U.S. Securities and Exchange Commission
Washington D.C. 20549
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2010
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission file number 0-12866
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PHAZAR CORP
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(Exact name of small business issuer as specified in its charter)
Delaware 75-1907070
- -------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
101 S.E. 25th Avenue, Mineral Wells, Texas 76067
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(Address of principal executive offices)
(940) 325-3301
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(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. |X| Yes |_| No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
|_| Large accelerated filer |_| Accelerated filer
|_| Non-accelerated filer |X| Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). |_|Yes |X|No
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,376,728 as of February 28, 2010.
1
PHAZAR CORP AND SUBSIDIARIES
INDEX TO FORM 10-Q
PAGE
PART I FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements for PHAZAR CORP
and Subsidiaries
Consolidated Balance Sheets - 3
February 28, 2010 (unaudited) and May 31, 2009
Consolidated Statements of Operations (unaudited) - 5
Three and Nine Months Ended February 28, 2010 and
February 28, 2009
Consolidated Statements of Cash Flows (unaudited) - 6
Nine Months Ended February 28, 2010 and February 28, 2009
Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of 9
Financial Condition and Results of Operations
Item 4. Controls and Procedures 13
Management's Evaluation of Internal Control over
Financial Reporting 13
PART II OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
Signature 15
Certifications
2
Item 1. Financial Statements
PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 2010 AND MAY 31, 2009
February 28, 2010 May 31, 2009
(Unaudited)
------------- -------------
CURRENT ASSETS
Cash and cash equivalents $ 2,159,576 $ 3,320,647
Accounts receivable:
Trade, net of allowance for doubtful
accounts of $2,002 as of February
28, 2010 and May 31, 2009 1,152,345 663,499
Inventories
Raw materials 1,162,776 981,331
Work in progress 901,832 1,126,006
Finished goods 858,220 424,479
Prepaid expenses and other current assets 156,759 76,261
Income taxes receivable 127,281 343,145
Deferred income taxes 76,903 74,853
------------ ------------
Total current assets $ 6,595,692 $ 7,010,221
Property and equipment, net of accumulated
depreciation of $5,731,273 and $5,714,585
as of February 28, 2010 and May 31, 2009 1,173,194 1,140,141
Long - term note receivable 339,993 -
Long - term deferred income tax 156,780 116,995
------------ ------------
TOTAL ASSETS $ 8,265,659 $ 8,267,357
============ ============
See accompanying Notes to the Unaudited Consolidated Financial Statements.
3
PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 2010 AND MAY 31, 2009
LIABILITIES AND SHAREHOLDERS' EQUITY
February 28, 2010 May 31, 2009
(Unaudited)
------------- -------------
CURRENT LIABILITIES
Accounts payable $ 228,492 $ 215,840
Accrued expenses 554,806 486,666
Deferred revenues 128,874 16,884
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Total current liabilities 912,172 719,390
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY
Preferred Stock, $1 par, 2,000,000 shares authorized,
none issued or outstanding, attributes to be
determined when issued - -
Common stock, $0.01 par, 6,000,000 shares authorized
2,376,728 and 2,371,728 issued and outstanding 23,768 23,718
Additional paid in capital 4,158,849 3,974,476
Treasury stock, at cost, 74,691 and 71,341 shares at
February 28, 2010 an February 28, 2009 (215,918) (205,611)
Retained earnings 3,386,788 3,755,384
------------ ------------
Total shareholders' equity 7,353,487 7,547,967
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,265,659 $ 8,267,357
============ =============
See accompanying Notes to the Unaudited Consolidated Financial Statements.
