10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-31990

TEL-INSTRUMENT ELECTRONICS CORP.

(Exact name of registrant as specified in its charter)

New Jersey	22-1441806
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Branca Road

East Rutherford, NJ 07073

(Address of principal executive offices)

(201) 933-1600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large, accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 10, 2022, there were 3,255,887 shares outstanding of the registrant’s common stock.

TEL-INSTRUMENT ELECTRONICS CORP.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
		Page
Item 1.	Unaudited Condensed Consolidated Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	25
Item 4.	Controls and Procedures.	25
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	26
Item 1A.	Risk Factors.	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	26
Item 3.	Defaults Upon Senior Securities.	26
Item 4.	Mine Safety Disclosures.	26
Item 5.	Other Information.	26
Item 6.	Exhibits.	27
Signatures		28

PART I – FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements.

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2021			March 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash	$	5,288,810		$	3,485,275
Accounts receivable, net		1,385,384			1,933,321
Inventories, net		2,748,275			3,437,989
Restricted cash to support appeal bond		2,011,050			2,011,050
Prepaid expenses and other current assets		286,507			263,067
Total current assets		11,720,026			11,130,702
Equipment and leasehold improvements, net		127,322			200,769
Operating lease right-of-use assets		1,768,343			1,922,805
Deferred tax asset, net		2,396,594			2,675,040
Other long-term assets		35,108			35,110
Total assets	$	16,047,393		$	15,964,426
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Operating lease liabilities – current portion	$	192,487		$	201,883
Accounts payable		438,569			906,149
Deferred revenues - current portion		123,615			150,709
Accrued expenses ‐vacation pay, payroll and payroll withholdings		376,073			457,232
Accrued legal damages		6,045,924			5,889,023
Accrued expenses - other		220,115			365,975
Total current liabilities		7,396,783			7,970,971
Operating lease liabilities – long-term		1,575,856			1,720,921
Long term debt - PPP		-			722,577
Deferred revenues – long-term		307,578			332,428
Total liabilities		9,280,217			10,746,897
Commitments and contingencies
Stockholders’ equity:
Preferred stock, 1,000,000 shares authorized, par value $0.10 per share
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
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
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
Additional paid-in capital		7,098,468			7,318,620
Accumulated deficit		(5,500,243	)		(7,270,042	)
Total stockholders’ equity		6,767,176			5,217,529
Total liabilities and stockholders’ equity	$	16,047,393		$	15,964,426

See accompanying notes to unaudited condensed consolidated financial statements.

3

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Nine Months Ended
	December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Net sales	$	3,171,532		$	2,672,742		$	10,914,787		$	8,948,575
Cost of sales		1,763,739			1,661,653			5,824,341			5,066,052
Gross margin		1,407,793			1,011,089			5,090,446			3,882,523
Operating expenses:
Selling, general and administrative		523,966			740,696			1,674,618			1,866,756
Litigation expenses		17,145			1,998			21,545			10,208
Engineering, research, and development		574,118			492,432			1,950,545			1,678,940
Total operating expenses		1,115,229			1,235,126			3,646,708			3,555,904
Income (loss) from operations		292,564			(224,037	)		1,443,738			326,619
Other (expense) income:
Interest income		996			1,591			2,977			6,316
Other income		-			758			35,854			14,612
Gain on forgiveness of PPP loan		-			722,577			722,577			722,577
Interest expense – judgement		(52,490	)		(52,490	)		(156,901	)		(180,124	)
Interest expense		-			(8,030	)		-			(27,190	)
Total other net (expense) income		(51,494	)		664,406			604,507			536,191
Income before income taxes		241,070			440,369			2,048,245			862,810
Income tax (benefit) expense		46,448			(59,264	)		278,446			29,449
Net income		194,622			499,633			1,769,799			833,361
Preferred dividends		(80,000	)		(80,000	)		(240,000	)		(240,000	)
Net income attributable to common shareholders	$	114,622		$	419,633		$	1,529,799		$	593,361
Basic income per common share	$	0.04		$	0.13		$	0.47		$	0.18
Diluted income per common share	$	0.04		$	0.10		$	0.35		$	0.16
Weighted average shares outstanding:
Basic		3,255,887			3,255,887			3,255,887			3,255,887
Diluted		5,095,665			5,095,665			5,095,665			5,065,665

See accompanying notes to unaudited condensed consolidated financial statements.

4

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three Months Ended December 31, 2021 and 2020

(Unaudited)

	Series A Convertible Preferred Stock					Series B Convertible Preferred Stock					Common Stock
	# of Shares Issued		Amount			# of Shares  Issued		Amount			# of Shares Issued		Amount		Additional Paid-In Capital			Accumulated Deficit			Total
Balances at October 1, 2021		500,000	$	3,695,998			166,667	$	1,147,367			3,255,887	$	325,586	$	7,170,954		$	(5,694,865	)	$	6,645,040
8% Dividends on Preferred Stock		-		60,000			-		20,000			-		-		(80,000	)		-			-
Dividend Payments		-		(60,000	)		-		(20,000	)		-		-		-			-			(80,000	)
Stock-based compensation		-		-			-		-			-		-		7,514			-			7,514
Net income		-		-			-		-			-		-		-			194,622			194,622
Balances at December 31, 2021		500,000	$	3,695,998			166,667	$	1,147,367			3,255,887	$	325,586	$	7,098,468		$	(5,500,243	)	$	6,767,176

	Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Common Stock
	# of Shares Issued		Amount		# of Shares Issued		Amount		# of Shares Issued		Amount		Additional Paid-In Capital			Accumulated Deficit			Total
Balances at October 1, 2020		500,000	$	3,635,998		166,667	$	1,127,367		3,255,887	$	325,586	$	7,467,176		$	(7,536,371	)	$	5,019,756
8% Dividends on Preferred Stock		-		60,000		-		20,000		-		-		(80,000	)		-			-
Stock-based compensation		-		-		-		-		-		-		5,277			-			5,277
Net income		-		-		-		-		-		-		-			499,633			499,633
Balances at December 31, 2020		500,000	$	3,695,998		166,667	$	1,147,367		3,255,887	$	325,586	$	7,392,453		$	(7,036,738	)	$	5,524,666

See accompanying notes to unaudited condensed consolidated financial statements.

5

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Nine Months Ended December 31, 2021 and 2020

(Unaudited)

	Series A Convertible Preferred Stock					Series B Convertible Preferred Stock					Common Stock
	# of Shares Issued		Amount			# of Shares Issued		Amount			# of Shares Issued		Amount		Additional Paid-In Capital			Accumulated Deficit			Total
Balances at April 1, 2021		500,000	$	3,695,998			166,667	$	1,147,367			3,255,887	$	325,586	$	7,318,620		$	(7,270,042	)	$	5,217,529
8% Dividends on Preferred Stock		-		180,000			-		60,000			-		-		(240,000	)		-			-
Dividend Payments		-		(180,000	)		-		(60,000	)		-		-		-			-			(240,000	)
Stock-based compensation		-		-			-		-			-		-		19,848			-			19,848
Net income		-		-			-		-			-		-		-			1,769,799			1,769,799
Balances at December 31, 2021		500,000	$	3,695,998			166,667	$	1,147,367			3,255,887	$	325,586	$	7,098,468		$	(5,500,243	)	$	6,767,176

	Series A Convertible Preferred Stock				Series B Convertible Preferred Stock				Common Stock
	# of Shares Issued		Amount		# of Shares Issued		Amount		# of Shares Issued		Amount		Additional Paid-In Capital			Accumulated Deficit			Total
Balances at April 1, 2020		500,000	$	3,515,998		166,667	$	1,087,367		3,255,887	$	325,586	$	7,616,624		$	(7,870,099	)	$	4,675,476
8% Dividends on Preferred Stock		-		180,000		-		60,000		-		-		(240,000	)		-			-
Stock-based compensation		-		-		-		-		-		-		15,829			-			15,829
Net income		-		-		-		-		-		-		-			833,361			833,361
Balances at December 31, 2020		500,000	$	3,695,998		166,667	$	1,147,367		3,255,887	$	325,586	$	7,392,453		$	(7,036,738	)	$	5,524,666

See accompanying notes to unaudited condensed consolidated financial statements.

6

TEL-INSTRUMENT ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	December 31, 2021			December 31, 2020
Cash flows from operating activities:
Net income	$	1,769,799		$	833,361
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Deferred income taxes		278,447			63,883
Depreciation and amortization		78,225			92,820
Amortization of right of use assets		154,462			159,833
Provision for inventory obsolescence		25,000			25,000
Forgiveness of PPP Loan		(722,577	)		(722,577	)
Non-cash stock-based compensation		19,848			15,829
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		547,937			(469,478	)
Decrease in inventories		664,714			136,815
Decrease (increase) in prepaid expenses & other assets		(23,440	)		148,743
Decrease in accounts payable and other accrued liabilities		(613,440	)		(353,905	)
Decrease in accrued payroll, vacation pay and payroll taxes		(81,159	)		(54,983	)
Decrease in deferred revenues		(51,944	)		(54,978	)
Decrease in operating lease liabilities		(154,461	)		(159,833	)
Increase in accrued legal damages		156,901			180,124
Net cash provided by (used in) operating activities		2,048,312			(159,346	)
Cash flows from investing activities:
Purchases of equipment		(4,777	)		(65,140	)
Net cash used in investing activities		(4,777	)		(65,140	)
Cash flows from financing activities:
Proceeds from SBA PPP Loan		-			722,577
Payment of dividends		(240,000	)		-
Repayment of line of credit		-			(680,000	)
Repayment of finance lease obligations		-			(49	)
Net cash (used in) provided by financing activities		(240,000	)		42,528
Net increase (decrease) in cash and restricted cash		1,803,535			(181,958	)
Cash and restricted cash at beginning of period		5,496,325			5,134,739
Cash and restricted cash at end of period	$	7,299,860		$	4,952,781
End of period
Cash	$	5,288,810		$	2,941,731
Restricted cash		2,011,050			2,011,050
	$	7,299,860		$	4,952,781
Beginning of period
Cash	$	3,485,275		$	3,126,195
Restricted cash		2,011,050			2,008,544
	$	5,496,325		$	5,134,739
Supplemental cash flow information:
Taxes paid	$	-			-
Interest paid	$	-		$	19,497

Supplemental disclosure of non-cash financing activities:

a) The Company’s first PPP loan was forgiven by the SBA during December 2020 in the amount of $722,577. The Company’s second PPP loan was forgiven by the SBA during September 2021 in the amount of $722,577.

See accompanying notes to unaudited condensed consolidated financial statements.

7

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Business, Organization and Liquidity

Business and Organization

Tel-Instrument Electronics Corp. (“Tel,” “TIC” 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 over the last two decades.

The Company is publicly traded and was quoted on the Over-the-Counter Market Place (“OTCQB”) under the symbol “TIKK.”

Liquidity

On December 31, 2021, the Company had positive working capital of $4,323,243 as compared to working capital of $3,159,731 on March 31, 2021. This included approximately $7.3 million of cash including the $2 million restricted cash supporting the appeal bond. The Company has recorded total damages of $6,045,924 including accrued interest, as a result of the jury verdict associated with the Aeroflex litigation.

With a $3.3 million backlog on December 31, 2021, the Company expects that in fiscal year 2022, revenue and profitability will continue to improve.

On March 27, 2020, former President Trump signed the Coronavirus Aid, Relief and Economic Security (the “CARES Act”), which, among other things, outlines the provisions of the Paycheck Protection Program (the “PPP”). The Company determined that it met the criteria to be eligible to obtain a loan under the PPP because, among other reasons, in light of the COVID-19 outbreak and the uncertainty of economic conditions related thereto, the loan was considered necessary to support the Company’s ongoing operations and retain all its employees. In addition, former President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act on April 24, 2020, which increased funding provided by the CARES Act. On May 4, 2020, the Company issued a promissory note (the “Note”) to Bank of America in the principal aggregate amount of $722,577 (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The amount was deposited in our bank on May 4, 2020. On June 5, 2020, the Paycheck Protection Program Flexibility Act was signed into law and extended the program until December 31, 2020.

TIC qualified for full loan forgiveness on the initial tranche on December 18, 2020. On January 6, 2021, updated PPP guidance outlining program changes to enhance its effectiveness and accessibility was released on in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. This was available to companies that recorded greater than a 25% sales reduction in any quarter compared to the prior year. The Company qualified for this second round of funding and on March 15, 2021, the Company secured a Second Draw PPP loan in the amount of $722,577. On September 17, 2021, TIC qualified for full loan forgiveness of the second round of funding and was recognized as other income in the quarter ended September 30, 2021.

On August 24, 2021, TIC, and the New Jersey Economic Development Authority (NJEDA) signed a small business emergency assistance grant agreement in the amount of $20,000. The funds related to the grant were received from the NJEDA on August 30, 2021, and were recognized as other income during the quarter ended September 30, 2021.

Based on the foregoing, we believe that our expected cash flows from operations and current cash balances will be sufficient to operate in the normal course of business for next 12 months from the issuance date of these unaudited condensed consolidated financial statements, including any payments for settlement of the Aeroflex litigation.

The Bank of America line of credit has been renewed for $690,000 and will expire on July 30, 2022. As of December 31, 2021, the line of credit draw remained at zero.

8

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Business, Organization and Liquidity (continued)

Impact of the COVID-19 Coronavirus

In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 coronavirus has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. government imposed travel restrictions on travel between the United States, Europe, and certain other countries. The impact of this pandemic has been, and will likely continue to be, extensive in many aspects of society, which has resulted, and will likely continue to result, in significant disruptions to the global economy as well as businesses and capital markets around the world.

On September 9, 2021, President Biden announced Executive Order 14042 (“Executive Order”) and related initiatives designed to lead the country out of the COVID-19 pandemic. The Executive Order includes policies that will require employees of contractors that do business with the federal government to be vaccinated. On September 24, 2021, The Safer Federal Workforce Task Force released COVID-19 vaccine guidance for Federal contractors and subcontractors. According to this guidance, covered employees must be fully vaccinated by December 8, 2021, or at the latest, by the first day of performance on a covered contract, absent the need for a disability or religious accommodation. In addition, covered contractors must follow the CDC’s mask and physical distance requirements for covered contractor employees and visitors. The Executive Order and the guidance apply to any prime contractor or subcontractor that is a party to a “contract or contract-like instrument” that includes a clause incorporating the requirements of the Executive Order. The new clause was applied on October 15, 2021, to only new federal contracts, solicitations, contract extensions and renewals.

On December 7, 2021, the federal court in Georgia issued a preliminary injunction temporarily halting the enforcement of EO 14042 (Ensuring Adequate COVID Safety Protocols for Federal Contractors) for all covered contracts nation-wide. New guidance from OMB also followed suit giving federal agencies input on how to go about non-enforcement provisions until legal challenges have been resolved. The updated guidance will remain applicable despite any change to new or existing court decisions. The new guidance does not impact the Safer Federal Workforce Taskforce Guidance. The vast majority of TIC employees are fully vaccinated, and TIC is preparing for full compliance of the Executive Order should it apply.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of Tel-Instrument Electronics Corp. as of December 31, 2021, the results of operations change in stockholders’ equity for the three and nine months ended December 31, 2021, and December 31, 2020, and statements of cash flow for the nine months ended December 31, 2021, and December 31, 2020. These results are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K. The March 31, 2021, balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date. Accordingly, the unaudited condensed consolidated financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021, as filed with the United States Securities and Exchange Commission (the “SEC”) on June 29, 2021 (the “Annual Report”).

Revenue Recognition

Under Financial Accounting Standards Board (“FASB”) Topic 606, Revenue from Contacts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

9

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – Summary of Significant Accounting Policies (continued)

The Company accounts for revenue recognition in accordance with ASC 606.The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The ASC 606 defines a five-step process to achieve the core principle.

The Company generates revenue from designing, manufacturing, and selling avionic tests and measurement solutions for the global commercial air transport, general aviation, and government/military aerospace and defense markets. The Company also offers calibration and repair services for a wide range of airborne navigation and communication equipment.

