New Jersey
|
22-1441806
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
One Branca Road
East Rutherford, NJ 07073
|
(Address of principal executive offices)
|
(201) 933-1600
|
(Registrant’s telephone number, including area code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
¨
|
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
ý
|
PART I – FINANCIAL INFORMATION
|
||
Page
|
||
Item 1.
|
||
3
|
||
Item 2.
|
||
16
|
||
Item 3.
|
||
20
|
||
Item 4.
|
||
20
|
||
PART II – OTHER INFORMATION
|
||
Item 1.
|
21
|
|
Item 1A.
|
21
|
|
Item 2.
|
21
|
|
Item 3.
|
21
|
|
Item 4.
|
21
|
|
Item 5.
|
21
|
|
Item 6.
|
22
|
|
23
|
September 30, 2012
|
March 31, 2012
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
196,270
|
413,195
|
|||||
Accounts receivable, net
|
860,487
|
1,694,636
|
||||||
Unbilled government receivables
|
1,762,254
|
1,780,381
|
||||||
Inventories, net
|
6,564,837
|
5,023,975
|
||||||
Prepaid expenses and other
|
101,514
|
220,255
|
||||||
Deferred debt expense
|
190,030
|
108,321
|
||||||
Deferred income tax asset
|
1,099,169
|
1,288,631
|
||||||
Total current assets
|
10,774,561
|
10,529,394
|
||||||
Equipment and leasehold improvements, net
|
645,553
|
706,870
|
||||||
Deferred debt expenses – long-term
|
210,624
|
264,784
|
||||||
Deferred income tax asset – non-current
|
1,753,977
|
948,489
|
||||||
Other assets
|
56,872
|
56,872
|
||||||
Total assets
|
$
|
13,441,587
|
$
|
12,506,409
|
||||
LIABILITIES & STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current portion long-term debt
|
1,113,356
|
542,382
|
||||||
Capital lease obligations
|
70,401
|
64,675
|
||||||
Accounts payable
|
3,382,728
|
2,850,432
|
||||||
Progress Billings
|
405,551
|
-
|
||||||
Deferred revenues – current portion
|
18,721
|
34,767
|
||||||
Accrued payroll, vacation pay and payroll taxes
|
476,848
|
440,116
|
||||||
Accrued expenses
|
2,437,697
|
2,074,911
|
||||||
Total current liabilities
|
7,905,302
|
6,007,283
|
||||||
Subordinated notes payable-related parties, net of debt discount
|
250,000
|
250,000
|
||||||
Capital Lease Obligations
|
113,594
|
149,582
|
||||||
Deferred revenues
|
2,662
|
4,637
|
||||||
Warrant Liability
|
198,903
|
355,290
|
||||||
Long-term debt, net of debt discount
|
1,369,607
|
1,490,302
|
||||||
Total liabilities
|
9,840,068
|
8,257,094
|
||||||
Commitments
|
||||||||
Stockholders' equity:
|
||||||||
Common stock, par value $.10 per share, 2,795,549 and
2,684,215 issued and outstanding as of September 30,
2012 and March 31, 2012, respectively
|
279,554
|
268,421
|
||||||
Additional paid-in capital
|
6,361,017
|
5,921,441
|
||||||
Accumulated deficit
|
(3,039,052
|
)
|
(1,940,547
|
)
|
||||
Total stockholders' equity
|
3,601,519
|
4,249,315
|
||||||
Total liabilities and stockholders' equity
|
$
|
13,441,587
|
$
|
12,506,409
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
September 30, 2012
|
September 30, 2011
|
September 30, 2012
|
September 30, 2011
|
|||||||||||||
(Restated)
|
||||||||||||||||
Net sales
|
$ | 2,394,950 | $ | 3,674,354 | 3,572,238 | $ | 7,664,565 | |||||||||
Cost of sales
|
1,792,527 | 2,191,127 | 2,686,121 | 4,319,707 | ||||||||||||
Gross margin
|
602,423 | 1,483,227 | 886,117 | 3,344,858 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling, general and administrative
|
686,346 | 667,874 | 1,340,234 | 1,466,696 | ||||||||||||
Engineering, research and development
|
548,800 | 677,933 | 1,127,404 | 1,526,971 | ||||||||||||
Total operating expenses
|
1,235,146 | 1,345,807 | 2,467,638 | 2,993,667 | ||||||||||||
Income (loss) from operations
|
(632,723 | ) | 137,420 | (1,581,521 | ) | 351,191 | ||||||||||
