Torotel (TTLO) 10-Q 13 Mar 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jan. 31, 2019	Mar. 12, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	TOROTEL INC
Entity Central Index Key	0000098752
Current Fiscal Year End Date	--04-30
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jan. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		5,995,750
Entity Small Business	true
Entity Emerging Growth Company	false

CONSOLIDATED CONDENSED BALANCE

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($)	Jan. 31, 2019	Apr. 30, 2018
Current assets:
Cash	$ 40,000	$ 575,000
Trade receivables, net	1,451,000	2,193,000
Contract assets	1,003,000
Inventories	2,897,000	2,362,000
Prepaid expenses	178,000	238,000
Property held for sale	734,000	694,000
Total Current Assets	6,303,000	6,062,000
Leasehold improvements	458,000	616,000
Equipment	4,009,000	3,951,000
Property, Plant and Equipment, Gross, Total	4,467,000	4,567,000
Less accumulated depreciation	3,320,000	3,235,000
Property, plant and equipment, net	1,147,000	1,332,000
Deferred income taxes	68,000	68,000
Other assets	153,000	209,000
Total Assets	7,671,000	7,671,000
Current liabilities:
Current maturities of long-term debt	1,173,000	1,706,000
Trade accounts payable	1,457,000	1,045,000
Accrued liabilities	670,000	817,000
Customer deposits	25,000	219,000
Total current liabilities	3,325,000	3,787,000
Long-term debt, less current maturities	826,000	130,000
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	12,518,000	12,437,000
Accumulated deficit	(9,058,000)	(8,743,000)
Stockholders' Equity	3,520,000	3,754,000
Total Liabilities and Stockholders' Equity	$ 7,671,000	$ 7,671,000

CONSOLIDATED CONDENSED BALANC_2

CONSOLIDATED CONDENSED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Jan. 31, 2019	Apr. 30, 2018
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 ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Jan. 31, 2019	Jan. 31, 2018
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales	$ 4,750,000	$ 4,529,000	$ 14,097,000	$ 13,742,000
Cost of goods sold	3,680,000	3,091,000	9,874,000	9,686,000
Gross profit	1,070,000	1,438,000	4,223,000	4,056,000
Operating expenses:
Engineering	351,000	267,000	966,000	806,000
Selling, general and administrative	1,089,000	1,140,000	3,590,000	3,783,000
Operating expenses	1,440,000	1,407,000	4,556,000	4,589,000
Income (loss) from operations	(370,000)	31,000	(333,000)	(533,000)
Other expense:
Interest expense, net	36,000	28,000	84,000	53,000
Income (loss) before income tax expense (benefit)	(406,000)	3,000	(417,000)	(586,000)
Income tax expense		310,000		85,000
Net loss attributable to common shareholders	$ (406,000)	$ (307,000)	$ (417,000)	$ (671,000)
Basic loss per share	$ (0.08)	$ (0.06)	$ (0.08)	$ (0.13)

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Excess of Par Value	Accumulated Deficit	Total
Balance beginning of year at Apr. 30, 2017	$ 60,000	$ 12,329,000	$ (6,729,000)	$ 5,660,000
Balance beginning of year (in shares) at Apr. 30, 2017	5,995,750			5,995,750
Stock compensation earned		81,000		$ 81,000
Net loss			(671,000)	(671,000)
Balance end of year at Jan. 31, 2018	$ 60,000	12,410,000	(7,400,000)	$ 5,070,000
Balance end of year (in shares) at Jan. 31, 2018	5,995,750			5,995,750
Balance beginning of year at Oct. 31, 2017	$ 60,000	12,383,000	(7,093,000)	$ 5,350,000
Balance beginning of year (in shares) at Oct. 31, 2017	5,995,750
Stock compensation earned		27,000		27,000
Net loss			(307,000)	(307,000)
Balance end of year at Jan. 31, 2018	$ 60,000	12,410,000	(7,400,000)	$ 5,070,000
Balance end of year (in shares) at Jan. 31, 2018	5,995,750			5,995,750
Balance beginning of year at Apr. 30, 2018	$ 60,000	12,437,000	(8,743,000)	$ 3,754,000
Balance beginning of year (in shares) at Apr. 30, 2018	5,995,750			5,995,750
Stock compensation earned		81,000		$ 81,000
Net loss			(417,000)	(417,000)
Balance end of year at Jan. 31, 2019	$ 60,000	12,518,000	(9,058,000)	$ 3,520,000
Balance end of year (in shares) at Jan. 31, 2019	5,995,750			5,995,750
Balance beginning of year at Oct. 31, 2018	$ 60,000	12,491,000	(8,652,000)	$ 3,899,000
Balance beginning of year (in shares) at Oct. 31, 2018	5,995,750
Stock compensation earned		27,000		27,000
Net loss			(406,000)	(406,000)
Balance end of year at Jan. 31, 2019	$ 60,000	$ 12,518,000	(9,058,000)	$ 3,520,000
Balance end of year (in shares) at Jan. 31, 2019	5,995,750			5,995,750
Cumulative effect of adoption of new accounting principle (see Note 1) | ASU 2014-09			$ 102,000	$ 102,000

