Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Dec. 31, 2017 | Feb. 08, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TEL INSTRUMENT ELECTRONICS CORP | |
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 | 96,885 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 263,983 | $ 287,873 |
Accounts receivable, net | 1,660,757 | 1,556,382 |
Inventories, net | 4,309,324 | 4,208,179 |
Restricted cash to support appeal bond | 2,000,000 | 0 |
Prepaid expenses and other current assets | 107,450 | 188,578 |
Total current assets | 8,341,514 | 6,241,012 |
Equipment and leasehold improvements, net | 197,602 | 161,427 |
Other long-term assets | 35,109 | 33,509 |
Total assets | 8,574,225 | 6,435,948 |
Current liabilities: | ||
Current portion of long-term debt | 3,696 | 291,991 |
Line of credit | 1,000,000 | 200,000 |
Capital lease obligations – current portion | 6,718 | 6,268 |
Accounts payable and accrued liabilities | 2,431,763 | 2,072,955 |
Federal and state taxes payable | 0 | 4,105 |
Deferred revenues – current portion | 54,671 | 123,720 |
Accrued legal damages | 4,930,523 | 2,800,000 |
Accrued payroll, vacation pay and payroll taxes | 396,207 | 527,413 |
Total current liabilities | 8,823,578 | 6,026,452 |
Capital lease obligations – long-term | 8,664 | 13,760 |
Long-term debt | 0 | 2,124 |
Deferred revenues – long-term | 353,280 | 352,973 |
Warrant liability | 0 | 95,000 |
Total liabilities | 9,185,522 | 6,490,309 |
Commitments | ||
Mezzanine Equity: | ||
Preferred stock, 1,000,000 shares authorized, par value $0.10 per share, 500,000 shares 8% Cumulative Series A Convertible Preferred issued and outstanding | 2,990,667 | 0 |
Total mezzanine equity | 2,990,667 | 0 |
Stockholders’ (deficit): | ||
Common stock, 4,000,000 shares authorized, par value $0.10 per share, 3,255,887 shares issued and outstanding, respectively | 325,586 | 325,586 |
Paid-in capital in excess of par value, common stock | 8,099,882 | 8,107,369 |
Accumulated deficit | (12,027,432) | (8,487,316) |
Total stockholders’ deficit | (3,601,964) | (54,361) |
Total liabilities, mezzanine equity and stockholders’ deficit | $ 8,574,225 | $ 6,435,948 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2017 | Mar. 31, 2017 |
Preferred stock, shares authorized | 1,000,000 | 0 |
Preferred stock, par value (in Dollars per share) | $ 0.10 | |
Preferred stock, shares issued | 500,000 | 0 |
Preferred stock, shares outstanding | 500,000 | 0 |
Common stock, par value (in Dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares issued | 3,255,887 | 3,255,887 |
Common stock, shares outstanding | 3,255,887 | 3,255,887 |
Common stock, shares authorized | 4,000,000 | 4,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net sales | $ 2,625,793 | $ 4,236,519 | $ 7,955,035 | $ 14,654,917 |
Cost of sales | 1,689,113 | 2,602,268 | 5,377,195 | 9,318,425 |
Gross margin | 936,680 | 1,634,251 | 2,577,840 | 5,336,492 |
Operating expenses: | ||||
Selling, general and administrative | 548,391 | 582,880 | 1,881,072 | 2,042,922 |
Litigation expenses | 134,765 | 282,490 | 560,610 | 609,330 |
Legal damages | 30,523 | 0 | 2,130,523 | 0 |
Engineering, research and development | 546,691 | 615,007 | 1,691,631 | 1,783,655 |
Total operating expenses | 1,260,370 | 1,480,377 | 6,263,836 | 4,435,907 |
(Loss) income from operations | (323,690) | 153,874 | (3,685,996) | 900,585 |
Other income (expense): | ||||
Proceeds from life insurance | 0 | 0 | 92,678 | 0 |
Amortization of deferred financing costs | (649) | (1,359) | (3,363) | (4,072) |
Change in fair value of common stock warrants | 5,000 | 37,000 | 95,000 | 288,203 |
Interest expense | (14,097) | (11,620) | (38,435) | (46,953) |
Total other income (expense) | (9,746) | 24,021 | 145,880 | 237,178 |
(Loss) income before income taxes | (333,436) | 177,895 | (3,540,116) | 1,137,763 |
Income tax expense | 0 | 36,382 | 0 | 313,886 |
Net (loss) income | (333,436) | 141,513 | (3,540,116) | 823,877 |
Preferred stock dividends | (30,667) | 0 | (30,667) | 0 |
Net (loss) income attributable to common shareholders | $ (364,103) | $ 141,513 | $ (3,570,783) | $ 823,877 |
Basic (loss) income per common share (in Dollars per share) | $ (0.11) | $ 0.04 | $ (1.10) | $ 0.25 |
Diluted (loss) income per common share (in Dollars per share) | $ (0.11) | $ 0.03 | $ (1.10) | $ 0.23 |
Weighted average shares outstanding: | ||||
Basic (in Shares) | 3,255,887 | 3,255,887 | 3,255,887 | 3,255,887 |
Diluted (in Shares) | 3,255,887 | 3,265,135 | 3,255,887 | 3,266,532 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net (loss) income | $ (3,540,116) | $ 823,877 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Deferred income taxes | 0 | 317,509 |
Depreciation and amortization | 53,221 | 95,209 |
Provision for inventory obsolescence | 50,000 | 20,000 |
Amortization of deferred financing costs | 3,363 | 4,072 |
Change in fair value of common stock warrant | (95,000) | (288,203) |
Non-cash stock-based compensation | 23,180 | 24,536 |
Changes in assets and liabilities: | ||
Decrease (increase) in accounts receivable | (104,375) | 396,430 |
(Increase) decrease in inventories | (151,145) | 185,145 |
Decrease (increase) in prepaid expenses & other assets | 76,165 | (28,774) |
Increase (decrease) in accounts payable and other accrued expenses | 358,808 | (299,359) |
Decrease in federal and state taxes | (4,105) | (53,623) |
Decrease in accrued payroll, vacation pay & withholdings | (131,206) | (224,072) |
(Decrease) increase in deferred revenues | (68,742) | 338,792 |
Increase in accrued legal damages | 2,130,523 | 0 |
Restricted cash for appeal bond | (2,000,000) | |
Decrease in other long-term liabilities | 0 | (7,800) |
Net cash (used in) provided by operating activities | (3,399,429) | 1,303,739 |
Cash flows from investing activities: | ||
Purchases of equipment | (89,396) | (37,070) |
Net cash used in investing activities | (89,396) | (37,070) |
Cash flows from financing activities: | ||
Proceeds from line of credit | 800,000 | 0 |
Proceeds from issuance of preferred stock, net of expenses | 2,960,000 | |
Payment of warrant liability | 0 | (720,000) |
Repayment of long-term debt | (290,419) | (322,894) |
Repayment of subordinated notes - related parties | 0 | (25,000) |