Other income (expense):
|
||||||||||||||||
Amortization of debt discount
|
(31,009 | ) | (13,396 | ) | (44,401 | ) | (26,791 | ) | ||||||||
Amortization of debt expense
|
(56,711 | ) | (27,080 | ) | (83,791 | ) | (54,160 | ) | ||||||||
Financing Costs
|
(26,477 | ) | - | (26,477 | ) | - | ||||||||||
Change in fair value of common stock Warrants
|
(337 | ) | 104,891 | 249,057 | (63,695 | ) | ||||||||||
Proceeds from life insurance policy
|
- | - | - | 300,029 | ||||||||||||
Interest income
|
13 | 101 | 13 | 194 | ||||||||||||
Interest expense
|
(131,032 | ) | (96,416 | ) | (223,500 | ) | (199,110 | ) | ||||||||
Total other income (expense)
|
(245,553 | ) | (31,900 | ) | (129,099 | ) | (43,533 | ) | ||||||||
Income (loss) before income taxes
|
(878,276 | ) | 105,520 | (1,710,620 | ) | 307,658 | ||||||||||
Income tax expense (benefit)
|
(448,571 | ) | 2,204 | (612,115 | ) | 285,137 | ||||||||||
Net income (loss)
|
$ | (429,705 | ) | $ | 103,316 | $ | (1,098,505 | ) | $ | 22,521 | ||||||
Basic income (loss) per common share
|
$ | (0.16 | ) | $ | 0.04 | $ | (0.41 | ) | $ | 0.01 | ||||||
Diluted income (loss) per common share
|
$ | (0.16 | ) | $ | 0.04 | $ | (0.41 | ) | $ | 0.01 | ||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
2,717,585 | 2,650,063 | 2,708,335 | 2,648,608 | ||||||||||||
Diluted
|
2,717,585 | 2,736,993 | 2,708,335 | 2,733,850 |
Six months ended
|
||||||||
September 30, 2012
|
September 30, 2011
|
|||||||
(Restated)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(1,098,505
|
)
|
$
|
22,521
|
|||
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
||||||||
Deferred income taxes
|
(616,026
|
)
|
284,220
|
|||||
Depreciation and amortization
|
106,625
|
58,104
|
||||||
Provision for inventory obsolescence
|
-
|
(260,000
|
)
|
|||||
Amortization of debt discount
|
44,401
|
26,791
|
||||||
Amortization of debt expense
|
83,791
|
54,161
|
||||||
Increase in cash surrender value of life insurance
|
-
|
2,011
|
||||||
Proceeds from life insurance policy
|
-
|
(300,029
|
)
|
|||||
Warrants issued in exchange for services
|
26,477
|
-
|
||||||
Change in fair value of common stock warrant
|
(249,057
|
)
|
63,695
|
|||||
Non-cash stock-based compensation
|
46,277
|
46,494
|
||||||
Changes in assets and liabilities:
|
||||||||
Decrease in accounts receivable
|
834,149
|
1,130,256
|
||||||
Decrease in unbilled government receivables
|
18,127
|
-
|
||||||
(Increase) decrease in inventories
|
(1,540,862
|
)
|
584,560
|
|||||
Decrease (increase) in prepaid expenses & other
|
118,741
|
(50,638
|
)
|
|||||
Increase in other assets
|
-
|
(42,100
|
)
|
|||||
Increase (decrease) in accounts payable
|
532,296
|
(1,161,438
|
)
|
|||||
Increase (decrease) in accrued payroll, vacation pay & withholdings
|
36,732
|
(26,629
|
)
|
|||||
Decrease in deferred revenues
|
(18,021
|
)
|
(11,063
|
)
|
||||
Increase (decrease) increase in progress billings
|
405,551
|
(424,202
|
)
|
|||||
Increase in accrued expenses
|
362,786
|
613,335
|
||||||
Net cash (used in) provided by operating activities
|
(906,518
|
)
|
610,049
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of equipment
|
(45,308
|
)
|
(79,772
|
)
|
||||
Net cash used in investing activities
|
(45,308
|
)
|
(79,772
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from the exercise of stock options
|
104,430
|
20,464
|
||||||
Proceeds from the sale of common stock
|
300,002
|
-
|
||||||
Proceeds from long-term debt
|
600,000
|
-
|
||||||
Expenses associated with long-term debt
|
(111,340
|
)
|
-
|
|||||
Repayment of long-term debt
|
(127,929
|
)
|
(39,405
|
)