Nature of goods and services

The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each.

Test Units/Sets

The Company develops and manufactures unit sets to test navigation and communication equipment, such as ramp testers and bench testers for equipment installed in aircraft and ground radios. The Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of the contract, which is usually at the time of shipment. Revenue on products is presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears the risk of loss while the inventory is in-transit. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to the customer.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines stand-alone selling prices based on the price at which the performance obligation is sold separately. If the stand-alone selling price is not observable through past transactions, the Company estimates the standalone selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

When determining the transaction price of a contract, an adjustment is made if payment from the customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of December 31, 2021.

Replacement Parts

The Company offers replacement parts for test equipment, ramp testers, and bench testers. Similar to the sale of test units, the control of the product transfers at a point of time and therefore, revenue is recognized at the point in time when the obligation to the customer has been fulfilled.

Extended Warranties

The extended warranties sold by the Company provide a level of assurance beyond the coverage for defects that existed at the time of a sale or against certain types of covered damage with coverage terms ranging from 5 to 7 years. Amounts received for warranties are recorded as deferred revenue and recognized as revenue ratably over the respective term of the agreements. As of December 31, 2021, $402,549 is expected to be recognized from remaining performance obligations for extended warranties as compared to $408,219 at March 31, 2021. For the three and nine months ended December 31, 2021, the Company recognized revenue of $20,267 and $52,249, respectively from amounts that were included in Deferred Revenue as compared to $22,140 and $66,420, respectively from amounts that were included in Deferred Revenue for the three months and nine months ended December 31, 2020.

The following table provides a summary of the changes in deferred revenues for the nine months ended December 31, 2021:

Deferred revenues at April 1, 2021	$	408,219
Additional extended warranties		46,579
Revenue recognized for the nine months ended December 31, 2021		(52,249	)
Deferred revenues at December 31, 2021	$	402,549

10

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – Summary of Significant Accounting Policies (continued)

Other Deferred Revenues

The Company sometimes receives payments in advance of shipment. These amounts are classified as other deferred revenues. For the periods ended December 31, 2021, and March 31, 2021, the Company has other deferred revenues of $28,644 and $74,920, respectively.

Repair and Calibration Services

The Company offers repair and calibration services for units that are returned for annual calibrations and/or for repairs after the warranty period has expired. The Company repairs and calibrates a wide range of airborne navigation and communication equipment. Revenue is recognized at the time the repaired or calibrated unit is shipped back to the customer, as it is at this time that the work is completed.

Other

The majority of the Company’s revenues are from contracts with the U.S. government, airlines, aircraft manufacturers, such as Boeing and Lockheed Martin, domestic distributors, international distributors for sales to military and commercial customers, and other commercial customers. The contracts with the U.S. government typically are subject to the Federal Acquisition Regulation (“FAR”) which provides guidance on the types of costs that are allowable in establishing prices for goods and services provided under U.S. government contracts.

Payment terms and conditions vary by contract, although terms include a requirement of payment within a range from 30 to 60 days, or in certain cases, up-front deposits. In circumstances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts do not include a significant financing component. Payments received prior to the delivery of units or services performed are recorded as deferred revenues. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from sales. The Company applied the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales. All sales are denominated in U.S. dollars.

The Company chose to apply the available practical expedient as commission eligible sales orders are fulfilled within less than one year and commissions are generally paid by the Company within 30 days of the related sales order fulfillment. Accordingly, management has determined that no change in accounting for costs to obtain a contract will be required for the Company to conform to ASC 606.

Disaggregation of revenue

In the following tables, revenue is disaggregated by revenue category.

	For the Three Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	91,688	$	2,533,296
	$	91,688	$	2,533,296

The remainder of our revenues for the three months ended December 31, 2021, are derived from repairs and calibration of $469,095,

replacement parts of $37,186, extended warranties of $20,267 and other revenues of $20,000. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Three Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	104,346	$	2,212,507
	$	104,346	$	2,212,507

11

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – Summary of Significant Accounting Policies (continued)

The remainder of our revenues for the three months ended December 31, 2020, are derived from repairs and calibration of $273,388, replacement parts of $59,026, extended warranties of $22,140 and other revenues of $1,335. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Nine Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	269,652	$	9,012,562
	$	269,652	$	9,012,562

The remainder of our revenues for the nine months ended December 31, 2021, are derived from repairs and calibration of $1,389,894, replacement parts of $170,430, extended warranties of $52,249 and other revenues of $20,000. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Nine Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	280,743	$	7,697,701
	$	280,743	$	7,697,701

The remainder of our revenues for the nine months ended December 31, 2020, are derived from repairs and calibration of $762,828, replacement parts of $82,796, extended warranties of $66,420 and other revenues of $58,087. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

In the following table, revenue is disaggregated by geography.

	For the Three Months Ended December 31, 2021		For the Three Months Ended December 31, 2020
Geography
United States	$	1,974,538	$	1,304,664
International		1,196,994		1,368,078
Total	$	3,171,532	$	2,672,742

	For the Nine Months Ended December 31, 2021		For the Nine Months Ended December 31, 2020
Geography
United States	$	6,885,551	$	3,842,263
International		4,029,236		5,106,312
Total	$	10,914,787	$	8,948,575

12

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – Summary of Significant Accounting Policies (continued)

For the three months ended December 31, 2021, three customers accounted for sales of $673,758 (Muirhead Avionics), $583,680 (DFAS) and $328,230 (H2L Tech) or 21%, 18% and 10% respectively. For the nine months ended December 31, 2021, four customers accounted for sales of $3,008,911 (DFAS), $1,585,620 (Muirhead Avionics), $1,368,964 (H2L Tech) and $1,244,380 (Lockheed Martin) or 28%, 15%, 13% and 11% respectively.

For the three and nine months ended December 31, 2020, Muirhead Avionics, the Company’s distributor for Western Europe accounted for sales of $681,293 and $3,234,035 or 25% and 36% respectively. One government customer (Lockheed Martin) represented 17% of sales for the three months ended December 31, 2020.

The Company, in addition to inside sales efforts, utilizes independent brokers to sell its products to customers. A related party independent broker has earned approximately $13,000 and $94,000 in commissions for the three and nine months ended December 31, 2021. The same related party independent broker has earned $27,000 for the nine months ended December 31, 2021, for monthly sales and marketing consulting services, earned $3,000 per month.

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments -Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. The amendment in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The effective date of the new standard has been deferred to April 1, 2023. We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements.

Note 3 – Accounts Receivable, net

The following table sets forth the components of accounts receivable:

	December 31, 2021			March 31, 2021
Government	$	1,164,424		$	1,700,907
Commercial		228,460			239,914
Less: Allowance for doubtful accounts		(7,500	)		(7,500	)
	$	1,385,384		$	1,933,321

Note 4 – Restricted Cash to Support Appeal Bond

In January 2018, the Company transferred $2,000,000 to a restricted cash account to secure a letter of credit which was used for collateral for the appeal bond (See Note 12).

Note 5 – Inventories, net

Inventories consist of:

	December 31, 2021			March 31, 2021
Purchased parts	$	2,437,294		$	2,912,599
Work-in-process		910,981			1,020,402
Finished goods		-			79,988
Less: Inventory reserve		(600,000	)		(575,000	)
	$	2,748,275		$	3,437,989

13

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 – Net Income per Share

Net income per share has been computed according to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 260”), “Earnings per Share,” which requires a dual presentation of basic and diluted income per share (“EPS”). Basic EPS represents net 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 preferred stock, 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. The dilutive effect of preferred stock is reflected in earnings per share by use of the if-converted 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.

	Three Months Ended			Three Months Ended
	December 31, 2021			December 31, 2020
Basic net income per share computation:
Net income	$	194,622		$	499,633
Less: Preferred dividends		(80,000	)		(80,000	)
Net income attributable to common shareholders		114,622			419,633
Weighted-average common shares outstanding		3,255,887			3,255,887
Basic net income per share	$	0.04		$	0.13
Diluted net income per share computation
Net income attributable to common shareholders	$	114,622		$	419,633
Add: Preferred dividends		80,000			80,000
Diluted income attributable to common shareholders	$	194,622		$	499,633
Weighted-average common shares outstanding		3,255,887			3,255,887
Incremental shares attributable to the assumed conversion of preferred stock		1,839,778			1,839,778
Total adjusted weighted-average shares		5,095,665			5,095,665
Diluted net income per share	$	0.04		$	0.10

	Nine Months Ended			Nine Months Ended
	December 31, 2021			December 31, 2020
Basic net income per share computation:
Net income	$	1,769,799		$	833,361
Less: Preferred dividends		(240,000	)		(240,000	)
Net income attributable to common shareholders		1,529,799			593,361
Weighted-average common shares outstanding		3,255,887			3,255,887
Basic net income per share	$	0.47		$	0.18
Diluted net income per share computation
Net income attributable to common shareholders	$	1,529,799		$	593,361
Add: Preferred dividends		240,000			240,000
Diluted income attributable to common shareholders	$	1,769,799		$	833,361
Weighted-average common shares outstanding		3,255,887			3,255,887
Incremental shares attributable to the assumed conversion of preferred stock		1,839,778			1,809,778
Total adjusted weighted-average shares		5,095,665			5,065,665
Diluted net income per share	$	0.35		$	0.16

14

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6 – Net Income per Share (continued)

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share for the three months ended:

	December 31, 2021		December 31, 2020
Stock options		121,500		83,500
		121,500		83,500

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share for the nine months ended:

	December 31, 2021		December 31, 2020
Stock options		121,500		83,500
		121,500		83,500

Note 7 – Line of Credit

In August 2021, Bank of America renewed the line of credit with a maturity of July 30, 2022. The agreement includes a line of credit up to $690,000. Monthly payments are interest only. The line is collateralized by substantially all of the assets of the Company.

As of December 31, 2021, the Line of Credit draw has remained at zero balance.

Note 8 – SBA PPP Loan

On January 6, 2021, updated PPP guidance outlining program changes to enhance its effectiveness and accessibility was released on in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. This was available to companies that recorded greater than a 25% sales reduction in any quarter compared to the prior year. The Company qualified for this second round of funding and on March 15, 2021, the Company secured a Second Draw PPP loan in the amount of $722,577. On September 17, 2021, TIC qualified for full loan forgiveness of the second round of funding which was recognized as other income.

Note 9 – 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.

15

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 9 – Segment Information (continued)

The tables below present information about reportable segments within the avionics business for the three and nine months ending December 31, 2021, and 2020:

Three Months Ended December 31, 2021	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	2,552,546	$	618,986	$	3,171,532	$	-		$	3,171,532
Cost of sales		1,366,699		397,040		1,763,739		-			1,763,739
Gross margin		1,185,847		221,946		1,407,793		-			1,407,793
Engineering, research, and development						574,118		-			574,118
Selling, general and administrative						187,132		336,834			523,966
Litigation costs						-		17,145			17,145
Interest income						-		(996	)		(996	)
Interest expense – judgment						-		52,490			52,490
Total expenses						761,250		405,473			1,166,723
Income (loss) before income taxes					$	646,543	$	(405,473	)	$	241,070

Three Months Ended December 31, 2020	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	2,212,507	$	460,235	$	2,672,742	$	-		$	2,672,742
Cost of sales		1,247,606		414,047		1,661,653		-			1,661,653
Gross margin		964,901		46,188		1,011,089		-			1,011,089
Engineering, research, and development						492,432		-			492,432
Selling, general and administrative						215,952		524,744			740,696
Litigation costs						-		1,998			1,998
Interest income						-		(1,591	)		(1,591	)
Other income						-		(758	)		(758	)
Forgiveness of PPP loan						-		(722,577	)		(722,577	)
Interest expense - judgment						-		52,490			52,490
Interest expense						-		8,030			8,030
Total expenses (income)						708,384		(137,664	)		570,720
Income before income taxes					$	302,705	$	137,664		$	440,369

Nine Months Ended December 31, 2021	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	9,031,812	$	1,882,975	$	10,914,787	$	-		$	10,914,787
Cost of sales		4,627,834		1,196,507		5,824,341		-			5,824,341
Gross margin		4,403,978		686,468		5,090,446		-			5,090,446
Engineering, research, and development						1,950,545		-			1,950,545
Selling, general and administrative						589,076		1,085,542			1,674,618
Litigation costs						-		21,545			21,545
Interest income						-		(2,977	)		(2,977	)
Other income						-		(35,854	)		(35,854	)
Interest expense – judgment						-		156,901			156,901
Forgiveness of PPP Loan						-		(722,577	)		(722,577	)
Total expenses						2,539,621		502,580			3,042,201
Income (loss) before income taxes					$	2,550,825	$	(502,580	)	$	2,048,245

16

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 9 – Segment Information (continued)

Nine Months Ended  December 30, 2020	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	7,751,936	$	1,196,639	$	8,948,575	$	-		$	8,948,575
Cost of sales		4,145,959		920,093		5,066,052		-			5,066,052
Gross margin		3,605,977		276,546		3,882,523		-			3,882,523
Engineering, research, and development						1,678,940		-			1,678,940
Selling, general and administrative						627,944		1,238,812			1,866,756
Litigation costs						-		10,208			10,208
Interest income						-		(6,316	)		(6,316	)
Forgiveness of PPP loan						-		(722,577	)		(722,577	)
Other income						-		(14,612	)		(14,612	)
Interest expense – judgment						-		180,124			180,124
Interest expense						-		27,190			27,190
Total expenses						2,306,884		712,829			3,019,713
Income (loss) before income taxes					$	1,575,639	$	(712,829	)	$	862,810

Note 10 – Income Taxes

FASB ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC 740-10”) 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. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company does not have any unrecognized tax benefits.

The tax effect of temporary differences, primarily net operating loss carryforwards, asset reserves and accrued liabilities, gave rise to the Company’s deferred tax asset. Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse. The Company had approximately $2.4 million in deferred tax assets at December 31, 2021. 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 differences between income taxes expected at the U.S. federal statutory income tax rate of 21 percent and the reported income tax expense are due to the recognition of non-taxable PPP funds of $722,577 as other income during the nine months ended December 31, 2021. Taxable income was $241,070 and $2,048,245 for the three and nine months ended December 31, 2021, resulting in income tax expense of $46,448 and $278,446 for the three and nine months ended December 30, 2021, respectively.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU was effective April 1, 2021, and adoption of this standard had no significant impact on our financial position and results of operations.

Note 11 – Operating Lease Liability

The Company leases its facility in East Rutherford, NJ with monthly payments of $18,467 which expired in August 2021 and the renewed monthly payments are $21,237 for an additional four years. Thereafter, monthly payments are $23,083 for the balance of the 8 year renewal lease agreement expiring August 2029.

The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company estimated its incremental borrowing rate based on its credit quality, line of credit agreement and by comparing interest rates available in the market for similar borrowings. The Company used a discount rate of 3.90% at December 31, 2021.

17

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 11 – Operating Lease Liability (continued)

The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheet as of December 31, 2021:

Remaining payments 2022	$	63,710
2023		254,840
2024		254,840
2025		254,840
2026		267,767
Thereafter		946,417
Total undiscounted future minimum lease payments		2,042,414
Less: Difference between undiscounted lease payments and discounted lease liabilities		(274,071	)
Present value of net minimum lease payments		1,768,343
Less current portion		(192,487	)
Operating lease liabilities – long-term	$	1,575,856

Total rent expense for the three and nine months ended December 31, 2021, was $100,967 and $288,117, respectively, as compared to $90,920 and $272,725 for the three and nine months ended December 31, 2020, respectively.

Note 12 – Litigation

Contingencies are recorded in the unaudited condensed 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 located in 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, to develop new Mode-5 radar test sets and kits to upgrade the existing TS-4530 radar test sets to Mode 5 (the “Award”). Aeroflex’s petition, seeking injunctive relief and damages, alleges that in connection with the Award, the Company and its named employees misappropriated Aeroflex’s trade secrets; tortiously interfered with Aeroflex’s business relationship; conspired to harm Aeroflex and tortiously interfered with Aeroflex’s contract. 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 on Aeroflex’s 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 case then entered an extended discovery period in the District Court.