Repayment of capitalized lease obligations | (4,646) | (9,254) |
Net cash provided by (used in) financing activities | 3,464,935 | (1,077,148) |
Net decrease in cash and cash equivalents | (23,890) | 189,521 |
Cash and cash equivalents at beginning of period | 287,873 | 972,633 |
Cash and cash equivalents at end of period | 263,983 | 1,162,154 |
Supplemental cash flow information: | ||
Taxes paid | 5,000 | 87,374 |
Interest paid | $ 50,374 | $ 107,768 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Basis of Accounting [Text Block] | Note 1 – 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. (the "Company" or "TIC" or "Tel" |
Note 2 - Liquidity and Going Co
Note 2 - Liquidity and Going Concern | 9 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Substantial Doubt about Going Concern [Text Block] | Note 2 - Liquidity and Going Concern These condensed consolidated financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern. As discussed in Note 15 to the Notes to the Condensed Consolidated Financial Statements, the Company has recorded total damages of $4,930,523 as a result of the jury verdict associated with the Aeroflex litigation as well as the Court’s decision on punitive damages. 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, which brings the total Tel damages awarded in this case to approximately $4.9 million. 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. A hearing on this motion is expected within the next 30 days and a final decision is expected within the next two to three months. The Judge could deny our motions, reduce the amount of damages or even order a new trial. Once a final decision has been rendered, the Company has 30 days to file an appeal. The Company has posted a $2,000,000 bond to prevent Aeroflex from enforcement actions until a final decision has been rendered by the Court. This $2 million bond amount would remain in place during the appeal process (See Note 5). The Company believes it has excellent grounds to appeal this verdict. The appeal process would be expected to take several years to complete. The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The ability of the Company to continue as a going concern is dependent upon its ability to achieve profitable operations and/or raise additional capital to support the appeal process or pay any final damages amount. In November 2017, the Company signed a subscription agreement in which the Company received $3 million for Series A Convertible Preferred Stock (See Note 14 to the Notes to the Condensed Financial Statements). These funds were used to finance an appeal and provide funds for operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Note 3 - Summary of Significant
Note 3 - Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 3 – Summary of Significant Accounting Policies During the nine months ended December 31, 2017, there have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Annual Report. |
Note 4 - Accounts Receivable, n
Note 4 - Accounts Receivable, net | 9 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 4 – Accounts Receivable, net The following table sets forth the components of accounts receivable: December 31, 2017 March 31, 2017 Government $ 1,461,090 $ 1,392,482 Commercial 207,167 171,400 Less: Allowance for doubtful accounts (7,500 ) (7,500 ) $ 1,660,757 $ 1,556,382 |
Note 5 - Restricted Cash to Sup
Note 5 - Restricted Cash to Support Appeal Bond | 9 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents Disclosure [Text Block] | Note 5 – Restricted Cash to support appeal bond 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 Notes 14 and 15). |
Note 6 - Inventories, net
Note 6 - Inventories, net | 9 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 6 – Inventories, net Inventories consist of: December 31, 2017 March 31, 2017 Purchased parts $ 3,839,370 $ 3,197,378 Work-in-process 817,543 1,272,235 Finished goods 32,411 68,566 Less: Inventory reserve (380,000 ) (330,000 ) $ 4,309,324 $ 4,208,179 |
Note 7 - Net Income (Loss) per
Note 7 - Net Income (Loss) per Share | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Note 7 – Net Income (Loss) per Share Net income (loss) 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 (loss) per share (“EPS”). Basic EPS represents net income (loss) divided by the weighted average number of common shares outstanding during a reporting period. Diluted EPS reflects the potential dilution that could occur if securities, including warrants and options, were converted into common stock. The dilutive effect of outstanding warrants and options is reflected in earnings per share by use of the treasury stock method. In applying the treasury stock method for stock-based compensation arrangements, the assumed proceeds are computed as the sum of the amount the employee must pay upon exercise and the amounts of average unrecognized compensation costs attributed to future services. Three Months Ended Three Months Ended December 31, 2017 December 31, 2016 Basic net (loss) income per share computation: Net (loss) income $ (364,103 ) $ 141,513 Weighted-average common shares outstanding 3,255,887 3,255,887 Basic net (loss) income per share $ (0.11 ) $ 0.04 Diluted net (loss) income per share computation Net (loss) income $ (364,103 ) $ 141,513 Add: Change in fair value of warrants - 37,000 Diluted (loss) income $ (364,103 ) 104,513 Weighted-average common shares outstanding 3,255,887 3,255,887 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants - 9,248 Total adjusted weighted-average shares 3,255,887 3,265,135 Diluted net (loss) income per share $ (0.11 ) $ 0.03 Nine Months Ended Nine Months Ended December 31, 2017 December 31, 2016 Basic net (loss) income per share computation: Net (loss) income $ (3,570,783 ) $ 823,877 Weighted-average common shares outstanding 3,255,887 3,255,887 Basic net(loss)income per share $ (1.10 ) $ 0.25 Diluted net (loss) income per share computation Net (loss) income $ (3,570,783 ) $ 823,877 Change in fair value of warrants - 70,000 Diluted (loss) income $ (3,570,783 ) 753,877 Weighted-average common shares outstanding 3,255,887 3,255,887 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants - 10,645 Total adjusted weighted-average shares 3,255,887 3,266,532 Diluted net (loss) income per share $ (1.10 ) $ 0.23 The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share: December 31, 2017 December 31, 2016 Convertible preferred stock 1,000,000 - Stock options 75,000 71,000 Warrants 50,000 - 1,125,000 71,000 |