|
||||
Repayment of capitalized lease obligations
|
(30,262
|
)
|
(15,685
|
)
|
||||
Proceeds from life insurance policy
|
-
|
312,683
|
||||||
Net cash provided by financing activities
|
734,901
|
278,057
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(216,925
|
)
|
808,334
|
|||||
Cash and cash equivalents at beginning of period
|
413,195
|
123,955
|
||||||
Cash and cash equivalents at end of period
|
$
|
196,270
|
$
|
932,289
|
||||
Taxes paid
|
$
|
-
|
$
|
-
|
||||
Interest paid
|
$
|
181,903
|
$
|
173,882
|
||||
Capitalized lease obligations
|
-
|
67,772
|
September 30,
2012
|
March 31,
2012
|
|||||||
Government
|
$
|
580,826
|
$
|
1,272,436
|
||||
Commercial
|
315,131
|
457,670
|
||||||
Less: Allowance for doubtful accounts
|
(35,470
|
)
|
(35,470
|
)
|
||||
$
|
860,487
|
$
|
1,694,636
|
September 30,
2012
|
March 31,
2012
|
|||||||
Purchased parts
|
$
|
4,539,202
|
$
|
3,452,832
|
||||
Work-in-process
|
2,084,641
|
1,725,395
|
||||||
Finished goods
|
140,994
|
45,748
|
||||||
Less: Inventory reserve
|
(200,000
|
)
|
(200,000
|
)
|
||||
$
|
6,564,837
|
$
|
5,023,975
|
Three Months Ended
|
Three Months Ended
|
|||||||
September 30,
2012
|
September 30,
2011
|
|||||||
Basic net income (loss) per share computation:
|
||||||||
Net income (loss) attributable to common stockholders
|
$
|
(429,705
|
)
|
$
|
$ 103,316
|
|||
Weighted-average common shares outstanding
|
2,717,585
|
2,650,063
|
||||||
Basic net income (loss) per share attributable to
common stockholders
|
$
|
(0.16
|
)
|
$
|
0.04
|
|||
Diluted net income (loss) per share computation
|
||||||||
Net income (loss) attributable to common stockholders
|
$
|
(429,705
|
)
|
$
|
$ 103,316
|
|||
Weighted-average common shares outstanding
|
2,717,585
|
2,650,063
|
||||||
Incremental shares attributable to the assumed exercise
of outstanding stock options
|
-
|
86,930
|
||||||
Total adjusted weighted-average shares
|
2.717,585
|
2,736,993
|
||||||
Diluted net income (loss) per share attributable to
common stockholders
|
$
|
(0.16
|
)
|
$
|
0.04
|
Six Months Ended
|
Six Months Ended
|
|||||||
September 30,
2012
|
September 30,
2011
|
|||||||
(Restated) | ||||||||
Basic net income (loss) per share computation:
|
||||||||
Net income (loss) attributable to common stockholders
|
$ | (1,098,505 | ) | $ | 22,521 | |||
Weighted-average common shares outstanding
|
2,708,335 | 2,648,608 | ||||||
Basic net income (loss) per share attributable to
common stockholders
|
$ | (0.41 | ) | $ | 0.01 | |||
Diluted net income (loss) per share computation
|
||||||||
Net income (loss) attributable to common stockholders
|
$ | (1,098,505 | ) | $ | 22,521 | |||
Weighted-average common shares outstanding
|
2,708,335 | 2,648,608 | ||||||
Incremental shares attributable to the assumed exercise
of outstanding stock options
|
- | 85,242 | ||||||
Total adjusted weighted-average shares
|
2,708,335 | 2,733,850 | ||||||
Diluted net income (loss) per share attributable to
common stockholders
|
$ | (0.41 | ) | $ | 0.01 |
(1)
|
The Note has a term of five (5) years with an annual interest rate of 14% on the outstanding principal amount. Payments for the first year were interest only and amounted to $28,762 monthly. In September 2011, the Company began making monthly payments of approximately $69,000 for interest and principal for the remaining term of the loan. BCA had agreed to allow the Company to defer principal payments for the three months ended September 30, 2012. BCA has also agreed to allow the Company to defer principal payments due on October 31 and November 30, 2012. These amounts are deferred until September 2015.
