<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
{X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended July 31, 1997
---------------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File Number: 0-13011
- --------------------------------
TNR TECHNICAL, INC.
(Exact name of Registrant as specified in its charter)
New York 11-2565202
- ------------------------------ ----------------------
(State of jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
301 Central Park Drive
Sanford, Florida 32771
- ------------------------------ ------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (407) 321-3011
--------------
Securities registered pursuant to Section 12(b) of the Act:
None
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.02 Par Value
- --------------------------------------------------------------------------------
(Title of Class)
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. Yes X . No ___.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in part III of this
Form 10-K or any amendment to this Form 10-K [x].
As of September 30, 1997, the number of shares held by non-affiliates
was approximately 155,000 shares. Due to the limited market for the Company's
Common Stock, no value has been attributed to the shares held by non-affiliates.
The number of shares outstanding of the issuer's Common Stock, as of
September 30, 1997 was 261,997.
<PAGE>
PART I
Item 1. Business
- ------- --------
General
- -------
TNR Technical, Inc. (the "Company") was incorporated on October 4, 1979
under the laws of the State of New York. The Company designs, assembles and
markets high technology batteries, multi-cell battery packs and rechargeable
power supplies to a variety of industrial markets. The Company is an authorized
distributor for several major battery manufacturers, which products are
distributed nationally by Company and are sold at its retail store. The
Company's business is conducted principally at its two facilities in Sanford,
Florida and Irvine, California.
Industrial and Distribution Programs
- ------------------------------------
The Company is an authorized distributor of (1) nickel-cadmium and
sealed lead-acid batteries and (ii) lithium cells and batteries manufactured by
Saft America, Powersonic Battery, Varta Battery, Yuasa, Duracell, Renata, GP
Battery, Eveready Battery, Sony and Sanyo Energy. As an authorized distributor,
the Company purchases cells, assembles them into battery packs and maintains an
inventory for resale. The Company sells its battery cells and/or battery packs
to the industrial users and wholesalers without geographical limitation and on a
non-exclusive basis. The Company also designs and assembles battery packs to
customers' specifications. The Company's batteries supply portable power for
tools, instruments, medical equipment, communications equipment, photography,
radios and remote control airplanes, video recorders, lighting, toys and
cellular telephones. The Company's batteries supply standby power for electronic
equipment, computer memories, emergency lighting, fire and burglar alarms,
electronic cash registers, logic systems, medical instruments and communications
systems.
Sales under industrial and distribution programs accounted for
substantially all of the Company's total revenues during the Company's past
three fiscal years and no one customer accounted for 10% or more of the
Company's total revenues during these years. At July 31, 1997 and 1996, the
Company had no significant backlog.
Retail Program
- --------------
The Company previously maintained a retail store consisting of
approximately 300 square feet in Sanford, Florida where the Company sold (I)
nickel-cadmium and sealed lead-acid batteries and (ii) lithium cells and
batteries under the name "Your Battery Store." In its retail store, the Company
offered to consumers the same products that it sells directly to the industrial
users and wholesalers. The Company promoted its retail store by advertising in
the local yellow pages and newspapers. In April 1997, the Company closed its
retail store to concentrate its efforts on its wholesale operations.
2
<PAGE>
Competition
- -----------
There are numerous companies producing and marketing batteries which
compete with those sold by the Company, including larger companies, battery
manufacturers and companies with a wider range of products and greater financial
and technical resources than the Company.
It should be noted that the Company's products and proposed products
are technological in nature and that modern technology often progresses rapidly.
Accordingly, the Company's present and proposed products are subject to the risk
of obsolescence because of technological innovation by competitors.
Employees
- ---------
At September 10, 1997, the Company had twenty-seven employees which
include nine salespersons (including two executive officers), four clerical
persons, two warehouse and shipping personnel and ten factory workers.
Item 2. Properties
- ------- ----------
The Company's principal executive office, sales, distribution and
assembly facility is located at 301 Central Park Drive, Sanford, Florida 32771.
These facilities, which consist of approximately 8,000 square feet of space, are
leased from RKW Holdings Ltd., a Florida Limited Partnership, controlled by
Wayne Thaw, an executive officer and director of the Company. The Florida lease
provides for a term of ten years with a base annual rent of $59,800 in year one
of the term with annual increases of five percent over the preceding year's base
rent. The Company is also responsible for the payment of all sales, use and
other taxes related to the leased facilities. The Company also leases a sales,
distribution and assembly facility at 17779 Main Street, Irvine, California
92614. These facilities consist of 1,620 square feet of space. The California
lease expires on June 14, 1998 unless extended by the Company for up to one
additional year. The Company pays a base rent of approximately $1,225 per month.
The Company owns production equipment, primarily welding, soldering, testing,
pneumatic and material handling equipment, and inspection equipment which has
been sufficient for its needs to date.
Item 3. Legal Proceedings
- ------- -----------------
There are no material legal proceedings to which the Company is a
party.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------- ----------------------------------------------------
No matters were submitted to a vote of security holders during the
fourth quarter of fiscal 1997.
3
<PAGE>
PART II
Item 5. Market for Registrant's Securities and Related Stockholder Matters.
- ------- -------------------------------------------------------------------
(a) Principal Market and Stock Prices.
---------------------------------
The Company's Common Stock may be quoted in the over-the-counter
market. The closing high and low bid prices of the Common Stock, as reported by
National Quotation Bureau, Incorporated are shown below for the Company's last
two fiscal years.
High Low
---- ---
Fiscal 1997
- -----------
First Quarter $ 3.44 $ 3.13
Second Quarter $ 3.44 $ 3.00
Third Quarter $ 3.38 $ 3.00
Fourth Quarter $ 3.38 $ 3.38
Fiscal 1996
- -----------
First Quarter $ 3.50 $ 3.25
Second Quarter $ 3.50 $ 3.25
Third Quarter $ 3.50 $ 3.00
Fourth Quarter $ 3.25 $ 3.00
The foregoing quotations represent approximately inter-dealers prices,
without retail markup, markdown or commission and do not represent actual
transactions. Such quotations should not be viewed as necessarily indicative of
the price that could have been obtained on that date for a substantial number of
securities due to the limited market and trading volume for the Company's
securities. On August 28, 1997, the last sale was $3.38.
