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 Commission File No.
ended March 31, 1996 33-18978
TEL-INSTRUMENT ELECTRONICS CORP.
(Exact name of Registrant as specified in its charter)
New Jersey 22-1441806
(State of incorporation) (IRS Employer Identification Number)
728 Garden Street
Carlstadt, New Jersey 07072
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 933-1600
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by checkmark 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___.
The aggregate market value of the voting Common Stock (par value $.10 per share)
held by non-affiliates on June 1, 1996 was $630,240.
1,603,806 shares of Common Stock and 125,025 shares of Redeemable Preferred
Stock were outstanding as of June 1, 1996.
Exhibit Index - page 30
<PAGE>
PART I
Item 1. Business
General
Tel-Instrument Electronics Corp. ("Tel" or the "Company") manufactures
and sells test equipment to the general aviation and commercial
aviation market, and to the government/military aviation market, both
domestically and internationally.
Tel's instruments are used to test navigation and communications
equipment installed in aircraft and range in list price from $7,000 to
$22,000 per unit. Tel is constantly revising and improving its test
instruments (see "Research and Development") in anticipation of
customers' needs. The development of multifunction "smart" testers,
for example, has made it easier for customers to perform ramp tests
with less training.
In the fiscal year ended March 31, 1995, Tel won a competitive
solicitation from the United States Air Force (USAF) for the Model
T-30CM. The total contract was valued at $1,679,265 and orders for
$869,711 were received in fiscal year 1995. An additional $907,334 in
orders for that contract were received in the fiscal year ended March
31, 1996.
The chart below sets forth the composition of Tel's sales for the last
three fiscal years.
Year Ended Year Ended Year Ended
March 31, March 31, March 31,
1996 1995 1994
---- ---- ----
Commercial $ 1,274,606 $ 1,268,422 $ 1,091,600
Government 1,043,482 597,070 297,319
Tel received, respectively, for the periods indicated above, 27%, 17%
and 12% of its commercial revenues from foreign commercial sales. For
the year ended March 31, 1996, 37% of total government sales were
attributed to the USAF contract for the T-30CM and 30% for a Canadian
Defense Forces (CDF) contract for the T-47C. Foreign commercial sales
are made direct or through an American export agent at a discount
reflecting the 15% selling commission under an oral, year-to-year
arrangement. The Company also sells at a discount reflecting selling
commission to other exporters who in turn sell Tel's product overseas.
The amount of sales made by these exporters is not readily
determinable and, therefore, not included in the aforementioned
amounts of foreign sales, reflected as a percentage of sales above.
Tel sells its products either directly or through distributors to its
commercial customers. There is no written agreement with the
distributors who receive a 15% discount for stocking and selling these
products. Tel also gives a 5 to 10% discount to non-stocking
distributors depending on their volume and promotional effort.
Independent sales representatives receive 5 to 10% commissions
depending on their sales volume and promotional efforts.
2
<PAGE>
Item 1. Business (Continued)
General (Continued)
Set forth below is Tel's backlog at March 31, 1996 and 1995. Tel
believes that approximately $1,711,947 of the commercial and
government backlog at March 31, 1996 will be delivered during the
fiscal year ending March 31, 1997.
Commercial Government Total
---------- ---------- -----
March 31, 1996 $ 9,900 $1,756,602 $1,766,502
March 31, 1995 84,235 1,279.387 1,363,622
All of the backlog is pursuant to purchase orders and all of the
government contracts are fully funded.
Sales increased again this past year, mainly because of government
orders. Commercial sales increased slightly. (See Management's
Discussion - Item 7 and Markets - Item 1).
Tel obtains its purchased parts from a number of suppliers. These
materials are standard in the industry and Tel foresees no difficulty
in obtaining purchased parts, as needed, at acceptable prices.
Markets
The general aviation market consists of some 1,000 repair and
maintenance service shops, at private and commercial airports in the
United States, which purchase test equipment to repair aircraft
electronics. The airline market consists of approximately 80 domestic
and foreign commercial airlines.
The civilian market for avionic testing equipment is dominated by
three manufacturers, of which Tel is believed to be the third largest.
The market is relatively small and management believes that it will
continue to be depressed. Commercial sales appear to be coming more
and more from foreign customers while domestic sales continue to
decline. Future growth will depend on whether the U.S. Federal
Aviation Administration (FAA) implements plans to upgrade the U.S. air
traffic control system and on continuing recent trends towards more
sophisticated avionics systems, both of which would require the design
and manufacture of new test equipment. Between March 31, 1985 and
March 31, 1996, the Company expended approximately $3,950,000 to
develop new and improved instruments to meet emerging FAA requirements
and redesign models to add functions and reduce the cost of
manufacturing. The Company believes its test equipment is recognized
by its customers for its quality, durability and reliability.
Over the last several years the commercial demand for new avionic test
equipment has been flat. However, the airline industry as a whole has
become profitable again and some operators have started buying capital
equipment. Changes in the law governing the liability of manufacturers
of
3
<PAGE>
Item 1. Business (Continued)
Markets (Continued)
small planes has caused some manufacturers to produce small aircraft
for general aviation. In addition, airlines' base of ramp testers is
aging and may require replacement over the next few years. New avionic
systems such as Global Positioning Systems (GPS) will create a market
for a new ramp test set.
Tel sells to many commercial customers. In fiscal 1996, no end user
customer accounted for more than 10% of commercial sales. The only
customers over 10% were two distributors (14% and 12%) who sell to
many end users.
The military market is large, but is dominated by large corporations
with substantially greater resources than Tel. Tel bids for government
contracts on competitive bids, on the basis of "small business set
asides" (i.e., statutory provisions requiring the military to
entertain bids only from statutorily defined small businesses), and on
bids for sub-contracts from major government suppliers. Since early
1983, when Tel first started bidding for government jobs, it had
increased its government sales from $84,853 in fiscal year 1983 to
over $1,000,000 per year in fiscal years 1989 through 1991. However,
in fiscal year 1992, military sales fell to $244,289 as military
spending was delayed and/or curtailed due to changes in the world
political climate. As the result of continuing marketing efforts,
government sales in fiscal year 1995 were more than double of what
they were in fiscal year 1994 and increased another 75% in fiscal year
1996 as compared to fiscal year 1995.
