Torotel (TTLO) 10-K/A 12 Jul 18 2018 FY Annual report (amended) Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Apr. 30, 2018	Jun. 29, 2018	Oct. 30, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	TOROTEL INC
Entity Central Index Key	98,752
Current Fiscal Year End Date	--04-30
Entity Filer Category	Smaller Reporting Company
Document Type	10-K/A
Document Period End Date	Apr. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		5,995,750
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float			$ 3,597,450

CONSOLIDATED CONDENSED BALANCE

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($)	Apr. 30, 2018	Apr. 30, 2017
Current assets:
Cash	$ 575,000	$ 298,000
Trade receivables, net	2,193,000	2,007,000
Inventories	2,362,000	2,739,000
Prepaid expenses and other current assets	238,000	217,000
Property held for sale	694,000	688,000
Assets, Current	6,062,000	5,949,000
Leasehold improvements	616,000	532,000
Equipment	3,951,000	3,718,000
Property, Plant and Equipment, Gross, Total	4,567,000	4,250,000
Less accumulated depreciation	3,235,000	2,937,000
Property, plant and equipment, net	1,332,000	1,313,000
Deferred income taxes	68,000	747,000
Other assets	209,000	256,000
Total Assets	7,671,000	8,265,000
Current liabilities:
Current maturities of long-term debt	1,706,000	603,000
Trade accounts payable	1,045,000	1,204,000
Accrued liabilities	817,000	319,000
Customer deposits	219,000	33,000
Liabilities, Current	3,787,000	2,159,000
Long-term debt, less current maturities	130,000	445,000
Stockholders' equity:
Common stock; par value $0.01; 6,000,000 shares authorized; 5,995,750 shares issued and outstanding	60,000	60,000
Capital in excess of par value	12,437,000	12,329,000
Accumulated deficit	(8,743,000)	(6,728,000)
Stockholders' Equity	3,754,000	5,661,000
Total Liabilities and Stockholders' Equity	$ 7,671,000	$ 8,265,000

CONSOLIDATED CONDENSED BALANCE3

CONSOLIDATED CONDENSED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Apr. 30, 2018	Apr. 30, 2017
Stockholders' equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	6,000,000	6,000,000
Common stock, shares issued	5,995,750	5,995,750
Common stock, shares outstanding	5,995,750	5,995,750

CONSOLIDATED CONDENSED STATEMEN

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 18,396,000	$ 16,302,000
Cost of goods sold	13,615,000	11,047,000
Gross profit	4,781,000	5,255,000
Operating expenses:
Engineering	1,082,000	906,000
Selling, general and administrative	4,967,000	4,738,000
Operating expenses	6,049,000	5,644,000
Loss from operations	(1,268,000)	(389,000)
Other expense:
Interest expense, net	74,000	24,000
Gain on asset disposal	(8,000)
Loss before provision (credit) for income taxes	(1,334,000)	(413,000)
Provision (benefit) for income taxes	681,000	(152,000)
Net loss	$ (2,015,000)	$ (261,000)
Basic loss per share	$ (0.38)	$ (0.05)

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Excess of Par Value	Accumulated Deficit	Treasury Stock, at cost	Total
Balance beginning of year at Apr. 30, 2016	$ 60,000	$ 12,277,000	$ (6,467,000)	$ (9,000)	$ 5,861,000
Balance beginning of year (in shares) at Apr. 30, 2016	5,983,545				5,615,750
Stock compensation earned		61,000			$ 61,000
Shares reverted	(350,000)				350,000
Shares released and issued		(9,000)		$ 9,000
Shares released and issued (in shares)	362,205
Net loss			(261,000)		$ (261,000)
Balance end of year at Apr. 30, 2017	$ 60,000	12,329,000	(6,728,000)		$ 5,661,000
Balance end of year (in shares) at Apr. 30, 2017	5,995,750				5,995,750
Stock compensation earned		108,000			$ 108,000
Net loss			(2,015,000)		(2,015,000)
Balance end of year at Apr. 30, 2018	$ 60,000	$ 12,437,000	$ (8,743,000)		$ 3,754,000
Balance end of year (in shares) at Apr. 30, 2018	5,995,750				5,995,750

CONSOLIDATED CONDENSED STATEME6

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Cash flows from operating activities:
Net loss	$ (2,015,000)	$ (261,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock compensation cost amortized	108,000	61,000
Depreciation	314,000	265,000
Gain on disposal of equipment	(8,000)
Deferred income taxes	679,000	(155,000)
Increase (decrease) in cash flows from operations resulting from changes in:
Trade receivables	(186,000)	(105,000)
Inventories	377,000	(1,036,000)
Prepaid expenses and other assets	20,000	(156,000)
Trade accounts payable	(159,000)	440,000
Accrued liabilities	498,000	(149,000)
Customer deposits	186,000	4,000
Net cash used in operating activities	(186,000)	(1,092,000)
Cash flows from investing activities:
Capital expenditures	(122,000)	(946,000)
Proceeds from disposal of equipment	22,000
Net cash used in investing activities	(100,000)	(946,000)
Cash flows from financing activities:
Principal payments on long-term debt	(132,000)	(99,000)
Payments on capital lease obligations	(55,000)
Proceeds from long-term debt		124,000
Proceeds from line of credit	750,000	465,000
Net cash provided by financing activities	563,000	490,000
Net increase (decrease) in cash	277,000	(1,548,000)
Cash, beginning of period	298,000	1,846,000
Cash, end of period	575,000	298,000
Cash paid during the year for:
Interest	74,000	24,000
Income taxes		101,000
Non-cash investing and financing activities:
Property, plant and equipment reclassified as held for sale	6,000	$ 688,000
Equipment financed with proceeds from capital lease	$ 225,000