|
(2)
|
At inception, the Company issued BCA a nine-year warrant for 136,090 shares, based upon 4.5% of the fully-diluted outstanding shares of the Company’s common stock exercisable at $6.70 per share, the average closing price of the common stock over the three days preceding the loan closing on the NYSE-Mkt Exchange. In the event of specific major corporate events or the maturity of the five-year loan, BCA can require the Company to purchase the warrant and warrant shares at the higher of the then Exchange market price less the share exercise price, in the case of the purchase of the warrant, or five times operating income per share. In connection with the warrant issued in conjunction with the issuance of this debt, the Company recorded a debt discount and warrant liability, which is being marked to fair value at the end of each period (see Note 10 to Notes to the Condensed Consolidated Financial Statements). The debt discount is to be amortized over the life of the loan.
|
(3)
|
Loan provisions also contain customary representations and warranties.
|
(4)
|
BCA has a lien on all of the Company’s assets. In February 2011, BCA agreed to release part of its lien on Company assets to the U.S. Government to allow for progress billings up to $1,000,000.
|
(5)
|
The Company was required to pay prepayment fees if the Company decided to prepay a portion of the principal amount during the first two years of the loan. The Company may now prepay a portion of the principal amount without any prepayment penalty. Each payment must be not less than $25,000 or multiples of $25,000 in excess thereof.
|
(6)
|
Upon the occurrence of a Change of Control (as defined in the Agreement) or within five (5) Business Days of an O’Hara Life Insurance Realization Event (as defined in the Agreement), the Company shall, in each case at the election of BCA, prepay by wire transfer the entire outstanding principal amount of the Note in accordance with the redemption prices (the “Mandatory Redemption Prices”) set forth below (expressed as a percentage of the outstanding principal amount being prepaid and shall pay 103% in the first year of the loan, 102% in the second year of the loan, and 100% thereafter), together with (x) Interest, if any, accrued and unpaid on the outstanding principal amount of the Note so prepaid through the date of such prepayment, (y) all reasonable out-of-pocket costs and expenses (including reasonable fees, charges and disbursements of counsel), if any, associated with such prepayment, and (z) all other costs, expenses and indemnities then payable under this Agreement (such amounts, collectively the “Mandatory Redemption Payment”). If a Change of Control or O’Hara Life Insurance Realization Event shall occur during any Loan Year set forth below, the Mandatory Redemption Price shall be determined based upon the percentage indicated above for such Loan Year multiplied by the principal amount which is being prepaid. At the election of BCA, all or any portion of the Mandatory Redemption Payment may be paid in the form of common stock of the Company in marketable condition in lieu of cash and to the extent available and to the extent not restricted by any SBIC Regulations. In the event BCA makes the election contemplated by the immediately preceding sentence, the Company shall issue to BCA that number of shares having an aggregate Current Market Price as of such issuance date equal to that portion of the Mandatory Redemption Payment subject to such election.
|
(7)
|
The Note contains a number of affirmative and negative covenants which restrict our operations. The BCA agreement contains a number of affirmative and negative covenants. For the quarter ended September 30, 2012, the Company was not in compliance with four covenants related to maintaining agreed upon financial ratios for fixed charges, leverage and debt service as well as a requirement for earnings before interest, taxes, depreciation and amortization (EBITDA) However, the Company received a waiver from BCA on each of the above mentioned covenants.