Because of the larger size of the military market, in contrast to the
limited civilian market, Tel has been increasing its efforts to obtain
military contracts and sub-contracts. Although it is anticipated that
the total defense budget will decline, management believes that the
portion devoted to operation and maintenance of existing and improved
avionics will be less adversely affected. Tel has increased its
concentration on meeting end user needs by modifying commercial
designs to satisfy special government/military requirements. This
approach appears to be viable as Tel has been able to sell the T-36,
T-49C, T-47C and T-48I to government agencies and sub-contractors with
a growing list of other prospective buyers. Government small purchase
procedures allow Tel to sell test sets into areas that could have
influence on future government purchases. Tel will also continue its
efforts to penetrate the export market.
Competition
In the general aviation and airline market, Tel competes principally
with IFR, an independent firm, and with JC Air, a division of B.F.
Goodrich. This market is highly competitive. Tel has generally been
successful because of its high quality products, competitive prices,
and responsive service. Tel also provides customers with calibration
and repair services.
The military market is dominated by large corporations with greater
operating experience with the military. Tel can compete in this market
by selling applicable "best commercial practice" test equipment,
adapted to government standards, by bidding for small business set
asides, and by subcontracting with larger corporations to produce
subsystems.
4
<PAGE>
Item 1. Business (Continued)
Competition (Continued)
Tel's past ability to compete in the civil aviation market and the
military market has been restricted because of limited financial
resources. Tel has no patents or licenses which are material to its
business.
Research and Development
In the fiscal years ended March 31, 1996, 1995 and 1994, Tel spent
$390,399, $315,331 and $236,206 respectively, on the research and
development of new and improved products. None of these amounts were
sponsored by customers. Tel's management believes that continued and
increased expenditures for research and development are necessary to
enable Tel to expand its sales and generate profits.
In fiscal year 1996, the T-30D model was completed and several were
delivered to commercial customers. Development of a military version
of our T-36 (T-36M) using a microprocessor for control, and an
interrogator version of the T-47C (T-47N) were started with completion
expected in fiscal year 1997. A contract for the T-36M for $324,795
was received in April 1996 and a solicitation for the T-47N is
expected in the first quarter of fiscal year 1997.
Item 2. Properties
The Company leases 11,164 square feet in Carlstadt, New Jersey as its
manufacturing plant and administrative offices, pursuant to a five
year lease expiring in August, 1998. Tel is unaware of any
environmental problems in connection with its location and, because of
the nature of its manufacturing activities, does not anticipate any
problems.
Tel has nine manufacturing, six administrative and sales, and three
research and development employees, none of whom belongs to a union.
Tel does not anticipate any difficulty in adding personnel as
required. The Company also uses several part-time consultants on an as
needed basis.
Item 3. Pending Legal Proceedings
There are no material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Securities Holders
The Company did not hold an annual meeting of the shareholders during
the fiscal year ended March 31, 1996.
5
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Market Information
There has been no established public trading market for Registrant's
Common Stock or Redeemable Preferred Stock. Subsequent to the public
offering of the Company's Common Stock in December 1988, the Common
Stock has traded sporadically in the over-the-counter market. On March
31, 1996, as reported by the market maker for the Common Stock, the
high and low bids were $.75 and $.56, respectively. These quotations
reflect inter-dealer prices, without retail markup or commission and
may not necessarily represent actual transactions.
Approximate Number of Equity Security Holders
Number of Record
Holders as of
Title of Class March 31, 1996
-------------- --------------
Common Stock, par value
$.10 per share 851
Redeemable Preferred Stock,
par value $3.00 per share One
Dividends
Registrant has not paid dividends on its Common Stock and does not
expect to pay such dividends in the foreseeable future.
6
<PAGE>
Item 6. Selected Financial Data
TEL-INSTRUMENT ELECTRONICS CORP.
SUMMARY OF FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Years Ended March 31,
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net Revenues $2,318,088 $1,865,492 $1,308,939 $1,430,923 $2,199,690
---------- ---------- ---------- ---------- ----------
Operating costs and expenses:
Cost of sales 1,022,942 888,213 619,165 772,312 1,060,489
Selling, general and
administrative 739,912 575,124 506,595 486,455 597,517
Engineering, research and
development 390,399 315,331 236,206 317,937 436,398
---------- ---------- ---------- ---------- ----------
$2,153,253 $1,788,668 $1,361,966 $1,576,704 $2,094,404
---------- ---------- ---------- ---------- ----------
Operating income/(loss) 164,835 86,824 (53,027) (145,781) 105,286
---------- ---------- ---------- ---------- ----------
Other expenses, net (69,156) (76,348) (66,116) (54,815) (20,966)
---------- ---------- ---------- ---------- ----------
Income/(loss) from continuing
operations, before
extraordinary item $ 95,679 $ 10,476 $ (119,143) $ (200,596) $ 84,320
========== ========== ========== ========== ==========
Extraordinary item -- 12,000 -- -- --
========== ========== ========== ========== ==========
Net income/(loss) $ 95,679 $ 22,476 $ (119,143) $ (200,596) $ 84,320
Income/(loss) per share from
continuing operations:
Before extraordinary item (1) $ .04 $ (.01) $ (.09) (.14) $ .03
Extraordinary item -- .01 -- -- --
----------- ----------- ----------- ----------- ------------
Income/(loss) per common share $ .04 $ -- $ (.09) (.14) $ .03
Years Ended March 31,
---------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ----- ---- ----- ----
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital (deficiency) $ (500,199) $ (519,207) $ (506,519) $ (385,862) $ (175,842)
Total assets 824,606 872,442 780,825 640,435 825,891
Long-term debt 100,000 165,000 200,000 200,000 200,000
Redeemable preferred stock 606,643 576,643 546,643 516,643 495,075
Stockholders' (deficiency) (1,118,364) (1,184,031) (1,176,507) (1,027,364) (796,768)
</TABLE>
(1) The earning/(loss) per share is calculated on the weighted average number of
shares outstanding. Preferred stock dividends of $30,000 per year are deducted
from income/(loss) from continuing operations, before extraordinary item.
