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) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | Smaller reporting company | ý |
PART I – FINANCIAL INFORMATION | ||
Page | ||
Item 1. | 3 | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II – OTHER INFORMATION | ||
Item 1. | | |
Item 1A. | | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
Item 5. | | |
Item 6. | | |
|
December 31, 2014 | March 31, 2014 | June 30, 2015 | March 31, 2015 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 331,991 | 232,118 | $ | 178,023 | 185,932 | ||||||||||
Accounts receivable, net | 614,239 | 2,095,640 | 1,856,985 | 1,625,171 | ||||||||||||
Inventories, net | 4,583,365 | 4,025,391 | 4,523,832 | 4,032,074 | ||||||||||||
Prepaid expenses and other current assets | 463,661 | 263,592 | 328,720 | 281,002 | ||||||||||||
Deferred financing costs | 5,429 | 108,321 | 5,429 | 5,429 | ||||||||||||
Deferred income tax asset | 1,089,538 | 1,089,538 | 1,064,395 | 1,064,395 | ||||||||||||
Total current assets | 7,088,223 | 7,814,600 | 7,957,384 | 7,194,003 | ||||||||||||
Equipment and leasehold improvements, net | 310,566 | 450,873 | 234,252 | 270,792 | ||||||||||||
Deferred financing costs – long-term | 10,149 | 48,142 | 7,435 | 8,792 | ||||||||||||
Deferred income tax asset – non-current | 2,484,379 | 2,273,068 | 2,162,405 | 2,377,583 | ||||||||||||
Other long-term assets | 32,317 | 47,670 | 32,317 | 32,317 | ||||||||||||
Total assets | 9,925,634 | 10,634,353 | 10,393,793 | 9,883,487 | ||||||||||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Current portion of long-term debt, net of debt discount | 382,169 | 718,848 | 393,846 | 387,839 | ||||||||||||
Capital lease obligations – current portion | 16,188 | 53,608 | 17,345 | 16,758 | ||||||||||||
Accounts payable and accrued liabilities | 3,728,861 | 3,332,181 | 3,903,312 | 3,577,566 | ||||||||||||
Progress billings | 256,816 | 775,475 | ||||||||||||||
Deferred revenues – current portion | 81,388 | 37,452 | 8,167 | 18,609 | ||||||||||||
Accrued payroll, vacation pay and payroll taxes | 527,228 | 444,238 | 676,288 | 594,114 | ||||||||||||
Total current liabilities | 4,992,650 | 5,361,802 | 4,998,958 | 4,594,886 | ||||||||||||
Subordinated notes payable - related parties | 250,000 | 250,000 | 250,000 | 250,000 | ||||||||||||
Capital lease obligations – long-term | 8,971 | 21,320 | - | 4,561 | ||||||||||||
Long-term debt | 807,859 | 596,526 | 607,927 | 708,604 | ||||||||||||
Deferred revenues – long-term | 133,650 | 133,650 | 133,650 | 133,650 | ||||||||||||
Warrant liability | 423,059 | 354,309 | 451,202 | 518,962 | ||||||||||||
Other long-term liabilities | 45,600 | 56,100 | 26,700 | 33,000 | ||||||||||||
Total liabilities | 6,661,789 | 6,773,707 | 6,468,437 | 6,243,663 | ||||||||||||
Commitments | ||||||||||||||||
Stockholders' equity: | ||||||||||||||||
Common stock, 4,000,000 shares authorized, par value $.10 per share, 3,256,887 and 3,251,387 shares issued and outstanding, respectively | 325,686 | 325,136 | ||||||||||||||
Common stock, 4,000,000 shares authorized, par value $0.10 per share, 3,256,887 and 3,256,887 shares issued and outstanding, respectively | 325,686 | 325,686 | ||||||||||||||
Additional paid-in capital | 8,042,893 | 7,987,100 | 8,052,634 | 8,046,168 | ||||||||||||
Accumulated deficit | (5,104,734 | ) | (4,451,590 | ) | (4,452,964 | ) | (4,732,030 | ) | ||||||||
Total stockholders' equity | 3,263,845 | 3,860,646 | 3,925,356 | 3,639,824 | ||||||||||||
Total liabilities and stockholders' equity | $ | 9,925,634 | $ | 10,634,353 | $ | 10,393,793 | $ | 9,883,487 |
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | June 30, 2015 | June 30, 2014 | |||||||||||||||||||
Net sales | $ | 5,030,097 | $ | 4,089,029 | 11,746,847 | $ | 11,323,585 | $ | 5,845,919 | $ | 3,129,076 | |||||||||||||
