total compensation. The amounts charged to operations were $46,151 and $0 for the years ended September 30, 1996 and 1995, respectively. B. EMPLOYEE STOCK OPTIONS PLANS: On February 26, 1987, the Stockholders approved the 1987 Incentive Stock Option Plan, the 1987 Employee Stock Purchase Plan and the 1987 Stock Option Program for Non-Employee Directors. Subject to the provisions of these plans, an aggregate of 150,000 shares of the Company's stock was made available for option purchases; namely, 75,000 shares, 37, 500 shares and 37,500 shares, respectively. The number of shares available for future grants at September 30, 1995 were 11,700, 11,900 and 7,500, respectively. The number of shares available for future grants at September 30, 1996 were 11,700, 12,150 and 7,500, respectively. OPTION ------ PRICE PER SHARE NUMBER OF SHARES --------------- ---------------- Shares under option at September 30, 1993 $3.00 53,500 Expired 3.00 (3,500) ------- Shares under option at September 30, 1994 3.00 50,000 Granted $1.0625 130,000 Exercised $1.06.25 (30,000) Expired $1.0625 (18,750) Expired/surrender $3.00 (50,000) ------- Shares under option at September 30, 1995 $1.0625 81,250 Exercised $1.0625 (34,500) Expired $1.0625 (250) ------- Shares under option at September 30, 1996 $1.0625 46,500 ======= C. SUPPLEMENTAL EXECUTIVE PENSION PLAN: On June 8, 1989, the Board of Directors adopted a Supplemental Executive Retirement Plan for certain executive employees to restore pension benefits which had been reduced by legislative action. The Company purchased life insurance contracts through a trust to fund its obligations for the participants and recognized a liability for vested benefits as accrued. The supplemental plan was terminated and insurance contracts canceled with proceeds of $33,804 credited to expense for the year ended September 30, 1994. 28 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 D. LEASE COMMITMENTS Subsequent to the sale of the Company's facility in Randolph, New Jersey on September 28, 1994, the company entered into a seven year lease for its present office and manufacturing facility in Hanover Township, New Jersey with a five year renewal option. Rent charged to operations for the fiscal year ended September 30, 1996 was $227,400. Annual rent for the initial seven year term is $227,400 for the first four years and $300,00 for years five through seven. Future minimum lease payments required under the operating lease are as follows: FISCAL YEAR AMOUNT ----------- ------ 1997 227,400 1998 227,400 1999 300,000 2000 300,000 2001 300,000 The Company leases office equipment under a five-year operating lease with an option to upgrade after three years which it intends to exercise. The annual lease payment for the term of the lease is $17,617. Future lease payments required under the operating lease are as follows: FISCAL YEAR AMOUNT ----------- ------ 1997 17,617 1998 17,617 1999 17,617 2000 17,617 2001 1,468 CONTINGENCIES: A. ENVIRONMENTAL CONTINGENCIES: Following an investigation by the New Jersey Department of Environmental Protection (NJDEP) of the Company's waste disposal practices at a certain site that it formerly leased, the Company put a ground water management plan into effect as approved by the Department. Costs associated with this site are charged directly to income as incurred. The lessor of this site has 29 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 notified the Company that if the NJDEP investigation proves to have interfered with a sale of the property, the lessor may seek to hold the Company liable for any loss it suffers as a result. However, corporate counsel has informed management that, in their opinion, the lessor would not prevail in any lawsuit filed due to the imposition by law of the statute of limitations. Costs charged to operations in connection with the water management plan amounted to $51,879 and $60,409 for the years ended September 30, 1996 and 1995, respectively. The Company estimates the expenditures in this regard for the fiscal year ending September 30, 1997 will amount to approximately $52,000. The Company will continue to be liable under the plan in all future years until such time as the NJDEP releases it from all obligations applicable thereto. B. INCOME TAX CONTINGENCIES: The Company's income tax returns through the fiscal year ended September 30, 1992 have been accepted as filed or are barred from further assessment. NOTE 9 - COMMON AND TREASURY STOCK: SEPTEMBER 30, ------------- 1996 1995 ---- ---- COMMON STOCK: $.10 par value, authorized 5,000,000 shares, issued and outstanding 1,556,585 shares and issued 1,522,085 shares. $155,659 $152,209 ======== ======== TREASURY STOCK (AT COST): No shares and 180,300 shares, respectively -- $932,291 ======== ======== Represents the repurchase of stock on November, 1987 as resolved by the Board of Directors. 