4
PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2010 AND 2009
(Unaudited)
Three Months Ended Nine Months Ended
February 28, February 28, February 28, February 28,
2010 2009 2010 2009
------------ ------------ ------------ ------------
Sales and contract revenues $ 1,974,013 $ 1,512,889 $ 5,905,777 $ 5,649,768
Cost of sales and contracts 974,726 955,875 2,999,790 3,770,616
----------- ----------- ----------- -----------
Gross Profit 999,287 557,014 2,905,987 1,879,152
Selling, general and administration expenses 1,042,921 594,931 2,628,966 1,816,034
Research and development costs 197,798 345,363 891,488 728,400
----------- ----------- ----------- -----------
Total selling, general and administration expenses 1,240,719 940,294 3,520,454 2.544,434
Operating Loss (241,432) (383,280) (614,467) (665,282)
Other income
Interest income (net of interest expense) (2,332) 15,214 1,148 134,758
Other income 467 4,239 54,839 41,073
----------- ----------- ----------- -----------
Total other income (1,865) 19,453 55,987 175,831
----------- ----------- ----------- -----------
Loss from operations before income taxes (243,297) (363,827) (558,480) (489,451)
Income tax benefit (82,721) (122,788) (189,883) (189,501)
----------- ----------- ----------- -----------
Net Loss $ (160,576) $ (241,039) $ (368,597) $ (299,950)
=========== ===========
Basic loss per common share $ (0.07) $ (0.10) $ (0.16) $ (0.13)
=========== =========== =========== ===========
Diluted loss per common share $ (0.07) $ (0.10) $ (0.16) $ (0.13)
=========== =========== =========== ===========
Weighted Average of Common Shares Outstanding
Basic 2,301,357 2,366,072 2,299,257 2,364,696
Diluted 2,301,357 2,366,072 2,299,257 2,364,696
See accompanying Notes to the Unaudited Consolidated Financial Statements.
5
PHAZAR CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2010 AND 2009
(Unaudited)
Nine Months Ended
February 28, February 28,
2010 2009
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (368,597) $ (299,950)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 103,314 83,567
Stock based compensation 184,423 213,881
Deferred federal income tax (41,835) (54,685)
Changes in assets and liabilities:
Accounts receivable, trade (488,846) 312,781
Inventories (391,012) (725,491)
Prepaid expenses and other current assets (80,498) (17,687)
Income taxes receivable 215,864 (157,851)
Accounts payable 12,652 (46,248)
Accrued expenses 68,140 (101,946)
Deferred revenues 111,990 (315,654)
------------ ------------
Net cash used in operating activities (674,405) (1,109,283)
CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of marketable securities - 2,650,000
Funding of note receivable (339,993) -
Purchase of property and equipment (136,366) (207,394)
Purchase of treasury stock (10,307) (26,788)
------------ ------------
Net cash provided by (used in)
investing activities (486,666) 2,415,818
Net increase(decrease) in cash and cash equivalents (1,161,071) 1,306,535
CASH AND CASH EQUIVALENTS, beginning of period 3,320,647 2,446,563
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CASH AND CASH EQUIVALENTS, end of period $ 2,159,576 $ 3,753,098
============ ============
See accompanying Notes to the Unaudited Consolidated Financial Statements.
6
PART I
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 BASIS OF PRESENTATION AND CERTAIN SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have been prepared
in accordance with Form 10-Q instructions and in the opinion of management
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the financial position as of February 28, 2010, the
results of operations for the three and nine months ended February 28, 2010 and
February 28, 2009, and the cash flows for the nine months ended February 28,
2010 and February 28, 2009. These results have been determined on the basis of
generally accepted accounting principles in the United States of America and
have been applied consistently with those used in the preparation of the
Company's audited financial statements for its fiscal year ended May 31, 2009.
These unaudited consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and accompanying notes
included in our Annual Report on Form 10-K for the year ended May 31, 2009.
Use of Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with U.S. generally accepted accounting principles. Those estimates
and assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were used.
Revenue Recognition
Revenue from short-term contracts calling for delivery of products is recognized
as the product is shipped. Revenue and costs under certain long-term fixed price
contracts with the United States Government are recognized on the units of
delivery method. This method recognizes as revenue the contract price of units
of the product delivered during each period and the costs allocable to the
delivered units as the cost of earned revenue. Costs allocable to undelivered
units are reported in the balance sheet as inventory. Amounts in excess of
agreed upon contract price for customer directed changes, constructive changes,
customer delays or other causes of additional contract costs are recognized in
contract value if it is probable that a claim for such amounts will result in
additional revenue and the amounts can be reasonably estimated. Revisions in
cost and profit estimates are reflected in the period in which the facts
requiring the revision become known and are estimable. Losses on contracts are
recorded when identified.
