UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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| | | |
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices)
(Telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 15, 2021, the Company announced its financial results for the quarter ended September 30, 2021. The information furnished under this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
A copy of the Company’s press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
Description |
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99.1* |
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104 |
Cover Page Interactive Data File (formatted as Inline XBRL) |
*Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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TEL-INSTRUMENT ELECTRONICS CORP. |
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Date: November 16, 2021 |
By: |
Jeffrey O’Hara |
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Name: Jeffrey O’Hara |
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Title: Chief Executive Officer |
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Item 9.01.
TEL-INSTRUMENT ELECTRONICS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30, 2021 |
March 31, 2021 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash |
$ | 4,808,457 | $ | 3,485,275 | ||||
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Accounts receivable, net |
1,530,060 | 1,933,321 | ||||||
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Inventories, net |
2,910,721 | 3,437,989 | ||||||
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Restricted cash to support appeal bond |
2,011,050 | 2,011,050 | ||||||
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Prepaid expenses and other current assets |
188,127 | 263,067 | ||||||
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Total current assets |
11,448,415 | 11,130,702 | ||||||
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Equipment and leasehold improvements, net |
142,277 | 200,769 | ||||||
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Operating lease right-of-use assets |
1,815,304 | 1,922,805 | ||||||
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Deferred tax asset, net |
2,443,042 | 2,675,040 | ||||||
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Other long-term assets |
35,109 | 35,110 | ||||||
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Total assets |
$ | 15,884,147 | $ | 15,964,426 | ||||
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LIABILITIES & STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Operating lease liabilities – current portion |
$ | 190,622 | $ | 201,883 | ||||
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Accounts payable |
391,247 | 906,149 | ||||||
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Deferred revenues - current portion |
149,223 | 150,709 | ||||||
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Accrued expenses ‐vacation pay, payroll and payroll withholdings |
342,170 | 457,232 | ||||||
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Accrued legal damages |
5,993,433 | 5,889,023 | ||||||
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Accrued expenses - other |
235,310 | 365,975 | ||||||
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Total current liabilities |
7,302,005 | 7,970,971 | ||||||
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Operating lease liabilities – long-term |
1,624,682 | 1,720,921 | ||||||
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Long term debt - PPP |
- | 722,577 | ||||||
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Deferred revenues – long-term |
312,420 | 332,428 | ||||||
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Total liabilities |
9,239,107 | 10,746,897 | ||||||
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, 1,000,000 shares authorized, par value $0.10 per share |
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Preferred stock, 500,000 shares 8% Cumulative Series A Convertible Preferred issued and outstanding, par value $0.10 per share |
3,695,998 | 3,695,998 | ||||||
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Preferred stock, 166,667 shares 8% Cumulative Series B Convertible Preferred issued and outstanding, par value $0.10 per share |
1,147,367 | 1,147,367 | ||||||
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Common stock, 7,000,000 shares authorized, par value $0.10 per share, 3,255,887 shares issued and outstanding, respectively |
325,586 | 325,586 | ||||||
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Additional paid-in capital |
7,170,954 | 7,318,620 | ||||||
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Accumulated deficit |
(5,694,865 |
) |
(7,270,042 |
) |
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Total stockholders’ equity |
6,645,040 | 5,217,529 | ||||||
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Total liabilities and stockholders’ equity |
$ | 15,884,147 | $ | 15,964,426 | ||||
TEL-INSTRUMENT ELECTRONICS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
Six Months Ended |
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September 30, 2021 |
September 30, 2020 |
September 30, 2021 |
September 30, 2020 |
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Net sales |
$ | 3,610,863 | $ | 3,336,396 | $ | 7,743,256 | $ | 6,275,833 | ||||||||
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Cost of sales |
1,942,956 | 1,969,573 | 4,060,602 | 3,404,399 | ||||||||||||
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Gross margin |
1,667,907 | 1,366,823 | 3,682,654 | 2,871,434 | ||||||||||||
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Operating expenses: |
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Selling, general and administrative |
596,618 | 464,809 | 1,150,651 | 1,126,060 | ||||||||||||
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Litigation expenses |
3,220 | 5,514 | 4,400 | 8,210 | ||||||||||||
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Engineering, research, and development |
682,852 | 554,555 | 1,376,427 | 1,186,508 | ||||||||||||
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Total operating expenses |
1,282,690 | 1,024,878 | 2,531,478 | 2,320,778 | ||||||||||||
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Income from operations |
385,217 | 341,945 | 1,151,176 | 550,656 | ||||||||||||
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Other income (expense): |
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Interest income |
995 | 1,879 | 1,980 | 4,725 | ||||||||||||
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Other income |
22,260 | - | 35,853 | 13,854 | ||||||||||||
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Gain on forgiveness of PPP loan |
722,577 | - | 722,577 | - | ||||||||||||
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Interest expense – judgement |
(52,490 |
) |
(52,490 |
) |
(104,410 |
) |
(127,634 |
) |
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Interest expense |
- | (9,380 |
) |
- | (19,160 |
) |
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Total other net income, (expense) |
693,342 | (59,991 |
) |
656,000 | (128,215 |
) |
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Income before income taxes |
1,078,559 | 281,954 | 1,807,176 | 422,441 | ||||||||||||
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Income tax expense |
78,883 | 59,206 | 231,999 | 88,713 | ||||||||||||
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Net income |
999,676 | 222,748 | 1,575,177 | 333,728 | ||||||||||||
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Preferred dividends |
80,000 | 80,000 | 160,000 | 160,000 | ||||||||||||
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Net income attributable to common shareholders |
$ | 919,676 | $ | 142,748 | $ | 1,415,177 | $ | 173,728 | ||||||||
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Basic income per common share |
$ | 0.28 | $ | 0.04 | $ | 0.43 | $ | 0.05 | ||||||||
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Diluted income per common share |
$ | 0.20 | $ | 0.04 | $ | 0.31 | $ | 0.05 | ||||||||
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Weighted average shares outstanding: |
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Basic |
3,255,887 | 3,255,887 | 3,255,887 | 3,255,887 | ||||||||||||
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Diluted |
5,095,665 | 5,068,949 | 5,095,665 | 3,255,887 | ||||||||||||
Exhibit 99.1
Tel-Instrument Electronics Corp. Reports Net Income
of $1.0 Million for Second Quarter 2022
East Rutherford, NJ – November 15, 2021 – Tel-Instrument Electronics Corp. (“Tel” or the “Company”) (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today reported net income of $1.0 million ($0.28 per common share) on revenues of $3.6 million for the second quarter of fiscal year 2022 ended September 30, 2021.