18

TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 12 – Litigation (continued)

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. The motion asserted Aeroflex lacks standing to sue alone. Also, the motion raises the fact that Aeroflex allowed the license to expire, Aeroflex’s claims are either moot or Aeroflex lacks standing to sue for damages alleged to have accrued after the license ended in 2011. The motion for summary judgment was denied.

The Aeroflex trial on remand in the Kansas District Court began in March 2017. After a nine-week trial, the jury rendered its verdict. The jury found no misappropriation of Aeroflex trade secrets but found that the Company tortiously interfered with a prospective business opportunity and awarded damages of $1.3 million for lost profits. The jury also ruled that Tel tortiously interfered with Aeroflex’s non-disclosure agreements with two former Aeroflex employees and awarded damages of $1.5 million for lost profits, resulting in total damages against the Company of $2.8 million. The jury also found that the former Aeroflex employees breached their non-disclosure agreements with Aeroflex and awarded damages against these two individuals totaling $525,000. The jury also decided that punitive damages should be allowed against the Company.

Following the verdict, the Company filed a motion for judgment as a matter of law. In the motion, the Company renewed its motion for judgment on Aeroflex’s tortious interference with prospective business opportunity claim arguing that such claim is barred by the statute of limitations. Alternatively, the motion asserts there is insufficient evidence supporting the lost profit award on that claim. Additionally, the motion for judgment addresses inconsistency between the awards against the former Aeroflex employees for breach of the non-disclosure agreements and the award against the Company for interfering with those agreements. Alternatively, the motion asserts there is insufficient evidence supporting the lost profit award on that claim.

During July 2017, the Court heard the Company’s motion for judgment as well as conducting a hearing as to the amount of a punitive damages award. Kansas statutes limit punitive damages to a maximum of $5 million.

Aeroflex submitted a motion to the Court requesting that the judge award punitive damages at the maximum $5 million amount. In October 2017, the Court denied the Company’s motions and awarded Aeroflex an additional $2.1 million of punitive damages, which brings the total Tel damages awarded in this case to approximately $4.9 million. Pursuant to K.S.A. 16-204(d) “any judgment rendered by a court of this state on or after July 1, 1986, shall bear interest on and after the day on which judgment is rendered at the rate provided by subsection (e). The Kansas Secretary of State publishes the interest rate which is modified annually based on market interest rates.

For the year starting July 1, 2020, the interest rate was 4.25% and cumulative interest as of fiscal year ended June 30, 2021, was $1,040,943. For the year starting July 1, 2021, the interest rate will be 4.25 %. Interest on the $4.9 million judgment started to accrue on November 22, 2017, the date the judgment was entered. As of December 31, 2021, the outstanding amount of the judgement and accrued interest is $6,045,924.

The Company filed post-trial motions to avoid damage duplication and inconsistency, and to secure judgment as a matter of law or a new trial. The trial court denied those motions. The Company appealed the verdict in 2019 and the post-trial rulings to the Court of Appeals of the State of Kansas, Case No. 18-119,563. The Company posted a $2 million supersedeas bond. The Plaintiff filed a cross-appeal. The appeal and cross-appeal are fully briefed. The appellate court has not set a date to hear the appeal.

The Company is optimistic about the prospects of its appeal for a judgment as a matter of law. The appeal decision has been delayed due to the COVID-19 related shutdown of the Kansas court system and the inability of court staff to work remotely on confidentiality issues. During August 2021, in an effort to move the appeal forward, all parties agreed to supply the appeal information to the court on a dedicated and secured laptop that would be used by the research attorney remotely. The Company has the ability to settle this case at its sole discretion by withdrawing the appeal and paying the judgment plus interest amount. The Company currently has sufficient cash on hand to pay off this liability if the appeal is lost. On January 28, 2022, Aeroflex filed a Motion to Require Supplemental Appeal Bond with the Court of Appeals of the State of Kansas, seeking a bond from the Company in the amount of $6 million to supplement the existing bond of $2 million. The Company has filed a response and we are confident that this motion will be denied.

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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TEL-INSTRUMENT ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 13 – Stock Options

The Board of Directors (the “Board”) adopted on January 18, 2017, and ratified by the shareholders at the Annual Meeting on January 18, 2017, the Company’s 2016 Stock Option Plan (the “Plan”). The Plan provides for the granting of incentive stock options, by a committee to be appointed by the Board (both the Board and the Committee are referred to herein as the “Committee”) to directors, officers, and employees (excluding directors and officers who are not employees) to purchase shares of the Common Stock of the Company, par value $0.10 per share (the “Stock”), in accordance with the terms and provisions. The 2016 Plan reserves for issuance, options to purchase up to 250,000 shares of its common stock. Options granted under the plan are exercisable up to a period of five 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 to a shareholder owning 10% or more of the outstanding common stock of the Company, as to which the exercise price must be not less than 110% of the fair market value of the common stock at the date of grant. Options 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. During fiscal year 2022, the Company granted 23,000 stock options at a price of $2.94 per share, the fair market value on the grant date.

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.

	Dividend			Risk-free
	Yield			Interest rate			Volatility			Life
2022		0.0	%		0.78	%		82.69	%	5 years

A summary of the status of the Company’s stock option plans for the fiscal year ended March 31, 2021, and year to date December 31, 2021, and changes during the year are presented below (in number of options):

	Number of Options		Average Exercise Price		Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding options at April 1, 2021		98,500	$	3.19	3.3 years	$	30,835
Options granted		23,000	$	2.94
Options exercised		-	$	-
Options canceled/forfeited		-	$	-
Outstanding options at December 31, 2021		121,500	$	3.14	2.9 years	$	8,090
Vested Options:
December 31, 2021:		37,900	$	3.21	2.1 years	$	304
March 31, 2021:		19,700	$	3.22	2.8 years	$	5,567

Remaining options available for grant were 128,500 and 151,500 as of December 31, 2021, and March 31, 2021, respectively.

For the year ended March 31, 2021, and year to date December 2021, the unamortized compensation expense for stock options was $60,013 and $55,505 respectively. Unamortized compensation expense is expected to be recognized over a weighted-average period of approximately 2.7 year.

For the three and nine months ended December 31, 2021, the Company recorded stock compensation costs of $7,514 and $19,848, respectively, as compared to $5,277 and $15,829 for the three and nine months ended December 31, 2020.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q and other reports filed by the Company from time to time with the SEC (collectively the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “may,” “will,” “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management are intended to identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and we caution you that these statements are not guarantees of future performance or events and are subject to risks, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our unaudited condensed consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report.

Overview

The Company reported net income of $194,622 and $1,769,799 and net sales of $3,171,532 and $10,914,787 for the three and nine months ended December 31, 2021. This compared to net income of $499,633 and $833,361 and net sales of $2,672,742 and $8,948,575 for the same three and nine month period in the prior fiscal year, respectively. Net income for the current nine months and for the prior three and nine months included separate $722,577 gains on forgiveness of PPP loans. Excluding the $722,577 gain on PPP forgiveness, net income (loss) for the three and nine months ended December 31, 2021, was $194,622 and $1,047,222, the three and nine months ended December 31, 2020, was ($222,944) and $110,784, respectively.

Profitability for the three and nine months ended December 31, 2021, versus the same three and nine months ended December 31, 2020, was positively impacted by an increase in sales of $498,790 (19%) and $1,966,212 (22%), respectively. Additionally, gross margin percentages increased 7% for the current versus prior three months and 3% for the current versus prior nine months, respectively. Backlog orders on December 31, 2021, were $3.3 million versus $5.7 million on December 31, 2020.

The Company continues to pursue opportunities in the domestic and international market for our Mode 5 test sets with good results. We continue to receive volume orders from South Korea, Australia, Canada, the U.K., and Germany for our Mode 5 test sets. We also are receiving volume orders from the U.S. Government and Lockheed Martin for our AN/USM-708 and 719 (“CRAFT”) Mode 5 test sets. Our expectation is that we will continue to improve both our revenues and gross margins, but the timing of these new orders is largely out of our hands.. After a sharp drop in FY 2021, the Company is also seeing the beginning of a rebound in commercial test set business. TIC is also working on the next generation of Mode 5 called Mode 5 Level 2B. This could potentially lead to substantial software upgrades in the future for our domestic and international Mode 5 customers. The Navy is systematically moving forward on a mid-life update of our CRAFT product line which could entail funded engineering starting next fiscal year. This is an important product for the Company, which should result in significant revenues over the next three to seven years.

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Overview (continued)

TIC is also exploring new avenues to broaden its product portfolio including designing a high frequency test set for the Lockheed Martin F-35. This contract takes advantage of our expertise in RF technology. This is a completely new market for TIC as it involves high frequency communication signals. This contract includes non-recurring engineering funding and expected annual production revenues in the $600,000 range. This program had been subject to a January 2021 stop-work-order which was lifted in November 2021. TIC is making solid progress on this program and completed the Critical Design Review (“CDR”) in December 2021. TIC has working test set prototypes and expects the development contract to be completed in mid-2022 calendar year. TIC will continue to explore funded engineering programs of this nature as this is high margin business that helps diversify and expand our product portfolio.

The main focus area for the Company is moving into the secure communications testing. The key for long-term sustained growth will be to supplement our strong position in military Mode 5 transponder testing with dominant product offerings in the much larger commercial and military communications and navigation test set market. TIC has spent several years and millions of dollars in developing our ground-breaking SDR/OMNI product which is meant to address both the commercial market for transponder and navigation test sets as well as competing in the military secure comm test set market. The SDR/OMNI supports a wide frequency range to accommodate new commercial and military waveforms in an industry leading 4-pound package. This is approximately half the weight of competitive test sets. It is also the only new multi-purpose test set which meets the Class 1 military environmental specifications. It utilizes the latest touch screen technology and has the capability to replace all TIC commercial test sets and military flight-line test sets with one handheld product. The engineering design on this test set has largely been completed and we are currently in the process of demonstrating this product to customers and performing product verification. The Company will start taking customer orders next month with production deliveries commencing this summer. There are several companies competing in this market space, but we believe that our SDR/OMNI design will be extremely competitive, particularly for military applications.

The Aeroflex litigation did not result in a favorable outcome for the Company, despite our belief that we committed no wrongdoing. The jury found no misappropriation of Aeroflex trade secrets, but it did rule that the Company tortiously interfered with a prospective business opportunity and awarded damages. The jury also ruled that Tel tortiously interfered with Aeroflex’s non-disclosure agreements with two former Aeroflex employees. The jury also found that the former Aeroflex employees breached their non-disclosure agreements with Aeroflex. The Court conducted further hearings on the Company’s post-trial motions which sought to reduce the damages award of $2.8 million, as well as the punitive damages claim. The Court denied the Company’s motions and awarded Aeroflex an additional $2.1 million of punitive damages. The Company has filed motions in January 2018 for the Court to reconsider the number of damages on the grounds that they are duplicative and not legally supportable. The Court heard these motions, and such motions were denied. The Company filed for an appeal during 2019. The Company has posted a $2 million bond for the appeal. This $2 million bond amount will remain in place during the appeal process. The appeal process has effectively been in limbo for several years due to the Kansas Supreme Court moving to remote work. The case documents are sealed, and the court has not responded to our repeated scheduling update requests. We believe we have strong appeal grounds, and the plan is to wait for the eventual decision despite the negative impact of the interest accruals on our financial results. The best case scenario is that the award is vacated while the worst-case scenario would be a dismissal which would require TIC to pay the judgement amount plus accrued interest.

Results of Operations

Sales

Net sales were $3,171,532 and $10,914,787 for the three and nine months ended December 31, 2021, as compared to $2,672,742 and $8,948,575 for the same three and nine month period in the prior fiscal year, respectively. The increase in sales of $498,790 (19%) and $1,966,212 (22%), respectively was due primarily to resurgence of repair order revenue increasing 64% and 73% respectively, and due to the reopening of governmental facilities resulting in a 15% and 17% increase in government sales.

Gross Margin

For the three and nine months ended December 31, 2021, total gross margin increased $396,704 (39%) and $1,207,923 (31%) to $1,407,793 and $5,090,446 as compared to $1,011,089 and $3,882,523 for the three and nine months ended December 31, 2020, primarily as a result of the increase in volume, price adjustments, highly profitable training products and restart of the Lockheed Martin contract. The gross margin percentage for the three months ended December 31, 2021, was 44.4% as compared to 37.8% for the three months ended December 30, 2020. The gross margin percentage for the nine months ended December 30, 2021, was 46.6% as compared to 43.4% for the nine months ended December 31, 2020.

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Operating Expenses

Selling, general and administrative expenses decreased $216,728 (29%) to $523,966 and $192,138 (10%) to $1,674,618 for the three and nine months ended December 31, 2021, as compared to $740,696 and $1,866,756, respectively for the three and nine months ended December 31, 2020. The three months decrease of $216,729 and nine months decrease of $192,138 for the three and nine months ended December 31, 2021, as compared to prior year is a result of lower sales commissions, and lower legal and consulting fees with an offset of increased profit sharing accruals.

Aeroflex litigation costs increased by $15,147 to $17,145 for the three months ended December 31, 2021, as compared to $1,998 for the three months ended December 31, 2020. Litigation costs increased $11,337 to $21,545 for the nine months ended December 31, 2021, as compared to $10,208 for the nine months ended December 31, 2020. Other legal costs declined $300K from the year-ago period which included costs related to a government bid protest. With respect to the Aeroflex litigation, the Company has appealed the $4.9 million judgement and has set aside $2 million in cash to support an appeal bond. The Company is optimistic about the prospects of its appeal for a judgment as a matter of law. The appeal decision has been delayed due to the COVID-19 related shutdown of the Kansas court system and the inability of court staff to work remotely on confidentiality issues. During August 2021, in an effort to move the appeal forward, all parties agreed to supply the appeal information to the court on a dedicated and secured laptop that would be used by the research attorney remotely. The Company has the ability to settle this case at its sole discretion by withdrawing the appeal and paying the judgment plus interest amount. The Company currently has sufficient cash on hand to pay off this liability if the appeal is lost. On January 28, 2022, Aeroflex filed a Motion to Require Supplemental Appeal Bond with the Court of Appeals of the State of Kansas, seeking a bond from the Company in the amount of $6 million to supplement the existing bond of $2 million. The Companyhas filed a response and we are confident that this motion will be denied.

Engineering, research, and development expenses increased $81,686 (17%) to $574,118 and $271,605(16%) to $1,950,545 for the three and nine months ended December 31, 2021, as compared to $492,432 and $1,678,940 for the three and nine months ended December 31, 2020, respectively. Total engineering expense has increased as a result of our increased engineering activities primarily with the SDR-OMNI hand-held product line final development plans to begin production early 2022 and slightly offset by the restart of the Lockheed Martin MADL program which reduced engineering costs in the current quarter by $57,980.

Income (loss) from Operations

As a result of the above, the Company recorded income from operations of $292,564 and $1,443,738 for the three and nine months ended December 31, 2021, as compared to income (loss) from operations of ($224,037) and $326,619 for the three and nine months ended December 31, 2020.

Other income (expense)

For the three and nine months ended December 31, 2021, total other net (expense) income was ($51,494) and $604,507 as compared to other net income of $664,406 and $536,191 for the three and nine months ended December 31, 2020, primarily the result of the Second Draw PPP loan in the amount of $722,577 being fully forgiven during September 2021 and the First Draw PPP loan in the amount of $722,577 being fully forgiven during December 2020.

Income before Income Taxes

The Company recorded income before taxes of $241,070 and $2,048,245 for the three and nine months ended December 31, 2021, as compared to income before taxes of $440,369 and $862,810 for the three and nine months ended December 31, 2020.