180,300 shares were reissued to G.E.M. USA, Inc. in accordance with the terms of the definitive Stock Purchase Agreement executed on February 23, 1996 by and between the 30 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 Company and General de Mesure et de maintenance Electronique, S.A. (GMME). G.E.M. USA, Inc., is a wholly-owned subsidiary of GMME. NOTE 10 - INCOME TAXES: The components of the deferred tax asset are: SEPTEMBER 30, 1996 1995 ---- ---- DIP --- Net operating loss carry forwards $3,799,877 $3,371,985 Less: Valuation allowance (2,730,168) (2,078,403) ---------- --------- Net deferred tax asset $1,069,709 $1,293,582 ========== ========= Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes", requires that the Company record a valuation allowance when it is "more likely than not that some portion or all of the deferred tax assets will not be realized". It further states that "forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years". The ultimate realization of this deferred income tax asset depends on the ability to generate sufficient taxable income in the future. The Company is undergoing substantial restructuring changes and has made strategic realignments of its operations in association with its Plan or Reorganization that management believes will result in future profitability. While it is management's belief that these measures will allow the total deferred income tax asset to be realized by future operating results, the losses in recent years and a desire to be conservative make it appropriate to record a valuation allowance. Accordingly, the Company has provided a valuation allowance (based on estimated future taxable income) for the portion of the total deferred income tax asset that will not be realized as related to the operating loss carryforward. Income tax laws allow for the utilization of loss carryforwards over periods not to exceed 15 and 7 years for Federal and State purposes, respectively. If the Company is not able to generate sufficient taxable income in the future through operating results, increases in the valuation allowance will be required through a charge to expense (reducing stockholder's equity). In the event the Company reports sufficient profitability to use all of the deferred income tax assets, the valuation allowance will be eliminated through a credit to expense (increasing stockholder's equity). 31 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 The provision for income taxes consists of the following: SEPTEMBER 30, ------------- 1996 1995 ---- ---- Current: Federal -- -- State $ 1,200 -- --------- --------- 1,200 -- --------- --------- Deferred: Federal 198,510 $(272,143) State 25,363 (44,196) --------- --------- 223,873 (316,339) Total $ 225,073 $(316,339) ========= ========= The following is a reconciliation of income taxes at the federal statutory rate: SEPTEMBER 30, ------------- 1996 1995 ---- ---- Computed income taxes at statutory rate $(280,366) $ (28,049) Recognition of net operating loss (139,441) -- Increase(decrease) in tax asset valuation allowance 651,765 (288,290) Other items - net (6,885) -- --------- ---------- Expense (Benefit) $ 225,073 $(316,339) ========= ========== For federal tax purposes, the Company's subsidiary, Boonton International Sales Corporation, elected to be treated as a Domestic International Sales Corporation (DISC) under Section 992(b) of the Internal Revenue Code. The Company is entitled to defer federal taxes on the income of the DISC which amounted to $223,449 for 1994. This subsidiary ceased operations effective October 1, 1994. Cumulative undistributed earnings of the DISC subsequent to December 31, 1984 was $1,023,055. The Company does not recognize the deferred income taxes since there is no intention to distribute the DISC income. The Company has net operating loss carryforwards for federal and state purposes approximating $9,478,000 and $9,647,000 that will begin to expire until the year 2006 and 1998, respectively. These loss carryforwards can be utilized to reduce future taxable income dollar for dollar. 32 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 NOTE 11 - SEGMENT INFORMATION: The Company is engaged in the manufacture and sale of electronic test and measurement equipment and management considers its business as a single segment for reporting purposes. A. The Company's export sales were as follows: YEARS ENDED % OF SEPTEMBER 30, AMOUNT TOTAL SALES - ------------- ------ ----------- 1996 $2,599,074 42% 1995 2,702,439 40% 1994 2,177,321 36% B. Customers sales to domestic government agencies were as follows: YEARS ENDED % OF SEPTEMBER 30, AMOUNT TOTAL SALES - ------------- ------ ----------- 1996 $907,189 15% 1995 636,020 9% 1994 383,932 6% NOTE 12 - SUBSEQUENT EVENT: On December 9, 1996, G.E.M. USA, Inc. purchase 80,000 shares of the Company's common stock for $200,000 at two dollars and fifty cents ($2.50) a share