7
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations 1996 Compared to 1995
Net sales increased $452,596 (24.3%) for the year ended March 31, 1996
as compared to the year ended March 31, 1995. Commercial sales
increased $6,184 (0.5%) and government sales increased $446,412
(74.8%). New product introductions to the commercial market and the
award of additional contracts from the government sector account for
these increases. While commercial sales increased, the commercial
airline market remains stagnant. The Company was awarded a contract
from the CDF in fiscal year 1994 in the amount of $630,700 of which
$309,400 was shipped during fiscal year 1996 to complete the contract.
In fiscal year 1995 the Company won an open quantity contract from the
USAF of which firm orders have been received in the amount of
$1,777,045 and $386,742 of these orders were shipped in fiscal year
1996. The balance of the orders from the USAF are expected to be
delivered in fiscal years 1997 and 1998. There is no assurance that
such sales will continue after these contracts have been completed.
Future growth and profitability continue to be dependent on a
turnaround of the commercial airline industry, introduction and
acceptance of new products, and the award of additional government
contracts.
Gross margin increased $317,867 (32.5%) for the year ended March 31,
1996 as compared to the previous year. Gross margin as a percent of
sales increased to 55.9% in 1996 from 52.4% in 1995. The higher gross
margin is attributed to the higher sales volume and the sale of higher
margin products. Tel does not expect to maintain this higher gross
margin percentage due to the higher mix of lower margin government
sales expected in the coming fiscal year.
Total selling, general and administrative expenses increased $164,788
(28.7%) for the year ended March 31, 1996 as compared to the last
fiscal year. The increase is attributed to the hiring of a director of
marketing and increased travel and trade show expenses. Engineering,
research and development expenditures increased $75,068 (23.8%) for
the same period due to increased development efforts as a result of
increased proposal activity.
The net income for the year was $95,679 as compared to a net income of
$22,476 in the prior fiscal year ended March 31, 1995.
8
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Results of Operations 1995 Compared to 1994
Net sales for the year ended March 31, 1995 increased $556,553 (42.5%)
as compared to the previous fiscal year. The stagnant conditions
experienced both in the commercial airline industry and in the
government sector continue to affect the Company's sales. The Company,
however, was awarded a contract from the USAF in the second quarter in
the amount of $1,679,265 which should be shipped over the next two
fiscal years. There is no assurance that such sales will continue.
Future growth and profitability are dependent on the growth of the
commercial airline industry and the award of additional government
contracts.
Gross margin increased $287,505 (41.7%) but gross margin percentage
decreased slightly to 52.4% from 52.7% as a result of product mix and
continuing cost reduction measures within the manufacturing process.
Total selling, general and administrative expenses increased $68,529
(13.5%) due primarily to training and documentation costs.
Engineering, research and development expenditures increased $79,125
(33.5%) because of increased development efforts as a result of
increased proposal activity.
The net income for the year was $22,476 as compared to a net loss of
$119,143 in the prior fiscal year.
Liquidity and Capital Resources
The working capital deficiency was $500,199 at March 31, 1996 as
compared to $519,207 at March 31, 1995. The Company's ability to
continue is dependent upon its ability to generate sufficient cash
flow from operations or to obtain additional financing. Since the
Company's ability to obtain financing from traditional sources is
limited, short-term liquidity must continue to be provided by cash
generated from operations.
Management continues to improve profitability and cashflow through its
continued sales efforts and incremental revenues derived from new
product developments and cost reduction measures.
In July, 1996 a group of the Company's employees and creditors (the
"Group") agreed to purchase the Company's outstanding redeemable
preferred stock (the "Preferred Stock") from the preferred stockholder
for $111,700 and to exchange the Preferred Stock for common stock. The
Company's Board of Directors approved the exchange of the Preferred
Stock and accrued dividends for 178,720 shares of newly issued common
stock and stock purchase warrants for an additional 35,744 shares of
common stock. The purchase warrants are exercisable at a price per
share of $.75 until March 31, 1997, $1.50 until March 31, 1998 and
$2.25 until March 31, 1999.
9
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
At March 31, 1996, the Preferred Stock and accrued dividends had a
face value of $606,643, as reflected on the accompanying balance
sheet. The effect of this transaction will be to reduce liabilities by
approximately $700,000 and the Company's negative net worth by
approximately $600,000. Also, as a result of canceling the Preferred
Stock, the dividends will no longer accrue.
The Board of Directors also authorized the Company to offer all
shareholders the right to purchase an additional 178,720 shares of
common stock at $.75 per share and to issue, to such participating
shareholders, up to 35,744 in stock purchase warrants with the same
terms as those described above.
There was no significant impact on the Company's operations as a
result of inflation for the year ended March 31, 1996.
Attention is directed to the report of independent accountants and
Note 1 to the financial statements included elsewhere herein.
Other Accounting Matters
During 1995 the Financial Accounting Standards Board issued Statement
Of Financial Accounting Standard No. 123 "Accounting For Stock Based
Compensation" (SFAS 123). SFAS 123 will be effective for fiscal year
ending March 31, 1997, and gives the company the option of adopting
its provisions and recognizing compensation expense based on the fair
value of the stock option at the grant date or disclosing the pro
forma effects on the Company's net income and earnings per share.
Management intends to adopt the disclosure requirements of SFAS 123.