|
(8)
|
The Company and BCA have amended certain provisions to ease some restrictions.
|
Three Months Ended
September 30, 2012 |
Avionics
Government |
Avionics
Commercial |
Avionics
Total |
Corporate
Items |
Total
|
|||||||||||||||
Net sales
|
1,847,545
|
547,405
|
2,394,950
|
-
|
2,394,950
|
|||||||||||||||
Cost of Sales
|
1,296,733
|
495,794
|
1,792,527
|
-
|
1,792,527
|
|||||||||||||||
Gross Margin
|
550,812
|
51,611
|
602,423
|
-
|
602,423
|
|||||||||||||||
Engineering, research, and development
|
548,800
|
548,800
|
||||||||||||||||||
Selling, general, and admin.
|
310,147
|
376,199
|
686,346
|
|||||||||||||||||
Amortization of debt discount
|
31,009
|
31,009
|
||||||||||||||||||
Amortization of debt expense
|
56,711
|
56,711
|
||||||||||||||||||
Financing costs
|
26,477
|
26,477
|
||||||||||||||||||
Change in fair value of common stock warrants
|
337
|
337
|
||||||||||||||||||
Interest expense, net
|
131,019
|
131,019
|
||||||||||||||||||
Total expenses
|
858,947
|
621,752
|
1,480,699
|
|||||||||||||||||
Loss before income taxes
|
(256,524
|
)
|
(621,752
|
)
|
(878,276
|
)
|
Three Months Ended
September 30, 2011
|
Avionics
Government
|
Avionics
Commercial
|
Avionics
Total
|
Corporate
Items
|
Total
|
|||||||||||||||
Net sales
|
3,161,291
|
513,063
|
3,674,354
|
-
|
3,674,354
|
|||||||||||||||
Cost of Sales
|
1,826,234
|
364,893
|
2,191,127
|
-
|
2,191,127
|
|||||||||||||||
Gross Margin
|
1, 335,057
|
148,170
|
1,483,227
|
-
|
1,483,227
|
|||||||||||||||
Engineering, research, and development
|
677,933
|
677,933
|
||||||||||||||||||
Selling, general, and admin.
|
326,027
|
341,847
|
667,874
|
|||||||||||||||||
Amortization of debt discount
|
-
|
13,396
|
13,396
|
|||||||||||||||||
Amortization of debt expense
|
-
|
27,080
|
27,080
|
|||||||||||||||||
Change in fair value of
common stock warrants
|
-
|
(104,891
|
)
|
(104,891
|
)
|
|||||||||||||||
Interest expense, net
|
-
|
96,315
|
96,315
|
|||||||||||||||||
Total expenses
|
1,003,960
|
373,747
|
1,377,707
|
|||||||||||||||||
Income (loss) before income taxes
|
$
|
479,267
|
$
|
(373,747
|
)
|
$
|
105,520
|
Six Months Ended
September 30, 2012 |
Avionics
Government |
Avionics
Commercial |
Avionics
Total |
Corporate
Items |
Total
|
|||||||||||||||
Net sales
|
2,397,509
|
1,174,729
|
3,572,238
|
-
|
3,572,238
|
|||||||||||||||
Cost of Sales
|
1,571,288
|
1,114,833
|
2,686,121
|
-
|
2,686,121
|
|||||||||||||||
Gross Margin
|
826,221
|
59,896
|
886,117
|
-
|
886,117
|
|||||||||||||||
Engineering, research, and development
|
1,127,404
|
1,127,404
|
||||||||||||||||||
Selling, general, and admin.
