<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, 2000
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, 2000, 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, 2000 was 259,558.
<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 primary and secondary batteries to a variety of industrial markets. The
Company is an authorized distributor for several major battery manufacturers,
which products are distributed nationally by Company. The Company's business is
conducted principally at its two facilities in Sanford, Florida and Santa Ana,
California.
The Company is an authorized distributor of nickel-cadmium, Ni-MH,
alkaline, lithium and sealed lead-acid batteries manufactured by Saft America,
Powersonic Battery, Varta Battery, Yuasa, Duracell, Renata, GP Battery, Eveready
Battery, 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 and toys. 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, 2000 and 1999, the
Company had no significant backlog.
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 30, 2000, the Company leases from a non-affiliated party
its staff which includes 28 persons. Such staff includes eight salespersons
(including two executive officers), six clericals, two warehouse and shipping
personnel and twelve factory
2
<PAGE>
workers. For a fee which is paid by the Company, the leasing company provides
the payroll, including, workmen's compensation, 401(k) plan and health
insurance. The Company's agreement with the leasing company can be terminated on
short notice at any time by the Company.
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 current monthly rent of $6,482
(including sales taxes) with annual increases of five percent over the preceding
year's base rent. The Company is also responsible for the payment of all
insurance, property, and other taxes related to the leased facilities. Property
taxes estimated at $660 per month, inclusive of sales taxes, are accrued on a
monthly basis.
The Company also leases a sales, distribution and assembly facility at
3400 W. Warner, Suites K, L and M, Santa Ana, CA 92704. These facilities consist
of 6,480 square feet of space. The California lease commenced on July 1, 2000
and expires on June 30, 2003, subject to the right of the Company to renew for
an additional two-year period. The Company currently pays a base rent of $4,406
per month, which is subject to increase for its share of the landlord's
increased operating expenses. The Company owns production equipment consisting
primarily of 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 2000.
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 high and low sales prices for fiscal 2000 and 1999 of the Common
Stock are shown below for the Company's last two fiscal years ended July 31,
2000.
High Low
---- ---
Fiscal 2000
-----------
First Quarter $ 4.75 $ 4.50
Second Quarter 12.00 1.00
Third Quarter 10.00 6.50
Fourth Quarter 8.25 6.25
Fiscal 1999
-----------
First Quarter $ 6.75 $ 5.38
Second Quarter 6.63 6.00
Third Quarter 6.13 5.13
Fourth Quarter 7.50 4.50
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.
The approximate number of holders of record of the Company's Common
Stock, as of September 30, 2000 was 762 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. Such financial
statements 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, 2000 July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996
------------- ------------- ------------- ------------- -------------
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $ 8,014,576 $6,126,132 $5,719,806 $4,239,423 $3,792,537
-----------------------------------------------------------------------------------------------------------------------------------
Net income 440,010 321,192 295,012 88,701 135,398
-----------------------------------------------------------------------------------------------------------------------------------
Net income per
share 1.69 1.23 1.13 .34 .52
-----------------------------------------------------------------------------------------------------------------------------------
Cash dividends -0- -0- -0- -0- -0-
===================================================================================================================================
</TABLE>
Balance Sheet Data:
------------------
<TABLE>
<CAPTION>
================================================================================================================================
July 31, 2000 July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996
------------- ------------- ------------- ------------- -------------
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Working capital $ 2,890,360 $2,430,337 $2,021,076 $1,677,501 $1,569,635
--------------------------------------------------------------------------------------------------------------------------------
Total Assets 3,663,315 3,034,415 2,488,793 2,265,123 1,997,399
--------------------------------------------------------------------------------------------------------------------------------
Long-term debt (including
capital leases) -0- 5,390 17,639 -0- -0-
--------------------------------------------------------------------------------------------------------------------------------
Total Shareholders' equity 3,018,886 2,586,716 2,271,643 1,976,751 1,889,814
================================================================================================================================
</TABLE>
5
<PAGE>
Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
Working capital amounted to $2,890,360 at July 31, 2000 as compared to
$2,430,337 at July 31, 1999. Cash and short-term investments amounted to
$1,574,611 at July 31, 2000 as compared to $1,075,161 at July 31, 1999. As more
fully described in the "Statements of Cash Flows" included in the Company's
financial statements elsewhere herein, net cash provided by operating activities
for the fiscal years ended July 31, 2000, July 31, 1999 and July 31, 1998 were
$540,389, $511,298 and $152,675, respectively.