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Apr. 30, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Torotel, Inc. ("Torotel") conducts business primarily through its wholly owned subsidiary, Torotel Products, Inc. ("Torotel Products"). Torotel specializes in the custom design and manufacture of a wide variety of precision magnetic components, consisting of transformers, inductors, reactors, chokes, toroidal coils, high voltage transformers, dry-type transformers and electro-mechanical assemblies for use in aerospace, industrial and military electronics. Principles of Consolidation The consolidated financial statements include the accounts of Torotel and its wholly owned subsidiary, Torotel Products. All significant inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these consolidated financial statements include those assumed in computing the valuation allowance of inventory, the allowance for doubtful accounts receivable, the valuation allowance on deferred income tax assets, and the reserve for warranty costs. Accordingly, actual results could differ from those estimates. Any changes in estimates are recorded in the period in which they become known. Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable. We grant unsecured credit to most of our customers. We do not believe that we are exposed to any extraordinary credit risk as a result of this policy. At various times, and at April 30, 2018 and 2017, cash balances exceeded federally insured limits. We have not experienced any losses in the cash accounts and we do not believe we are exposed to any significant credit risk with respect to our cash. Fair Value of Financial Instruments We determine fair value by utilizing a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels as follows:  Level 1. Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.  Level 2. Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.  Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in the assessment of fair value. The carrying amounts of certain financial instruments, including cash, trade receivables and trade accounts payable approximate fair value due to their short maturities. As of April 30, 2018 and 2017, the amount of our long-term debt approximates fair value based on the present value of estimated future cash flows using a discount rate commensurate with a borrowing rate available to us. The inputs used to estimate the fair value of long-term debt are considered Level 2 inputs. Treasury Stock We utilize the weighted average cost method in accounting for treasury stock transactions. Revenue Recognition Revenue is recognized when a fixed price contract or purchase order exists; delivery has occurred; and collection is reasonably assured. Selling terms are generally FOB Shipping Point so we consider our products delivered once they have been shipped and title and risk of loss have been transferred. Allowance for Doubtful Accounts Gross trade accounts receivable are offset with an allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We review the allowance for doubtful accounts on a regular basis, and all past due balances are reviewed individually for collectability. Account balances are charged against the allowance when placed for collection. Recoveries of receivables previously written off are recorded when received. The majority of the customer accounts are considered past due after the invoice becomes older than the customer's credit terms. Interest is not charged on past due accounts. The allowance for doubtful accounts as of April 30, 2018 and 2017 was $12,000 and $12,000, respectively. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using a FIFO approximated weighted average cost method of valuation. Our industry is characterized by short-term customer commitments and changes in demand, as well as other market considerations. Provisions for obsolete and excess inventory are based on reviews of inventory usage, quantities on hand and latest product demand information from customers. Inventories are reviewed in detail utilizing a 12-month time horizon. Individual part numbers that have not had any usage or purchases in a 12-month time period and do not have any known usage requirements are categorized as obsolete; individual part numbers having more than a 12-month supply based on the current year's usage are categorized as excess. Once specific inventory has been identified as excess or obsolete, the cost of the identified inventory is fully reserved and the cost of the inventory is not recovered until it is sold. The reserve balance is analyzed for adequacy as part of the inventory review each quarter. The reserve for inventory as of April 30, 2018 and 2017 was $364,000 and $261,000, respectively. Property, Plant and Equipment Property, plant and equipment are carried at cost. Depreciation and amortization are provided in amounts sufficient to relate the costs of depreciable assets to operations primarily using the straight-line method over estimated useful lives of three to five years for equipment and three and a half to twenty years for buildings and improvements. Cash For purposes of the consolidated statements of cash flows, we consider all short-term investments and demand deposits purchased with original maturity dates of three months or less to be cash. Income Taxes Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. An estimated effective tax rate for a year is applied to our quarterly operating results. In the event there is a significant or unusual item recognized in our quarterly operating results, the tax attributable to that item is separately calculated and recorded at the same time as that item. Tax law requires items to be included in our tax returns at different times than the items are reflected in our financial statements. As a result, our annual tax rate reflected in our financial statements is different than that reported in our tax returns (our cash tax rate). Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recorded the tax benefit in our statement of operations. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax liabilities generally represent tax expense recognized in our financial statements for which payment has been deferred, or expense for which we have already taken a deduction in our tax return but have not yet recognized as expense in our financial statements. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. If necessary, we record a liability for the difference between the benefit recognized and measured for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that our assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. If applicable in a given year, tax-related interest and penalties are classified as a component of income tax expense. Advertising Costs Advertising costs are expensed as incurred. For the years ended April 30, 2018 and 2017 advertising costs were $22,000 and $6,000, respectively. Warranty Costs We maintain a reserve for estimated warranty costs associated with products returned from customers. A limited warranty is provided for a period of one year which requires us to repair or replace defective products at no cost to the customer. The warranty reserve is based on historical experience and reflects management's best estimate of probable liability under the product warranties. Share-Based Compensation We have a share-based compensation plan that includes restricted stock, which is described more fully in Note 7 of the Notes to the Consolidated Financial Statements. We account for the share-based compensation plan in accordance with authoritative guidance under which the estimated fair value of share-based awards granted under our share-based compensation plan is recognized as compensation expense over the vesting period of the award. New Accounting Guidance In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, Topic 606 (“ASC 606”). The standard is effective for reporting periods beginning after December 15, 2017. Torotel has evaluated the transition method to be used and the impact of adoption of this standard on its consolidated financial statements. As part of the evaluation and transition process, no significant implementation matters have been identified as needing to be addressed. In applying ASC 606, revenue is recognized when control of promised goods or services transfers to a customer and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The major provisions of the new standard include: the determination of enforceable rights and obligations between parties; the identification of performance obligations including those related to material right obligations; the allocation of consideration based upon relative standalone selling price; accounting for variable consideration; the determination of whether performance obligations are satisfied over time or at a point in time; and enhanced disclosure requirements. ASC 606 will be effective for Torotel beginning May 1, 2018 and permits two methods of adoption: retrospectively to each prior reporting period presented (“full retrospective method”) or retrospectively with the cumulative effect of the initial application recognized at the date of initial application (“modified retrospective method”). Torotel will adopt the standard using the full retrospective method and will record an adjustment to Retained Earnings for the effect of the initial application on April 30, 2017 for the cumulative portion earned through the end of fiscal year 2017, and will record a second adjustment on April 30, 2018 for the portion earned during fiscal year 2018 (the “Transition Adjustments”). Torotel has reviewed all of its contracts with customers and has implemented the required process, data, and system changes to comply with the requirements of ASC 606. Prior to adoption, revenue has historically been recognized when a fixed price contract or purchase order exists; delivery has occurred; and collection was reasonably assured. Upon adoption, ASC 606 will be applied by analyzing each contract, or a combination of contracts, to determine if revenue is recognized over time or at a point in time. Torotel has determined that some of its contracts will have performance obligations that are satisfied over time and some at a point in time based on when performance obligations have been satisfied by the transfer of control of the goods and services to the customer. For performance obligations that are satisfied over time, Torotel will use an input method as the basis for recognizing revenue. Input methods recognize revenue on the basis of an entity’s efforts or inputs toward satisfying a performance obligation (for example, resources consumed, labor hours expended, costs incurred, time lapsed, or machine hours used) relative to the total expected inputs to satisfy the performance obligation. Torotel will generally use costs incurred as the measure of performance; and therefore will generally not defer any production costs. Performance obligations that are not recognized over time will be recognized at the point in time when performance obligations have been satisfied by the transfer of control to the customer. ASC 606 requires Torotel to allocate contract consideration to performance obligations on the basis of their relative standalone selling price. Torotel has determined that certain contracts require a deferral of revenues due to the requirement to allocate revenue based upon relative standalone selling price. Accordingly, contract liabilities will be established at the Transition Date to defer revenue that was previously recognized under ASC 605 (“legacy GAAP”). We have completed our preliminary assessment of adopting ASC 606 on our 2018 and 2017 operating results, and have presented selected recast, unaudited financial data in the following table. The impact of adopting ASC 606 on our 2018 and 2017 operating results may not be indicative of the adoption impacts in future periods or of our operating performance. Unaudited 2018 2017 Net sales $ 18,469,000 $ 17,395,000 Earnings (loss) from operations (1,280,000) 147,000 ASC 340-40 was added by ASC 606, and becomes effective for reporting periods beginning after December 15, 2017. ACC 340-40 provides guidance on contract costs that are not within the scope of other authoritative literature, and is applied to costs to obtain or fulfill a contract if existing guidance is not applicable. Torotel’s accounting for preproduction, tooling, and certain other costs is expected to continue under existing guidance, since the costs generally do not fall within the scope of ASC 340-40. Torotel anticipates that in fiscal year 2019, revenue and gross margin for certain contracts that would not have been recognized under legacy GAAP will be accelerated because of the allocation of revenue to performance obligations based upon relative standalone selling price. The enhanced disclosure requirements of ASC 606 include discussions on the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Torotel expects the disclosures to include qualitative and quantitative information about its contracts with customers; information about contract assets and liabilities; information about the performance obligation for customer contracts; and, the significant judgments made in applying the guidance in ASC 606. This will result in changes to Torotel’s existing disclosures, as well as new disclosures, which will impact the information reported in Torotel’s financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 requires expanded disclosures about the nature and terms of lease agreements and is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. Torotel is currently evaluating the potential impact of this standard on its consolidated financial statements. Torotel anticipates the impact will be material to the consolidated financial statements for reporting periods beginning after December 15, 2018, due to the building lease amendment executed on October 31, 2016. The status of the implementation effort is in the preliminary stage. No significant implementation matters have been identified as needing to be addressed.

INVENTORIES

INVENTORIES	12 Months Ended
	Apr. 30, 2018
INVENTORIES
INVENTORIES	NOTE 2—INVENTORIES The following table summarizes the components of inventories, as of April 30 of each year: 2018 2017 Raw materials $ 1,278,000 $ 1,305,000 Work in process 635,000 826,000 Finished goods 449,000 608,000 $ 2,362,000 $ 2,739,000

