New Jersey
|
22-1441806
|
(State of incorporation)
|
(IRS Employer Identification Number)
|
|
|
One Branca Road
East Rutherford, New Jersey
|
07073
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of Each Class
|
Name of Exchange on Which Registered
|
Common Stock $.10 par value
|
NYSE - MKT
|
PART I.
|
|
Page
|
|
|
|
Item 1.
|
4 | |
|
|
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Item 1A.
|
11 | |
|
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Item 1B.
|
11 | |
|
|
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Item 2.
|
11 | |
|
|
|
Item 3.
|
11 | |
|
|
|
Item 4.
|
12 | |
|
|
|
PART II.
|
|
|
|
|
|
Item 5.
|
13 | |
|
|
|
Item 6.
|
14 | |
|
|
|
Item 7.
|
15 | |
|
|
|
Item 7A.
|
21 | |
|
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Item 8.
|
22 | |
|
|
|
Item 9.
|
49 | |
|
|
|
Item 9A.
|
49 | |
|
|
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Item 9B.
|
49 | |
|
|
|
PART III.
|
|
|
|
|
|
Item 10.
|
50 | |
|
|
|
Item 11.
|
53 | |
|
|
|
Item 12.
|
56 | |
|
|
|
Item 13.
|
58 | |
|
|
|
Item 14.
|
59 | |
|
|
|
PART IV.
|
|
|
|
|
|
Item 15.
|
60 | |
|
|
|
62 |
·
|
$277,000 from India for T-47G and our new TR-36 Test Sets;
|
·
|
$102,200 from a U.S. Company for our TR-100AF Test Sets;
|
·
|
$245,000 from Italy for upgrades to its Precision DME Test Sets;
|
·
|
$212,000 from our commercial U.S. distributor for TR-220 Test Sets.
|
Commercial
|
Government
|
Total
|
||||||||||
March 31, 2016
|
$
|
221,453
|
$
|
11,410,210
|
$
|
11,631,663
|
||||||
March 31, 2015
|
$
|
450,497
|
$
|
28,289,279
|
$
|
28,739,776
|
Fiscal Year
|
||||||||
Ended March 31,
|
||||||||
2016
|
High
|
Low
|
||||||
First Quarter
|
$
|
6.35
|
$
|
4.87
|
||||
Second Quarter
|
5.27
|
3.98
|
||||||
Third Quarter
|
5.52
|
4.60
|
||||||
Fourth Quarter
|
4.76
|
3.70
|
||||||
2015
|
||||||||
First Quarter
|
$
|
5.60
|
$
|
4.40
|
||||
Second Quarter
|
5.78
|
4.99
|
||||||
Third Quarter
|
5.38
|
4.34
|
||||||
Fourth Quarter
|
6.55
|
4.30
|
Plan category
|
Number of securities to be issued upon exercise of outstanding options
|
Weighted average exercise price of outstanding options
|
Number of options remaining available for future issuance under Equity Compensation Plans
|
|||||||||
Equity Compensation Plans approved by shareholders
|
85,000
|
$
|
5.33
|
--
|
||||||||
Equity Compensation Plans not approved by shareholders
|
--
|
--
|
--
|
|||||||||
Total
|
85,000
|
$
|
5.33
|
--
|
·
|
Revenues increased 36% in fiscal year 2016 as compared to fiscal year 2015.
|
·
|
Income from operations increased to $2.6 million for fiscal year 2016 as compared to $330k in fiscal year 2015.
|
·
|
$1.4 million improvement in net working capital to a $4.0 million since March 31, 2015.
|
·
|
Net income was $1,004,153 for the year ended March 31, 2016 as compared to a net loss of $280,440 for year ended March 31, 2015. Net income for fiscal year 2016 was negatively impacted by the change in the fair value of the warrants in the amount of $617,241 as compared to $164,653 in fiscal year 2015.
|
·
|
The Company received orders for an additional 61 CRAFT test sets from Lockheed Martin in the amount of $2.2 million. These units are to be used on the Joint Strike Fighter program (“JSF”) program. This brings total CRAFT orders for this program to $4.4 million.
|
·
|
Introduction of the TR-36 Navigation/Communication Test Set (the “TR-36”), representing our first new product introduction into the commercial market for the last 10 years. The TR-36 provides comprehensive ramp testing in a user-friendly, light weight high-precision instrument for rapid functional testing of VOR, LOC/GS, MB, and VHF COMM (AM/FM), ELT and EPIRB avionic equipment all in a weather proof package with color display. We believe this product will be very competitive in this market.
|
·
|
Investment in new lightweight, hand held test set design for commercial and military customers that we expect to expand our product line and allow us to compete in this very large radio test set market.
|
·
|
Engagement of our new partner, Blue Star Engineering and Electronics Ltd. (“Blue Star”). Blue Star will handle all the Company’s interests in India, Nepal, Sri Lanka, Maldives and Bangladesh for both General Aviation and Military markets. The market in this region represents a significant opportunity for the Company.
|
·
|
As developments of our major programs are complete, engineering efforts have been directed to new product development, and we have a few new products in the pipeline, in addition to the recently introduced TR-36.
|
|
Pages
|
(1) Financial Statements:
|
|
|
|
23 | |
24 | |
25 | |
26 | |
27 | |
28 | |
|
|
ASSETS
|
March 31, 2016
|
March 31, 2015
|
||||||
Current assets:
|
||||||||
Cash
|
$
|
972,633
|
$
|
185,932
|
||||
Accounts receivable, net of allowance for doubtful accounts
of $7,500 and $24,975, respectively
|
1,454,361
|
1,625,171
|
||||||
Inventories, net
|
4,679,032
|
4,032,074
|
||||||
Prepaid expenses and other current assets
|
128,071
|
286,431
|
||||||
Deferred tax asset
|
578,507
|
1,064,395
|
||||||
Total current assets
|
7,812,604
|
7,194,003
|
||||||
|
||||||||
Equipment and leasehold improvements, net
|
193,518
|
270,792
|
||||||
Deferred tax asset – non-current
|
2,065,126
|
2,377,583
|
||||||
Other assets
|
36,871
|
41,109
|
||||||
|
||||||||
Total assets
|
$
|
10,108,119
|
$
|
9,883,487
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term debt
|
$
|
418,255
|
$
|
387,839
|
||||
Capital lease obligations – current portion
|
10,232
|
16,758
|
||||||
Accounts payable
|
1,686,469
|
2,811,781
|
||||||
Deferred revenues – current portion
|
48,766
|
18,609
|
||||||
Federal and state taxes payable
|
53,623
|
-
|
||||||
Accrued expenses - vacation pay, payroll and payroll withholdings
|
836,589
|
594,114
|
||||||
Accrued expenses - related parties
|
213,344
|
170,348
|
||||||
Accrued expenses – other
|
501,687
|
595,437
|
||||||
Total current liabilities
|
3,768,965
|
4,594,886
|
||||||
|
||||||||
Subordinated notes payable – related parties
|
25,000
|
250,000
|
||||||
Capital lease obligations – long-term
|
20,524
|
4,561
|
||||||
Long-term debt, net of debt discount
|
304,560
|
708,604
|
||||||
Warrant liability
|
1,136,203
|
518,962
|
||||||
Deferred revenues – long-term
|
172,703
|
133,650
|
||||||
Other long-term liabilities
|
7,800
|
33,000
|
||||||
|
||||||||
Total liabilities
|
5,435,755
|
6,243,663
|
||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
||||||||
Stockholders’ equity
|
||||||||
Common stock, 4,000,000 shares authorized, par value $.10 per share,
3,255,887 and 3,256,887 shares issued and outstanding, respectively
|
325,586
|
325,686
|
||||||
Additional paid-in capital
|
8,074,655
|
8,046,168
|
||||||
Accumulated deficit
|
(3,727,877
|
)
|
(4,732,030
|
)
|
||||
|
||||||||
Total stockholders’ equity
|
4,672,364
|
3,639,824
|
||||||
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
10,108,119
|
$
|
9,883,487
|
|
For the years ended March 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
Net sales
|
$
|
24,804,825
|
$
|
18,195,972
|
||||
|
||||||||
Cost of sales
|
16,819,235
|
12,755,280
|
||||||
|
||||||||
Gross margin
|
7,985,590
|
5,440,692
|
||||||
|
||||||||
Operating expenses:
|
||||||||
Selling, general and administrative
|
3,367,544
|
3,149,031
|
||||||
Engineering, research and development
|
2,038,126
|
1,961,275
|
||||||
|
||||||||
Total operating expenses
|
5,405,670
|
5,110,306
|
||||||
|
||||||||
Income from operations
|
2,579,920
|
330,386
|
||||||
|
||||||||
Other income (expense):
|
||||||||
Amortization of debt discount
|
-
|
(75,308
|
)
|
|||||
Amortization of deferred financing costs
|
(5,429
|
)
|
(69,165
|
)
|
||||
Change in fair value of common stock warrants
|
(617,241
|
)
|
(164,653
|
)
|
||||
Loss on extinguishment of debt
|
-
|
(188,102
|
)
|
|||||
Interest expense
|
(58,133
|
)
|
(145,658
|
)
|
||||
Interest expense - related parties
|
(42,996
|
)
|
(47,312
|
)
|
||||
|
||||||||
Total other expense
|
(723,799
|
)
|
(690,198
|
)
|
||||
|
||||||||
Income (loss) before income taxes
|
1,856,121
|
(359,812
|
)
|
|||||
|
||||||||
Provision (benefit) for income taxes
|
851,968
|
(79,372
|
)
|
|||||
|
||||||||
Net income (loss)
|
$
|
1,004,153
|
$
|
(280,440
|
)
|
|||
|
||||||||
|
||||||||
Basic income (loss) per common share
|
$
|
0.31
|
$
|
(0.09
|
)
|
|||
Diluted income (loss) per common share
|
$
|
0.31
|
$
|
(0.09
|
)
|
|||
|
||||||||
Weighted average number of shares outstanding
|
||||||||
Basic
|
3,256,887
|
3,253,992
|
||||||
Diluted
|
3,261,153
|
3,253,992
|
Common Stock
|
Additional
|
|||||||||||||||||||
# of Shares
|
Paid-In
|
Accumulated
|
||||||||||||||||||
Issued
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||
Balances at April 1, 2014
|
3,251,387
|
$
|
325,136
|
$
|
7,987,100
|
$
|
(4,451,590
|
)
|
$
|
3,860,646
|
||||||||||
Stock-based compensation
|
-
|
-
|
33,008
|
-
|
33,008
|
|||||||||||||||
Issuance of common stock in connection with the exercise of stock options
|
5,500
|
550
|
26,060
|
-
|
26,610
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(280,440
|
)
|
(280,440
|
)
|
|||||||||||||
Balances at March 31, 2015
|
3,256,887
|
$
|
325,686
|
$
|
8,046,168
|
$
|
(4,732,030
|
)
|
$
|
3,639,824
|
||||||||||
Stock-based compensation
|
-
|
-
|
32,277
|
-
|
32,277
|
|||||||||||||||
Net income
|
-
|
-
|
-
|
1,004,153
|
1,004,153
|
|||||||||||||||
Reversal of shares intended to be issued in connection with the exercise of stock options
|
(1,000
|
)
|
(100
|
)
|
(3,790
|
)
|
-
|
(3,890
|
)
|
|||||||||||
Balances at March 31, 2016
|
3,255,887
|
$
|
325,586
|
$
|
8,074,655
|
$
|
(3,727,877
|
)
|
$
|
4,672,364
|
|
For the years ended March 31,
|
|||||||
|
2016
|
2015
|
||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$
|
1,004,153
|
$
|
(280,440
|
)
|
|||
Adjustments to reconcile net (loss) income to net cash
(Used in) provided by operating activities:
|
||||||||
Deferred income taxes
|
798,345
|
(79,372
|
)
|
|||||
Allowance for doubtful accounts
|
(17,295
|
)
|
(2,487
|
)
|
||||
Depreciation and amortization
|
164,774
|
177,291
|
||||||
Amortization of debt discount
|
-
|
75,308
|
||||||
Amortization of deferred financing costs
|
5,429
|
69,165
|
||||||
Change in fair value of common stock warrant
|
617,241
|
164,653
|
||||||
Provision for inventory obsolescence
|
60,713
|
24,287
|
||||||
Loss on extinguishment of debt
|
-
|
188,102
|
||||||
Non-cash stock-based compensation
|
32,277
|
33,008
|
||||||
Changes in assets and liabilities:
|
||||||||
Decrease in accounts receivable
|
188,105
|
472,956
|
||||||
Increase in inventories
|
(707,671
|
)
|
(16,959
|
)
|
||||
Decrease (increase) in prepaid expenses and other assets
|
153,279
|
(2,057
|
)
|
|||||
(Decrease) increase in accounts payable
|
(1,125,312
|
)
|
521,923
|
|||||
Increase (decrease) in deferred revenues
|
69,210
|
(18,843
|
)
|
|||||
Increase in federal and state taxes payable
|
53,623
|
-
|
||||||
Increase in accrued payroll, vacation pay & withholdings
|
242,475
|
149,876
|
||||||
Decrease in accrued expenses – related party and other
|
(50,754
|