10
<PAGE>
Item 8. Financial Statements and Supplementary Data
Pages
-----
(1) Financial Statements:
Report of Independent Accountants 12-13
Balance Sheets - March 31, 1996 and 1995 14
Statements of Operations - Years Ended
March 31, 1996, 1995 and 1994 15
Statements of Changes in Stockholders'
Deficiency - Years Ended March 31,
1996, 1995 and 1994 16
Statements of Cash Flows - Years Ended
March 31, 1996, 1995 and 1994 17
Notes to Financial Statements 18-25
(2) Financial Statement Schedule:
II - Valuation and Qualifying Accounts 26
Financial statement schedules not included in this annual report on
Form 10-K have been omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
11
<PAGE>
{LETTERHEAD OF COOPERS & LYBRAND L.L.P.]
Report of Independent Accountants
Stockholders and Board of Directors of
Tel-Instrument Electronics Corp.
We have audited the financial statements and financial statement schedule of
Tel-Instrument Electronics Corp. listed in item 14(a) of this Form 10-K. These
financial statements and the financial statement schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the financial statement schedule 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 Tel-Instrument Electronics
Corp. as of March 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended March 31, 1996, in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole presents fairly, in
all material respects, the information required to be included therein.
<PAGE>
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, as discussed in Note 1 to the
financial statements, the Company has a working capital deficiency and a
deficiency in stockholders' capital at March 31, 1996. In addition, the
Company's ability to meet its obligations on both a short-term and long-term
basis requires the Company to continue to increase revenue, operating profits
and operating cash flow and to fulfill its manufacturing contracts. These
circumstances raise substantial doubt about the ability of the Company to
continue as a going concern. Management's plans in regard to 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.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
May 31, 1996,
-13-
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Balance Sheets
<TABLE>
<CAPTION>
March 31,
-------------------------------
ASSETS 1996 1995
----------- -----------
<S> <C> <C>
Current assets:
Cash $ 22,625 $ 38,768
Accounts receivable, net of allowance for doubtful
accounts of $66,090 and $51,090 at March 31,
1996 and 1995, respectively 359,494 239,479
Inventories, net 346,874 482,273
Prepaid expenses and other current assets 7,135 35,103
----------- -----------
Total current assets 736,128 795,623
Office and manufacturing equipment, net 41,825 40,218
Other assets 46,653 36,601
----------- -----------
Total assets $ 824,606 $ 872,442
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Note payable $ -- $ 16,667
Convertible subordinated note - related party 30,000 --
Convertible subordinated note 35,000 --
Accounts payable 93,789 246,102
Accrued payroll, vacation pay and deferred wages 590,353 560,870
Accrued expenses - related parties 136,086 105,613
Other accrued expenses 351,099 385,578
----------- -----------
Total current liabilities 1,236,327 1,314,830
Note payable - related party 100,000 100,000
Convertible subordinated note - related party -- 30,000
Convertible subordinated note -- 35,000
Redeemable preferred stock - redemption value
of $375,075, plus unpaid dividends 606,643 576,643
Stockholders' deficiency:
Common stock, par value $.10 per share 160,383 160,383
Additional paid-in capital 3,151,432 3,181,444
Accumulated deficit (4,430,179) (4,525,858)
----------- -----------
Total stockholders' deficiency (1,118,364) (1,184,031)
----------- -----------
Total liabilities and stockholders' deficiency $ 824,606 $ 872,442
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
14
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Statements Of Operations
<TABLE>
<CAPTION>
For the years ended March 31,
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Sales - commercial, net $ 1,274,606 $ 1,268,422 $ 1,091,600
Sales - government, net 1,043,482 597,070 217,339
----------- ----------- -----------
Total Sales 2,318,088 1,865,492 1,308,939
----------- ----------- -----------
Cost of sales 1,022,942 888,213 619,165
----------- ----------- -----------
Gross margin 1,295,146 977,279 689,774
----------- ----------- -----------
Operating expenses:
Selling, general and administrative 739,912 575,124 506,595
Engineering, research and development 390,399 315,331 236,206
----------- ----------- -----------
Total Operating Expense 1,130,311 890,455 742,801
----------- ----------- -----------
Income/(loss) from operations 164,835 86,824 (53,027)
----------- ----------- -----------
Other income/(expense):
Interest (57,570) (60,748) (57,588)
Interest - related parties (12,100) (15,600) (17,000)
Other, net 514 8,472
----------- ----------- -----------
Income (loss) before extraordinary item 95,679 10,476 (119,143)
Extraordinary item - extinguishment of debt 12,000
----------- ----------- -----------
Net income/(loss) $ 95,679 $ 22,476 $ (119,143)
=========== =========== ===========
Income/loss per common share:
Before extraordinary item $ .04 $ (.01) $ (.09)
Extraordinary item -- .01 --
----------- ----------- -----------
Income/(loss) per common share $ .04 $ $ (.09)
=========== =========== ===========
Weighted average number of shares outstanding 1,603,806 1,603,806 1,603,806
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Statements Of Changes In Stockholders' Deficiency
<TABLE>
<CAPTION>
Common Stock
----------------------------------------- Additional
Number of Shares Paid-In Accumulated Total
Authorized Issued Amount Capital Deficit
---------- --------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balances, March 31, 1993 2,000,000 1,603,806 $ 160,383 $3,241,444 $(4,429,191) $(1,027,364)
Net loss (119,143) (119,143)
Redeemable preferred stock
dividends accrued (30,000) (30,000)
--------- --------- ---------- ---------- ----------- -----------
Balances, March 31, 1994 2,000,000 1,603,806 $ 160,383 $3,211,444 $(4,548,334) $(1,176,507)
Net income 22,476 22,476
Redeemable preferred stock
dividends accrued (30,000) (30,000)
--------- --------- ---------- ---------- ----------- -----------
Balance, March 31, 1995 2,000,000 1,603,806 $ 160,383 $3,181,444 $(4,525,858) $(1,184,031)
Net income 95,679 95,679
Repurchase of shares (12) (12)
Redeemable preferred stock
dividends accrued (30,000) (30,000)
--------- --------- ---------- ---------- ----------- -----------
Balances March 31, 1996 2,000,000 1,603,806 $ 160,383 $3,151,432 $(4,430,179) $(1,118,364)
========= ========= ========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Statements Of Cash Flows
Increase (Decrease) In Cash
<TABLE>
<CAPTION>
