-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O5E6lcEBMLBAUra6r8K7dCtQgihwezj+jPAeMuVjUPjOmKBl8fAnedjNT32U3o1p RevyoDXKy2oqQfkYXXZFgQ== 0000891092-99-000052.txt : 19990215 0000891092-99-000052.hdr.sgml : 19990215 ACCESSION NUMBER: 0000891092-99-000052 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEL INSTRUMENT ELECTRONICS CORP CENTRAL INDEX KEY: 0000096885 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 221441806 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-18978 FILM NUMBER: 99536541 BUSINESS ADDRESS: STREET 1: 728 GARDEN ST CITY: CARLSTADT STATE: NJ ZIP: 07072 BUSINESS PHONE: 2019331600 MAIL ADDRESS: STREET 1: 728 GARDEN ST CITY: CARLSTADT STATE: NJ ZIP: 07072 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1998 __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 33-18978 TEL-INSTRUMENT ELECTRONICS CORP. (Exact name of the Registrant as specified in Charter) New Jersey 22-1441806 (State of Incorporation) (I.R.S. Employer ID Number) 728 Garden Street, Carlstadt, New Jersey 07072 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone No. including Area Code: 201-933-1600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No __ Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date: 2,107,057 shares of Common stock, $.10 par value as of February 1, 1999. TEL-INSTRUMENT ELECTRONICS CORPORATION TABLE OF CONTENTS PAGE ---- Item 1. Financial Statements (Unaudited): Condensed Comparative Balance Sheets December 31, 1998 and March 31, 1998 1 Condensed Comparative Statements of Operations - Three and Nine Months Ended December 31, 1998 and 1997 2 Condensed Comparative Statements of Cash Flows - Nine Months Ended December 31, 1998 and 1997 3 Notes to Condensed Financial Statements 4-5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6-10 Part II Other Information 11 SIGNATURES 11 Item 1 - Financial Statements TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE BALANCE SHEETS (Unaudited) ASSETS December 31, March 31, 1998 1998 ----------- ---------- Current assets: Cash $ 55,506 $ 585,281 Accounts receivable, net of allowance for doubtful 447,495 374,506 Accounts of $15,923 at December 31, 1998 and $16,164 at March 31, 1998 Unbilled revenues (see note 2) 154,011 -- Inventories 592,720 383,030 Prepaid expenses and other current assets 33,060 24,017 Deferred income tax benefit - current 78,300 78,300 ----------- ----------- Total current assets 1,361,092 1,445,134 Property, plant, and equipment, net 108,477 79,321 Other assets 127,063 96,067 Deferred income tax benefit 328,571 320,619 ----------- ----------- Total assets 1,925,203 1,941,141 =========== =========== LIABILITIES & STOCKHOLDERS EQUITY Current liabilities: Note payable - related party - current portion 50,000 50,000 Convertible subordinated notes - related party 15,000 15,000 Accrued payroll, vacation pay, deferred wages, payroll taxes, and interest on deferred wages 210,624 211,400 Accounts payable and accrued expenses 296,846 304,673 ----------- ----------- Total current liabilities 572,470 581,073 Notes payable - related party - non-current portion 300,000 300,000 ----------- ----------- Total liabilities 872,470 881,073 ----------- ----------- Stockholders' equity: Common stock 210,708 209,476 Additional paid-in capital 3,925,057 3,921,670 Accumulated deficit (3,083,032) (3,071,078) ----------- ----------- Total stockholders' equity 1,052,733 1,060,068 ----------- ----------- Total liabilities and stockholders' equity $ 1,925,203 $ 1,941,141 =========== =========== See accompanying notes to condensed financial statements TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended December 31, December 31, December 31, December 31, Sales 1998 1997 1998 1997 ----------- ----------- ----------- ----------- Government, net $ 584,490 $ 1,133,538 $ 1,385,702 $ 2,258,243 Commercial, net 388,446 348,495 1,278,103 938,654 ----------- ----------- ----------- ----------- Total Sales 972,936 1,482,033 2,663,805 3,196,897 Cost of sales 346,610 505,202 1,111,420 1,193,096 ----------- ----------- ----------- ----------- Gross Margin 626,326 976,831 1,552,385 2,003,801 Operating expenses: Selling, general & administrative 233,366 334,208 706,593 737,383 Engineering, research, & development 273,057 284,309 842,602 648,235 ----------- ----------- ----------- ----------- Total operating expenses 506,423 618,517 1,549,195 1,385,618 Income from operations 119,903 358,314 3,190 618,183 Other income (expense): Interest income 82 6,145 8,635 17,878 Interest expense (10,238) (17,578) (31,731) (55,170) ----------- ----------- ----------- ----------- Income/(loss) before taxes 109,747 346,881 (19,906) 580,891 Provision/(Benefit) for income taxes 43,844 138,834 (7,952) 232,298 ----------- ----------- ----------- ----------- Net income/(loss) $ 65,903 $ 208,047 $ (11,954) $ 348,593 =========== =========== =========== =========== Basic and diluted income (loss) per common share $ 0.03 $ 0.10 $ (0.01) $ 0.17 Dividends per share None None None None Weighted average shares outstanding Basic 2,104,539 2,039,581 2,098,657 2,035,248 Diluted 2,116,101 2,093,989 2,098,657 2,089,656