FINANCING AGREEMENTS

FINANCING AGREEMENTS	12 Months Ended
	Apr. 30, 2018
FINANCING AGREEMENTS
FINANCING AGREEMENTS	NOTE 3—FINANCING AGREEMENTS On September 27, 2010, Torotel Products entered into a financing agreement (the “agreement”) with Commerce Bank, N.A (the “Bank”). The agreement provides for a revolving line of credit, a guidance line of credit, and a real estate term loan. Torotel serves as an additional guarantor to all notes described below. A summary of the notes issued under the agreement are provided below: 2018 2017 4.05% mortgage note payable in monthly installments of $4,873, including interest, with final payment of $349,000 due January 27, 2019 $ 373,000 $ 415,000 4.00% working capital line of credit with a maturity date of October 20, 2018 751,000 465,000 4.00% building line of credit with a maturity date of October 20, 2018 465,000 - Capital lease obligations (see Note 5) 170,000 - Borrowings under an equipment financing line of credit: 4.75% note payable in monthly installments of $2,269, including interest, with final payment made on May 27, 2018 2,000 28,000 3.75% note payable in monthly installments of $2,112, including interest, with final payment made on April 10, 2018 - 25,000 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 75,000 115,000 Total long-term debt 1,836,000 1,048,000 Less current installments 1,706,000 603,000 Long-term debt, excluding current installments $ 130,000 $ 445,000 Under the financing agreement with the Bank, prepayment of the mortgage note up to $100,000 per year is allowed without penalty so long as these funds are generated through internal cash flow and not borrowed from a separate financial institution. The mortgage note is cross collateralized and cross defaulted with all other credit facilities of Torotel Products and is secured by a first real estate mortgage on the property located at 620 North Lindenwood Drive in Olathe, Kansas. Two separate promissory notes have been delivered by Torotel Products under the working capital line of credit, and amounts under this working capital revolving line of credit are available for working capital purposes. As of April 30, 2018, Torotel Products has only drawn upon the promissory note that matures on October 20, 2018 and no amounts were outstanding under the promissory note that matured on April 30, 2018. The working capital revolving line of credit is renewable annually. The associated interest rate of both promissory notes is equal to the greater of the floating Commerce Bank Prime Rate (4.75% as of April 30, 2018) or a floor of 4% (as listed above). Monthly repayments of interest only are required under both promissory notes with the principal due at maturity. The maximum borrowing of this line of credit is $1,250,000. This revolving line of credit is cross collateralized and cross defaulted with all other credit facilities and arrangements of Torotel Products with the Bank and is secured by a first lien on all business assets of Torotel Products. This working capital line of credit is scheduled to mature on October 20, 2018, and Torotel Products expects to negotiate an extension of that maturity date on similar terms. On March 31, 2017, Torotel Products entered into a $500,000 building revolving line of credit, which is available for working capital purposes and is renewable annually. The associated interest rate is equal to the greater of the floating Commerce Bank Prime Rate (4.75% as of April 30, 2018) or a floor of 4% (as listed above). Monthly repayments of interest only are required with the principal due at maturity. The maximum borrowing of this line of credit is $500,000. This facility is cross collateralized and cross defaulted with all other facilities and is secured by a first lien on the building located at 620 North Lindenwood Drive in Olathe, Kansas. This revolving line of credit is scheduled to mature on October 20, 2018, and Torotel Products expects to negotiate an extension of that maturity date on similar terms. The equipment note is a guidance line of credit to be used for equipment purchases. Monthly repayments consisting of both interest and principal are required. This note is cross collateralized and cross defaulted with all other facilities of Torotel Products and is secured by a purchase money security interest in the assets purchased as well as a first lien on all business assets of Torotel Products. The maximum borrowing of this line of credit is $500,000. Torotel Products is required to comply with specified financial covenants of the financing agreement with Commerce Bank. As of April 30, 2018, Torotel Products was not in compliance with the covenants in such financing agreement that require a ratio of EBITDA (as defined in the financing agreement) to fixed charge coverage (as defined in the financing agreement) in excess of 1.100 to 1.000, and that Torotel maintain a minimum Tangible Net Worth (as defined in the financing agreement) of $4,500,000. A waiver for non-compliance with these covenants was received from Commerce Bank for the period ending April 30, 2018. The amount of long-term debt maturities by year is as follows: Year Ending April 30, Amount 2019 $ 1,706,000 2020 100,000 2021 30,000 $ 1,836,000 Irrevocable Standby Letter of Credit Under the terms of a lease amendment for its building located at 520 N. Rogers Road in Olathe, Kansas (see Note 5), Torotel initially provided the landlord an irrevocable standby letter of credit in the amount of $350,000 as additional security, with the letter of credit requirement being reduced to $300,000 in accordance with the third amendment to the lease entered into on August 30, 2017 (the “Third Amendment”), The balance under the letter of credit will automatically reduce in accordance with the below schedule if not drawn upon: Date of Reduction Amount of Reduction Balance of Letter of Credit January 1, 2020 $ 75,000 $ 225,000 January 1, 2021 75,000 150,000 January 1, 2022 75,000 75,000 January 1, 2023 75,000 -

INCOME TAXES

INCOME TAXES	12 Months Ended
	Apr. 30, 2018
INCOME TAXES
INCOME TAXES	NOTE 4—INCOME TAXES The components of the provision (benefit) for income taxes are as follows: 2018 2017 Current tax expense Federal $ — $ 2,000 State 2,000 1,000 2,000 3,000 Deferred tax expense (benefit) Federal (137,000) State 67,000 (18,000) (155,000) Total income tax provision (benefit) $ 681,000 $ The provision for income taxes reflected in the consolidated statements of operations differs from the amounts computed at the federal statutory tax rates. The principal differences between our statutory income tax expense and the effective provision for income taxes are summarized as follows: 2018 2017 Computed tax expense at statutory rates $ (405,000) $ (144,000) Permanent differences 11,000 6,000 State tax and credits (49,000) (18,000) Provision to return adjustment 6,000 4,000 Impact of federal rate change 467,000 — Increase in valuation allowance 651,000 — $ 681,000 $ (152,000) We have available as benefits to reduce future income taxes, subject to applicable limitations, estimated federal net operating loss carryforward amounts as described below. Net Operating Loss Year of Expiration Carryforwards 2027 $ 94,000 2030 28,000 2032 298,000 2037 960,000 2038 909,000 $ 2,289,000 The following table summarizes the components of the net deferred income tax asset: 2018 2017 Net operating loss carryforwards $ 574,000 $ 420,000 Inventory valuation reserve 98,000 101,000 Loss on equity and impairment in investee 301,000 437,000 Tax credit carryforward 68,000 68,000 Other 115,000 158,000 1,156,000 1,184,000 Less: valuation allowance (1,088,000) (437,000) $ 68,000 $ 747,000 On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent effective for tax years beginning after January 1, 2018; (2) extending bonus depreciation that will allow for full expensing of qualified property; and, (3) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized. The corporate tax rate change is administratively effective at the beginning of our fiscal year, using a blended statutory rate of 30.4% for the annual period. The SEC issued Staff Accounting Bulletin No. 118 (‘SAB 118’) to address the application of accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. The Company has considered SAB 118 and believes the accounting for the income tax effects of the Act is substantially complete and appropriately reflected in the financial statements for the period ended April 30, 2018. The Company’s financial statements for the year ended April 30, 2018, reflect certain effects of the Act, which includes a reduction in the corporate tax rate from 34% to 21%, as well as other changes. As a result of the changes to tax laws and tax rates under the Act, the Company incurred incremental income tax expense of $467,000 during the year ended April 30, 2018, which consisted primarily of the remeasurement of deferred tax assets and liabilities from a 34% to a 21% tax rate. As of April 30, 2018, the Company has federal minimum tax credit carryforwards of $68,000. As a result of The Act, the federal minimum tax credits will be fully refunded to the Company by 2021 if not fully utilized. We record deferred income tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence. Positive evidence includes, but is not limited to the following: cumulative earnings in recent years, earnings expected in future years, excess appreciated asset value over the tax basis and positive industry trends. Negative evidence includes, but is not limited to the following: cumulative losses in recent years, earnings expected in future years, a history of operating losses or tax credit carryforwards expiring, and adverse industry trends. Cumulative losses in recent years are significant negative evidence when determining the need for a valuation allowance. During the fourth quarter of the fiscal year ending April 30, 2018 the Company determined that is was no longer in a positive cumulative earnings position for the three-year period ended April 30, 2018. The Company is anticipating increased demand over the next few fiscal years related to continuing business in the aerospace and defense markets, but has not yet executed contracts. Therefore, this expected growth is not sufficient positive evidence to outweigh the negative evidence. Given the significance of the negative evidence, the Company concluded that it is no longer more likely than not that it will realize a portion of its deferred tax assets, with exception of the AMT credit. As a result, the Company increased the valuation allowance by an additional $651,000 during the fourth quarter of fiscal year 2018, resulting in a nearly full valuation allowance against the Company’s deferred tax assets as of April 30, 2018. The increase in the valuation allowance resulted in an increase in income tax expense of $651,000. The Company's determination of the realizable deferred tax assets requires the exercise of significant judgment, based in part on business plans and expectations about future outcomes. In the event the actual results differ from these estimates in future periods, the Company may need to adjust the valuation allowance, which could materially impact our financial position and results of operations. The Company will continue to assess the need for a valuation allowance in future periods. As of April 30, 2018 and 2017, the Company maintained a valuation allowance of $1,088,000 and $437,000, respectively, for its deferred tax assets. As of April 30, 2018, the federal tax returns for the fiscal years ended 2015 through 2017 remain subject to examination and assessment. Fiscal years ending before 2015 remain open solely for purposes of examination of our loss and credit carryforwards. As of April 30, 2018, the Company has no federal or state examinations ongoing. We recognize accrued interest and penalties related to unrecognized tax benefits, as well as interest received from favorable tax settlements, within income tax expense. As of April 30, 2018 and 2017, we recorded no accrued interest or penalties related to uncertain tax positions. We expect no significant change in the amount of unrecognized tax benefit, accrued interest or penalties within the next twelve months.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Apr. 30, 2018
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 5—COMMITMENTS AND CONTINGENCIES As part of our ongoing operations, we enter into arrangements that obligate us to make future payments to various parties. Some of these contractual obligations are not reflected on the accompanying consolidated balance sheets due to the nature of the obligations. Such obligations include operating leases for production space and for equipment. On July 10, 2014, we entered into a real estate lease agreement in Hatfield, Pennsylvania to lease approximately 5,000 square feet for manufacturing electromechanical assemblies and other transformers. This agreement commenced on August 1, 2014 and continues through July 31, 2019. On October 31, 2016, Torotel entered into the Second Amendment (“Second Amendment”) to the lease for its Rogers Road facility located in Olathe, Kansas. The Second Amendment became effective as of April 1, 2017, and served to extend the lease term through December 31, 2026 and expand the leased space from approximately 14,137 square feet to approximately 72,388 square feet. The Second Amendment provides that through December 31, 2018, the monthly base rate is $26,844, and subsequently through December 31, 2019, the monthly base rate is $29,257, escalating annually thereafter as previously disclosed in our other public filings. The Second Amendment required Torotel to increase its security deposit from $12,750 to $55,000 and provide a letter of credit as additional security. Additionally, the Second Amendment addressed other terms and conditions by which Torotel is leasing the facility or terminate the lease, and provided Torotel two separate options to extend the lease term for additional five year periods. Future minimum lease payments on operating leases are as follows: Capital Operating Fiscal Years Ending April 30, Leases Leases 2019 $ 87,000 $ 413,000 2020 75,000 407,000 2021 31,000 402,000 2022 — 427,000 2023 — 442,000 2024 — 452,000 2025 — 456,000 2026 — 467,000 2027 — 350,000 193,000 3,816,000 Less: Amounts representing interest (23,000) — Total $ 170,000 $ 3,816,000 The gross amount of assets recorded under capital leases amounted to $225,000 of equipment. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease including any periods free of rent. Total rent expense for all operating leases for the fiscal years ended April 30, 2018 and 2017 was $596,000 and $246,000, respectively. As of April 30, 2018, the property owned by Torotel at 620 N. Lindenwood in Olathe, Kansas had a net carrying value of approximately $694,000, and is listed on the market for immediate sale. The property is currently accounted for as a capital asset at historical cost less depreciation. Torotel is subject to legal proceedings and claims that arise in the normal course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position or results of operations of Torotel.

