SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended March 31, 2000
Commission file number: 0-11882
TELECOMMUNICATION PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0916299
(state or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
P. O. Box l7013, Golden, Colorado 80402
Registrant's telephone number, including area code: (303)278-2725
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: None
Name of each exchange on which registered: Not applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no 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 the filing requirements
for at least the past 90 days. Yes X No ___
Aggregate market value of the voting stock held by non-
affiliates of the registrant as of June 23, 2000: $1,799,424 (based
on the bid/price of $0.08 published by NASDAQ OTCBB on this date).
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date: 22,492,800 as of March 31, 2000.
Documents incorporated by reference: None.
Exhibit index on page 12 Page 1 of 23
PART I
Item 1. Business.
Telecommunication Products, Inc. (the "Company") was
incorporated in Colorado on June 8, 1983, and successfully
completed an initial public offering of its common stock on March
20, 1984. It is engaged in the design, manufacture, and marketing
of specialized communication equipment. As of May 28, 1998, the
Company employed two persons, with an additional two people
available as contract labor as needed.
Products
Model 9100 Infrared Laser Communication Link. The Model 9100
has been designed to permit the transmission of up to 2.048 million
bits per second of asynchronous data for up to 6km. The Model
9100-2B is an upgrade of the Model 9100-2 system. The Model 9100-
2B has a peak optical power output of 2.4 watts. The Model 9100-2
previously manufactured and sold by TELPRO had a peak power input
to the transmitter laser diode of 1.0 watt. The previously-offered
Model 9100-2 system was offered for applications of up to 2.5
miles. The Model 9100-2B infrared laser communication link has an
upgrade system gain of 7 db which is anticipated to increase the
"line of sight" path distance capabilities to approximately 5
miles. In order to improve the reliability of the Model 9100-2B,
this system has been designed to operate from an uninterruptable
48vdc power source or an uninterruptable 115/230vac - 50/60hz
primary power source. This system is being marketed as an
alternative to microwave or fiber optics communication systems in
specific applications. There is no requirement to obtain property
easements for burial of fiber or other type cable.
The upgraded Model 9100-2B infrared laser system capable of
2.048 mbps is competitively priced to 18 ghz microwave operating
with a T1 (1.544 mbps) data transmission capability. The specific
market target is for microcell interconnection of cellular or PCS
networks. It is anticipated the availability of FCC licensing for
18 and 23 ghz microwave frequencies space will become more
difficult due to the frequency congestion in metropolitan areas.
There is no requirement for FCC licensing for infrared laser
communication links.
The Model 9100 has been tested by the Company in a variety of
conditions (-40 to +140 degrees F, and winds up to 86 mph), with a
bit error rate in unfaded weather conditions of approximately 10-11,
which translates to error-free transmission during 99.9985% of
running time, compared with microwave transmission which averages
only 85% of running time error-free. The results of these
propagation studies have been published in electronic trade
journals and presented at many trade shows. Customers for this
product range from government and governmental agencies to private
industry and foreign corporations. Presently, systems have been
sold to customers in Mexico, Canada, Indonesia, Malaysia, and
Korea, in addition to the U.S. The Model 9100 is designed to be
versatile, and can be adapted for specialized applications, such as
the transmission of video signals. This product can also interface
with both digital fiber optic and digital microwave systems.
Sales of the Model 9100 and related equipment accounted for 98%
of total revenues in fiscal 1995, 100% of total revenues in fiscal
1994, and 100% in fiscal 1993.
The company is currently designing an upgrade of a TELPRO
atmospheric laser communication link to directly interface with
fiber optic communication systems operating at OC-3 (155 mbps)
protocol. The TELPRO atmospheric laser transmission link will be
compatible with large telecommunication company fiber optic systems
where authorization to bury or use aerial fiber cables over
streets, highways or rivers is either not available or cost
prohibitive.
Model 1001 Series Converter. This product had an established
sales record for the Company, but had a small specialize travel
agency market, and in fact contributed nothing to revenues in the
last three fiscal years. As a result, this product is no longer
being offered by TELPRO.
Other Products and Services. In the event a prospective
customer has particular needs for telecommunications or similarly
related technology equipment, the Company from time to time will
specially design and manufacture a made-to-order device. Although
this area accounted for only 2% of revenues in 1995, and no
revenues in the previous two fiscal years, it generated 29% of
total revenues in fiscal 1992.