During the last three years, the Company's net income contributed to
cash flows from operating activities. In 2000, net cash was provided from
operating activities. The Company's net income and an increase in accounts
payable and accrued expenses and income taxes payable contributed to such cash
flow partially offset by an increase in inventories. In 1999, net cash was
provided from operating activities. The Company's net income, sales of
short-term investments and an increase in accounts payable and accrued expenses
contributed to such cash flow partially offset by increases to accounts
receivables and inventories. In 1998, net cash was provided from operating
activities partially offset by changes in operating assets and liabilities
including, without limitation, net purchases of short-term investments and a
decrease in accounts payable and accrued expenses. In 2000, 1999 and 1998, net
cash was used in investing activities to purchase property and equipment.
During the past three years, the Company's liquidity needs have been
satisfied from internal sources including cash from operations and amounts
available from the Company's working capital. During fiscal 2001, Management
expects this trend to continue. There are no material commitments for capital
expenditures or any long-term credit arrangements as of July 31, 2000.
Results of Operations
Sales for 2000 increased by $1,888,444 or approximately 31% as compared
to fiscal 1999. Sales for 1999 increased by $406,326 or approximately 7% as
compared to fiscal 1998. The sales increases were due to increased demand for
the Company's products from the Company's existing client base and from new
customers including customers derived from the Company's expansion of its
operations into California. 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 and a
concerted effort by management to increase and maintain overall targeted profit
margins.
Operating (selling, general and administrative) expenses increased
during the past three years substantially due to increases in rent, insurance,
administrative salaries and depreciation resulting primarily from increased
sales activity over this period. Operating
6
<PAGE>
expenses when expressed as a percentage of net sales were 17.3%, 19.0% and 19.5%
for fiscal 2000, fiscal 1999 and fiscal 1998, respectively. During the past
three years, the Company did not charge its operations with any research and
development costs.
Net income for fiscal 2000 was $440,010 as compared to $321,192 for
fiscal 1999 as compared to $295,012 for fiscal 1998. Net income per share for
fiscal 2000, fiscal 1999 and fiscal 1998 was $1.69, $1.23 and $1.13,
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.
Year 2000 Issue
Many existing computer programs used only two digits to identify a year
in the date field. These programs were designed and developed without
considering the impact of the recent change in the century. If not corrected,
many computer applications have failed or created erroneous results by or at the
year 2000. The Company purchased new computers which are year 2000 compliant and
upgraded its remaining equipment to correct the problem at a cost of
approximately $20,000. The Company's operations were not materially impacted by
the year 2000 issue.
Item 8. Financial Statements and Supplementary Data.
The information required by Item 8, and an index thereto, appears at
pages F-1 through F-15 (inclusive) of this Report, which pages follow Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. None.
7
<PAGE>
TNR TECHNICAL, INC.
Financial Statements
July 31, 2000 and 1999
(With Independent Auditors' Report Thereon)
<PAGE>
TNR TECHNICAL, INC.
Index to Financial Statements
<TABLE>
<S> <C>
Independent Auditors' Report...........................................................................F-1
Financial Statements:
Balance Sheets - July 31, 2000 and 1999........................................................F-2
Statements of Operations - Three years ended July 31, 2000.....................................F-4
Statements of Shareholders' Equity - Three years ended July 31, 2000...........................F-5
Statements of Cash Flows - Three years ended July 31, 2000.....................................F-8
Notes to Financial Statements
</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, 2000 and 1999, and the related statements of operations, shareholders'
equity and cash flows for the three 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, 2000 and 1999 and the results of its operations and its cash flows for the
three years then ended in conformity with generally accepted accounting
principles.
PARKS, TSCHOPP, WHITCOMB & ORR
September 1, 2000
Maitland, Florida
F-1
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
July 31, 2000 and 1999
Assets
<TABLE>
<CAPTION>
2000 1999
------------------- ------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,574,611 1,075,161
Accounts receivable - trade, less allowance for doubtful
accounts of $33,018 in 2000 and $34,529 in 1999 662,121 693,032
Inventories (note 2) 1,239,665 1,062,043
Prepaid expenses and other current assets 10,392 7,410
Deferred income taxes (note 6) 48,000 35,000
------------------- ------------------
Total current assets 3,534,789 2,872,646
Property and equipment, at cost, net of accumulated
depreciation and amortization (notes 3 and 4) 108,894 148,157
Other assets:
Deposits 19,632 13,612
------------------- ------------------
$ 3,663,315 3,034,415
=================== ==================
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
TNR TECHNICAL, INC.