EMPLOYEE INCENTIVE PLANS

EMPLOYEE INCENTIVE PLANS	12 Months Ended
	Apr. 30, 2018
EMPLOYEE INCENTIVE PLANS
EMPLOYEE INCENTIVE PLANS	NOTE 6—EMPLOYEE INCENTIVE PLANS Short-term Cash Incentive Plan The Short-term Cash Incentive Plan ("STIP") became effective for fiscal year 2008. The purpose of the STIP is to promote the long-term financial performance of Torotel by providing key employees with the opportunity to earn cash awards for accomplishing annual goals for Return on Capital Employed ("ROCE") as defined in the STIP. For the years ended April 30, 2018 and 2017, total short-term cash incentive plan expense was $0 and $0, respectively. Long-term Incentive Plans The Long-term Incentive Plans ("LTIPs"), which consist of a Stock Award Plan and a Long-term Cash Incentive Plan, also became effective for fiscal year 2008. The purpose of the LTIPs is to provide incentives that will attract and retain highly competent persons as key employees to promote the long-term financial performance of Torotel by providing key employees an opportunity to earn stock and cash awards for accomplishing long-range goals for sales growth, earnings growth, ROCE and debt to equity, as defined and measured in each of the Stock Award Plan and the Long-term Cash Incentive Plan. Stock Award Plan The Stock Award Plan ("SAP"), which did not require shareholder approval, provides key employees the opportunity to acquire common stock of Torotel pursuant to awards earned for accomplishing goals that promote the long-term financial performance of Torotel. Under the terms of the SAP, stock awards are in the form of restricted stock having a 5-year restriction period, which shall lapse, based on certain conditions as outlined in the SAP. All stock awards are represented by a Restricted Stock Agreement, which afford the grantees all of the rights of a stockholder with respect to the award shares, including the right to vote such shares and to receive dividends and other distributions payable with respect to such shares since the date of award. Long-term Cash Incentive Plan The Long-term Cash Incentive Plan ("LTCIP") provides key employees with the opportunity to earn cash awards for accomplishing plan goals based on predetermined targets for average annual sales and earnings growth, ROCE and debt to equity. Under the terms of the LTCIP, awards will not be paid if Torotel's performance on any LTCIP metric is less than the threshold level of performance defined for that LTCIP metric. For the years ended April 30, 2018 and 2017, total long-term cash incentive plan expense was $0 for both years. Performance Bonus We provided discretionary performance bonuses for employees not participating in the above incentive plans. Total expense for these bonuses was $71,000 and $0 for the years ended April 30, 2018 and 2017. 401(k) Retirement Plan We have a 401(k) Retirement Plan for Torotel’s employees. Employer contributions to that plan are at the discretion of the Board of Directors. Employer contributions to the plan for the years ended April 30, 2018 and 2017 were $137,000 and $86,000, respectively.

RESTRICTED STOCK AGREEMENTS

RESTRICTED STOCK AGREEMENTS	12 Months Ended
	Apr. 30, 2018
RESTRICTED STOCK AGREEMENTS
RESTRICTED STOCK AGREEMENTS	NOTE 7—RESTRICTED STOCK AGREEMENTS Restricted Stock Agreements, and stock awards thereunder, are authorized by the Compensation and Nominating Committee (the "Committee") and the Board of Directors of Torotel (the "Board"). The terms of the Restricted Stock Agreements afford the grantees all of the rights of a stockholder with respect to the award shares, including the right to vote such shares and to receive dividends and other distributions payable with respect to such shares since the date of award. Under the terms of each agreement, the non-vested shares are restricted as to disposition and subject to forfeiture under certain circumstances. The Restricted Stock Agreements further provide, subject to certain conditions, that if prior to all of the restricted shares having vested, we undergo a change in control, then all of the restricted shares shall be vested and no longer subject to restrictions under the Restricted Stock Agreements. The restricted shares are treated as non-vested stock; accordingly, the fair value of the restricted stock at the date of award is offset against capital in excess of par value in the accompanying consolidated balance sheets under stockholders' equity. Restricted Stock Grants The Shares were granted subject to restrictions that prohibit them from being sold, assigned, pledged or otherwise disposed of until the restrictions lapse. The restrictions will lapse on the fifth anniversary of the date of grant if during the five year restriction period, (1) the Company's cumulative annual growth in revenue is at least 10%, and (2) the average economic value added as a percentage of revenue is at least 2%. The economic value added, which attempts to capture the true economic profit, will be calculated as the operating profit less the cost of capital with adjustments made for taxes. The restrictions will also lapse, if prior to the fifth anniversary of the date of grant, (1) the grantee's employment with the Company is terminated by reason of disability, (2) the grantee dies, or (3) the Committee, in its sole discretion, terminates the restrictions. If the restrictions on the Shares have not lapsed by the fifth anniversary of the date of grant, the Shares will be forfeited to the Company. For the years ended April 30, 2018 and 2017, total stock award plan expense was $0 and $0, respectively. Stock Compensation Costs and Restricted Stock Activity Total stock compensation cost for the twelve months ended April 30, 2018 and 2017 was $108,000 and $61,000, respectively. Restricted stock activity for each twelve month period through April 30 is summarized as follows: 2018 2017 Restricted Weighted Restricted Weighted Shares Average Shares Average Under Grant Under Grant Option Price Option Price Outstanding at May 1 730,000 $ 0.740 350,000 $ 0.500 Granted — — 730,000 0.740 Forfeited — — (350,000) 0.500 Outstanding at April 30 730,000 $ 0.740 730,000 $ 0.740

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	12 Months Ended
	Apr. 30, 2018
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 8—STOCKHOLDERS' EQUITY The changes in shares of common stock outstanding as of April 30 of each year are summarized as follows: 2018 2017 Balance, May 1 5,615,750 Shares released from treasury for restricted stock grants — 717,795 Newly issued shares for restricted stock grants — 12,205 Shares reverted to treasury for restricted stock forfeitures — (350,000) Balance, April 30 5,995,750 5,995,750

EARNINGS PER SHARE

EARNINGS PER SHARE	12 Months Ended
	Apr. 30, 2018
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 9—EARNINGS (LOSS) PER SHARE Basic and diluted earnings per share are computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during each period. The basic earnings (loss) per common share were computed as follows: Year Ended 2018 2017 Net loss $ (2,015,000) $ (261,000) Amounts allocated to participating securities (nonvested restricted shares) — — Net loss attributable to common shareholders $ (2,015,000) $ (261,000) Basic weighted average common shares 5,265,750 5,123,000 Earnings (loss) per share attributable to common shareholders: Basic loss per share $ (0.38) $ (0.05) ASC 260, Earnings per Share, provides that unvested share-based payment awards that contain non-forfeitable rights to dividends are considered to be participating securities and must be included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per share is not presented as we do not have any shares considered incremental and dilutive.

