New Jersey
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001-31990
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22-1441806
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(State or other Jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TEL-INSTRUMENT ELECTRONICS CORP.
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Date: July 21, 2017
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By:
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/s/ Joseph P. Macaluso
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Name: Joseph P. Macaluso
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Title: Principal Accounting Officer
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·
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Revenues decreased to 24% to $18.7 million from $24.8 million in 2016.
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·
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Gross profit decreased 16% to $6.7 million. Gross margin percentage improved to 35.7% versus 32.2% in 2016.
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·
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Litigation expenses increased to over $1.2 million, as compared to $448k in the prior fiscal year.
Operating profit would have been $1.67 million if Aeroflex litigation and damage amounts were backed out of the results.
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Recorded $2.8 million in estimated damages associated with the jury verdict in the Aeroflex litigation.
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Operating loss was $2.4 million compared to operating income of $2.5 million in 2016.
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Net loss was $4.8 million as a result of valuation allowance against the tax asset versus net income of $1 million in 2016.
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Working capital declined to $215k as compared to $3.5 million in 2016 as a result of litigation expenses and damages.
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The audit report included in the Company’s Annual Report for the year ended March 31, 2017 contains a going concern
paragraph as a result of the Aeroflex litigation. The Company is exploring various financing options to address this issue.
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Completion of mechanical design for our key hand-held modular communications and avionics test set products.
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Revenues decreased to $4.1 million or 34% from $6.2 million in the fourth quarter last year.
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Litigation expenses increased to $564k compared to $133k in the fourth quarter of 2016.
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Recorded $2.8MM in estimated damages associated with the jury verdict in the Aeroflex litigation.
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Operating loss of $3.3MM as compared to $481k profit in the fourth quarter of 2016.
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Net loss was $5.6MM as a result of valuation allowance against the tax asset as compared to net income of $299k in 2016.
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Increased line of credit with Bank of America to $1,000,000
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·
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Following the trial the Company filed a post-trial motion for judgment and these motions were heard July 10-11, 2017.
The Court has not yet issued a ruling.
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Contact:
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Joseph P. Macaluso
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John Nesbett or Jennifer Belodeau
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Tel-Instrument Electronics Corp.
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Institutional Marketing Services (IMS)
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(201) 933-1600
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(203) 972-9200
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jnesbett@institutionalms.com
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ASSETS
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March 31, 2017
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March 31, 2016
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||||||
Current assets:
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||||||||
Cash
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$
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287,873
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$
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972,633
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||||
Accounts receivable, net of allowance for doubtful accounts
of $7,500 and $7,500, respectively
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1,556,382
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1,454,361
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||||||
Inventories, net
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4,208,179
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4,679,032
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Prepaid expenses and other current assets
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188,578
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128,071
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Total current assets
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6,241,012
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7,234,097
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||||||
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Equipment and leasehold improvements, net
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161,427
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193,518
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Deferred tax asset – non-current
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-
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2,643,633
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Other assets
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33,509
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36,871
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Total assets
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$
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6,435,948
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$
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10,108,119
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LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
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Current liabilities:
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Current portion of long-term debt
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$
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291,991
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$
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418,255
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Line of credit
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200,000
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-
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Capital lease obligations – current portion
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6,268
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10,232
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Accounts payable
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1,428,320
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1,686,469
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Deferred revenues – current portion
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123,720
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48,766
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Federal and state taxes payable
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4,105
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53,623
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Accrued expenses - vacation pay, payroll and payroll withholdings
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527,413
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836,589
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Accrued legal damages
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2,800,000
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-
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Accrued expenses - related parties
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45,586
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213,344
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Accrued expenses – other
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599,049
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501,687
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Total current liabilities
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6,026,452
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3,768,965
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Subordinated notes payable – related parties
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-
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25,000
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Capital lease obligations – long-term
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13,760
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20,524
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Long-term debt, net of debt discount
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2,124
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304,560
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Warrant liability
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95,000
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1,136,203
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Deferred revenues – long-term
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352,973
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172,703
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Other long-term liabilities
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-
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7,800
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Total liabilities
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6,490,309
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5,435,755
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Commitments and contingencies
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Stockholders’ (deficit) equity
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Common stock, 4,000,000 shares authorized, par value $.10 per share,
3,255,887 and 3,255,887 shares issued and outstanding, respectively
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325,586
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325,586
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Additional paid-in capital
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8,107,369
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8,074,655
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Accumulated deficit
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(8,487,316
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)
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(3,727,877
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)
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Total stockholders’ (deficit) equity
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(54,361
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)
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4,672,364
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Total liabilities and stockholders’ (deficit) equity
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$
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6,435,948
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$
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10,108,119
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For the years ended March 31,
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2017
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2016
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Net sales
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$
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18,745,456
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$
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24,804,825
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Cost of sales
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12,061,341
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16,819,235
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Gross margin
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6,684,115
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7,985,590
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Operating expenses:
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Selling, general and administrative
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2,581,085
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2,919,165
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Litigation expenses
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1,244,639
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448,379
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Legal damages
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2,800,000
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-
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Engineering, research and development
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2,430,322
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2,038,126
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Total operating expenses
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9,056,046
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5,405,670
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(Loss) income from operations
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(2,371,931
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)
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2,579,920
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Other income (expense):
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Amortization of deferred financing costs
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(5,429
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)
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(5,429
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)
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Change in fair value of common stock warrants
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321,203
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(617,241
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)
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Interest expense
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(40,431
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)
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(58,133
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)
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Interest expense - related parties
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(18,736
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)
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(42,996
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)
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Total other income (expense)
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256,607
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(723,799
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)
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(Loss) income before income taxes
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(2,115,324
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)
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1,856,121
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Provision for income taxes
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2,644,115
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851,968
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Net (loss) income
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$
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(4,759,439
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)
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$
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1,004,153
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Basic (loss) income per common share
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$
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(1.46
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)
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$
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0.31
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Diluted (loss) income per common share
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$
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(1.49
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)
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$
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0.31
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Weighted average number of shares outstanding
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||||||||
Basic
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3,255,887
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3,256,887
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Diluted
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3,266,842
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3,261,153
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