Cost of sales | 3,484,310 | 2,693,342 | 8,211,499 | 7,465,991 | 4,030,624 | 2,008,859 | ||||||||||||||||||
Gross margin | 1,545,787 | 1,395,687 | 3,535,348 | 3,857,594 | 1,815,295 | 1,120,217 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Selling, general and administrative | 825,261 | 697,919 | 2,364,488 | 2,022,579 | 865,688 | 879,193 | ||||||||||||||||||
Engineering, research and development | 494,721 | 449,477 | 1,476,343 | 1,378,426 | 492,132 | 483,896 | ||||||||||||||||||
Total operating expenses | 1,319,982 | 1,147,396 | 3,840,831 | 3,401,005 | 1,357,820 | 1,363,089 | ||||||||||||||||||
Income (loss) from operations | 225,805 | 248,291 | (305,483 | ) | 456,589 | 457,475 | (242,872 | ) | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Amortization of debt discount | (14,373 | ) | (27,120 | ) | (75,308 | ) | (75,707 | ) | - | (30,874 | ) | |||||||||||||
Loss on extinguishment of debt | (188,102 | ) | - | (188,102 | ) | (26,600 | ) | |||||||||||||||||
Amortization of deferred financing costs | (13,648 | ) | (27,827 | ) | (67,808 | ) | (81,987 | ) | (1,357 | ) | (27,080 | ) | ||||||||||||
Change in fair value of common stock warrants | 37,330 | (229,726 | ) | (68,750 | ) | (272,499 | ) | 67,760 | (133,881 | ) | ||||||||||||||
Interest income | - | 129 | - | 163 | ||||||||||||||||||||
Interest expense | (39,137 | ) | (50,828 | ) | (159,004 | ) | (252,295 | ) | (29,634 | ) | (62,480 | ) | ||||||||||||
Total other income (expense) | (217,930 | ) | (335,372 | ) | (558,972 | ) | (708,925 | ) | 36,769 | (254,315 | ) | |||||||||||||
Income (loss) before income taxes | 7,875 | (87,081 | ) | (864,455 | ) | (252,336 | ) | 494,244 | (497,187 | ) | ||||||||||||||
Income tax expense (benefit) | 28,819 | 58,852 | (211,311 | ) | 51,843 | |||||||||||||||||||
Income tax provision (benefit) | 215,178 | (113,182 | ) | |||||||||||||||||||||
Net loss | $ | (20,944 | ) | $ | (145,933 | ) | $ | (653,144 | ) | $ | (304,179 | ) | ||||||||||||
Net income (loss) | $ | 279,066 | $ | (384,005 | ) | |||||||||||||||||||
Basic loss per common share | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.20 | ) | $ | (0.10 | ) | ||||||||||||
Diluted loss per common share | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.20 | ) | $ | (0.10 | ) | ||||||||||||
Net income (loss) per share: | ||||||||||||||||||||||||
Basic income (loss) per common share | $ | 0.09 | $ | (0.12 | ) | |||||||||||||||||||
Diluted income (loss) per common share | $ | 0.02 | $ | (0.12 | ) | |||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||
Basic | 3,255,028 | 3,247,387 | 3,253,045 | 3,189,123 | 3,256,887 | 3,251,387 | ||||||||||||||||||
Diluted | 3,255,028 | 3,247,387 | 3,253,045 | 3,189,123 | 3,320,442 | 3,251,387 |
Nine months ended | Three months ended | |||||||||||||||
December 31, 2014 | December 31, 2013 | June 30, 2015 | June 30, 2014 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (653,144 | ) | $ | (304,179 | ) | ||||||||||
Net income (loss) | $ | 279,066 | $ | (384,005 | ) | |||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Deferred income taxes | (211,311 | ) | 50,503 | 215,178 | (113,182 | ) | ||||||||||
Depreciation and amortization | 134,837 | 153,818 | 42,413 | 45,062 | ||||||||||||
Provision for inventory obsolescence | 5,000 | - | 5,713 | 5,000 | ||||||||||||
Amortization of debt discount | 75,308 | 75,707 | - | 30,874 | ||||||||||||
Amortization of deferred financing costs | 67,808 | 81,987 | 1,357 | 27,080 | ||||||||||||
Loss on extinguishment of debt | 188,102 | 26,600 | ||||||||||||||
Change in fair value of common stock warrant | 68,750 | 272,499 | (67,760 | ) | 133,881 | |||||||||||
Non-cash interest associated with conversion of note | - | 21,003 | ||||||||||||||