The approximate number of holders of record of the Company's Common
Stock, as of September 10, 1997 was 1,536 as supplied by the Company's transfer
agent, American Stock Transfer Company, 40 Wall Street, New York, NY 10005.
No cash dividends have been paid by the Company on its Common Stock and
no such payment is anticipated in the foreseeable future.
4
<PAGE>
Item 6.
SELECTED FINANCIAL DATA
The following selected financial data has been derived from the Company's
financial statements which have been examined by independent certified public
accountants, as indicated in their reports included elsewhere herein. Such
financial statements should should be read in conjunction with the following
financial data.
Statement of Operations Summary:
- --------------------------------
<TABLE>
<CAPTION>
===================================================================================================================================
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, 1997 July 31, 1996 July 31, 1995 July 31, 1994 July 31, 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net sales $4,239,423 $3,792,537 $3,710,805 $3,585,872 $2,804,053
- -----------------------------------------------------------------------------------------------------------------------------------
Net income 88,701 135,398(1) 437,982(1) 148,238 129,963
- -----------------------------------------------------------------------------------------------------------------------------------
Net income per
share .34 .52 1.67 .56 .50
- -----------------------------------------------------------------------------------------------------------------------------------
Cash dividends -0- -0- -0- -0- -0-
===================================================================================================================================
</TABLE>
Balance Sheet Data:
- -------------------
<TABLE>
<CAPTION>
===================================================================================================================================
July 31, 1997 July 31, 1996 July 31, 1995 July 31,1994 July 31, 1993
------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Working capital $1,677,501 $1,569,635 $1,456,548 $1,272,929 $1,129,220
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets 2,265,123 1,997,399 2,022,611 1,532,215 1,364,331
- -----------------------------------------------------------------------------------------------------------------------------------
Long-term debt
(including capital
leases) -0- -0- -0- -0- -0-
- -----------------------------------------------------------------------------------------------------------------------------------
Total Shareholders'
equity 1,976,751 1,889,814 1,754,416 1,316,434 1,168,196
===================================================================================================================================
</TABLE>
(1) Includes a credit for income taxes of $239,000. See "Note 6 in Notes
to Financial Statements."
5
<PAGE>
Item 7. Managements Discussion and Analysis of
- ------- --------------------------------------
Financial Condition and Results of Operations.
----------------------------------------------
Liquidity and Capital Resources
- -------------------------------
Working capital amounted to $1,677,501 at July 31, 1997 as compared to
$1,569,635 at July 31, 1996 as compared to $1,456,548 at July 31, 1995. Cash and
short-term investments amounted to $556,468 at July 31, 1997 as compared to
$774,570 at July 31, 1996 as compared to $608,161 at July 31, 1995. As more
fully described in the "Statements of Cash Flows" included in the Company's
Financial Statements elsewhere herein, net cash provided by (used in) operating
activities for the fiscal years ended July 31, 1997, July 31, 1996 and July 31,
1995 were ($166,403), $242,858, and ($83,021), respectively.
During 1997, 1996 and 1995, the Company's net income contributed to
cash flows from operating activities. In 1997 net cash was used in operating
activities primarily as a result of substantial increases in accounts receivable
and inventories partially offset by the Company's net income and increases in
accounts payable. The substantial increase in inventory is primarily due to low
inventory levels at July 31, 1996 in anticipation of the Company's move to its
new facilities in Sanford, Florida in the summer of 1996. During 1997, net cash
was provided by investing activities as a result of reduction in short term
investments partially offset by purchase of property and equipment.
In 1996, cash flow from operating activities was increased
substantially by decreases in inventories partially offset by increases in
accounts receivable. The substantial decrease in inventory is primarily due to
the Company's move to its new facilities as described above. With respect to
accounts payable, the balance of accounts payable was decreased approximately
$150,000 during the year ended July 31, 1996, as a result of the availability of
cash which was primarily caused by substantially decreased levels of inventory
purchases for the reasons discussed above. During 1996, net cash was provided by
investing activities as a result of reduction in short term investments
partially offset by purchase of property and equipment.
In 1995, cash was used in operating activities primarily as a result of
increases in inventories and deferred income taxes partially offset by the
Company's net income. Management purchased larger than customary volumes of
product during the latter half of 1995 primarily to take advantage of certain
price breaks offered at the time and in anticipation of increased sales in
fiscal 1996 over fiscal 1995. In early 1996 as a result of strong, but not
dramatically increased sales, further purchases of inventory were substantially
reduced which caused inventory levels to decrease to more manageable and
appropriate level given the volume of sales experienced over the past three
years. During 1995, net cash was used in investing activities to increase short
term investments and purchase property and equipment. During the past three
years, the Company did not have any external sources of financing.
6
<PAGE>
During the past three years, the Company's liquidity needs has been
satisfied from internal sources including cash from operations and amounts
available from the Company's working capital. During fiscal 1998, Management
expects this trend to continue. There are no material commitments for capital
expenditures or any long-term credit arrangements as of July 31, 1997.
Results of Operations
- ---------------------
Sales for 1997 increased $446,886 or approximately 12% as compared to
fiscal 1996. Sales for 1996 increased by approximately $82,000 or 2% as compared
to fiscal 1995. The sales increases were due to increased demand for the
Company's products from the Company's existing client base and from new
customers. During the past three years, no customer accounted for more than 10%
of revenues. The Company's gross margin fluctuated slightly over the past three
years primarily due to changes in product mix.
Operating (selling, general and administrative) expenses increased
during fiscal 1997 as compared to fiscal 1996 and for fiscal 1996 as compared to
fiscal 1995, substantially due to increases in rent, insurance, administrative
salaries and depreciation. Operating expenses when expressed as a percentage of
net sales was 23.0%, 22.7%, and 21.5%, for fiscal 1997, fiscal 1996 and fiscal
1995, respectively.
During the past three years, the Company did not charge its operations
with any research and development costs.
Net income for fiscal 1997 was $88,701 as compared to $135,398, for
fiscal 1996 as compared to a net income for fiscal 1995 of $437,982. Net income
per share for fiscal 1997, fiscal 1996 and 1995 were $.34, $.52 and $1.67,
respectively.