Income Taxes (benefit)

For the three and nine months ended December 31, 2021, the Company recorded income tax expense of $46,448 and $278,446, as a result of the Company’s taxable income for the respective quarters, as compared to ($59,264) and $29,449 for the three and nine months ended December 31, 2020. The differences between income taxes expected at the U.S. federal statutory income tax rate of 21 percent and the reported income tax expense are due to the recognition of non-taxable PPP funds of $722,577 as other income during the nine months ended December 30, 2021. Taxable income was $241,069 and $2,048,245for the three and nine months ended December 31, 2021. The forgiven PPP loan is non-taxable.

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Net Income

The Company recorded net income of $194,622 and $1,769,799 for the three and nine months ended December 31, 2021, as compared to net income of $499,633 and $833,361 for the three and nine months ended December 31, 2020.  The December 2020 results were positively impacted by the first PPP loan forgiveness.

Liquidity and Capital Resources

At December 31, 2021, the Company had net working capital of $4,323,243 including accrued legal damages related to the Aeroflex litigation of $6,045,924, as compared to working capital of $3,159,731 at March 31, 2021. This change is due to profitable operations for the first nine months and the forgiveness of the PPP loan, partially offset by payment of preferred dividends.

During the nine months ended December 31, 2021, the Company’s cash balance (including the $2 million in restricted cash for the appeal) increased by $1.8 million to $7,299,860. The Company’s principal sources, and uses of funds were as follows:

Cash provided by (used in) operating activities. For the nine months ended December 31, 2021, $2,048,312 in cash from operations was provided, as compared to the nine months ended December 31, 2020, the Company used $159,346. This increase in cash provided for operations is mostly attributed to an increase in net income from increased sales and margin, decrease in inventory purchases, and offset by decrease in accounts payable.

Cash used in investing activities. For the nine months ended December 31, 2021, the Company used $4,777 in investing activities as compared to the nine months ended December 31, 2020, the Company used $65,140 for IT equipment related upgrades.

Cash (used in) provided by financing activities. For the nine months ended December 30, 2021, the Company used $240,000 in cash from financing activities as compared to providing $42,528 for the nine months ended December 31,2020. This decrease is due mainly from the receipt of PPP loan funding received in the prior year, compared to payments of $240,000 in dividends in the current period.

The Bank of America line of credit was renewed and will mature July 30, 2022. As of December 31, 2021, the line of credit draw remained at zero.

On December 31, 2021, the Company has $7.3 million of cash on hand which included $2 million of restricted cash supporting the appeal bond.

As of December 31, 2021, the Company has recorded total damages of $6,045,924 including accrued interest, as a result of the jury verdict associated with the Aeroflex litigation as well as the Court’s decision on punitive damages. The Company has recorded accrued interest of $1,145,924 as of December 31, 2021.

The Company is very optimistic about the prospects of its appeal for a judgment as a matter of law. Due to the three-month COVID-19 related shutdown of the Kansas court system and subsequent partial reopening of the court system, a major backlog has resulted. As such, the appeal process is expected to take at least a year to complete unless a settlement can be reached. The Company has the ability to settle this case at its sole discretion by withdrawing the appeal and paying the judgment plus interest amount. The Company currently has sufficient cash on hand to pay off this liability if we lose the appeal.

On March 27, 2020, former President Trump signed the Coronavirus Aid, Relief and Economic Security (the “CARES Act”), which, among other things, outlines the provisions of the Paycheck Protection Program (the “PPP”). The Company determined that it met the criteria to be eligible to obtain a loan under the PPP because, among other reasons, in light of the COVID-19 outbreak and the uncertainty of economic conditions related thereto, the loan was considered necessary to support the Company’s ongoing operations and retain all its employees. In addition, former President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act on April 24, 2020, which increased funding provided by the CARES Act. On May 4, 2020, the Company issued a promissory note (the “Note”) to Bank of America in the principal aggregate amount of $722,577 (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The amount was deposited in our bank on May 4, 2020. On June 5, 2020, the Paycheck Protection Program Flexibility Act was signed into law and extended the program until December 31, 2020. TIC qualified for full loan forgiveness on the initial tranche on December 18, 2020.

On January 6, 2021, updated PPP guidance outlining program changes to enhance its effectiveness and accessibility was released on in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. This was available to companies that recorded greater than a 25% sales reduction in any quarter compared to the prior year. The Company qualified for this second round of funding and on March 15, 2021, the company secured a Second Draw PPP loan in the amount of $722,577. TIC qualified for full loan forgiveness on September 17, 2021.

24

Liquidity and Capital Resources (continued)

On August 24, 2021, TIC, and the New Jersey Economic Development Authority (NJEDA) signed a small business emergency assistance grant agreement in the amount of $20,000. We received these funds into our bank account on August 30, 2021, from NJEDA.

Moving forward, we believe that our expected cash flows from operations and current cash balances, which amounted to approximately $7.3 million, including the approximately $2 million in restricted cash will be sufficient to operate in the normal course of business for next 12 months from the issuance date of these unaudited condensed financial statements, including any payments for settlement of the litigation.

Currently, the Company has no material future capital expenditure requirements.

There was no significant impact on the Company’s operations as a result of inflation for the three months ended December 31, 2021.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on For 10-K for the fiscal year ended March 31, 2021, filed with the SEC on June 29, 2021 (the “Annual Report”).

Off-Balance Sheet Arrangements

As of December 31, 2021, the Company had no off-balance sheet arrangements.

Critical Accounting Policies

Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report. There have been no changes in our critical accounting policies. Our significant accounting policies are described in our notes to the 2021 consolidated financial statements included in our Annual Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

The Company, including its principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report (the “Evaluation Date”). Based upon the evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective. Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include controls and procedures designed to reasonably ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

The Company, including its chief executive officer and chief financial officer, reviewed the Company’s internal control over financial reporting, pursuant to Rule 13(a)-15(e) under the Exchange Act and concluded that there was no change in the Company’s internal control over financial reporting during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

The Aeroflex litigation (see Note 12 to the Unaudited Condensed Consolidated Financial Statements) did not result in a favorable outcome for the Company, despite our belief that we committed no wrong-doing.

The jury found no misappropriation of Aeroflex trade secrets but found that the Company tortiously interfered with a prospective business opportunity and awarded damages. The jury also ruled that Tel tortiously interfered with Aeroflex’s non-disclosure agreements with two former Aeroflex employees. The jury also found that the former Aeroflex employees breached their non-disclosure agreements with Aeroflex. The Court conducted further hearings on the Company’s post-trial motions which sought to reduce the damages award of $2.8 million, as well as the punitive damages claim. The Court denied the Company’s motions and awarded Aeroflex an additional $2.1 million of punitive damages. The Company has filed motions in January 2018 for the Court to reconsider the amount of damages on the grounds that they are duplicative and not legally supportable. The Court heard these motions, and such motions were denied. In 2019 the Company filed for an appeal. The Company has posted a $2 million bond for the appeal. This $2 million bond amount will remain in place during the appeal process (See Note 4).

As reflected in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2021, the Company has recorded estimated damages to date of approximately $6 million, including interest, as a result of a jury verdict associated with the Aeroflex litigation. The Company has filed for an appeal (see Notes 4 and 12). As of December 31, 2021, the Company has cash balances of $7.3 million, including $2 million of restricted cash as well as $1.4 million in accounts receivable. We expect to continue to have sufficient cash to fully cover the Aeroflex damages amount.

The appeal decision has been delayed due to the COVID-19 related shutdown of the Kansas court system and the inability of court staff to work remotely on confidentiality issues. During August 2021, in an effort to move the appeal forward, all parties agreed to supply the appeal information to the court on a dedicated and secured laptop that would be used by the research attorney remotely. The Company has the ability to settle this case at its sole discretion by withdrawing the appeal and paying the judgment plus interest amount. The Company currently has sufficient cash on hand to pay off this liability if the appeal is lost.

On January 28, 2022, Aeroflex filed a Motion to Require Supplemental Appeal Bond with the Court of Appeals of the State of Kansas, seeking a bond from the Company in the amount of $6 million to supplement the existing bond of $2 million. The Company has filed a response and we are confident that this motion will be denied.

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.

Item 1A. Risk Factors.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021, filed with the SEC on June 29, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of the Company’s equity securities during the quarter ended December 31, 2021.

Item 3. Defaults upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

There is no other information required to be disclosed under this item which was not previously disclosed.

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Item 6. Exhibits.

Exhibit No.	Description
31.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
31.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS	Inline XBRL Instance Document*
101.SCH	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

* Filed herewith

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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.

	TEL-INSTRUMENT ELECTRONICS CORP.
Date: February 11, 2022	By:	/s/ Jeffrey C. O’Hara
		Name: Jeffrey C. O’Hara
		Title: Chief Executive Officer (Principal Executive Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey C. O’Hara, certify that:

1. I have reviewed this Form 10-Q of Tel-Instrument Electronics Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4. Along with the Principal Financial Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 11, 2022	By:	/s/ Jeffrey C. O’Hara
		Jeffrey C. O’Hara
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Pauline Romeo, certify that:

1. I have reviewed this Form 10-Q of Tel-Instrument Electronics Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4. Along with the Principal Executive Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 11, 2022	By:	/s/ Pauline Romeo
		Pauline Romeo
		Chief Accounting Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Tel-Instrument Electronics Corp. (the “Company”), on Form 10-Q for the quarter ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Jeffrey C. O’Hara, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) Such Quarterly Report on Form 10-Q for the quarter ended December 31, 2021, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in such Quarterly Report on Form 10-Q for the quarter ended December 31, 2021, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 11, 2022	By:	/s/ Jeffrey C. O’Hara
		Jeffrey C. O’Hara
		Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Tel-Instrument Electronics Corp. (the “Company”), on Form 10-Q for the quarter ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Pauline Romeo, Chief Accounting Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) Such Quarterly Report on Form 10-Q for the quarter ended December 31, 2021, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in such Quarterly Report on Form 10-Q for the quarter ended December 31, 2021, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 11, 2022	By:	/s/ Pauline Romeo
		Pauline Romeo
		Chief Accounting Officer (Principal Financial and Accounting Officer)

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Document And Entity Information - shares	9 Months Ended
	Dec. 31, 2021	Feb. 01, 2022
Document Information Line Items
Entity Registrant Name	TEL-INSTRUMENT ELECTRONICS CORP.
Trading Symbol	N/A
Document Type	10-Q
Current Fiscal Year End Date	--03-31
Entity Common Stock, Shares Outstanding		3,255,887
Amendment Flag	false
Entity Central Index Key	0000096885
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Dec. 31, 2021
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-31990
Entity Incorporation, State or Country Code	NJ
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
Entity Interactive Data Current	Yes

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Condensed Consolidated Balance Sheets - USD ($)	Dec. 31, 2021	Mar. 31, 2021
Current assets:
Cash	$ 5,288,810	$ 3,485,275
Accounts receivable, net	1,385,384	1,933,321
Inventories, net	2,748,275	3,437,989
Restricted cash to support appeal bond	2,011,050	2,011,050
Prepaid expenses and other current assets	286,507	263,067
Total current assets	11,720,026	11,130,702
Equipment and leasehold improvements, net	127,322	200,769
Operating lease right-of-use assets	1,768,343	1,922,805
Deferred tax asset, net	2,396,594	2,675,040
Other long-term assets	35,108	35,110
Total assets	16,047,393	15,964,426
Current liabilities:
Operating lease liabilities – current portion	192,487	201,883
Accounts payable	438,569	906,149
Deferred revenues - current portion	123,615	150,709
Accrued expenses ‐vacation pay, payroll and payroll withholdings	376,073	457,232
Accrued legal damages	6,045,924	5,889,023
Accrued expenses - other	220,115	365,975
Total current liabilities	7,396,783	7,970,971
Operating lease liabilities – long-term	1,575,856	1,720,921
Long term debt - PPP	0	722,577
Deferred revenues – long-term	307,578	332,428
Total liabilities	9,280,217	10,746,897
Commitments and contingencies
Stockholders’ equity:
Preferred stock
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
Additional paid-in capital	7,098,468	7,318,620
Accumulated deficit	(5,500,243)	(7,270,042)
Total stockholders’ equity	6,767,176	5,217,529
Total liabilities and stockholders’ equity	16,047,393	15,964,426
Series A Preferred Stock [Member]
Stockholders’ equity:
Preferred stock	3,695,998	3,695,998
Series B Preferred Stock [Member]
Stockholders’ equity:
Preferred stock	$ 1,147,367	$ 1,147,367

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Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	9 Months Ended	12 Months Ended
	Dec. 31, 2021	Mar. 31, 2021
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, par value (in Dollars per share)	$ 0.1	$ 0.1
Common stock, par value (in Dollars per share)	$ 0.1	$ 0.1
Common stock, shares issued	3,255,887	3,255,887
Common stock, shares outstanding	3,255,887	3,255,887
Common stock, shares authorized	7,000,000	7,000,000
Series A Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 0.1	$ 0.1
Preferred stock, shares issued	500,000	500,000
Preferred stock, shares outstanding	500,000	500,000
Preferred stock, Cumulative Series Convertible Preferred	8.00%	8.00%
Series B Preferred Stock [Member]
Preferred stock, par value (in Dollars per share)	$ 0.1	$ 0.1
Preferred stock, shares issued	166,667	166,667
Preferred stock, shares outstanding	166,667	166,667
Preferred stock, Cumulative Series Convertible Preferred	8.00%	8.00%

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Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Net sales	$ 3,171,532	$ 2,672,742	$ 10,914,787	$ 8,948,575
Cost of sales	1,763,739	1,661,653	5,824,341	5,066,052
Gross margin	1,407,793	1,011,089	5,090,446	3,882,523
Selling, general and administrative	523,966	740,696	1,674,618	1,866,756
Litigation expenses	17,145	1,998	21,545	10,208
Engineering, research, and development	574,118	492,432	1,950,545	1,678,940
Total operating expenses	1,115,229	1,235,126	3,646,708	3,555,904
Income (loss) from operations	292,564	(224,037)	1,443,738	326,619
Interest income	996	1,591	2,977	6,316
Other income	0	758	35,854	14,612
Gain on forgiveness of PPP loan	0	722,577	722,577	722,577
Interest expense – judgement	(52,490)	(52,490)	(156,901)	(180,124)
Interest expense	0	(8,030)	0	(27,190)
Total other net (expense) income	(51,494)	664,406	604,507	536,191
Income before income taxes	241,070	440,369	2,048,245	862,810
Income tax (benefit) expense	46,448	(59,264)	278,446	29,449
Net income	194,622	499,633	1,769,799	833,361
Preferred dividends	(80,000)	(80,000)	(240,000)	(240,000)
Net income attributable to common shareholders	$ 114,622	$ 419,633	$ 1,529,799	$ 593,361
Basic income per common share (in Dollars per share)	$ 0.04	$ 0.13	$ 0.47	$ 0.18
Diluted income per common share (in Dollars per share)	$ 0.04	$ 0.1	$ 0.35	$ 0.16
Weighted average shares outstanding:
Basic (in Shares)	3,255,887	3,255,887	3,255,887	3,255,887
Diluted (in Shares)	5,095,665	5,095,665	5,095,665	5,065,665