)
|
(276,538
|
)
|
||||
Decrease in progress billings
|
-
|
(775,475
|
)
|
|||||
Decrease in other long-term liabilities
|
(25,200
|
)
|
(23,100
|
)
|
||||
Net cash provided by operating activities
|
1,463,392
|
401,298
|
||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Acquisition of equipment
|
(61,306
|
)
|
(11,221
|
)
|
||||
Net cash used in investing activities
|
(61,306
|
)
|
(11,221
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from exercise of stock options
|
-
|
26,610
|
||||||
Repayment of subordinated notes - related parties
|
(225,000
|
)
|
-
|
|||||
Proceeds from issuance of debt
|
18,000
|
1,200,000
|
||||||
Expenses associated with long-term debt
|
-
|
(16,287
|
)
|
|||||
Repayment of long-term debt
|
(391,628
|
)
|
(1,592,977
|
)
|
||||
Repayment of capitalized lease obligations
|
(16,757
|
)
|
(53,609
|
)
|
||||
Net cash used in financing activities
|
(615,385
|
)
|
(436,263
|
)
|
||||
|
||||||||
Net increase (decrease) in cash
|
786,701
|
(46,186
|
)
|
|||||
Cash, beginning of year
|
185,932
|
232,118
|
||||||
Cash, end of year
|
$
|
972,633
|
$
|
185,932
|
||||
|
||||||||
Supplemental cash flow information:
|
||||||||
Taxes paid
|
$
|
-
|
$
|
20,500
|
||||
Interest paid
|
$
|
59,100
|
$
|
166,040
|
||||
Supplemental non-cash information:
|
||||||||
Capital lease obligations
|
$
|
26,194
|
$
|
-
|
|
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Government
|
$
|
1,343,477
|
$
|
1,440,378
|
||||
Commercial
|
118,384
|
209,768
|
||||||
Less: Allowance for doubtful accounts
|
(7,500
|
)
|
(24,975
|
)
|
||||
|
$
|
1,454,361
|
$
|
1,625,171
|
|
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Purchased parts
|
$
|
3,420,249
|
$
|
2,746,671
|
||||
Work-in-process
|
1,446,293
|
1,514,356
|
||||||
Finished goods
|
102,490
|
334
|
||||||
Less: Allowance for obsolete inventory
|
(290,000
|
)
|
(229,287
|
)
|
||||
|
$
|
4,679,032
|
$
|
4,032,074
|
|
March 31,
|
|||||||
|
2016
|
2015
|
||||||
Leasehold Improvements
|
$
|
95,858
|
$
|
94,413
|
||||
Machinery and equipment
|
1,518,780
|
1,458,919
|
||||||
Automobiles
|
23,712
|
23,712
|
||||||
Sales equipment
|
572,236
|
572,236
|
||||||
Assets under capitalized leases
|
637,189
|
610,995
|
||||||
Less: Accumulated depreciation & amortization
|
(2,654,257
|
)
|
(2,489,483
|
)
|
||||
|
$
|
193,518
|
$
|
270,792
|
|
March 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
Accrued vacation pay
|
$
|
394,404
|
$
|
328,777
|
||||
Accrued compensation and payroll withholdings
|
442,185
|
265,337
|
||||||
|
||||||||
|
$
|
836,589
|
$
|
594,114
|
|
March 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
Accrued commissions
|
8,189
|
117,523
|
||||||
Accrued legal costs
|
53,766
|
126,740
|
||||||
Warranty reserve
|
208,102
|
140,333
|
||||||
Accrued – other
|
231,630
|
210,841
|
||||||
|
||||||||
|
$
|
501,687
|
$
|
595,437
|
March 31,
|
||||||||
|
2016
|
2015
|
||||||
Warranty reserve, at beginning of period
|
$
|
140,333
|
$
|
194,062
|
||||
Warranty expense
|
367,935
|
279,955
|
||||||
Warranty deductions
|
(300,166
|
)
|
(333,684
|
)
|
||||
Warranty reserve, at end of period
|
$
|
208,102
|
$
|
140,333
|
|
March 31,
|
|||||||
|
2016
|
2015
|
||||||
|
||||||||
Interest due to the estate of the Company’s former Chairman
|
$
|
107,237
|
$
|
85,174
|
||||
Interest and other expenses due to the Company’s President/CEO
|
106,107
|
85,174
|
||||||
|
||||||||
|
$
|
213,344
|
$
|
170,348
|
|
Fiscal Year Ended
|
|||||||
|
March 31,
|
March 31,
|
||||||
|
2016
|
2015
|
||||||
Current:
|
||||||||
Federal
|
$
|
52,123
|
$
|
-
|
||||
State and local
|
1,500
|
-
|
||||||
|
||||||||
Total current tax provision
|
53,623
|
-
|
||||||
|
||||||||
Deferred:
|
||||||||
Federal
|
796,500
|
(171,180
|
)
|
|||||
State and local
|
1,845
|
91,808
|
||||||
|
||||||||
Total deferred tax provision (benefit)
|
798,345
|
(79,372
|
)
|
|||||
|
||||||||
Total provision (benefit)
|
$
|
851,968
|
$
|
(79,372
|
)
|
|
March 31,
|
March 31,
|
||||||
|
2016
|
2015
|
||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$
|
1,802,492
|
$
|
2,865,606
|
||||
Tax credits
|
329,032
|
329,032
|
||||||
Charitable contributions
|
51
|
17
|
||||||
Allowance for doubtful accounts
|
2,550
|
8,499
|
||||||
Reserve for inventory obsolescence
|
98,614
|
78,024
|
||||||
Inventory capitalization
|
69,918
|
76,820
|
||||||
Deferred payroll
|
88,288
|
29,264
|
||||||
Vacation accrual
|
134,116
|
111,880
|
||||||
Warranty reserve
|
70,765
|
47,754
|
||||||
Deferred revenues
|
75,310
|
51,812
|
||||||
Stock options
|
23,544
|
23,561
|
||||||
Non-compete agreement
|
7,889
|
9,868
|
||||||
AMT credit
|
52,123
|
|||||||
Depreciation
|
26,721
|
(52,379
|
)
|
|||||
Deferred tax asset
|
2,781,413
|
3,579,758
|
||||||
Less valuation allowance
|
(137,780
|
)
|
(137,780
|
)
|
||||
|
||||||||
Deferred tax asset, net
|
$
|
2,643,633
|
$
|
3,441,978
|
||||
|
||||||||
Deferred tax asset – current
|
$
|
578,507
|
$
|
1,064,395
|
||||
Deferred tax asset – long-term
|
2,065,126
|
2,377,583
|
||||||
Total
|
$
|
2,643,633
|
$
|
3,441,978
|
|
March 31,
|
March 31,
|
||||||
|
2016
|
2015
|
||||||
|
||||||||
Income tax (benefit) provision – statutory rate
|
$
|
631,081
|
$
|
(122,338
|
)
|
|||
Income tax expenses – state and local, net of federal benefit
|
2,835
|
(104
|
)
|
|||||
Permanent items
|
12,194
|
10,802
|
||||||
Change in value of warrants – permanent difference
|
209,862
|
55,982
|
||||||
True-up of prior year’s deferred taxes
|
(4,281
|
)
|
(162,527
|
)
|
||||
Change in valuation allowance
|
-
|
137,780
|
||||||
Other
|
277
|
1,033
|
||||||
|
||||||||
Income tax provision (benefit)
|
$
|
851,968
|
$
|
(79,372
|
)
|
2017
|
$
|
418,255
|
||
2018
|
297,176
|
|||
2019
|
7,384
|
|||
2020
|
-
|
|||
2021
|
-
|
|||
|
||||
Total Principal
|
722,815
|
|||
Less: Current Portion
|
(418,255
|
)
|
||
Total Long-Term Debt
|
$
|
304,560
|
|
Years Ended March 31,
|
|||
2017
|
$
|
289,074
|
||
2018
|
288,857
|
|||
2019
|
283,593
|
|||
2020
|
282,540
|
|||
2021
|
282,540
|
|||
|
$
|
1,426,604
|
2016
|
$
|
12,535
|
||
2017
|
7,864
|
|||
2018
|
7,864
|
|||
2019
|
7,864
|
|||
2020
|
--
|
|||
Total minimum lease payments
|
36,127
|
|||
Less amounts representing interest
|
(5,371
|
)
|
||
Present value of net minimum lease payments
|
30,756
|
|||
Less current portion
|
(10,232
|
)
|
||
Long-term capital lease obligation
|
$
|
20,524
|
|
2016
|
2015
|
||||||
United States
|
$
|
22,904,101
|
$
|
16,386,477
|
||||
Foreign countries
|
1,900,724
|
1,809,495
|
||||||
Total Avionics Sales
|
$
|
24,804,825
|
$
|
18,195,972
|
Dividend | Risk-free | ||||||||||||
Yield
|
Interest rate
|
Volatility
|
Life
|
||||||||||
2016
|
0.0
|
%
|
1.39
|
%
|
44.54
|
%
|
5 years
|
||||||
2015
|
0.0
|
1.68
|
%
|
47.21
|
%
|
5 years
|
|
Number of Options
|
Average Exercise Price
|
Average Remaining
Contractual Term
|
Aggregate Intrinsic
Value
|
||||||||||
Outstanding options at April 1, 2014
|
88,000
|
$
|
6.12
|
|
||||||||||
Options granted
|
10,000
|
$
|
5.14
|
|
||||||||||
Options exercised
|
(5,500
|
)
|
$
|
4.84
|
|
|||||||||
Options canceled/forfeited
|
(21,000
|
)
|
$
|
6.19
|
|
|||||||||
|
|
|||||||||||||
Outstanding options at March 31, 2015
|
71,500
|
$
|
6.06
|
1.9 years
|
$
|
64,000
|
||||||||
Options granted
|
51,000
|
$
|
5.85
|
|
||||||||||
Options exercised
|
-
|
$
|
-
|
|
||||||||||
Options canceled/forfeited
|
(37,500
|
)
|
$
|
7.43
|
|
|||||||||
|
|
|||||||||||||
Outstanding options at March 31, 2016
|
85,000
|
$
|
5.33
|
3.4 years
|
$
|
9,000
|
||||||||
Vested Options:
|
|
|||||||||||||
March 31, 2016:
|
26,000
|
$
|
4.38
|
2.1 years
|
$
|
9,000
|
||||||||
March 31, 2015:
|
59,900
|
$
|
6.20
|
1.5 years
|
$
|
53,760
|
Non-vested Shares
|
Shares
|
Weighted-Average
Grant-Date
Fair value
|
||||||
|
||||||||
Non-vested at April 1, 2015
|
11,600
|
$
|
5.34
|
|||||
Granted
|
51,000
|
$
|
5.85
|
|||||
Vested
|
(3,600
|
)
|
$
|
5.78
|
||||
Forfeited
|
-
|
$
|
-
|
|||||
Non-vested at March 31, 2016
|
59,000
|
$
|
5.75
|
|
March 31, 2016
|
March 31, 2015
|
||||||
Basic net income (loss) per share computation:
|
||||||||
Net income(loss)
|
$
|
1,004,153
|
$
|
(280,440
|
)
|
|||
Weighted-average common shares outstanding
|
3,256,887
|
3,253,992
|
||||||
Basic net income (loss) per share
|
$
|
0.31
|
$
|
(0.09
|
)
|
|||
Diluted net income (loss) per share computation
|
||||||||
Net income (loss)
|
$
|
1,004,153
|
$
|
(280,440
|
)
|
|||
Weighted-average common shares outstanding
|
3,256,887
|
3,253,992
|
||||||
Incremental shares attributable to the assumed exercise
of outstanding stock options and warrants
|
4,266
|
-
|
||||||
Total adjusted weighted-average shares
|
3,261,153
|
3,253,992
|
||||||
Diluted net income (loss) per share
|
$
|
0.31
|
$
|
(0.09
|
)
|
|
March 31,
2016
|
March 31,
2015
|
||||||
Stock options
|
65,000
|
71,500
|
||||||
Warrants
|
286,920
|
297,336
|
||||||
|
351,920
|
368,836
|
2016
|
Avionics
|
Avionics
|
Avionics
|
Corporate/
|
||||||||||||||||
Government
|
Commercial
|
Total
|
Reconciling Items
|
Total
|
||||||||||||||||
Net sales
|
$
|
23,011,016
|
$
|
1,793,809
|
$
|
24,804,825
|
$
|
-
|
$
|
24,804,825
|
||||||||||
Cost of Sales
|
15,446,232
|
1,373,003
|
16,819,235
|
-
|
16,819,235
|
|||||||||||||||
Gross Margin
|
7,564,784
|
420,806
|
7,985,590
|
-
|
7,985,590
|
|||||||||||||||
Engineering, research, and development
|
2,038,126
|
-
|
2,038,126
|
|||||||||||||||||
Selling, general, and administrative
|
1,218,327
|
2,149,217
|
3,367,544
|
|||||||||||||||||
Amortization of deferred financing costs
|
-
|
5,429
|
5,429
|
|||||||||||||||||
Change in fair value of common stock warrant
|
-
|
617,241
|
617,241
|
|||||||||||||||||
Interest expense, net
|
-
|
101,129
|
101,129
|
|||||||||||||||||
3,256,453
|
2,873,016
|
6,129,469
|
||||||||||||||||||
Income (loss) before income taxes
|
$
|
4,729,137
|
$
|
(2,873,016
|
)
|
$
|
1,856,121
|
|||||||||||||
Segment Assets
|
$
|
5,644,551
|
$
|
488,842
|
$
|
6,133,393
|
$
|
3,974,726
|
$
|
10,108,119
|
2015
|
Avionics
|
Avionics
|
Avionics
|
Corporate/
|
||||||||||||||||
Government
|
Commercial
|
Total
|
Reconciling Items
|
Total
|
||||||||||||||||
Net sales
|
$
|
15,926,532
|
$
|
2,269,440
|
$
|
18,195,972
|
$
|
-
|
$
|
18,195,972
|
||||||||||
Cost of Sales
|
10,927,710
|
1,827,570
|
12,755,280
|
-
|
12,755,280
|
|||||||||||||||
Gross Margin
|
4,998,822
|
441,870
|
5,440,692
|
-
|
5,440,692
|
|||||||||||||||
Engineering, research, and development
|
1,961,275
|
-
|
1,961,275
|
|||||||||||||||||
Selling, general, and administrative
|
1,203,628
|
1,945,403
|
3,149,031
|
|||||||||||||||||
Amortization of debt discount
|
-
|
75,308
|
75,308
|
|||||||||||||||||
Amortization of deferred financing costs
|
-
|
69,165
|
69,165
|
|||||||||||||||||
Change in fair value of common stock warrant
|
-
|
164,653
|
164,653
|
|||||||||||||||||
Loss on extinguishment of debt
|
-
|
188,102
|
188,102
|
|||||||||||||||||
Interest expense, net
|
-
|
192,970
|
192,970
|
|||||||||||||||||
3,164,903
|
2,635,601
|
5,800,504
|
||||||||||||||||||
Income (loss) before income taxes
|
$
|
2,275,789
|
$
|
(2,635,601
|
)
|
$
|
(359,812
|
)
|
||||||||||||