Management of TNR Technical, Inc. has received a number of comments
from its odd lot stockholders regarding the costs associated with any sale of
their odd lots. Further, Management would like to reduce TNR's expense of
maintaining mailings to odd lot holders. Accordingly, TNR will from time-to-time
privately purchase from odd lot holders of its common stock, such odd lots (i.e.
99 shares or less) from its stockholders of record on December 15, 1995 so long
as such purchases would not have the effect of reducing TNR's record holders to
500 or less. The purchase price to be paid will be based upon the closing asked
price on the NASD electronic bulletin board of TNR's Common Stock for the
preceding trading day. Stockholders will not be permitted to breakup their
stockholdings into odd lots and stockholders or their legal representatives must
affirm to TNR that the odd lot shares submitted for payment represent the
stockholder's entire holdings and that such holdings do not exceed 99 shares.
(This offer shall be open to all odd lot beneficial holders even those held in
street or nominee name so long as the proper representations can be obtained
satisfactory to TNR that the shares are odd lot shares, were owned by the
beneficial stockholder as of December 15, 1995 and represent such stockholder's
entire holdings of TNR). This offer will not be valid in those states or
jurisdictions where such offer or sale would be unlawful.
7
<PAGE>
Item 8. Financial Statements and Supplementary Data.
- ------- --------------------------------------------
The information required by Item 8, and an index thereto, appears at
pages F-1 through F-12 (inclusive) of this Report, which pages follow Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- ------- ---------------------------------------------------------------
Financial Disclosure.
---------------------
In November 1995, the Company reported the death of Burton R. Abrams
CPA, 22 Julliard Drive, Plainview, New York 11803, the Company's certifying
accountant. Mr. Abrams was a sole practitioner. The Burton R. Abrams' firm was
terminated as a result of the death of Mr. Abrams. Burton R. Abrams' report on
the financial statements of the Company for the fiscal year ended July 31, 1995
did not contain an adverse opinion or a disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope, or accounting principles.
During the Company's fiscal year ended July 31, 1995 and during the
period August 1, 1995 through November 20, 1995, there were no disagreements
between the Company and its former accountant on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure that if not resolved to the satisfaction of the former accountant
would have caused the former accountant to refer to the subject matter of the
disagreement in connection with the report.
During the Company's fiscal year ended July 31, 1995 and during the
period August 1, 1995 through November 20, 1995: (I) the accountant did not
advise the Company of the lack of internal controls necessary to develop
reliable financial statements; (ii) the accountant did not advise the Company
that it could no longer rely on representations of the Company's management or
that it was unwilling to be associated with the financial statements prepared by
the Company's management; (iii) the accountant did not advise the Company of the
need to significantly expand the scope of its audit or of the existence of
information that if further investigated could materially impact the fairness or
reliability of audited reports or financial statements or cause the accountant
to be unable to rely on management's representation; and (iv) the accountant did
not advise the Company of information that, in the opinion of the accountant,
materially impacted the fairness or reliability or a previously issued audit
report or underlying financial statement.
Parks, Tschopp & Whitcomb, P.A., was engaged by the Company on
November 20, 1995 as the Company's new certifying accountants to perform an
audit of the Company for its fiscal year ended July 31, 1996. During the fiscal
year ended July 31, 1995 and during the period August 1, 1995 to the date of
engagement of Parks, Tschopp & Whitcomb, P.A., the Company did not consult the
firm of Parks, Tschopp & Whitcomb, P.A., regarding (I) the application of
accounting principles to a specified transaction, either completed or proposed;
(ii) the type of audit opinion that might be rendered on the Company's financial
statements; or (iii) any matter that was the subject of a disagreement with the
Company's former accountant or any other matter as required under the Securities
Act of 1933 as amended.
8
<PAGE>
The financial statements of TNR Technical, Inc. as of July 31, 1997
and 1996 and for the two years then ended as listed in Item 8 were audited by
Parks, Tschopp and Whitcomb P.A. and include their report thereon dated
September 12, 1997. The financial statements as of July 31, 1995 and for the
year then ended also listed in Item 8 were audited by Burton R. Abrams, CPA, a
sole practitioner who died in November 1995. The Company's Form 10-K for the
fiscal year ended July 31, 1995 includes his report dated August 25, 1995
wherein Mr. Abrams expressed an unqualified opinion on the financial statements
of TNR Technical, Inc. as of July 31, 1995 and for the year then ended which he
manually executed. However, this report cannot be included herein without his
consent, and as a result of his death has not been included. Based upon the
audit of the financial statements of TNR Technical, Inc. as of July 31, 1997 and
1996 and the two years then ended the firm of Parks, Tschopp and Whitcomb P.A.
has indicated that no matters have come to their attention which might have a
material effect on, or require disclosure in the financial statements reported
on previously by Mr. Abrams.
9
<PAGE>
TNR TECHNICAL, INC.
Index to Financial Statements
<TABLE>
<CAPTION>
<S> <C>
Independent Auditors' Report F-1
Report of Independent Certified Public Accountant -- July 31, 1995 F-2
Financial Statements:
Balance Sheets -- July 31, 1997 and 1996 F-3
Statements of Operations -- Three years ended July 31, 1997 F-4
Statements of Shareholders' Equity -- Three years ended July 31, 1997 F-5
Statements of Cash Flows -- Three years ended July 31, 1997 F-6
Notes to Financial Statements F-7
</TABLE>
<PAGE>
Independent Auditors' Report
----------------------------
The Shareholders and Board of Directors
TNR Technical, Inc.:
We have audited the accompanying balance sheets of TNR Technical, Inc. as of
July 31, 1997 and 1996, and the related statements of operations, shareholders'
equity and cash flows for the two years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of TNR Technical, Inc. as of July
31, 1997 and 1996 and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ Parks, Tschopp & Whitcomb, P.A.