Sales, Markets, and Competition
The Company sells its products through Mr. Ranniger and outside
entities, sales and sales representatives for territories including
Alaska, Arizona, California, Texas, Hawaii, Idaho, Louisiana,
Montana, Nevada, Oregon, Washington, New Mexico, Washington D.C.,
Virginia, and Maryland. Internationally, the Company has been
approached by individuals/entities interested in representing the
Company's products in Korea, Malaysia, and Russia. As of May,
1998, the Company has an exclusive representative agreement for
Korea with a firm there which anticipates a continued market for
the Company's products in that country. The agreements with the
sales representatives for domestic territories, which were signed
on and after the spring of 1985, may be terminated by either party
on 30 days notice, and are non-exclusive. The Company operates
solely out of its Golden, Colorado facility, and all information
regarding assets and operating profit and loss is addressed in the
accompanying financial statements. As of March 31, 2000 and the
date of this report, the Company has no material backlog of orders.
The Company has had no sales revenues for the past three fiscal
years. Therefore, it has had no sales to unaffiliated customers
during the past three fiscal years, nor has it had sales in excess
of 10% to any individual customers over the past three-year period.
The Company's revenues depend on its ability to continue to expand
its client base.
The Company competes generally with a number of other
manufacturers of telecommunications equipment. System design and
engineering, and component technical features are the principal
methods of competition.
Miscellaneous
As is customary in the telecommunications industry, the Company
produces its products from readily available components purchased
from a variety of manufacturers. Printed circuit boards and
housings are contracted for manufacture according to Company
specifications from among many available suppliers. The business
of the Company is not seasonal. The Company maintains no special
arrangements relating to working capital items, and as far as it is
aware this is standard in the industry. Its inventory as of March
31, 2000 was $92,109. The Company is not subject to environmental
protection regulations during the foreseeable future. The Company
has spent nothing on research and development in the last three
fiscal years. Patents have not appeared to be important to the
industry, and as of December 1990 the Company's patent expired.
None of the Company's present business is subject to renegotiation
of profits or termination of contracts or subcontracts at the
election of the government.
Item 2. Properties.
The building in which the Company was renting its office space
has been sold, and the Company presently has no physical location
for its offices. The Company currently has a mailing address of
Post Office Box 17013, Golden, Colorado, 80402.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
The Company's common stock is traded on the over-the-counter
bulletin board market. The Company has not had any revenues which
could be used to pay for official quarterly bid/ask figures from
the National Quotation Bureau since fiscal year ended 3/31/96;
however, the high and low bid/ask quotations over the past three
fiscal years have ranged from 0/not trading to $0.58 (on 3/2/2000).
This range reflects inter-dealer prices, without retail mark-up,
mark-down, or commission, and may not necessarily represent actual
transactions.
As of March 31, 2000, there were approximately 378 record
holders of the Company's Common Stock.
The Company has not paid dividends on its Common Stock and does
not anticipate paying dividends in the foreseeable future. The
Company anticipates that all earnings will be retained for
development of the Company's business.
The underwriter for the initial public offering, Norbay
Securities, Inc., of Bayside, New York, is no longer in business.
The Company is unaware as to whether a market is still being made
in the Company's stock by any brokerage firms.
Item 6. Selected Financial Data.
Financial Condition:
Year ended March 31,
2000 1999 1998 1997 1996
Current assets $ 92,293 $ 92,347 $ 92,145 $ 92,765 $ 94,355
Total Assets $ 92,293 92,717 93,642 95,379 98,666
Long Term Debt
Stockholders'
(deficiency) (609,028) (556,127) (495,931) (442,304) (388,985)
equity
Results of Operations:
Year ended March 31,
2000 1999 1998 1997 1996
Total revenues $ 0 $ 0 $ 0 $ 0 $ 0
Selling, general
& admin. 52,901 60,196 53,407 53,019 54,540
Cost of sales 0 0 220 300 1,532
Net loss (52,901) (60,196) (53,627) ( 53,319) ( 56,072)
Loss per share ( .0024) ( .0027) ( .0025) ( .0024) ( .0026)
Net cash flows
from operating ( 642) ( 1,000) ( 1,413) ( 1,235) ( 11,645)
activities
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Financial Condition and Changes in Financial Condition
The Company had no revenues in the past five fiscal years (in
contrast to the substantial revenues earned by the Company in
fiscal 1995). As a result, there was again a net loss for the
year. This loss has continued the erosion of the stockholders'
equity, and such attrition may continue through fiscal 2001. The
Company had significant sales to customers in Malaysia and Korea
during fiscal 1995, and there appears to be continued interest in
these countries, which could, without assurance, result in future
sales.