Highlights include:
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● |
Revenues for the second quarter increased to $3.6 million, an 8% increase from the year-ago quarter. |
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Gross margin percentages improved 46.2% due to manufacturing efficiencies, tight cost controls, and product mix pricing. |
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Quarterly operating expenses increased 25% to $1.3 million due to higher engineering and higher profit-sharing accruals. |
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Operating income increased to $385K for the current quarter as compared to $342K in the year ago quarter. |
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Six month operating income increased to $1,151K versus $551K in the year-ago period. |
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The Company received full loan forgiveness on the $722k second draw PPP loan. |
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Net income increased to $1.0 million, or $0.28 per common share and $0.20 per share on a fully diluted basis. |
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Cash balances improved to $6.8 million, compared to $5.5 million at the start of the fiscal year. |
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Net worth improved to $6.6 million compared to $5.2 million at the start of the fiscal year. |
Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented, “The Company recorded a profitable second quarter despite ongoing supply chain interruptions which have hampered our production. With the recent forgiveness of the PPP loan, we now have zero debt and a growing cash balance which has allowed us to continue our aggressive engineering programs such as the SDR/OMNI. We have started to market this product to key customers with production and deliveries expected to commence in the first quarter of calendar year 2022. We believe that this will be a strong competitor in both commercial and military markets. We were informed this week that the Lockheed Martin has lifted the stop work order on the MADL program. This will generate non-recurring engineering revenues over the next two quarters and should result in ongoing production revenues in what is essentially a new market for TIC. We are also actively working with the U.S. Navy on a “mid-life” update of our CRAFT test sets which could result in significant revenues over the next five to 10 years. We also continue to invest in our market leading Mode 5 products and successfully demonstrated new Mode 5 Level 2B test capabilities at an international military test event. This new Mode 5 capability could potentially lead to future software upgrades of all of our Mode 5 test sets in the field.
With respect to the Aeroflex litigation, we continue to believe that we have strong grounds for the award to be vacated or reduced. The appeal process has been delayed due to the COVID-19 pandemic, but we expect a decision within the next 12 months.
About Tel-Instrument Electronics Corp.
Tel-Instrument is a leading designer and manufacturer of avionics test and measurement solutions for the global commercial air transport, general aviation, and government/military aerospace and defense markets. Tel-Instrument provides instruments to test, measure, calibrate, and repair a wide range of airborne navigation and communication equipment. For further information please visit our website at www.telinstrument.com.
# # #
This press release includes statements that are not historical in nature and may be characterized as “forward-looking statements,” including those related to future financial and operating results, benefits, and synergies of the combined companies, statements concerning the Company’s outlook, pricing trends, and forces within the industry, the completion dates of capital projects, expected sales growth, cost reduction strategies, and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. All predictions as to future results contain a measure of uncertainty and, accordingly, actual results could differ materially. Among the factors which could cause a difference are: changes in the general economy; changes in demand for the Company’s products or in the cost and availability of its raw materials; the actions of its competitors; the success of our customers; technological change; changes in employee relations; government regulations; litigation, including its inherent uncertainty; difficulties in plant operations and materials; transportation, environmental matters; and other unforeseen circumstances. A number of these factors are discussed in the Company’s previous filings with the U.S. Securities and Exchange Commission. The Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 (the “Act”) protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
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Contact: |
Pauline Romeo |
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Tel-Instrument Electronics Corp. |
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(201) 933-1600 |
Document And Entity Information |
Nov. 15, 2021 |
|---|---|
| Document Information Line Items | |
| Entity Registrant Name | TEL-INSTRUMENT ELECTRONICS CORP. |
| Trading Symbol | N/A |
| Document Type | 8-K |
| Amendment Flag | false |
| Entity Central Index Key | 0000096885 |
| Document Period End Date | Nov. 15, 2021 |
| Entity Emerging Growth Company | false |
| Entity Incorporation, State or Country Code | NJ |
| Entity File Number | 001-31990 |
| Entity Tax Identification Number | 22-1441806 |
| Entity Address, Address Line One | One Branca Road |
| Entity Address, City or Town | East Rutherford |
| Entity Address, State or Province | NJ |
| Entity Address, Postal Zip Code | 07073 |
| City Area Code | (201) |
| Local Phone Number | 933-1600 |
| Title of 12(b) Security | N/A |
| Security Exchange Name | NONE |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
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