Note 8 - Long-Term Debt
Note 8 - Long-Term Debt | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Long-term Debt [Text Block] | Note 8 – Long-Term Debt Term Loans with Bank of America In November 2014, the Company entered into a term loan in the amount of $1,200,000 with Bank of America. The term loan was was In July 2015, the Company entered into a term loan in the amount of $18,000 with Bank of America. The term loan is for three years, and matures in July 2018. Monthly payments are at $536 including interest at 4.5%. The term loan is collateralized by substantially all of the assets of the Company. At December 31, 2017 and March 31, 2017, the outstanding balances were $3,696 and $8,305, respectively. At December 31, 2017, $3,696 was classified as current. |
Note 9 - Line of Credit
Note 9 - Line of Credit | 9 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 9 - Line of Credit On March 21, 2016, the Company entered into a line of credit agreement with Bank of America, which expired March 31, 2017. In March 2017, the line of credit was renewed and the expiration date extended until March 31, 2018. The new line provides a revolving credit facility with borrowing capacity of up to $1,000,000 . |
Note 10 - Deferred Revenues
Note 10 - Deferred Revenues | 9 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue Disclosure [Text Block] | Note 10 – Deferred Revenues In June 2016, the Company negotiated a settlement with a customer in the amount of $679,935 for price increases due to delays on a production release. Deferred revenues are recognized based upon the shipment of units under this contract. During the nine months ended December 31, 2017, the Company recognized the remaining balance of $73,302 as compared to $470,288 for the nine months ended December 30, 2016. As of December 31, 2017, the remaining deferred revenues related to the above-mentioned settlement was $-0- as compared to $73,302 at March 31, 2017. During the nine months ended December 31, 2017, the Company recognized revenues in the amount of $70,000 that pertained to fiscal year 2017 shipments and that were not recorded in fiscal year 2017. |
Note 11 - Segment Information
Note 11 - Segment Information | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 11 – 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 table below presents information about reportable segments within the avionics business for the three and nine month periods ending December 31, 2017 and 2016: Three Months Ended December 31, 2017 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 1,825,744 $ 800,049 $ 2,625,793 $ - $ 2,625,793 Cost of sales 1,013,481 675,632 1,689,113 - 1,689,113 Gross margin 812,263 124,417 936,680 - 936,680 Engineering, research, and development 546,691 - 546,691 Selling, general and administrative 225,610 322,781 548,391 Litigation costs 134,765 134,765 Legal damages 30,523 30,523 Amortization of deferred financing costs - 649 649 Change in fair value of common stock warrants - (5,000 ) (5,000 ) Proceeds from life insurance - - Interest expense, net - 14,097 14,097 Total expenses 772,301 497,815 1,270,116 Income (loss) before income taxes $ 164,379 $ (497,815 ) $ (333,436 ) Three Months Ended December 31, 2016 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 3,771,384 $ 465,135 $ 4,236,519 $ - $ 4,236,519 Cost of sales 2,297,157 305,111 2,602,268 - 2,602,268 Gross margin 1,474,227 160,024 1,634,251 - 1,634,251 Engineering, research, and development 615,007 - 615,007 Selling, general and administrative 256,599 326,281 582,880 Litigation costs 282,490 282,490 Amortization of deferred financing costs - 1,359 1,359 Change in fair value of common stock warrants - (37,000 ) (37,000 ) Interest expense, net - 11,620 11,620 Total expenses 871,606 584,750 1,456,356 Income (loss) before income taxes $ 762,645 $ (584,750 ) $ 177,895 Nine Months Ended December 31, 2017 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 5,826,763 $ 2,128,272 $ 7,955,035 $ - $ 7,955,035 Cost of sales 3,489,223 1,887,972 5,377,195 - 5,377,195 Gross margin 2,337,540 240,300 2,577,840 - 2,577,840 Engineering, research, and development 1,691,631 - 1,691,631 Selling, general and administrative 861,795 1,019,277 1,881,072 Litigation costs 560,610 560,610 Legal damages 2,130,523 2,130,523 Amortization of deferred financing costs - 3,363 3,363 Change in fair value of common stock warrants - (95,000 ) (95,000 ) Proceeds from life insurance (92,678 ) (92,678 ) Interest expense, net - 38,435 38,435 Total expenses 2,553,426 3,564,530 6,117,956 Income (loss) before income taxes $ 24,414 $ (3,564,530 ) $ (3,540,116 ) Nine Months Ended December 31, 2016 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 12,981,768 $ 1,673,149 $ 14,654,917 $ - $ 14,654,917 Cost of sales 8,067,636 1,250,789 9,318,425 - 9,318,425 Gross margin 4,914,132 422,360 5,336,492 - 5,336,492 Engineering, research, and development 1,783,655 - 1,783,655 Selling, general and administrative 946,589 1,096,333 2,042,922 Litigation costs 609,330 609,330 Amortization of deferred financing costs - 4,072 4,072 Change in fair value of common stock warrants - (288,203 ) (288,203 ) Interest expense, net - 46,953 46,953 Total expenses 2,730,244 1,468,485 4,198,729 Income (loss) before income taxes $ 2,606,248 $ (1,468,485 ) $ 1,137,763 |
Note 12 - Income Taxes
Note 12 - Income Taxes | 9 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 12 – 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 has provided a 100% valuation allowance against its deferred tax asset at December 31, 2017 and March 31, 2017. On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law and the new legislation contains several key tax provisions that affected us, including a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. The Tax Act had no impact on the accompanying financial statements. |
Note 13 - Fair Value Measuremen