Since its liquidity was enhanced in fiscal 1984 by a limited
offering of the Company's securities in August, 1983 for net
proceeds of $218,055, and an initial public offering of its common
stock for net proceeds of $493,394 on March 20, 1984, the Company's
liquidity has declined due to the initial expenditures required for
research and development, and the time involved in securing a
market for the Company's products. There are no present or planned
commitments for material capital expenditures, and the Company
presently has no material unused sources of liquid assets.
There are continuing inquiries regarding the Company's products
from potential customers, and management believes that marketing
efforts by Mr. Ranniger and by its outside commissioned sales
dealer and/or sales representatives may continue to increase
revenues, thus enabling the Company to sustain operations. Due to
the losses sustained by the Company during its development stage
and over the intervening years, the Company's ability to remain a
going concern depends upon its ability to generate sufficient cash
flow to meet its obligations, to obtain additional financing as may
be required, and to continue to increase its product sales. Even
though the Company has previously been unable to obtain outside
conventional financing, it has been able to continue as a going
concern due to loans it has received from officers, in addition to
those officers deferring their respective salaries since January
1987.
Results of Operations
Fiscal 2000 was the fifth year of all-time low revenues for the
Company. However, the Company has seen such highs and lows over
the past years that the future is difficult to project. For
instance, although fiscal 1995 revenues were the second highest
annual revenues in the previous five-year period, fiscal 1994 total
revenues were among the lowest in the Company's history. The total
revenues for fiscal 1993 were almost nine times as great as those
generated in fiscal 1992, where sales were the lowest in its
preceding five year period, and fiscal 1991 revenues were the
highest in the Company's history. As a result, it is impossible to
speculate as to what will happen in fiscal 2001. Ninety-eight
percent of fiscal 1995 revenues, and 100% of fiscal 1994 and 1993
revenues, were generated via sales of the Company's Model 9100 and
related equipment.
The Company has been working to upgrade its Model 9100 system
with a new diode which will increase the transmission power of the
system from 1 watt power input to 1.2 and 2.4 optical power output,
thereby increasing the transmission range to over two miles in
normal atmospheric conditions.
In addition, the Company is upgrading the data rate
transmission capabilities of the Model 9100. Presently, the Model
9100-2 is capable of transmitting communication formats of DS-0 (64
kbps), DS-1 (1.544 mbps), and the European standard CEPT HDB-3
(2.048 mbps). Upgrades would allow transmission of additional data
rates of OC-1 (51.84 mbps) and OC-2 (155.520 mbps). The present
plans to accomplish these upgrades would utilize the same castings,
optics, mounts, and most other hardware, therefore reducing the
cost of the new design while greatly enhancing system features.
Other than the above, the Company does not expect any material
changes in the mix and relative cost of resources. Raw materials
were previously augmented in the anticipation of potential future
demand in Asia. As of year end, there were no finished goods in
inventory. Inflation has had no material effect on the Company's
operations over the last three fiscal years.
The Company's current cash requirement for payroll is down to
zero, due to the fact that the Company's only full time employees,
Don and Clara Ranniger, have elected to defer their salaries since
January of 1987 in order to help the Company's cash flow. The
Company's former engineering technician and another
technician/consultant are presently available to work as
independent contractors for the Company on an as-needed basis.
Fiscal 2001 operations will continue to concentrate efforts on
increasing sales and production of the Model 9100. However, due to
varying economic conditions in the domestic and world-wide market
for this product, sales projections are difficult to estimate.
Item 8. Financial Statement and Supplementary Data.
Index to Financial Statements:
1. Compilation Report
2. Financial Statements
a. Balance Sheets as of March 31, 2000 and 1999;
b. Statements of Operations for the years ended March 31,
2000, 1999, and 1998;
c. Statements of Stockholders' Deficiency for the years
ended March 31, 2000, 1999, and 1998;
d. Statements of Cash Flows for the years ended March 31,
2000, 1999, and 1998; and
e. Notes to Financial Statements for the years ended
March 31, 2000, 1999, and 1998.
3. Schedule IV - Indebtedness to Related Parties
Item 9. Changes in and Disagreements with Accountant on Accounting
and Financial Disclosure.
None.
PART III
Principal Security Holders
The following table sets forth information, as of June 24,
2000, with respect to the beneficial ownership of Common Stock by
each person known by the Company to be the beneficial owner of more
than five percent of the outstanding Common Stock, by all directors
and nominees of the Company, and by directors and officers of the
Company as a group:
Shares beneficially owned
Name of Person or Identity of Group Number %
Donald E. and Clara H. Ranniger (1) 7,610,000 33.8%
Travis K. Pethe (2) 25,000 0.1%
Harry D. Thompson (2) --- ---
Daniel P. Newman (2) --- ---
Five directors and officers 7,610,000 33.9%
_______________
(1) Directors, officers, and controlling persons of the
Company. Their address is P. O. Box 17013, Golden, Colorado
80402.