ACCRUED LIABILITIES

ACCRUED LIABILITIES	12 Months Ended
	Apr. 30, 2018
ACCRUED LIABILITIES
ACCRUED LIABILITIES	NOTE 10—ACCRUED LIABILITIES Accrued liabilities as of April 30 of each year consist of the following: 2018 2017 Employee related expenses: Accrued payroll $ 167,000 $ 68,000 Accrued payroll taxes 13,000 5,000 Accrued employee benefits 129,000 136,000 $ 309,000 $ 209,000 Other, including interest: Warranty reserve $ 300,000 $ 24,000 Property taxes 18,000 20,000 Deferred rent 129,000 7,000 Other 61,000 59,000 $ 508,000 $ 110,000 $ 817,000 $ 319,000 The changes in warranty reserve as of April 30 of each year are summarized as follows: 2018 2017 Balance, May 1 $ 24,000 $ 67,000 Credit memos issued (52,000) (161,000) Provision for warranty accrual 328,000 118,000 Balance, April 30 $ 300,000 $ 24,000

CUSTOMER DEPOSITS

CUSTOMER DEPOSITS	12 Months Ended
	Apr. 30, 2018
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS	NOTE 11—CUSTOMER DEPOSITS For certain customers, we collect payment at the time the order is placed. These deposits are classified as a liability and will be recognized as revenue at the time of shipment in accordance with our revenue recognition policy. As of April 30, 2018 and April 30, 2017 we had approximately $219,000 and $33,000, respectively in customer deposits related to this arrangement.

SELF-INSURANCE CAPTIVE

SELF-INSURANCE CAPTIVE	12 Months Ended
	Apr. 30, 2018
SELF-INSURANCE CAPTIVE
SELF-INSURANCE CAPTIVE	NOTE 12—SELF-INSURANCE CAPTIVE We are a member of a limited liability company formed as an insurance association captive (the "captive") in order to provide partially self-insured health benefits to our employees that elect coverage under the plan. Our membership percentage in this captive is approximately 0.5% and represents an investment of $87,000. Therefore, our investment is accounted for utilizing the cost method of accounting. Our risk of loss is limited to our investment in the captive and we are not required to fund additional capital to the captive in the event of negative capital accounts. Our share of net income from the captive is based on our ratio of contribution to the captive. No income has been allocated in either fiscal year 2018 or 2017. We maintain a reserve for incurred but not reported medical claims and claim development. Our reserve is an estimate based on historical experience and other assumptions, some of which are subjective. We adjust our self-insured medical benefits reserve as we experience changes due to medical inflation, changes in the number of plan participants and changes to specific cases. Our total reserve for these claims for the fiscal years ended April 30, 2018 and 2017 was $25,000 and $28,000 respectively.

NET SALES BY PRODUCT LINE AND G

NET SALES BY PRODUCT LINE AND GEOGRAPHY	12 Months Ended
	Apr. 30, 2018
NET SALES BY PRODUCT LINE AND GEOGRAPHY
NET SALES BY PRODUCT LINE AND GEOGRAPHY	NOTE 13—NET SALES BY PRODUCT LINE AND GEOGRAPHY Torotel’s net sales by product line and geography for the periods presented were as follows: Years ended April 30, 2018 2017 Magnetic components $ 9,251,000 $ 7,924,000 Potted coil assembly 5,962,000 5,268,000 Electro-mechanical assemblies 3,060,000 3,098,000 Large transformers 123,000 12,000 Total $ 18,396,000 $ 16,302,000 Years ended April 30, 2018 2017 Domestic $ 16,236,556 $ 14,755,000 Foreign 2,159,444 1,547,000 Total consolidated net sales $ 18,396,000 $ 16,302,000 Torotel currently has a primary base of approximately 19 customers that provide nearly 90% of its annual sales volume. Sales to two major customers as a percentage of consolidated net sales for the fiscal year ended April 30, 2018 was 34% and 18% respectively. Sales to two major customers as a percentage of consolidated net sales for the fiscal year ended April 30, 2017 was 34% and 23% respectively. Trade receivables from one major customer as a percentage of consolidated net trade receivables for the fiscal years ended April 30, 2018 and 2017 was 36% and 27%, respectively.

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Apr. 30, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Torotel and its wholly owned subsidiary, Torotel Products. All significant inter-company accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these consolidated financial statements include those assumed in computing the valuation allowance of inventory, the allowance for doubtful accounts receivable, the valuation allowance on deferred income tax assets, and the reserve for warranty costs. Accordingly, actual results could differ from those estimates. Any changes in estimates are recorded in the period in which they become known
Credit Risk	Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and accounts receivable. We grant unsecured credit to most of our customers. We do not believe that we are exposed to any extraordinary credit risk as a result of this policy. At various times, and at April 30, 2018 and 2017, cash balances exceeded federally insured limits. We have not experienced any losses in the cash accounts and we do not believe we are exposed to any significant credit risk with respect to our cash.
Fair Value of Financial Instruments	Fair Value of Financial Instruments We determine fair value by utilizing a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels as follows:  Level 1. Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.  Level 2. Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.  Level 3. Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in the assessment of fair value. The carrying amounts of certain financial instruments, including cash, trade receivables and trade accounts payable approximate fair value due to their short maturities. As of April 30, 2018 and 2017, the amount of our long-term debt approximates fair value based on the present value of estimated future cash flows using a discount rate commensurate with a borrowing rate available to us. The inputs used to estimate the fair value of long-term debt are considered Level 2 inputs.
Treasury Stock	Treasury Stock We utilize the weighted average cost method in accounting for treasury stock transactions
Revenue Recognition	Revenue Recognition Revenue is recognized when a fixed price contract or purchase order exists; delivery has occurred; and collection is reasonably assured. Selling terms are generally FOB Shipping Point so we consider our products delivered once they have been shipped and title and risk of loss have been transferred.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts Gross trade accounts receivable are offset with an allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We review the allowance for doubtful accounts on a regular basis, and all past due balances are reviewed individually for collectability. Account balances are charged against the allowance when placed for collection. Recoveries of receivables previously written off are recorded when received. The majority of the customer accounts are considered past due after the invoice becomes older than the customer's credit terms. Interest is not charged on past due accounts. The allowance for doubtful accounts as of April 30, 2018 and 2017 was $12,000 and $12,000, respectively.
Inventories	Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using a FIFO approximated weighted average cost method of valuation. Our industry is characterized by short-term customer commitments and changes in demand, as well as other market considerations. Provisions for obsolete and excess inventory are based on reviews of inventory usage, quantities on hand and latest product demand information from customers. Inventories are reviewed in detail utilizing a 12-month time horizon. Individual part numbers that have not had any usage or purchases in a 12-month time period and do not have any known usage requirements are categorized as obsolete; individual part numbers having more than a 12-month supply based on the current year's usage are categorized as excess. Once specific inventory has been identified as excess or obsolete, the cost of the identified inventory is fully reserved and the cost of the inventory is not recovered until it is sold. The reserve balance is analyzed for adequacy as part of the inventory review each quarter. The reserve for inventory as of April 30, 2018 and 2017 was $364,000 and $261,000, respectively.
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment are carried at cost. Depreciation and amortization are provided in amounts sufficient to relate the costs of depreciable assets to operations primarily using the straight-line method over estimated useful lives of three to five years for equipment and three and a half to twenty years for buildings and improvements
Cash and Cash Equivalents	Cash For purposes of the consolidated statements of cash flows, we consider all short-term investments and demand deposits purchased with original maturity dates of three months or less to be cash.
Income Taxes	Income Taxes Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. An estimated effective tax rate for a year is applied to our quarterly operating results. In the event there is a significant or unusual item recognized in our quarterly operating results, the tax attributable to that item is separately calculated and recorded at the same time as that item. Tax law requires items to be included in our tax returns at different times than the items are reflected in our financial statements. As a result, our annual tax rate reflected in our financial statements is different than that reported in our tax returns (our cash tax rate). Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recorded the tax benefit in our statement of operations. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax liabilities generally represent tax expense recognized in our financial statements for which payment has been deferred, or expense for which we have already taken a deduction in our tax return but have not yet recognized as expense in our financial statements. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. If necessary, we record a liability for the difference between the benefit recognized and measured for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that our assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. If applicable in a given year, tax-related interest and penalties are classified as a component of income tax expense.
Advertising Costs	Advertising Costs Advertising costs are expensed as incurred. For the years ended April 30, 2018 and 2017 advertising costs were $22,000 and $6,000, respectively.
Warranty Costs	Warranty Costs We maintain a reserve for estimated warranty costs associated with products returned from customers. A limited warranty is provided for a period of one year which requires us to repair or replace defective products at no cost to the customer. The warranty reserve is based on historical experience and reflects management's best estimate of probable liability under the product warranties.
Share-Based Compensation	Share-Based Compensation We have a share-based compensation plan that includes restricted stock, which is described more fully in Note 7 of the Notes to the Consolidated Financial Statements. We account for the share-based compensation plan in accordance with authoritative guidance under which the estimated fair value of share-based awards granted under our share-based compensation plan is recognized as compensation expense over the vesting period of the award.
New Accounting Guidance	New Accounting Guidance In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, Topic 606 (“ASC 606”). The standard is effective for reporting periods beginning after December 15, 2017. Torotel has evaluated the transition method to be used and the impact of adoption of this standard on its consolidated financial statements. As part of the evaluation and transition process, no significant implementation matters have been identified as needing to be addressed. In applying ASC 606, revenue is recognized when control of promised goods or services transfers to a customer and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The major provisions of the new standard include: the determination of enforceable rights and obligations between parties; the identification of performance obligations including those related to material right obligations; the allocation of consideration based upon relative standalone selling price; accounting for variable consideration; the determination of whether performance obligations are satisfied over time or at a point in time; and enhanced disclosure requirements. ASC 606 will be effective for Torotel beginning May 1, 2018 and permits two methods of adoption: retrospectively to each prior reporting period presented (“full retrospective method”) or retrospectively with the cumulative effect of the initial application recognized at the date of initial application (“modified retrospective method”). Torotel will adopt the standard using the full retrospective method and will record an adjustment to Retained Earnings for the effect of the initial application on April 30, 2017 for the cumulative portion earned through the end of fiscal year 2017, and will record a second adjustment on April 30, 2018 for the portion earned during fiscal year 2018 (the “Transition Adjustments”). Torotel has reviewed all of its contracts with customers and has implemented the required process, data, and system changes to comply with the requirements of ASC 606. Prior to adoption, revenue has historically been recognized when a fixed price contract or purchase order exists; delivery has occurred; and collection was reasonably assured. Upon adoption, ASC 606 will be applied by analyzing each contract, or a combination of contracts, to determine if revenue is recognized over time or at a point in time. Torotel has determined that some of its contracts will have performance obligations that are satisfied over time and some at a point in time based on when performance obligations have been satisfied by the transfer of control of the goods and services to the customer. For performance obligations that are satisfied over time, Torotel will use an input method as the basis for recognizing revenue. Input methods recognize revenue on the basis of an entity’s efforts or inputs toward satisfying a performance obligation (for example, resources consumed, labor hours expended, costs incurred, time lapsed, or machine hours used) relative to the total expected inputs to satisfy the performance obligation. Torotel will generally use costs incurred as the measure of performance; and therefore will generally not defer any production costs. Performance obligations that are not recognized over time will be recognized at the point in time when performance obligations have been satisfied by the transfer of control to the customer. ASC 606 requires Torotel to allocate contract consideration to performance obligations on the basis of their relative standalone selling price. Torotel has determined that certain contracts require a deferral of revenues due to the requirement to allocate revenue based upon relative standalone selling price. Accordingly, contract liabilities will be established at the Transition Date to defer revenue that was previously recognized under ASC 605 (“legacy GAAP”). We have completed our preliminary assessment of adopting ASC 606 on our 2018 and 2017 operating results, and have presented selected recast, unaudited financial data in the following table. The impact of adopting ASC 606 on our 2018 and 2017 operating results may not be indicative of the adoption impacts in future periods or of our operating performance. Unaudited 2018 2017 Net sales $ 18,469,000 $ 17,395,000 Earnings (loss) from operations (1,280,000) 147,000 ASC 340-40 was added by ASC 606, and becomes effective for reporting periods beginning after December 15, 2017. ACC 340-40 provides guidance on contract costs that are not within the scope of other authoritative literature, and is applied to costs to obtain or fulfill a contract if existing guidance is not applicable. Torotel’s accounting for preproduction, tooling, and certain other costs is expected to continue under existing guidance, since the costs generally do not fall within the scope of ASC 340-40. Torotel anticipates that in fiscal year 2019, revenue and gross margin for certain contracts that would not have been recognized under legacy GAAP will be accelerated because of the allocation of revenue to performance obligations based upon relative standalone selling price. The enhanced disclosure requirements of ASC 606 include discussions on the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Torotel expects the disclosures to include qualitative and quantitative information about its contracts with customers; information about contract assets and liabilities; information about the performance obligation for customer contracts; and, the significant judgments made in applying the guidance in ASC 606. This will result in changes to Torotel’s existing disclosures, as well as new disclosures, which will impact the information reported in Torotel’s financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 requires expanded disclosures about the nature and terms of lease agreements and is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. Torotel is currently evaluating the potential impact of this standard on its consolidated financial statements. Torotel anticipates the impact will be material to the consolidated financial statements for reporting periods beginning after December 15, 2018, due to the building lease amendment executed on October 31, 2016. The status of the implementation effort is in the preliminary stage. No significant implementation matters have been identified as needing to be addressed.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Apr. 30, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of New Accounting Pronouncements and Changes in Accounting Principles	Unaudited 2018 2017 Net sales $ 18,469,000 $ 17,395,000 Earnings (loss) from operations (1,280,000) 147,000