Note 13 - Fair Value Measurements | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 13 – Fair Value Measurements FASB ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. As defined in ASC 820-10, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observation of those inputs. ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy defined by ASC 820-10 are as follows: - Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. - Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. - Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The valuation techniques that may be used to measure fair value are as follows: · Market approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. · Income approach — Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method. · Cost approach — Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). The carrying value of the Company’s borrowings is a reasonable estimate of its fair value as borrowings under the Company’s credit facility reflect currently available terms and conditions for similar debt. The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2017 and March 31, 2017. As required by ASC 820-10, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. December 31, 2017 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - - - Total Liabilities $ - $ - $ - $ - March 31, 2017 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - 95,000 95,000 Total Liabilities $ - $ - $ 95,000 $ 95,000 The Company adopted the guidance of ASC 815 “Derivative and Hedging”, which requires that we mark the value of our warrant liability to market and recognize the change in valuation in our statement of operations each reporting period. Determining the warrant liability to be recorded requires us to develop estimates to be used in calculating the fair value of the warrant. The following table provides a summary of the changes in fair value of our Level 3 financial liabilities from March 31, 2017 through December 31, 2017, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to the liability held at December 31, 2017: Level 3 Reconciliation Balance 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 $ 95,000 $ (95,000 ) $ - $ - $ - Total Liabilities $ 95,000 $ (95,000 ) $ - $ - $ - The Company has remaining warrants with an outside investor to purchase 50,000 shares of the Company’s common stock at an exercise price of $3.35 per share or exercising the “put option” to the Company. The warrant liability of the 50,000 warrants was $-0- at December 31, 2017 as compared to $95,000 at March 31, 2017. |
Note 15 - Series A 8% Convertib
Note 15 - Series A 8% Convertible Preferred Stock | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Preferred Stock [Text Block] | Note 14 – Series A 8% Convertible Preferred Stock On November 14, 2017, the Company entered into definitive subscription agreements with an accredited investor, pursuant to which the investor purchased an aggregate of 500,000 shares of the Company’s Series A Preferred Stock (the “ Series A Preferred The shares of Series A Preferred have a stated value of $6.00 per share (the “Series A Stated Value”) and are convertible into Common Stock at a price of $3.00 per share. The holders of shares of the Series A Preferred shall be entitled to receive dividends out of any assets legally available, to the extent permitted by New Jersey law, at an annual rate equal to 8% of the Series A Stated Value of such shares of Series A Preferred, calculated on the basis of a 360 day year, consisting of twelve 30-day months, and shall accrue from the date of issuance of such shares of Series A Preferred, payable quarterly in cash. Any unpaid dividends shall accrue at the same rate. To the extent not paid on the last day of March, June, September and December of each calendar year, all dividends on any share of Series A Preferred shall accumulate whether or not declared by the Board and shall remain accumulated dividends until paid. As of December 31, 2017, the Company accrued $30,667 for dividends within mezzanine equity on the accompanying Balance Sheet. Since there were not sufficient authorized shares to allow for full conversion of the preferred stock into common stock at December 31, 2017, preferred stock was classified as mezzanine equity. At the January 2018 annual meeting approval was obtained for the additional authorized shares. As such, future financial statements will have preferred stock classified as permanent stockholders’ equity. The Holders will vote together with the holders of the Company’s Common Stock on an as-converted basis on each matter submitted to a vote of holders of Common Stock (whether at a meeting of shareholders or by written consent). Effective beginning on the third anniversary of the Original Issue Date, and upon 30 days’ written notice to the Holders of Series A Preferred, the Company may, in its sole discretion, redeem the Series A Preferred at the aggregate Series A Stated Value plus any accrued and accumulated but unpaid dividends. |
Note 15 - Litigation
Note 15 - Litigation | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Legal Matters and Contingencies [Text Block] | Note 15 – Litigation Contingencies are recorded in the consolidated financial statements when it is probable that a liability will be incurred and the amount of the loss is reasonably estimable, or otherwise disclosed, in accordance with Accounting Standards Codification 450, Contingencies (“ASC 450”). Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosures related to such matter as appropriate and in compliance with ASC 450. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, the Company will, when applicable, adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss or if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made. On March 24, 2009, Aeroflex Wichita, Inc. (“Aeroflex”) filed a petition against the Company and two of its employees in the District Court 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. On May 23, 2016, the Company filed a motion for summary judgment based on Aeroflex’s lack of jurisdictional standing to bring the case. The motion asserts that Aeroflex does not own the intellectual property at issue since it is a bare licensee of Northrop Grumman. Northrop Grumman has declined to join this suit as plaintiff. Aeroflex lacks standing to sue alone. Also, the motion raises the fact that 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 it did rule 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. 