Balance Sheets
July 31, 2000 and 1999
Liabilities and Shareholders' Equity
<TABLE>
<CAPTION>
2000 1999
------------------- ------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 183,949 211,346
Accrued expenses 320,090 108,714
Income taxes payable 135,000 110,000
Current installments of note payable (note 4) 5,390 12,249
------------------- ------------------
Total current liabilities 644,429 442,309
------------------- ------------------
Note payable, excluding current installments (note 4) - 5,390
------------------- ------------------
Total liabilities 644,429 447,699
------------------- ------------------
Commitment (note 7)
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
Retained earnings 582,966 142,956
------------------- ------------------
3,228,999 2,788,989
Less cost of treasury stock - 42,023 and 40,663
shares in 2000 and 1999, respectively (210,113) (202,273)
------------------- ------------------
Total shareholders' equity 3,018,886 2,586,716
------------------- ------------------
$ 3,663,315 3,034,415
=================== ==================
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
TNR TECHNICAL, INC.
Statements of Operations
Years ended July 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
2000 1999 1998
------------------ ------------------ -------------------
<S> <C> <C> <C>
Revenues:
Net sales (note 8) $ 8,014,576 6,126,132 5,719,806
------------------ ------------------ -------------------
Cost and expenses:
Cost of goods sold 5,952,933 4,473,826 4,213,673
Selling, general and administrative (note 9) 1,385,526 1,164,100 1,114,194
------------------ ------------------ -------------------
7,338,459 5,637,926 5,327,867
------------------ ------------------ -------------------
Operating income 676,117 488,206 391,939
Non-operating revenue (expense):
Interest income 66,620 33,609 22,763
Other, net (11,727) - -
------------------ ------------------ -------------------
Income before income taxes 731,010 521,815 414,702
Income tax expense (note 6) 291,000 200,623 119,690
------------------ ------------------ -------------------
Net income $ 440,010 321,192 295,012
================== ================== ===================
Net income per share $ 1.69 1.23 1.13
================== ================== ===================
Weighted average number of shares 260,135 261,480 261,973
================== ================== ===================
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE>
TNR TECHNICAL, INC.
Statements of Shareholders' Equity
Years ended July 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Retained Treasury
Shares Amount Capital Earnings Stock
----------------- ----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Balances, July 31, 1997 301,581 $ 6,032 2,640,001 (473,248) (196,034)
Net income - - - 295,012 -
Purchase of Company
stock - - - - (120)
----------------- ----------------- ---------------- ----------------- -----------------
Balances, July 31, 1998 301,581 6,032 2,640,001 (178,236) (196,154)
Net income - - - 321,192 -
Purchase of Company
stock - - - - (6,119)
----------------- ----------------- ---------------- ----------------- -----------------
Balances, July 31, 1999 301,581 6,032 2,640,001 142,956 (202,273)
================= ================= ================ ================= =================
Net income - - - 440,010 -
Purchase of Company
stock - - - - (7,840)
----------------- ----------------- ---------------- ----------------- -----------------
Balances, July 31, 2000 301,581 $ 6,032 2,640,001 582,966 (210,113)
================= ================= ================ ================= =================
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
Years ended July 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
2000 1999 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 440,010 321,192 295,012
Adjustments to reconcile net income to net cash
provided by operations:
Deferred income taxes (13,000) 57,000 87,000
Depreciation and amortization 37,186 53,567 49,780
Unrealized gain on short term investments - - (860)
Provision for doubtful accounts 8,400 18,400 8,400
Loss on disposition of fixed assets 22,927 - -
Changes in operating assets and liabilities:
Purchases of short term investments - - (251,667)
Sales of short term investments - 167,181 113,378
Accounts receivable 22,511 (111,928) (32,965)
Inventories (177,622) (247,438) (32,216)
Prepaid expenses and other assets (2,982) 11,204 15,103
Accounts payable and accrued expenses 183,979 155,876 (124,188)
Deposits (6,020) 233 549
Income taxes receivable/payable 25,000 86,011 25,349
----------------- ----------------- -----------------
Net cash provided by operating activities 540,389 511,298 152,675
----------------- ----------------- -----------------
Cash flows from investing activities:
Purchase of property and equipment (20,850) (16,363) (112,285)
----------------- ----------------- -----------------
Net cash used in investing activities (20,850) (16,363) (112,285)
----------------- ----------------- -----------------
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
TNR TECHNICAL, INC.