INVENTORIES (Tables)

INVENTORIES (Tables)	12 Months Ended
	Apr. 30, 2018
INVENTORIES
Table summarizing the components of inventories	2018 2017 Raw materials $ 1,278,000 $ 1,305,000 Work in process 635,000 826,000 Finished goods 449,000 608,000 $ 2,362,000 $ 2,739,000

FINANCING AGREEMENTS (Tables)

FINANCING AGREEMENTS (Tables)	12 Months Ended
	Apr. 30, 2018
FINANCING AGREEMENTS
Summary of the notes within the financing agreement	2018 2017 4.05% mortgage note payable in monthly installments of $4,873, including interest, with final payment of $349,000 due January 27, 2019 $ 373,000 $ 415,000 4.00% working capital line of credit with a maturity date of October 20, 2018 751,000 465,000 4.00% building line of credit with a maturity date of October 20, 2018 465,000 - Capital lease obligations (see Note 5) 170,000 - Borrowings under an equipment financing line of credit: 4.75% note payable in monthly installments of $2,269, including interest, with final payment made on May 27, 2018 2,000 28,000 3.75% note payable in monthly installments of $2,112, including interest, with final payment made on April 10, 2018 - 25,000 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 75,000 115,000 Total long-term debt 1,836,000 1,048,000 Less current installments 1,706,000 603,000 Long-term debt, excluding current installments $ 130,000 $ 445,000
Long-term debt maturities by year	Year Ending April 30, Amount 2019 $ 1,706,000 2020 100,000 2021 30,000 $ 1,836,000
Schedule of letter of credit outstanding balance	Date of Reduction Amount of Reduction Balance of Letter of Credit January 1, 2020 $ 75,000 $ 225,000 January 1, 2021 75,000 150,000 January 1, 2022 75,000 75,000 January 1, 2023 75,000 -

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Apr. 30, 2018
INCOME TAXES
Components of the provision (benefit) for income taxes	2018 2017 Current tax expense Federal $ — $ 2,000 State 2,000 1,000 2,000 3,000 Deferred tax expense (benefit) Federal (137,000) State 67,000 (18,000) (155,000) Total income tax provision (benefit) $ 681,000 $
Summary of the principal differences between statutory income tax expense and effective provision for income taxes	2018 2017 Computed tax expense at statutory rates $ (405,000) $ (144,000) Permanent differences 11,000 6,000 State tax and credits (49,000) (18,000) Provision to return adjustment 6,000 4,000 Impact of federal rate change 467,000 — Increase in valuation allowance 651,000 — $ 681,000 $ (152,000)
Summary of net operating loss carryforwards	Net Operating Loss Year of Expiration Carryforwards 2027 $ 94,000 2030 28,000 2032 298,000 2037 960,000 2038 909,000 $ 2,289,000
Summary of the components of the net deferred income tax asset	2018 2017 Net operating loss carryforwards $ 574,000 $ 420,000 Inventory valuation reserve 98,000 101,000 Loss on equity and impairment in investee 301,000 437,000 Tax credit carryforward 68,000 68,000 Other 115,000 158,000 1,156,000 1,184,000 Less: valuation allowance (1,088,000) (437,000) $ 68,000 $ 747,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Apr. 30, 2018
COMMITMENTS AND CONTINGENCIES.
Future minimum lease payments under non-cancellable operating leases	Future minimum lease payments on operating leases are as follows: Capital Operating Fiscal Years Ending April 30, Leases Leases 2019 $ 87,000 $ 413,000 2020 75,000 407,000 2021 31,000 402,000 2022 — 427,000 2023 — 442,000 2024 — 452,000 2025 — 456,000 2026 — 467,000 2027 — 350,000 193,000 3,816,000 Less: Amounts representing interest (23,000) — Total $ 170,000 $ 3,816,000

RESTRICTED STOCK AGREEMENTS (Ta

RESTRICTED STOCK AGREEMENTS (Tables)	12 Months Ended
	Apr. 30, 2018
RESTRICTED STOCK AGREEMENTS
Summary of restricted stock activity	2018 2017 Restricted Weighted Restricted Weighted Shares Average Shares Average Under Grant Under Grant Option Price Option Price Outstanding at May 1 730,000 $ 0.740 350,000 $ 0.500 Granted — — 730,000 0.740 Forfeited — — (350,000) 0.500 Outstanding at April 30 730,000 $ 0.740 730,000 $ 0.740