Non-cash stock-based compensation | 29,733 | 48,519 | 6,466 | 12,063 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Decrease (increase) in accounts receivable | 1,481,401 | (572,034 | ) | |||||||||||||
(Increase) decrease in inventories, net | (548,963 | ) | 1,731,581 | |||||||||||||
(Increase) decrease in accounts receivable | (231,814 | ) | 1,250,928 | |||||||||||||
Increase in inventories | (497,471 | ) | (534,136 | ) | ||||||||||||
Increase in prepaid expenses & other | (184,716 | ) | (28,077 | ) | (47,718 | ) | (316,628 | ) | ||||||||
Increase (decrease) in accounts payable and other accrued liabilities | 423,290 | (2,137,411 | ) | |||||||||||||
Increase (decrease) in accrued payroll, vacation pay & withholdings | 82,990 | (48,090 | ) | |||||||||||||
(Decrease) increase in deferred revenues | 43,936 | 107,000 | ||||||||||||||
(Decrease) increase in progress billings | (518,659 | ) | 795,050 | |||||||||||||
Increase (decrease) in accounts payable and other accrued expenses | 325,746 | (2,593 | ) | |||||||||||||
Increase in accrued payroll, vacation pay & withholdings | 82,174 | 28,936 | ||||||||||||||
Decrease in deferred revenues | (10,442 | ) | (33,226 | ) | ||||||||||||
Decrease in other long-term liabilities | (10,500 | ) | - | (6,300 | ) | (2,100 | ) | |||||||||
Net cash provided by operating activities | 473,862 | 274,476 | 96,608 | 147,954 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of equipment | (8,541 | ) | (11,595 | ) | (5,873 | ) | (1,145 | ) | ||||||||
Net cash used in investing activities | (8,541 | ) | (11,595 | ) | (5,873 | ) | (1,145 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from note payable – related party | - | 100,000 | ||||||||||||||
Proceeds from the exercise of stock options | - | 23,370 | ||||||||||||||
Proceeds from term loan | 1,200,000 | - | ||||||||||||||
Deferred financing costs | (16,287 | ) | - | |||||||||||||
Repayment of long-term debt | (1,499,392 | ) | (424,245 | ) | (94,670 | ) | (156,069 | ) | ||||||||
Repayment of capitalized lease obligations | (49,769 | ) | (55,956 | ) | (3,974 | ) | (20,400 | ) | ||||||||
Net cash used in financing activities | (365,448 | ) | (356,831 | ) | (98,644 | ) | (176,469 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 99,873 | (93,950 | ) | |||||||||||||
Net decrease in cash and cash equivalents | (7,909 | ) | (29,660 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 232,118 | 310,297 | 185,932 | 232,118 | ||||||||||||
Cash and cash equivalents at end of period | $ | 331,991 | $ | 216,347 | $ | 178,023 | $ | 202,458 | ||||||||
Supplemental cash flow information: | ||||||||||||||||
Taxes paid | $ | 20,500 | $ | - | $ | - | $ | 20,500 | ||||||||
Interest paid | $ | 141,180 | $ | 276,546 | $ | 17,154 | $ | 53,556 | ||||||||
Supplemental non-cash information: | ||||||||||||||||
Converted accounts payable to equity | 26,610 | - | ||||||||||||||
Converted debt to equity | $ | - | $ | 700,000 | ||||||||||||
Converted accrued interest to equity | $ | - | $ | 37,400 |
December 31, 2014 | March 31, 2014 | June 30, 2015 | March 31, 2015 | |||||||||||||
Government | $ | 519,018 | $ | 1,982,215 | $ | 1,680,023 | $ | 1,440,378 | ||||||||
Commercial | 122,503 | 140,707 | 201,937 | 209,768 | ||||||||||||
Less: Allowance for doubtful accounts | (27,282 | ) | (27,282 | ) | (24,975 | ) | (24,975 | ) | ||||||||
$ | 614,239 | $ | 2,095,640 | $ | 1,856,985 | $ | 1,625,171 |
December 31, 2014 | March 31, 2014 | June 30, 2015 | March 31, 2015 | |||||||||||||
Purchased parts | $ | 3,360,506 | $ | 3,085,070 | $ | 3,065,974 | $ | 2,746,671 | ||||||||
Work-in-process | 1,387,572 | 1,134,714 | 1,658,180 | 1,514,356 | ||||||||||||
Finished goods | 45,287 | 10,607 | 34,678 | 334 | ||||||||||||