Segment Assets
|
$
|
4,480,332
|
$
|
1,176,913
|
$
|
5,657,245
|
$
|
4,226,242
|
$
|
9,883,487
|
|
Quarter Ended
|
|||||||||||||||
FY 2016
|
June 30
|
September 30
|
December 31
|
March 31
|
||||||||||||
|
||||||||||||||||
Net sales
|
$
|
5,845,919
|
$
|
6,818,390
|
$
|
5,970,865
|
$
|
6,169,651
|
||||||||
Gross margin
|
1,815,295
|
2,243,466
|
2,034,757
|
1,892,072
|
||||||||||||
Income before taxes
|
494,244
|
370,153
|
453,537
|
538,187
|
||||||||||||
Net income
|
279,066
|
199,466
|
226,586
|
299,035
|
||||||||||||
Basic income per share
|
0.09
|
0.06
|
0.07
|
0.09
|
||||||||||||
Diluted income per share
|
0.02
|
0.06
|
0.07
|
0.09
|
FY 2015
|
June 30
|
September 30
|
December 31
|
March 31
|
||||||||||||
Net sales
|
$
|
3,129,076
|
$
|
3,587,674
|
$
|
5,030,097
|
$
|
6,449,125
|
||||||||
Gross margin
|
1,120,217
|
869,344
|
1,545,787
|
1,905,344
|
||||||||||||
Income (loss) before taxes
|
(497,187
|
)
|
(375,143
|
)
|
7,875
|
504,643
|
||||||||||
Net income (loss)
|
(384,005
|
)
|
(248,195
|
)
|
(20,944
|
)
|
372,704
|
|||||||||
Basic income (loss) per share
|
(0.12
|
)
|
(0.08
|
)
|
(0.01
|
)
|
0.11
|
|||||||||
Diluted income (loss) per share
|
(0.12
|
)
|
(0.08
|
)
|
(0.01
|
)
|
0.11
|
March 31, 2016
|
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
|
|||||||||||||||||
Warrant Liability
|
$
|
-
|
$
|
-
|
$
|
1,136,203
|
$
|
1,136,203
|
|||||||||
Total Liabilities
|
$
|
-
|
$
|
-
|
$
|
1,136,203
|
$
|
1,136,203
|
March 31, 2015
|
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
|
|||||||||||||||||
Warrant Liability
|
$
|
-
|
$
|
-
|
$
|
518,962
|
$
|
518,962
|
|||||||||
Total Liabilities
|
$
|
-
|
$
|
-
|
$
|
518,962
|
$
|
518,962
|
|
March 31, 2016
|
March 31, 2015
|
||||||
Fair value, at beginning of period
|
$
|
518,962
|
$
|
354,309
|
||||
|
||||||||
New issuances
|
-
|
-
|
||||||
Change in fair value
|
617,241
|
164,653
|
||||||
|
||||||||
Fair value, at end of period
|
$
|
1,136,203
|
$
|
518,962
|
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
|
|||||||||||||||||||||
11-20-2012
|
09-10-2019
|
20,000
|
$
|
3.56
|
$
|
3.50
|
42.45
|
%
|
6.83
|
1.09
|
%
|
$
|
21,441
|
|||||||||||||||||||||
02-14-2013
|
09-10-2019
|
20,000
|
$
|
3.58
|
$
|
3.80
|
41.72
|
%
|
6.58
|
1.43
|
%
|
$
|
23,714
|
|||||||||||||||||||||
07-12-2013
|
09-10-2019
|
20,000
|
$
|
3.33
|
$
|
3.32
|
40.26
|
%
|
6.17
|
2.00
|
%
|
$
|
19,523
|
|||||||||||||||||||||
08-12-2013
|
09-10-2019
|
20,000
|
$
|
3.69
|
$
|
3.69
|
40.20
|
%
|
6.08
|
2.01
|
%
|
$
|
21,587
|
Date of
Warrant
|
Expiration
Date
|
Number of
Warrants
|
Exercise
Price
|
Fair Market Value
Per Share
|
Put Option Value
|
Market Price Option
|
Remaining
Life in Years
|
Warrant
Liability
|
||||||||||||||||||||||||||
09-10-2010
|
09-10-2019
|
136,920
|
$
|
6.70
|
$
|
6.42
|
$
|
90,367
|
NA
|
4.45
|
$
|
68,460
|
||||||||||||||||||||||
09-10-2010
|
09-10-2015
|
10,416
|
$
|
6.70
|
$
|
6.42
|
NA
|
NA
|
0.45
|
$
|
7,002
|
*
|
||||||||||||||||||||||
07-26-2012
|
09-10-2019
|
50,000
|
$
|
3.35
|
$
|
6.42
|
$
|
30,000
|
153,500
|
4.45
|
$
|
153,500
|
||||||||||||||||||||||
07-26-2012
|
09-10-2019
|
20,000
|
$
|
3.35
|
$
|
6.42
|
$
|
13,200
|
61,400
|
4.45
|
$
|
61,400
|
||||||||||||||||||||||
11-20-2012
|
09-10-2019
|
20,000
|
$
|
3.56
|
$
|
6.42
|
$
|
13,200
|
57,200
|
4.45
|
$
|
57,200
|
||||||||||||||||||||||
02-14-2013
|
09-10-2019
|
20,000
|
$
|
3.58
|
$
|
6.42
|
$
|
13,200
|
55,000
|
4.45
|
$
|
55,000
|
||||||||||||||||||||||
07-12-2013
|
09-10-2019
|
20,000
|
$
|
3.33
|
$
|
6.42
|
$
|
13,200
|
61,800
|
4.45
|
$
|
61,800
|
||||||||||||||||||||||
08-12-2013
|
09-10-2019
|
20,000
|
$
|
3.69
|
$
|
6.42
|
$
|
13,200
|
54,600
|
4.45
|
$
|
54,600
|
Date of
Warrant
|
Expiration
Date
|
Number of
Warrants
|
Exercise
Price
|
Fair Market Value
Per Share
|
Put Option Value
|
Market Price Option
|
Remaining
Life in Years
|
Warrant
Liability
|
||||||||||||||||||||||||||
09-10-2010
|
09-10-2019
|
136,920
|
$
|
6.70
|
$
|
4.31
|
542,203
|
NA
|
3.45
|
$
|
542,203
|
|||||||||||||||||||||||
07-26-2012
|
09-10-2019
|
50,000
|
$
|
3.35
|
$
|
4.31
|
198,000
|
48,000
|
3.45
|
$
|
198,000
|
|||||||||||||||||||||||
07-26-2012
|
09-10-2019
|
20,000
|
$
|
3.35
|
$
|
4.31
|
79,200
|
19,200
|
3.45
|
$
|
79,200
|
|||||||||||||||||||||||
11-20-2012
|
09-10-2019
|
20,000
|
$
|
3.56
|
$
|
4.31
|
79,200
|
15,000
|
3.45
|
$
|
79,200
|
|||||||||||||||||||||||
02-14-2013
|
09-10-2019
|
20,000
|
$
|
3.58
|
$
|
4.31
|
79,200
|
12,800
|
3.45
|
$
|
79,200
|
|||||||||||||||||||||||
07-12-2013
|
09-10-2019
|
20,000
|
$
|
3.33
|
$
|
4.31
|
79,200
|
19,600
|
3.45
|
$
|
79,200
|
|||||||||||||||||||||||
08/12/2013
|
09-10-2019
|
20,000
|
$
|
3.69
|
$
|
4.31
|
79,200
|
12,400
|
3.45
|
$
|
79,200
|
Name (age)
|
|
Position
|
|
Year First
Elected a Director
|
Stephen A. Fletcher (1)
(55)
|
|
Director
|
|
2011
|
|
|
|
|
|
George J. Leon (2) (3)
(72)
|
|
Director
|
|
1986
|
|
|
|
|
|
Jeffrey C. O’Hara, CPA (1) (4)
(58)
|
|
Director; President since August 2007; Chief Executive Officer since December 2010; Chief Operating Officer since June 2006; Vice President since 2005
|
|
1998
|
|
|
|
|
|
Robert A. Rice (2) (3)
(60)
|
|
Director
|
|
2004
|
|
|
|
|
|
Robert H. Walker (2) (3) (5)
(80)
|
|
Director and Chairman of the Board since April 2011
|
|
1984
|
|
|
|
|
|
Michael W. Schirmer
(58)
|
|
Effective May 12, 2014, the Board approved the appointment of Mr. Schirmer as the Company’s Chief Operating Officer.
|
|
-
|
(1) | Mr. Fletcher is the son of Mr. Harold K. Fletcher, the former Chairman of the Company who passed away in April 2011, and the brother-in-law of Jeffrey C. O’Hara, the Company’s Chief Executive Officer |
(2) | Member of the Audit Committee |
(3) | Member of the Compensation Committee |
(4) | Mr. O’Hara has served as a member of the Board since 1998 and was appointed President of the Company in 2007, and as Chief Executive Officer in December 2010. |
(5) | Mr. Walker has served as a member of the Board since 1984 and was appointed Chairman of the Board in April 2011. |
Name and Principal Position
|
Fiscal Year
|
Salary ($) (1)
|
Incentive ($) (2)
|
Option Awards ($) (3)
|
All Other Compensation ($) (4)
|
Total ($)
|
||||||||||||||||
|
|
|||||||||||||||||||||
Jeffrey C. O’Hara, CEO President
|
2016
|
175,000
|
64,909
|
47,150
|
19,578
|
306,637
|
||||||||||||||||
2015 |
160,000
|
- | - |
19,877
|
179,877
|
|||||||||||||||||
|
|
|||||||||||||||||||||
Michael Schirmer, Vice President of Operations (5)
|
2016
|
167,500
|
64,909
|
23,575
|
19,488
|
275,472
|
||||||||||||||||
2015 |
140,000
|
- |
21,973
|
9,509
|
171,482
|
|||||||||||||||||
|
|
|||||||||||||||||||||
Joseph P. Macaluso PAO
|
2016
|
139,375
|
13,000
|
4,715
|
12,680 |
169,770
|
||||||||||||||||
2015 |
137,500
|
- | - |
10,862
|
148,362
|
(1) | The amounts shown in this column represent the dollar value of base cash salary earned by each named executive officer (“NEO”). |
(2) | Incentive compensation for 2016 is pending Board approval. No incentive compensation was made to the NEO’s in 2015, and therefore no amounts are shown. |
(3) | Amounts in this column represent the fair value required by ASC Topic 718 to be included in our financial statements for all options granted during that year (see Note 15 to Notes to the Consolidated Financial Statements). |
(4) | The amounts shown in this column represent amounts for medical and life insurance as well as the Company’s match in the 401(k) Plan. |
Name
|
Approval Date
|
Grant Date
|
All Other Option Awards:
Number of Shares of Stock (#)
|
Exercise or Base Price of
Option Awards ($/Share)
|
Grant date Fair Value of
Option Awards ($)
|
|||||||||||
Jeffrey C. O’Hara
|
04/28/15
|
04/28/15
|
20,000
|
$
|
5.85
|
$
|
47,150
|
|||||||||
Michael Schirmer
|
04/28/15
|
04/28/15
|
10,000
|
$
|
5.85
|
$
|
23,575
|
|||||||||
Joseph P. Macaluso
|
04/28/15
|
04/28/15
|
2,000
|
$
|
5.85
|
$
|
4,715
|
Name
|
Number of Securities Underlying Unexercised Options (#)
Exercisable
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable (1)
|
Option Exercise Price ($)
|
Option Expiration Date
|
|||||||||
|
|
||||||||||||
Joseph P. Macaluso
|
4,000
|
-
|
$
|
6.59
|
12/14/16
|
||||||||
-
|
2,000
|
$
|
5.85
|
4/28/20
|
|||||||||
|
|
||||||||||||
Jeffrey C. O’Hara
|
-
|
20,000
|
$
|
5.85
|
4/28/20
|
||||||||
|
|
||||||||||||
Michael Schirmer
|
10,000
|
-
|
$
|
4.22
|
11/01/18
|
||||||||
2,000
|
8,000
|
$
|
5.14
|
5/05/19
|
|||||||||
-
|
10,000
|
$
|
5.85
|
4/28/20
|
Name
|
Cash Compensation
|
Option Awards ($)(1)(2)
|
Total $
|
|||||||||
George J. Leon
|
$
|
11,250
|
$
|
-0-
|
$
|
11,250
|
||||||
Robert A. Rice
|
$
|
11,250
|
$
|
-0-
|
$
|
11,250
|
||||||
Robert H. Walker (3)
|
$
|
11,250
|
$
|
-0-
|
$
|
11,250
|
||||||
Stephen A. Fletcher
|
$
|
6,250
|
$
|
-0-
|
$
|
6,250
|
(1) | Amounts in this column, if any, represent the fair value required by ASC 718 to be included in our financial statements for all options granted during fiscal year 2015. |
(2) | The numbers of currently exercisable options are set forth in the footnotes to Item 12 below. |
(3) | Mr. Walker also receives a monthly stipend of $2,400 for his additional responsibility as Chairman of the Board. |
Name and Address
|
Number of Shares
Beneficially Owned
|
Percentage
of Class (1)
|
||||||
|
||||||||
Named Directors and Officers
|
||||||||
|
||||||||
Stephen A. Fletcher, Director
|
-0-
|
(2) |
0
|
%
|
||||
7378 E. Main Street
|
||||||||
Lima, NY 14485
|
||||||||
|
||||||||
George J. Leon, Director
|
455,971
|
(3) |
14.0
|
%
|
||||
168 Redpath Avenue
|
||||||||
Toronto, Ontario, Canada M4P 2K6
|
||||||||
|
||||||||
Jeffrey C. O’Hara, Director
|
241,156
|
(4) |
7.4
|
%
|
||||
853 Turnbridge Circle
|
||||||||
Naperville, IL 60540
|
||||||||
|
||||||||
Robert A. Rice, Director
|
113,404
|
3.5
|
%
|
|||||
5 Roundabout Lane
|
||||||||
Cape Elizabeth, ME 04107
|
||||||||
|
||||||||
Robert H. Walker, Director
|
75,053
|
2.3
|
%
|
|||||
27 Vantage Court
|
||||||||
Port Jefferson, NY 11777
|
||||||||
|
||||||||
Michael Schirmer
|
16,000
|
(5) |
0.5
|
%
|
||||
14 Turnberry Lane
|
||||||||
Pittsford, NY 14534
|
||||||||
|
||||||||
Joseph P. Macaluso, PAO
|
27,913
|
(6) |
0.9
|
%
|
||||
167 Tennis Court
|
||||||||
Wall Township, NJ 07719
|
||||||||
|
||||||||
All officers and directors as a group (6 persons)
|
929,497
|
(7) |
28.3
|
%
|
||||
|
||||||||
Mrs. Sadie Fletcher
|
656,907
|
(8) |
20.2
|
%
|
||||
657 Downing Lane
|
||||||||
Williamsville, NY 14221
|
||||||||
|
||||||||
Vincent J. Dowling, Jr.
|
285,400
|
(9) |
8.8
|
%
|
||||
54 Ledyard Road
|
||||||||
West Hartford, CT 06117
|
||||||||
|
||||||||
All officers, directors and 5% holders as a group (8 persons)
|
1,871,804
|
57.0
|
%
|
(1)
|
The class includes 3,256,887 shares outstanding in the calculation of the percentage of shares owned by a party. The Common Stock deemed to be owned by the named party includes stock which is not outstanding but subject to currently exercisable options held by the individual named in accordance with Rule 13d-3(d)c) of the Exchange Act. The foregoing information is based on reports made by the named individuals.