(2) Director
Identification of Directors, Executive Officers, Committees, and
Related Matters
The Company elects less than the entire Board of Directors
annually. The Board of Directors is divided into three classes.
Each class holds office until the second annual meeting succeeding
their election. Officers of the Company hold office until the next
annual meeting of the Board of Directors immediately following the
next annual meeting of shareholders or until removal by the Board
of Directors.
The names of each director and officer, and certain other
information about them are set forth below:
Name Age Title
Class 1 Directors:
Harry D. Thompson 67 Director
Daniel P. Newman 49 Director
Class 2 Directors:
Travis K. Pethe 48 Director
Class 3 Directors:
Donald E. Ranniger 72 Chairman of the Board of Directors,
President, and
Treasurer
Clara H. Ranniger 72 Vice President, Secretary, Director
Harry D. Thompson, a director since August 6, 1985, has been
self-employed as a public accountant since June 1970. He provides
services to clients in manufacturing, construction, retail, service
and other businesses in connection with establishing and
maintaining accounting books and records, taxes, financial
reporting, budgeting, management reporting, job costing and
financing. The Company made no payments to Mr. Thompson during his
last fiscal year, and expects to make payments to Mr. Thompson of
less than ten percent of his gross revenues during his current
fiscal year. Mr. Thompson holds a bachelors degree in Business
Administration from the University of Denver.
Daniel P. Newman, a director since April 26, 1995, has been
a practicing attorney for thirteen years. He received his Juris
Doctor degree from the University of Denver in June, 1986.
Presently, Mr. Newman is employed as an Appeals Referee for the
State of Colorado, where he conducts public hearings on appealed
unemployment compensation claims. Mr. Newman defines the issues,
questions witnesses, evaluates the evidence, applies appropriate
regulations, rules and law, and renders a complete written decision
which is final unless appealed to the Industrial Commission. Mr.
Newman also has a Bachelor of Arts degree with a major in
Psychology from the University of Pennsylvania. In addition, Mr.
Newman has a variety of practical business experience.
Travis K. Pethe, a director since September 21, 1983, is
employed by Air Methods, Inc. as Program Manager since June, 1999.
Previously, Mr. Pethe was Vice President of Omnitech Robotics, Inc.
Prior to that, he ran his own consulting business after leaving
Total Petroleum, Inc. as the Corporate Safety Manager since 1992,
where he was responsible for planning, implementation, and
oversight of the company's product safety, process safety,
occupational safety, and transportation safety programs. From 1979
to 1992, Mr. Pethe was employed by Martin Marietta Astronautics
Group, Denver, Colorado, as a manager in system safety, management
information systems, and technical operations. From 1974 to 1979,
he was a commissioned officer in the United States Air Force. Mr.
Pethe is a 1974 graduate of the United States Air Force Academy
with a B.S. degree in engineering mechanics and a 1976 graduate of
the University of Utah with a master's degree in engineering
administration. He is a member of the National Society of
Professional Engineers and the American Society of Mechanical
Engineers. He expects to devote only so much of his time to the
business activities of the Company as may be necessary. It is
contemplated that he may act as a contract consultant to the
Company from time to time, on product safety and liability
prevention matters. The terms of any such consulting arrangement
have not been determined.
Donald E. Ranniger, Chairman of the Board of Directors,
President, and Treasurer since June 8, 1983, is employed by the
Company full time. He has been president and co-owner of Ranniger
Systems, Inc., an affiliate of the Company, since July 1981. Since
1969, Ranniger Systems, Inc. and its predecessor, a sole
proprietorship, have engaged in the design, manufacture, and
marketing of specialized communication equipment, including
infrared voice and data communication links, current converters,
and digital/voice response systems. They have also engaged in a
manufacturer's representative business. The design and
manufacturing portion of their operations was transferred to the
Company on June 8, 1983. From July 1959 to March 1963, and again
from June 1966 to April 1969, he was a major accounts manager for
General Electric Co., where he was responsible for sales of
microwave and data processing equipment in a five-state area. He
was a district sales manager for Raytheon Co. from March 1963 to
June 1966. Mr. Ranniger was employed from October 1955 to July
1959 by Collins Radio Co. as a field project engineer. Mr.
Ranniger graduated in 1950 from Central Institute, Kansas City,
Missouri. He is a member of the Rocky Mountain Inventors Congress
and has been issued a U.S. patent. He holds an FCC general radio
license and is a certified engineer by the National Association of
Radio & Telecommunications Engineers. He is a Senior Member of the
Institute of Electrical and Electronics Engineers. Mr. Ranniger
is the husband of Clara Ranniger.