See accompanying notes to condensed financial statements 2 TEL-INSTRUMENT ELECTRONICS CORPORATION CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended December 31, 1998 1997 ------------ ---------- (Decrease) increase in cash: Cash flows from operating activities Net (loss) income $ (11,954) $ 348,593 Adjustments to reconcile net (loss) income to cash used in operating activities: Deferred income taxes (7,952) 232,298 Depreciation 30,558 24,483 Changes in assets or liabilities: (Increase) decrease in accounts receivable and unbilled revenue (227,000) (482,853) (Increase) decrease in inventories (209,690) (45,318) (Increase) decrease in prepaid expenses and other current assets (9,043) (18,594) (Increase) decrease in other assets (30,996) (15,000) Increase in advanced billings -- 57,061 (Decrease) increase in accrued payroll, deferred wages and And vacation pay (776) (5,747) (Decrease) increase in accounts payable and accrued expenses (7,827) (106,206) --------- --------- Net cash used in operations (474,680) (11,283) --------- --------- Cash flows from investing activities: Cash purchases of property, plant and equipment (59,714) (62,483) --------- --------- Net cash used in investing activities (59,714) (62,483) --------- --------- Cash flows from financing activities: Proceeds from exercise of stock options 4,619 8,188 Proceeds from issuance of common stock -- -- --------- --------- Net cash provided by financing activities 4,619 8,188 --------- --------- Net decrease in cash (529,775) (65,578) Cash at beginning of period 585,281 528,636 --------- --------- Cash at end of period $ 55,506 $ 463,058 ========= ========= Interest paid $ 20,538 $ 45,041 ========= ========= See accompanying notes to condensed financial statements 3 TEL-INSTRUMENT ELECTRONICS CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS Note 1 Basis of Presentation In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of Tel-Instrument Electronics Corp. as of December 31, 1998, the results of operations for the three and nine months ended December 31, 1998 and December 31, 1997, and statements of cash flows for the nine months ended December 31, 1998 and December 31, 1997. These results are not necessarily indicative of the results to be expected for the full year. The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K. The March 31, 1998 results included herein have been derived from the audited financial statements included in the Company's annual report on Form 10-K. Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998. Note 2 Unbilled Revenue Sales are recognized primarily upon shipment of products, except in the case of long-term contracts wherein sales are recognized on the percentage-of-completion method. Sales under the U.S. Navy contract have been recorded on the percentage-of-completion method. Under this approach, sales and gross margin are recognized based on the ratio of costs incurred to date to total estimated contract costs. Unbilled revenues of $154,011 represent recoverable costs and accrued profit not billed resulting from the application of percentage-of-completion accounting. Actual billing of these amounts will be based upon contractual billing terms. Note 3 Inventories Inventories consist of: December 31, March 31, 1998 1998 --------- --------- Purchased parts $355,843 $ 253,616 Work-in-process 272,497 165,034 Less: Reserve for obsolescence (35,620) (35,620) -------- --------- $592,720 $ 383,030 ======== ========= Note 4 Income Taxes The Company, in accordance with SFAS 109, has recognized a deferred income tax benefit based upon the expected utilization of net operating loss carryforwards as the Company believes that it is more likely than not that it will realize a portion of its operating losses before they expire. For the nine months ended December 31, 1998, the Company recorded a deferred income tax benefit of $7,952, which represents the effective federal and state tax rate on the Company's net loss before taxes of $19,906. This tax benefit reduced the loss for the period. The $7,952 increased the Company's deferred income tax asset by the same amount in the accompanying balance sheet. The Company expects to utilize this deferred income tax benefit in the future for tax reporting purposes. 4 TEL-INSTRUMENT ELECTRONICS CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued) Note 5 Reclassifications Certain reclassifications have been made to the fiscal year 1998 financial statement format to be consistent with the fiscal year 1999 presentation. Note 6 Earnings Per Share Basic income (loss) per share is based on net income (loss) for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share for December 31, 1998 is based on net income (loss), divided by the weighted average number of common shares outstanding, including common share equivalents such as outstanding stock options and warrants during the period. Common share equivalents, such as outstanding stock options, are not included in the calculation for the nine months ended December 31, 1998 since the effect would be antidilutive. Note 7 Credit Facility On July 22, 1998, the Company entered into a credit agreement with Summit Bank for $350,000, which extends for one year and is thereafter renewable on an annual basis at the bank's option. The Company does not currently have any outstanding balance against this credit line. The Company pays no commitment fee and the rate of interest on borrowings is the Lender's Prevailing Base Rate plus 1%. 