Statements of Cash Flows
Years ended July 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
2000 1999 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Cash flows from financing activities:
Purchase of treasury stock $ (7,840) (6,119) (120)
Proceeds from issuance of note payable - - 35,198
Principal payments on note payable (12,249) (11,338) (6,221)
--------------------------------------------------------
Net cash provided by (used in)
financing activities (20,089) (17,457) 28,857
--------------------------------------------------------
Increase in cash and cash equivalents 499,450 477,478 69,247
Cash and cash equivalents - beginning of year 1,075,161 597,683 528,436
--------------------------------------------------------
Cash and cash equivalents - end of year $1,574,611 1,075,161 597,683
========================================================
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ 938 1,849 1,914
========================================================
Cash paid during the year for income taxes $ 279,000 57,612 7,341
========================================================
</TABLE>
See accompanying notes to financial statements
F-7
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(1) Summary of Significant 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 expensed as incurred.
F-8
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(1) Summary of Significant Policies - Continued
(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.
(h) Financial Instruments Fair Value, Concentration of Business and Credit
Risks
The carrying amount reported in the balance sheet for cash, accounts
receivable, accounts payable and accrued expenses approximates fair
value because of the immediate or short-term maturity of these
financial instruments. The carrying amount reported in the accompanying
balance sheet for note payable approximates fair value because the
actual interest rate does not significantly differ from current rates
offered for instruments with similar characteristics. Financial
instruments, which potentially subject the Company to concentrations of
credit risk, consist principally of trade accounts receivable which
amount to approximately $700,000 and money market funds amounting to
approximately $1,200,000. 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 $1,100,000 and $850,000 at July 31,
2000 and 1999, respectively.
(i) Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123) which sets forth accounting and
disclosure requirements for stock-based compensation arrangements. The
new statement encourages but does not require, companies to measure
stock-based compensation using a fair value method, rather than the
intrinsic value method prescribed by Accounting Principles Board
Opinion No. 25 ("APB no. 25".) The Company has adopted disclosure
requirements of SFAS 123 and has elected to continue to record
stock-based compensation expense using the intrinsic value approach
prescribed by APB
F-9
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(1) Summary of Significant Policies - Continued
(i) Stock-Based Compensation - Continued
No. 25. Accordingly, the Company computes compensation cost
for each employee stock option granted as the amount by which
the quoted market price of the Company's common stock on the
date of grant exceeds the amount the employee must pay to
acquire the stock. The amount of compensation cost, if any,
will be charged to operations over the vesting period. SFAS
123 requires companies electing to continue using the
intrinsic value method to make certain pro forma disclosures
(see note 5).
(j) 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.
(k) Cash Flows
For purposes of cash flows, the Company considers all highly
liquid investments with an initial maturity of three months or
less to be cash equivalents.
(l) 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 effort on earnings per common share.
(m) Reclassifications
Certain amounts from 1999 and 1998 have been reclassified to
conform with the 2000 presentation.
F-10
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(2) Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Finished goods $ 1,196,277 1,031,244
Work-in-process 43,388 30,799
----------- ---------
$ 1,239,665 1,062,043
=========== =========
</TABLE>
(3) Property and Equipment
Property and equipment consists of the following:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Machinery and equipment $ 206,317 282,905
Leasehold improvements 20,347 27,457
--------- -------
226,664 310,362
Less accumulated depreciation and amortization 117,770 162,205
--------- -------
$ 108,894 148,157
========= =======
</TABLE>
(4) Note Payable
Note payable consists of an obligation payable in monthly installments
of $1,099 including interest at 7.75% expiring December 2000. The note
is secured by vehicles.
(5) Stock Option Plans
In November 1992, the Board of Directors approved an Incentive and
Non-Qualified Stock Option Plan (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.
(Continued)
F-11
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(5) Stock Option Plans (Continued)
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 to its
officers and directors. The options are exercisable for a ten-year
period expiring in December 2006. In December 1998, the Company granted
additional stock options to purchase 7,000 shares at an exercise price
of $5.00 per share to three of its directors. The options are
exercisable through December 2008.