Clara H. Ranniger, Vice President, Secretary, and a director
since June 8, 1983, has been vice president and co-owner of
Ranniger Systems, Inc., an affiliate of the Company, since July
1981. Her responsibilities with Ranniger Systems, Inc. included
the preparation of bids for government contracts and maintaining
the books and records of the corporation. She was associated with
Mr. Ranniger in the operations of its predecessor, a sole
proprietorship, from August 1974 to July 1981. Mrs. Ranniger is
employed by the Company full time, and handles all administrative
work for the Company, including purchasing, day-to-day accounting,
quality control documentation, inventory, customer and shareholder
relations.
The Board of Directors has a standing audit committee
consisting of Clara H. Ranniger and Harry D. Thompson, both of whom
are directors. Functions of the audit committee are: engagement or
discharge of auditors; prior approval of each professional service
provided by the auditors; determining fees; reviewing the audit
plan; reviewing internal accounting controls; reviewing the
adequacy of financial and accounting personnel; reviewing the
results of the audit; and reviewing financial information and press
releases concerning financial matters prior to dissemination. The
audit committee meets monthly to review the financial statements of
the Company, as evidenced by the minutes of such meetings in the
Company minute book.
The Board of Directors has a standing nominating committee
consisting of Messrs. Ranniger, Pethe, Thompson, and Mrs. Ranniger.
The functions of the committee are to propose nominees for
positions on the Board of Directors and to monitor the procedures
set forth in the Articles of Incorporation for nominations. These
procedures provide, in relevant part, that nominations for the
election of directors by shareholders will be considered if they
are submitted in writing not less than 14 days nor more than 50
days prior to any annual meeting of shareholders. The written
notice must contain specific information about the nominee as
required by the Articles of Incorporation.
There is no compensation committee; similar functions are
performed by the Board of Directors.
Management Remuneration and Transactions
The following table sets forth the cash compensation paid to
all officers and directors of the Company as a group for services
rendered during the fiscal year ended March 31, 2000 (no officer
received cash compensation in excess of $60,000):
No. Persons in Group Capacities in which served Cash Compensation
Five Officers and directors $ .00 *
* Mr. & Mrs. Ranniger have deferred payout of their salaries since
January, 1987, which deferment amount totals $651,900 through the
end of the fiscal year ended March 31, 2000. Mr. & Mrs. Ranniger
are still owed outstanding interest of $12,909.17 due from prior
loans to the Company, which has not been paid to date, as well as
the principal sum of $2,805.24 with additional accruing interest,
which was loaned to the Company in the past fiscal years.
The Company proposes to continue the employment of Mr. and
Mrs. Ranniger as officers of the Company at their monthly salaries
of $2,500 and $1,600 respectively. Mr. Thompson has provided, and
it is proposed that he continue to provide, accounting services to
the Company at his customary hourly rates for bookkeeping and for
preparation of financial reports. In addition, each director is
paid up to $100 plus reasonable expenses for attendance at each
Board of Directors' meeting, although the Directors decided to
defer this stipend for all meetings during the fiscal years 1988
through 2000.
The shareholders of the Company adopted an incentive stock
option plan (the "Plan") on June 8, 1983. The Plan provides for
the granting, in the discretion of the Board of Directors, to the
officers and employees of the Company of options (the "Options") to
purchase up to 3,000,000 shares of Common Stock. The Options are
to be exercisable at the fair market value of the Common Stock on
the date of grant, or 110% of such fair market value if the amount
of stock owned by the optionee is more than 10% of the total
combined voting power of all classes of capital stock of the
Company as of the date of grant. The Options are to be exercisable
for a period of not longer than ten years from the date of grant,
and the Plan expired June 8, 1993. No Options have been granted or
exercised under the Plan since its adoption.
There was no other remuneration paid or distributed to or
accrued for the account of the officers and directors of the
Company for services to the Company for the last fiscal year or
other proposed remuneration, including payments proposed to be made
in the future pursuant to any on-going plan or arrangement to
officers and directors of the Company, besides that already stated.
The Company has no other pension or retirement plans, or annuities.
PART IV
Item 14. Exhibits and Financial Statement Schedules, and Reports
on Form 8K.
A. The following documents are filed as a part of this report:
1. Financial Statements
a. Balance Sheets as of March 31, 2000 and 1999;
b. Statements of Operations for the years ended March 31,
2000, 1999, and 1998;
c. Statements of Stockholders' Deficiency for the years
ended March 31, 2000, 1999, and 1998;
d. Statements of Cash Flows for the years ended March 31,
2000, 1999, and 1998; and
e. Notes to Financial Statements for the years ended
March 31, 2000, 1999, and 1998.