September 12, 1997
Maitland, Florida
F-1
<PAGE>
Report of Independent Certified Public Accountant
-------------------------------------------------
The financial statements of TNR Technical, Inc. as of July 31, 1995 and for the
year then ended were audited by Burton R. Abrams, CPA, a sole practitioner who
died in November 1995. The Company's Form 10-K for the fiscal year ended July
31, 1995 includes his report dated August 25, 1995 wherein Mr. Abrams expressed
an unqualified opinion on the financial statements of TNR Technical, Inc. as of
July 31, 1995 and for the year then ended which he manually executed. However,
his report cannot be included herein without his consent, and as a result of his
death has not been included. Based upon the audits of the financial statements
of TNR Technical, Inc. as of July 31, 1997 and 1996 and the years then ended,
the firm of Parks, Tschopp and Whitcomb, P.A. has indicated that no matters have
come to their attention which might have a material effect on, or require
disclosure in, the financial statements reported on previously by Mr. Abrams.
F-2
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
July 31, 1997 and 1996
<TABLE>
<CAPTION>
Assets
------
1997 1996
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 528,436 426,320
Short-term investments (note 2) 28,032 348,250
Accounts receivable - trade, less allowance for doubtful
accounts of $14,860 in 1997 and $20,000 in 1996 574,939 442,181
Income taxes receivable 1,360 1,685
Inventories (note 3) 782,389 440,586
Prepaid expenses and other current assets 33,717 5,198
Deferred income taxes (note 6) 17,000 13,000
----------- -----------
Total current assets 1,965,873 1,677,220
Deferred income taxes (note 6) 162,000 197,000
Property and equipment, at cost, net of accumulated
depreciation and amortization (note 4) 122,856 109,796
Other assets:
Deposits 14,394 13,383
----------- -----------
Total assets $ 2,265,123 1,997,399
=========== ===========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 196,114 61,077
Accrued expenses 92,258 46,508
----------- -----------
Total current liabilities 288,372 107,585
----------- -----------
Shareholders' equity:
Common stock - $.02 par value, authorized 500,000
shares; issued and outstanding 301,581 shares (note 5) 6,032 6,032
Additional paid in capital 2,640,001 2,640,001
Accumulated deficit (473,248) (561,949)
----------- -----------
2,172,785 2,084,084
Less cost of treasury stock - 39,600 and 39,159
shares in 1997 and 1996, respectively 196,034 194,270
----------- -----------
Total shareholders' equity 1,976,751 1,889,814
----------- -----------
Commitment (note 7)
$ 2,265,123 1,997,399
=========== ===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
TNR TECHNICAL, INC.
Statements of Operations
Years ended July 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Revenues:
Net sales (note 8) $4,239,423 3,792,537 3,710,805
---------- ---------- ----------
Costs and expenses:
Cost of goods sold 3,170,948 2,779,595 2,746,734
Selling, general and administrative (note 9) 975,757 859,047 799,572
---------- ---------- ----------
4,146,705 3,638,642 3,546,306
Operating income 92,718 153,895 164,499
Non-operating revenue (expense):
Interest income 35,110 30,538 34,483
---------- ---------- ----------
Income before income taxes 127,828 184,433 198,982
Income tax expense (benefit) (note 6) 39,127 49,035 (239,000)
---------- ---------- ----------
Net income $ 88,701 135,398 437,982
========== ========== ==========
Net income per share $ .34 .52 1.67
========== ========== ==========
Weighted average number of shares 262,203 262,422 262,422
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
TNR TECHNICAL, INC.
Statements of Shareholders' Equity
Years ended July 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Accumulated Treasury
Shares Amount Capital Deficit Stock
---------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balances, July 31, 1994 301,581 $ 6,032 2,640,001 (1,135,329) (194,270)
Net income -- -- -- 437,982 --
---------- ---------- --------- ---------- ---------
Balances, July 31, 1995 301,581 6,032 2,640,001 (697,347) (194,270)
Net income -- -- -- 135,398 --
---------- ---------- --------- ---------- ---------
Balances, July 31, 1996 301,581 6,032 2,640,001 (561,949) (194,270)
Net income 88,701
Purchase of Company
Stock -- -- -- -- (1,764)
---------- ---------- --------- ---------- ---------
Balances, July 31, 1997 301,581 $ 6,032 2,640,001 (473,248) (196,034)
========== ========== ========= ========== =========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
Years ended July 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income 88,701 135,398 437,982
Adjustments to reconcile net income to net cash
provided by operations:
Deferred income taxes 31,000 40,000 (250,000)
Depreciation and amortization 36,875 23,530 17,028
Provision for doubtful accounts 8,400 24,820 6,000
Changes in operating assets and liabilities:
Accounts receivable (141,158) (86,699) (91,912)
Inventories (341,803) 274,852 (270,260)
Prepaid expenses and other assets (28,519) 644 15,727
Accounts payable and accrued expenses 180,787 (155,110) 52,414
Deposits (1,011) (7,392) --
Income taxes receivable 325 (7,185) --
----------- ----------- ----------
Net cash provided by (used in) operating
activities (166,403) 242,858 (83,021)
----------- ----------- ----------
Cash flows from investing activities:
Purchases of short-term investments (1,035,848) (1,047,304) (758,442)
Maturities of short-term investments 1,356,066 1,206,917 624,348
Purchase of property and equipment (49,935) (76,449) (36,391)
----------- ----------- ----------
Net cash provided by (used in) investing
activities 270,283 83,164 (170,485)
----------- ----------- ----------
Cash flows from financing activities:
Purchase of treasury stock (1,764) -- --
----------- ----------- ----------
Net cash used in financing activities (1,764) -- --
----------- ----------- ----------
Increase (decrease) in cash and cash
equivalents 102,116 326,022 (253,506)
Cash and cash equivalents - beginning of year 426,320 100,298 353,804
----------- ----------- ----------
Cash and cash equivalents - end of year $ 528,436 426,320 100,298
=========== =========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ -- -- --
=========== =========== ==========
Cash paid during the year for income taxes $ 7,803 10,860 13,000
=========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1997 and 1996
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Nature of Operations
--------------------
TNR Technical, Inc. (TNR or the Company) designs, assembles and
markets batteries and multi-cell battery packs to a wide variety
of industrial markets. The Company is a distributor for a number
of major U.S. battery manufacturers and markets its products
nationally.
(b) Inventories
-----------
Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method.
(c) Property and Equipment
----------------------
Property and equipment are recorded at cost. The Company provides
depreciation for machinery and equipment using the straight-line
method over the estimated useful lives of the respective assets,
which range from five to ten years. Amortization of leasehold
improvements is computed using the straight-line method over the
lesser of the lease term or estimated useful lives of the
improvements.