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. A hearing on this motion is expected within the next 30 days and a final decision is expected within the next two to three months. The Judge could deny our motions, reduce the amount of damages or even order a new trial. Once a final decision has been rendered, the Company has 30 days to file an appeal. The Company has posted a $2,000,000 bond to prevent Aeroflex from enforcement actions until a final decision has been rendered by the Court. This $2 million bond amount would remain in place during the appeal process (See Note 5). The Company believes it has excellent grounds to appeal this verdict. The appeal process would be expected to take several years to complete. 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. |
Note 16 - New Accounting Pronou
Note 16 - New Accounting Pronouncements | 9 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Note 16 – New Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments should be applied prospectively to an award modified on or after the adoption date. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. We are evaluating whether this ASU will have a material impact on our consolidated financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09 (“Improvements to Employee Share-Based Payment Accounting”) which simplifies several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new standard was effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The Company adopted this standard and it did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 (“Leases”), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. The adoption of this ASU will increase assets and liabilities for operating leases. The Company is evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, which is an update to Topic 740, “Income Taxes”. This update requires that all deferred tax assets and liabilities be classified as non-current. The Company adopted this update, which is reflected in the accompanying balance sheets. The adoption of this update did not have any impact on the Company’s results of operations. In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern. The guidance requires management to assess whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. When management identifies such conditions or events, a footnote disclosure is required to disclose their nature, as well as management’s plans to alleviate the substantial doubt to continue as a going concern. The standard became effective for our fiscal year end 2017. In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In March 2016, the FASB issued ASU 2016-08 which further clarifies the guidance on the principal versus agent considerations within ASU 2014-09. In April 2016, the FASB issued ASU 2016-10 to expand the guidance on identifying performance obligations and licensing within ASU 2014-09. In May 2016, the FASB issued ASU 2016-12 to improve revenue recognition in the areas of collectability, presentation of sales tax and other similar taxes collected from customers, noncash consideration, contract modifications and completed contracts at transition. This update also amends the disclosure requirements within ASU 2014-09 for entities that retrospectively apply the guidance. The latest amendments are intended to address implementation issues that were raised by stakeholders and discussed by the Revenue Recognition Transition Resource Group, and provide additional practical expedients. These standards are effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is assessing their implementation process and the potential impact on its existing revenue accounting policies and newly required financial statement disclosures. The Company has not yet determined the impact from the adoption of the new standard on either its financial position or results of operations. ASU 2016-18, Restricted Cash, updates Topic 230, Statement of Cash Flows, to require that a statement of cash flows explain the change during the period in restricted cash or restricted cash equivalents, in addition to changes in cash and cash equivalents. That is, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Consequently, transfers between cash and restricted cash will not be presented as a separate line item in the operating, investing or financing sections of the cash flow statement. The ASU includes examples of the revised presentation guidance, and additional presentation and disclosure requirements apply. The ASU is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments should be applied retrospectively to each period presented. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s condensed consolidated financial statements. |
Note 4 - Accounts Receivable,22
Note 4 - Accounts Receivable, net (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
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, 2017 March 31, 2017 Government $ 1,461,090 $ 1,392,482 Commercial 207,167 171,400 Less: Allowance for doubtful accounts (7,500 ) (7,500 ) $ 1,660,757 $ 1,556,382 |
Note 6 - Inventories, net (Tabl
Note 6 - Inventories, net (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories consist of: December 31, 2017 March 31, 2017 Purchased parts $ 3,839,370 $ 3,197,378 Work-in-process 817,543 1,272,235 Finished goods 32,411 68,566 Less: Inventory reserve (380,000 ) (330,000 ) $ 4,309,324 $ 4,208,179 |
Note 7 - Net Income (Loss) pe24
