U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-KSB/A
Amendment No. 1
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1998
Commission File No. 1-8125
TOROTEL, INC.
(Name of small business issuer in its charter)
MISSOURI 44-0610086
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13402 SOUTH 71 HIGHWAY, GRANDVIEW, MISSOURI 64030
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (816) 761-6314
Securities registered under Section 12(b) of the Exchange
Act:
Title of each class Name of each exchange
on which registered
Common Stock, $.50 par value NONE
Securities registered under Section 12(g) of the Exchange
Act:
NONE
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months and (2) has been subject to such filing
requirements for the past 12 months and (2) has been subject
to such filing requirements for the past 90 days.
YES X NO
Check if no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is contained in this Form 10-KSB,
and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy statements
incorporated by reference in Part III of this Form 10-KSB or
any amendment to this Form 10-KSB. X
The issuer's revenues for the most recent fiscal year were
$11,738,000.
The aggregate market value of the voting stock held by non-
affiliates, based on the closing sale price of the American
Stock Exchange on July 30, 1998, was $1,649,000. As of July
30, 1998, there were 2,811,590 shares of Common Stock, $.50
Par Value, outstanding.
TOROTEL, INC.
For the fiscal year ended April 30, 1998
The Registrant hereby amends the Form 10-KSB for the
fiscal year ended April 30, 1998. This amendment is the
result of a review by the Securities and Exchange
Commission. The purpose of the amendment is to correct the
totals on the Consolidated Balance Sheet and to comply with
the disclosure requirements of Statement of Position 93-7
and Statement of Financial Accounting Standards No. 123.
TOROTEL, INC.
TABLE OF CONTENTS
PART II
Item 7. Financial Statements and Supplementary Data
SIGNATURES
ITEM 7. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheet as of April 30, 1998
Notes to Consolidated Financial Statements
CONSOLIDATED BALANCE SHEET
As of April 30, 1998
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash $ 46,000
Trade and other receivables,
less allowance for doubtful accounts
of $89,000 (Notes A, C, and E) 1,564,000
Inventories (Notes A, D, and E) 3,136,000
Prepaid expenses and other current assets 103,000
Asset held for disposal (Note P) 76,000
4,925,000
Property, plant and equipment (Notes A and E):
Land 292,000
Buildings and improvements 1,489,000
Equipment 2,556,000
4,337,000
Less accumulated depreciation and
amortization 2,769,000
1,568,000
Other assets 28,000
$ 6,521,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term revolving credit line (Note E) 1,561,000
Current maturities of long-term debt
(Notes E and P) 284,000
Trade accounts payable 695,000
Accrued liabilities (Note K) 442,000
2,982,000
Long-term debt, less current maturities
(Notes E and P) 1,581,000
Note and interest payable to former officer
(Notes L and N) 438,000
Commitments and contingencies
(Notes G, N, and Q) 486,000
Stockholders' equity (Notes H, I, J, M, P,
and Q):
Common stock, $.50 par value; 6,000,000
shares authorized; 2,880,569 shares issued 1,441,000
Capital in excess of par value 8,672,000
Accumulated deficit (8,874,000)
1,239,000
Less cost of treasury stock, 71,205 shares 205,000
1,034,000
$ 6,521,000
</TABLE>
The accompanying notes are an integral
part of this statement.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Advertising Costs
Advertising costs are expensed as incurred.
Consolidated advertising costs for the years ended April 30,
1998 and 1997 were $72,000 and $79,000, respectively.
NOTE H - EMPLOYEE INCENTIVE PLANS
Employee Stock Option Plans
In accordance with the Incentive Compensation Plan
approved on September 19, 1994, the Company reserved 400,000
common shares for issuance to key employees pursuant to the
exercise of incentive and non-qualified stock options
granted prior to June 20, 2004. The options are accounted
for under APB Opinion 25, Accounting for Stock Issued to
Employees, and related interpretations in accounting for
this Plan. The incentive stock options have a term of five
years when issued and vest 50% per year at the end of each
of the first two years. The non-qualified stock options
have a term of ten years when issued and vest 25% per year
at the end of each of the first four years. The exercise
price of each option equals the market price of the
Company's common stock on the date of grant. Accordingly,
no compensation cost has been recognized for the Plan. Had
compensation cost for the Plan been determined based on the
fair value of the options at the grant dates consistent with
the method of Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation, the
Company's operating results would have been reduced to the
pro forma amounts indicated below.
<TABLE>
1998 1997
<S> <C> <C>
Loss before cumulative
effect of change in
method of accounting As Reported $(1,523,000) $(659,000)
Pro Forma $(1,563,000) $(676,000)
Basic loss per share As Reported $ (.54) $ (.24)
Pro Forma $ (.56) $ (.24)
Diluted loss per share As Reported $ (.54) $ (.24)
Pro Forma $ (.56) $ (.24)
</TABLE>
The fair values of the options granted were estimated on the
date of grant using the Black-Scholes options-pricing model.
The fair value of the incentive stock options was determined
using the following weighted average assumptions: no
dividend payments over the life of the options; expected
volatility of 106.1%; risk-free interest rate of 6.94%; and
expected life of five years. The fair value of the non-
qualified stock options was determined using the following
weighted average assumptions: no dividend payments over the
life of the options; expected volatility of 106.1%; risk-
free interest rate of 6.6%; and expected life of ten years.
SIGNATURES
In accordance with the requirements of the Securities
Exchange Act of 1934, the Registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
Torotel, Inc.
(Registrant)
Date: July 9, 1999 /s/ H. James Serrone
H. James Serrone
Vice President of Finance and
Chief Financial Officer