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($)	Series A Preferred Stock [Member] Preferred Stock [Member]	Series B Preferred Stock [Member] Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balances at Mar. 31, 2020	$ 3,515,998	$ 1,087,367	$ 325,586	$ 7,616,624	$ (7,870,099)	$ 4,675,476
Balances (in Shares) at Mar. 31, 2020	500,000	166,667	3,255,887
8% Dividends on Preferred Stock	$ 180,000	$ 60,000		(240,000)		240,000
Dividend Payments						0
Stock-based compensation				15,829		15,829
Net income					833,361	833,361
Balances at Dec. 31, 2020	$ 3,695,998	$ 1,147,367	$ 325,586	7,392,453	(7,036,738)	5,524,666
Balances (in Shares) at Dec. 31, 2020	500,000	166,667	3,255,887
Balances at Sep. 30, 2020	$ 3,635,998	$ 1,127,367	$ 325,586	7,467,176	(7,536,371)	5,019,756
Balances (in Shares) at Sep. 30, 2020	500,000	166,667	3,255,887
8% Dividends on Preferred Stock	$ 60,000	$ 20,000		(80,000)		80,000
Stock-based compensation				5,277		5,277
Net income					499,633	499,633
Balances at Dec. 31, 2020	$ 3,695,998	$ 1,147,367	$ 325,586	7,392,453	(7,036,738)	5,524,666
Balances (in Shares) at Dec. 31, 2020	500,000	166,667	3,255,887
Balances at Mar. 31, 2021	$ 3,695,998	$ 1,147,367	$ 325,586	7,318,620	(7,270,042)	$ 5,217,529
Balances (in Shares) at Mar. 31, 2021	500,000	166,667	3,255,887			3,255,887
8% Dividends on Preferred Stock	$ 180,000	$ 60,000		(240,000)		$ 240,000
Dividend Payments	(180,000)	(60,000)				(240,000)
Stock-based compensation				19,848		19,848
Net income					1,769,799	1,769,799
Balances at Dec. 31, 2021	$ 3,695,998	$ 1,147,367	$ 325,586	7,098,468	(5,500,243)	$ 6,767,176
Balances (in Shares) at Dec. 31, 2021	500,000	166,667	3,255,887			3,255,887
Balances at Sep. 30, 2021	$ 3,695,998	$ 1,147,367	$ 325,586	7,170,954	(5,694,865)	$ 6,645,040
Balances (in Shares) at Sep. 30, 2021	500,000	166,667	3,255,887
8% Dividends on Preferred Stock	$ 60,000	$ 20,000		(80,000)		80,000
Dividend Payments	(60,000)	(20,000)				(80,000)
Stock-based compensation				7,514		7,514
Net income					194,622	194,622
Balances at Dec. 31, 2021	$ 3,695,998	$ 1,147,367	$ 325,586	$ 7,098,468	$ (5,500,243)	$ 6,767,176
Balances (in Shares) at Dec. 31, 2021	500,000	166,667	3,255,887			3,255,887

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Parentheticals)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Additional Paid-in Capital [Member]
Dividends on Preferred Stock	8.00%	8.00%	8.00%	8.00%

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Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Statement of Cash Flows [Abstract]
Net income	$ 1,769,799	$ 833,361
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Deferred income taxes	278,447	63,883
Depreciation and amortization	78,225	92,820
Amortization of right of use assets	154,462	159,833
Provision for inventory obsolescence	25,000	25,000
Forgiveness of PPP Loan	(722,577)	(722,577)
Non-cash stock-based compensation	19,848	15,829
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	547,937	(469,478)
Decrease in inventories	664,714	136,815
Decrease (increase) in prepaid expenses & other assets	(23,440)	148,743
Decrease in accounts payable and other accrued liabilities	(613,440)	(353,905)
Decrease in accrued payroll, vacation pay and payroll taxes	(81,159)	(54,983)
Decrease in deferred revenues	(51,944)	(54,978)
Decrease in operating lease liabilities	(154,461)	(159,833)
Increase in accrued legal damages	156,901	180,124
Net cash provided by (used in) operating activities	2,048,312	(159,346)
Cash flows from investing activities:
Purchases of equipment	(4,777)	(65,140)
Net cash used in investing activities	(4,777)	(65,140)
Cash flows from financing activities:
Proceeds from SBA PPP Loan	0	722,577
Payment of dividends	(240,000)	0
Repayment of line of credit	0	(680,000)
Repayment of finance lease obligations	0	(49)
Net cash (used in) provided by financing activities	(240,000)	42,528
Net increase (decrease) in cash and restricted cash	1,803,535	(181,958)
	5,496,325	5,134,739
Taxes paid	0	0
Interest paid	0	19,497
	7,299,860	4,952,781
Cash	3,485,275	3,126,195
Restricted cash	2,011,050	2,008,544
Cash	5,288,810	2,941,731
Restricted cash	$ 2,011,050	$ 2,011,050

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Supplemental disclosure of non-cash financing activities:

9 Months Ended

Dec. 31, 2021

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

Supplemental disclosure of non-cash financing activities:

a) The Company’s first PPP loan was forgiven by the SBA during December 2020 in the amount of $722,577. The Company’s second PPP loan was forgiven by the SBA during September 2021 in the amount of $722,577.

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Business, Organization, and Liquidity

9 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Accounting [Text Block]

Note 1 – Business, Organization and Liquidity

Business and Organization

Tel-Instrument Electronics Corp. (“Tel,” “TIC” 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 over the last two decades.

The Company is publicly traded and was quoted on the Over-the-Counter Market Place (“OTCQB”) under the symbol “TIKK.”

Liquidity

On December 31, 2021, the Company had positive working capital of $4,323,243 as compared to working capital of $3,159,731 on March 31, 2021. This included approximately $7.3 million of cash including the $2 million restricted cash supporting the appeal bond. The Company has recorded total damages of $6,045,924 including accrued interest, as a result of the jury verdict associated with the Aeroflex litigation.

With a $3.3 million backlog on December 31, 2021, the Company expects that in fiscal year 2022, revenue and profitability will continue to improve.

On March 27, 2020, former President Trump signed the Coronavirus Aid, Relief and Economic Security (the “CARES Act”), which, among other things, outlines the provisions of the Paycheck Protection Program (the “PPP”). The Company determined that it met the criteria to be eligible to obtain a loan under the PPP because, among other reasons, in light of the COVID-19 outbreak and the uncertainty of economic conditions related thereto, the loan was considered necessary to support the Company’s ongoing operations and retain all its employees. In addition, former President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act on April 24, 2020, which increased funding provided by the CARES Act. On May 4, 2020, the Company issued a promissory note (the “Note”) to Bank of America in the principal aggregate amount of $722,577 (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The amount was deposited in our bank on May 4, 2020. On June 5, 2020, the Paycheck Protection Program Flexibility Act was signed into law and extended the program until December 31, 2020.

TIC qualified for full loan forgiveness on the initial tranche on December 18, 2020. On January 6, 2021, updated PPP guidance outlining program changes to enhance its effectiveness and accessibility was released on in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. This was available to companies that recorded greater than a 25% sales reduction in any quarter compared to the prior year. The Company qualified for this second round of funding and on March 15, 2021, the Company secured a Second Draw PPP loan in the amount of $722,577. On September 17, 2021, TIC qualified for full loan forgiveness of the second round of funding and was recognized as other income in the quarter ended September 30, 2021.

On August 24, 2021, TIC, and the New Jersey Economic Development Authority (NJEDA) signed a small business emergency assistance grant agreement in the amount of $20,000. The funds related to the grant were received from the NJEDA on August 30, 2021, and were recognized as other income during the quarter ended September 30, 2021.

Based on the foregoing, we believe that our expected cash flows from operations and current cash balances will be sufficient to operate in the normal course of business for next 12 months from the issuance date of these unaudited condensed consolidated financial statements, including any payments for settlement of the Aeroflex litigation.

The Bank of America line of credit has been renewed for $690,000 and will expire on July 30, 2022. As of December 31, 2021, the line of credit draw remained at zero.

Impact of the COVID-19 Coronavirus

In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 coronavirus has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. government imposed travel restrictions on travel between the United States, Europe, and certain other countries. The impact of this pandemic has been, and will likely continue to be, extensive in many aspects of society, which has resulted, and will likely continue to result, in significant disruptions to the global economy as well as businesses and capital markets around the world.

On September 9, 2021, President Biden announced Executive Order 14042 (“Executive Order”) and related initiatives designed to lead the country out of the COVID-19 pandemic. The Executive Order includes policies that will require employees of contractors that do business with the federal government to be vaccinated. On September 24, 2021, The Safer Federal Workforce Task Force released COVID-19 vaccine guidance for Federal contractors and subcontractors. According to this guidance, covered employees must be fully vaccinated by December 8, 2021, or at the latest, by the first day of performance on a covered contract, absent the need for a disability or religious accommodation. In addition, covered contractors must follow the CDC’s mask and physical distance requirements for covered contractor employees and visitors. The Executive Order and the guidance apply to any prime contractor or subcontractor that is a party to a “contract or contract-like instrument” that includes a clause incorporating the requirements of the Executive Order. The new clause was applied on October 15, 2021, to only new federal contracts, solicitations, contract extensions and renewals.

On December 7, 2021, the federal court in Georgia issued a preliminary injunction temporarily halting the enforcement of EO 14042 (Ensuring Adequate COVID Safety Protocols for Federal Contractors) for all covered contracts nation-wide. New guidance from OMB also followed suit giving federal agencies input on how to go about non-enforcement provisions until legal challenges have been resolved. The updated guidance will remain applicable despite any change to new or existing court decisions. The new guidance does not impact the Safer Federal Workforce Taskforce Guidance. The vast majority of TIC employees are fully vaccinated, and TIC is preparing for full compliance of the Executive Order should it apply.

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Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of Tel-Instrument Electronics Corp. as of December 31, 2021, the results of operations change in stockholders’ equity for the three and nine months ended December 31, 2021, and December 31, 2020, and statements of cash flow for the nine months ended December 31, 2021, and December 31, 2020. These results are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K. The March 31, 2021, balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date. Accordingly, the unaudited condensed consolidated financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021, as filed with the United States Securities and Exchange Commission (the “SEC”) on June 29, 2021 (the “Annual Report”).

Revenue Recognition

Under Financial Accounting Standards Board (“FASB”) Topic 606, Revenue from Contacts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company accounts for revenue recognition in accordance with ASC 606.The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The ASC 606 defines a five-step process to achieve the core principle.

The Company generates revenue from designing, manufacturing, and selling avionic tests and measurement solutions for the global commercial air transport, general aviation, and government/military aerospace and defense markets. The Company also offers calibration and repair services for a wide range of airborne navigation and communication equipment.

Nature of goods and services

The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each.

Test Units/Sets

The Company develops and manufactures unit sets to test navigation and communication equipment, such as ramp testers and bench testers for equipment installed in aircraft and ground radios. The Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of the contract, which is usually at the time of shipment. Revenue on products is presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears the risk of loss while the inventory is in-transit. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to the customer.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines stand-alone selling prices based on the price at which the performance obligation is sold separately. If the stand-alone selling price is not observable through past transactions, the Company estimates the standalone selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

When determining the transaction price of a contract, an adjustment is made if payment from the customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of December 31, 2021.

Replacement Parts

The Company offers replacement parts for test equipment, ramp testers, and bench testers. Similar to the sale of test units, the control of the product transfers at a point of time and therefore, revenue is recognized at the point in time when the obligation to the customer has been fulfilled.

Extended Warranties

The extended warranties sold by the Company provide a level of assurance beyond the coverage for defects that existed at the time of a sale or against certain types of covered damage with coverage terms ranging from 5 to 7 years. Amounts received for warranties are recorded as deferred revenue and recognized as revenue ratably over the respective term of the agreements. As of December 31, 2021, $402,549 is expected to be recognized from remaining performance obligations for extended warranties as compared to $408,219 at March 31, 2021. For the three and nine months ended December 31, 2021, the Company recognized revenue of $20,267 and $52,249, respectively from amounts that were included in Deferred Revenue as compared to $22,140 and $66,420, respectively from amounts that were included in Deferred Revenue for the three months and nine months ended December 31, 2020.

The following table provides a summary of the changes in deferred revenues for the nine months ended December 31, 2021:

Deferred revenues at April 1, 2021	$	408,219
Additional extended warranties		46,579
Revenue recognized for the nine months ended December 31, 2021		(52,249	)
Deferred revenues at December 31, 2021	$	402,549

Other Deferred Revenues

The Company sometimes receives payments in advance of shipment. These amounts are classified as other deferred revenues. For the periods ended December 31, 2021, and March 31, 2021, the Company has other deferred revenues of $28,644 and $74,920, respectively.

Repair and Calibration Services

The Company offers repair and calibration services for units that are returned for annual calibrations and/or for repairs after the warranty period has expired. The Company repairs and calibrates a wide range of airborne navigation and communication equipment. Revenue is recognized at the time the repaired or calibrated unit is shipped back to the customer, as it is at this time that the work is completed.

Other

The majority of the Company’s revenues are from contracts with the U.S. government, airlines, aircraft manufacturers, such as Boeing and Lockheed Martin, domestic distributors, international distributors for sales to military and commercial customers, and other commercial customers. The contracts with the U.S. government typically are subject to the Federal Acquisition Regulation (“FAR”) which provides guidance on the types of costs that are allowable in establishing prices for goods and services provided under U.S. government contracts.

Payment terms and conditions vary by contract, although terms include a requirement of payment within a range from 30 to 60 days, or in certain cases, up-front deposits. In circumstances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts do not include a significant financing component. Payments received prior to the delivery of units or services performed are recorded as deferred revenues. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from sales. The Company applied the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales. All sales are denominated in U.S. dollars.

The Company chose to apply the available practical expedient as commission eligible sales orders are fulfilled within less than one year and commissions are generally paid by the Company within 30 days of the related sales order fulfillment. Accordingly, management has determined that no change in accounting for costs to obtain a contract will be required for the Company to conform to ASC 606.

Disaggregation of revenue

In the following tables, revenue is disaggregated by revenue category.

	For the Three Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	91,688	$	2,533,296
	$	91,688	$	2,533,296

The remainder of our revenues for the three months ended December 31, 2021, are derived from repairs and calibration of $469,095,

replacement parts of $37,186, extended warranties of $20,267 and other revenues of $20,000. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Three Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	104,346	$	2,212,507
	$	104,346	$	2,212,507

The remainder of our revenues for the three months ended December 31, 2020, are derived from repairs and calibration of $273,388, replacement parts of $59,026, extended warranties of $22,140 and other revenues of $1,335. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Nine Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	269,652	$	9,012,562
	$	269,652	$	9,012,562

The remainder of our revenues for the nine months ended December 31, 2021, are derived from repairs and calibration of $1,389,894, replacement parts of $170,430, extended warranties of $52,249 and other revenues of $20,000. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Nine Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	280,743	$	7,697,701
	$	280,743	$	7,697,701

The remainder of our revenues for the nine months ended December 31, 2020, are derived from repairs and calibration of $762,828, replacement parts of $82,796, extended warranties of $66,420 and other revenues of $58,087. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

In the following table, revenue is disaggregated by geography.

	For the Three Months Ended December 31, 2021		For the Three Months Ended December 31, 2020
Geography
United States	$	1,974,538	$	1,304,664
International		1,196,994		1,368,078
Total	$	3,171,532	$	2,672,742

	For the Nine Months Ended December 31, 2021		For the Nine Months Ended December 31, 2020
Geography
United States	$	6,885,551	$	3,842,263
International		4,029,236		5,106,312
Total	$	10,914,787	$	8,948,575

For the three months ended December 31, 2021, three customers accounted for sales of $673,758 (Muirhead Avionics), $583,680 (DFAS) and $328,230 (H2L Tech) or 21%, 18% and 10% respectively. For the nine months ended December 31, 2021, four customers accounted for sales of $3,008,911 (DFAS), $1,585,620 (Muirhead Avionics), $1,368,964 (H2L Tech) and $1,244,380 (Lockheed Martin) or 28%, 15%, 13% and 11% respectively.

For the three and nine months ended December 31, 2020, Muirhead Avionics, the Company’s distributor for Western Europe accounted for sales of $681,293 and $3,234,035 or 25% and 36% respectively. One government customer (Lockheed Martin) represented 17% of sales for the three months ended December 31, 2020.

The Company, in addition to inside sales efforts, utilizes independent brokers to sell its products to customers. A related party independent broker has earned approximately $13,000 and $94,000 in commissions for the three and nine months ended December 31, 2021. The same related party independent broker has earned $27,000 for the nine months ended December 31, 2021, for monthly sales and marketing consulting services, earned $3,000 per month.

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments -Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. The amendment in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The effective date of the new standard has been deferred to April 1, 2023. We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements.