U.S. These shares were purchased in accordance with the terms of a definitive Stock Purchase Agreement executed by and between the Company and GMME on October 21, 1996. The Agreement provides an option to GMME to purchase an additional 443,700 shares for $1,437,588 at three dollars and twenty-four cents ($3.24) a share U.S. This option will expire on June 9, 1997 and is conditioned upon the satisfactory completion of further delineation of the environmental issue at a site formerly leased by the Company as disclosed in Note 8 - Contingencies (A) and Note 13 - Special Charges. NOTE 13 - SPECIAL CHARGES: In accordance with the GMME agreement, the Company was required to attempt to obtain an agreement, acceptable to GMME, with the New Jersey Department of Environmental Protection for finalizing the clean-up of a site it formerly leased. In order to fulfill this requirement, it was necessary for the Company to incur and accrue charges of $271,772 33 BOONTON ELECTRONICS CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 for services of environmental consultants and counsel that were deemed not to be in the ordinary course of business. Additionally, the Company has accrued $45,000 for its expected settlement in the Sharkey Landfill clean up. Although the Company contends that it did not send hazardous waste to the Landfill, it was determined by counsel that the NJDEP will prevail against all companies named in the suit to some extent. The Company has accrued $33,633 for penalties imposed, by the NJDEP, for missing a reporting event in 1994, payable in four quarterly installments during fiscal 1997. NOTE 14 - QUARTERLY FINANCIAL DATA: SEPTEMBER 30, 1996 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR. - ------------------ -------- -------- -------- -------- Sales $1,632,222 $ 1,559,269 $ ,410,126 $ 1,436,719 Gross Profit 803,166 766,387 644,537 415,666 Net income/(loss) 52,710 (47,683) (294,884) (759,822) Earnings/(loss) per share .04 (.04) (.19) (.53) SEPTEMBER 30, 1995 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR. - ------------------ -------- -------- -------- -------- Sales $ 1,494,193 $1,655,059 $1,818,211 $1,869,785 Gross Profit 633,993 707,582 808,337 798,573 Net income/(loss) (132,458) 40,179 99,128 226,995 Earnings/(loss) per share (.10) .03 .07 .17 34 BOONTON ELECTRONICS CORPORATION INDEX TO EXHIBITS FILED IN THE ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED SEPTEMBER 30, 1996 10.7 Report on Form 8-K dated December 15, 1995 for "Other Events", "Letter of Intent", effective December 5, 1995. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. .................................36 10.8 "Purchase of Treasury Stock", effective February 23, 1996. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. .................................38 10.9 Report on Form 8-K dated March 18, 1996 for "Other Events", "Purchase of Treasury Stock", effective March 7, 1996. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. .....................................39 10.10 Report on Form 8-K dated January 7, 1997 for "Other Events", "Purchase of Stock", effective December 9, 1996. Filed as an Exhibit in the Annual Report on Form 10-KSB for the year ended September 30, 1996. ..........................................40 21. Subsidiaries of Company. ...........................................42 27. Financial Data Schedule ............................................43 Copies of Exhibits to the 10-KSB will be supplied upon written request and payment of $0.25 per page. 35 EX-10.7 2 OPINION U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: December 15, 1995 BOONTON ELECTRONICS CORPORATION A New Jersey corporation Commission File Number 0-2364 I.R.S. Employer Identification No. 22-1543137 25 Eastmans Road, PO Box 465, Parsippany, N.J. 07054-0465 (201) 386-9696 ITEM 5. OTHER EVENTS ------------ On December 5, 1995, the Board of Directors of Boonton Electronics Corporation (BEC) agreed to terminate the letter of intent previously executed with General de Mesure et de Maintenance Electronique S.A. (GMME) which letter of intent anticipated a GMME tender offer to purchase of a controlling interest in BEC for three dollars and fifty cents ($3.50) per common share. Upon completion of GMME's due diligence review, a contingency of the letter of intent, GMME decided not to proceed with their proposed tender offer. GMME has now agreed to invest $2,200,000 into BEC through the purchase of 180,300 treasury shares together with 523,700 authorized but unissued common shares for three dollars and twelve and one-half cents ($3.125) per common share. The sale of the BEC common shares is conditioned upon, among other things, SEC approval and the execution of a definitive Stock Purchase Agreement by and between BEC and GMME on or before March 29, 1996. EXHIBITS: None -------- 36 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BOONTON