|
627,137
|
713,097
|
1,340,234
|
|||||||||||||||||
Amortization of debt discount
|
44,401
|
44,401
|
||||||||||||||||||
Amortization of debt expense
|
83,791
|
83,791
|
||||||||||||||||||
Financing costs
|
26,477
|
26,477
|
||||||||||||||||||
Change in fair value of common stock warrants
|
(249,057
|
)
|
(249,057
|
)
|
||||||||||||||||
Interest expense, net
|
223,487
|
223,487
|
||||||||||||||||||
Total expenses
|
1,754,541
|
842,196
|
2,596,737
|
|||||||||||||||||
Loss before income
|
(868,424
|
)
|
(842,196
|
)
|
(1,710,620
|
)
|
Six Months Ended
September 30, 2011
|
Avionics
Gov’t
|
Avionics
Comm’l.
|
Avionics
Total
|
Corporate
Items
|
Total
|
|||||||||||||||
Net sales
|
6,306,883
|
1,357,682
|
7,664,565
|
-
|
7,664,565
|
|||||||||||||||
Cost of Sales
|
3,501,047
|
818,660
|
4,319,707
|
-
|
4,319,707
|
|||||||||||||||
Gross Margin
|
2,805,836
|
539,022
|
3,344,858
|
-
|
3,344,858
|
|||||||||||||||
Engineering, research, and development
|
1,526,971
|
1,526,971
|
||||||||||||||||||
Selling, general, and admin.
|
687,843
|
778,853
|
1,466,696
|
|||||||||||||||||
Amortization of debt discount
|
-
|
26,791
|
26,791
|
|||||||||||||||||
Amortization of debt expense
|
-
|
54,160
|
54,160
|
|||||||||||||||||
Change in fair value of
Common stock warrants
|
-
|
63,695
|
63,695
|
|||||||||||||||||
Proceeds from life insurance
|
-
|
(300,029
|
)
|
(300,029
|
)
|
|||||||||||||||
Interest expense, net
|
-
|
198,916
|
198,916
|
|||||||||||||||||
Total expenses
|
2,214,814
|
822,386
|
3,037,200
|
|||||||||||||||||
Income (loss) before income taxes
|
$
|
1,130,044
|
$
|
(822,386
|
)
|
$
|
307,658
|
·
|
Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
|
·
|
Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.
|
·
|
Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
·
|
Market approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
|
·
|
Income approach — Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method.
|
·
|
Cost approach — Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
|
September 30, 2012
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Total Assets
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Warrant liability
|
-
|
-
|
198,903
|
198,903
|
||||||||||||
Total Liabilities
|
$
|
-
|
$
|
-
|
$
|
198,903
|
$
|
198,903
|
March 31, 2012
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Total Assets
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Warrant liability
|
-
|
-
|
355,290
|
355,290
|
||||||||||||
Total Liabilities
|
$
|
-
|
$
|
-
|
$
|
355,290
|
$
|
355,290
|
Date of
Warrant
|
Expiration
Date
|
Number of
Warrants
|
Exercise
Price
|
Fair Market Value
Per Share
|
Expected
Volatility
|
Remaining
Life in Years
|
Risk Free
Interest Rate
|
Warrant
Liability
|
|||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 6.70 | 28.51 | % | 9 | 2.81 | % | $ | 267,848 | ||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 6.70 | 28.51 | % | 5 | 1.59 | % | $ | 13,808 | ||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 3.90 | 42.04 | % | 7 | 0.94 | % | $ | 66,193 | ||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 3.90 | 42.04 | % | 7 | 0.94 | % | $ | 26,477 |
Date of
Warrant
|
Expiration
Date
|
Number of
Warrants
|
Exercise
Price
|
Fair Market Value
Per Share
|
Expected
Volatility
|
Remaining
Life in Years
|
Risk Free
Interest Rate
|
Warrant
Liability
|
|||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 6.33 | 53.19 | % | 7.45 | 2.23 | % | $ | 338,116 | ||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 6.33 | 53.19 | % | 3.45 | 2.23 | % | $ | 17,174 |
Date of
Warrant
|
Expiration
Date
|
Number of
Warrants
|
Exercise
Price
|
Fair Market Value
Per Share
|
Expected
Volatility
|
Remaining
Life in Years
|
Risk Free
Interest Rate
|
Warrant
Liability
|
|||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 3.72 | 43.48 | % | 6.95 | 1.64 | % | $ | 108,063 | ||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 3.72 | 43.48 | % | 2.95 | 1.59 | % | $ | 3,314 | ||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 3.72 | 43.48 | % | 6.83 | 0.94 | % | $ | 62,519 | ||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 3.72 | 43.48 | % | 6.83 | 0.94 | % | $ | 25,007 |
Exhibit No.