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Accounts Receivable, net

9 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 – Accounts Receivable, net

The following table sets forth the components of accounts receivable:

	December 31, 2021			March 31, 2021
Government	$	1,164,424		$	1,700,907
Commercial		228,460			239,914
Less: Allowance for doubtful accounts		(7,500	)		(7,500	)
	$	1,385,384		$	1,933,321

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Restricted Cash to Support Appeal Bond

9 Months Ended

Dec. 31, 2021

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents Disclosure [Text Block]

Note 4 – Restricted Cash to Support Appeal Bond

In January 2018, the Company transferred $2,000,000 to a restricted cash account to secure a letter of credit which was used for collateral for the appeal bond (See Note 12).

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Inventories, net

9 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 5 – Inventories, net

Inventories consist of:

	December 31, 2021			March 31, 2021
Purchased parts	$	2,437,294		$	2,912,599
Work-in-process		910,981			1,020,402
Finished goods		-			79,988
Less: Inventory reserve		(600,000	)		(575,000	)
	$	2,748,275		$	3,437,989

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Net Income per Share

9 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 6 – Net Income per Share

Net income per share has been computed according to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 260”), “Earnings per Share,” which requires a dual presentation of basic and diluted income per share (“EPS”). Basic EPS represents net 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 preferred stock, 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. The dilutive effect of preferred stock is reflected in earnings per share by use of the if-converted 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.

	Three Months Ended			Three Months Ended
	December 31, 2021			December 31, 2020
Basic net income per share computation:
Net income	$	194,622		$	499,633
Less: Preferred dividends		(80,000	)		(80,000	)
Net income attributable to common shareholders		114,622			419,633
Weighted-average common shares outstanding		3,255,887			3,255,887
Basic net income per share	$	0.04		$	0.13
Diluted net income per share computation
Net income attributable to common shareholders	$	114,622		$	419,633
Add: Preferred dividends		80,000			80,000
Diluted income attributable to common shareholders	$	194,622		$	499,633
Weighted-average common shares outstanding		3,255,887			3,255,887
Incremental shares attributable to the assumed conversion of preferred stock		1,839,778			1,839,778
Total adjusted weighted-average shares		5,095,665			5,095,665
Diluted net income per share	$	0.04		$	0.10

	Nine Months Ended			Nine Months Ended
	December 31, 2021			December 31, 2020
Basic net income per share computation:
Net income	$	1,769,799		$	833,361
Less: Preferred dividends		(240,000	)		(240,000	)
Net income attributable to common shareholders		1,529,799			593,361
Weighted-average common shares outstanding		3,255,887			3,255,887
Basic net income per share	$	0.47		$	0.18
Diluted net income per share computation
Net income attributable to common shareholders	$	1,529,799		$	593,361
Add: Preferred dividends		240,000			240,000
Diluted income attributable to common shareholders	$	1,769,799		$	833,361
Weighted-average common shares outstanding		3,255,887			3,255,887
Incremental shares attributable to the assumed conversion of preferred stock		1,839,778			1,809,778
Total adjusted weighted-average shares		5,095,665			5,065,665
Diluted net income per share	$	0.35		$	0.16

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share for the three months ended:

	December 31, 2021		December 31, 2020
Stock options		121,500		83,500
		121,500		83,500

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share for the nine months ended:

	December 31, 2021		December 31, 2020
Stock options		121,500		83,500
		121,500		83,500

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Line of Credit

9 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 7 – Line of Credit

In August 2021, Bank of America renewed the line of credit with a maturity of July 30, 2022. The agreement includes a line of credit up to $690,000. Monthly payments are interest only. The line is collateralized by substantially all of the assets of the Company.

As of December 31, 2021, the Line of Credit draw has remained at zero balance.

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SBA PPP Loan

9 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

Note 8 – SBA PPP Loan

On January 6, 2021, updated PPP guidance outlining program changes to enhance its effectiveness and accessibility was released on in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. This was available to companies that recorded greater than a 25% sales reduction in any quarter compared to the prior year. The Company qualified for this second round of funding and on March 15, 2021, the Company secured a Second Draw PPP loan in the amount of $722,577. On September 17, 2021, TIC qualified for full loan forgiveness of the second round of funding which was recognized as other income.

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Segment Information

9 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 9 – 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.

The tables below present information about reportable segments within the avionics business for the three and nine months ending December 31, 2021, and 2020:

Three Months Ended December 31, 2021	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	2,552,546	$	618,986	$	3,171,532	$	-		$	3,171,532
Cost of sales		1,366,699		397,040		1,763,739		-			1,763,739
Gross margin		1,185,847		221,946		1,407,793		-			1,407,793
Engineering, research, and development						574,118		-			574,118
Selling, general and administrative						187,132		336,834			523,966
Litigation costs						-		17,145			17,145
Interest income						-		(996	)		(996	)
Interest expense – judgment						-		52,490			52,490
Total expenses						761,250		405,473			1,166,723
Income (loss) before income taxes					$	646,543	$	(405,473	)	$	241,070

Three Months Ended December 31, 2020	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	2,212,507	$	460,235	$	2,672,742	$	-		$	2,672,742
Cost of sales		1,247,606		414,047		1,661,653		-			1,661,653
Gross margin		964,901		46,188		1,011,089		-			1,011,089
Engineering, research, and development						492,432		-			492,432
Selling, general and administrative						215,952		524,744			740,696
Litigation costs						-		1,998			1,998
Interest income						-		(1,591	)		(1,591	)
Other income						-		(758	)		(758	)
Forgiveness of PPP loan						-		(722,577	)		(722,577	)
Interest expense - judgment						-		52,490			52,490
Interest expense						-		8,030			8,030
Total expenses (income)						708,384		(137,664	)		570,720
Income before income taxes					$	302,705	$	137,664		$	440,369

Nine Months Ended December 31, 2021	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	9,031,812	$	1,882,975	$	10,914,787	$	-		$	10,914,787
Cost of sales		4,627,834		1,196,507		5,824,341		-			5,824,341
Gross margin		4,403,978		686,468		5,090,446		-			5,090,446
Engineering, research, and development						1,950,545		-			1,950,545
Selling, general and administrative						589,076		1,085,542			1,674,618
Litigation costs						-		21,545			21,545
Interest income						-		(2,977	)		(2,977	)
Other income						-		(35,854	)		(35,854	)
Interest expense – judgment						-		156,901			156,901
Forgiveness of PPP Loan						-		(722,577	)		(722,577	)
Total expenses						2,539,621		502,580			3,042,201
Income (loss) before income taxes					$	2,550,825	$	(502,580	)	$	2,048,245

Nine Months Ended  December 30, 2020	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	7,751,936	$	1,196,639	$	8,948,575	$	-		$	8,948,575
Cost of sales		4,145,959		920,093		5,066,052		-			5,066,052
Gross margin		3,605,977		276,546		3,882,523		-			3,882,523
Engineering, research, and development						1,678,940		-			1,678,940
Selling, general and administrative						627,944		1,238,812			1,866,756
Litigation costs						-		10,208			10,208
Interest income						-		(6,316	)		(6,316	)
Forgiveness of PPP loan						-		(722,577	)		(722,577	)
Other income						-		(14,612	)		(14,612	)
Interest expense – judgment						-		180,124			180,124
Interest expense						-		27,190			27,190
Total expenses						2,306,884		712,829			3,019,713
Income (loss) before income taxes					$	1,575,639	$	(712,829	)	$	862,810

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Income Taxes

9 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 10 – Income Taxes

FASB ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC 740-10”) 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. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company does not have any unrecognized tax benefits.

The tax effect of temporary differences, primarily net operating loss carryforwards, asset reserves and accrued liabilities, gave rise to the Company’s deferred tax asset. Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse. The Company had approximately $2.4 million in deferred tax assets at December 31, 2021. 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 differences between income taxes expected at the U.S. federal statutory income tax rate of 21 percent and the reported income tax expense are due to the recognition of non-taxable PPP funds of $722,577 as other income during the nine months ended December 31, 2021. Taxable income was $241,070 and $2,048,245 for the three and nine months ended December 31, 2021, resulting in income tax expense of $46,448 and $278,446 for the three and nine months ended December 30, 2021, respectively.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU was effective April 1, 2021, and adoption of this standard had no significant impact on our financial position and results of operations.

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Operating Lease Liability

9 Months Ended

Dec. 31, 2021

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

Note 11 – Operating Lease Liability

The Company leases its facility in East Rutherford, NJ with monthly payments of $18,467 which expired in August 2021 and the renewed monthly payments are $21,237 for an additional four years. Thereafter, monthly payments are $23,083 for the balance of the 8 year renewal lease agreement expiring August 2029.

The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company estimated its incremental borrowing rate based on its credit quality, line of credit agreement and by comparing interest rates available in the market for similar borrowings. The Company used a discount rate of 3.90% at December 31, 2021.

The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheet as of December 31, 2021:

Remaining payments 2022	$	63,710
2023		254,840
2024		254,840
2025		254,840
2026		267,767
Thereafter		946,417
Total undiscounted future minimum lease payments		2,042,414
Less: Difference between undiscounted lease payments and discounted lease liabilities		(274,071	)
Present value of net minimum lease payments		1,768,343
Less current portion		(192,487	)
Operating lease liabilities – long-term	$	1,575,856

Total rent expense for the three and nine months ended December 31, 2021, was $100,967 and $288,117, respectively, as compared to $90,920 and $272,725 for the three and nine months ended December 31, 2020, respectively.

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Litigation

9 Months Ended

Dec. 31, 2021

Disclosure Text Block Supplement [Abstract]

Legal Matters and Contingencies [Text Block]

Note 12 – Litigation

Contingencies are recorded in the unaudited condensed 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 located in 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, to develop new Mode-5 radar test sets and kits to upgrade the existing TS-4530 radar test sets to Mode 5 (the “Award”). Aeroflex’s petition, seeking injunctive relief and damages, alleges that in connection with the Award, the Company and its named employees misappropriated Aeroflex’s trade secrets; tortiously interfered with Aeroflex’s business relationship; conspired to harm Aeroflex and tortiously interfered with Aeroflex’s contract. 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 on Aeroflex’s 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 case then entered an extended discovery period in the District Court.

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. The motion asserted Aeroflex lacks standing to sue alone. Also, the motion raises the fact that Aeroflex allowed the license to expire, Aeroflex’s claims are either moot or Aeroflex lacks standing to sue for damages alleged to have accrued after the license ended in 2011. The motion for summary judgment was denied.

The Aeroflex trial on remand in the Kansas District Court began in March 2017. After a nine-week trial, the jury rendered its verdict. The jury found no misappropriation of Aeroflex trade secrets but found that the Company tortiously interfered with a prospective business opportunity and awarded damages of $1.3 million for lost profits. The jury also ruled that Tel tortiously interfered with Aeroflex’s non-disclosure agreements with two former Aeroflex employees and awarded damages of $1.5 million for lost profits, resulting in total damages against the Company of $2.8 million. The jury also found that the former Aeroflex employees breached their non-disclosure agreements with Aeroflex and awarded damages against these two individuals totaling $525,000. The jury also decided that punitive damages should be allowed against the Company.

Following the verdict, the Company filed a motion for judgment as a matter of law. In the motion, the Company renewed its motion for judgment on Aeroflex’s tortious interference with prospective business opportunity claim arguing that such claim is barred by the statute of limitations. Alternatively, the motion asserts there is insufficient evidence supporting the lost profit award on that claim. Additionally, the motion for judgment addresses inconsistency between the awards against the former Aeroflex employees for breach of the non-disclosure agreements and the award against the Company for interfering with those agreements. Alternatively, the motion asserts there is insufficient evidence supporting the lost profit award on that claim.

During July 2017, the Court heard the Company’s motion for judgment as well as conducting a hearing as to the amount of a punitive damages award. Kansas statutes limit punitive damages to a maximum of $5 million.

Aeroflex submitted a motion to the Court requesting that the judge award punitive damages at the maximum $5 million amount. In October 2017, the Court denied the Company’s motions and awarded Aeroflex an additional $2.1 million of punitive damages, which brings the total Tel damages awarded in this case to approximately $4.9 million. Pursuant to K.S.A. 16-204(d) “any judgment rendered by a court of this state on or after July 1, 1986, shall bear interest on and after the day on which judgment is rendered at the rate provided by subsection (e). The Kansas Secretary of State publishes the interest rate which is modified annually based on market interest rates.

For the year starting July 1, 2020, the interest rate was 4.25% and cumulative interest as of fiscal year ended June 30, 2021, was $1,040,943. For the year starting July 1, 2021, the interest rate will be 4.25 %. Interest on the $4.9 million judgment started to accrue on November 22, 2017, the date the judgment was entered. As of December 31, 2021, the outstanding amount of the judgement and accrued interest is $6,045,924.

The Company filed post-trial motions to avoid damage duplication and inconsistency, and to secure judgment as a matter of law or a new trial. The trial court denied those motions. The Company appealed the verdict in 2019 and the post-trial rulings to the Court of Appeals of the State of Kansas, Case No. 18-119,563. The Company posted a $2 million supersedeas bond. The Plaintiff filed a cross-appeal. The appeal and cross-appeal are fully briefed. The appellate court has not set a date to hear the appeal.

The Company is optimistic about the prospects of its appeal for a judgment as a matter of law. The appeal decision has been delayed due to the COVID-19 related shutdown of the Kansas court system and the inability of court staff to work remotely on confidentiality issues. During August 2021, in an effort to move the appeal forward, all parties agreed to supply the appeal information to the court on a dedicated and secured laptop that would be used by the research attorney remotely. The Company has the ability to settle this case at its sole discretion by withdrawing the appeal and paying the judgment plus interest amount. The Company currently has sufficient cash on hand to pay off this liability if the appeal is lost. On January 28, 2022, Aeroflex filed a Motion to Require Supplemental Appeal Bond with the Court of Appeals of the State of Kansas, seeking a bond from the Company in the amount of $6 million to supplement the existing bond of $2 million. The Company has filed a response and we are confident that this motion will be denied.

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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Stock Options

9 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-based Payment Arrangement [Text Block]

Note 13 – Stock Options

The Board of Directors (the “Board”) adopted on January 18, 2017, and ratified by the shareholders at the Annual Meeting on January 18, 2017, the Company’s 2016 Stock Option Plan (the “Plan”). The Plan provides for the granting of incentive stock options, by a committee to be appointed by the Board (both the Board and the Committee are referred to herein as the “Committee”) to directors, officers, and employees (excluding directors and officers who are not employees) to purchase shares of the Common Stock of the Company, par value $0.10 per share (the “Stock”), in accordance with the terms and provisions. The 2016 Plan reserves for issuance, options to purchase up to 250,000 shares of its common stock. Options granted under the plan are exercisable up to a period of five 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 to a shareholder owning 10% or more of the outstanding common stock of the Company, as to which the exercise price must be not less than 110% of the fair market value of the common stock at the date of grant. Options 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. During fiscal year 2022, the Company granted 23,000 stock options at a price of $2.94 per share, the fair market value on the grant date.

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.

	Dividend			Risk-free
	Yield			Interest rate			Volatility			Life
2022		0.0	%		0.78	%		82.69	%	5 years

A summary of the status of the Company’s stock option plans for the fiscal year ended March 31, 2021, and year to date December 31, 2021, and changes during the year are presented below (in number of options):

	Number of Options		Average Exercise Price		Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding options at April 1, 2021		98,500	$	3.19	3.3 years	$	30,835
Options granted		23,000	$	2.94
Options exercised		-	$	-
Options canceled/forfeited		-	$	-
Outstanding options at December 31, 2021		121,500	$	3.14	2.9 years	$	8,090
Vested Options:
December 31, 2021:		37,900	$	3.21	2.1 years	$	304
March 31, 2021:		19,700	$	3.22	2.8 years	$	5,567

Remaining options available for grant were 128,500 and 151,500 as of December 31, 2021, and March 31, 2021, respectively.

For the year ended March 31, 2021, and year to date December 2021, the unamortized compensation expense for stock options was $60,013 and $55,505 respectively. Unamortized compensation expense is expected to be recognized over a weighted-average period of approximately 2.7 year.