ELECTRONICS CORPORATION By: /s/ John E. Titterton ------------------------------- John E. Titterton Secretary/Treasurer and Vice President Finance Dated: December 15, 1995 37 EX-10.8 3 EXHIBIT 10.8 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: February 23, 1996 BOONTON ELECTRONICS CORPORATION A New Jersey corporation Commission File Number 0-2364 I.R.S. Employer Identification No. 22-1543137 25 Eastmans Road, PO Box 465, Parsippany, N.J. 07054-0465 (201) 386-9696 ITEM 5. OTHER EVENTS ------------ On Februrary 23, 1996, in accordance with the Letter of Intent dated January 14, 1996, by and between Boonton Electronics Corporation (BEC) and General de Mesure et de Maintenance Electronique, S.A. (GMME), G.E.M. USA, Inc., a Delaware corporation and a wholly-owned subsidiary of GMME, purchased 180,300 treasury shares for three dollars and twelve and on-half cents ($3.125) per share. In conjunction with the above, the employment contract of Holmes Bailey, President and CEO, will not be renewed and Otto H. York, Chairman of the Board, will serve as President of the Corporation in the interim. EXHIBITS: None -------- SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BOONTON ELECTRONICS CORPORATION By: /s/ John E. Titterton ------------------------------- John E. Titterton Secretary/Treasurer and Vice President Finance Dated: February 23, 1996 38 EX-10.9 4 EXHIBIT 10.9 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: March 7, 1996 BOONTON ELECTRONICS CORPORATION A New Jersey corporation Commission File Number 0-2364 I.R.S. Employer Identification No. 22-1543137 25 Eastmans Road, PO Box 465, Parsippany, N.J. 07054-0465 (201) 386-9696 ITEM 5. OTHER EVENTS ------------ On March 7, 1996, in accordance with the Subscription and Option Agreement, dated February 23, 1996, by and between Boonton Electronics Corporation (BEC) and G.E.M. USA, Inc. (GEM), BEC received, from GEM, Five Hundred and Sixty-Three Thousand Four Hundred and Thirty-Seven Dollars and Fifty Cents ($563,437.50) for the purchase of 180,300 treasury shares for Three Dollars and Twelve and One-Half Cents ($3.125) per share. In return BEC provided GEM with a stock certificate for the 180,300 shares of stock. As a result of the above noted actions, all of the documents executed on February 23, 1996, pursuant to the Subscription and Option Agreement, became effective on March 7, 1996. EXHIBITS: None -------- SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BOONTON ELECTRONICS CORPORATION By: /s/ John E. Titterton ------------------------------- John E. Titterton Secretary/Treasurer and Vice President Finance Dated: March 18, 1996 39 EX-10.10 5 EXHIBIT 10.10 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: December 9, 1996 BOONTON ELECTRONICS CORPORATION A New Jersey corporation Commission File Number 0-2364 I.R.S. Employer Identification No. 22-1543137 25 Eastmans Road, PO Box 465, Parsippany, N.J. 07054-0465 (201) 386-9696 ITEM 5. OTHER EVENTS ------------ On December 9, 1996, in accordance with the Subscription and Option Agreement dated October 21, 1996, by and between Boonton Electronics Corporation (BEC) and G.E.M. USA, Inc. (GEM), BEC received, from GEM, Two Hundred Thousand Dollars ($200,000.00) for the purchase of 80,000 shares of authorized but unissued common shares for Two Dollars and Fifty Cents ($2.50) per share. In return BEC provided GEM with a stock certificate for the 80,000 shares of stock. As a result of the above noted actions, all of the documents executed effective October 21, 1996, pursuant to the Subscription and Option Agreement, became effective on December 9, 1996. The Subscription and Option Agreement further provides an option to GEM for an additional purchase of 443,700 shares of authorized but unissued common shares for Three Dollars and Twenty-Four Cents ($3.24) per share or One Million Four Hundred and Thirty-Seven Thousand Five Hundred and Eighty-Eight Dollars ($1,437,588.00). EXHIBITS: None -------- 40 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BOONTON ELECTRONICS CORPORATION By: /s/ John E. Titterton ------------------------------- John E. Titterton Secretary/Treasurer and Vice President Finance Dated: January 7, 1997 41 EX-21 6 SUBSIDIARIES OF THE REGISTRANT Registrant owns all of the outstanding stock (and all of the voting securities) of Boonton International Sales Corporation, a New Jersey corporation, and of Integra, Inc., a California corporation, which are included in the Registrant's consolidated financial statements 42 EX-27 7 FDS FOR 10KSB
5 (Page 43) 0000013191 Boonton Electronics 1 12-MOS SEP-30-1996 SEP-30-1996 113,041 0 971,342 0 1,210,940 2,606,721 2,031,689 1,867,831 3,826,998 1,110,734 0 0 0 155,659 2,062,293 3,826,998 6,038,336 6,038,336 3,408,580 3,078,071 (1,823) 0 27,709 (474,201) 225,073 (699,274) 0 350,405 0 (1,049,679) (.72) (.72)
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