Less: Inventory reserve | (210,000 | ) | (205,000 | ) | (235,000 | ) | (229,287 | ) | ||||||||
$ | 4,583,365 | $ | 4,025,391 | $ | 4,523,832 | $ | 4,032,074 |
Three Months Ended | Three Months Ended | |||||||
December 31, 2014 | December 31, 2013 | |||||||
Basic net loss per share computation: | ||||||||
Net loss | $ | (20,944 | ) | $ | (145,933 | ) | ||
Weighted-average common shares outstanding | 3,255,028 | 3,247,387 | ||||||
Basic net loss per share | $ | (0.01 | ) | $ | (0.04 | ) | ||
Diluted net loss per share computation: | ||||||||
Net loss | $ | (20,944 | ) | $ | (145,933 | ) | ||
Weighted-average common shares outstanding | 3,255,028 | 3,247,387 | ||||||
Incremental shares attributable to the assumed exercise of outstanding stock options | - | - | ||||||
Total adjusted weighted-average shares | 3,255,028 | 3,247,387 | ||||||
Diluted net loss per share | $ | (0.01 | ) | $ | (0.04 | ) |
Three Months Ended | Three Months Ended | |||||||
June 30, 2015 | June 30, 2014 | |||||||
Basic net income (loss) per share computation: | ||||||||
Net income(loss) | $ | 279,066 | $ | (384,005 | ) | |||
Weighted-average common shares outstanding | 3,256,887 | 3,251,387 | ||||||
Basic net income (loss) per share | $ | 0.09 | $ | (0.12 | ) | |||
Diluted net income (loss) per share computation | ||||||||
Net income (loss) | $ | 279,066 | $ | (384,005 | ) | |||
Add: Change in fair value of warrants | 198,000 | - | ||||||
Diluted income (loss) | 81,066 | (384,005 | ) | |||||
Weighted-average common shares outstanding | 3,256,887 | 3,251,387 | ||||||
Incremental shares attributable to the assumed exercise of outstanding stock options and warrants | 63,555 | - | ||||||
Total adjusted weighted-average shares | 3,320,442 | 3,251,387 | ||||||
Diluted net income (loss) per share | $ | 0.02 | $ | (0.12 | ) |
Nine Months Ended | Nine Months Ended | |||||||
December 31, 2014 | December 31, 2013 | |||||||
Basic net loss per share computation: | ||||||||
Net loss | $ | (653,144 | ) | $ | (304,179 | ) | ||
Weighted-average common shares outstanding | 3,253,045 | 3,189,123 | ||||||
Basic net loss per share | $ | (0.20 | ) | $ | (0.10 | ) | ||
Diluted net loss per share computation: | ||||||||
Net loss | $ | (653,144 | ) | $ | (304,179 | ) | ||
Weighted-average common shares outstanding | 3,253,045 | 3,189,123 | ||||||
Incremental shares attributable to the assumed exercise of outstanding stock options | - | - | ||||||
Total adjusted weighted-average shares | 3,253,045 | 3,189,123 | ||||||
Diluted net loss per share | $ | (0.20 | ) | $ | (0.10 | ) |
June 30, 2015 | June 30, 2014 | |||||||
Stock options | 99,500 | 93,500 | ||||||
Warrants | 147,336 | 297,336 | ||||||
246,836 | 390,836 |
Three Months Ended December 31, 2014 | Avionics Government | Avionics Commercial | Avionics Total | Corporate Items | Total | |||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2015 | Avionics Government | Avionics Commercial | Avionics Total | Corporate Items | Total | |||||||||||||||||||||||||||||||||||
Net sales | $ | 4,455,399 | $ | 574,698 | $ | 5,030,097 | - | $ | 5,030,097 | $ | 5,261,319 | $ | 584,600 | $ | 5,845,919 | - | $ | 5,845,919 | ||||||||||||||||||||||
Cost of sales | 3,015,359 | 468,951 | 3,484,310 | - | 3,484,310 | 3,561,594 | 469,030 | 4,030,624 | - | 4,030,624 | ||||||||||||||||||||||||||||||
Gross margin | 1,440,040 | 105,747 | 1,545,787 | - | 1,545,787 | 1,699,725 | 115,570 | 1,815,295 | - | 1,815,295 | ||||||||||||||||||||||||||||||
Engineering, research, and development | 494,721 | - | 494,721 | 492,132 | - | 492,132 | ||||||||||||||||||||||||||||||||||
Selling, general and administrative | 323,862 | 501,399 | 825,261 | 360,629 | 505,059 | 865,688 | ||||||||||||||||||||||||||||||||||
Amortization of debt discount | - | 14,373 | 14,373 | |||||||||||||||||||||||||||||||||||||