For the three and nine months ended December 31, 2021, the Company recorded stock compensation costs of $7,514 and $19,848, respectively, as compared to $5,277 and $15,829 for the three and nine months ended December 31, 2020.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of Tel-Instrument Electronics Corp. as of December 31, 2021, the results of operations change in stockholders’ equity for the three and nine months ended December 31, 2021, and December 31, 2020, and statements of cash flow for the nine months ended December 31, 2021, and December 31, 2020. These results are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K. The March 31, 2021, balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date. Accordingly, the unaudited condensed consolidated financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2021, as filed with the United States Securities and Exchange Commission (the “SEC”) on June 29, 2021 (the “Annual Report”).

Revenue [Policy Text Block]

Revenue Recognition

Under Financial Accounting Standards Board (“FASB”) Topic 606, Revenue from Contacts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company accounts for revenue recognition in accordance with ASC 606.The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The ASC 606 defines a five-step process to achieve the core principle.

The Company generates revenue from designing, manufacturing, and selling avionic tests and measurement solutions for the global commercial air transport, general aviation, and government/military aerospace and defense markets. The Company also offers calibration and repair services for a wide range of airborne navigation and communication equipment.

Nature of goods and services

The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each.

Test Units/Sets

The Company develops and manufactures unit sets to test navigation and communication equipment, such as ramp testers and bench testers for equipment installed in aircraft and ground radios. The Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of the contract, which is usually at the time of shipment. Revenue on products is presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears the risk of loss while the inventory is in-transit. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to the customer.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines stand-alone selling prices based on the price at which the performance obligation is sold separately. If the stand-alone selling price is not observable through past transactions, the Company estimates the standalone selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

When determining the transaction price of a contract, an adjustment is made if payment from the customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of December 31, 2021.

Replacement Parts

The Company offers replacement parts for test equipment, ramp testers, and bench testers. Similar to the sale of test units, the control of the product transfers at a point of time and therefore, revenue is recognized at the point in time when the obligation to the customer has been fulfilled.

Extended Warranties

The extended warranties sold by the Company provide a level of assurance beyond the coverage for defects that existed at the time of a sale or against certain types of covered damage with coverage terms ranging from 5 to 7 years. Amounts received for warranties are recorded as deferred revenue and recognized as revenue ratably over the respective term of the agreements. As of December 31, 2021, $402,549 is expected to be recognized from remaining performance obligations for extended warranties as compared to $408,219 at March 31, 2021. For the three and nine months ended December 31, 2021, the Company recognized revenue of $20,267 and $52,249, respectively from amounts that were included in Deferred Revenue as compared to $22,140 and $66,420, respectively from amounts that were included in Deferred Revenue for the three months and nine months ended December 31, 2020.

The following table provides a summary of the changes in deferred revenues for the nine months ended December 31, 2021:

Deferred revenues at April 1, 2021	$	408,219
Additional extended warranties		46,579
Revenue recognized for the nine months ended December 31, 2021		(52,249	)
Deferred revenues at December 31, 2021	$	402,549

Other Deferred Revenues

The Company sometimes receives payments in advance of shipment. These amounts are classified as other deferred revenues. For the periods ended December 31, 2021, and March 31, 2021, the Company has other deferred revenues of $28,644 and $74,920, respectively.

Repair and Calibration Services

The Company offers repair and calibration services for units that are returned for annual calibrations and/or for repairs after the warranty period has expired. The Company repairs and calibrates a wide range of airborne navigation and communication equipment. Revenue is recognized at the time the repaired or calibrated unit is shipped back to the customer, as it is at this time that the work is completed.

Other

The majority of the Company’s revenues are from contracts with the U.S. government, airlines, aircraft manufacturers, such as Boeing and Lockheed Martin, domestic distributors, international distributors for sales to military and commercial customers, and other commercial customers. The contracts with the U.S. government typically are subject to the Federal Acquisition Regulation (“FAR”) which provides guidance on the types of costs that are allowable in establishing prices for goods and services provided under U.S. government contracts.

Payment terms and conditions vary by contract, although terms include a requirement of payment within a range from 30 to 60 days, or in certain cases, up-front deposits. In circumstances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts do not include a significant financing component. Payments received prior to the delivery of units or services performed are recorded as deferred revenues. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from sales. The Company applied the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales. All sales are denominated in U.S. dollars.

The Company chose to apply the available practical expedient as commission eligible sales orders are fulfilled within less than one year and commissions are generally paid by the Company within 30 days of the related sales order fulfillment. Accordingly, management has determined that no change in accounting for costs to obtain a contract will be required for the Company to conform to ASC 606.

Disaggregation of revenue

In the following tables, revenue is disaggregated by revenue category.

	For the Three Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	91,688	$	2,533,296
	$	91,688	$	2,533,296

The remainder of our revenues for the three months ended December 31, 2021, are derived from repairs and calibration of $469,095,

replacement parts of $37,186, extended warranties of $20,267 and other revenues of $20,000. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Three Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	104,346	$	2,212,507
	$	104,346	$	2,212,507

The remainder of our revenues for the three months ended December 31, 2020, are derived from repairs and calibration of $273,388, replacement parts of $59,026, extended warranties of $22,140 and other revenues of $1,335. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Nine Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	269,652	$	9,012,562
	$	269,652	$	9,012,562

The remainder of our revenues for the nine months ended December 31, 2021, are derived from repairs and calibration of $1,389,894, replacement parts of $170,430, extended warranties of $52,249 and other revenues of $20,000. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

	For the Nine Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	280,743	$	7,697,701
	$	280,743	$	7,697,701

The remainder of our revenues for the nine months ended December 31, 2020, are derived from repairs and calibration of $762,828, replacement parts of $82,796, extended warranties of $66,420 and other revenues of $58,087. We do not disaggregate these revenue streams as they are not deemed an important element related to how management operates the business between segments.

In the following table, revenue is disaggregated by geography.

	For the Three Months Ended December 31, 2021		For the Three Months Ended December 31, 2020
Geography
United States	$	1,974,538	$	1,304,664
International		1,196,994		1,368,078
Total	$	3,171,532	$	2,672,742

	For the Nine Months Ended December 31, 2021		For the Nine Months Ended December 31, 2020
Geography
United States	$	6,885,551	$	3,842,263
International		4,029,236		5,106,312
Total	$	10,914,787	$	8,948,575

For the three months ended December 31, 2021, three customers accounted for sales of $673,758 (Muirhead Avionics), $583,680 (DFAS) and $328,230 (H2L Tech) or 21%, 18% and 10% respectively. For the nine months ended December 31, 2021, four customers accounted for sales of $3,008,911 (DFAS), $1,585,620 (Muirhead Avionics), $1,368,964 (H2L Tech) and $1,244,380 (Lockheed Martin) or 28%, 15%, 13% and 11% respectively.

For the three and nine months ended December 31, 2020, Muirhead Avionics, the Company’s distributor for Western Europe accounted for sales of $681,293 and $3,234,035 or 25% and 36% respectively. One government customer (Lockheed Martin) represented 17% of sales for the three months ended December 31, 2020.

The Company, in addition to inside sales efforts, utilizes independent brokers to sell its products to customers. A related party independent broker has earned approximately $13,000 and $94,000 in commissions for the three and nine months ended December 31, 2021. The same related party independent broker has earned $27,000 for the nine months ended December 31, 2021, for monthly sales and marketing consulting services, earned $3,000 per month.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments -Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. The amendment in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. The effective date of the new standard has been deferred to April 1, 2023. We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

The following table provides a summary of the changes in deferred revenues for the nine months ended December 31, 2021:

Deferred revenues at April 1, 2021	$	408,219
Additional extended warranties		46,579
Revenue recognized for the nine months ended December 31, 2021		(52,249	)
Deferred revenues at December 31, 2021	$	402,549

Disaggregation of Revenue [Table Text Block]

In the following tables, revenue is disaggregated by revenue category.

	For the Three Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	91,688	$	2,533,296
	$	91,688	$	2,533,296

	For the Three Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	104,346	$	2,212,507
	$	104,346	$	2,212,507

	For the Nine Months Ended December 31, 2021
	Commercial		Government
Sales Distribution
Test Units	$	269,652	$	9,012,562
	$	269,652	$	9,012,562

	For the Nine Months Ended December 31, 2020
	Commercial		Government
Sales Distribution
Test Units	$	280,743	$	7,697,701
	$	280,743	$	7,697,701

Revenue from External Customers by Geographic Areas [Table Text Block]

In the following table, revenue is disaggregated by geography.

	For the Three Months Ended December 31, 2021		For the Three Months Ended December 31, 2020
Geography
United States	$	1,974,538	$	1,304,664
International		1,196,994		1,368,078
Total	$	3,171,532	$	2,672,742

	For the Nine Months Ended December 31, 2021		For the Nine Months Ended December 31, 2020
Geography
United States	$	6,885,551	$	3,842,263
International		4,029,236		5,106,312
Total	$	10,914,787	$	8,948,575

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Accounts Receivable, net (Tables)

9 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

The following table sets forth the components of accounts receivable:

	December 31, 2021			March 31, 2021
Government	$	1,164,424		$	1,700,907
Commercial		228,460			239,914
Less: Allowance for doubtful accounts		(7,500	)		(7,500	)
	$	1,385,384		$	1,933,321

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Inventories, net (Tables)

9 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories consist of:

	December 31, 2021			March 31, 2021
Purchased parts	$	2,437,294		$	2,912,599
Work-in-process		910,981			1,020,402
Finished goods		-			79,988
Less: Inventory reserve		(600,000	)		(575,000	)
	$	2,748,275		$	3,437,989

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Net Income per Share (Tables)

9 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Net income per share has been computed according to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC 260”), “Earnings per Share,” which requires a dual presentation of basic and diluted income per share (“EPS”). Basic EPS represents net 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 preferred stock, 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. The dilutive effect of preferred stock is reflected in earnings per share by use of the if-converted 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.

	Three Months Ended			Three Months Ended
	December 31, 2021			December 31, 2020
Basic net income per share computation:
Net income	$	194,622		$	499,633
Less: Preferred dividends		(80,000	)		(80,000	)
Net income attributable to common shareholders		114,622			419,633
Weighted-average common shares outstanding		3,255,887			3,255,887
Basic net income per share	$	0.04		$	0.13
Diluted net income per share computation
Net income attributable to common shareholders	$	114,622		$	419,633
Add: Preferred dividends		80,000			80,000
Diluted income attributable to common shareholders	$	194,622		$	499,633
Weighted-average common shares outstanding		3,255,887			3,255,887
Incremental shares attributable to the assumed conversion of preferred stock		1,839,778			1,839,778
Total adjusted weighted-average shares		5,095,665			5,095,665
Diluted net income per share	$	0.04		$	0.10

	Nine Months Ended			Nine Months Ended
	December 31, 2021			December 31, 2020
Basic net income per share computation:
Net income	$	1,769,799		$	833,361
Less: Preferred dividends		(240,000	)		(240,000	)
Net income attributable to common shareholders		1,529,799			593,361
Weighted-average common shares outstanding		3,255,887			3,255,887
Basic net income per share	$	0.47		$	0.18
Diluted net income per share computation
Net income attributable to common shareholders	$	1,529,799		$	593,361
Add: Preferred dividends		240,000			240,000
Diluted income attributable to common shareholders	$	1,769,799		$	833,361
Weighted-average common shares outstanding		3,255,887			3,255,887
Incremental shares attributable to the assumed conversion of preferred stock		1,839,778			1,809,778
Total adjusted weighted-average shares		5,095,665			5,065,665
Diluted net income per share	$	0.35		$	0.16

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	December 31, 2021		December 31, 2020
Stock options		121,500		83,500
		121,500		83,500

	December 31, 2021		December 31, 2020
Stock options		121,500		83,500
		121,500		83,500

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Segment Information (Tables)

9 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The tables below present information about reportable segments within the avionics business for the three and nine months ending December 31, 2021, and 2020:

Three Months Ended December 31, 2021	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	2,552,546	$	618,986	$	3,171,532	$	-		$	3,171,532
Cost of sales		1,366,699		397,040		1,763,739		-			1,763,739
Gross margin		1,185,847		221,946		1,407,793		-			1,407,793
Engineering, research, and development						574,118		-			574,118
Selling, general and administrative						187,132		336,834			523,966
Litigation costs						-		17,145			17,145
Interest income						-		(996	)		(996	)
Interest expense – judgment						-		52,490			52,490
Total expenses						761,250		405,473			1,166,723
Income (loss) before income taxes					$	646,543	$	(405,473	)	$	241,070

Three Months Ended December 31, 2020	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	2,212,507	$	460,235	$	2,672,742	$	-		$	2,672,742
Cost of sales		1,247,606		414,047		1,661,653		-			1,661,653
Gross margin		964,901		46,188		1,011,089		-			1,011,089
Engineering, research, and development						492,432		-			492,432
Selling, general and administrative						215,952		524,744			740,696
Litigation costs						-		1,998			1,998
Interest income						-		(1,591	)		(1,591	)
Other income						-		(758	)		(758	)
Forgiveness of PPP loan						-		(722,577	)		(722,577	)
Interest expense - judgment						-		52,490			52,490
Interest expense						-		8,030			8,030
Total expenses (income)						708,384		(137,664	)		570,720
Income before income taxes					$	302,705	$	137,664		$	440,369

Nine Months Ended December 31, 2021	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	9,031,812	$	1,882,975	$	10,914,787	$	-		$	10,914,787
Cost of sales		4,627,834		1,196,507		5,824,341		-			5,824,341
Gross margin		4,403,978		686,468		5,090,446		-			5,090,446
Engineering, research, and development						1,950,545		-			1,950,545
Selling, general and administrative						589,076		1,085,542			1,674,618
Litigation costs						-		21,545			21,545
Interest income						-		(2,977	)		(2,977	)
Other income						-		(35,854	)		(35,854	)
Interest expense – judgment						-		156,901			156,901
Forgiveness of PPP Loan						-		(722,577	)		(722,577	)
Total expenses						2,539,621		502,580			3,042,201
Income (loss) before income taxes					$	2,550,825	$	(502,580	)	$	2,048,245

Nine Months Ended  December 30, 2020	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	7,751,936	$	1,196,639	$	8,948,575	$	-		$	8,948,575
Cost of sales		4,145,959		920,093		5,066,052		-			5,066,052
Gross margin		3,605,977		276,546		3,882,523		-			3,882,523
Engineering, research, and development						1,678,940		-			1,678,940
Selling, general and administrative						627,944		1,238,812			1,866,756
Litigation costs						-		10,208			10,208
Interest income						-		(6,316	)		(6,316	)
Forgiveness of PPP loan						-		(722,577	)		(722,577	)
Other income						-		(14,612	)		(14,612	)
Interest expense – judgment						-		180,124			180,124
Interest expense						-		27,190			27,190
Total expenses						2,306,884		712,829			3,019,713
Income (loss) before income taxes					$	1,575,639	$	(712,829	)	$	862,810

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Operating Lease Liability (Tables)

9 Months Ended

Dec. 31, 2021

Disclosure Text Block [Abstract]

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheet as of December 31, 2021:

Remaining payments 2022	$	63,710
2023		254,840
2024		254,840
2025		254,840
2026		267,767
Thereafter		946,417
Total undiscounted future minimum lease payments		2,042,414
Less: Difference between undiscounted lease payments and discounted lease liabilities		(274,071	)
Present value of net minimum lease payments		1,768,343
Less current portion		(192,487	)
Operating lease liabilities – long-term	$	1,575,856

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Stock Options (Tables)

9 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [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.