2. Schedule IV, Indebtedness to Related Parties. Besides
Schedule IV, which is attached, all other schedules are
omitted, as the required information is included in the
financial statements or notes thereto.
3. Exhibits:
Form 10-K
Regulation S-K
consecutive
exhibit number Exhibit page
number
3.1 Articles of Incorporation (incorporated N/A
by reference to Exhibit 3.1 of the
Company's Registration Statement on Form
S-18, Registration No. 2-86781-D)
3.2 Bylaws (incorporated by reference to N/A
Exhibit 3.2 of the Company's Registration
Statement on Form S-18, Registration No.
2-86781-D)
10.1 Building Lease (incorporated by reference N/A
to Exhibit 10.2 of the Company's Form 10-K
for the fiscal year ended March 31, 1984)
10.2 Patent Assignment (incorporated by ref. N/A
to Exhibit 10.2 of the Company's Registration
Statement on Form S-18, Registration No.
2-86781-D)
10.3 Incentive Stock Option Plan (incorp. by N/A
reference to Exhibit 10.5 of the Company's
Registration Statement on Form S-18,
Registration No. 2-86781-D)
10.4 Assignment of Products, Ranniger Systems, N/A
Inc., as assignor, and the Company, as
assignee (incorporated by reference to
Exhibit 10.6 of the Company's Registration
Statement on Form S-18, Registration No.
2-86781-D)
28.1 U.S. Patent No. 3,778,616 (incorporated N/A
by reference to Exhibit 28.1 of the
Company's Registration Statement on Form
S-18, Registration No. 2-86781-D)
B. During the last quarter of its fiscal year ended March 31,
2000, the Company filed two reports on Form 8-K. The first
was filed on 3/3/2000, and gave notice that the Company was
in negotiations for a substantive transaction, and that
another 8-K would be filed if the negotiations were
successful; as of the date of this present filing, that
transaction is moot. The second 8-K (and 8-KA/amended) was
filed on 3/20/2000 and gave notice of an address change for
the Company.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TELECOMMUNICATION PRODUCTS, INC.
By:_____________/s/_____________
Don E. Ranniger, President
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.
June 26, 2000 By:____________/s/____________
Don E. Ranniger, Chairman of
the Board of Directors,
President and Treasurer
June 26, 2000 By:____________/s/____________
Clara H. Ranniger, Director
and Vice President and
Secretary
June 26, 2000 By:____________/s/_____________
Travis K. Pethe, Director
June 26, 2000 By:____________/s/_____________
Harry D. Thompson, Director
June 26, 2000 By:____________/s/_____________
Daniel P. Newman, Director
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
COMPILATION REPORT
To the Stockholders
Telecommunication Products, Inc.
Golden, Colorado
In accordance with the United States Securities and
Exchange Commission Regulation S-X paragraph 210.3-11, the Company
has compiled the accompanying balance sheets of Telecommunication
Products, Inc. as of March 31, 2000 and 1999, and the related
statement of operations and stockholders' deficiency and statement
of cash flows, with notes to financial statements, for the years
ended March 31, 2000, 1999, and 1998.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company's
recurring losses from operations and net stockholders' deficiency
raise doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in
Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
A compilation is limited to presenting in the form of
financial statements accounting information and records kept by the
Company. The Company has not audited the accompanying financial
statements and is not in a position to express an opinion or any
other form of assurance on them.
Golden, Colorado
June 26, 2000
F-1
TELECOMMUNICATION PRODUCTS, INC.
BALANCE SHEETS (Unaudited)
MARCH 31, 2000 AND 1999
(See Management's Compilation Report)
2000 1999
ASSETS
CURRENT ASSETS
Cash $ 184 -0-
Inventories (Note 3) 92,109 92,109
Prepaid expenses 238
-------- --------
92,293 92,347
-------- --------
PROPERTY AND EQUIPMENT
Equipment 46,446 46,446
Office furniture
and equipment 13,776 13,776
-------- --------
Total 60,222 60,222
Less accumulated depreciation 60,222 59,852
-------- --------
Net property
and equipment -0- 370
-------- --------
TOTAL $ 92,293 $ 92,717
======= ========
See notes to financial statements
F-2
TELECOMMUNICATION PRODUCTS, INC.