Amortization of deferred financing costs | - | 13,648 | 13,648 | - | 1,357 | 1,357 | ||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | - | 188,102 | 188,102 | |||||||||||||||||||||||||||||||||||||
Change in fair value of common stock warrants | - | (37,330 | ) | (37,330 | ) | - | (67,760 | ) | (67,760 | ) | ||||||||||||||||||||||||||||||
Interest expense, net | - | 39,137 | 39,137 | - | 29,634 | 29,634 | ||||||||||||||||||||||||||||||||||
Total expenses | 818,583 | 719,329 | 1,537,912 | 852,761 | 468,290 | 1,321,051 | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 727,204 | $ | (719,329 | ) | $ | 7,875 | $ | 962,534 | $ | (468,290 | ) | $ | 494,244 |
Three Months Ended December 31, 2013 | Avionics Government | Avionics Commercial | Avionics Total | Corporate Items | Total | |||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2014 | Avionics Government | Avionics Commercial | Avionics Total | Corporate Items | Total | |||||||||||||||||||||||||||||||||||
Net sales | $ | 3,797,272 | 291,757 | 4,089,029 | - | 4,089,029 | $ | 2,520,723 | $ | 608,353 | $ | 3,129,076 | - | $ | 3,129,076 | |||||||||||||||||||||||||
Cost of sales | 2,415,427 | 277,915 | 2,693,342 | - | 2,693,342 | 1,514,415 | 494,444 | 2,008,859 | - | 2,008,859 | ||||||||||||||||||||||||||||||
Gross margin | 1,381,845 | 13,842 | 1,395,687 | - | 1,395,687 | 1,006,308 | 113,909 | 1,120,217 | - | 1,120,217 | ||||||||||||||||||||||||||||||
Engineering, research, and development | 449,477 | 449,477 | 483,896 | - | 483,896 | |||||||||||||||||||||||||||||||||||
Selling, general, and administrative | 375,255 | 322,664 | 697,919 | 292,383 | 586,810 | 879,193 | ||||||||||||||||||||||||||||||||||
Amortization of debt discount | 27,120 | 27,120 | - | 30,874 | 30,874 | |||||||||||||||||||||||||||||||||||
Amortization of deferred financing costs | 27,827 | 27,827 | - | 27,080 | 27,080 | |||||||||||||||||||||||||||||||||||
Change in fair value of common stock warrants | 229,726 | 229,726 | - | 133,881 | 133,881 | |||||||||||||||||||||||||||||||||||
Interest (income) expense, net | 50,699 | 50,699 | - | 62,480 | 62,480 | |||||||||||||||||||||||||||||||||||
Total expenses | 824,732 | 658,036 | 1,482,768 | 776,279 | 841,125 | 1,617,404 | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 570,955 | $ | (658,036) | $ | (87,081 | ) | $ | 343,938 | $ | (841,125 | ) | $ | (497,187 | ) |
Nine Months Ended December 31, 2014 | Avionics Government | Avionics Commercial | Avionics Total | Corporate Items | Total | |||||||||||||||
Net sales | $ | 10,002,850 | $ | 1,743,997 | $ | 11,746,847 | - | $ | 11,746,847 | |||||||||||
Cost of sales | 6,800,031 | 1,411,468 | 8,211,499 | - | 8,211,499 | |||||||||||||||
Gross margin | 3,202,819 | 332,529 | 3,535,348 | - | 3,535,348 | |||||||||||||||
Engineering, research, and development | 1,476,343 | - | 1,476,343 | |||||||||||||||||
Selling, general and administrative | 899,579 | 1,464,909 | 2,364,488 | |||||||||||||||||
Amortization of debt discount | - | 75,308 | 75,308 | |||||||||||||||||
Amortization of deferred financing costs | - | 67,808 | 67,808 | |||||||||||||||||
Loss on extinguishment of debt | 188,102 | 188,102 | ||||||||||||||||||
Change in fair value of common stock warrants | - | 68,750 | 68,750 | |||||||||||||||||
Interest expense, net | - | 159,004 | 159,004 | |||||||||||||||||
Total expenses | 2,375,922 | 2,023,881 | 4,399,803 | |||||||||||||||||
Income (loss) before income taxes | $ | 1,159,426 | $ | (2,023,881 | ) | $ | (864,455 | ) |
Nine Months Ended December 31, 2013 | Avionics Government | Avionics Commercial | Avionics Total | Corporate Items | Total | |||||||||||||||
Net sales | 10,054,033 | 1,269,552 | 11,323,585 | - | 11,323,585 | |||||||||||||||