|
Description
|
|
31.1
|
||
31.2
|
||
32.1
|
||
32.2
|
||
101.INS
|
XBRL Instance Document**
|
|
101.SCH
|
Taxonomy Extension Schema Document**
|
|
101.CAL
|
Taxonomy Extension Calculation Linkbase Document**
|
|
101.DEF
|
Taxonomy Extension Definition Linkbase Document**
|
|
101.LAB
|
Taxonomy Extension Label Linkbase Document**
|
|
101.PRE
|
Taxonomy Extension Presentation Linkbase Document**
|
TEL-INSTRUMENT ELECTRONICS CORP.
|
|||||
Date: November 21, 2012
|
By:
|
/s/ Jeffrey C. O’Hara
|
|||
Name: Jeffrey C. O’Hara
|
|||||
Title: Chief Executive Officer
Principal Executive Officer
|
Date: November 21, 2012
|
By:
|
/s/ Joseph P. Macaluso
|
|||
Name: Joseph P. Macaluso
|
|||||
Title: Principal Financial Officer
Principal Accounting Officer
|
1.
|
I have reviewed this Form 10-Q of Tel-Instrument Electronics Corp.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
|
|
4.
|
Along with the Principal Financial Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 21, 2012
|
By:
|
/s/ Jeffrey C. O’Hara
|
|
Jeffrey C. O’Hara
|
|||
Principal Executive Officer
Tel-Instrument Electronics Corp.
|
1.
|
I have reviewed this Form 10-Q of Tel-Instrument Electronics Corp.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
|
|
4.
|
Along with the Principal Executive Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 21, 2012
|
By:
|
/s/ Joseph P. Macaluso
|
|
Joseph P. Macaluso
|
|||
Principal Financial Officer
Tel-Instrument Electronics Corp.
|
(1)
|
Such Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in such Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 21, 2012
|
By:
|
/s/ Jeffrey C. O’Hara
|
|
Jeffrey C. O’Hara
|
|||
Principal Executive Officer
Tel-Instrument Electronics Corp.
|
|||
(1)
|
Such Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in such Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 21, 2012
|
By:
|
/s/ Joseph P. Macaluso
|
|
Joseph P. Macaluso
|
|||
Principal Financial Officer
Tel-Instrument Electronics Corp.
|
Note 8 - Segment Information (Detail) - Schedule of segment reporting, by segment (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Net sales | $ 2,394,950 | $ 3,674,354 | $ 3,572,238 | $ 7,664,565 |
Cost of Sales | 1,792,527 | 2,191,127 | 2,686,121 | 4,319,707 |
Gross Margin | 602,423 | 1,483,227 | 886,117 | 3,344,858 |
Engineering, research, and development | 548,800 | 677,933 | 1,127,404 | 1,526,971 |
Selling, general, and admin. | 686,346 | 667,874 | 1,340,234 | 1,466,696 |
Amortization of debt discount | 31,009 | 13,396 | 44,401 | 26,791 |
Amortization of debt expense | 56,711 | 27,080 | 83,791 | 54,160 |
Financing costs | 26,477 | 0 | 26,477 | 0 |
Change in fair value of common stock warrants | 337 | (104,891) | (249,057) | 63,695 |
Proceeds from life insurance | 0 | 0 | 0 | (300,029) |
Interest (income) expense, net | 131,019 | 96,315 | 223,487 | 198,916 |
Total expenses | 1,480,699 | 1,377,707 | 2,596,737 | 3,037,200 |
Income (loss) before income taxes | (878,276) | 105,520 | (1,710,620) | 307,658 |
Avionics Gov't [Member]
|
||||
Net sales | 1,847,545 | 3,161,291 | 2,397,509 | 6,306,883 |
Cost of Sales | 1,296,733 | 1,826,234 | 1,571,288 | 3,501,047 |
Gross Margin | 550,812 | 1,335,057 | 826,221 | 2,805,836 |
Engineering, research, and development | 0 | |||
Selling, general, and admin. | 0 | 0 | ||