|
(2)
|
Mr. Stephen A. Fletcher is the son of Mr. Harold K. Fletcher, former Chief Executive Officer and director of the Company. Mr. Stephen A. Fletcher is the son of Mrs. Sadie Fletcher who beneficially owns 656,907 shares by virtue of the Estate of Harold K. Fletcher. Mr. Fletcher disclaims beneficial ownership of the shares owned by the Estate of Harold K. Fletcher.
|
(3)
|
Includes 423,621 shares owned by the George Leon Family Trust, of which Mr. Leon is a beneficiary. Mr. Leon acts as manager of the trust assets pursuant to an informal family, oral arrangement, and disclaims beneficial ownership of the shares owned by the trust.
|
(4)
|
Includes 4,000 shares subject to currently exercisable stock options owned by Mr. O’Hara.
|
(5)
|
Includes 16,000 shares subject to currently exercisable stock options owned by Mr. Schirmer.
|
(6)
|
Includes 4,400 shares subject to currently exercisable stock options owned by Mr. Macaluso.
|
(7)
|
Includes 24,400 shares subject to currently exercisable options held by all executive officers and directors of the Company (including those individually named above).
|
(8)
|
Represents 656,907 shares owned by the Estate of Harold K. Fletcher, former Chief Executive Officer and director of the Company. Mrs. Fletcher is the mother of Stephen A. Fletcher, a director of the Company.
|
(9)
|
Based on Schedule 13G filed with the SEC on February 11, 2015 and furnished to the Company.
|
Plan category
|
Number of securities to be issued upon exercise of outstanding options
|
Weighted average exercise price of outstanding options
|
Number of options remaining available for future issuance under Equity Compensation Plans
|
|||||||||
Equity Compensation Plans approved by shareholders
|
85,000
|
$
|
5.33
|
--
|
||||||||
Equity Compensation Plans not approved by shareholders
|
--
|
--
|
--
|
|||||||||
Total
|
85,000
|
$
|
5.33
|
--
|
|
2016
|
2015
|
||||||
|
||||||||
Audit Fees
|
$
|
140,800
|
$
|
120,350
|
||||
Audit-Related Fees
|
-
|
-
|
||||||
Total Audit and Audit-Related Fees
|
140,800
|
120,350
|
||||||
Tax Fees
|
-
|
-
|
||||||
All Other Fees
|
-
|
-
|
||||||
|
||||||||
Total
|
$
|
140,800
|
$
|
120,350
|
|
Pages
|
Financial Statements:
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
23 |
|
|
Consolidated Balance Sheets - March 31, 2016 and 2015
|
24 |
|
|
Consolidated Statements of Operations - Years Ended March 31, 2016 and 2015
|
25 |
|
|
Consolidated Statements of Changes in Stockholders' Equity - Years Ended March 31, 2016 and 2015
|
26 |
|
|
Consolidated Statements of Cash Flows - Years Ended March 31, 2016 and 2015
|
27 |
|
|
Notes to Consolidated Financial Statements
|
28 |
*
|
(3.1)
|
Tel-Instrument Electronics Corp.'s Certificate of Incorporation, as amended.
|
*
|
(3.2)
|
Tel-Instrument Electronics Corp.'s By-Laws, as amended.
|
*
|
(3.3)
|
Tel-Instrument Electronics Corp.'s Restated Certificate of Incorporation dated November 8, 1996.
|
*
|
(4.1)
|
Specimen of Tel-Instrument Electronics Corp.'s Common Stock Certificate.
|
*
|
(10.2)
|
10% convertible subordinated note between Registrant and Harold K. Fletcher.
|
*
|
(10.3)
|
Purchase agreement between Registrant and Innerspace Technology
|
*
|
(10.4)
|
Agreement between Registrant and Semaphore Capital Advisors, LLC
|
*
|
(10.5)
|
2006 Stock Option Plan
|
*
|
(10.6)
|
Subordinated Note Between Registrant and Harold K. Fletcher
|
*
|
(10.7)
|
Subordinated Note Between Registrant and Jeffrey C. O’Hara
|
*
|
(10.8)
|
Shareholder Purchase Agreement between the Registrant and Harold K. Fletcher
|
*
|
(10.9)
|
Shareholder Purchase Agreement between the Registrant and Jeffrey C. O’Hara
|
*
|
(10.10)
|
Shareholder Purchase Agreement between the Registrant and George Leon
|
*
|
(10.11)
|
Loan Agreement with BCA Mezzanine Fund, LLP and Amendments 1-3
|
*
|
(10.12)
|
Intercreditor and Subordination Agreement among Harold. K. Fletcher, Jeffrey C. O’Hara and BCA Mezzanine Fund, LLP.
|
*
|
(10.13)
|
Subscription Agreement between Registrant and Subscriber, dated November 8, 2012
|
*
|
(10.14)
|
Loan Agreement with Bank of America
|
|
(23.1)
|
|
|
(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
|
* | Incorporated by reference to previously filed documents. |
|
TEL-INSTRUMENT ELECTRONICS CORP.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Dated: June 29, 2016
|
By:
|
/s/ Jeffrey C. O’Hara
|
|
|
|
Jeffrey C. O’Hara
|
|
|
|
CEO and Director
|
|
|
|
(Principal Executive Officer)
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Jeffrey C. O’Hara
|
|
CEO, President, and Director
|
|
June 29, 2016
|
|
Jeffrey C. O’Hara
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joseph P. Macaluso
|
|
Principal Accounting Officer
|
|
June 29, 2016
|
|
Joseph P. Macaluso
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Stephen A. Fletcher
|
|
Director
|
|
June 29, 2016
|
|
Stephen A. Fletcher
|
|
|
|
|
|
|
|
|
|
|
|
/s/ George J. Leon
|
|
Director
|
|
June 29, 2016
|
|
George J. Leon
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert A. Rice
|
|
Director
|
|
June 29, 2016
|
|
Robert A. Rice
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert H. Walker
|
|
Chairman of the Board, Director
|
|
June 29, 2016
|
|
Robert H. Walker
|
|
|
|
|
1. | I have reviewed this annual report on Form 10-K 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 presented in this report; |
4. | The registrant's other certifying officer and I are 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) and 15(f) and 15(d)-15(f) for the registrant and we have: |
a) | Designed such disclosure controls and procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, 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 financial 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. | The registrant's other certifying officer and 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 registrant's board of directors: |
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 involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
1. | I have reviewed this annual report on Form 10-K 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 presented in this report; |
4. | The registrant's other certifying officer and I are 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) and 15(f) and 15(d)-15(f) for the registrant and we have: |
a) | Designed such disclosure controls and procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, 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 financial 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. | The registrant's other certifying officer and 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 registrant's board of directors: |
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 involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Document And Entity Information - USD ($) |
12 Months Ended | ||
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Mar. 31, 2016 |
Jun. 23, 2016 |
Sep. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TEL INSTRUMENT ELECTRONICS CORP | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Common Stock, Shares Outstanding | 3,255,887 | ||
Entity Public Float | $ 7,881,206 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000096885 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Mar. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets (Parentheticals) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Accounts receivable, allowance for doubtful accounts (in Dollars) | $ 7,500 | $ 24,975 |
Common stock, par value (in Dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares issued | 3,255,887 | 3,256,887 |
Common stock, shares outstanding | 3,255,887 | 3,256,887 |
Common stock, shares authorized | 4,000,000 | 4,000,000 |
1. Business, Organization, and Liquidity |
12 Months Ended |
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Mar. 31, 2016 | |
Disclosure Text Block [Abstract] | |
Basis of Accounting [Text Block] |
1. Business, Organization, and Liquidity
Business and Organization
Tel-Instrument Electronics Corp. (“Tel” or the “Company”) has been in business since 1947. The Company is a leading designer and manufacturer of avionics test and measurement instruments for the global, commercial air transport, general aviation, and government/military defense markets. Tel provides instruments to test, measure, calibrate, and repair a wide range of airborne navigation and communication equipment. The Company sells its equipment in both domestic and international markets. Tel continues to develop new products in anticipation of customers’ needs and to maintain its strong market position. Its development of multi-function testers has made it easier for customers to perform ramp tests with less operator training, fewer test sets, and lower product support costs. The Company has become a major manufacturer and supplier of Identification Friend or Foe (“IFF”) flight line test equipment and over the last few years was awarded three major military contracts.
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2. Summary of Significant Accounting Policies |
12 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] |
2. Summary of Significant Accounting Policies
Principles of Consolidation:
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and include the Company and its wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated.
Revenue Recognition:
Revenues are recognized at the time of shipment to, or acceptance by the customer, provided title and risk of loss is transferred to the customer as the product price is fixed or determinable, collection of the resulting receivable is probable, evidence of an arrangement exists and product returns are reasonably estimable. Provisions, when appropriate, are made where the right to return exists.
Revenues for repairs and calibrations of the Company’s products represented 3.7% and 5.4% of sales for the years ended March 31, 2016 and 2015, respectively. These revenues are for units that are periodically returned for annual calibrations and/or for repairs after the warranty period has expired. Revenues on repairs and calibrations are recognized at the time the repaired or calibrated unit is shipped, as it is at this time that the work is completed. The Company’s terms are F.O.B. Plant, and as such, delivery has occurred, and revenue recognized, when picked up and acknowledged by a common carrier.
Shipping and handling costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.
Payments received prior to the delivery of units or services performed are recorded as deferred revenues.
With respect to warranty revenues, upon the completion of two years from the date of sale, considered to be the warranty period, the Company offers customers an optional warranty. Amounts received for warranties are recorded as deferred revenue and recognized over the respective terms of the agreements.
Fair Value of Financial Instruments:
The Company estimates that the fair value of all financial instruments at March 31, 2016 and March 31, 2015, as defined in Financial Accounting Standards Board (“FASB”) ASC 825 “Financial Instruments”, does not differ materially, except for the items discussed below, from the aggregate carrying values of its financial instruments recorded in the accompanying consolidated balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value.
The carrying amounts reported in the consolidated balance sheets as of March 31, 2016 and March 31, 2015 for cash, accounts receivable and accounts payable approximate the fair value because of the immediate or short-term maturity of these financial instruments. Each reporting period we evaluate market conditions including available interest rates, credit spreads relative to our credit rating and liquidity in estimating the fair value of our debt. After considering such market conditions, we estimate that the fair value of debt approximates its carrying value.
Concentrations of Credit Risk:
Cash held in banks: The Company maintains cash balances at a financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts.
Accounts Receivable: The Company’s avionics customer base is primarily comprised of airlines, distributors, and the U.S. Government. As of March 31, 2016, the Company believes it has no significant risk related to its concentration within its accounts receivable.
Inventories:
Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. Inventories are written down if the estimated net realizable value is less than the recorded value. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based, in part, on the Company’s forecasts of future sales and age of inventory. In accordance with industry practice, service parts inventory is included in current assets, although service parts are carried for established requirements during the serviceable lives of the products and, therefore, not all parts are expected to be sold within one year.
Equipment and Leasehold Improvements:
Office and manufacturing equipment are stated at cost, net of accumulated depreciation. Depreciation and amortization are provided on a straight-line basis over periods ranging from 3 to 5 years.
Leasehold improvements are amortized over the term of the lease or the useful life of the asset, whichever is shorter.
Maintenance, repairs, and renewals that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred.
When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Statement of Operations.
Engineering, Research and Development Costs:
Engineering, research and development costs are expensed as incurred.
Advertising Expenses:
Advertising expenses consist primarily of costs for direct advertising. The Company expenses all advertising costs as incurred, and classifies these costs under selling, general and administrative expenses. Advertising costs amounted to $577 and $-0- for the years ended March 31, 2016 and 2015, respectively.
Deferred Revenues:
Amounts billed in advance of the period in which the service is rendered or product delivered are recorded as deferred revenue. At March 31, 2016 and 2015, deferred revenues totaled $221,469 and $152,259, respectively. See above for additional information regarding our revenue recognition policies.
Net Income (Loss) per Common Share:
Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed by dividing diluted net income by the weighted-average number of common shares outstanding during the period, including common stock equivalents, such as stock options and warrants using the treasury stock method. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, and excludes the anti-dilutive effects of common stock equivalents.
Accounting for Income Taxes:
The Company accounts for income taxes using the asset and liability method described in FASB ASC 740, “Income Taxes”. Deferred tax assets arise from a variety of sources, the most significant being: a) tax losses that can be carried forward to be utilized against profits in future years; b) expenses recognized for financial reporting purposes but disallowed in the tax return until the associated cash flow occurs; and c) valuation changes of assets which need to be tax effected for book purposes but are deductible only when the valuation change is realized.
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when such differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefit which is not more likely than not to be realized. In assessing the need for a valuation allowance, future taxable income is estimated, considering the realization of tax loss carryforwards. Valuation allowances related to deferred tax assets can also be affected by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event it was determined that the Company would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through a charge to income in the period in which that determination is made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made. In its evaluation of a valuation allowance the Company takes into account existing contracts and backlog, and the probability that options under these contract awards will be exercised as well as sales of existing products. The Company prepares profit projections based on the revenue and expenses forecast to determine that such revenues will produce sufficient taxable income to realize the deferred tax assets.
The Company accounts for uncertainties in income taxes under ASC 740-10-50 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 requires that the Company determine whether the benefits of its tax positions are more-likely-than-not of being sustained upon audit based on the technical merits of the tax position. The Company recognizes the impact of an uncertain income tax position taken on its income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The implementation of ASC 740-10 had no impact on the Company’s results of operations or financial position.
Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, one or more positions may be challenged by taxing authorities. Settlement of any challenge can result in no change, a complete disallowance, or some partial adjustment reached through negotiations or litigation.
Interest and penalties related to income tax matters, if applicable, will be recognized as income tax expense. During the years ended March 31, 2016 and 2015 the Company did not incur any expense related to interest or penalties for income tax matters, and no such amounts were accrued as of March 31, 2016 and 2015. The Company’s tax years remain open for examination by the tax authorities primarily beginning 2013 through present.
Stock-based Compensation:
The Company accounts for stock-based compensation in accordance with FASB ASC 718 which requires the measurement of stock-based compensation based on the fair value of the award on the date of grant. The Company recognizes compensation cost on awards on a straight-line basis over the vesting period, typically four years. The Company estimates the fair value of each option granted using the Black-Scholes option-pricing model.
Additional information and disclosure are provided in Note 14 below.
Long-Lived Assets:
The Company assesses the recoverability of the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future, undiscounted cash flows expected to be generated by an asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairment losses have been recognized for the years ended March 31, 2016 and 2015, respectively.
Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that management 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include income taxes, warranty claims, inventory and accounts receivable valuations.
Reclassifications:
Certain prior year amounts have been reclassified to conform to the current year presentation.