Cost of Sales | 6,497,178 | 968,813 | 7,465,991 | - | 7,465,991 | |||||||||||||||
Gross Margin | 3,556,855 | 300,739 | 3,857,594 | - | 3,857,594 | |||||||||||||||
Engineering, research, and development | 1,378,426 | 1,378,426 | ||||||||||||||||||
Selling, general and administrative | 933,033 | 1,089,546 | 2,022,579 | |||||||||||||||||
Amortization of debt discount | 75,707 | 75,707 | ||||||||||||||||||
Amortization of deferred financing costs | 81,987 | 81,987 | ||||||||||||||||||
Loss on extinguishment of debt | 26,600 | 26,600 | ||||||||||||||||||
Change in fair value of common stock warrants | 272,499 | 272,499 | ||||||||||||||||||
Interest expense, net | 252,132 | 252,132 | ||||||||||||||||||
Total expenses | 2,311,459 | 1,798,471 | 4,109,930 | |||||||||||||||||
Income (loss) before income taxes | $ | 1,546,135 | $ | (1,798,471 | ) | $ | (252,336 | ) |
· | Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. |
· | Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. |
Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
· | Market approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. |
· | Income approach — Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method. |
· | Cost approach — Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). |
December 31, 2014 | Level I | Level II | Level III | Total | ||||||||||||||||||||||||||||
June 30, 2015 | Level I | Level II | Level III | Total | ||||||||||||||||||||||||||||
Total Assets | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Warrant liability | - | - | 423,059 | 423,059 | - | - | 451,202 | 451,202 | ||||||||||||||||||||||||
Total Liabilities | $ | - | $ | - | $ | 423,059 | $ | 423,059 | $ | - | $ | - | $ | 451,202 | $ | 451,202 |
March 31, 2014 | Level I | Level II | Level III | Total | ||||||||||||||||||||||||||||
March 31, 2015 | Level I | Level II | Level III | Total | ||||||||||||||||||||||||||||
Total Assets | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Warrant liability | - | - | 354,309 | 354,309 | - | - | 518,962 | 518,962 | ||||||||||||||||||||||||
Total Liabilities | $ | - | $ | - | $ | 354,309 | $ | 354,309 | $ | - | $ | - | $ | 518,962 | $ | 518,962 |
Level 3 Reconciliation | Beginning at beginning of period | (Gains) and losses for the period (realized and unrealized) | Purchases, issuances, sales and settlements, net | Transfers in or out of Level 3 | Balance at the end of period | Beginning at beginning of period | (Gains) and losses for the period (realized and unrealized) | Purchases, issuances, sales and settlements, net | Transfers in or out of Level 3 | Balance at the end of period | ||||||||||||||||||||||||||||||
Warrant liability | 354,309 | 68,750 | - | - | 423,059 | 518,962 | (67,760 | ) | - | - | 451,202 | |||||||||||||||||||||||||||||
Total Liabilities | $ | 354,309 | $ | 68,750 | $ | - | $ | - | $ | 423,059 | $ | 518,962 | $ | (67,760 | ) | $ | - | $ | - | $ | 451,202 |
Date of Warrant | Expiration Date | Number of Warrants | Exercise Price | Fair Market Value Per Share | Expected Volatility | Remaining Life in Years | Risk Free Interest Rate | Warrant Liability | ||||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 6.70 | 28.51 | % | 9 | 2.81 | % | $ | 267,848 | |||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 6.70 | 28.51 | % | 5 | 1.59 | % | $ | 13,808 | |||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 3.90 | 42.04 | % | 7 | 0.94 | % | $ | 66,193 | |||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 3.90 | 42.04 | % | 7 | 0.94 | % | $ | 26,477 | |||||||||||||||||||||
11-20-2012 | 09-10-2019 | 20,000 | $ | 3.56 | $ | 3.50 | 42.45 | % | 6.83 | 1.09 | % | $ | 21,441 | |||||||||||||||||||||
02-14-2013 | 09-10-2019 | 20,000 | $ | 3.58 | $ | 3.80 | 41.25 | % | 6.58 | 1.43 | % | $ | 23,714 | |||||||||||||||||||||