(d) Research and Development Costs
------------------------------
Research and development costs are charged against income in the
year incurred.
(e) Revenue Recognition
-------------------
The Company recognizes revenue upon shipment of its product from
its warehouse facilities.
(f) Advertising Costs
-----------------
Advertising expenditures relating to product distribution and
marketing efforts consisting primarily of product presentation
material, catalog preparation, printing and postage expenses are
amortized over the period during which the benefits are expected.
(g) Use of Estimates
----------------
Management of the Company has made certain estimates and
assumptions relating to the reporting of assets and liabilities
and disclosure of contingent assets and liabilities to prepare
these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
F-7
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1997 and 1996
(1), Continued
(h) Financial Instruments Fair Value, Concentration of Business and
---------------------------------------------------------------
Credit Risks
------------
The carrying amount reported in the balance sheet for cash, short-term
investments, accounts receivable, accounts payable and accrued
expenses approximates fair value because of the immediate or
short-term maturity of these financial instruments. Financial
instruments, which potentially subject the Company to concentrations
of credit risk, consist principally of trade accounts receivable which
amount to approximately $575,000 and money market funds amounting to
approximately $483,000. The Company performs periodic credit
evaluations of its trade customers and generally does not require
collateral. The Company maintains its cash balances at certain
financial institutions in which balances are insured by the Federal
Deposit Insurance Corporation up to $100,000. The Company's uninsured
balances amount to approximately $400,000 and $200,000 at July 31,
1997 and 1996, respectively.
(i) Income Taxes
------------
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(j) Cash Flows
----------
For purposes of cash flows, the Company considers all highly liquid
investments with a maturity of three months or less to be cash
equivalents.
(k) Earnings Per Common Share
-------------------------
Earnings per common share have been computed based upon the weighted
average number of common shares outstanding during the years
presented. Common stock equivalents resulting from the issuance of the
stock options have not been included in the per share calculations
because such inclusion would not have a material effect on earnings
per common share.
(i) Reclassifications
-----------------
Certain amounts from 1996 and 1995 have been reclassified to conform
with the 1997 presentation.
(Continued)
F-8
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1997 and 1996
(2) Short-Term Investments
----------------------
Short-term investments are comprised of held to maturity and trading
securities at July 31, 1996 and 1997, respectively, and are presented
below:
<TABLE>
<CAPTION>
Description Face Value Price Maturity Balance
----------- ---------- ----- -------- -------
<S> <C> <C> <C> <C>
1996:
- ----
United States Treasury Bill $ 350,000 99-1/2 08-29-96 $ 348,250
===========
1997:
- ----
Unit investment trust $ - - - $ 28,032
===========
</TABLE>
The Company's trading securities are carried at far value, which is not
materially different than cost. Net realized and unrealized gains and losses on
trading securities are included in net income.
<TABLE>
<CAPTION>
<S> <C> <C>
(3) Inventories
-----------
Inventories consist of the following:
1997 1996
---- ----
Finished goods $ 763,613 430,061
Purchased parts and material 18,776 10,525
------------ -----------
$ 782,389 440,586
============ ===========
(4) Property and Equipment
----------------------
Property and equipment consists of the following:
1997 1996
---- ----
Machinery and equipment $ 202,774 164,450
Leasehold improvements 26,742 23,467
------------ -----------
229,516 187,917
Less accumulated depreciation and amortization 106,660 78,121
------------ -----------
$ 122,856 109,796
============ ===========
</TABLE>
F-9
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1997 and 1996
(5) Stock Option Plan
-----------------
In November 1992, the Board of Directors approved an Incentive and
Non-Qualified Stock Option Plan, which was ratified by the stockholders in
January 1993. The plan covers 60,000 shares of Common Stock, subject to
adjustment of shares under the anti-dilution provisions of the Plan. The
plan authorizes the issuance of the options covered thereby as either
"Incentive Stock Options" within the meaning of the Internal Revenue Code
of 1986, as amended, or as "Non-Statutory Stock Options." No options may be
granted after November 16, 2002.
Under the Plan, the aggregate fair market value (determined at the time the
option is granted) of the optioned stock for which Incentive Stock Options
are exercisable for the first time by any employee during any calendar year
shall not exceed $100,000.
In December 1996, the Company granted options to purchase 30,000 shares of
stock at an exercise price of $3.25 per share to three of its officers and
directors. The options are exercisable for a ten-year period expiring in
December 2006.
(6) Income Taxes
------------
The income tax provision (benefit) for the years ended December 31, 1997,
1996 and 1995 consists of the following:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
Current:
<S> <C> <C> <C>
Federal $ - - -
State 7,000 9,035 11,000
---------- ---------- ----------
7,000 9,035 11,000
---------- ---------- ----------
Deferred:
Federal 31,000 40,000 (250,000)
State 1,127 - -
---------- ---------- ----------
32,127 40,000 (250,000)
---------- ---------- ----------
Total $ 39,127 49,035 (239,000)
========== ========== ==========
</TABLE>
(Continued)
F-10
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1997 and 1996
(6), Continued
Income tax expense (benefit) attributable to income before income tax
differed from the amount computed by applying the U.S. Federal income tax
rate of 34% to income from operations before income taxes as a result of
the following:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Computed "expected" tax expense $ 43,500 62,700 67,700
Increase (reduction) in income tax expense (benefit)
resulting from:
State income taxes, net of federal income tax benefit 4,500 6,000 7,000
Utilization of net operating loss carryforwards - - (52,500)
Rate differences (8,873) (19,665) (11,200)
Reduction in valuation allowance - - (250,000)
----------- ---------- --------
$ 39,127 49,035 (239,000)
=========== ========== ========
</TABLE>
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets at July 31, 1997 and 1996 are presented below:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Deferred tax assets:
Inventories, principally due to additional costs
inventoried for tax purposes $ 13,000 8,000
Accounts receivable, due to allowance for uncollectible
accounts 4,000 5,000
Net operating losses 162,000 197,000
---------- ----------
179,000 210,000
Less valuation allowance - -
---------- ----------
Total $ 179,000 210,000
========== ==========
</TABLE>
(Continued)
F-11
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1997 and 1996
(6), Continued
Deferred taxes are presented in the accompanying balance sheets as:
1997 1996
---- ----
Current deferred tax assets $ 17,000 13,000
Noncurrent deferred tax assets 162,000 197,000
------------ ------------
$ 179,000 210,000
============ ============
In the year ended July 31, 1994, the Company adopted the Financial Accounting
Board Statement No. 109, "Accounting for Income Taxes" and recorded a gross
deferred tax asset of $250,000 which was offset by a valuation allowance in the
same amount as of July 31, 1994. During fiscal 1995, the Company reversed the
entire valuation allowance and, accordingly, credited $250,000 to income tax
expense.