Note 7 - Net Income (Loss) per Share (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Three Months Ended December 31, 2017 December 31, 2016 Basic net (loss) income per share computation: Net (loss) income $ (364,103 ) $ 141,513 Weighted-average common shares outstanding 3,255,887 3,255,887 Basic net (loss) income per share $ (0.11 ) $ 0.04 Diluted net (loss) income per share computation Net (loss) income $ (364,103 ) $ 141,513 Add: Change in fair value of warrants - 37,000 Diluted (loss) income $ (364,103 ) 104,513 Weighted-average common shares outstanding 3,255,887 3,255,887 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants - 9,248 Total adjusted weighted-average shares 3,255,887 3,265,135 Diluted net (loss) income per share $ (0.11 ) $ 0.03 Nine Months Ended Nine Months Ended December 31, 2017 December 31, 2016 Basic net (loss) income per share computation: Net (loss) income $ (3,570,783 ) $ 823,877 Weighted-average common shares outstanding 3,255,887 3,255,887 Basic net(loss)income per share $ (1.10 ) $ 0.25 Diluted net (loss) income per share computation Net (loss) income $ (3,570,783 ) $ 823,877 Change in fair value of warrants - 70,000 Diluted (loss) income $ (3,570,783 ) 753,877 Weighted-average common shares outstanding 3,255,887 3,255,887 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants - 10,645 Total adjusted weighted-average shares 3,255,887 3,266,532 Diluted net (loss) income per share $ (1.10 ) $ 0.23 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share: December 31, 2017 December 31, 2016 Convertible preferred stock 1,000,000 - Stock options 75,000 71,000 Warrants 50,000 - 1,125,000 71,000 |
Note 11 - Segment Information (
Note 11 - Segment Information (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The table below presents information about reportable segments within the avionics business for the three and nine month periods ending December 31, 2017 and 2016: Three Months Ended December 31, 2017 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 1,825,744 $ 800,049 $ 2,625,793 $ - $ 2,625,793 Cost of sales 1,013,481 675,632 1,689,113 - 1,689,113 Gross margin 812,263 124,417 936,680 - 936,680 Engineering, research, and development 546,691 - 546,691 Selling, general and administrative 225,610 322,781 548,391 Litigation costs 134,765 134,765 Legal damages 30,523 30,523 Amortization of deferred financing costs - 649 649 Change in fair value of common stock warrants - (5,000 ) (5,000 ) Proceeds from life insurance - - Interest expense, net - 14,097 14,097 Total expenses 772,301 497,815 1,270,116 Income (loss) before income taxes $ 164,379 $ (497,815 ) $ (333,436 ) Three Months Ended December 31, 2016 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 3,771,384 $ 465,135 $ 4,236,519 $ - $ 4,236,519 Cost of sales 2,297,157 305,111 2,602,268 - 2,602,268 Gross margin 1,474,227 160,024 1,634,251 - 1,634,251 Engineering, research, and development 615,007 - 615,007 Selling, general and administrative 256,599 326,281 582,880 Litigation costs 282,490 282,490 Amortization of deferred financing costs - 1,359 1,359 Change in fair value of common stock warrants - (37,000 ) (37,000 ) Interest expense, net - 11,620 11,620 Total expenses 871,606 584,750 1,456,356 Income (loss) before income taxes $ 762,645 $ (584,750 ) $ 177,895 Nine Months Ended December 31, 2017 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 5,826,763 $ 2,128,272 $ 7,955,035 $ - $ 7,955,035 Cost of sales 3,489,223 1,887,972 5,377,195 - 5,377,195 Gross margin 2,337,540 240,300 2,577,840 - 2,577,840 Engineering, research, and development 1,691,631 - 1,691,631 Selling, general and administrative 861,795 1,019,277 1,881,072 Litigation costs 560,610 560,610 Legal damages 2,130,523 2,130,523 Amortization of deferred financing costs - 3,363 3,363 Change in fair value of common stock warrants - (95,000 ) (95,000 ) Proceeds from life insurance (92,678 ) (92,678 ) Interest expense, net - 38,435 38,435 Total expenses 2,553,426 3,564,530 6,117,956 Income (loss) before income taxes $ 24,414 $ (3,564,530 ) $ (3,540,116 ) Nine Months Ended December 31, 2016 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 12,981,768 $ 1,673,149 $ 14,654,917 $ - $ 14,654,917 Cost of sales 8,067,636 1,250,789 9,318,425 - 9,318,425 Gross margin 4,914,132 422,360 5,336,492 - 5,336,492 Engineering, research, and development 1,783,655 - 1,783,655 Selling, general and administrative 946,589 1,096,333 2,042,922 Litigation costs 609,330 609,330 Amortization of deferred financing costs - 4,072 4,072 Change in fair value of common stock warrants - (288,203 ) (288,203 ) Interest expense, net - 46,953 46,953 Total expenses 2,730,244 1,468,485 4,198,729 Income (loss) before income taxes $ 2,606,248 $ (1,468,485 ) $ 1,137,763 |
Note 13 - Fair Value Measurem26
Note 13 - Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels December 31, 2017 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - - - Total Liabilities $ - $ - $ - $ - March 31, 2017 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - 95,000 95,000 Total Liabilities $ - $ - $ 95,000 $ 95,000 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table provides a summary of the changes in fair value of our Level 3 financial liabilities from March 31, 2017 through December 31, 2017, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to the liability held at December 31, 2017: Level 3 Reconciliation Balance 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 $ 95,000 $ (95,000 ) $ - $ - $ - Total Liabilities $ 95,000 $ (95,000 ) $ - $ - $ - |
Note 2 - Liquidity and Going 27
Note 2 - Liquidity and Going Concern (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | |
Note 2 - Liquidity and Going Concern (Details) [Line Items] | |||
Estimated Litigation Liability | $ 4,930,523 | ||
Loss Contingency, Damages Sought, Value | 2,800,000 | ||
Restricted Cash, Current | $ 0 | 2,000,000 | |
Aeroflex [Member] | |||
Note 2 - Liquidity and Going Concern (Details) [Line Items] | |||
Loss Contingency, Damages Awarded, Value | $ 2,100,000 | $ 2,800,000 | |
Restricted Cash, Current | 2,000,000 | ||
Aeroflex [Member] | |||
Note 2 - Liquidity and Going Concern (Details) [Line Items] | |||
Loss Contingency, Damages Awarded, Value | $ 2,100,000 |
Note 4 - Accounts Receivable,28
Note 4 - Accounts Receivable, net (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Less: Allowance for doubtful accounts | $ (7,500) | $ (7,500) |
Accounts Receivable, net | 1,660,757 | 1,556,382 |
Government Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | 1,461,090 | 1,392,482 |
Commercial Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | $ 207,167 | $ 171,400 |
Note 5 - Restricted Cash to S29