Accounts Receivable:
The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current credit worthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for and payments from its customers and maintains provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. While such credit losses have historically been within the Company’s expectation and the provision established, the Company cannot guarantee that this will continue.
Warranty Reserves:
Warranty reserves are based upon historical rates and specific items that are identifiable and can be estimated at time of sale. While warranty costs have historically been within the Company’s expectations and the provisions established, future warranty costs could be in excess of the Company’s warranty reserves. A significant increase in these costs could adversely affect the Company’s operating results for the period and the periods these additional costs materialize. Warranty reserves are adjusted from time to time when actual warranty claim experience differs from estimates. For the year ended March 31, 2016 warranty costs were $367,935 as compared to $279,955 for the year ended March 31, 2015 and are included in Cost of Sales in the accompanying statement of operations. See Note 6 for warranty reserves.
Risks and Uncertainties:
The Company’s operations are subject to a number of risks, including but not limited to changes in the general economy, demand for the Company’s products, the success of its customers, research and development results, reliance on the government and commercial markets, litigation, and the renewal of its line of credit. The Company has major contracts with the U.S. Government, which like all government contracts are subject to termination.
New Accounting Pronouncements:
In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 ("Improvements to Employee Share-Based Payment Accounting") which simplifies several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The Company is evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02 ("Leases"), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The Company is evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements.
In January 2016, the FASB issued ASU No. 2016-01 (ASC Subtopic 825-10), Financial Instruments - Overall Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU require entities to measure all investments in equity securities at fair value with changes recognized through net income. This requirement does not apply to investments that qualify for the equity method of accounting, to those that result in consolidation of the investee, or for which the entity meets a practicability exception to fair value measurement. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain portions of the ASU. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.
In November 2015, the FASB issued ASU 2015-17, which is an update to Topic 740, "Income Taxes". The update will require that all deferred tax assets and liabilities be classified as non-current. The update is effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016. ASU 2015-17 will have a material impact on the Company's balance sheet, as the deferred tax reported as a current asset will be reported as a non-current asset once the update is effective, resulting in a decrease to the Company's current ratio. As of March 31, 2016, the Company reported $578,507 of deferred tax as a current asset. It will not have any material impact on the Company's results of operations.
In September 2015, the FASB issued ASU 2015-16 (ASC Topic 805), Business Combinations Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize measurement period adjustments in the period in which the adjustments are determined. The income effects of such measurement period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The amendments in this update are for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this new guidance is not expected to have a material impact on the Company’s consolidated financial statements and disclosures.
In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact, if any, it will have on its consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern”, which requires management to evaluate whether conditions or events raise substantial doubt about the entity’s ability to continue as a going concern and, if so, to provide related footnote disclosures. The guidance is effective for annual or interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated Financial Statements.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. This ASU applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LILO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures.
No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s condensed consolidated financial statements.
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3. Accounts Receivable |
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Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
3. Accounts Receivable
The following table sets forth the components of accounts receivable:
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4. Inventories |
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Inventory Disclosure [Text Block] |
4. Inventories
Inventories consist of:
Work-in-process inventory includes $1,331,784 and $1,151,118 for government contracts at March 31, 2016 and 2015, respectively.
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5. Equipment and Leasehold Improvements |
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Property, Plant and Equipment Disclosure [Text Block] |
5. Equipment and Leasehold Improvements
Equipment and leasehold improvements consist of the following:
Depreciation and amortization expense related to the assets above for the years ended March 31, 2016 and 2015 was $164,774 and $177,291 respectively.
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6. Accrued Expenses |
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Accounts Payable and Accrued Liabilities Disclosure [Text Block] |
6. Accrued Expenses
Accrued vacation pay, deferred wages, payroll and payroll withholdings consist of the following:
Accrued vacation pay, payroll and payroll withholdings includes $321,831 and $240,964 at March 31, 2016 and 2015, respectively, which is due to officers.
Accrued expenses - other consist of the following:
The following table provides a summary of the changes in warranty reserves for the years ended March 31, 2016 and 2015:
Accrued expenses – related parties consists of the following:
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7. Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] |
7. Income Taxes
Income tax (benefit) provision:
The approximate values of the components of the Company’s deferred taxes at March 31, 2016 and 2015 are as follows:
The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income. The Company has federal net operating loss (“NOL”) carryforwards of approximately $5,301,000 as of March 31, 2016. These carryforward losses are available to offset future taxable income, and begin to expire in the year 2027. New Jersey State NOL carryforwards approximate $3,989,000 as of March 31, 2016. New Jersey State NOL carryforwards expire in 20 years, and certain of these amounts begin to expire in 2030.
The foregoing amounts are management’s estimates, and the actual results could differ from those estimates. Future profitability in this competitive industry depends on continually obtaining and fulfilling new profitable sales agreements and modifying products. The inability to obtain new profitable contracts or the failure of the Company’s engineering development efforts could reduce estimates of future profitability, which could affect the Company’s ability to realize the deferred tax assets.
A reconciliation of the income tax (benefit) provision at the statutory Federal tax rate of 34% to the income tax (benefit) provision recognized in the financial statements is as follows:
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8. Related Parties |
12 Months Ended |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] |
8. Related Parties
Subordinated Notes
On February 22, 2010, the Company borrowed $250,000 in exchange for issuing subordinated notes to two executive officers and directors in the amount of $125,000 (individually, the “Subordinated Note” and collectively, the “Subordinated Notes”). Each officer and director also received 5,000 options to purchase Common Stock at an exercise price of $8.00 per share, the market price at the date of grant. In September 2010, these officers/directors entered into an Intercreditor and Subordination agreement which subordinated their loans to the BCA Loan Agreement (see Note 10 to Notes to Consolidated Financial Statements). The notes were to become due April 1, 2011 with an interest rate of 1% per month, payable on a monthly basis within 14 days of the end of each month. The Intercreditor and Subordination Agreement amongst the parties precludes the payment of principal or interest under these subordinated notes unless and until the Senior Obligations (as defined in the Intercreditor and Subordination Agreement) have been paid in full or without the express written consent of Senior Lender. The holders of Subordinated Notes agreed that the Company’s failure to pay the monthly interest amounts pursuant to the terms of the February 22, 2010 Subordinated Notes will not constitute an event of default on such notes if the Company is precluded from making these payments pursuant to the limitations included in the loan agreement with BCA Mezzanine Fund L.L.P. (“BCA”). Upon payment in full of the loan to BCA in November 2014, the Company was able to commence to pay down the principal balance of the Subordinated Notes. During fiscal year 2012, the Company’s Chairman, at the time, passed away. His surviving spouse has retained this Subordinated Note and continues to acknowledge the terms. During the fiscal year ended March 31, 2016, the Company repaid $225,000 of the Subordinated Notes. The outstanding balances at March 31, 2016 and 2015 were $25,000 and $250,000, respectively. Total interest expense was $42,966 and $47,312 for the years ended March 31, 2016 and 2015, respectively. Accrued interest at March 31, 2016 and 2015 was $107,237 and $85,174, respectively.
Services
The Company has obtained marketing and sales services from a brother-in-law of the Company’s CEO with the related fees and commissions amounting to $107,980 and $100,480 for the years ended March 31, 2016 and 2015, respectively.
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9. Long-Term Debt |
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Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt [Text Block] |
9. Long-Term Debt
BCA Mezzanine Fund LLP
In September 2010 the Company entered into an agreement with BCA (“the “BCA Loan Agreement”) to lend the Company $2.5 million in the form of a promissory note (“the “BCA Note”). The Company incurred expenses of $541,604 in connection with this loan, including legal fees, investment banking fees and other transaction fees. These expenses were included as deferred financing costs in the accompanying balance sheets, and were amortized over the term of the loan using the straight-line method which approximates the effective interest rate method. For the years ended March 31, 2016 and 2015, the Company recorded amortization of deferred financing costs in the amount of $-0- and $69,165. On November 13, 2014, the Company paid off the BCA Note, and as a result, wrote-off the remaining balance of deferred charges in the amount of $89,365, and such amount is included in Loss on Extinguishment of Debt in the accompanying statement of operations for the year ended March 31, 2015. As of March 31, 2016 and March 31, 2015, there were no unamortized deferred financing costs related to the BCA loan.
The Company also issued warrants to BCA for 136,920 shares at an exercise price of $6.70 per share for nine years in conjunction with the issuance with the BCA Note. In connection with the initial warrants issued with this debt, the Company recorded a debt discount of $267,848. The debt discount was being amortized over the life of the loan.
In consideration for the waivers for non-compliance of the financial covenants, BCA received a total of 100,000 additional warrants to purchase shares of the Common Stock, which expire on September 10, 2019. Determining the warrant value to be recorded requires us to develop estimates to be used in calculating the fair value of the warrant. The fair value of the warrant is calculated using the Black-Scholes valuation model. See Note 19 which summarizes the additional warrants received by BCA. The value of the warrants was charged to debt discount in the accompanying balance sheet, and the amount was amortized over the remaining term of the loan.
Total amortization expense associated with the initial warrants, additional warrants and fees were $-0- and $75,308 for the years ended March 31, 2016 and 2015, respectively. On November 13, 2014, the Company paid off the BCA Note, and as a result, wrote off the remaining balance of unamortized discount in the amount of $98,737, and such amount is included in Loss on Extinguishment of Debt in the accompanying statement of operations for the year ended March 31, 2015.
Term Loans with Bank of America
On November 13, 2014, the Company entered into a term loan in the amount of $1,200,000 with Bank of America. The proceeds from the term loan were primarily used to pay off the remaining balance of the BCA Note in the amount of $1,153,109, including accrued interest of $4,467 (see above). The term loan is for three years, and expires on November 13, 2017. Monthly payments are at $36,551 including interest at 6%. The term loan is collateralized by substantially all of the assets of the Company. At March 31, 2016 and March 31, 2015, the outstanding balances were $693,407 and $1,076,894, respectively. At March 31, 2016, $407,598 was classified as current. The Company incurred expenses $16,287 in connection with this loan, including legal fees and other transaction fees. These expenses are included as deferred financing costs in the accompanying balance sheets, and are amortized over the term of the loan, using the straight-line method which approximates the effective interest rate method. For the years ended March 31, 2016 and 2015, the Company recorded amortization of deferred financing costs in the amount of $5,429 and $2,066, respectively. As of March 31, 2016 and March 31, 2015, the Company had unamortized deferred financing costs in the amount of $8,792 and $14,221, respectively.
In July 2015, the Company entered into a term loan in the amount of $18,000 with Bank of America. The term loan is for three years, and expires in July 2018. Monthly payments are at $536 including interest at 4.5%. The term loan is collateralized by substantially all of the assets of the Company. At March 31, 2016 and March 31, 2015, the outstanding balances were $14,211 and $-0-, respectively.
Automobile Loan
In March 2014, the Company entered into a loan with Ford Credit for its van in the amount of $23,712. Such note has a term of five (5) years with an annual interest rate of 8.79% with monthly payments of $492. The outstanding balances at March 31, 2016 and 2015 were $15,197 and $19,549, respectively.
The annual maturities of long-term debt for the five fiscal years subsequent to March 31, 2016 are as follows:
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10. Line of Credit |
12 Months Ended |
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Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] |
10. Line of Credit
On March 21, 2016, the Company entered into a line of credit agreement with Bank of America, which expires March 31, 2017. The line provides a revolving credit facility with borrowing capacity of up to $500,000
. There are no covenants or borrowing base calculations associated with this line of credit. Interest on any outstanding balances is payable monthly at an annual interest rate equal to the LIBOR (London Interbank Offered Rates) Daily Floating plus 3.75 percentage points. The Company’s interest rate was 4.96% at March 31, 2016. The line is collateralized by substantially all of the assets of the Company. The Company has not made any borrowings against this line of credit. As of March 31, 2016, the remaining availability under this line is $500,000.
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11. Commitments |
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] |
11. Commitments
The Company leases its general office and manufacturing facility in East Rutherford, NJ (approximately 27,000 square feet) under an operating lease agreement which expires July 31, 2016. The lease is for a five year period, beginning August 1, 2011, with a five year option in a one-story facility. In June 2016, the Company extended the lease term for another five years until August 2021.
Under terms of the lease, the Company is also responsible for its proportionate share of the additional rent to include all real estate taxes, insurance, snow removal, landscaping and other building charges. The Company is also responsible for the utility costs for the premises.
The Company also leases a small office in Lawrence, Kansas under an operating lease agreement which expires June 30, 2017.
In addition, the Company has agreements to lease equipment for use in the operations of the business under operating leases.
The following is a schedule of approximate future minimum rental payments for operating leases subsequent to the year ended March 31, 2016.
Total rent expense, including common charges related to the building as well as equipment rentals, was approximately $358,000 and $355,000 for the years ended March 31, 2016 and 2015, respectively.
The Company sponsors a 401k Plan in which employee contributions on a pre-tax basis are supplemented by matching contributions by the Company. The Company charged to operations $27,916 and $23,555 as its matching contribution to the Company’s 401k Plan for the years ended March 31, 2016 and 2015, respectively.
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12. Capitalized Lease Obligations |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Capital Leases Disclosures [Text Block] |
12. Capitalized Lease Obligations
The Company has entered into lease commitments for furniture and equipment that meet the requirements for capitalization. The equipment has been capitalized and shown in equipment and leasehold improvements in the accompanying balance sheets. The related obligations are also recorded in the accompanying consolidated balance sheets and are based upon the present value of the future minimum lease payments with interest rates ranging from 9% to 14%. The net book value of equipment acquired under capitalized lease obligations amounted to $51,230 and $79,938 at March 31, 2016 and 2015, respectively. There was one new capital lease for the year ended March 31, 2016 in the amount of $26,194. There were no new capital lease obligations during the year ended March 31, 2015. As of March 31, 2016 and 2015, accumulated amortization under capital leases was $585,959 and $531,057, respectively.
At March 31, 2016, future payments under capital leases are as follows over each of the next five fiscal years:
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13. Significant Customer Concentrations |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||
Concentration Risk Disclosure [Text Block] |
13. Significant Customer Concentrations
For the years ended March 31, 2016 and 2015, sales to the U.S. Government represented approximately 79% and 77%, respectively of net sales. No other individual customer represented over 10% of net sales for these years. No direct customer accounted for more than 10% of commercial or government net sales. Our U.S. distributor accounted for 21% and 22% of commercial sales for the years ended March 31, 2016 and 2015, respectively.
Net sales to foreign customers were $1,900,724 and $1,809,495 for the years ended March 31, 2016 and 2015, respectively. All other sales were to customers located in the U.S. The following table presents net sales by U.S. and foreign countries:
Net sales related to any single foreign country did not comprise more than 10% of consolidated net sales. The Company had no assets outside the United States.