	Dividend			Risk-free
	Yield			Interest rate			Volatility			Life
2022		0.0	%		0.78	%		82.69	%	5 years

Share-based Payment Arrangement, Option, Activity [Table Text Block]

A summary of the status of the Company’s stock option plans for the fiscal year ended March 31, 2021, and year to date December 31, 2021, and changes during the year are presented below (in number of options):

	Number of Options		Average Exercise Price		Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding options at April 1, 2021		98,500	$	3.19	3.3 years	$	30,835
Options granted		23,000	$	2.94
Options exercised		-	$	-
Options canceled/forfeited		-	$	-
Outstanding options at December 31, 2021		121,500	$	3.14	2.9 years	$	8,090
Vested Options:
December 31, 2021:		37,900	$	3.21	2.1 years	$	304
March 31, 2021:		19,700	$	3.22	2.8 years	$	5,567

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Supplemental disclosure of non-cash financing activities: (Details) - USD ($)	1 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Supplemental Cash Flow Elements [Abstract]
Extinguishment of Debt, Amount	$ 722,577	$ 722,577

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Business, Organization, and Liquidity (Details) - USD ($)	9 Months Ended
	Dec. 31, 2021	Mar. 31, 2021	Mar. 15, 2021	Dec. 31, 2020	May 04, 2020	Mar. 31, 2020
Accounting Policies [Abstract]
Working Capital	$ 4,323,243	$ 3,159,731
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	7,299,860	$ 5,496,325		$ 4,952,781		$ 5,134,739
Restricted Cash, Current	2,000,000
Loss Contingency, Damages Awarded, Value	6,045,924,000,000
Backlog	3,300,000
Debt Instrument, Face Amount			$ 722,577		$ 722,577
Line of Credit Facility, Maximum Borrowing Capacity	690,000
Long-term Line of Credit	$ 0

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Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2021
Summary of Significant Accounting Policies (Details) [Line Items]
Extended Product Warranty Description			The extended warranties sold by the Company provide a level of assurance beyond the coverage for defects that existed at the time of a sale or against certain types of covered damage with coverage terms ranging from 5 to 7 years.
Extended Product Warranty Accrual	$ 402,549		$ 402,549		$ 408,219
Recognition of Deferred Revenue	20,267	$ 22,140	52,249	$ 66,420
Deferred Revenue and Credits, Current	28,644		28,644		$ 74,920
Revenues	3,171,532	2,672,742	10,914,787	8,948,575
Payments for Commissions	13,000	3,000	94,000	27,000
Repairs and Calibration [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues	469,095	273,388	1,389,894	762,828
Replacement Parts [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues	37,186	59,026	170,430	82,796
Extended Warranty [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues	20,267	22,140	52,249	66,420
Other Revenue [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues	20,000	$ 1,335	20,000	58,087
Customer Concentration Risk [Member] | Customer One [Member] | Revenue Benchmark [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues	$ 673,758		$ 3,008,911	$ 681,293
Concentration Risk, Percentage	21.00%	17.00%	28.00%	25.00%
Customer Concentration Risk [Member] | Customer Two [Member] | Revenue Benchmark [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues	$ 583,680		$ 1,585,620	$ 3,234,035
Concentration Risk, Percentage	18.00%		15.00%	36.00%
Customer Concentration Risk [Member] | Customer Three [Member] | Revenue Benchmark [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues	$ 328,230		$ 1,368,964
Concentration Risk, Percentage	10.00%		13.00%
Customer Concentration Risk [Member] | Customer Four [Member] | Revenue Benchmark [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Revenues			$ 1,244,380
Concentration Risk, Percentage			11.00%

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Summary of Significant Accounting Policies (Details) - Deferred Revenue, by Arrangement, Disclosure	9 Months Ended
	Dec. 31, 2021 USD ($)
Deferred Revenue, by Arrangement, Disclosure [Abstract]
Deferred revenues related to extended warranties	$ 408,219
Additional extended warranties	46,579
Revenue recognized	(52,249)
Deferred revenues related to extended warranties	$ 402,549

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Summary of Significant Accounting Policies (Details) - Disaggregation of Revenue - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Commercial Customers [Member]
Sales Distribution
Revenues	$ 91,688	$ 104,346	$ 269,652	$ 280,743
Commercial Customers [Member] | Test Units [Member]
Sales Distribution
Revenues	91,688	104,346	269,652	280,743
U.S. Government [Member]
Sales Distribution
Revenues	2,533,296	2,212,507	9,012,562	7,697,701
U.S. Government [Member] | Test Units [Member]
Sales Distribution
Revenues	$ 2,533,296	$ 2,212,507	$ 9,012,562	$ 7,697,701

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Summary of Significant Accounting Policies (Details) - Revenue from External Customers by Geographic Areas - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Geography
Revenues	$ 3,171,532	$ 2,672,742	$ 10,914,787	$ 8,948,575
UNITED STATES
Geography
Revenues	1,974,538	1,304,664	6,885,551	3,842,263
INTERNATIONAL
Geography
Revenues	$ 1,196,994	$ 1,368,078	$ 4,029,236	$ 5,106,312

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Accounts Receivable, net (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($)	Dec. 31, 2021	Mar. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less: Allowance for doubtful accounts	$ (7,500)	$ (7,500)
Total	1,385,384	1,933,321
Government Receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable	1,164,424	1,700,907
Commercial Receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable	$ 228,460	$ 239,914

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Restricted Cash to Support Appeal Bond (Details) $ in Millions	Dec. 31, 2021 USD ($)
Cash and Cash Equivalents [Abstract]
Restricted Cash, Current	$ 2

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Inventories, net (Details) - Schedule of Inventory, Current - USD ($)	Dec. 31, 2021	Mar. 31, 2021
Schedule of Inventory, Current [Abstract]
Purchased parts	$ 2,437,294	$ 2,912,599
Work-in-process	910,981	1,020,402
Finished goods	0	79,988
Less: Allowance for obsolete inventory	(600,000)	(575,000)
Inventory, net	$ 2,748,275	$ 3,437,989

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Net Income per Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Basic net income per share computation:
Net income	$ 194,622	$ 499,633	$ 1,769,799	$ 833,361
Less: Preferred dividends	(80,000)	(80,000)	(240,000)	(240,000)
Net income attributable to common shareholders	114,622	419,633	1,529,799	593,361
Add: Preferred dividends	80,000	80,000	240,000	240,000
Diluted income attributable to common shareholders	$ 194,622	$ 499,633	$ 1,769,799	$ 833,361
Weighted-average common shares outstanding (in Shares)	3,255,887	3,255,887	3,255,887	3,255,887
Incremental shares attributable to the assumed conversion of preferred stock (in Shares)	1,839,778	1,839,778	1,839,778	1,809,778
Total adjusted weighted-average shares (in Shares)	5,095,665	5,095,665	5,095,665	5,065,665
Diluted net income per share (in Dollars per share)	$ 0.04	$ 0.1	$ 0.35	$ 0.16
Basic net income per share (in Dollars per share)	$ 0.04	$ 0.13	$ 0.47	$ 0.18

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Net Income per Share (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share - shares	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities	121,500	83,500	121,500	83,500
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities	121,500	83,500	121,500	83,500

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Line of Credit (Details) - Line of Credit [Member]	9 Months Ended
	Dec. 31, 2021 USD ($)
Line of Credit (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 690,000
Line of Credit Facility, Collateral	The line is collateralized by substantially all of the assets of the Company.
Long-term Line of Credit	$ 0

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SBA PPP Loan (Details)	Mar. 15, 2021 USD ($)
Debt Disclosure [Abstract]
Borrowings under Guaranteed Investment Agreements	$ 722,577

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Segment Information (Details)	9 Months Ended
	Dec. 31, 2021
Segment Reporting [Abstract]
Number of Reportable Segments	2

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Segment Information (Details) - Schedule of Segment Reporting Information, by Segment - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Segment Reporting Information [Line Items]
Net sales	$ 3,171,532	$ 2,672,742	$ 10,914,787	$ 8,948,575
Cost of Sales	1,763,739	1,661,653	5,824,341	5,066,052
Gross Margin	1,407,793	1,011,089	5,090,446	3,882,523
Engineering, research, and Development	574,118	492,432	1,950,545	1,678,940
Selling, general, and administrative	523,966	740,696	1,674,618	1,866,756
Litigation expenses	17,145	1,998	21,545	10,208
Interest income	(996)	(1,591)	(2,977)	(6,316)
Other income	0	(758)	(35,854)	(14,612)
Forgiveness of PPP Loan	0	(722,577)	(722,577)	(722,577)
Interest expense - judgment	52,490	52,490	156,901	180,124
Interest expense, net		8,030		27,190
Total expenses	1,166,723	570,720	3,042,201	3,019,713
Income (loss) before income taxes	241,070	440,369	2,048,245	862,810
Avionics Government [Member]
Segment Reporting Information [Line Items]
Net sales	2,552,546	2,212,507	9,031,812	7,751,936
Cost of Sales	1,366,699	1,247,606	4,627,834	4,145,959
Gross Margin	1,185,847	964,901	4,403,978	3,605,977
Avionics Commercial [Member]
Segment Reporting Information [Line Items]
Net sales	618,986	460,235	1,882,975	1,196,639
Cost of Sales	397,040	414,047	1,196,507	920,093
Gross Margin	221,946	46,188	686,468	276,546
Avionics Total [Member]
Segment Reporting Information [Line Items]
Net sales	3,171,532	2,672,742	10,914,787	8,948,575
Cost of Sales	1,763,739	1,661,653	5,824,341	5,066,052
Gross Margin	1,407,793	1,011,089	5,090,446	3,882,523
Engineering, research, and Development	574,118	492,432	1,950,545	1,678,940
Selling, general, and administrative	187,132	215,952	589,076	627,944
Litigation expenses	0	0	0	0
Interest income	0	0	0	0
Other income		0	0	0
Forgiveness of PPP Loan		0	0	0
Interest expense - judgment	0	0	0	0
Interest expense, net		0		0
Total expenses	761,250	708,384	2,539,621	2,306,884
Income (loss) before income taxes	646,543	302,705	2,550,825	1,575,639
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Net sales	0	0	0	0
Cost of Sales	0	0	0	0
Gross Margin	0	0	0	0
Engineering, research, and Development	0	0	0	0
Selling, general, and administrative	336,834	524,744	1,085,542	1,238,812
Litigation expenses	17,145	1,998	21,545	10,208
Interest income	(996)	(1,591)	(2,977)	(6,316)
Other income		(758)	(35,854)	(14,612)
Forgiveness of PPP Loan		(722,577)	(722,577)	(722,577)
Interest expense - judgment	52,490	52,490	156,901	180,124
Interest expense, net		8,030		27,190
Total expenses	405,473	(137,664)	502,580	712,829
Income (loss) before income taxes	$ (405,473)	$ 137,664	$ (502,580)	$ (712,829)

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Deferred Income Tax Assets, Net	$ 2,396,594		$ 2,396,594		$ 2,675,040
Effective Income Tax Rate Reconciliation, Percent			21.00%
Gain (Loss) on Extinguishment of Debt	0	$ 722,577	$ 722,577	$ 722,577
Income (Loss) Attributable to Parent, before Tax	241,070		2,048,245
Income Tax Expense (Benefit)	$ 46,448	$ (59,264)	$ 278,446	$ 29,449

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Operating Lease Liability (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Operating Lease Liability (Details) [Line Items]
Operating Lease, Expense	$ 100,967	$ 90,920	$ 288,117	$ 272,725
Building [Member]
Operating Lease Liability (Details) [Line Items]
Operating Lease, Expense			$ 21,237
Lessee, Operating Lease, Renewal Term	4 years		4 years
Lessee, Operating Lease, Discount Rate	3.90%		3.90%
Minimum [Member] | Building [Member]
Operating Lease Liability (Details) [Line Items]
Operating Lease, Expense			$ 18,467
Minimum [Member] | Building [Member] | Monthly Payments September 2025 [Member]
Operating Lease Liability (Details) [Line Items]
Operating Lease, Expense			$ 23,083
Minimum [Member] | Building [Member] | Monthly Payments September 2021 [Member]
Operating Lease Liability (Details) [Line Items]
Lessee, Operating Lease, Renewal Term	8 years		8 years

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Operating Lease Liability (Details) - Lessee, Operating Lease, Liability, Maturity - USD ($)	Dec. 31, 2021	Mar. 31, 2021
Lessee, Operating Lease, Liability, Maturity [Abstract]
Remaining payments 2022	$ 63,710
2023	254,840
2024	254,840
2025	254,840
2026	267,767
Thereafter	946,417
Total undiscounted future minimum lease payments	2,042,414
Less: Difference between undiscounted lease payments and discounted lease liabilities	(274,071)
Present value of net minimum lease payments	1,768,343
Less current portion	(192,487)	$ (201,883)
Operating lease liabilities – long-term	$ 1,575,856	$ 1,720,921

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Litigation (Details) - USD ($)			9 Months Ended	12 Months Ended
	Jan. 28, 2022	Nov. 22, 2017	Dec. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Mar. 31, 2018
Litigation (Details) [Line Items]
Loss Contingency, Damages Awarded, Value			$ 6,045,924,000,000
Loss Contingency, Damages Sought, Value	$ 6,000,000
Litigation Case, Interest Rate on Damages Awarded				4.25%
Loss Contingency, Accrual, Current			$ 6,045,924
Aeroflex [Member]
Litigation (Details) [Line Items]
Loss Contingency, Damages Awarded, Value						$ 4,900,000
Litigation Case, Interest Rate on Damages Awarded					4.25%
Loss Contingency Accrual, Period Increase (Decrease)					$ 1,040,943
Business Opportunity [Member] | Aeroflex [Member]
Litigation (Details) [Line Items]
Loss Contingency, Damages Awarded, Value		$ 1,300,000
Non-Disclosure Agreements [Member] | Aeroflex [Member]
Litigation (Details) [Line Items]
Loss Contingency, Damages Awarded, Value		1,500,000
Total Damages Award by Court [Member] | Aeroflex [Member]
Litigation (Details) [Line Items]
Loss Contingency, Damages Awarded, Value		$ 2,800,000
Additional Punitive Damages [Member] | Aeroflex [Member]
Litigation (Details) [Line Items]
Loss Contingency, Damages Awarded, Value						2,100,000
Loss Contingency, Damages Sought, Value						$ 5,000,000

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Stock Options (Details) - USD ($)		3 Months Ended		9 Months Ended
	Jan. 18, 2017	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2021
Stock Options (Details) [Line Items]
Common Stock, Par or Stated Value Per Share (in Dollars per share)	$ 0.1	$ 0.1		$ 0.1		$ 0.1
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)	250,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)				23,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount		$ 60,013		$ 60,013		$ 55,505
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition				2 years 8 months 12 days
Share-based Payment Arrangement, Expense		$ 7,514	$ 5,277	$ 19,848	$ 15,829
Share-based Payment Arrangement, Option [Member]
Stock Options (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)	23,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)	$ 2.94
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)		128,500		128,500		151,500
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award	Options granted under the plan are exercisable up to a period of five 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 to a shareholder owning 10% or more of the outstanding common stock of the Company, as to which the exercise price must be not less than 110% of the fair market value of the common stock at the date of grant.
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights	Options 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.

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Stock Options (Details) - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	9 Months Ended
	Dec. 31, 2021
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Abstract]
Dividend Yield	0.00%
Risk-free Interest rate	0.78%
Volatility	82.69%
Life	5 years

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Stock Options (Details) - Share-based Payment Arrangement, Option, Activity - USD ($)	9 Months Ended	12 Months Ended
	Dec. 31, 2021	Mar. 31, 2021
Share-based Payment Arrangement, Option, Activity [Abstract]
Outstanding, Number of Options		98,500
Outstanding, Average Exercise Price		$ 3.19
Outstanding, Average Remaining Contractual Term	2 years 10 months 24 days	3 years 3 months 18 days
Outstanding, Aggregate Intrinsic Value	$ 8,090	$ 30,835
Balance, Average Exercise Price	37,900	19,700
Balance, Average Exercise Price	$ 3.21	$ 3.22
Balance, Average Remaining Contractual Term	2 years 1 month 6 days	2 years 9 months 18 days
Balance, Aggregate Intrinsic Value	$ 304	$ 5,567
Options granted, Average Exercise Price	23,000
Options granted, Average Exercise Price	$ 2.94
Options exercised, Average Exercise Price	0
Options exercised, Average Exercise Price	$ 0
Options canceled/forfeited, Average Exercise Price	0
Options canceled/forfeited, Average Exercise Price	$ 0
Outstanding, Number of Options	121,500
Outstanding, Average Exercise Price	$ 3.14