CONSOLIDATED CONDENSED STATEM_2

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Cash flows from operating activities:
Net loss	$ (417,000)	$ (671,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock compensation cost amortized	81,000	81,000
Depreciation	253,000	233,000
Deferred income taxes		103,000
Changes in operating assets and liabilities:
Trade receivables	742,000	94,000
Contract assets	(901,000)
Inventories	(535,000)	(214,000)
Prepaid expenses and other assets	116,000	13,000
Trade accounts payable	412,000	(415,000)
Accrued liabilities	(147,000)	324,000
Customer deposits	(194,000)	(10,000)
Net cash provided (used) in operating activities	(590,000)	(462,000)
Cash flows from investing activities:
Capital expenditures	(108,000)	(52,000)
Net cash used in investing activities	(108,000)	(52,000)
Cash flows from financing activities:
Principal payments on long-term debt	(1,671,000)	(99,000)
Payments on capital lease obligations	(53,000)	(26,000)
Payments on line of credit	1,258,000
Proceeds from long-term debt	859,000
Proceeds from line of credit	2,286,000	750,000
Net cash provided by financing activities	163,000	625,000
Net increase (decrease) in cash	(535,000)	111,000
Cash, beginning of period	575,000	298,000
Cash, end of period	40,000	409,000
Cash paid during the period for:
Interest	$ 81,298	53,000
Non-cash investing and financing activities:
Equipment financed with proceeds from capital lease		$ 225,000

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Jan. 31, 2019
BASIS OF PRESENTATION
BASIS OF PRESENTATION	NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NOTE The consolidated condensed balance sheet as of April 30, 2018, which has been derived from the audited financial statements of Torotel, Inc. ("Torotel" or the “Company”), is accompanied by the unaudited interim consolidated condensed financial statements, which reflect the normal recurring adjustments that in the opinion of management are necessary to present fairly Torotel’s consolidated financial position at January 31, 2019, and the consolidated results of operations and cash flows for the three and nine months ended January 31, 2019, and 2018, respectively. The unaudited interim consolidated condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although management believes the disclosures made are adequate to make the information not misleading. The financial statements contained herein should be read in conjunction with Torotel’s consolidated financial statements and related notes filed on Torotel's Form 10-K/A for the year ended April 30, 2018 as filed with the SEC on July 12, 2018. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which replaces or supersedes ASC Topic 840, Leases , and is intended to increase the transparency and comparability of accounting for lease transactions. ASU 2016-02 requires most leases to be recognized on the balance sheet as lessees will need to recognize a right-of-use asset and a lease liability for virtually all leases with a term longer than twelve months. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting remains similar to the current model. Targeted improvements were made to lessor accounting to align, where necessary, with certain changes to the lessee model and the new revenue recognition standard. The ASU will require both quantitative and qualitative disclosures regarding key information about leasing arrangements. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and the Company expects to adopt the standard on May 1, 2019. The Company plans to elect the optional transition method that applies the new lease requirements through a cumulative-effect adjustment in the period of adoption. Based on the results of our preliminary evaluation, the most significant impact is expected to relate to the recognition of right-of-use assets and lease liabilities on the Company's condensed consolidated balance sheets for long-term operating leases and is expected to be material in the first quarter of fiscal year 2020. We have implemented a project plan where contracts and assets are being reviewed for identifying leases under the new standard, evaluating the components of the lease, determining the initial recognition of each lease liability and right-of-use asset, and presentation based on the classification of the lease as an operating or finance lease. The Company's assessment and implementation plan will be ongoing and will include evaluating the impact of this standard on the consolidated financial statements and footnotes. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASC 606) . ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605) , and requires entities to recognize revenue in a way that depicts 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. The new revenue recognition standard also requires disclosures that sufficiently describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This ASU was amended by ASU No. 2015-14, issued in August 2015, which deferred the original effective date by one year; the effective date of this ASU is for fiscal years, and interim reporting periods within those years, beginning after December 15, 2017, using one of two retrospective application methods. In addition, the FASB issued other amendments during 2016 to ASC 606, which include implementation guidance to principal versus agent considerations, guidance to identifying performance obligations and licensing guidance and other narrow scope improvements. The Company adopted this new guidance on May 1, 2018 using the modified retrospective application method. As part of the Company's implementation plan for this new standard, the Company assessed the impact of these new standards on its business processes, business and accounting systems, and consolidated financial statements and related disclosures by evaluating the terms and conditions of samples of both standard and non-standard contracts across the Company's in-scope business segments in light of the new standards. Specifically, the Company recognized the cumulative effect of initially applying the new revenue standard as an increase to the opening balance of retained earnings of $102,000 as of May 1, 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Torotel has two primary product revenue streams. Over 90% of our revenue is derived from product revenue in the aerospace and defense industries. Under this revenue stream, control is transferred as products are completed and closed to finished goods. Torotel’s industrial and commercial product revenue makes up less than 7% of total revenue. Under this revenue stream, control is transferred as the products are shipped. The remainder of Torotel revenue consists of product fees and engineering and design services. With product fees, control transfer is determined by the revenue stream of the associated product. Percentage-of-completion revenue recognition is utilized when revenue recognized exceeds the amount billed to the customer for any project-related services, utilizing labor as the input method. Torotel recognizes revenue when control has been transferred to the customer. Under the previous revenue recognition accounting standard, Torotel product revenue was recognized upon shipment or delivery of goods. Over 90% of Torotel revenue is derived from contracts with performance obligations satisfied over time. Performance obligations under long-term agreements are considered to be under contract at the time that authorization to ship has been obtained from the customer. Performance obligations under standalone purchase orders are considered to be under contract at the time that the purchase order is received. Parts manufactured for customers in our aerospace and defense product revenue stream must be built to certain specifications that are then qualified by the customer. Due to the proprietary nature of our custom-built products designed for a specific use by our aerospace and defense customers, control is considered to be with the customer as the products are finalized and placed into finished goods. For our commercial customers, control of the underlying product design is retained by Torotel, therefore the products are considered in our control until the moment of shipment. Torotel’s warranty obligations fall under Topic 460, and are not considered to be within the scope of Topic 606. The following table summarizes the cumulative effect of the changes to our consolidated condensed balance sheet as of May 1, 2018 from the adoption of ASC 606: Adjustments due to April 30, 2018 ASC 606 May 1, 2018 Assets Contract assets $ — $ 102,000 $ 102,000 Equity Accumulated deficit $ (8,743,000) $ 102,000 $ (8,641,000) In accordance with the new revenue recognition requirements relative to the revenue recognition requirements under ASC 605, the disclosure of the impact of adoption on our consolidated condensed balance sheet, consolidated condensed statement of operations, and consolidated condensed statement of cash flows as of and for the nine months ended January 31, 2019 was as follows: Balances Without Adoption of ASC 606 Effect of Change As Reported as of January 31, 2019 Higher/(Lower) Balance Sheet Assets Contract assets $ 1,003,000 $ — $ 1,003,000 Inventories 2,897,000 3,404,000 (507,000) Accumulated deficit (9,058,000) (8,562,000) (496,000) Three Months Ended January 31, 2019 Balances Without Adoption Effect of Change As Reported of ASC 606 Higher/(Lower) Statement of Operations Net sales $ 4,750,000 $ 4,214,000 $ 536,000 Cost of goods sold 3,680,000 3,377,000 303,000 Gross profit 1,070,000 837,000 233,000 Loss from operations (370,000) (603,000) 233,000 Loss before income tax expense (406,000) (639,000) 233,000 Net loss (406,000) (639,000) 233,000 Nine Months Ended January 31, 2019 Balances Without Adoption Effect of Change As Reported of ASC 606 Higher/(Lower) Statement of Operations Net sales $ 14,097,000 $ 13,094,000 $ 1,003,000 Cost of goods sold 9,874,000 9,367,000 507,000 Gross profit 4,223,000 3,727,000 496,000 Loss from operations (333,000) (829,000) 496,000 Loss before income tax expense (417,000) (913,000) 496,000 Net loss (417,000) (913,000) 496,000 Statement of Cash Flows Net loss $ (417,000) $ (913,000) $ 496,000 Contract assets (901,000) — (901,000) Inventories (535,000) (1,042,000) 507,000 Net cash used in operating activities (590,000) (590,000) —