Receivables from the U.S. Government represented approximately 37% and 59%, respectively, of total receivables at March 31, 2016 and 2015, respectively. As of March 31, 2016, one individual customer accounted for 27% of the Company’s outstanding accounts receivable. As of March 31, 2015, no other individual customer accounted for over 10% of the Company’s outstanding accounts receivable.
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14. Stock Option Plans |
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Share-based Arrangements with Employees and Nonemployees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] |
14. Stock Option Plans
In March 2006, the Board adopted the 2006 Stock Option Plan (the “Plan”) which reserved for issuance options to purchase up to 250,000 shares of its Common Stock. The stockholders approved the Plan at the December 2006 annual meeting. The Plan, which had a term of ten years from the date of adoption, is administered by the Board of Directors (the “Board”) or by a committee appointed by the Board. The selection of participants, allotment of shares, and other conditions related to the grant of options, to the extent not set forth in the Plan, are determined by the Board. Options granted under the Plan are exercisable up to a period of 5 years from the date of grant at an exercise price which is not less than the fair market value of the common stock at the date of grant, except as to a stockholder owning 10% or more of the outstanding common stock of the Company, as to whom the exercise price must not be less than 110% of the fair market value of the common stock at the date of grant. Options, for the most part, are exercisable on a cumulative basis, 20% at or after each of the first, second, and third anniversary of the grant and 40% after the fourth year anniversary. These terms can be modified based upon approval of the Board.
The fair value of each option awarded is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of Common Stock. The expected life of the options granted represents the period of time from date of grant to expiration (5 years). The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. The per share weighted-average fair value of stock options granted for the years ended March 31, 2016 and 2015 was $2.36 and $2.20, respectively, on the date of grant using the Black Scholes option-pricing model with the following assumptions:
A summary of the status of the Company’s stock option plans for the fiscal years ended March 31, 2015 and 2014 and changes during the years are presented below (in number of options):
Remaining options available for grant were -0- and 248,278 as of March 31, 2016 and 2015, respectively.
The total intrinsic value of options exercised during the years ended March 31, 2016 and 2015 were $-0- and $1,470, respectively. Cash received from the exercise of stock options for the years ended March 31, 2016 and 2015 was $-0- and $26,610, respectively.
For the years ended March 31, 2016 and 2015, the unamortized compensation expense for stock options was $95,792 and $19,934, respectively. Unamortized compensation expense is expected to be recognized over a weighted-average period of approximately 1 year.
A summary of the Company’s non-vested shares as of March 31, 2016 and changes during the year ended March 31, 2016 is presented below:
The compensation cost that has been charged was $32,277 and $33,008 for the fiscal years ended March 31, 2016 and 2015, respectively. The total income tax benefit recognized in the statement of operations for share-based compensation arrangements was $-0- and $1,216 for the fiscal years ended March 31, 2016 and 2015, respectively, and relates to the compensation cost associated with non-qualified stock options
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15. Net Diluted Income (Loss) per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] |
15. Net Diluted Income (Loss) per Share
Net income (loss) per share has been computed according to FASB ASC 260, “Earnings per Share,” which requires a dual presentation of basic and diluted earnings (loss) per share (“EPS”). Basic EPS represents net (loss) income divided by the weighted average number of common shares outstanding during a reporting period. Diluted EPS reflects the potential dilution that could occur if securities, including warrants and options, were converted into common stock. The dilutive effect of outstanding warrants and options is reflected in earnings per share by use of the treasury stock method. In applying the treasury stock method for stock-based compensation arrangements, the assumed proceeds are computed as the sum of the amount the employee must pay upon exercise and the amounts of average unrecognized compensation costs attributed to future services.
The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share:
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16. Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] |
16. Segment Information
In accordance with FASB ASC 280, “Disclosures about Segments of an Enterprise and related information”, the Company determined it has two reportable segments - avionics government and avionics commercial. There are no inter-segment revenues.
The Company is organized primarily on the basis of its avionics products. The avionics government segment consists primarily of the design, manufacture, and sale of test equipment to the U.S. and foreign governments and militaries either directly or through distributors. The avionics commercial segment consists of design, manufacture, and sale of test equipment to domestic and foreign airlines, directly or through commercial distributors, and to general aviation repair and maintenance shops. The Company develops and designs test equipment for the avionics industry and as such, the Company’s products and designs cross segments.
Management evaluates the performance of its segments and allocates resources to them based on gross margin. The Company’s general and administrative costs and sales and marketing expenses, and engineering costs are not segment specific. As a result, all operating expenses are not managed on a segment basis. Net interest includes expenses on debt and income earned on cash balances, both maintained at the corporate level. Segment assets include accounts receivable and work-in-process inventory. Asset information, other than accounts receivable and work-in-process inventory, is not reported, since the Company does not produce such information internally. All long-lived assets are located in the U.S.
The table below presents information about reportable segments for the years ended March 31:
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17. Quarterly Results of Operations (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information [Text Block] |
17. Quarterly Results of Operations (Unaudited)
Quarterly consolidated data for the years ended March 31, 2016 and 2015 is as follows:
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18. Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] |
18. Fair Value Measurements
FASB ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and prescribes disclosures about fair value measurements.
As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The three levels of the fair value hierarchy defined by ASC 820 are as follows:
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.
The valuation techniques that may be used to measure fair value are as follows:
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)
The carrying value of the Company’s borrowings is a reasonable estimate of its fair value as borrowings under the Company’s credit facility have variable rates that reflect currently available terms and conditions for similar debt.
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.
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of March 31, 2016 and March 31, 2015. As required by FASB ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
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.
ASC 815, “Derivatives and Hedging” requires that we mark the value of our warrant to market and recognize the change in valuation in our statement of operations each reporting period. Determining the warrant liability to be recorded requires us to develop estimates to be used in calculating the fair value of the warrant.
The following table provides a summary of the changes in fair value of our Level 3 financial liabilities for the years ended March 31, 2016 and 2015 as well as the unrealized gains or losses included in income.
The common stock warrants were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign corporation. The warrants do not qualify for hedge accounting, and, as such, all changes in the fair value of these warrants are recognized as other income/expense in the statement of operations until such time as the warrants are exercised or expire. Since these common stock warrants do not trade in an active securities market, the Company recognized a warrant liability and estimated the fair value of these warrants using the Black-Scholes options model until the payment of the loan in November 2014.
With the payment of the loan in November 2014, the holder has the right, exercisable at any time, in writing (the “Warrant Put Notice”, to cause the Company, subject to the terms and conditions hereof, to purchase from the holder all, or any portion, of the warrant for the warrant put repurchase price (the “Repurchase Price”). The Repurchase Price is the greater of 1) Adjusted EBITDA (as defined below) per share as of the date of the Warrant Put Notice, less $0.01, multiplied by the number of warrants or 2) the product of the current market price per share as of the date of the Warrant Put Notice, less the purchase price of the warrant or warrants, multiplied by the number of warrants, if this amount is higher. “Adjusted EBITDA” means EBITDA, multiplied by 5, plus cash and cash equivalents less unpaid debt divided by the number of shares outstanding on a fully diluted basis. As such, the values of the warrants at March 31, 2016 reflect the higher of these two options for each specific warrant.
Values at Inception
Values at March 31, 2015
* Based on Black-Scholes Calculation
Values at March 31, 2016
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19. Litigation |
12 Months Ended |
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Mar. 31, 2016 | |
Disclosure Text Block Supplement [Abstract] | |
Legal Matters and Contingencies [Text Block] |
19. Litigation
Contingencies are recorded in the consolidated financial statements when it is probable that a liability will be incurred and the amount of the loss is reasonably estimable, or otherwise disclosed, in accordance with Accounting Standards Codification 450, Contingencies (ASC 450). Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosures related to such matter as appropriate and in compliance with ASC 450. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, the Company will, when applicable, adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss or if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made.
On March 24, 2009, Aeroflex Wichita, Inc. (“Aeroflex”) filed a petition against the Company and two of its employees in the District Court, Sedgwick County, Kansas, Case No. 09 CV 1141 (the “Aeroflex Action”), alleging that the Company and its two employees misappropriated Aeroflex’s proprietary technology in connection with the Company winning a substantial contract from the U.S. Army (the “Award”), to develop new Mode-5 radar test sets and kits to upgrade the existing TS-4530 radar test sets to Mode 5. Aeroflex’s petition alleges that in connection with the Award, the Company and its named employees misappropriated Aeroflex’s trade secrets; tortiously interfered with its business relationship; conspired to harm Aeroflex and tortiously interfered with its contract and seeks injunctive relief and damages. The central basis of all the claims in the Aeroflex Action is that the Company misappropriated and used Aeroflex proprietary technology and confidential information in winning the Award. In February 2009, subsequent to the Company winning the Award, Aeroflex filed a protest of the Award with the Government Accounting Office (“GAO”). In its protest, Aeroflex alleged, inter alia, that the Company used Aeroflex’s proprietary technology in order to win the Award, the same material allegations as were later alleged in the Aeroflex Action. On or about March 17, 2009, the U.S. Army Contracts Attorney and the U.S. Army Contracting Officer each filed a statement with the GAO, expressly rejecting Aeroflex’s allegations that the Company used or infringed Aeroflex proprietary technology in winning the Award, and concluding that the Company had used only its own proprietary technology. On April 6, 2009, Aeroflex withdrew its protest.
In December 2009, the Kansas District Court dismissed the Aeroflex Action on jurisdiction grounds. Aeroflex appealed this decision. In May 2012, the Kansas Supreme Court reversed the decision and remanded the Aeroflex Action to the Kansas District Court for further proceedings. The Company has been engaged in discovery and depositions for the last three quarters, which has resulted in substantially higher legal expense.
On May 23, 2016, the Company filed a motion for summary judgment based on Aeroflex’s lack of jurisdictional standing to bring the case. The motion asserts that Aeroflex does not own the intellectual property at issue since it is a bare licensee of Northrop Grumman. Northrop Grumman has declined to join this suit as plaintiff. Aeroflex lacks standing to sue alone. Also, the motion raises the fact that in December 2011 Aeroflex allowed the license to expire, so that Aeroflex’s claims are either moot or it lacks standing to sue for damages allegedly accruing after the license ended. Tel believes we have a solid legal position and it is expected that this action will be heard in the September 2016 timeframe. The June 2, 2016 Amended Supplemental Modified Scheduling Order has the trial date set for February 13, 2017 and is estimated to last three weeks, but this date may be subject to postponement. The Company is optimistic as to the outcome of this litigation. However, the outcome of any litigation is unpredictable and an adverse decision in this matter could have a material adverse effect on our financial condition, results of operations or liquidity.
Other than the matters outlined above, we are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of executive officers of our Company, threatened against or affecting our Company, or our common stock in which an adverse decision could have a material effect.
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20. Subsequent Event |
12 Months Ended |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] |
20. Subsequent Event
In May 2016,
BCA Mezzanine Fund LLP (“BCA”) exercised its “put option” wherein BCA is exercising its right to have the Company purchase the warrants for 236,920 shares from BCA (see Notes 10 and 19 in Notes to Consolidated Financial Statements. As of March 31, 2016, the total estimated value for all warrants was $1,136,203. The amount attributed to BCA was $938,203. However, this amount will be updated based upon more current information as of April 30, 2016. The Company has the option of paying the final amount or providing BCA a note payable for this amount at an interest rate of 14%. The note will be due in one year with no prepayment penalties. The Company is currently evaluating these options. The remaining warrant holder has not exercised their option.
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Accounting Policies, by Policy (Policies) |
12 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation:
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and include the Company and its wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated.
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Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition:
Revenues are recognized at the time of shipment to, or acceptance by the customer, provided title and risk of loss is transferred to the customer as the product price is fixed or determinable, collection of the resulting receivable is probable, evidence of an arrangement exists and product returns are reasonably estimable. Provisions, when appropriate, are made where the right to return exists.
Revenues for repairs and calibrations of the Company’s products represented 3.7% and 5.4% of sales for the years ended March 31, 2016 and 2015, respectively. These revenues are for units that are periodically returned for annual calibrations and/or for repairs after the warranty period has expired. Revenues on repairs and calibrations are recognized at the time the repaired or calibrated unit is shipped, as it is at this time that the work is completed. The Company’s terms are F.O.B. Plant, and as such, delivery has occurred, and revenue recognized, when picked up and acknowledged by a common carrier.
Shipping and handling costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.
Payments received prior to the delivery of units or services performed are recorded as deferred revenues.
With respect to warranty revenues, upon the completion of two years from the date of sale, considered to be the warranty period, the Company offers customers an optional warranty. Amounts received for warranties are recorded as deferred revenue and recognized over the respective terms of the agreements.
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments:
The Company estimates that the fair value of all financial instruments at March 31, 2016 and March 31, 2015, as defined in Financial Accounting Standards Board (“FASB”) ASC 825 “Financial Instruments”, does not differ materially, except for the items discussed below, from the aggregate carrying values of its financial instruments recorded in the accompanying consolidated balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value.
The carrying amounts reported in the consolidated balance sheets as of March 31, 2016 and March 31, 2015 for cash, accounts receivable and accounts payable approximate the fair value because of the immediate or short-term maturity of these financial instruments. Each reporting period we evaluate market conditions including available interest rates, credit spreads relative to our credit rating and liquidity in estimating the fair value of our debt. After considering such market conditions, we estimate that the fair value of debt approximates its carrying value.
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash held in banks: The Company maintains cash balances at a financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts.
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Receivables, Policy [Policy Text Block] | Accounts Receivable: The Company’s avionics customer base is primarily comprised of airlines, distributors, and the U.S. Government. As of March 31, 2016, the Company believes it has no significant risk related to its concentration within its accounts receivable.
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Inventory, Policy [Policy Text Block] | Inventories:
Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. Inventories are written down if the estimated net realizable value is less than the recorded value. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based, in part, on the Company’s forecasts of future sales and age of inventory. In accordance with industry practice, service parts inventory is included in current assets, although service parts are carried for established requirements during the serviceable lives of the products and, therefore, not all parts are expected to be sold within one year.
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Property, Plant and Equipment, Policy [Policy Text Block] | Equipment and Leasehold Improvements:
Office and manufacturing equipment are stated at cost, net of accumulated depreciation. Depreciation and amortization are provided on a straight-line basis over periods ranging from 3 to 5 years.
Leasehold improvements are amortized over the term of the lease or the useful life of the asset, whichever is shorter.
Maintenance, repairs, and renewals that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred.
When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Statement of Operations.
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Research and Development Expense, Policy [Policy Text Block] | Engineering, Research and Development Costs:
Engineering, research and development costs are expensed as incurred.