The 1998 Incentive and Non-Qualified Stock Option Plan, (the "1998
Plan"), was approved by the Board of Directors effective December 15,
1998 subject to stockholder approval within 12 months. The 1998 Plan
covers 30,000 shares of Common Stock, subject to adjustment of shares
under the anti-dilution provisions of the 1998 Plan. The 1998 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 1998 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 1998 Plan also provides that no options may be granted
after December 15, 2008. Except for the foregoing, the 1998 Plan is
identical to the 1992 Plan. As of July 31, 2000, no options have been
granted under the 1998 Plan.
The Company continues to account for stock-based compensation using the
intrinsic value method prescribed by Accounting Principles Board
Opinion No. 25 under which no compensation cost for stock options is
recognized for stock option awards granted at or above fair market
value.
Had compensation expense been determined based upon fair values at the
grant date for the award of options as described herein in accordance
with SFAS No. 123, "Accounting for Stock-Base Compensation," the
Company's net earnings and earnings per share would not be materially
changed from the amounts as reported in the accompanying financial
statements.
Accordingly, management has not presented the pro forma effects of the
application of SFAS No. 123 herein with respect to net earnings and
earnings per share for the years ended July 31, 2000, 1999 and 1998.
(Continued)
F-12
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(6) Income Taxes
The income tax provision for the years ended July 31, 2000, 1999 and
1998 consists of the following:
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $ 246,000 128,623 -
State 58,000 15,000 20,000
--------- ------- -------
304,000 143,623 20,000
--------- ------- -------
Deferred:
Federal (11,000) 51,000 98,500
State ( 2,000) 6,000 1,190
--------- ------- -------
(13,000) 57,000 99,690
--------- ------- -------
Total $ 291,000 200,623 119,690
========= ======= =======
</TABLE>
Income tax expense 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>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Computed "expected" tax expense $ 249,000 178,000 140,000
Increase (reduction) in income tax expense
resulting from:
State income taxes, net of federal
income tax benefit 37,000 24,000 14,000
Adjustment to deferred tax assets to
reflect current effective tax rates
and other 5,000 (1,377) (34,310)
--------- ------- -------
$ 291,000 200,623 119,690
========= ======= =======
(Continued)
</TABLE>
F-13
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(6) Income Taxes - Continued
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets at July 31, 2000 and 1999 are
presented below:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Deferred tax assets:
Inventories, principally due to additional costs
inventoried for tax purposes $ 37,000 25,000
Accounts receivable, due to allowance for
uncollectible accounts 11,000 10,000
-------- ------
48,000 35,000
Less valuation allowance - -
-------- ------
Total $ 48,000 35,000
======== ======
</TABLE>
Deferred taxes are presented in the accompanying balance sheets as:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Current deferred tax assets $ 48,000 35,000
Noncurrent deferred tax assets - -
-------- ------
$ 48,000 35,000
======== ======
</TABLE>
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 the 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, 2000 and 1999.
F-14
<PAGE>
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 2000 and 1999
(7) Lease Commitments
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 payment of real estate
taxes and insurance and extends for a term of ten years. The Company
also leases warehouse and distribution facilities in California from an
unrelated party under a three-year operating lease agreement. Future
minimum rental payments associated with these operating lease
obligations are indicated below:
Year Ending July 31,
2001 $ 126,346
2002 131,777
2003 133,232
2004 85,960
2005 91,117
Thereafter 74,526
---------
$ 642,958
=========
Total lease and rental expense amounted to $111,330, $95,953 and
$93,732 in 2000, 1999 and 1998, respectively. In 2000, 1999 and 1998
lease expense associated with related parties amounted approximately to
$81,000, $78,000 and $78,000, respectively.
(8) Sales to Major Customers
During the years ended July 31, 2000, 1999 and 1998 no customer
accounted for more than 10% of total revenues.
(9) Supplementary Information
2000 1999 1998
---- ---- ----
Advertising costs $29,184 54,390 64,654
Provision for doubtful accounts $ 8,400 18,400 8,400
The provision for doubtful accounts and advertising costs are included
in selling, general and administrative costs in the accompanying
statements of operations.
F-15
<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 68 (1) 1987 Chairman of the
Board and Chief
Executive Officer
Norman L. Thaw 67 (1) 1979 President of
Stride Rite
Stables, Inc.,
Private Investor
Wayne Thaw 43 (1) 1983 President and
Chief Operating
Officer
Kathie Thaw 45 (1) 1996 Vice-President
Mitchell Thaw 44 (1) 1998 Professional
Equity Trader
Patrick Hoscoe 37 (1) 1998 Vice President and
Operations Manager
of the Company's West
Coast Division
</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 and Patrick
Hoscoe each serve as a 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,
8
<PAGE>
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.