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	12 Months Ended
	Apr. 30, 2018
STOCKHOLDERS' EQUITY
Summary of changes in shares of common stock outstanding	2018 2017 Balance, May 1 5,615,750 Shares released from treasury for restricted stock grants — 717,795 Newly issued shares for restricted stock grants — 12,205 Shares reverted to treasury for restricted stock forfeitures — (350,000) Balance, April 30 5,995,750 5,995,750

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	12 Months Ended
	Apr. 30, 2018
EARNINGS PER SHARE
Computation of earnings (loss) per common share	Year Ended 2018 2017 Net loss $ (2,015,000) $ (261,000) Amounts allocated to participating securities (nonvested restricted shares) — — Net loss attributable to common shareholders $ (2,015,000) $ (261,000) Basic weighted average common shares 5,265,750 5,123,000 Earnings (loss) per share attributable to common shareholders: Basic loss per share $ (0.38) $ (0.05)

ACCRUED LIABILITIES (Tables)

ACCRUED LIABILITIES (Tables)	12 Months Ended
	Apr. 30, 2018
ACCRUED LIABILITIES
Accrued liabilities as of year end	2018 2017 Employee related expenses: Accrued payroll $ 167,000 $ 68,000 Accrued payroll taxes 13,000 5,000 Accrued employee benefits 129,000 136,000 $ 309,000 $ 209,000 Other, including interest: Warranty reserve $ 300,000 $ 24,000 Property taxes 18,000 20,000 Deferred rent 129,000 7,000 Other 61,000 59,000 $ 508,000 $ 110,000 $ 817,000 $ 319,000
Schedule of changes in warranty reserve	2018 2017 Balance, May 1 $ 24,000 $ 67,000 Credit memos issued (52,000) (161,000) Provision for warranty accrual 328,000 118,000 Balance, April 30 $ 300,000 $ 24,000

NET SALES BY PRODUCT LINE AND30

NET SALES BY PRODUCT LINE AND GEOGRAPHY (Tables)	12 Months Ended
	Apr. 30, 2018
NET SALES BY PRODUCT LINE AND GEOGRAPHY
Schedule of net sales by product line	Years ended April 30, 2018 2017 Magnetic components $ 9,251,000 $ 7,924,000 Potted coil assembly 5,962,000 5,268,000 Electro-mechanical assemblies 3,060,000 3,098,000 Large transformers 123,000 12,000 Total $ 18,396,000 $ 16,302,000
Schedule of net sales by geography	Years ended April 30, 2018 2017 Domestic $ 16,236,556 $ 14,755,000 Foreign 2,159,444 1,547,000 Total consolidated net sales $ 18,396,000 $ 16,302,000

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Significant accounting policies and useful lives
Allowance for doubtful accounts	$ 12,000	$ 12,000
Inventory time horizon for excess and obsolete review	12 months
Individual parts time horizon to review for obsolete inventory	12 months
Individual parts time horizon to review for excess inventory	12 months
Inventory Reserves	$ 364,000	261,000
Advertising costs	$ 22,000	$ 6,000
Provided limited warranty period	1 year
Equipment | Minimum
Significant accounting policies and useful lives
Estimated useful lives	3 years
Equipment | Maximum
Significant accounting policies and useful lives
Estimated useful lives	5 years
Buildings and improvements | Minimum
Significant accounting policies and useful lives
Estimated useful lives	3 years 6 months
Buildings and improvements | Maximum
Significant accounting policies and useful lives
Estimated useful lives	20 years

SUMMARY OF SIGNIFICANT ACCOUN32

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New Accounting Guidance (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle
Net sales	$ 18,396,000	$ 16,302,000
Earnings (loss) from operations	(1,268,000)	(389,000)
Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle
Net sales	18,469,000	17,395,000
Earnings (loss) from operations	$ (1,280,000)	$ 147,000

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Apr. 30, 2018	Apr. 30, 2017
INVENTORIES
Raw materials	$ 1,278,000	$ 1,305,000
Work in process	635,000	826,000
Finished goods	449,000	608,000
Inventories	$ 2,362,000	$ 2,739,000

FINANCING AGREEMENTS (Details)

FINANCING AGREEMENTS (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Mar. 31, 2017
Long-term indebtedness
Total long-term debt	$ 1,836,000	$ 1,048,000
Less current installments	1,706,000	603,000
Long-term debt, excluding current installments	130,000	445,000
Minimum Tangible Net Worth	4,500,000
Mortgage note payable
Long-term indebtedness
Annual prepayment limit	100,000
Capital Leases
Long-term indebtedness
Total long-term debt	170,000
Note payable 4.05 percent | Mortgage note payable
Long-term indebtedness
Total long-term debt	$ 373,000	415,000
Rate	4.05%
Monthly installments	$ 4,873
Final payment	$ 349,000
Working line of credit 4.00 percent | Minimum
Long-term indebtedness
Rate	4.00%
Working line of credit 4.00 percent | Prime Rate
Long-term indebtedness
Rate	4.75%
Working line of credit 4.00 percent | Line of Credit
Long-term indebtedness
Total long-term debt	$ 751,000	465,000
Rate	4.00%
Maximum borrowing	$ 1,250,000
Building line of credit 4.00 percent | Minimum
Long-term indebtedness
Rate			4.00%
Building line of credit 4.00 percent | Prime Rate
Long-term indebtedness
Rate			4.75%
Building line of credit 4.00 percent | Line of Credit
Long-term indebtedness
Total long-term debt	$ 465,000
Rate	4.00%
Maximum borrowing			$ 500,000
Note payable 4.75 percent | Note Payable
Long-term indebtedness
Total long-term debt	$ 2,000	28,000
Rate	4.75%
Monthly installments	$ 2,269
Note payable 3.75 percent | Note Payable
Long-term indebtedness
Total long-term debt		25,000
Rate	3.75%
Monthly installments	$ 2,112
Note payable 4.05 percent | Note Payable
Long-term indebtedness
Total long-term debt	$ 75,000	$ 115,000
Rate	4.05%
Monthly installments	$ 3,680
Equipment line of credit
Long-term indebtedness
Equipment financing maximum borrowing	$ 500,000

FINANCING AGREEMENTS (MATURITIE

FINANCING AGREEMENTS (MATURITIES OF LONG-TERM DEBT (Details) - USD ($)	Apr. 30, 2018	Apr. 30, 2017
Long-term debt maturities by year
2,019	$ 1,706,000
2,020	100,000
2,021	30,000
Total long-term debt	$ 1,836,000	$ 1,048,000

FINANCING AGREEMENTS (IRREVOCAB

FINANCING AGREEMENTS (IRREVOCABLE STANDBY LETTER OF CREDIT (Details)	Jan. 01, 2023USD ($)	Jan. 01, 2022USD ($)	Jan. 01, 2021USD ($)	Jan. 01, 2020USD ($)	Apr. 30, 2018	Aug. 31, 2017USD ($)	Aug. 30, 2017USD ($)
Minimum
Long-term indebtedness
Ratio of EBITDA to fixed charge coverage					1.100
Maximum
Long-term indebtedness
Ratio of EBITDA to fixed charge coverage					1
Irrevocable Standby Letter of Credit
Long-term indebtedness
Principal amount						$ 300,000	$ 350,000
Irrevocable Standby Letter of Credit | Forecast
Long-term indebtedness
Amount of Reduction	$ 75,000	$ 75,000	$ 75,000	$ 75,000
Balance of Letter of Credit		$ 75,000	$ 150,000	$ 225,000

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Current tax expense
Federal		$ 2,000
State	$ 2,000	1,000
Current tax expense (benefit)	2,000	3,000
Deferred tax expense (benefit)
Federal	612,000	(137,000)
State	67,000	(18,000)
Deferred tax expense	679,000	(155,000)
Total income tax provision (benefit)	$ 681,000	$ (152,000)

INCOME TAXES (STATUTORY RATE RE

INCOME TAXES (STATUTORY RATE RECONCILIATION) (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Income Tax Reconciliation
Computed tax expense at statutory rates	$ (405,000)	$ (144,000)
Permanent differences	11,000	6,000
State tax and credits	(49,000)	(18,000)
Provision to return adjustment	6,000	4,000
Impact of federal rate change	467,000
Increase in valuation allowance	651,000
Total income tax provision (benefit)	$ 681,000	$ (152,000)

INCOME TAXES (NET OPERATING LOS

INCOME TAXES (NET OPERATING LOSS CARRYFORWARDS) (Details) - Federal	12 Months Ended
	Apr. 30, 2018USD ($)
Estimated federal net operating
Net Operating Loss Carryforwards	$ 2,289,000
Tax Year 2027
Estimated federal net operating
Year of Expiration	Apr. 30, 2027
Net Operating Loss Carryforwards	$ 94,000
Tax Year 2030
Estimated federal net operating
Year of Expiration	Apr. 30, 2030
Net Operating Loss Carryforwards	$ 28,000
Tax Year 2032
Estimated federal net operating
Year of Expiration	Apr. 30, 2032
Net Operating Loss Carryforwards	$ 298,000
Tax Year 2038
Estimated federal net operating
Year of Expiration	Apr. 30, 2038
Net Operating Loss Carryforwards	$ 909,000