Recently Adopted Accounting Guidance
In June, 2009, the FASB issued a new accounting standard regarding the FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles - a replacement of FASB Statement No. 162. The FASB
Accounting Standards Codification will become the source of authoritative U.S.
generally accepted accounting principles recognized by the FASB to be applied by
nongovernmental entities. This statement is effective for financial statements
issued for interim and annual periods ending after September 15, 2009. The
adoption of this statement will not have an impact on the Company's consolidated
financial statements.
7
NOTE 2 NET INCOME (LOSS) PER COMMON SHARE
Earnings per share are computed by dividing net income (loss) by the weighted
average number of common shares outstanding during the period. Weighted average
shares outstanding were 2,299,257 and 2,364,696 for the nine month period ended
February 28, 2010 and 2009, respectively.
Nine Months Ended
February 28,February 28,
2010 2009
----------- -----------
Numerator:
Net loss $ (299,950) (368,597)
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Numerator for basic and diluted loss
per share $ (299,950) (368,597)
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Denominator:
Weighted-average shares outstanding-basic 2,299,257 2,364,696
Effect of dilutive securities:
Stock options - -
---------- -----------
Denominator for diluted loss per share-
Weighted-average shares 2,299,257 2,364,696
---------- -----------
Basic loss per share $ (.16) $ (.13)
========== ===========
Diluted loss per share $ (.16) $ (.13)
========== ===========
NOTE 3 CONTINGENCIES
Litigation
On August 15, 2008, Janet McCollum, as personal representative of the Estate of
Richard Alan Catoe, deceased, filed a wrongful death complaint against the
University of West Florida, Diamond Enterprise, Inc., North Safety Products,
L.L.C. a/k/a North Safety Products, Inc. and Antenna Products Corporation
(the"Lawsuit") in Circuit Court in Escambia County, Florida. Antenna Products
Corporation is PHAZAR CORP's wholly owned and principal operating subsidiary.
The lawsuit alleges that the deceased fell to his death while climbing a ladder
inside a water tower on the University of West Florida campus to install
antennas. The lawsuit further alleges that while the deceased was descending the
ladder, he wore an Antenna Products Corporation safety sleeve affixed to a
safety rail manufactured by defendant North Safety Products that was attached to
the ladder and that the safety sleeve and rail were allegedly defective and
failed to prevent the deceased from falling, thus causing his death. Plaintiff
seeks recovery of unspecified amounts from all the defendants. Antenna Products
Corporation denies any liability to plaintiff and anticipates being dismissed
from the lawsuit. However, if we were found to be responsible or liable, we
would not expect such costs to be material to the Company.
8
PHAZAR CORP AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors that have affected the Company's financial condition and operating
results for the period included in the consolidated financial statements in Item
1.
Company Overview
PHAZAR CORP's continuing operation is that of its subsidiaries, Antenna Products
Corporation, Phazar Antenna Corp., Tumche Corp. and Thirco, Inc. The management
discussion presented in this item relates to the operations of subsidiary units
and the associated consolidated financials.
PHAZAR CORP operates as a holding company with Antenna Products Corporation,
Phazar Antenna Corp., Tumche Corp. and Thirco, Inc. as its wholly owned
subsidiaries. Antenna Products Corporation and Phazar Antenna Corp. are
operating subsidiaries with Thirco, Inc. serving as an equipment leasing company
to PHAZAR CORP's operating units. Tumche Corp. has no sales or operations.
Antenna Products Corporation designs, manufactures and markets antenna systems,
towers and communication accessories worldwide. The United States Government,
military and civil agencies and prime contractors are Antenna Products
Corporation's principal customers. Phazar Antenna Corp. designs and markets
fixed and mobile antennas for commercial wireless applications that include
cellular, PCS, ISM (instrument scientific medical), AMR (automatic meter
reading), wireless internet, wireless local area network, and other WiMax market
applications.
PHAZAR CORP is primarily a build-to-order company. As such, most United States
government and commercial orders are negotiated firm-fixed price contracts.
Executive Level Overview
The following table presents selected data of PHAZAR CORP. This historical data
should be read in conjunction with the consolidated financial statements and the
related notes.