For the years ended March 31,
-----------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income/(loss) $ 95,679 $ 22,476 $(119,143)
Adjustments to reconcile net income/(loss) to cash
provided by (used in) operating activities:
Depreciation and amortization 17,994 17,067 18,260
Provision for losses on accounts receivable 15,000 16,000 23,590
Provision for inventory obsolescence -- 70,336 25,500
Gain on early extinguishment of debt -- (12,000) --
Gain on sale of equipment -- (7,014) --
Changes in current assets and liabilities:
(Increase)/decrease in accounts receivable (135,015) 3,650 (61,196)
(Increase)/decrease in inventories 135,399 (155,592) (140,284)
(Increase)/decrease in other assets 17,916 10,853 (33,047)
Increase/(decrease) in accounts payable (152,313) 78,632 118,348
Increase in accrued expenses 25,477 58,842 141,185
--------- --------- ---------
Net cash provided by/(used in) operating
activities 20,137 103,250 (26,787)
--------- --------- ---------
Cash flows from investing activities:
Additions to office and manufacturing equipment (19,601) (36,119) (10,986)
Proceeds from sale of equipment 12,000
--------- --------- ---------
Net cash used in investing activities (19,601) (24,119) (10,986)
--------- --------- ---------
Cash flows from financing activities:
Repayment of notes payable (16,667) (33,333) --
Repurchase of shares (12) -- --
Repayment of convertible subordinated note -- (23,000) --
--------- --------- ---------
Net cash used in financing activities (16,679) (56,333) --
--------- --------- ---------
Net increase/(decrease) in cash (16,143) 22,798 (37,773)
Cash - beginning of year 38,768 15,970 53,743
--------- --------- ---------
Cash - end of year $ 22,625 $ 38,768 $ 15,970
========= ========= =========
Non-cash investing and financing activities:
Redeemable preferred stock dividends accrued $ 30,000 $ 30,000 $ 30,000
Supplemental information:
Interest paid $ 20,153 $ 8,667 $ 5,575
</TABLE>
17
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements
1. Business and Organization
Tel-Instrument Electronics Corp. ("Tel" or the "Company") designs and
manufactures avionic test equipment for the civil aviation industry and
avionic testing and electronic equipment for the military under government
contracts. The Company grants credit to its civil aviation customers,
substantially all of whom are either domestic and foreign commercial
airlines or repair and maintenance service shops located at the private and
commercial airports in the United States.
As shown in the accompanying financial statements, as of March 31, 1996,
the Company had a working capital deficiency of $500,199 and a net
stockholders' deficiency of $1,118,364. Tel's ability to continue as a
going concern is dependent upon its ability to generate sufficient cash
flow from operations and obtain sufficient debt financing or capital
contributions to meet its obligations. In addition, the Company's ability
to meet its obligations on both a short-term and long-term basis requires
the Company to continue to increase revenue, operating profits and
operating cash flow and to fulfill manufacturing contracts. These
circumstances raise substantial doubt about the ability of the Company to
continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
Management's plans include new product developments which are outgrowths of
existing products for which a backlog currently exists, the introduction of
new products to meet new commercial needs, and improved penetration of the
government market. Although no significant amounts were required in fiscal
year 1996, if necessary, the Company will again defer the payment of
certain salary related amounts and amounts due to related parties in an
effort to conserve cash. Management believes that short-term liquidity can
be provided from cash generated by operations. In addition, management
intends to continue searching for external financing.
2. Summary of Significant Accounting Policies
Inventories:
Inventories are stated at the lower of cost or market. Cost is determined
on a first-in, first-out basis.
In accordance with industry practice, service parts inventory is included
in current assets, although parts are carried for established requirements
during the serviceable lives of products and, therefore, are not expected
to be sold within one year.
18
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements (Continued)
Office and Manufacturing Equipment:
Office and manufacturing equipment are stated at cost. Depreciation and
amortization is provided on a straight-line basis over periods ranging from
3 to 10 years.
Maintenance, repairs and renewals that do not materially add to the value
of the equipment nor appreciably prolong its life are charged to expense as
incurred. Upon retirement or disposition of a fixed asset, the cost and
related accumulated depreciation are removed from the accounts and the
resulting gain or loss is included in the Statements of Operations.
Revenue Recognition:
Commercial sales and sales related to Government contracts are recorded
when products are shipped.
Research and Development Costs:
Research and development costs are expensed as incurred.
Income/(Loss) Per Common Share:
The computation of income/(loss) per common share is based on the weighted
average number of shares outstanding. The Company's common stock
equivalents were anti-dilutive for the year ended March 31, 1996. Preferred
stock dividends are considered when determining per share amounts. In
fiscal 1995 the preferred stock dividend of $30,000 is deducted from the
income before extraordinary item of $10,476, which results in the loss per
share before extraordinary item of $.01. The convertible subordinated notes
are not considered common stock equivalents for the purpose of determining
per share amounts.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
most significant estimates include taxes and the inventory and accounts
receivable reserves.
Reclassification
Certain amounts have been reclassified to conform to the current year
presentation.
19
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements (Continued)
3. Accounts Receivable
The following tabulation shows the component elements of accounts
receivable:
March 31,
-----------------------------
1996 1995
------------- -------------
Government $ 147,542 $ 124,323
Commercial 211,952 115,156
------------- -------------
$ 359,494 $ 239,479
============= =============
4. Inventories
Inventories consist of:
March 31,
----------------------------
1996 1995
------------- ------------
Purchased Parts $ 160,327 $ 246,909
Work-in-process 246,668 339,400
Less: Reserve for obsolescence (60,121) (104,036)
------------- ------------
$ 346,874 $ 482,273
============= ============
The work-in-process includes $147,090 and $145,855 for government contracts
at March 31, 1996 and March 31, 1995, respectively.