Amortization of debt discount | 0 | 0 | ||
Amortization of debt expense | 0 | 0 | ||
Change in fair value of common stock warrants | 0 | 0 | ||
Proceeds from life insurance | 0 | |||
Interest (income) expense, net | 0 | 0 | ||
Total expenses | 0 | 0 | ||
Income (loss) before income taxes | 0 | 0 | ||
Avionics Comm'l. [Member]
|
||||
Net sales | 547,405 | 513,063 | 1,174,729 | 1,357,682 |
Cost of Sales | 495,794 | 364,893 | 1,114,833 | 818,660 |
Gross Margin | 51,611 | 148,170 | 59,896 | 539,022 |
Engineering, research, and development | 0 | |||
Selling, general, and admin. | 0 | 0 | ||
Amortization of debt discount | 0 | 0 | ||
Amortization of debt expense | 0 | 0 | ||
Change in fair value of common stock warrants | 0 | 0 | ||
Proceeds from life insurance | 0 | |||
Interest (income) expense, net | 0 | 0 | ||
Total expenses | 0 | 0 | ||
Income (loss) before income taxes | 0 | 0 | ||
Avionics Total [Member]
|
||||
Net sales | 2,394,950 | 3,674,354 | 3,572,238 | 7,664,565 |
Cost of Sales | 1,792,527 | 2,191,127 | 2,686,121 | 4,319,707 |
Gross Margin | 602,423 | 1,483,227 | 886,117 | 3,344,858 |
Engineering, research, and development | 548,800 | 677,933 | 1,127,404 | 1,526,971 |
Selling, general, and admin. | 310,147 | 326,027 | 627,137 | 687,843 |
Amortization of debt discount | 0 | 0 | 0 | |
Amortization of debt expense | 0 | 0 | 0 | |
Change in fair value of common stock warrants | 0 | 0 | 0 | |
Proceeds from life insurance | 0 | |||
Interest (income) expense, net | 0 | 0 | ||
Total expenses | 858,947 | 1,003,960 | 1,754,541 | 2,214,814 |
Income (loss) before income taxes | (256,524) | 479,267 | (868,424) | 1,130,044 |
Corporate [Member]
|
||||
Net sales | 0 | 0 | 0 | 0 |
Cost of Sales | 0 | 0 | 0 | 0 |
Gross Margin | 0 | 0 | 0 | 0 |
Engineering, research, and development | 0 | |||
Selling, general, and admin. | 376,199 | 341,847 | 713,097 | 778,853 |
Amortization of debt discount | 31,009 | 13,396 | 44,401 | 26,791 |
Amortization of debt expense | 56,711 | 27,080 | 83,791 | 54,160 |
Financing costs | 26,477 | 26,477 | ||
Change in fair value of common stock warrants | 337 | (104,891) | (249,057) | 63,695 |
Proceeds from life insurance | (300,029) | |||
Interest (income) expense, net | 131,019 | 96,315 | 223,487 | 198,916 |
Total expenses | 621,752 | 373,747 | 842,196 | 822,386 |
Income (loss) before income taxes | $ (621,752) | $ (373,747) | $ (842,196) | $ (822,386) |
Note 10 - Fair Value Measurements (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | Since these common stock warrants do not trade in an active securities market, the Company recognizes a warrant liability and estimates the fair value of these warrants using the Black-Scholes options model using the following assumptions:
|
Note 13 - Restatement (Detail) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Tax Credit Carryforward, Deferred Tax Asset | $ 394,604 | $ 394,604 | ||
Net Income (Loss) Attributable to Parent | (429,705) | 103,316 | (1,098,505) | 22,521 |
Restate Prior Year Income [Member]
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Net Income (Loss) Attributable to Parent | $ 256,644 |
Note 4 -Inventories, net
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Inventory Disclosure [Text Block] |
Note 4
–Inventories, net
Inventories
consist of:
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