Mr. Lazarus is currently scheduled to retire from the Company in January 2001;
however, he intends to remain on the Company's Board of Directors.
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 thoroughbred racing and breeding farm in South
Florida.
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.
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.
Mitchell Thaw has been director of the Company since December 1998.
Since May 2000, he has been acting as a professional trader for his own account.
From April 1999 through May 2000, Mr. Thaw served as a Director of Institutional
Options at Schroder & Co., Inc. From 1988 through April 1998, Mr. Thaw was an
executive for UBS Securities. Between April 1998 and March 1999, Mr. Thaw was
not associated with any firms and was temporarily retired.
Patrick Hoscoe has been Vice President and a director of the Company
since 1998. Mr. Hoscoe also serves as Operations Manager of the Company's West
Coast operations. Mr. Hoscoe has 18 years experience in the battery industry and
worked for House of Batteries for the past five years prior to joining the
Company in 1997.
Family Relationships
Norman L. Thaw is the father of Wayne Thaw and Mitchell Thaw. Wayne
Thaw and Kathie Thaw are married.
9
<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 Chief Executive Officer and President for
the past three fiscal years. No other executive officer in fiscal 2000 had
salaries and bonuses of at least $100,000. During the past three fiscal years,
the Company has not granted restricted stock awards or stock appreciation
rights. In addition, the Company does not have a defined benefit or actuarial
plan.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
===================================================================================================================================
Long Term Compensation
-----------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
-----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (C) (d) (e) (f) (g) (h) (i)
Other All
Name Annual Restricted Other Compen-
and Compen- Stock Number LTIP sation
Principal sation Award(s) of Payouts ($)
Position Year Salary ($) Bonus ($) ($)(1) ($) Options ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000 75,400 27,900 75,400 (2) 0 0 0 0
Jerrold Lazarus
CEO, Chairman of the Board
--------------------------------------------------------------------------------------------------------
1999 75,400 18,000 0 0 2,000 0 0
--------------------------------------------------------------------------------------------------------
1998 75,690 7,200 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------------
2000 112,288 38,400 0 0 0 0 0
Wayne Thaw,
President
--------------------------------------------------------------------------------------------------------
1999 107,042 17,000 0 0 3,000 0 0
--------------------------------------------------------------------------------------------------------
1998 104,500 9,503 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
---------------
(1) Does not include the value of a leased or company owned automobile provided
to each officer for business purposes.
(2) Includes a retirement accrual of $75,400 to be paid at Mr. Lazarus'
retirement in January 2001.
10
<PAGE>
The Company has no employment contracts with its executive officers.
Jerrold Lazarus and Wayne Thaw are currently receiving a monthly salary of
$6,283 and $9,518, 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 an 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 Plans
The 1992 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. In December 1996, 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). In December 1998, the Company granted
ten year non-statutory stock options to purchase 7,000 shares at an exercise
price of $5.00 per share to Jerrold Lazarus (2,000 shares), Wayne Thaw (3,000
shares) and Patrick Hoscoe (2,000 shares). No additional options have been
granted by the Board of Directors since December 1998.
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
11
<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.
The 1998 Plan
The 1998 Incentive and Non-Qualified Stock Option Plan, (the "1998
Plan"), was approved by the Board of Directors effective December 15, 1998
subject to stockholder approval within 12 months. The 1998 Plan covers 30,000
shares of Common Stock, subject to adjustment of shares under the anti-dilution
provisions of the 1998 Plan. The 1998 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 1998 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 1998 Plan also provides
that no options may be granted after December 15, 2008. Except for the
foregoing, the 1998 Plan is identical to the 1992 Plan. As of September 30,
2000, no options have been granted under the 1998 Plan.
12
<PAGE>
OPTION GRANTS TABLE
The information provided in the table below provides information with
respect to individual grants of stock options during fiscal 2000 of each of the
executive officers named in the summary compensation table above. The Company
did not grant any stock appreciation rights during 2000.
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>
Wayne Thaw 0 0 N/A N/A N/A N/A
------------------------------------------- ------------------- --------------------------------------------- -----------------
Jerrold Lazarus 0 0 N/A N/A N/A N/A
------------------------------------------- ------------------- --------------------------------------------- -----------------
</TABLE>
N/A - Not Applicable.