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will be realized. Management considers the projected future taxable
income and tax planning strategies in making this assessment. The Company
believes that future earnings in addition to the amount of taxable differences
which will reverse in future periods, will be sufficient to offset recorded
deferred tax assets and, accordingly, a valuation allowance is not considered
necessary at July 31, 1997 and 1996.
At July 31, 1997, the Company has net operating loss carryforwards of
approximately $640,000, which will expire as follows:
Year Ending July 31,
--------------------
2002 $ 10,000
2003 380,000
2004 250,000
(Continued)
F-12
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1997 and 1996
(7) Lease Commitment
----------------
Commencing in June 1996, the Company entered into an agreement to lease its
Florida office, warehouse and distribution facilities from a partnership
controlled by an executive officer, shareholder and director of TNR. The
lease agreement provides for a term of ten years including the payments as
indicated below:
Year Ending July 31,
--------------------
1998 $ 63,313
1999 66,480
2000 69,804
2001 73,293
2002 76,598
Thereafter 332,049
------------
$ 681,537
============
Total lease and rental expense amounted to $83,928 and $74,707 in 1997 and
1996, respectively. In 1997 and 1996, lease expense associated with related
parties amounted to $64,030 and $9,966, respectively.
(8) Sales to Major Customers
------------------------
During the years ended July 31, 1997, 1996, and 1995 no customer accounted
for more than 10% of total revenues.
(9) Supplementary Information
-------------------------
1997 1996 1995
---- ---- ----
Advertising costs $ 53,103 37,244 56,810
Provision for doubtful accounts 8,400 24,820 6,000
The provision for doubtful accounts and advertising costs are included in
selling, general and administrative costs in the accompanying statements of
operations.
F-13
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
- -------- ---------------------------------------------------
The names, ages and principal occupations of the Company's present
directors, and the date on which their term of office commenced and expires, are
listed below.
<TABLE>
<CAPTION>
Term First
of Became Principal
Name Age Office Director Occupation
- ---- --- ------ -------- ----------
<S> <C> <C> <C> <C>
Jerrold Lazarus 65 (1) 1987 Chairman of the
Board and Chief
Executive Officer
Norman L. Thaw 64 (1) 1979 President of
Stride Rite
Stables, Inc.,
Private Investor
Wayne Thaw 40 (1) 1983 President and
Chief Operating
Officer
Kathie Thaw 42 (1) 1996 Vice-President
</TABLE>
- ---------
(1) Directors are elected at the annual meeting of stockholders and hold
office to the following annual meeting.
Jerrold Lazarus is Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, Secretary and Treasurer of the Company. Wayne Thaw is
President and Chief Operating Officer of the Company. Kathie Thaw is Vice
President of the Company. The terms of all officers expire at the annual meeting
of directors following the annual stockholders meeting. Officers may be removed,
either with or without cause, by the Board of Directors, and a successor elected
by a majority vote of the Board of Directors, at any time.
Jerrold Lazarus has been a full time employee of the Company since
October 1987 and has served as an Executive Officer of the Company since 1987.
Norman L. Thaw is one of the founders of the Company and served as its
Chairman and Chief Executive Officer between March 1987 and April 1988. For more
than the past five years, Mr. Thaw's principal occupation is the President of
Stride Rite Stables, Inc., a
10
<PAGE>
thoroughbred racing and breeding farm in South Florida. Norman L. Thaw is the
father of Wayne Thaw.
Wayne Thaw has been a full time employee of the Company since 1980 and
has served as an Executive Officer of the Company since 1981. Wayne Thaw is the
son of Norman L. Thaw.
Kathie Thaw has been Vice-President and a director of the Company since
December 1996. Kathie Thaw has been associated with the Company for the past
five years as a consultant to the President.
11
<PAGE>
Item 11. Compensation of Directors and Executive Officers.
The following table provides a summary compensation table with respect
to the compensation of the Company's two executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
=======================================================================================
Annual Compensation
- ---------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Other
Name Annual
and Compen-
Principal sation
Position Year Salary ($) Bonus ($) ($)(1)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jerrold Lazarus 1997 67,901 1,000 0
-------------------------------------------------------------
CEO, 1996 79,627 7,500 0
-------------------------------------------------------------
Chairman of the 1995 81,200 7,500 4,900
Board
- ---------------------------------------------------------------------------------------
Wayne Thaw, 1997 105,751 1,250 0
President -------------------------------------------------------------
1996 106,308 7,500 0
-------------------------------------------------------------
1995 95,200 7,500 0
-------------------------------------------------------------
=======================================================================================
</TABLE>
SUMMARY COMPENSATION TABLE [RESTUBBED]
<TABLE>
<CAPTION>
============================================================================================
Long Term Compensation
- --------------------- ----------------------------------------------- |
Awards Payouts |
----------------------------------------------- |
(a) (f) (g) (h) | (I)
| All
Name Restricted | Other
and Stock Number LTIP | Compen-
Principal Award(s) of Payouts | sation
Position ($) Options ($) | ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jerrold Lazarus 0 10,000 0 0
----------------------------------------------------------------
CEO, 0 0 0 0
----------------------------------------------------------------
Chairman of the 0 0 0 0
Board
- --------------------------------------------------------------------------------------------
Wayne Thaw, 0 10,000 0 0
President ----------------------------------------------------------------
0 0 0 0
----------------------------------------------------------------
0 0 0 0
----------------------------------------------------------------
============================================================================================
</TABLE>
- ----------
(1) Does not include the value of a leased automobile at the monthly
lease rate of $480 which is provided to each officer for business purposes.