NATURE OF OPERATIONS

NATURE OF OPERATIONS	9 Months Ended
	Jan. 31, 2019
NATURE OF OPERATIONS
NATURE OF OPERATIONS	NOTE Torotel conducts business primarily through its wholly owned subsidiary, Torotel Products, Inc. (“Torotel Products”). Torotel Products 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 commercial, industrial and military electronics.

INVENTORIES

INVENTORIES	9 Months Ended
	Jan. 31, 2019
INVENTORIES
INVENTORIES	NOTE The following table summarizes the components of inventories: January 31, 2019 April 30, 2018 Raw materials $ 1,580,000 $ 1,278,000 Work in process 1,107,000 635,000 Finished goods 210,000 449,000 $ 2,897,000 $ 2,362,000

FINANCING AGREEMENTS

FINANCING AGREEMENTS	9 Months Ended
	Jan. 31, 2019
FINANCING AGREEMENTS
FINANCING AGREEMENTS	NOTE Torotel Products had a financing agreement (the “previous financing agreement”) with Commerce Bank, N.A. that provided for a revolving line of credit, a guidance line of credit, and a real estate term loan. Torotel was the guarantor to all promissory notes under the previous financing agreement. On October 19, 2018, the debt that was outstanding under the previous financing agreement was fully repaid and extinguished, with an aggregate payoff amount of approximately $1,625,000 and an immaterial early prepayment fee. On October 19, 2018, Torotel entered into three new business loan agreements (the “financing agreements”) with Cornerstone Bank (the “Bank”). The financing agreements provide for an asset-backed revolving line of credit, a guidance line of credit, and a real estate term loan. A summary of the notes issued under the financing agreements is provided below: January 31, 2019 April 30, 2018 6.25% asset-based line of credit with a maturity date of October 19, 2019 $ 1,028,000 $ - 6.25% guidance line of credit with a maturity date of October 19, 2019 54,000 - 5.35% mortgage note payable in monthly installments of $5,573, including interest, with final payment of $690,829 due October 19, 2023 800,000 - Capital lease obligations (see Note 12) 117,000 170,000 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 4.00% working capital line of credit with a maturity date of October 20, 2018 - 751,000 4.00% building line of credit with a maturity date of October 20, 2018 - 465,000 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 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 - 75,000 Total long-term debt 1,999,000 1,836,000 Less current installments 1,173,000 1,706,000 Long-term debt, excluding current installments $ 826,000 $ 130,000 The asset-based revolving line of credit is intended to be used for working capital purposes and has a capacity of $1,250,000. The asset-based revolving line of credit is renewable annually upon mutual agreement of Torotel and the Bank. The associated interest rate is equal to the greater of the floating Cornerstone Bank Corporate Base Rate (6.25% as of January 31, 2019) or a floor of 5% (as listed above). Monthly repayments of interest only are required under the asset-based revolving line of credit promissory note with the principal due at maturity. The borrowing base of the revolving line of credit is limited to 80% of eligible accounts receivable, plus 50% of eligible inventory, plus 80% of eligible equipment. This asset-based revolving line of credit is cross collateralized and cross defaulted with all other financing agreements of Torotel with the Bank. Pursuant to a Commercial Security Agreement dated October 19, 2018, between Torotel and the Bank (the “Commercial Security Agreement”), which was entered into in connection with the financiang agreements, the asset-based revolving line of credit is secured by a first lien on all business assets of Torotel. Under the revolving line of credit, if the aggregate principal amount of the outstanding advances exceeds the applicable borrowing base, Torotel must pay the Bank an amount equal to the difference between the outstanding principal balance of the revolving line of credit and the borrowing base. The equipment note is a guidance line of credit to be used for equipment purchases and has a capacity of $250,000 with a 12-month term that is renewable annually upon mutual agreement of Torotel and the Bank. Monthly repayments of interest are required, with principal due at maturity. The associated advance rate is equal to the greater of the floating Cornerstone Bank Corporate Base Rate (currently 6.25%) or a floor of 5% (as listed above). Monthly repayments of interest only are required, with the principal due at maturity. This note is cross collateralized and cross defaulted with all other financing agreements of Torotel 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. Upon execution of the agreement, Torotel received initial advances of $54,000 under the guidance line of credit. The real estate term loan is in the principal amount of $815,000 and contains a 5-year term with a 20-year amortization period, with the balance at maturity on October 19, 2023. The associated interest rate is fixed at 5.35%. Monthly repayments of approximately $5,573, consisting of both interest and principal, are required. The final payment of approximately $690,829 is due on the maturity date. This real estate term loan is cross collateralized and cross defaulted with the other financing agreements. The real estate term loan is secured by a first lien priority real estate mortgage on the property located at 620 North Lindenwood Drive in Olathe, Kansas pursuant to the Commercial Security Agreement. The financing agreements contain customary representations, warranties, and covenants of Torotel for the benefit of the Bank, as well as customary default provisions. Other than the borrowing base limitations under the asset-based revolving line of credit, none of the financing agreements requires Torotel to comply with any financial covenants. Prepayments are allowed without penalty under all of the financing agreements. Irrevocable Standby Letter of Credit Under the terms of a lease amendment for its manufacturing facility located in Olathe, Kansas (see Note 12), Torotel provided the landlord an irrevocable standby letter of credit in the original amount of $300,000 as additional security. 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	9 Months Ended
	Jan. 31, 2019
INCOME TAXES
INCOME TAXES	NOTE 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 made broad and complex changes to the U.S. tax code, including, but not limited to: (1) reducing the maximum U.S. federal corporate tax rate from 35% to a flat 21% 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 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’s financial statements for the year ended April 30, 2018, reflect certain effects of the Tax 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 Tax 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 January 31, 2019, the federal tax returns for the fiscal years ended 2016 through 2018 are open to audit until the statute of limitations closes for the years in which our net operating losses are utilized. We would recognize interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. As of January 31, 2019, 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.

RESTRICTED STOCK AGREEMENTS

RESTRICTED STOCK AGREEMENTS	9 Months Ended
	Jan. 31, 2019
RESTRICTED STOCK AGREEMENTS
RESTRICTED STOCK AGREEMENTS	NOTE 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. Stock Compensation Costs and Restricted Stock Activity Total stock compensation cost was $81,000 for each of the nine months ended January 31, 2019 and 2018. Restricted stock activity for each nine month period through January 31 is summarized as follows: 2019 2018 Restricted Weighted Restricted Weighted Shares Average Shares Average Under Grant Under Grant Option Price Option Price Outstanding at May 1 730,000 $ 0.740 730,000 $ 0.740 Granted — — — — Forfeited — — — — Outstanding at January 31 730,000 $ 0.740 730,000 $ 0.740

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Jan. 31, 2019
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE The shares of common stock outstanding as each nine month period ended as of January 31 are summarized as follows: 2019 2018 Balance, May 1 5,995,750 5,995,750 Shares released from treasury for restricted stock grants — — Newly issued shares for restricted stock grants — — Shares reverted to treasury for restricted stock forfeitures — — Balance, January 31 5,995,750 5,995,750

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Jan. 31, 2019
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 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 per common share were computed as follows: Three Months Ended Nine Months Ended January 31, 2019 January 31, 2018 January 31, 2019 January 31, 2018 Net loss $ (406,000) $ (307,000) $ (417,000) $ (671,000) Amounts allocated to participating securities (nonvested restricted shares) — — — — Net loss attributable to common shareholders $ (406,000) $ (307,000) $ (417,000) $ (671,000) Basic weighted average common shares 5,265,750 5,265,750 5,265,750 5,265,750 Loss per share attributable to common shareholders: Basic loss per share $ (0.08) $ (0.06) $ (0.08) $ (0.13) 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 considered 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.