9
Three Month Period Ended Nine Month Period Ended
February 28, February 28,
------------------------ -------------------------
2010 2009 2010 2009
Net Sales $1,974,013 $1,512,889 $5,905,777 $5,649,768
Gross profit margin percent 50.6% 36.8% 49.2% 33.3%
Operating loss $ (241,432) $ (383,280) $ (614,467) $ (665,282)
Net loss $ (160,576) $ (241,039) $ (368,597) $ (299,950)
Net loss per share $ (0.07) $ (0.10) $ (0.16) $ (0.13)
Total assets $8,265,659 $8,267,357 $8,265,659 $8,267,357
Total liabilities $ 912,172 $ 719,390 $ 912,172 $ 719,390
Capital expenditures $ 104,867 $ 31,262 $ 136,067 $ 207,394
Results of Operations
Third Quarter Ended February 28, 2010 ("2010"), Compared to Third Quarter Ended
February 28, 2009 ("2009")
PHAZAR CORP's consolidated sales from operations were $1,974,013 for the quarter
ended February 28, 2010 compared to sales of $1,512,889 for the third quarter
ended February 28, 2009. The Company's revenue increased $461,124, or 30%,
representing a significant upturn in the commercial products segment of our
business.
Cost of sales and contracts for the operations were $974,726 for the quarter
ended February 28, 2010 compared to $955,875 for the third quarter ended
February 28, 2009, up $18,851, or 2%. The reduction in cost of goods sold as a
percent of sales is attributable to lower raw material costs, redirecting
indirect labor to sales and administrative expense along with an improved
product mix, resulting in a 14% increase in the gross profit margin for the
third quarter of fiscal year 2010 at 51 % compared to 37% for the same period in
2009.
Sales and administration expenses were higher in the third quarter of the fiscal
year 2010, $1,042,921 versus $594,931 for the third quarter of fiscal year 2009.
The $447,990 or 75% increase in sales and administration expense includes wages
associated with employees servicing the new mesh radio wireless networking
product line and indirect labor costs. Discretionary product development
spending for the quarter ended February 28, 2010 was $197,798, or 10% of sales,
compared to $345,363, or 23% of sales for the comparable period last year. The
spending level is down $147,565, or 43% however, the Company continues
development on the mesh product line and new antenna designs for the commercial
market.
The Company recorded a net loss of $160,576, or $0.07 per share for the three
month period ended February 28, 2010 compared to a net loss of $241,039, or $.10
per share for the comparable period in the prior year.
10
Commenting on the quarter, Garland P. Asher, Chairman and CEO, said, "After
showing substantial sales and incoming order improvement in December and January
over the prior year, the sluggish tone returned in the month of February for
both. Further, the sales and order picture was mixed. While we continued to see
very solid gains in commercial lines, the traditional government based orders
remain the weakest part of our business. On a more positive note the gross
margin improvement achieved in the second fiscal quarter continued in the third,
which has allowed us to continue our investment in research and development and
our cash position remains strong at over two million dollars."
Nine Months Ended February 28, 2010 ("2010"), Compared to the Nine Months Ended
February 28, 2009 ("2009")
Consolidated sales from operations for PHAZAR CORP were $5,905,777 for the nine
months ended February 28, 2010 compared to $5,649,768 for the nine months ended
February 28, 2009. The Company's revenue increased by $256,009, or 5%, while
recognizing gains in both the commercial and mesh lines, the traditional
government based orders remain the weakest part of our business.
Cost of sales and contracts for the operations were $2,999,790 for the nine
months ended February 28, 2010 compared to $3,770,616 for the comparable period
in fiscal year 2009, down $770,826, or 20%. The reduction in cost of goods sold
is attributable to lower raw material costs, redirecting indirect labor to sales
and administration expense and an improved product mix, resulting in a 16%
increase in the gross profit margin for the nine month period ended February 28,
2010, at 49% compared to 33% for the same period in prior year.
Sales and administration expenses were up $812,932, or 45% in the nine months
ended February 28, 2010, $2,628,966 compared to $1,816,034 for the nine month
period ended February 28, 2009. The increase in sales and administration expense
includes wages associated with employees servicing the new mesh radio wireless
networking product line and redirected indirect labor costs.