INCOME TAXES (COMPONENTS OF DEF

INCOME TAXES (COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES) (Details) - USD ($)	Apr. 30, 2018	Apr. 30, 2017
INCOME TAXES
Net operating loss carryforwards	$ 574,000	$ 420,000
Inventory valuation reserve	98,000	101,000
Loss on equity and impairment in investee	301,000	437,000
Tax credit carryforward	68,000	68,000
Other	115,000	158,000
Gross deferred income tax asset	1,156,000	1,184,000
Less: valuation allowance	(1,088,000)	(437,000)
Net deferred income tax assets	$ 68,000	$ 747,000

INCOME TAXES (NARRATIVE) (Detai

INCOME TAXES (NARRATIVE) (Details) - USD ($)	Dec. 22, 2017	Oct. 31, 2016	Apr. 30, 2018	Dec. 31, 2017	Apr. 30, 2018	Apr. 30, 2017
INCOME TAXES
Federal statutory income tax rate (as a percent)	35.00%		21.00%	34.00%
Blended statutory tax rate					30.40%
Impact of federal rate change					$ 467,000
Federal tax credit carryforwards			$ 68,000		68,000
Increase in valuation allowance					651,000
Increase in income tax expense					651,000
Valuation allowance			1,088,000		1,088,000	$ 437,000
Accrued interest and penalties			$ 0		$ 0	$ 0
Extension of lease term		5 years			12 months	12 months

COMMITMENTS AND CONTINGENCIES42

COMMITMENTS AND CONTINGENCIES (Details)	Jan. 01, 2017USD ($)ft²	Oct. 31, 2016USD ($)ft²	Jul. 10, 2014ft²	Dec. 31, 2019USD ($)	Apr. 30, 2018USD ($)	Apr. 30, 2017USD ($)	Dec. 31, 2018USD ($)
Commitments and contingencies
Real estate lease agreement (in square feet) | ft²	72,388	14,137
Extension of lease term		5 years			12 months	12 months
Equipment					$ 3,951,000	$ 3,718,000
Security deposit	$ 55,000	$ 12,750
Property held for sale					694,000	688,000
Future minimum lease payments under non-cancellable operating leases
2,019					413,000
2,020					407,000
2,021					402,000
2,022					427,000
2,023					442,000
2,024					452,000
2,025					456,000
2,026					467,000
2,027					350,000
Total					3,816,000
Capital Leases
2,019					87,000
2,020					75,000
2,021					31,000
Total					193,000
Interest Portion of Minimum Lease Payments					(23,000)
Presents value of minimum capital lease payments					170,000
Forecast
Commitments and contingencies
Monthly base rate				$ 29,257			$ 26,844
Bergey Road Associates
Commitments and contingencies
Real estate lease agreement (in square feet) | ft²			5,000
Assets recorded under capital lease
Commitments and contingencies
Equipment					225,000
Operating Leases
Commitments and contingencies
Operating Leases, Rent Expense, Net					$ 596,000	$ 246,000

EMPLOYEE INCENTIVE PLANS (Detai

EMPLOYEE INCENTIVE PLANS (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
401(k) Retirement Plan
Employee incentive plans
Employer contributions	$ 137,000	$ 86,000
Performance Bonus
Employee incentive plans
Discretionary bonus expense	71,000	0
Short Term Cash Incentive Plan
Employee incentive plans
Incentive plan expense	$ 0	0
Stock Award Plan | Restricted Stock
Employee incentive plans
Restriction period of awards	5 years
Long Term Cash Incentive Plan
Employee incentive plans
Incentive plan expense	$ 0	$ 0

RESTRICTED STOCK AGREEMENTS (De

RESTRICTED STOCK AGREEMENTS (Details)	Sep. 21, 2016employeeshares	Apr. 30, 2018USD ($)$ / sharesshares	Apr. 30, 2017USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award
Stock compensation cost amortized | $		$ 108,000	$ 61,000
Restricted Shares Under Option
Outstanding at beginning of period		730,000	350,000
Granted			730,000
Forfeited			(350,000)
Outstanding at end of period		730,000	730,000
Weighted Average Grant Price
Outstanding at beginning of period, Weighted Average Grant Price (in dollars per share) | $ / shares		$ 0.740	$ 0.500
Granted, Weighted Average Grant Price (in dollars per share) | $ / shares			0.740
Forfeited, Weighted Average Grant Price (in dollars per share) | $ / shares			0.500
Outstanding at end of period, Weighted Average Grant Price (in dollars per share) | $ / shares		$ 0.740	$ 0.740
2016 Restricted Stock Grants | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Cumulative annual growth in revenue (as a percentage)	10.00%
Average economic value added as percentage of revenue (as a percentage)	2.00%
Stock Award Plan
Share-based Compensation Arrangement by Share-based Payment Award
Restriction period of awards	5 years
Allocated Share-based Compensation Expense | $		$ 0	$ 0
Stock Award Plan | Restricted Stock | Three Key Employees
Share-based Compensation Arrangement by Share-based Payment Award
Number of key employees receiving award under plan | employee	3
Aggregate amount of restricted stock awards authorized	730,000
Number of shares expected to revert during fiscal year		350,000

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	12 Months Ended
	Apr. 30, 2017shares
Increase (Decrease) in Stockholders' Equity
Balance beginning of year (in shares)	5,615,750
Shares released from treasury for restricted stock grants	717,795
Newly issued shares for restricted stock grants	12,205
Shares reverted to treasury for restricted stock forfeitures	(350,000)
Balance end of year (in shares)	5,995,750

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
EARNINGS PER SHARE
Net loss	$ (2,015,000)	$ (261,000)
Net loss attributable to common shareholders	$ (2,015,000)	$ (261,000)
Basic weighted average common shares	5,265,750	5,123,000
Earnings (loss) per share attributable to common shareholders:
Basic loss per share	$ (0.38)	$ (0.05)

ACCRUED LIABILITIES (Details)

ACCRUED LIABILITIES (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Employee related expenses:
Accrued payroll	$ 167,000	$ 68,000
Accrued payroll taxes	13,000	5,000
Accrued employee benefits	129,000	136,000
Total employee related expenses	309,000	209,000
Other, including interest:
Warranty reserve	300,000	24,000
Property taxes	18,000	20,000
Deferred rent	129,000	7,000
Other	61,000	59,000
Total other	508,000	110,000
Total accrued liabilities	817,000	319,000
Changes in warranty reserve
Balance, May 1	24,000	67,000
Credit memos issued	(52,000)	(161,000)
Provision for warranty accrual	328,000	118,000
Balance, April 30	$ 300,000	$ 24,000

CUSTOMER DEPOSITS (Details)

CUSTOMER DEPOSITS (Details) - USD ($)	Apr. 30, 2018	Apr. 30, 2017
CUSTOMER DEPOSITS
Customer Advances, Current	$ 219,000	$ 33,000

SELF-INSURANCE CAPTIVE (Details

SELF-INSURANCE CAPTIVE (Details) - Captive Insurance LLC - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Self-insurance captive
Membership percentage	0.50%
Investment	$ 87,000
Investment income	0	$ 0
Self-insured medical benefits reserve	$ 25,000	$ 28,000

NET SALES BY PRODUCT LINE AND50

NET SALES BY PRODUCT LINE AND GEOGRAPHY (Details) - USD ($)	12 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Revenue from External Customer
Net sales	$ 18,396,000	$ 16,302,000
Magnetic components
Revenue from External Customer
Net sales	9,251,000	7,924,000
Potted coil assembly
Revenue from External Customer
Net sales	5,962,000	5,268,000
Electro-mechanical assemblies
Revenue from External Customer
Net sales	3,060,000	3,098,000
Large transformers
Revenue from External Customer
Net sales	123,000	12,000
Total Torotel products
Revenue from External Customer
Net sales	$ 18,396,000	$ 16,302,000

NET SALES BY PRODUCT LINE AND51

NET SALES BY PRODUCT LINE AND GEOGRAPHY (Details)	12 Months Ended
	Apr. 30, 2018USD ($)customer	Apr. 30, 2017USD ($)customer
Revenue from External Customer
Net sales | $	$ 18,396,000	$ 16,302,000
Number of customers for given percentage annual sales volume | customer	19
Annual sales volume percentage	90.00%
Number of major customers for given percentage consolidated net sales | customer	2	2
Number of major customer | customer	1	1
Major Customer One
Revenue from External Customer
Consolidated net sales percentage	34.00%	34.00%
Consolidated net trade receivables	36	27
Major Customer Two
Revenue from External Customer
Consolidated net sales percentage	18.00%	23.00%
Domestic
Revenue from External Customer
Net sales | $	$ 16,236,556	$ 14,755,000
Foreign
Revenue from External Customer
Net sales | $	$ 2,159,444	$ 1,547,000