CONTRACT ASSETS

CONTRACT ASSETS	9 Months Ended
	Jan. 31, 2019
CONTRACT ASSETS
CONTRACT ASSETS	NOTE 9—CONTRACT ASSETS For each of our contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Contract assets consist of unbilled receivables typically resulting from revenue recognition under contracts when either control has passed to the customer but the product has not yet shipped or the percentage-of-completion of revenue recognition is utilized when revenue recognized exceeds the amount billed to the customer for any project-related services, utilizing labor as the input method. January 31, 2019 April 30, 2018 Contract assets $ 1,003,000 $ — Contract assets increased $1,003,000 between April 30, 2018 and January 31, 2019 due to the adoption of the new revenue standard, and relates to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations for which we have not yet billed.

CUSTOMER DEPOSITS

CUSTOMER DEPOSITS	9 Months Ended
	Jan. 31, 2019
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS	NOTE 10 — 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 January 31, 2019 and April 30, 2018, we had approximately $25,000 and $219,000, respectively, in customer deposits related to these arrangements.

CONCENTRATIONS OF CREDIT RISK

CONCENTRATIONS OF CREDIT RISK	9 Months Ended
	Jan. 31, 2019
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK	NOTE 11 — CONCENTRATIONS OF 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 cash balances exceeded federally insured limits. However, we have incurred no losses in the cash accounts and we do not believe we are exposed to any significant credit risk with respect to our cash.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Jan. 31, 2019
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 12 — COMMITMENTS AND CONTINGENCIES Torotel is obligated under several capital leases for the lease of various information technology equipment that expire at various dates during the next three years. All of these leases are non-cancellable and are presented in the accompanying consolidated financial statements as long-term debt. At January 31, 2019 and April 30, 2018, the gross amount of equipment under capital lease was $225,000. Related accumulated depreciation recorded under capital lease were $65,000 and $48,000, respectively. Amortization of assets held under capital lease is included with depreciation expense. On August 30, 2017, Torotel entered into a Third Amendment (“Amendment”) to the lease for its manufacturing facility located in Olathe, Kansas. The Amendment reconfigured the Suite 520 entry design, and granted Torotel a $37,500 lump sum net base rent abatement, applied at $18,750 per month from September 1, 2017 through October 31, 2017. The Amendment also reduced the letter of credit requirement from $350,000 to $300,000. The Amendment did not change the term of the lease, which continues through December 31, 2026 (subject to early termination options and two separate options to extend the lease term for additional five year periods). Future minimum lease payments on the amended operating lease and future minimum capital lease payments as of January 31, 2019 are as follows: Capital Operating Fiscal Years Ending April 30, Leases Leases 2019 $ 15,000 $ 110,000 2020 75,000 415,000 2021 27,000 410,000 2022 — 430,000 2023 — 442,000 2024 — 452,000 2025 — 456,000 2026 — 467,000 2027 — 350,000 117,000 3,532,000 Less: Amounts representing interest (5,000) — Total $ 112,000 $ 3,532,000

SUBSEQUENT EVENT

SUBSEQUENT EVENT	9 Months Ended
	Jan. 31, 2019
SUBSEQUENT EVENT
SUBSEQUENT EVENT	NOTE 13 – SUBSEQUENT EVENT We evaluated events that occurred subsequent to January 31, 2019 and have identified the following subsequent event. On February 15, 2019, a lease agreement became effective for tenant occupancy of the 23,924 square foot building owned by Torotel. Monthly installment payments of $11,500 began to be paid to us on March 1, 2019. The lease is for a sixty-two month term with monthly payments escalating periodically from $11,500 to $15,500. The tenant has the right to elect to purchase the building. The election to purchase must be made within the lease term or Torotel is permitted to place the building up for public sale. This event will result in current assets currently classified as property held for sale to be reclassified as noncurrent assets associated with property, plant and equipment. There have been no other subsequent events that occurred during such period that require disclosure in, or adjustment to, the consolidated financial statements as of and for the quarter and nine months ended January 31, 2019. N

BASIS OF PRESENTATION (Tables)

BASIS OF PRESENTATION (Tables)	9 Months Ended
	Jan. 31, 2019
BASIS OF PRESENTATION
Schedule of New Accounting Pronouncements and Changes in Accounting Principles	Adjustments due to April 30, 2018 ASC 606 May 1, 2018 Assets Contract assets $ — $ 102,000 $ 102,000 Equity Accumulated deficit $ (8,743,000) $ 102,000 $ (8,641,000) Balances Without Adoption of ASC 606 Effect of Change As Reported as of January 31, 2019 Higher/(Lower) Balance Sheet Assets Contract assets $ 1,003,000 $ — $ 1,003,000 Inventories 2,897,000 3,404,000 (507,000) Accumulated deficit (9,058,000) (8,562,000) (496,000) Three Months Ended January 31, 2019 Balances Without Adoption Effect of Change As Reported of ASC 606 Higher/(Lower) Statement of Operations Net sales $ 4,750,000 $ 4,214,000 $ 536,000 Cost of goods sold 3,680,000 3,377,000 303,000 Gross profit 1,070,000 837,000 233,000 Loss from operations (370,000) (603,000) 233,000 Loss before income tax expense (406,000) (639,000) 233,000 Net loss (406,000) (639,000) 233,000 Nine Months Ended January 31, 2019 Balances Without Adoption Effect of Change As Reported of ASC 606 Higher/(Lower) Statement of Operations Net sales $ 14,097,000 $ 13,094,000 $ 1,003,000 Cost of goods sold 9,874,000 9,367,000 507,000 Gross profit 4,223,000 3,727,000 496,000 Loss from operations (333,000) (829,000) 496,000 Loss before income tax expense (417,000) (913,000) 496,000 Net loss (417,000) (913,000) 496,000 Statement of Cash Flows Net loss $ (417,000) $ (913,000) $ 496,000 Contract assets (901,000) — (901,000) Inventories (535,000) (1,042,000) 507,000 Net cash used in operating activities (590,000) (590,000) —