5. Office and Manufacturing Equipment
March 31,
----------------------------
1996 1995
------------- ------------
Leasehold Improvements $ 36,999 $ 36,999
Machinery and equipment 471,083 464,503
Sales Equipment 55,000 68,021
Less: Accumulated depreciation (534,278) (516,284)
------------- ------------
$ 41,825 $ 40,218
============= ============
6. Note Payable
The note payable at March 31, 1995 consisted of a bank note, bearing
interest at 9% and payable on demand. The loan was collateralized by the
cash surrender value of a life insurance policy for the Chairman/President
of the Company. The note was paid in full in 1996.
20
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements (Continued)
7. Accrued Expenses
Accrued payroll, vacation pay and deferred wages consists of the following:
March 31,
----------------------------
1996 1995
------------- ------------
Deferred salary and wages and interest $ 468,980 $ 462,647
Accrued vacation pay 101,621 81,477
Accrued salary, and payroll taxes 19,752 16,746
------------- ------------
$ 590,353 $ 560,870
============= ============
Through March 31, 1994, the Company maintained a salary and wage deferral
plan which was applicable for all employees. The deferrals were scaled in
proportion to an employees salary level. Interest is accrued on the amount
of deferred salary and wages. Such deferred amounts have been recognized as
expense in the period incurred.
Other accrued expenses of $351,099 and $385,578 at March 31, 1996 and 1995,
respectively, consist primarily of professional service costs for legal,
accounting and consulting services and of product related costs, such as
warranty.
8. Redeemable Preferred Stock
Tel has issued and outstanding 125,025 shares of 8% cumulative redeemable
preferred stock. The redeemable preferred stock has a $3 par value.
Dividends are payable prior to the redemption date only to the extent of
10% of net income. Redemption provisions provide that Tel will pay the
holders of the preferred stock 10% of net income (less amounts paid for
dividends) and 10% of the net proceeds of any Tel equity financing. In any
event, subject to the conditions set forth in the following paragraph, Tel
was required to redeem this stock and any unpaid dividends by June 21,
1995. At March 31, 1996, cumulative unpaid dividends amount to $231,568.
The Company's management does not believe that a market exists to readily
determine the estimated fair value of the redeemable preferred stock.
In the opinion of the Company's external legal counsel, the state law
governing the redemption of the preferred stock prohibits a corporation
from redeeming or acquiring its shares for cash if, after giving effect
thereto, the Company's total assets would be less than its total
liabilities. At March 31, 1996, Tel's liabilities exceed its assets by
$1,118,364. The redeemable preferred stock has been classified as a
non-current liability because of the restriction upon its redemption. See
Note 14 for discussion of such redeemable preferred stock.
21
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements (Continued)
9. Income Taxes
The components of the Company's deferred taxes are as follows:
March 31, March 31,
1996 1995
------------- ------------
Net operating loss carryforwards $ 1,446,900 $ 1,466,300
Asset reserves 50,400 62,000
Deferred wages and accrued interest 218,800 209,600
Provision for estimated expenses 78,500 89,200
------------- ------------
Deferred tax asset 1,794,600 1,827,100
Less, valuation allowance 1,794,600 1,827,100
------------- ------------
Amount recognized in financial statements $ -- $ --
============= ============
As of March 31, 1996, the Company has Federal tax net operating loss
carryforwards of approximately $3,873,000 which begin to expire in 1998.
A reconciliation of the income tax expense at the statutory Federal tax
rate of 34% to the income tax expense recognized in the financial
statements is as follows:
1996 1995
------------- ------------
Income tax expense - statutory rate $ 32,500 $ 7,642
Net change in valuation allow (32,500) (7,642)
------------- ------------
Income tax expense recognized in financial
statements $ -- $ --
============= ============
22
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements (Continued)
10. Related Party Transactions
The non-current note payable - related party at March 31, 1996 and 1995 of
$100,000 is payable to the Company's Chairman/President, bears interest at
10% and is payable on demand no earlier than April 1, 1997. Accrued
interest thereon of $72,500 and $62,500 at March 31, 1996 and 1995,
respectively, is included in accrued expenses - related parties.
Accrued payroll, vacation pay and deferred wages and related interest
includes, $374,343 and $326,420 at March 31, 1996 and 1995, respectively,
which is due to officers of the Company.
Tel has obtained legal services from an officer/stockholder with the
related professional fees amounting to $21,000, $12,000 and $12,000 for the
years ended March 31, 1996, 1995 and 1994, respectively.
The Chairman/President of the Company guaranteed payment of the note
payable to the bank. In 1995 and 1994, as compensation for providing this
guarantee, the Company paid this individual $2,500 and $3,500 in cash,
respectively.
The convertible subordinated notes accrue interest semi-annually at a rate
of 7% and mature on March 31, 1997. The notes are convertible to common
stock at the option of the holder at $1.50 per share, at any time prior to
maturity. Payment of the $35,000 note outstanding at March 31, 1996 has
been guaranteed by an officer/stockholder of the Company.
In the year ended March 31, 1995, a convertible subordinated note with a
face value of $35,000 was redeemed for $23,000. The gain on this
transaction of $12,000 has been recognized as an extraordinary item -
extinguishment of debt. As part of the redemption transaction the
subordinated noteholders adjusted the interest due and accrued by $6,942.
This income has been reflected within the operating statement line item
interest-related parties.
11. Leases
The Company rents its office space and manufacturing facility under a lease
agreement expiring in August, 1998. Minimum lease payments are $55,824 in
1996 and 1997 and $20,934 in 1998. Under terms of the lease, the Company
pays all real estate taxes and utility costs for the premises.