12
<PAGE>
During the past three fiscal years, the Company has not granted
restricted stock awards, stock options or stock appreciation rights. In
addition, the Company does not have a defined benefit or actuarial plan.
The Company has no employment contracts with its executive officers.
Jerrold Lazarus and Wayne Thaw are currently receiving a monthly salary of
$6,438 and $9,209, respectively. Directors do not presently receive compensation
for serving on the Board or on its committees. Depending on the number of
meetings and the time required for the Company's operations, the Company may
decide to compensate its directors in the future.
The Company provides each of its two above named executive officers
with a leased automobile. The Company has no annuity, pension, or retirement
benefits for its employees. The Company has not afforded any of its officers or
directors any other personal benefits, the value of which exceeds 10% of his
cash compensation, which is not directly related to job performance or provided
generally to all salaried employees.
Stock Option Plan
- -----------------
The 1992 Incentive and Non-Qualified Stock Option Plan, (the "1992
Plan"), was approved by the Board of Directors on November 17, 1992 and ratified
by stockholders on January 29, 1993. The 1992 Plan covers 60,000 shares of
Common Stock, subject to adjustment of shares under the anti-dilution provisions
of the 1992 Plan. The 1992 Plan authorizes the issuance of the options covered
thereby as either "Incentive Stock Options" within the meaning of the Internal
Revenue Code of 1986, as amended, or as "Non-Statutory Stock Options." Persons
eligible to receive options under the 1992 Plan includes employees, directors,
officers, consultants or advisors, provided that bona fide services shall be
rendered by consultants or advisors and such services must not be in connection
with the offer or sale of securities in a capital raising transaction; however,
only employees (who may also be officers and/or directors) are eligible to
receive an Incentive Stock Option. The 1992 Plan also provides that no options
may be granted after November 16, 2002. As of August 31, 1997, the Company has
granted ten year non-statutory options to purchase 30,000 shares at an exercise
price of $3.25 per share to Wayne Thaw (10,000 shares), Jerrold Lazarus (10,000
shares) and Kathie Thaw (10,000 shares).
The 1992 Plan is administered by the Company's Board of Directors or a
stock option committee consisting of three members of the Board which has the
authority to determine the persons to whom options shall be granted, whether any
particular option shall be an Incentive Option or a Non-Statutory Option, the
number of shares to be covered by each option, the time or times at which
options will be granted or may be exercised and the other terms and provisions
of the Options.
Under the 1992 Plan, the aggregate fair market value (determined at the
time the option is granted) of the optioned stock for which Incentive Stock
Options are exercisable for the first time by any employee during any calendar
year (under all such Plans of the
13
<PAGE>
individual's Employer Corporation and its parent and subsidiary corporation)
shall not exceed $100,000.
The 1992 Plan also provides that the Board of directors shall determine
the exercise price of the Common Stock under each option. The 1992 Plan also
provides that: (I) the exercise price of Incentive Stock Options granted
thereunder shall not be less than 100% (110% if the optionee owns 10% or more of
the outstanding voting securities of the Company) of the fair market value of
such shares on the date of grant, as determined by the Board or Committee, and
(ii) no option by its terms may be exercised more than ten years (five years in
the case of an Incentive Stock Option, where the optionee owns 10% or more of
the outstanding voting securities of the Company) after the date of grant. Any
options which are canceled or not exercised within the option period become
available for future grants. All Stock Options are non-transferable except by
will or the laws of descent and distribution.
14
<PAGE>
OPTION GRANTS TABLE
The information provided in the table below provides information with
respect to individual grants of stock options during fiscal 1997 of each of the
executive officers named in the summary compensation table above. The Company
did not grant any stock appreciation rights during 1997.
Option Grants in Last Fiscal Year
---------------------------------
<TABLE>
<CAPTION>
==================================================================================================================================
Potential
Realizable Value at
Assumed Annual
Individual Grants Rates of Stock Price
Appreciation
for Option Term (2)
- -----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
--- --- --- --- --- --- ---
% of
Total
Options/
Granted to
Options Employees Exercise Expira-
Granted in Fiscal Price tion
Name (#) Year (1) ($/Sh) Date 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wayne Thaw 10,000 33.3% 3.25 12/9/06 20,400 51,800
- -----------------------------------------------------------------------------------------------------------------------------------
Jerrold Lazarus 10,000 33.3% 3.25 12/9/06 20,400 51,800
- -----------------------------------------------------------------------------------------------------------------------------------
N/A - Not Applicable.
</TABLE>
(1) The percentage of total options granted to employees in fiscal year is
based upon options granted to officers, directors and employees.
(2) The potential realizable value of each grant of options assumes that
the market price of the Company's Common Stock appreciates in value
from the date of grant to the end of the option term at annualized
rates of 5% and 10%, respectively, and after subtracting the exercise
price from the potential realizable value.
15
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
The information provided in the table below provides information with
respect to each exercise of stock option during fiscal 1997 by each of the
executive officers named in the summary compensation table and the fiscal year
end value of unexercised options.
<TABLE>
<CAPTION>
==============================================================================================================
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Shares Unexercised In-the-Money
Acquired Options at Options
on Value FY-End (#) at Fy-End($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($)(1) Unexercisable Unexercisable(1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wayne Thaw -0- -0- 10,000/0 1,250/0
- --------------------------------------------------------------------------------------------------------------
Jerrold Lazarus -0- -0- 10,000/0 1,250/0
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
(1) The aggregate dollar values in column (c) and (e) are calculated by
determining the difference between the fair market value of the
Common Stock underlying the options and the exercise price of the
options at exercise or fiscal year end, respectively. In calculating
the dollar value realized upon exercise, the value of any payment of
the exercise price is not included. Fiscal year end value based upon
a market price of $3.375 per share.