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Jan. 31, 2019
INVENTORIES
Table summarizing the components of inventories	January 31, 2019 April 30, 2018 Raw materials $ 1,580,000 $ 1,278,000 Work in process 1,107,000 635,000 Finished goods 210,000 449,000 $ 2,897,000 $ 2,362,000

FINANCING AGREEMENTS (Tables)

FINANCING AGREEMENTS (Tables)	9 Months Ended
	Jan. 31, 2019
FINANCING AGREEMENTS
Summary of the notes within the financing agreement	January 31, 2019 April 30, 2018 6.25% asset-based line of credit with a maturity date of October 19, 2019 $ 1,028,000 $ - 6.25% guidance line of credit with a maturity date of October 19, 2019 54,000 - 5.35% mortgage note payable in monthly installments of $5,573, including interest, with final payment of $690,829 due October 19, 2023 800,000 - Capital lease obligations (see Note 12) 117,000 170,000 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 4.00% working capital line of credit with a maturity date of October 20, 2018 - 751,000 4.00% building line of credit with a maturity date of October 20, 2018 - 465,000 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 4.05% note payable in monthly installments of $3,680, including interest, with final payment due January 10, 2020 - 75,000 Total long-term debt 1,999,000 1,836,000 Less current installments 1,173,000 1,706,000 Long-term debt, excluding current installments $ 826,000 $ 130,000
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 -

RESTRICTED STOCK AGREEMENTS (Ta

RESTRICTED STOCK AGREEMENTS (Tables)	9 Months Ended
	Jan. 31, 2019
RESTRICTED STOCK AGREEMENTS
Summary of restricted stock activity	2019 2018 Restricted Weighted Restricted Weighted Shares Average Shares Average Under Grant Under Grant Option Price Option Price Outstanding at May 1 730,000 $ 0.740 730,000 $ 0.740 Granted — — — — Forfeited — — — — Outstanding at January 31 730,000 $ 0.740 730,000 $ 0.740

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	Jan. 31, 2019
STOCKHOLDERS' EQUITY
Summary of changes in shares of common stock outstanding	2019 2018 Balance, May 1 5,995,750 5,995,750 Shares released from treasury for restricted stock grants — — Newly issued shares for restricted stock grants — — Shares reverted to treasury for restricted stock forfeitures — — Balance, January 31 5,995,750 5,995,750

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Jan. 31, 2019
EARNINGS PER SHARE
Schedule of basic earnings per common share	Three Months Ended Nine Months Ended January 31, 2019 January 31, 2018 January 31, 2019 January 31, 2018 Net loss $ (406,000) $ (307,000) $ (417,000) $ (671,000) Amounts allocated to participating securities (nonvested restricted shares) — — — — Net loss attributable to common shareholders $ (406,000) $ (307,000) $ (417,000) $ (671,000) Basic weighted average common shares 5,265,750 5,265,750 5,265,750 5,265,750 Loss per share attributable to common shareholders: Basic loss per share $ (0.08) $ (0.06) $ (0.08) $ (0.13)

CONTRACT ASSETS (Tables)

CONTRACT ASSETS (Tables)	9 Months Ended
	Jan. 31, 2019
CONTRACT ASSETS
Schedule of contract assets	January 31, 2019 April 30, 2018 Contract assets $ 1,003,000 $ —

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Jan. 31, 2019
COMMITMENTS AND CONTINGENCIES.
Future minimum lease payments under non-cancellable operating leases	Capital Operating Fiscal Years Ending April 30, Leases Leases 2019 $ 15,000 $ 110,000 2020 75,000 415,000 2021 27,000 410,000 2022 — 430,000 2023 — 442,000 2024 — 452,000 2025 — 456,000 2026 — 467,000 2027 — 350,000 117,000 3,532,000 Less: Amounts representing interest (5,000) — Total $ 112,000 $ 3,532,000

