New Jersey
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001-31990
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22-1441806
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(State or other Jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TEL-INSTRUMENT ELECTRONICS CORP.
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|||
Date: July 16, 2013
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By:
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/s/ Joseph P. Macaluso
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Name: Joseph P. Macaluso
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|||
Title: Principal Accounting Officer
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·
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On July 12, 2013, the Company received a contract amendment from the Army calling for an interim production release of $3.3 million for the TS-4530A program which is expected to ship at a monthly rate of $500k starting this month. TIC has signed the amendment and should receive the fully executed agreement this week. The Company has received final AIMS certification for this product, but a full production release on this contract will not be provided until the remaining logistics documentation items (e.g., technical manual) are approved by the U.S. Army. The Company currently has $18.3 million of existing TS-4530A orders on this Indefinite-Delivery-Indefinite Quantity (“IDIQ”) contract program. The Army has the option of purchasing up to an additional $18 million of units under this IDIQ contract. The commencement of TS-4530A volume shipments will augment the Company’s liquidity position as the Company has a substantial amount of the material in house to commence production.
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·
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The Company converted approximately $634k of outstanding short-term debt with an external party into 200,000 shares of common stock at a price of $3.19 per share with the transaction effective date of May 31, 2013. The final paperwork on this transaction was not completed until late June 2013.
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·
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As a result of the substantial operating losses incurred in the last year, the Company is not currently in compliance with the NYSE-MKT’s continued listing standards. Based on the information provided by the Company on June 17, 2013, the Exchange has determined that the Company has made a reasonable demonstration of its ability to regain compliance. As such, the Company listing is being continued pursuant to an extension and will continue to be monitored against this plan with the next NYSE evaluation date being August 15, 2013. Failure to make progress against this plan could result in the Exchange staff initiating delisting provisions. The Company is optimistic that it will demonstrate sufficient progress to maintain our NYSE-MKT listing.
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·
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The Company retained a senior manufacturing contractor earlier this year to restructure our manufacturing operations to better support the three major military programs now coming on line. The Company expects improvement in operating efficiencies, material management and quality processes as production increases.
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·
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The Company first quarter FY 2014 revenues (April through June) exceeded $3 million. Revenue growth in the first quarter was hampered by liquidity constraints and related parts availability issues. These liquidity issues are expected to lessen with the commencement of TS-4530A shipments. With the commencement of TS-4530A production and expected improvements in CRAFT production levels, TIC is forecasting significant revenue and profitability growth for the fiscal year ending March 31, 2014.
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ASSETS
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March 31, 2013
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March 31, 2012
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||||||
Current assets:
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||||||||
Cash
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$
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310,297
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$
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413,195
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||||
Accounts receivable, net of allowance for doubtful accounts
of $18,940 and $35,470, respectively
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557,879
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1,694,636
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||||||
Unbilled government receivables
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-
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1,780,381
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||||||
Inventories, net
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6,241,181
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5,023,975
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||||||
Prepaid expenses and other current assets
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115,852
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220,255
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||||||
Deferred financing costs
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108,321
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108,321
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||||||
Deferred tax asset
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1,238,421
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1,288,631
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||||||
Total current assets
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8,571,951
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10,529,394
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||||||
Equipment and leasehold improvements, net
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587,958
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706,870
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||||||
Deferred financing costs – long-term
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156,463
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264,784
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||||||
Deferred tax asset – non-current
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2,546,190
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948,489
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||||||
Other assets
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56,872
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56,872
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||||||
Total assets
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$
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11,919,434
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$
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12,506,409
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
Current liabilities:
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||||||||
Current portion of long-term debt
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$
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1,229,643
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$
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542,382
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||||
Capital lease obligations – current portion
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74,508
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64,675
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||||||
Accounts payable
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4,272,431
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2,850,432
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||||||
Deferred revenues – current portion
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18,460
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34,767
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||||||
Accrued expenses - vacation pay, payroll and payroll withholdings
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442,522
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440,116
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||||||
Accrued expenses - related parties
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100,536
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68,777
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||||||
Accrued expenses – other
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1,425,002
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2,006,134
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||||||
Total current liabilities
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7,563,102
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6,007,283
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||||||
Subordinated notes payable – related parties
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250,000
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250,000
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||||||
Capital lease obligations – long-term
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76,055
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149,582
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||||||
Long-term debt, net of debt discount
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1,134,549
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1,490,302
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||||||
Warrant liability
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198,330
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355,290
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||||||
Deferred revenues – long-term
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1,045
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4,637
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||||||
Total liabilities
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9,223,081
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8,257,094
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||||||
Commitments and contingencies
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||||||||
Stockholders’ equity
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||||||||
Common stock, 4,000,000 shares authorized, par value $.10 per share,
3,011,739 and 2,684,215 shares issued and outstanding, respectively
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301,171
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268,421
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||||||
Additional paid-in capital
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7,108,300
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5,921,441
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||||||
Accumulated deficit
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(4,713,118
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)
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(1,940,547
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)
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||||
Total stockholders’ equity
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2,696,353
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4,249,315
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||||||
Total liabilities and stockholders’ equity
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$
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11,919,434
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$
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12,506,409
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For the years ended March 31,
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||||||||
2013
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2012
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|||||||
Net sales
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$
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7,827,258
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$
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16,508,678
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||||
Cost of sales
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6,866,036
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10,068,236
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||||||
Gross margin
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961,222
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6,440,442
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||||||
Operating expenses:
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||||||||
Selling, general and administrative
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2,564,637
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2,969,956
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||||||
Engineering, research and development
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2,149,591
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2,794,478
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||||||
Total operating expenses
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4,714,228
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5,764,434
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||||||
(Loss) income from operations
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(3,753,006
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)
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676,008
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|||||
Other income (expense):
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||||||||
Amortization of debt discount
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(129,763
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)
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(53,570
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)
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||||
Amortization of deferred financing costs
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(219,662
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)
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(108,321
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)
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||||
Change in fair value of common stock warrants
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294,785
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10,847
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||||||
Gain on sales of capital asset
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-
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500
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||||||
Proceeds from life insurance policy
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-
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300,029
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||||||
Interest income
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434
|
616
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||||||
Interest expense
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(478,939
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)
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(367,410
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)
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||||
Interest expense - related parties
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(30,000
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)
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(31,964
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)
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||||
Total other expense
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(563,145
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)
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(249,273
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)
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||||
(Loss) income before income taxes
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(4,316,151
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)
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426,735
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|||||
(Benefit) provision for income taxes
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(1,543,580
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)
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355,719
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|||||
Net (loss) income
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$
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(2,772,571
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)
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$
|
71,016
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|||
Basic (loss) income per common share
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$
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(0.98
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)
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$
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0.03
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Diluted (loss) income per common share
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$
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(0.98
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)
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$
|
0.02
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|||
Weighted average number of shares outstanding
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||||||||
Basic
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2,834,257
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2,657,279
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||||||
Diluted
|
2,834,257
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2,717,820
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