Discretionary product development spending for the nine month period ended
February 28, 2010 was $891,488, or 15% of sales, compared to $728,400, or 13% of
sales for the comparable period in the prior year. Year over year, there is an
increase of $163,088 in discretionary spending, as the Company continues
development on the mesh product line and new antenna designs for the commercial
market.
The Company recorded a net loss of $368,597, or $0.16 per share for the nine
month period ended February 28, 2010 compared to a net loss of $299,950, or
$0.13 per share for the nine month period ended February 28, 2009.
United States Government contracts contain a provision that they may be
terminated at any time for the convenience of the Government. In such event, the
contractor is entitled to recover allowable costs plus any profits earned to the
date of termination. The possibility that Government priorities could change,
causing a delay or cancellation of this contract and any potential follow-on
work, makes it impossible to accurately predict whether revenues will increase
or decrease in the upcoming year.
Liquidity and Capital Resources
Sources of Liquidity
11
Funds generated from operations are the major internal sources of liquidity and
are supplemented by funds derived from capital markets, principally bank
facilities. The Company's operating subsidiary has a $2,000,000 revolving note
facility with a bank collateralized by the subsidiary's inventory and accounts
with PHAZAR CORP, the parent company, signing as the guarantor. The facility is
currently unused. PHAZAR CORP believes that its cash and the credit available at
February 28, 2010, are sufficient to fund the Company's operations for at least
the next twelve months.
Capital Requirements
Management of the operating subsidiaries evaluates the facilities and reviews
equipment requirements for existing and projected contracts on a regular basis.
An annual capital plan is generated by management and submitted to the Board of
Directors for review and approval. In the first three quarters of fiscal year
2010, there were $136,067 in capital expenditures for new and replacement
equipment compared to $207,394 of expenditures in the first three quarters of
fiscal year 2009. The Company intends to limit the fiscal year 2010 capital
program to less than $150,000 for improvements and new equipment.
At February 28, 2010, PHAZAR CORP had cash and cash equivalents of $2,159,576.
There were $128,874 of deferred revenues at February 28, 2010.
Cash Flows
Operating Activities
Cash and cash equivalents of $2,159,576 at February 28, 2010 are down
$1,161,071, or 35% on a balance of $3,320,647 as of May 31, 2009.
The negative $674,704 of cash flow from operations consists of a $391,012
increase in inventory and a $ 488,846 increase in accounts receivables. The 15%
increase in inventory levels for the nine month period ended February 28, 2010
compared to fiscal year end May 31, 2009, represents a continued effort by
management to take advantage of lower raw material costs and increase stock
levels in certain finished goods products. The $488,846, or 74% increase in
accounts receivable is attributable to a significant increase in revenues for
the quarter year over year.
Investing Activities
Cash of $486,367 was used in investing activities during the nine month period
ended February 28, 2010, which consists of $339,993 of funding for the purchase
of a senior secured convertible note obligation with warrants involving a
non-related party, a $136,067 of capital expenditures and $10,307 for the
purchase of treasury stock. Cash of $2,415,818 was provided from investing
activities during the nine month period ended February 28, 2009, which consists
of $2,650,000 of redemption of marketable securities offset by $207,394 of
capital expenditures and $26,788 for the purchase of treasury stock.
Financing Activities
There were no financing activities requiring cash during the third quarter
ending February 28, 2010 and 2009. At February 28, 2010 and 2009, PHAZAR CORP
had no long-term debt outstanding.
12
Forward Looking Statement Disclaimer
This Form 10-Q contains forward-looking information within the meaning of
Section 29A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements include statements concerning
plans, objectives, goals, strategies, future events or performances and
underlying assumption and other statements, which are other than statements of
historical facts. Certain statements contained herein are forward-looking
statements and, accordingly, involve risks and uncertainties, which could cause
actual results, or outcomes to differ materially from those expressed in the
forward-looking statements. The Company's expectations, beliefs and projections
are expressed in good faith and are believed by the Company to have a reasonable
basis, including without limitations, management's examination of historical
operating trends, data contained in the Company's records and other data
available from third parties, but there can be no assurance that management's
expectations, beliefs or projections will result, or be achieved, or
accomplished.