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details)	3 Months Ended		9 Months Ended
	Jan. 31, 2019USD ($)item	Jan. 31, 2018USD ($)	Jan. 31, 2019USD ($)item	Jan. 31, 2018USD ($)	May 01, 2018USD ($)	Apr. 30, 2018USD ($)
Revenue from Contracts with Customers
Number of primary product revenue streams | item	2		2
Revenue from contracts with performance obligations satisfied over time	90.00%		90.00%
Assets
Contract assets	$ 1,003,000		$ 1,003,000		$ 102,000
Inventories	2,897,000		2,897,000			$ 2,362,000
Equity
Accumulated deficit	(9,058,000)		(9,058,000)		(8,641,000)	$ (8,743,000)
Net sales	4,750,000	$ 4,529,000	14,097,000	$ 13,742,000
Cost of goods sold	3,680,000	3,091,000	9,874,000	9,686,000
Gross profit	1,070,000	1,438,000	4,223,000	4,056,000
Loss from operations	(370,000)	31,000	(333,000)	(533,000)
Loss before income tax expense	(406,000)	3,000	(417,000)	(586,000)
Net loss	(406,000)	(307,000)	(417,000)	(671,000)
Net loss	$ (406,000)	$ (307,000)	(417,000)	(671,000)
Contract assets			(901,000)
Inventories			(535,000)	(214,000)
Net cash used in operating activities			$ (590,000)	$ (462,000)
Aerospace and defense industries
Revenue from Contracts with Customers
Percentage of revenue	90.00%		90.00%
Industrial and commercial
Revenue from Contracts with Customers
Percentage of revenue	7.00%		7.00%
ASU 2014-09 | Balances Without Adoption of ASC 606
Assets
Inventories	$ 3,404,000		$ 3,404,000
Equity
Accumulated deficit	(8,562,000)		(8,562,000)
Net sales	4,214,000		13,094,000
Cost of goods sold	3,377,000		9,367,000
Gross profit	837,000		3,727,000
Loss from operations	(603,000)		(829,000)
Loss before income tax expense	(639,000)		(913,000)
Net loss	(639,000)		(913,000)
Net loss			(913,000)
Inventories			(1,042,000)
Net cash used in operating activities			(590,000)
ASU 2014-09 | Effect of Change Higher/(Lower)
Assets
Contract assets	1,003,000		1,003,000		102,000
Inventories	(507,000)		(507,000)
Equity
Accumulated deficit	(496,000)		(496,000)		$ 102,000
Net sales	536,000		1,003,000
Cost of goods sold	303,000		507,000
Gross profit	233,000		496,000
Loss from operations	233,000		496,000
Loss before income tax expense	233,000		496,000
Net loss	$ 233,000		496,000
Net loss			496,000
Contract assets			(901,000)
Inventories			$ 507,000

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Jan. 31, 2019	Apr. 30, 2018
INVENTORIES
Raw materials	$ 1,580,000	$ 1,278,000
Work in process	1,107,000	635,000
Finished goods	210,000	449,000
Inventories	$ 2,897,000	$ 2,362,000

FINANCING AGREEMENTS (Details)

FINANCING AGREEMENTS (Details)	Oct. 19, 2018USD ($)agreement	Jan. 31, 2019USD ($)	Apr. 30, 2018USD ($)
FINANCING AGREEMENTS
Total debt repaid and extinguished | $	$ 1,625,000	$ 1,999,000	$ 1,836,000
Number of new business loan agreements | agreement	3

FINANCING AGREEMENTS - Debt Tab

FINANCING AGREEMENTS - Debt Table (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jan. 31, 2019	Apr. 30, 2018	Oct. 19, 2018
Long-term indebtedness
Total long-term debt	$ 1,999,000	$ 1,836,000	$ 1,625,000
Less current installments	1,173,000	1,706,000
Long-term debt, excluding current installments	826,000	130,000
Capital Leases
Long-term indebtedness
Total long-term debt	117,000	170,000
Asset Based Line Of Credit 6.00 Percent Due October 2019 | Line of Credit
Long-term indebtedness
Total long-term debt	$ 1,028,000
Rate	6.25%
Maximum borrowing	$ 1,250,000
Asset Based Line Of Credit 6.00 Percent Due October 2019 | Line of Credit | Prime Rate
Long-term indebtedness
Rate	6.25%
Asset Based Line Of Credit 6.00 Percent Due October 2019 | Line of Credit | Prime Rate | Minimum
Long-term indebtedness
Rate	5.00%
Guidance Line Of Credit 6.00 Percent Due October 2019 | Line of Credit
Long-term indebtedness
Total long-term debt	$ 54,000
Rate	6.25%
Mortgage note payable 5.35 percent due October 2023 | Mortgage note payable
Long-term indebtedness
Total long-term debt	$ 800,000
Notes Payable	$ 815,000
Rate	5.35%
Monthly installments	$ 5,573
Final payment	$ 690,829
Real estate term loan period	5 years
Amortization period	20 years
Mortgage note payable 4.05 Percent Due January 2019 | Mortgage note payable
Long-term indebtedness
Total long-term debt		$ 373,000
Rate		4.05%
Monthly installments		$ 4,873
Final payment		349,000
Working line of credit 4.00 percent | Line of Credit
Long-term indebtedness
Total long-term debt		$ 751,000
Rate		4.00%
Building line of credit 4.00 percent | Line of Credit
Long-term indebtedness
Total long-term debt		$ 465,000
Rate		4.00%
Note payable 4.75 percent | Note Payable
Long-term indebtedness
Total long-term debt		$ 2,000
Rate		4.75%
Monthly installments		$ 2,269
Note payable 4.05 percent | Note Payable
Long-term indebtedness
Total long-term debt		$ 75,000
Rate		4.05%
Monthly installments		$ 3,680
Equipment line of credit
Long-term indebtedness
Equipment financing maximum borrowing	$ 250,000
Equipment line of credit | Line of Credit
Long-term indebtedness
Term	12 months
Initial advances, line of credit	$ 54,000