BALANCE SHEETS (Unaudited) - Continued
MARCH 31, 2000 AND 1999
(See Management's Compilation Report)
2000 1999
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 17,859 $ 15,408
Accrued liabilities
Officers (Note 2) 651,900 602,700
Other 28,757 28,757
-------- --------
698,516 646,865
LONG TERM DEBT
Officers/stockholders
(Note 2) 2,805 1,979
STOCKHOLDERS' DEFICIENCY
(Note 4)
Common stock, no par value
Authorized:
100,000,000 shares
Issued & outstanding:
22,492,800 shares 733,768 733,768
Preferred stock
$1 par value,
Non-voting
Authorized:
50,000,000 shares
Issued: none
Accumulated deficit (1,342,796) (1,289,895)
------- -------
Total stockholders'
deficiency (609,028) (556,127)
------- -------
TOTAL $ 92,293 $ 92,717
======= =======
See notes to financial statements
F-3
<PAGE>
TELECOMMUNICATION PRODUCTS, INC.
STATEMENT OF OPERATIONS (Unaudited)
YEARS ENDING MARCH 31, 2000, 1999, AND 1998
(See Management's Compilation Report)
2000 1999 1998
REVENUES
Net sales $ -0- $ -0- $ -0-
------ ------ ------
Total revenues -0- -0- -0-
EXPENSES
Cost of sales -0- -0- 220
Selling, general and
administrative 52,901 60,196 53,407
(Note 2)
------ ------ ------
Total expenses 52,901 60,196 53,627
NET LOSS $(52,901) $(60,196) $(53,627)
========= ========= =========
NET LOSS PER COMMON SHARE $(0.0024) $(0.0027) $(0.0025)
========= ========= =========
WEIGHTED-AVERAGE COMMON
SHARES OUTSTANDING 22,492,800 22,492,800 22,492,800
========== ========== ==========
See notes to financial statements
F-4
TELECOMMUNICATION PRODUCTS, INC.
STATEMENTS OF STOCKHOLDERS DEFICIENCY (Unaudited)
YEARS ENDING MARCH 31, 2000, 1999, AND 1998
(See Management's Compilation Report)
Common Stock Accumulated Total
Shares Amount Deficit
BALANCE AT MARCH 31,
1997 22,492,800 $733,768 $(1,176,072) $(442,304)
Net loss (Unaudited) (53,627) (53,627)
----------- ---------
BALANCE AT MARCH 31,
1998 22,492,800 $733,768 $(1,229,699) $(495,931)
Net loss (Unaudited) (60,196) (60,196)
----------- ---------
BALANCE AT MARCH 31,
1999 22,492,800 $733,768 $(1,289,895) $(556,127)
Net loss (Unaudited) (52,901) (52,901)
----------- ---------
BALANCE AT MARCH 31,
2000 22,492,800 $733,768 $(1,342,796) $(609,028)
========== ======= ========= =======
See notes to financial statements
F-5
TELECOMMUNICATION PRODUCTS, INC.
STATEMENT OF CASH FLOWS (Unaudited)
YEARS ENDING MARCH 31, 2000, 1999, AND 1998
(See Management's Compilation Report)
2000 1999 1998
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(52,901) $(60,196) ($53,627)
Adjustments to reconcile
net loss to net cash
flows from operating
activities:
Depreciation and 370 1,127 1,117
amortization
Increase (decrease) in
assets & liabilities
Accounts receivable
Inventories
Prepaid expenses 238 (238) 222
Accounts payable 2,451 9,158 1,935
Accrued liabilities 49,200 49,149 48,940
-------- -------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES
Payments for property and
equipment -- -- --
-------- -------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES
Borrowing under long-term
debt & notes payable 826 964 1,015
Principal payments of long-
term debt & notes payable
-------- -------- --------
Net cash flows from
financing activities 826 964 1,015
NET INCREASE (DECREASE)
IN CASH 184 (36) (398)
CASH, BEGINNING OF YEAR -0- 36 434
-------- -------- --------
CASH, END OF YEAR 184 -0- 36
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest expense -0- -0- -0-
See notes to financial statements
F-6
TELECOMMUNICATION PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
YEARS ENDING MARCH 31, 2000, 1999, AND 1998
(See Management's Compilation Report)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Telecommunication Products, Inc. (Company)
was incorporated in the State of Colorado on June 8, 1983, to
design, manufacture and market specialized communication equipment.
Going-Concern Basis - The accompanying financial statements
have been prepared on a going-concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. As shown in the financial statements,
during the year ended March 31, 2000, the Company incurred a net
loss of $52,901 and, as of that date, the Company has an
accumulated deficit of $1,342,796 and a net stockholders'
deficiency of $609,028. These factors, among others, may indicate
that the Company will be unable to continue as a going concern.