Item 4. Controls and Procedures
Management's Evaluation of Internal Controls over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rule 13a-15(f) of
the Exchange Act. This system is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of the
consolidated financial statements for external purposes in accordance with U.S.
generally accepted accounting principles. Our internal control over financial
reporting includes those policies and procedures that: (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
our transactions and disposition of our assets; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of
consolidated financial statements in accordance with U.S. generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of our management and directors; and (3)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. The scope of
management's assessment of the effectiveness of internal control over financial
reporting includes all of our Company's subsidiaries.
The Company has had no change during the quarter ending February 28, 2010 that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
13
Disclosure Controls and Procedures
The Company's Chief Executive Officer and Chief Financial Officer evaluated the
Company's disclosure controls and procedures as of February 28, 2010. In making
their assessment, the Company's Chief Executive Officer and Chief Financial
Officer were guided by the releases issued by the SEC and to the extent
applicable was based upon the framework in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. The Company's Chief Executive Officer and Chief Financial Officer
have concluded that the Company's disclosure controls and procedures were
effective as of February 28, 2010.
14
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The information provided in Note 3 of the unaudited Consolidated Financial
Statements is hereby incorporated into this Part II, Item I by reference
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements. See Item 1.
2. Financial Statement Schedules. Not applicable.
All other schedules have been omitted because the required
information is shown in the consolidated financials or
notes thereto, or they are not applicable.
3. Exhibits. See Index to Exhibits for listing of exhibits
which are filed herewith or incorporated by reference
(b) Reports on Form 8-K.
1. Form 8-K filed on December 17, 2009
2. Form 8-K filed on March 31, 2010
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHAZAR CORP
/s/GARLAND P. ASHER
Date: April 14, 2010 --------------------------------------------
Garland P. Asher, Principal Executive Officer
and Director
15
EXHIBIT INDEX
Exhibit 3.(i) - Registrant's Articles of Incorporation, as amended,
incorporated by reference to the like numbered exhibit in the
Registrant's Annual Report on Form 10-KSB/A for the fiscal
year ended May 31, 2000, filed on February 20, 2004
Exhibit 3.(ii) - Registrant's By Laws, incorporated by reference to the like
numbered exhibit in the Registrant's Annual Report on Form
10-KSB/A for the fiscal year ended May 31, 2000, filed on
February 20, 2004
Exhibit 4.1(1) - 2006 Incentive Stock Option Plan, incorporated by reference as
Exhibit A to the Registrant's Definitive Proxy Statement dated
September 15, 2006 and filed on September 15, 2006. Also
incorporated by reference to the like numbered exhibit in the
Registrant's Form S-8 dated January 8, 2007 and filed on
January 8, 2007
Exhibit 4.1(2) - 2009 Equity Compensation Plan dated April 22, 2009,
incorporated by reference to Exhibit 10-1 of the Registrant's
Form S-8, filed on April 27, 2009
Exhibit 10.b - Amended and restated agreement with Garland Asher dated
September 10, 2009, incorporated by reference to the like
numbered exhibit in the Registrant's Form 10-Q, ended November
30, 2009 and filed on January 14, 2010
Exhibit 14.1 - Code of Ethics and Business Conduct for the Senior Executive
Officers and Senior Financial Officers incorporated by
reference to the like numbered exhibit in the Registrant's
annual report on form 10-KSB for the fiscal year ended May 31,
2004, filed on August 6, 2004
Exhibit 21. - A list of all subsidiaries of the Registrant, incorporated by
reference to the like numbered exhibit in the Registrant's
Annual Report on Form 10-KSB/A for the fiscal year ended May
31, 2000 filed on February 20, 2004
Exhibit 23.1 - Consent of Weaver and Tidwell, L.L.P. incorporated by
reference to the like numbered exhibit in the Registrant's
Form 10-K/A for the fiscal year ended May 31, 2009, filed on
March 24, 2010
Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
Officer (attached)
Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
Officer (attached)
Exhibit 32.1 - Section 1350 Certification (attached)
Exhibit 99.1 - Nominating Committee Charter incorporated by reference to the
like numbered exhibit in the Registrant's Form 8-K filed on
November 7, 2005
16