FINANCING AGREEMENTS - Irrevoca

FINANCING AGREEMENTS - Irrevocable Standby Letters of Credit (Details) - USD ($)	Jan. 01, 2023	Jan. 01, 2022	Jan. 01, 2021	Jan. 01, 2020	Jan. 31, 2019	Aug. 31, 2017	Aug. 30, 2017
Long-term indebtedness
Principal amount						$ 300,000	$ 350,000
Irrevocable Standby Letter of Credit
Long-term indebtedness
Principal amount					$ 300,000
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 (NARRATIVE) (Detai

INCOME TAXES (NARRATIVE) (Details) - USD ($)	Dec. 22, 2017	Jan. 31, 2018	Jan. 31, 2018	Apr. 30, 2018	Apr. 30, 2017	Jan. 31, 2019
INCOME TAXES
Federal statutory income tax rate (as a percent)	35.00%			21.00%	34.00%
Income tax expense		$ 310,000	$ 85,000	$ 467,000
Accrued interest and penalties						$ 0

RESTRICTED STOCK AGREEMENTS (De

RESTRICTED STOCK AGREEMENTS (Details)	Sep. 21, 2016employeeshares	Jan. 31, 2019USD ($)$ / sharesshares	Jan. 31, 2018USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award
Stock compensation cost amortized | $		$ 81,000	$ 81,000
Restricted Stock
Restricted Shares Under Option
Outstanding at beginning of period		730,000	730,000
Granted		0	0
Forfeited		0	0
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	$ 0.740
Granted, Weighted Average Grant Price (in dollars per share) | $ / shares		0	0
Forfeited, Weighted Average Grant Price (in dollars per share) | $ / shares		0	0
Outstanding at end of period, Weighted Average Grant Price (in dollars per share) | $ / shares		$ 0.740	$ 0.740
2016 Restricted Stock Grants | Restricted Stock | 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 | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award
Restriction period of awards	5 years
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

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - shares	9 Months Ended
	Jan. 31, 2019	Jan. 31, 2018
Increase (Decrease) in Stockholders' Equity
Balance beginning of year (in shares)	5,995,750	5,995,750
Shares released from treasury for restricted stock grants	0	0
Balance end of year (in shares)	5,995,750	5,995,750

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jan. 31, 2019	Jan. 31, 2018	Jan. 31, 2019	Jan. 31, 2018
EARNINGS PER SHARE
Net loss	$ (406,000)	$ (307,000)	$ (417,000)	$ (671,000)
Net loss attributable to common shareholders	$ (406,000)	$ (307,000)	$ (417,000)	$ (671,000)
Basic weighted average common shares	5,265,750	5,265,750	5,265,750	5,265,750
Earnings (loss) per share attributable to common shareholders:
Basic earnings (loss) per share	$ (0.08)	$ (0.06)	$ (0.08)	$ (0.13)

CONTRACT ASSETS (Details)

CONTRACT ASSETS (Details) - USD ($)	Jan. 31, 2019	May 01, 2018
CONTRACT ASSETS
Contract assets	$ 1,003,000	$ 102,000
Increase in contract assets	$ 1,003,000

CUSTOMER DEPOSITS (Details)

CUSTOMER DEPOSITS (Details) - USD ($)	Jan. 31, 2019	Apr. 30, 2018
CUSTOMER DEPOSITS
Customer deposits	$ 25,000	$ 219,000

CONCENTRATIONS OF CREDIT RISK (

CONCENTRATIONS OF CREDIT RISK (Details)	9 Months Ended
	Jan. 31, 2019USD ($)
CONCENTRATIONS OF CREDIT RISK
Losses in the cash accounts	$ 0

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details)	Aug. 30, 2017USD ($)Option	Oct. 31, 2017USD ($)	Jan. 31, 2019USD ($)	Apr. 30, 2018USD ($)	Aug. 31, 2017USD ($)
COMMITMENTS AND CONTINGENCIES.
Capital Leased Assets, Gross			$ 225,000	$ 225,000
Accumulated depreciation			65,000	$ 48,000
Net base rent abatement	$ 37,500
Monthly rent payment		$ 18,750
Principal amount	$ 350,000				$ 300,000
Number Options To Extend Lease | Option	2
Extension of lease term	5 years
Future minimum lease payments under non-cancellable operating leases
2019			110,000
2020			415,000
2021			410,000
2022			430,000
2023			442,000
2024			452,000
2025			456,000
2026			467,000
2027			350,000
Total			3,532,000
Capital Leases
2019			15,000
2020			75,000
2021			27,000
Total			117,000
Interest Portion of Minimum Lease Payments			(5,000)
Presents value of minimum capital lease payments			$ 112,000

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - Subsequent Event.	Mar. 01, 2019USD ($)	Feb. 15, 2019USD ($)ft²
Subsequent event
Square feet (in area) | ft²		23,924
Monthly base rate	$ 11,500
Number of years for which monthly base rate is fixed		62 months
Minimum
Subsequent event
Monthly base rate		$ 11,500
Maximum
Subsequent event
Monthly base rate		$ 15,500