Note 5 - Restricted Cash to Support Appeal Bond (Details) - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Note 5 - Restricted Cash to Support Appeal Bond (Details) [Line Items] | ||
Restricted Cash, Current | $ 2,000,000 | $ 0 |
Aeroflex [Member] | ||
Note 5 - Restricted Cash to Support Appeal Bond (Details) [Line Items] | ||
Restricted Cash, Current | $ 2,000,000 |
Note 6 - Inventories, net (Det
Note 6 - Inventories, net (Details) - Schedule of Inventory, Current - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Schedule of Inventory, Current [Abstract] | ||
Purchased parts | $ 3,839,370 | $ 3,197,378 |
Work-in-process | 817,543 | 1,272,235 |
Finished goods | 32,411 | 68,566 |
Less: Inventory reserve | (380,000) | (330,000) |
$ 4,309,324 | $ 4,208,179 |
Note 7 - Net Income (Loss) pe31
Note 7 - Net Income (Loss) per Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic net (loss) income per share computation: | ||||
Net (loss) income | $ (364,103) | $ 141,513 | $ (3,570,783) | $ 823,877 |
Weighted-average common shares outstanding | 3,255,887 | 3,255,887 | 3,255,887 | 3,255,887 |
Basic net (loss) income per share | $ (0.11) | $ 0.04 | $ (1.10) | $ 0.25 |
Diluted net (loss) income per share computation | ||||
Net (loss) income | $ (364,103) | $ 141,513 | $ (3,570,783) | $ 823,877 |
Add: Change in fair value of warrants | 0 | 37,000 | 0 | 70,000 |
Diluted (loss) income | $ (364,103) | $ 104,513 | $ (3,570,783) | $ 753,877 |
Weighted-average common shares outstanding | 3,255,887 | 3,255,887 | 3,255,887 | 3,255,887 |
Incremental shares attributable to the assumed exercise of outstanding stock options and warrants | 0 | 9,248 | 0 | 10,645 |
Total adjusted weighted-average shares | 3,255,887 | 3,265,135 | 3,255,887 | 3,266,532 |
Diluted net (loss) income per share | $ (0.11) | $ 0.03 | $ (1.10) | $ 0.23 |
Note 7 - Net Income (Loss) pe32
Note 7 - Net Income (Loss) per Share (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share - shares | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Securities | 1,125,000 | 71,000 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Securities | 1,000,000 | 0 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Securities | 75,000 | 71,000 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Securities | 50,000 | 0 |
Note 8 - Long-Term Debt (Detail
Note 8 - Long-Term Debt (Details) - Notes Payable to Banks [Member] - USD ($) | 1 Months Ended | |||
Jul. 31, 2015 | Nov. 30, 2014 | Dec. 31, 2017 | Mar. 31, 2017 | |
Note to Bank #1 [Member] | ||||
Note 8 - Long-Term Debt (Details) [Line Items] | ||||
$ 1,200,000 | ||||
Debt Instrument, Term | 3 years | |||
Debt Instrument, Maturity Date, Description | November 2,017 | |||
Debt Instrument, Frequency of Periodic Payment | Monthly | |||
Debt Instrument, Periodic Payment | $ 36,551 | |||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||
Notes Payable | $ 285,810 | |||
Debt Instrument, Collateral | collateralized by substantially all of the assets of the Company | |||
Note to Bank #2 [Member] | ||||
Note 8 - Long-Term Debt (Details) [Line Items] | ||||
$ 18,000 | ||||
Debt Instrument, Term | 3 years | |||
Debt Instrument, Frequency of Periodic Payment | Monthly | |||
Debt Instrument, Periodic Payment | $ 536 | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |||
Notes Payable | $ 3,696 | $ 8,305 | ||
Debt Instrument, Collateral | collateralized by substantially all of the assets of the Company | |||
Notes Payable, Current | $ 3,696 |
Note 9 - Line of Credit (Detail
Note 9 - Line of Credit (Details) - Line of Credit [Member] - USD ($) | 1 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Dec. 31, 2017 | |
Note 9 - Line of Credit (Details) [Line Items] | ||
Line of Credit Facility, Expiration Date | Mar. 31, 2018 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 | |
Line of Credit Facility, Interest Rate at Period End | 5.319% | |
Proceeds from Lines of Credit | $ 800,000 | |
Long-term Line of Credit | $ 200,000 | 1,000,000 |
Line of Credit Facility, Remaining Borrowing Capacity | $ 0 | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Note 9 - Line of Credit (Details) [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 3.75% |
Note 10 - Deferred Revenues (De
Note 10 - Deferred Revenues (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Note 10 - Deferred Revenues (Details) [Line Items] | ||||
Recognition of Deferred Revenue | $ 0 | |||
Price Increase Settlement [Member] | ||||
Note 10 - Deferred Revenues (Details) [Line Items] | ||||
Deferred Revenue, Additions | $ 679,935 | |||
Deferred Revenue, Revenue Recognized | $ 70,000 | $ 73,302 | $ 470,288 | |
Recognition of Deferred Revenue | $ 73,302 |
Note 11 - Segment Information36
Note 11 - Segment Information (Details) | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Note 11 - Segment Information
Note 11 - Segment Information (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 2,625,793 | $ 4,236,519 | $ 7,955,035 | $ 14,654,917 |
Cost of sales | 1,689,113 | 2,602,268 | 5,377,195 | 9,318,425 |
Gross margin | 936,680 | 1,634,251 | 2,577,840 | 5,336,492 |
Engineering, research, and development | 546,691 | 615,007 | 1,691,631 | 1,783,655 |
Selling, general and administrative | 548,391 | 582,880 | 1,881,072 | 2,042,922 |
Litigation costs | 134,765 | 282,490 | 560,610 | 609,330 |
Legal damages | 30,523 | 0 | 2,130,523 | 0 |
Amortization of deferred financing costs | 649 | 1,359 | 3,363 | 4,072 |
Change in fair value of common stock warrants | (5,000) | (37,000) | (95,000) | (288,203) |
Proceeds from life insurance | 0 | 0 | (92,678) | 0 |
Interest expense, net | 14,097 | 11,620 | 38,435 | 46,953 |
Total expenses | 1,270,116 | 1,456,356 | 6,117,956 | 4,198,729 |
Income (loss) before income taxes | (333,436) | 177,895 | (3,540,116) | 1,137,763 |
Avionics Government [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,825,744 | 3,771,384 | 5,826,763 | 12,981,768 |
Cost of sales | 1,013,481 | 2,297,157 | 3,489,223 | 8,067,636 |
Gross margin | 812,263 | 1,474,227 | 2,337,540 | 4,914,132 |
Avionics Commercial [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 800,049 | 465,135 | 2,128,272 | 1,673,149 |
Cost of sales | 675,632 | 305,111 | 1,887,972 | 1,250,789 |