(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.
13
<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 2000 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 on Options at Options
Exercise (#) Value FY-End (#) at Fy-End($)
Realized Exercisable/ Exercisable/
Name ($)(1) Unexercisable Unexercisable(1)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wayne Thaw -0- -0- 13,000/0 33,750 / 0
---------------------------------------------------------------------------------------------------------
Jerrold Lazarus -0- -0- 12,000/0 32,500 / 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 $6.25 per share determined as of the close of business on July 25,
2000, the last trade before July 31, 2000.
Report of the Board of Directors on Executive Compensation
During fiscal 2000, the entire Board which consists of Norman Thaw,
Jerrold Lazarus, Wayne Thaw, Kathie Thaw , Mitchell Thaw and Patrick Hoscoe,
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. The foregoing report has
been approved by all members of the board of directors.
Jerrold Lazarus-Chairman
Norman Thaw
Wayne Thaw
Kathie Thaw
Mitchell Thaw
Patrick Hoscoe
14
<PAGE>
Compensation Committee Interlocks and Insider Participation
During fiscal 2000, Jerrold Lazarus, Wayne Thaw, Kathie Thaw and
Patrick Hoscoe, 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, 2000, the Company had outstanding 259,558 shares of
Common Stock. The only persons of record who presently hold or are known to own
(or 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 Address of Number of Approximate
Title of Class Beneficial Owner (1) Shares Percent
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Wayne Thaw (3)(8) 64,592 23.8
---------------------------------------------------------------------------------------------------------
Common Stock Norman L. Thaw (2)(8) 55,228 21.3
---------------------------------------------------------------------------------------------------------
Common Stock Jerrold Lazarus (5) 12,691 4.7
---------------------------------------------------------------------------------------------------------
Common Stock Kathie Thaw (4)(8) 10,000 3.7
---------------------------------------------------------------------------------------------------------
Common Stock Patrick Hoscoe (6) 2,000 *
---------------------------------------------------------------------------------------------------------
Common Stock Mitchell A. Thaw (8) 21,525 8.3
---------------------------------------------------------------------------------------------------------
Common Stock All Directors and
Officers as a group
(six persons) (7) 166,036 56.0
---------------------------------------------------------------------------------------------------------
</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. The address for all officers and
directors is 301 Central Park Drive, Sanford, Florida 32771.
15
<PAGE>
(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) Includes options to purchase 13,000 shares.
(4) Includes options to purchase 10,000 shares.
(5) Includes options to purchase 12,000 shares.
(6) Includes options to purchase 2,000 shares.
(7) Includes options to purchase 37,000 shares granted to officers and
directors.
(8) 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 Mitchell 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.
Item 13. Certain Relationships and Related Transactions.
See Item 2 regarding the description of lease between the Company and a
RKW Holding Ltd. ("RKW"), a Florida Limited Partnership, controlled by Wayne
Thaw. In fiscal 2000 and 1999, $74,690 and $71,133, respectively, were paid by
the Company to RKW, which amount is expected to increase by approximately 5% for
fiscal 2001.
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.
16
<PAGE>
(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*
99 1998 Incentive and Non-Statutory Stock Option Plan (4)
-----------
* 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.
(4) Incorporated by reference to Form 10-K for the fiscal year ended
July 31, 1999.
(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, 2000.
17
<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 12, 2000
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 12, 2000
----------------------
Norman L. Thaw
/s/ Wayne Thaw President, Chief October 12, 2000
----------------------- Operating
Wayne Thaw Officer and
Director
/s/ Jerrold Lazarus Chairman of the October 12, 2000
----------------------- Board, Chief
Jerrold Lazarus Executive Officer
Chief Financial
and Accounting
Officer, Treasurer
and Secretary
/s/ Kathie Thaw Vice President October 12, 2000
----------------------- and Director
Kathie Thaw
/s/ Mitchell Thaw Director October 12, 2000
-----------------------
Mitchell Thaw
/s/ Patrick Hoscoe Vice President October 12, 2000
-------------------- and Director
Patrick Hoscoe
</TABLE>
Norman Thaw, Kathie Thaw, Wayne Thaw, Mitchell Thaw, Patrick Hoscoe and Jerrold
Lazarus represent all the members of the Board of Directors.
18