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Advertising Costs, Policy [Policy Text Block] | Advertising Expenses:
Advertising expenses consist primarily of costs for direct advertising. The Company expenses all advertising costs as incurred, and classifies these costs under selling, general and administrative expenses. Advertising costs amounted to $577 and $-0- for the years ended March 31, 2016 and 2015, respectively.
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Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred Revenues:
Amounts billed in advance of the period in which the service is rendered or product delivered are recorded as deferred revenue. At March 31, 2016 and 2015, deferred revenues totaled $221,469 and $152,259, respectively. See above for additional information regarding our revenue recognition policies.
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Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Common Share:
Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed by dividing diluted net income by the weighted-average number of common shares outstanding during the period, including common stock equivalents, such as stock options and warrants using the treasury stock method. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, and excludes the anti-dilutive effects of common stock equivalents
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Income Tax, Policy [Policy Text Block] | Accounting for Income Taxes:
The Company accounts for income taxes using the asset and liability method described in FASB ASC 740, “Income Taxes”. Deferred tax assets arise from a variety of sources, the most significant being: a) tax losses that can be carried forward to be utilized against profits in future years; b) expenses recognized for financial reporting purposes but disallowed in the tax return until the associated cash flow occurs; and c) valuation changes of assets which need to be tax effected for book purposes but are deductible only when the valuation change is realized.
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when such differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefit which is not more likely than not to be realized. In assessing the need for a valuation allowance, future taxable income is estimated, considering the realization of tax loss carryforwards. Valuation allowances related to deferred tax assets can also be affected by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event it was determined that the Company would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through a charge to income in the period in which that determination is made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made. In its evaluation of a valuation allowance the Company takes into account existing contracts and backlog, and the probability that options under these contract awards will be exercised as well as sales of existing products. The Company prepares profit projections based on the revenue and expenses forecast to determine that such revenues will produce sufficient taxable income to realize the deferred tax assets.
The Company accounts for uncertainties in income taxes under ASC 740-10-50 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 requires that the Company determine whether the benefits of its tax positions are more-likely-than-not of being sustained upon audit based on the technical merits of the tax position. The Company recognizes the impact of an uncertain income tax position taken on its income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The implementation of ASC 740-10 had no impact on the Company’s results of operations or financial position.
Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, one or more positions may be challenged by taxing authorities. Settlement of any challenge can result in no change, a complete disallowance, or some partial adjustment reached through negotiations or litigation.
Interest and penalties related to income tax matters, if applicable, will be recognized as income tax expense. During the years ended March 31, 2016 and 2015 the Company did not incur any expense related to interest or penalties for income tax matters, and no such amounts were accrued as of March 31, 2016 and 2015. The Company’s tax years remain open for examination by the tax authorities primarily beginning 2013 through present.
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-based Compensation:
The Company accounts for stock-based compensation in accordance with FASB ASC 718 which requires the measurement of stock-based compensation based on the fair value of the award on the date of grant. The Company recognizes compensation cost on awards on a straight-line basis over the vesting period, typically four years. The Company estimates the fair value of each option granted using the Black-Scholes option-pricing model.
Additional information and disclosure are provided in Note 14 below.
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Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets:
The Company assesses the recoverability of the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future, undiscounted cash flows expected to be generated by an asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairment losses have been recognized for the years ended March 31, 2016 and 2015, respectively.
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Use of Estimates, Policy [Policy Text Block] | Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that management 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include income taxes, warranty claims, inventory and accounts receivable valuations.
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Reclassification, Policy [Policy Text Block] | Reclassifications:
Certain prior year amounts have been reclassified to conform to the current year presentation.
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Trade and Other Accounts Receivable, Unbilled Receivables, Policy [Policy Text Block] | Accounts Receivable:
The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current credit worthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for and payments from its customers and maintains provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. While such credit losses have historically been within the Company’s expectation and the provision established, the Company cannot guarantee that this will continue.
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Guarantees, Indemnifications and Warranties Policies [Policy Text Block] | Warranty Reserves:
Warranty reserves are based upon historical rates and specific items that are identifiable and can be estimated at time of sale. While warranty costs have historically been within the Company’s expectations and the provisions established, future warranty costs could be in excess of the Company’s warranty reserves. A significant increase in these costs could adversely affect the Company’s operating results for the period and the periods these additional costs materialize. Warranty reserves are adjusted from time to time when actual warranty claim experience differs from estimates. For the year ended March 31, 2016 warranty costs were $367,935 as compared to $279,955 for the year ended March 31, 2015 and are included in Cost of Sales in the accompanying statement of operations. See Note 6 for warranty reserves.
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Concentration Risk, Credit Risk, Policy [Policy Text Block] | Risks and Uncertainties:
The Company’s operations are subject to a number of risks, including but not limited to changes in the general economy, demand for the Company’s products, the success of its customers, research and development results, reliance on the government and commercial markets, litigation, and the renewal of its line of credit. The Company has major contracts with the U.S. Government, which like all government contracts are subject to termination.
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New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements:
In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 ("Improvements to Employee Share-Based Payment Accounting") which simplifies several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The Company is evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02 ("Leases"), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The Company is evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements.
In January 2016, the FASB issued ASU No. 2016-01 (ASC Subtopic 825-10), Financial Instruments - Overall Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU require entities to measure all investments in equity securities at fair value with changes recognized through net income. This requirement does not apply to investments that qualify for the equity method of accounting, to those that result in consolidation of the investee, or for which the entity meets a practicability exception to fair value measurement. Additionally, the amendments eliminate certain disclosure requirements related to financial instruments measured at amortized cost and add disclosures related to the measurement categories of financial assets and financial liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain portions of the ASU. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.
In November 2015, the FASB issued ASU 2015-17, which is an update to Topic 740, "Income Taxes". The update will require that all deferred tax assets and liabilities be classified as non-current. The update is effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016. ASU 2015-17 will have a material impact on the Company's balance sheet, as the deferred tax reported as a current asset will be reported as a non-current asset once the update is effective, resulting in a decrease to the Company's current ratio. As of March 31, 2016, the Company reported $578,507 of deferred tax as a current asset. It will not have any material impact on the Company's results of operations.
In September 2015, the FASB issued ASU 2015-16 (ASC Topic 805), Business Combinations Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize measurement period adjustments in the period in which the adjustments are determined. The income effects of such measurement period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The amendments in this update are for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this new guidance is not expected to have a material impact on the Company’s consolidated financial statements and disclosures.
In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact, if any, it will have on its consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern”, which requires management to evaluate whether conditions or events raise substantial doubt about the entity’s ability to continue as a going concern and, if so, to provide related footnote disclosures. The guidance is effective for annual or interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated Financial Statements.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. This ASU applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LILO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures.
No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s condensed consolidated financial statements.
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3. Accounts Receivable (Tables) |
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Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The following table sets forth the components of accounts receivable:
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4. Inventories (Tables) |
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Schedule of Inventory, Current [Table Text Block] | Inventories consist of:
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5. Equipment and Leasehold Improvements (Tables) |
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Property, Plant and Equipment [Table Text Block] | Equipment and leasehold improvements consist of the following:
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6. Accrued Expenses (Tables) |
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Schedule of Product Warranty Liability [Table Text Block] | The following table provides a summary of the changes in warranty reserves for the years ended March 31, 2016 and 2015:
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Schedule of Accrued Liabilities [Table Text Block] | Accrued vacation pay, deferred wages, payroll and payroll withholdings consist of the following:
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Schedule of Accrued Liabilities [Table Text Block] | Accrued expenses - other consist of the following:
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Schedule of Accrued Liabilities [Table Text Block] | Accrued expenses – related parties consists of the following:
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7. Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax (benefit) provision:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The approximate values of the components of the Company’s deferred taxes at March 31, 2016 and 2015 are as follows:
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the income tax (benefit) provision at the statutory Federal tax rate of 34% to the income tax (benefit) provision recognized in the financial statements is as follows:
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9. Long-Term Debt (Tables) |
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Schedule of Maturities of Long-term Debt [Table Text Block] | The annual maturities of long-term debt for the five fiscal years subsequent to March 31, 2016 are as follows:
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11. Commitments (Tables) |
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Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | The following is a schedule of approximate future minimum rental payments for operating leases subsequent to the year ended March 31, 2016.
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12. Capitalized Lease Obligations (Tables) |
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Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | At March 31, 2016, future payments under capital leases are as follows over each of the next five fiscal years:
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13. Significant Customer Concentrations (Tables) |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | Net sales to foreign customers were $1,900,724 and $1,809,495 for the years ended March 31, 2016 and 2015, respectively. All other sales were to customers located in the U.S. The following table presents net sales by U.S. and foreign countries:
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14. Stock Option Plans (Tables) |
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Share-based Arrangements with Employees and Nonemployees [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of each option awarded is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of Common Stock. The expected life of the options granted represents the period of time from date of grant to expiration (5 years). The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. The per share weighted-average fair value of stock options granted for the years ended March 31, 2016 and 2015 was $2.36 and $2.20, respectively, on the date of grant using the Black Scholes option-pricing model with the following assumptions:
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the status of the Company’s stock option plans for the fiscal years ended March 31, 2015 and 2014 and changes during the years are presented below (in number of options):
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Schedule of Nonvested Share Activity [Table Text Block] | A summary of the Company’s non-vested shares as of March 31, 2016 and changes during the year ended March 31, 2016 is presented below:
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15. Net Diluted Income (Loss) per Share (Tables) |
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share:
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16. Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The table below presents information about reportable segments for the years ended March 31:
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17. Quarterly Results of Operations (Unaudited) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information [Table Text Block] | Quarterly consolidated data for the years ended March 31, 2016 and 2015 is as follows:
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18. Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of March 31, 2016 and March 31, 2015. As required by FASB ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table provides a summary of the changes in fair value of our Level 3 financial liabilities for the years ended March 31, 2016 and 2015 as well as the unrealized gains or losses included in income.
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Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] |
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3. Accounts Receivable (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Less: Allowance for doubtful accounts | $ (7,500) | $ (24,975) |
1,454,361 | 1,625,171 | |
Government Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | 1,343,477 | 1,440,378 |
Commercial Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | $ 118,384 | $ 209,768 |
4. Inventories (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
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4. Inventories (Details) [Line Items] | ||
Inventory, Work in Process, Gross | $ 1,446,293 | $ 1,514,356 |
Government Receivables [Member] | ||
4. Inventories (Details) [Line Items] | ||
Inventory, Work in Process, Gross | $ 1,331,784 | $ 1,151,118 |