The financial statements do not include any adjustments that may be
necessary should the Company be unable to continue as a going
concern. The Company's continuation as a going concern is
dependent upon its ability to generate sufficient cash flow to meet
its obligations on a timely basis, to obtain additional financing
as may be required, and ultimately to attain successful operations.
Management is of the opinion that enhanced marketing efforts will
enable the Company to increase revenues sufficiently to sustain
operations.
Inventories - Inventories are stated at the lower or cost
(first-in, first-out) or market.
Property and Equipment and Depreciation - Depreciation is
provided using the straight-line method over an estimated useful
life of five years.
Revenue Recognition - Revenue is recognized when products
are delivered and accepted by customers.
Warranty Reserve - The Company grants a one-year warranty
on parts and labor for all of its products. The Company has
historically experienced minimal warranty claims.
Net Loss Per Common Share - Net loss per common share is
computed by dividing net loss by the weighted average common shares
outstanding during the period. The weighted shares outstanding
include 9,800,000 shares issued to certain persons at a price
substantially less than the public offering price.
F-7
2. RELATED PARTY TRANSACTIONS
One of the Company's directors provides accounting services
to the Company. Expenses for such services were $1,250, $-0-, and
$-0- for 2000, 1999, and 1998, respectively.
Certain officers/stockholders of the Company elected to
defer their salaries beginning the first quarter of calendar year
1987 in order to help the Company's cash flow. Unpaid compensation
expenses of $49,200 annually were incurred in each of the
subsequent years and as of March 31, 2000 and 1999, unpaid
compensation to officers/stockholders totaled $651,900 and $602,700
respectively.
Long-term debt - officers/stockholders represents an
unsecured note payable with interest at 0%. During the years ended
March 31, 2000, 1999, and 1998, interest expense of $ 0, $ 0, and
$ 0, respectively, was incurred on the note and, at March 31, 2000
and 1999, accrued interest of $12,909 and $12,909 was payable.
Officers/stockholders have also loaned monies to the Company on a
short-term basis, as reflected on Schedule IV below. This debt may
incur interest of up to 21% per annum pursuant to an agreement with
the Company.
3. INVENTORIES
Inventories consist of the following at March 31,
1999 2000
Raw materials $ 55,176 $ 55,176
Work in process 36,933 36,933
Finished goods -0- -0-
-------- --------
Total $ 92,109 $ 92,109
======== ========
4. COMMON STOCK
On June 8, 1983, the Company's Board approved an incentive
stock option plan for all employees and reserved 3,000,000 shares
of common stock for issuance upon the exercise of options granted.
The minimum exercise price under the plan is generally 100% of the
fair market value of the Company's common stock at the date of the
grant, and the options are exercisable for a period up to 10 years
from the date of the grant. For 10% stockholders, the minimum
exercise price is 110% of the fair market value at the date of
grant, and the options are exercisable for a period up to 5 years
from the date of grant. As of March 31, 2000, no options have been
granted.
In connection with the March 1984 public offering, the
Company sold to the underwriter for $100 warrants to purchase up to
644,280 shares of the Company's no par value common stock. The
warrants expired unexercised on January 11, 1989.
F-8
5. INCOME TAXES
At March 31, 2000 the Company has accumulated net operating
loss carryforwards of approximately $625,258 which may be utilized
to offset future taxable income and which expire through the year
2014. The Company has investment tax credit carryforwards of
approximately $3,196 which expire through the year 2001.
Additionally, the Company has research and development tax credit
carryovers of approximately $16,261 which expire through the year
2002. Accordingly, the Company has made no provision for income
taxes.
Pursuant to the Tax Reform Act of 1986, net operating
losses utilized in future income tax returns may be subject to
alternative minimum tax regulations which may limit up to 10% of
the net operating loss carryforward applied in a given year.
SCHEDULE IV - INDEBTEDNESS TO RELATED PARTIES (Unaudited)
YEAR ENDED MARCH 31, 2000
Balance at Balance at
Beginning Additions Deletions End
Notes payable
to shareholders 1,979 826 2,805
Donald E. and
Clara H. Ranniger*
YEAR ENDED MARCH 31, 1999
Balance at Balance at
Beginning Additions Deletions End
Notes payable
to shareholders 1,015 964 1,979
Donald E. and
Clara H. Ranniger*
YEAR ENDED MARCH 31, 1998
Balance at Balance at
Beginning Additions Deletions End
Notes payable
to shareholders -0- 1,015 1,015
Donald E. and
Clara H. Ranniger*
* Made to maintain operations
F-9