07-12-2013 | 09-10-2019 | 20,000 | $ | 3.33 | $ | 3.32 | 40.26 | % | 6.17 | 2.00 | % | $ | 19,523 | |||||||||||||||||||||
08-12-2013 | 09-10-2019 | 20,000 | $ | 3.69 | $ | 3.69 | 40.20 | % | 6.08 | 2.01 | % | $ | 21,587 |
Date of Warrant | Expiration Date | Number of Warrants | Exercise Price | Fair Market Value Per Share | Expected Volatility | Remaining Life in Years | Risk Free Interest Rate | Warrant Liability | ||||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 6.70 | 28.51 | % | 9 | 2.81 | % | $ | 267,848 | |||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 6.70 | 28.51 | % | 5 | 1.59 | % | $ | 13,808 | |||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 3.90 | 42.04 | % | 7 | 0.94 | % | $ | 66,193 | |||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 3.90 | 42.04 | % | 7 | 0.94 | % | $ | 26,477 | |||||||||||||||||||||
11-20-2012 | 09-10-2019 | 20,000 | $ | 3.56 | $ | 3.50 | 42.45 | % | 6.83 | 1.09 | % | $ | 21,441 | |||||||||||||||||||||
02-14-2013 | 09-10-2019 | 20,000 | $ | 3.58 | $ | 3.80 | 41.25 | % | 6.58 | 1.43 | % | $ | 23,714 | |||||||||||||||||||||
07-12-2013 | 09-10-2019 | 20,000 | $ | 3.33 | $ | 3.32 | 40.26 | % | 6.17 | 2.00 | % | $ | 19,523 | |||||||||||||||||||||
08-12-2013 | 09-10-2019 | 20,000 | $ | 3.69 | $ | 3.69 | 40.20 | % | 6.08 | 2.01 | % | $ | 21,587 |
Date of Warrant | Expiration Date | Number of Warrants | Exercise Price | Fair Market Value Per Share | Expected Volatility | Remaining Life in Years | Risk Free Interest Rate | Warrant Liability | ||||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 4.42 | 43.35 | % | 5.45 | 1.73 | % | $ | 123,564 | |||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 4.42 | 43.35 | % | 1.45 | 0.44 | % | $ | 2,498 | |||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 4.42 | 43.35 | % | 5.45 | 1.73 | % | $ | 77,626 | |||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 4.42 | 43.35 | % | 5.45 | 1.73 | % | $ | 31,050 | |||||||||||||||||||||
11-20-2012 | 09-10-2019 | 20,000 | $ | 3.56 | $ | 4.42 | 43.35 | % | 5.45 | 1.73 | % | $ | 29,892 | |||||||||||||||||||||
02-14-2013 | 09-10-2019 | 20,000 | $ | 3.58 | $ | 4.42 | 43.35 | % | 5.45 | 1.73 | % | $ | 29,310 | |||||||||||||||||||||
07-12-2013 | 09-10-2019 | 20,000 | $ | 3.33 | $ | 4.42 | 43.35 | % | 5.45 | 1.73 | % | $ | 31,163 | |||||||||||||||||||||
08-12-2013 | 09-10-2019 | 20,000 | $ | 3.69 | $ | 4.42 | 43.35 | % | 5.45 | 1.73 | % | $ | 29,206 |
Date of Warrant | Expiration Date | Number of Warrants | Exercise Price | Fair Market Value Per Share | Put Option Value | Market Price Option | Remaining Life in Years | Warrant Liability | ||||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 6.42 | $ | 68,460 | NA | 4.45 | $ | 68,460 | ||||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 6.42 | NA | NA | 0.45 | $ | 7,002* | |||||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 6.42 | $ | 30,000 | 153,500 | 4.45 | $ | 153,500 | ||||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 6.42 | $ | 13,200 | 61,400 | 4.45 | $ | 61,400 | ||||||||||||||||||||||
11-20-2012 | 09-10-2019 | 20,000 | $ | 3.56 | $ | 6.42 | $ | 13,200 | 57,200 | 4.45 | $ | 57,200 | ||||||||||||||||||||||
02-14-2013 | 09-10-2019 | 20,000 | $ | 3.58 | $ | 6.42 | $ | 13,200 | 55,000 | 4.45 | $ | 55,000 | ||||||||||||||||||||||
07-12-2013 | 09-10-2019 | 20,000 | $ | 3.33 | $ | 6.42 | $ | 13,200 | 61,800 | 4.45 | $ | 61,800 | ||||||||||||||||||||||
08-12-2013 | 09-10-2019 | 20,000 | $ | 3.69 | $ | 6.42 | $ | 13,200 | 54,600 | 4.45 | $ | 54,600 |