4. Inventories (Details) - Schedule of Inventory, Current - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
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Schedule of Inventory, Current [Abstract] | ||
Purchased parts | $ 3,420,249 | $ 2,746,671 |
Work-in-process | 1,446,293 | 1,514,356 |
Finished goods | 102,490 | 334 |
Less: Allowance for obsolete inventory | (290,000) | (229,287) |
$ 4,679,032 | $ 4,032,074 |
5. Equipment and Leasehold Improvements (Details) - USD ($) |
12 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation, Depletion and Amortization | $ 164,774 | $ 177,291 |
5. Equipment and Leasehold Improvements (Details) - Property, Plant and Equipment - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation & amortization | $ (2,654,257) | $ (2,489,483) |
193,518 | 270,792 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 95,858 | 94,413 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,518,780 | 1,458,919 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 23,712 | 23,712 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 572,236 | 572,236 |
Assets Held under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 637,189 | $ 610,995 |
6. Accrued Expenses (Details) - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
6. Accrued Expenses (Details) [Line Items] | ||
Employee-related Liabilities, Current | $ 836,589 | $ 594,114 |
Officer [Member] | ||
6. Accrued Expenses (Details) [Line Items] | ||
Employee-related Liabilities, Current | $ 321,831 | $ 240,964 |
6. Accrued Expenses (Details) - Schedule of Accrued Employee Related Liabilities - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Schedule of Accrued Employee Related Liabilities [Abstract] | ||
Accrued vacation pay | $ 394,404 | $ 328,777 |
Accrued compensation and payroll withholdings | 442,185 | 265,337 |
$ 836,589 | $ 594,114 |
6. Accrued Expenses (Details) - Schedule of Accrued Liabilities - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
---|---|---|---|
Schedule of Accrued Liabilities [Abstract] | |||
Accrued commissions | $ 8,189 | $ 117,523 | |
Accrued legal costs | 53,766 | 126,740 | |
Warranty reserve | 208,102 | 140,333 | $ 194,062 |
Accrued – other | 231,630 | 210,841 | |
$ 501,687 | $ 595,437 |
6. Accrued Expenses (Details) - Schedule of Product Warranty Liability - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Schedule of Product Warranty Liability [Abstract] | ||
Warranty reserve, at beginning of period | $ 140,333 | $ 194,062 |
Warranty expense | 367,935 | 279,955 |
Warranty deductions | (300,166) | (333,684) |
Warranty reserve, at end of period | $ 208,102 | $ 140,333 |
6. Accrued Expenses (Details) - Schedule of Accrued Liabilities, Related Party - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
6. Accrued Expenses (Details) - Schedule of Accrued Liabilities, Related Party [Line Items] | ||
Accrued expenses - related parties | $ 213,344 | $ 170,348 |
Estate of Former Chairman [Member] | ||
6. Accrued Expenses (Details) - Schedule of Accrued Liabilities, Related Party [Line Items] | ||
Accrued expenses - related parties | 107,237 | 85,174 |
President [Member] | ||
6. Accrued Expenses (Details) - Schedule of Accrued Liabilities, Related Party [Line Items] | ||
Accrued expenses - related parties | $ 106,107 | $ 85,174 |
7. Income Taxes (Details) |
12 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
7. Income Taxes (Details) [Line Items] | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% |
Domestic Tax Authority [Member] | |
7. Income Taxes (Details) [Line Items] | |
Operating Loss Carryforwards | $ 5,301,000 |
Operating Loss Carryforwards, Expiration Date | 2027 |
State and Local Jurisdiction [Member] | |
7. Income Taxes (Details) [Line Items] | |
Operating Loss Carryforwards | $ 3,989,000 |
Operating Loss Carryforward, Expiration Period | 20 years |
7. Income Taxes (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Current: | ||
Federal | $ 52,123 | $ 0 |
State and local | 1,500 | 0 |
Total current tax provision | 53,623 | 0 |
Deferred: | ||
Federal | 796,500 | (171,180) |
State and local | 1,845 | 91,808 |
Total deferred tax provision (benefit) | 798,345 | (79,372) |
Total provision (benefit) | $ 851,968 | $ (79,372) |
7. Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforwards | $ 1,802,492 | $ 2,865,606 |
Tax credits | 329,032 | 329,032 |
Charitable contributions | 51 | 17 |
Allowance for doubtful accounts | 2,550 | 8,499 |
Reserve for inventory obsolescence | 98,614 | 78,024 |
Inventory capitalization | 69,918 | 76,820 |
Deferred payroll | 88,288 | 29,264 |
Vacation accrual | 134,116 | 111,880 |
Warranty reserve | 70,765 | 47,754 |
Deferred revenues | 75,310 | 51,812 |
Stock options | 23,544 | 23,561 |
Non-compete agreement | 7,889 | 9,868 |
AMT credit | 52,123 | 0 |
Depreciation | 26,721 | (52,379) |
Deferred tax asset | 2,781,413 | 3,579,758 |
Less valuation allowance | (137,780) | (137,780) |
Deferred tax asset, net | 2,643,633 | 3,441,978 |
Deferred tax asset – current | 578,507 | 1,064,395 |
Deferred tax asset – long-term | 2,065,126 | 2,377,583 |
Total | $ 2,643,633 | $ 3,441,978 |
7. Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Income tax (benefit) provision – statutory rate | $ 631,081 | $ (122,338) |
Income tax expenses – state and local, net of federal benefit | 2,835 | (104) |
Permanent items | 12,194 | 10,802 |
Change in value of warrants – permanent difference | 209,862 | 55,982 |
True-up of prior year’s deferred taxes | (4,281) | (162,527) |
Change in valuation allowance | 0 | 137,780 |
Other | 277 | 1,033 |
Income tax provision (benefit) | $ 851,968 | $ (79,372) |
9. Long-Term Debt (Details) - Schedule of Maturities of Long-term Debt |
Mar. 31, 2016
USD ($)
|
---|---|
Schedule of Maturities of Long-term Debt [Abstract] | |
2017 | $ 418,255 |
2018 | 297,176 |
2019 | 7,384 |
2020 | 0 |
2021 | 0 |
Total Principal | 722,815 |
Less: Current Portion | (418,255) |
Total Long-Term Debt | $ 304,560 |
10. Line of Credit (Details) - Line of Credit [Member] |
12 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
10. Line of Credit (Details) [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000 |
Line of Credit Facility, Interest Rate at Period End | 4.96% |
Line of Credit Facility, Remaining Borrowing Capacity | $ 500,000 |
London Interbank Offered Rate (LIBOR) [Member] | |
10. Line of Credit (Details) [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 3.75% |
11. Commitments (Details) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
ft²
|
Mar. 31, 2015
USD ($)
|
|
Commitments and Contingencies Disclosure [Abstract] | ||
Area of Real Estate Property (in Square Feet) | ft² | 27,000 | |
Lease Expiration Date | Jul. 31, 2016 | |
Description of Lessee Leasing Arrangements, Operating Leases | The lease is for a five year period, beginning August 1, 2011, with a five year option in a one-story facility. In June 2016, the Company extended the lease term for another five years until August 2021. | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 5 years | |
Operating Leases, Rent Expense | $ 358,000 | $ 355,000 |
Defined Benefit Plan, Contributions by Employer | $ 27,916 | $ 23,555 |
11. Commitments (Details) - Schedule of Future Minimum Rental Payments for Operating Leases |
Mar. 31, 2016
USD ($)
|
---|---|
Schedule of Future Minimum Rental Payments for Operating Leases [Abstract] | |
2017 | $ 289,074 |
2018 | 288,857 |
2019 | 283,593 |
2020 | 282,540 |
2021 | 282,540 |
$ 1,426,604 |
12. Capitalized Lease Obligations (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
12. Capitalized Lease Obligations (Details) [Line Items] | ||
Capital Lease Obligations Incurred | $ 26,194 | $ 0 |
Assets Held under Capital Leases [Member] | ||
12. Capitalized Lease Obligations (Details) [Line Items] | ||
Property, Plant and Equipment, Other, Net | 51,230 | 79,938 |
Property, Plant and Equipment, Other, Accumulated Depreciation | $ 585,959 | $ 531,057 |
Minimum [Member] | Capital Lease Obligations [Member] | ||
12. Capitalized Lease Obligations (Details) [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | |
Maximum [Member] | Capital Lease Obligations [Member] | ||
12. Capitalized Lease Obligations (Details) [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 14.00% |
12. Capitalized Lease Obligations (Details) - Schedule of Future Minimum Lease Payments for Capital Leases - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Schedule of Future Minimum Lease Payments for Capital Leases [Abstract] | ||
2016 | $ 12,535 | |
2017 | 7,864 | |
2018 | 7,864 | |
2019 | 7,864 | |
2020 | 0 | |
Total minimum lease payments | 36,127 | |
Less amounts representing interest | (5,371) | |
Present value of net minimum lease payments | 30,756 | |
Less current portion | (10,232) | $ (16,758) |
Long-term capital lease obligation | $ 20,524 | $ 4,561 |
13. Significant Customer Concentrations (Details) - Schedules of Concentration of Risk, by Risk Factor - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Concentration Risk [Line Items] | ||||||||||
Net sales | $ 6,169,651 | $ 5,970,865 | $ 6,818,390 | $ 5,845,919 | $ 6,449,125 | $ 5,030,097 | $ 3,587,674 | $ 3,129,076 | $ 24,804,825 | $ 18,195,972 |
Domestic Customers [Member] | Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | 22,904,101 | 16,386,477 | ||||||||
Foreign Customers [Member] | Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Net sales | $ 1,900,724 | $ 1,809,495 |
14. Stock Option Plans (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions - 2006 Stock Option Plan [Member] |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
14. Stock Option Plans (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Line Items] | ||
Dividend Yield | 0.00% | 0.00% |
Risk-free Interest rate | 1.39% | 1.68% |
Volatility | 44.54% | 47.21% |
Life | 5 years | 5 years |
14. Stock Option Plans (Details) - Schedule of Nonvested Share Activity - $ / shares |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Schedule of Nonvested Share Activity [Abstract] | ||
Non-vested at April 1, 2015 | 11,600 | |
Non-vested at April 1, 2015 | $ 5.34 | |
Granted | 51,000 | 10,000 |
Granted | $ 5.85 | |
Vested | (3,600) | |
Vested | $ 5.78 | |
Forfeited | 0 | |
Forfeited | $ 0 | |
Non-vested at March 31, 2016 | 59,000 | 11,600 |
Non-vested at March 31, 2016 | $ 5.75 | $ 5.34 |
15. Net Diluted Income (Loss) per Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Basic net income (loss) per share computation: | ||||||||||
Net loss (in Dollars) | $ 299,035 | $ 226,586 | $ 199,466 | $ 279,066 | $ 372,704 | $ (20,944) | $ (248,195) | $ (384,005) | $ 1,004,153 | $ (280,440) |
Weighted-average common shares outstanding | 3,256,887 | 3,253,992 | ||||||||
Incremental shares attributable to the assumed exercise of outstanding stock options and warrants | 4,266 | 0 | ||||||||
Total adjusted weighted-average shares | 3,261,153 | 3,253,992 | ||||||||
Diluted net income (loss) per share (in Dollars per share) | $ 0.09 | $ 0.07 | $ 0.06 | $ 0.02 | $ 0.11 | $ (0.01) | $ (0.08) | $ (0.12) | $ 0.31 | $ (0.09) |
Basic net income (loss) per share (in Dollars per share) | $ 0.09 | $ 0.07 | $ 0.06 | $ 0.09 | $ 0.11 | $ (0.01) | $ (0.08) | $ (0.12) | $ 0.31 | $ (0.09) |
15. Net Diluted Income (Loss) per Share (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share - shares |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 351,920 | 368,836 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 65,000 | 71,500 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 286,920 | 297,336 |
16. Segment Information (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Segment Reporting Information [Line Items] | ||||||||||
Net sales | $ 6,169,651 | $ 5,970,865 | $ 6,818,390 | $ 5,845,919 | $ 6,449,125 | $ 5,030,097 | $ 3,587,674 | $ 3,129,076 | $ 24,804,825 | $ 18,195,972 |
Cost of Sales | 16,819,235 | 12,755,280 | ||||||||
Gross Margin | 1,892,072 | 2,034,757 | 2,243,466 | 1,815,295 | 1,905,344 | 1,545,787 | 869,344 | 1,120,217 | 7,985,590 | 5,440,692 |
Engineering, research, and Development | 2,038,126 | 1,961,275 | ||||||||
Selling, general, and administrative | 3,367,544 | 3,149,031 | ||||||||
Amortization of debt discount | 0 | 75,308 | ||||||||
Amortization of deferred financing costs | 5,429 | 69,165 | ||||||||
Change in fair value of common stock warrant | 617,241 | 164,653 | ||||||||
Loss on extinguishment of debt | 0 | 188,102 | ||||||||
Interest expense, net | 101,129 | 192,970 | ||||||||
Total expenses | 6,129,469 | 5,800,504 | ||||||||
Income (loss) before income taxes | 538,187 | $ 453,537 | $ 370,153 | $ 494,244 | 504,643 | $ 7,875 | $ (375,143) | $ (497,187) | 1,856,121 | (359,812) |
Segment Assets | 10,108,119 | 9,883,487 | 10,108,119 | 9,883,487 | ||||||
Avionics Government [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | 23,011,016 | 15,926,532 | ||||||||
Cost of Sales | 15,446,232 | 10,927,710 | ||||||||
Gross Margin | 7,564,784 | 4,998,822 | ||||||||
Segment Assets | 5,644,551 | 4,480,332 | 5,644,551 | 4,480,332 | ||||||
Avionics Commercial [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | 1,793,809 | 2,269,440 | ||||||||
Cost of Sales | 1,373,003 | 1,827,570 | ||||||||
Gross Margin | 420,806 | 441,870 | ||||||||
Segment Assets | 488,842 | 1,176,913 | 488,842 | 1,176,913 | ||||||
Avionics Total [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | 24,804,825 | 18,195,972 | ||||||||
Cost of Sales | 16,819,235 | 12,755,280 | ||||||||
Gross Margin | 7,985,590 | 5,440,692 | ||||||||
Engineering, research, and Development | 2,038,126 | 1,961,275 | ||||||||
Selling, general, and administrative | 1,218,327 | 1,203,628 | ||||||||
Amortization of debt discount | 0 | |||||||||
Amortization of deferred financing costs | 0 | 0 | ||||||||
Change in fair value of common stock warrant | 0 | 0 | ||||||||
Loss on extinguishment of debt | 0 | |||||||||
Interest expense, net | 0 | 0 | ||||||||
Total expenses | 3,256,453 | 3,164,903 | ||||||||
Income (loss) before income taxes | 4,729,137 | 2,275,789 | ||||||||
Segment Assets | 6,133,393 | 5,657,245 | 6,133,393 | 5,657,245 | ||||||
Corporate Segment [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | 0 | 0 | ||||||||
Cost of Sales | 0 | 0 | ||||||||
Gross Margin | 0 | 0 | ||||||||
Engineering, research, and Development | 0 | 0 | ||||||||
Selling, general, and administrative | 2,149,217 | 1,945,403 | ||||||||
Amortization of debt discount | 75,308 | |||||||||
Amortization of deferred financing costs | 5,429 | 69,165 | ||||||||
Change in fair value of common stock warrant | 617,241 | 164,653 | ||||||||
Loss on extinguishment of debt | 188,102 | |||||||||
Interest expense, net | 101,129 | 192,970 | ||||||||
Total expenses | 2,873,016 | 2,635,601 | ||||||||
Income (loss) before income taxes | (2,873,016) | (2,635,601) | ||||||||
Segment Assets | $ 3,974,726 | $ 4,226,242 | $ 3,974,726 | $ 4,226,242 |
17. Quarterly Results of Operations (Unaudited) (Details) - Schedule of Quarterly Financial Information - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Schedule of Quarterly Financial Information [Abstract] | ||||||||||
Net sales | $ 6,169,651 | $ 5,970,865 | $ 6,818,390 | $ 5,845,919 | $ 6,449,125 | $ 5,030,097 | $ 3,587,674 | $ 3,129,076 | $ 24,804,825 | $ 18,195,972 |
Gross margin | 1,892,072 | 2,034,757 | 2,243,466 | 1,815,295 | 1,905,344 | 1,545,787 | 869,344 | 1,120,217 | 7,985,590 | 5,440,692 |
Income before taxes | 538,187 | 453,537 | 370,153 | 494,244 | 504,643 | 7,875 | (375,143) | (497,187) | 1,856,121 | (359,812) |
Net income | $ 299,035 | $ 226,586 | $ 199,466 | $ 279,066 | $ 372,704 | $ (20,944) | $ (248,195) | $ (384,005) | $ 1,004,153 | $ (280,440) |
Basic income per share (in Dollars per share) | $ 0.09 | $ 0.07 | $ 0.06 | $ 0.09 | $ 0.11 | $ (0.01) | $ (0.08) | $ (0.12) | $ 0.31 | $ (0.09) |
Diluted income per share (in Dollars per share) | $ 0.09 | $ 0.07 | $ 0.06 | $ 0.02 | $ 0.11 | $ (0.01) | $ (0.08) | $ (0.12) | $ 0.31 | $ (0.09) |
18. Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis - USD ($) |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
18. Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Warrant liability | $ 1,136,203 | $ 518,962 |
Total Assets | 1,136,203 | 518,962 |
Fair Value, Inputs, Level 1 [Member] | ||
18. Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Warrant liability | 0 | 0 |
Total Assets | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
18. Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Warrant liability | 0 | 0 |
Total Assets | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
18. Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Warrant liability | 1,136,203 | 518,962 |
Total Assets | $ 1,136,203 | $ 518,962 |
18. Fair Value Measurements (Details) - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation - USD ($) |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value, at beginning of period | $ 518,962 | $ 354,309 |
Fair value, at end of period | 1,136,203 | 518,962 |
Change in fair value | 617,241 | 164,653 |
Warrant [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
New issuances | $ 0 | $ 0 |
20. Subsequent Event (Details) - USD ($) |
1 Months Ended | |
---|---|---|
May 30, 2016 |
Mar. 31, 2016 |
|
20. Subsequent Event (Details) [Line Items] | ||
Class of Warrants or Rights, Outstanding, Fair Value | $ 1,136,203 | |
Subsequent Event [Member] | ||
20. Subsequent Event (Details) [Line Items] | ||
Class of Warrant or Right, Exercised (in Shares) | 236,920 | |
Loans Payable [Member] | Subsequent Event [Member] | ||
20. Subsequent Event (Details) [Line Items] | ||
Debt Instrument, Description | The Company has the option of paying the final amount or providing BCA a note payable | |
Debt Instrument, Interest Rate, Stated Percentage | 14.00% | |
Debt Instrument, Term | 1 year | |
Warrants Held by BCA [Member] | ||
20. Subsequent Event (Details) [Line Items] | ||
Class of Warrants or Rights, Outstanding, Fair Value | $ 938,203 |
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