Gross margin | 124,417 | 160,024 | 240,300 | 422,360 |
Avionics Total [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,625,793 | 4,236,519 | 7,955,035 | 14,654,917 |
Cost of sales | 1,689,113 | 2,602,268 | 5,377,195 | 9,318,425 |
Gross margin | 936,680 | 1,634,251 | 2,577,840 | 5,336,492 |
Engineering, research, and development | 546,691 | 615,007 | 1,691,631 | 1,783,655 |
Selling, general and administrative | 225,610 | 256,599 | 861,795 | 946,589 |
Amortization of deferred financing costs | 0 | 0 | 0 | 0 |
Change in fair value of common stock warrants | 0 | 0 | 0 | 0 |
Interest expense, net | 0 | 0 | 0 | 0 |
Total expenses | 772,301 | 871,606 | 2,553,426 | 2,730,244 |
Income (loss) before income taxes | 164,379 | 762,645 | 24,414 | 2,606,248 |
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 | 322,781 | 326,281 | 1,019,277 | 1,096,333 |
Litigation costs | 134,765 | 282,490 | 560,610 | 609,330 |
Legal damages | 30,523 | 2,130,523 | ||
Amortization of deferred financing costs | 649 | 1,359 | 3,363 | 4,072 |
Change in fair value of common stock warrants | (5,000) | (37,000) | (95,000) | (288,203) |
Proceeds from life insurance | 0 | (92,678) | ||
Interest expense, net | 14,097 | 11,620 | 38,435 | 46,953 |
Total expenses | 497,815 | 584,750 | 3,564,530 | 1,468,485 |
Income (loss) before income taxes | $ (497,815) | $ (584,750) | $ (3,564,530) | $ (1,468,485) |
Note 12 - Income Taxes (Details
Note 12 - Income Taxes (Details) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 100.00% | 100.00% |
Note 13 - Fair Value Measurem39
Note 13 - Fair Value Measurements (Details) - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Note 13 - Fair Value Measurements (Details) [Line Items] | ||
Derivative Liability, Noncurrent | $ 0 | $ 95,000 |
Warrants Held by Outside Investor [Member] | ||
Note 13 - Fair Value Measurements (Details) [Line Items] | ||
Warrants and Rights Outstanding | $ 50,000 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 3.35 | |
Derivative Liability, Noncurrent | $ 95,000 |
Note 13 - Fair Value Measurem40
Note 13 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Note 13 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | $ 0 | $ 0 |
Warrant liability | 95,000 | |
Total Liabilities | 95,000 | |
Fair Value, Inputs, Level 1 [Member] | ||
Note 13 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Warrant liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Note 13 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Warrant liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Note 13 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | $ 0 | 0 |
Warrant liability | 95,000 | |
Total Liabilities | $ 95,000 |
Note 13 - Fair Value Measurem41
Note 13 - Fair Value Measurements (Details) - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation - Fair Value, Inputs, Level 3 [Member] | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at beginning of period | $ 95,000 |
Gains and losses for the period (realized and unrealized) | (95,000) |
Purchases, issuances, sales and settlements, net | 0 |
Transfers in or out of Level 3 | 0 |
Warrant [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at beginning of period | 95,000 |
Gains and losses for the period (realized and unrealized) | (95,000) |
Purchases, issuances, sales and settlements, net | 0 |
Transfers in or out of Level 3 | $ 0 |
Note 15 - Series A 8% Convert42
Note 15 - Series A 8% Convertible Preferred Stock (Details) - USD ($) | Nov. 14, 2017 | Dec. 31, 2017 |
Note 15 - Series A 8% Convertible Preferred Stock (Details) [Line Items] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.10 | |
Series A Preferred Stock [Member] | ||
Note 15 - Series A 8% Convertible Preferred Stock (Details) [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 500,000 | |
Proceeds from Issuance of Convertible Preferred Stock | $ 3,000,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 6 | |
Convertible Preferred Stock, Conversion Price | $ 3 | |
Preferred Stock, Dividend Rate, Percentage | 8.00% | |
Preferred Stock, Conversion Basis | calculated on the basis of a 360 day year, consisting of twelve 30-day months, and shall accrue from the date of issuance of such shares of Series A Preferred, payable quarterly in cash | |
Dividends Payable, Current | $ 30,667 |
Note 15 - Litigation (Details)
Note 15 - Litigation (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2018 | Oct. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | |
Note 15 - Litigation (Details) [Line Items] | ||||
Loss Contingency, Damages Sought, Value | $ 2,800,000 | |||
Aeroflex [Member] | ||||
Note 15 - Litigation (Details) [Line Items] | ||||
Loss Contingency, Damages Awarded, Value | $ 2,100,000 | $ 2,800,000 | ||
Loss Contingency, Estimate of Possible Loss | $ 4,900,000 | |||
Business Opportunity [Member] | Aeroflex [Member] | ||||
Note 15 - Litigation (Details) [Line Items] | ||||
Loss Contingency, Damages Awarded, Value | 1,300,000 | |||
Non-Disclosure Agreements [Member] | Aeroflex [Member] | ||||
Note 15 - Litigation (Details) [Line Items] | ||||
Loss Contingency, Damages Awarded, Value | 525,000 | |||
Loss Contingency, Damages Sought, Value | 1,500,000 | |||
Maximum [Member] | Aeroflex [Member] | ||||
Note 15 - Litigation (Details) [Line Items] | ||||
Loss Contingency, Damages Sought, Value | $ 5,000,000 | |||
Subsequent Event [Member] | Aeroflex [Member] | ||||
Note 15 - Litigation (Details) [Line Items] | ||||
Loss Contingency, Description | 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. A hearing on this motion is expected within the next 30 days and a final decision is expected within the next two to three months. The Judge could deny our motions, reduce the amount of damages or even order a new trial. Once a final decision has been rendered, the Company has 30 days to file an appeal. The Company has posted a $2,000,000 bond to prevent Aeroflex from enforcement actions until a final decision has been rendered by the Court. This $2 million bond amount would remain in place during the appeal process (See Note 5). The Company believes it has excellent grounds to appeal this verdict. The appeal process would be expected to take several years to complete. |