Date of Warrant | Expiration Date | Number of Warrants | Exercise Price | Fair Market Value Per Share | Put Option Value | Market Price Option | Remaining Life in Years | Warrant Liability | ||||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 5.34 | $ | 138,289 | NA | 4.70 | $ | 138,289 | ||||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 5.34 | NA | NA | 0.70 | $ | 3,270* | |||||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 5.34 | $ | 20,200 | 39,800 | 4.70 | $ | 39,800 | ||||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 5.34 | $ | 50,500 | 99,500 | 4.70 | $ | 99,500 | ||||||||||||||||||||||
11-20-2012 | 09-10-2019 | 20,000 | $ | 3.56 | $ | 5.34 | $ | 20,200 | 35,600 | 4.70 | $ | 35,600 | ||||||||||||||||||||||
02-14-2013 | 09-10-2019 | 20,000 | $ | 3.58 | $ | 5.34 | $ | 20,200 | 33,400 | 4.70 | $ | 33,400 | ||||||||||||||||||||||
07-12-2013 | 09-10-2019 | 20,000 | $ | 3.33 | $ | 5.34 | $ | 20,200 | 40,200 | 4.70 | $ | 40,200 | ||||||||||||||||||||||
08-12-2013 | 09-10-2019 | 20,000 | $ | 3.69 | $ | 5.34 | $ | 20,200 | 33,000 | 4.70 | $ | 33,000 |
Date of Warrant | Expiration Date | Number of Warrants | Exercise Price | Fair Market Value Per Share | Put Option Value | Market Price Option | Remaining Life in Years | Warrant Liability | ||||||||||||||||||||||||||
09-10-2010 | 09-10-2019 | 136,920 | $ | 6.70 | $ | 5.10 | $ | 205,380 | NA | 4.20 | $ | 205,380 | ||||||||||||||||||||||
09-10-2010 | 09-10-2015 | 10,416 | $ | 6.70 | $ | 5.10 | NA | NA | 0.20 | $ | 322* | |||||||||||||||||||||||
07-26-2012 | 09-10-2019 | 50,000 | $ | 3.35 | $ | 5.10 | $ | 75,000 | 84,300 | 4.20 | $ | 84,300 | ||||||||||||||||||||||
07-26-2012 | 09-10-2019 | 20,000 | $ | 3.35 | $ | 5.10 | $ | 30,000 | 35,000 | 4.20 | $ | 35,000 | ||||||||||||||||||||||
11-20-2012 | 09-10-2019 | 20,000 | $ | 3.56 | $ | 5.10 | $ | 30,000 | 30,800 | 4.20 | $ | 30,800 | ||||||||||||||||||||||
02-14-2013 | 09-10-2019 | 20,000 | $ | 3.58 | $ | 5.10 | $ | 30,000 | 28,600 | 4.20 | $ | 30,000 | ||||||||||||||||||||||
07-12-2013 | 09-10-2019 | 20,000 | $ | 3.33 | $ | 5.10 | $ | 30,000 | 35,400 | 4.20 | $ | 35,400 | ||||||||||||||||||||||
08-12-2013 | 09-10-2019 | 20,000 | $ | 3.69 | $ | 5.10 | $ | 30,000 | 28,200 | 4.20 | $ | 30,000 |
· | Revenues increased 87% from the same three month period in the prior year. |
· |
· | Net income was $279,066 as compared to a net loss of $384,005 for the same period in the prior year. |
· | In March 2015, the Company received an order for an additional 21 CRAFT test sets from Lockheed Martin in the amount of $775,369 with shipment expected to take place in the second and |
· | Introduction of the TR-36 Navigation/Communication Test Set, representing our first new production introduction into the |
· | Pursuit of Foreign Military Sales (“FMS”) for its major products. |
· | Investment in new lightweight design for commercial and military customers that we hope will expand our product line and be very competitive. |
· | Engagement of our new partner, Blue Star Engineering and Electronics Ltd. (“Blue Star”). Blue Star will handle all the Company’s interests in India, Nepal, Sri Lanka, Maldives and Bangladesh for both General Aviation and Military markets. The market in this region represents a significant opportunity for the Company. |
· |
· |
Exhibit No. | Description | |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document* | |
101.SCH | Taxonomy Extension Schema Document* | |
101.CAL | Taxonomy Extension Calculation Linkbase Document* | |
101.DEF | Taxonomy Extension Definition Linkbase Document* | |
101.LAB | Taxonomy Extension Label Linkbase Document* | |
101.PRE | Taxonomy Extension Presentation Linkbase Document* |
TEL-INSTRUMENT ELECTRONICS CORP. | |||||
Date: | By: | /s/ Jeffrey C. O’Hara | |||
Name: Jeffrey C. O’Hara | |||||
Title: Chief Executive Officer Principal Executive Officer |
Date: | By: | /s/ Joseph P. Macaluso | |||
Name: Joseph P. Macaluso | |||||
Title: Principal Financial Officer Principal Accounting Officer |