Total rent expense, including real estate taxes, was approximately $84,000,
$85,000 and $89,000 for the years ended March 31, 1996, 1995 and 1994,
respectively.
23
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements (Continued)
12. Concentrations
Sales to a major commercial distributor accounted for 14%, 12% and 12% of
total commercial revenue for the years ended March 31, 1996, 1995 and 1994,
respectively. Sales to another commercial distributor accounted for 12% of
total commercial revenue for the year ended March 31, 1996. Foreign
commercial sales were 27%, 17% and 12% of total commercial sales for the
years ended March 31, 1996, 1995 and 1994, respectively.
Government sales to the USAF, Canadian Defense Force (CDF) and US Army for
the fiscal year ended March 31, 1996 were 37%, 30% and 18% of total
government sales, respectively. Government sales to the CDF and US Coast
Guard for the fiscal year ended March 31, 1995 were 54% and 23% of total
government sales, respectively.
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of accounts receivable.
The Company feels that the credit risk is limited due to the number of
customers and their dispersion across different geographic areas.
13. Stock Option Plan
The Company has a stock option plan that provides for the granting of
options to employees and directors. Activity during 1996, 1995 and 1994 is
summarized below (in number of options):
1996 1995 1994
-------- -------- --------
Held at beginning of year 54,153 57,653 47,620
Granted 53,733 -- 48,720
Canceled or expired (3,500) (38,687)
-------- -------- --------
Held at end of year 107,886 54,153 57,653
======== ======== ========
The exercise price of options range from $.375 to $1.50 per share. The
shares become exercisable in 33% increments through 1999. No options were
exercised during 1996, 1995 or 1994. As of March 31, 1996, the number of
shares exercisable was approximately 38,100.
24
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Notes To Financial Statements (Continued)
14. Subsequent Event (Unaudited)
In July, 1996 a group of the Company's employees and creditors (the
"Group") agreed to purchase the Company's outstanding redeemable preferred
stock (the "Preferred Stock") from the preferred stockholder for $111,700
and to exchange the Preferred Stock for common stock. The Company's Board
of Directors approved the exchange of the Preferred Stock and accrued
dividends for 178,720 shares of newly issued common stock and stock
purchase warrants for an additional 35,744 shares of common stock. The
purchase warrants are exercisable at a price per share of $.75 until March
31, 1997, $1.50 until March 31, 1998 and $2.25 until March 31, 1999. At
March 31, 1996, the Preferred Stock and accrued dividends had a face value
of $606,643, as reflected on the accompanying balance sheet. The effect of
this transaction will be to reduce liabilities by approximately $700,000
and the Company's negative net worth by approximately $600,000.
The Board of Directors also authorized the Company to offer all
shareholders the right to purchase an additional 178,720 shares of common
stock at $.75 per share and to issue, to such participating shareholders,
up to 35,744 in stock purchase warrants with the same terms as those
described above.
25
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Schedule II - Valuation and Qualifying Accounts
<TABLE>
<CAPTION>
Balance at Charged to Charged to Deductions Balance at
Beginning Costs and Other End of Year
Description of Period Expenses Accounts
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year ended March 31, 1994:
Allowance for doubtful
accounts $ 11,500 $ 23,590 $ 35,090
========= ========== =========
Allowance for obsolete
inventory $ 69,400 $ 25,500 $ 15,000(1) $ 79,900
========= ========== ========= =========
Year ended March 31, 1995:
Allowance for doubtful
accounts $ 35,090 $ 16,000 $ 51,090
========= ========== =========
Allowance for obsolete
inventory $ 79,900 $ 70,336 $ 46,200(1) $ 104,036
========= ========== ========= =========
Year ended March 31, 1996:
Allowance for doubtful
accounts $ 51,090 $ 15,000 $ 66,090
========= ========== =========
Allowance for obsolete
inventory $ 104,036 $ (1,673) $ 42,242(1) $ 60,121
========= ========== ========= =========
</TABLE>
(1) Amounts represent disposals of obsolete inventory
26
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
No disagreements arose between the Registrant and its independent
auditors' regarding accounting and financial matters during the twelve
months preceding March 31, 1996.
PART III
Item 10. Directors and Executive Officers of the Registrant
DIRECTORS AND EXECUTIVE OFFICERS
Year First
Elected a
Name (age) Position Director
---------- -------- ----------
Harold K. Fletcher Chairman of the Board, 1982
(71) President and Chief
Executive Officer
since 1982.
George J. Leon Director; Investment 1986
(52) Manager and beneficiary of
the George Leon Family Trust
(investments) since 1986.
Robert H. Walker Director; Executive Vice 1984
(60) President, Robotic Vision
Systems, Inc. (design and
manufacture of robotic
vision systems),
1983-present.
There are no family relationships between any of the Directors and
Officers of the Registrant.
Significant Employee
--------------------
Richard J. Wixson Vice President of Manufacturing, employed by
Tel in his present capacity since 1987.
27
<PAGE>
Item 11. Executive Compensation
The following table and accompanying notes set forth information
concerning compensation for the fiscal years ended March 31, 1996,
1995 and 1994.
Stock Other
Name and Principal Position Year Salary Options Compensation
- --------------------------------------------------------------------------------
Harold K. Fletcher 1996 $86,250 $ -
Chairman of Board 1995 85,000 2,500
President and Chief 1994 85,000 3,500
Executive Officer
(1) Salaries includes wages deferred in 1994 of $36,680, and 1996 of
$1,250.
(2) Other compensation represents compensation for debt guarantees.
28
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following tables set forth, as of March 31, 1996, the number and
percentage of the outstanding shares of common stock, beneficially
owned by each director and by each beneficial owner of 5% or more of
such shares, and by all officers and directors as a group.