Report of the Board of Directors on Executive Compensation
- ----------------------------------------------------------
During fiscal 1997, the entire Board which consists of Norman Thaw,
Jerrold Lazarus and Wayne Thaw (with Kathie Thaw joining the Board on December
9, 1996) held primary responsibility for determining executive compensation
levels. The goals of the Company's compensation program is to align compensation
with business objectives and performance and to enable the Company to attract,
retain and reward executive officers and other key employees who contribute to
the long-term success of the Company. The Company has provided on a prospective
basis annual incentive opportunity to several of its key employees sufficient to
provide motivation to achieve specific operating goals. Compensation Committee
Interlocks and Insider Participation
During fiscal 1997, Jerrold Lazarus and Wayne Thaw, executive officers
of the Company, were involved in determining executive officer compensation
levels as members of the Board of Directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- -------- ---------------------------------------------------------------
As of September 30, 1997, the Company had outstanding 261,997 shares of
Common Stock. The only persons of record who presently hold or are known to own
(or
16
<PAGE>
believed by the Company to own) beneficially more than 5% of the outstanding
shares of such class of stock is listed below. The following table also sets
forth certain information as to holdings of the Company's Common Stock of all
officers and directors individually, and all officers and directors as a group.
(The shares shown in the table below for Norman Thaw and his sons, Wayne Thaw
and Mitchell Thaw are not beneficially owned by each other and are listed
separately).
<TABLE>
<CAPTION>
==========================================================================================================
Name and Amount and
Address of Nature of
Beneficial Beneficial Approximate
Title of Class Owner Ownership (1) Percent
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Wayne Thaw 61,592 22.6
(3)(4)(6)
- ----------------------------------------------------------------------------------------------------------
Common Stock Norman L. Thaw 55,228 21.1
(2)(3)(6)
- ----------------------------------------------------------------------------------------------------------
Common Stock Jerrold Lazarus (3)(4) 10,441 3.8
- ----------------------------------------------------------------------------------------------------------
Common Stock Kathie Thaw (3)(4)(6) 10,000 3.7
- ----------------------------------------------------------------------------------------------------------
Common Stock All Directors and 137,624 47.1
Officers as a group
(four persons)(5)(6)
- ----------------------------------------------------------------------------------------------------------
Common Stock Mitchel A. Thaw 21,525 8.2
(3)(6)
==========================================================================================================
</TABLE>
* Owns less than 1% of the issued and outstanding shares of the Company's
Common Stock.
- -----------------
(1) All shares are directly owned, and the sole investment and voting power
is held, by the persons named.
(2) May be deemed to be a parent and/or founder of the Company under the
Securities Act of 1933, as amended and may be deemed to be a "control
person" of the Company within the meaning of the Securities Exchange
Act of 1934.
(3) Address: 301 Central Park Drive, Sanford, Florida 32771.
17
<PAGE>
(4) Includes options to purchase 10,000 shares.
(5) Includes options to purchase 30,000 shares granted to officers and
directors.
(6) Wayne Thaw and Kathie Thaw are married and their individual stock
ownership is shown separately. Both Wayne Thaw and Kathie Thaw may be
deemed to also own the shares owned by the other person. Norman Thaw is
the father of Wayne Thaw and Mitchel A. Thaw.
The Company does not know of any arrangement or pledge of its
securities by persons now considered in control of the Company that might result
in a change of control of the Company.
18
<PAGE>
Item 13. Certain Relationships and Related Transactions.
- -------- -----------------------------------------------
See Item 2 regarding the description of lease between the Company and a
RKW Holding Ltd., a Florida Limited Partnership, controlled by Wayne Thaw.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- -------- -----------------------------------------------------------------
(a)(1)(2) Financial Statements and Financial Statement Schedules.
------------------------------------------------------
A list of the Financial Statements and Financial Statement
Schedules filed as a part of this Report is set forth in
Item 8, and appears at Page F-1 of this Report, which list
is incorporated herein by reference.
(a)(3) Exhibits
--------
3 Certificate of Incorporation and Amendments
thereto. (1)
3(A) By-Laws. (1)
3(B) February 1992 Certificate of Amendment to
Certificate of Incorporation (2)
10 Lease Agreement dated January 17, 1996 by and
between RKW Holding Ltd. and the Registrant (3)
11 Earnings per share. See Financial Statements
27 Selected Financial Data*
- -------------------
* Filed herewith
(1) Exhibits 3 and 3(A) are incorporated by reference from Registration No.
2-85110 which were filed in a Registration Statement on Form S-18.
(2) Incorporated by reference to Form 10-K for the fiscal year ended July
31, 1992.
(3) Incorporated by reference to Form 10-K for the fiscal year ended July
31, 1996.
(b) Reports on Form 8-K.
-------------------
No Reports on Form 8-K were filed or required to be
filed during the quarter ended July 31, 1997.
19
<PAGE>
SIGNATURES
Pursuant to the requirements Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TNR TECHNICAL, INC.
By/s/ Jerrold Lazarus
--------------------------------
Jerrold Lazarus, Chief Executive Officer
Dated: Sanford, Florida
October 20, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Norman L. Thaw Director October 20, 1997
- ------------------------
Norman L. Thaw
/s/ Wayne Thaw President, Chief October 20, 1997
- ------------------------ Operating
Wayne Thaw Officer and
Director
/s/ Jerrold Lazarus Chairman of the October 20, 1997
- ------------------------ Board, Chief
Jerrold Lazarus Executive
Officer, Chief
Financial and
Accounting
Officer,
Treasurer,
and Secretary
/s/ Kathie Thaw Vice President October 20, 1997
- -------------------------- and Director
Kathie Thaw
</TABLE>
Norman Thaw, Kathie Thaw, Wayne Thaw and Jerrold Lazarus represent all the
members of the Board of Directors.
20
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> JUL-31-1997
<EXCHANGE-RATE> 1
<CASH> 556,468
<SECURITIES> 0
<RECEIVABLES> 589,789
<ALLOWANCES> 14,860
<INVENTORY> 782,389
<CURRENT-ASSETS> 1,965,873
<PP&E> 229,516
<DEPRECIATION> 106,660
<TOTAL-ASSETS> 2,265,123
<CURRENT-LIABILITIES> 288,372
<BONDS> 0
0
0
<COMMON> 6,032
<OTHER-SE> 1,970,719
<TOTAL-LIABILITY-AND-EQUITY> 1,976,751
<SALES> 4,239,423
<TOTAL-REVENUES> 4,274,533
<CGS> 3,170,948
<TOTAL-COSTS> 4,138,305
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 8,400
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 127,828
<INCOME-TAX> 39,127
<INCOME-CONTINUING> 88,701
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 88,701
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
</TABLE>