Number of Shares Percentage
Name and Address Beneficially Owned of Class (1)
---------------- ------------------ ------------
Harold K. Fletcher, Director 389,557 (2) 23.9%
728 Garden Street
Carlstadt, New Jersey 07072
George J. Leon, Director 306,066 (3) 19.0%
116 Glenview
Toronto, Ontario
Canada M4R1P8
Robert H. Walker, Director 12,183 (4) 0.8%
425 Robro Drive East
Hauppague, New York 11788
All Officers and Directors 787,627 46.0%
as a Group (5 persons)
(1) The class includes 1,603,806 shares outstanding. In determining
the percentage of shares owned by an option holder, the class
includes shares subject to his option.
(2) Includes 24,681 shares owned by Mr. Fletcher's wife, 4,254 shares
owned by his son, 261,295 owned by a family partnership in which
Mr.Fletcher is a partner and 25,787 shares of common stock
issuable to Mr. Fletcher upon conversion of options. Mr.Fletcher
disclaims beneficial ownership of the shares owned by his wife and
son and by the partnership.
(3) Includes 299,516 shares owned by the George Leon Family Trust, of
which Mr. Leon is a beneficiary, and options owned by Mr.Leon to
purchase 1,800 shares at $1.50 per share, 750 shares at $.375 per
share and 4,000 shares at $.375 per share. Mr. Leon disclaims
beneficial ownership of the shares owned by the trust.
(4) Includes options to purchase 1,800 shares at an exercise price of
$1.50 per share, 2,250 shares at $.375 per share and 3,800 shares
at $.375 per share.
29
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
Item 13. Certain Relationships and Related Transactions
The disclosures required by this item are contained in Note 10 to the
financial statements included on page 22 of this document.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 10-K
a.) The following documents are filed as a part of this report:
Pages
-----
(1) Financial Statements:
Report of Independent Accountants 12-13
Balance Sheets - March 31, 1996 and 1995 14
Statements of Operations - Years Ended
March 31, 1996, 1995 and 1994 15
Statements of Changes in Stockholders'
Deficiency - Years Ended March 31, 1996,
1995 and 1994 16
Statements of Cash Flows - Years Ended
March 31, 1996, 1995 and 1994 17
Notes to Financial Statements 18-25
(2) Financial Statement Schedule:
II - Valuation and Qualifying Accounts 26
b.) No reports on Form 8-K were filed during the fourth quarter of
1996.
30
<PAGE>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 10-K
(Continued)
c.) Exhibits identified in parentheses below on file with the
Securities and Exchange Commission, are incorporated herein
by reference as exhibits hereto.
* (3.1) Tel-Instrument Electronics Corp.'s Certificate of
Incorporation, as amended.
* (3.2) Tel-Instrument Electronics Corp.'s By-Laws,as amended.
* (4.1) Specimen of Tel-Instrument Electronics Corp.'s Common
Stock Certificate.
* (4.2) Specimen of Tel-Instrument Electronics Corp.'s
Convertible Preferred Stock Certificate.
(10.1) Lease dated August 15, 1994, by and between Registrant
and 210 Garibaldi Avenue Corp.
(10.2) Department of the Air Force Contract No. G-1331, dated
August 30, 1994.
(10.3) Canadian Defense Forces Contract No. G-1457, dated
December 22, 1993.
(10.4) 7%, $35,000 Convertible Subordinated Note dated March
31,1992 by and between Registrant and George Bresler.
(10.5) 7%, $30,000 Convertible Subordinated Note dated March
31, 1992 between Registrant and Donald S. Bab.
* (10.6) Guarantee of bank loan,$50,000 Key Bank of Western New
York, N.A., Promissory Note dated July 29, 1988, and
Letter Agreement dated July 27, 1988 by and between
Issuer, Kevin S. Neumaier and Kirsten S. Neumaier.
**(11.) Statement recomputation of per share earnings.
**(12.) Statement recomputation of ratio of earnings to fixed
charges.
**(22.) Registrant has no subsidiaries.
* Incorporated by reference to Registration 33-18978 dated November 7,
1988.
** Not Applicable
The Company will furnish, without charge to a security holder, upon
request, copy of the documentary portions which are incorporated by
reference, and will furnish any other exhibit at cost.
31
<PAGE>
TEL-INSTRUMENT ELECTRONICS CORP.
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.
TEL-INSTRUMENT ELECTRONICS CORP.
(Registrant)
Dated: June 28, 1996 By: /s/ Harold K. Fletcher
----------------------
President and Director
(Principal Executive
Officer)
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 date indicated and
by signature hereto.
Signature Title Date
--------- ----- ----
/s/ Harold K. Fletcher Director June 28, 1996
---------------------------
/s/ Harold K. Fletcher
/s/ George J. Leon Director June 28, 1996
---------------------------
/s/ George J. Leon
/s/ Robert H. Walker Director June 28, 1996
---------------------------
/s/ Robert H. Walker
Supplemental Information to be Furnished with Reports Filed Pursuant
to Section 15(d) of the Act by Registrants Which Have Not Registered
Securities Pursuant to Section 12 of the Act.
No annual report to security holders covering the fiscal year ended
March 31, 1996, except in the form set forth in this Form 10-K, has
been prepared. No proxy statement, form of proxy, or other proxy
soliciting material has been sent to shareholders with respect to any
annual or other meeting of shareholders. No annual report or proxy
material is contemplated.
32
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 23
<SECURITIES> 0
<RECEIVABLES> 425
<ALLOWANCES> 66
<INVENTORY> 347
<CURRENT-ASSETS> 736
<PP&E> 42
<DEPRECIATION> 18
<TOTAL-ASSETS> 825
<CURRENT-LIABILITIES> 1,236
<BONDS> 0
607
0
<COMMON> 160
<OTHER-SE> (1,279)
<TOTAL-LIABILITY-AND-EQUITY> 825
<SALES> 2,318
<TOTAL-REVENUES> 2,318
<CGS> 1,000
<TOTAL-COSTS> 1,000
<OTHER-EXPENSES> 1,153
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70
<INCOME-PRETAX> 96
<INCOME-TAX> 0
<INCOME-CONTINUING> 96
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 96
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