5 Item 2 MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL POSITION Results of Operations A number of the statements made by the Company in this report may be regarded as "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, statements concerning the Company's outlook, pricing trends and forces within the industry, the completion dates of capital projects, expected sales growth, cost reduction strategies and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. All predictions as to future results contain a measure of uncertainty and accordingly, actual results could differ materially. Among the factors that could cause a difference are: changes in the general economy; changes in the demand for the Company's products or in the cost and availability of its raw materials; the actions of its competitors; the success of our customers; technological change; changes in employee relations; government regulations; litigation, including its inherent uncertainty; difficulties in plant operations and materials; transportation, environmental matters; and other unforseen circumstances. A number of these factors are discussed in the Company's filings with the Securities and Exchange Commission. Overview While the Company's long-term outlook continues to be positive, the Company experienced two problems which resulted in a decline in sales and income for the first nine months of the current fiscal year as compared to the first nine months of the prior fiscal year. As previously reported, the Company completed deliveries under its substantial U.S. Air Force T-30CM contract in the last quarter of fiscal year 1998. The company also experienced manpower problems and technical issues in engineering, associated with the Company's substantial growth in sales in the last two years, due to development of new and more sophisticated products. This resulted in delays in completion and shipment of orders, and consequent reduction in sales for the current year. These problems have been identified and are in the process of being corrected. Management believes that most of the delayed shipments will be made in the first half of the next fiscal year. Operating income levels have declined from the prior fiscal year primarily as a result of lower sales, while operating expense levels have been as planned. Management continues to believe that this decline is temporary and that new contracts can and will be obtained and the current backlog shipped to increase sales. In this regard, management is encouraged by the dollar value of its backlog, which was over $2,250,000 at December 31, 1998, the large and unexpected increase in commercial sales, which increased 36% for the first nine months of the current fiscal year as compared to last year, the progress on the U.S. Navy contract, and the efforts of its international distributors. Total bookings increased $581,982 (22%) for the nine months ended December 31, 1998, as compared to the same period last year. The Company's profit before taxes was $109,747 for the three months ended December 31, 1998, which reduced the loss before taxes for the nine months ended December 31, 1998 to $19,906. The net profit for the three months ended December 31, 1998 was earned despite the Company having lower sales as compared to the three months ended September 30, 1998. The higher profitability in the current quarter is the result of a higher gross profit on sales and slightly lower engineering, research and development expenses. The Company continues to invest heavily in product development, and these expenditures represented 28% of sales for the three months ended December 31, 1998. The principal effort resulted from the U.S. Navy exercising their option to incorporate a collision avoidance (TCAS) test capability into the T-47M test 6 Item 2 MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL POSITION (Continued) Overview (Continued) design. Eight T-47M prototypes have been fabricated and these units have begun several months of environmental and functional testing. Several tests have been successfully completed, including the reliability test, which exceeded the Navy's requirements. Field evaluation by the U.S. Navy is anticipated to begin early in the next fiscal year. The U.S. Navy continually monitors the Company's progress on this contract and management believes that the Navy is satisfied with the Company's product and progress. Assuming field evaluations are satisfactory and the U.S. Navy exercises production options in the first quarter of the next fiscal year, deliveries would begin in the second quarter of that year. This contract can be a source of significant revenues that could include options for up to 1,300 units, which the U.S. Navy can exercise through calendar year 2001. However, there can be no assurance that field evaluations will be favorable and that the U.S. Navy will exercise its options under this contract. In addition, the Company continues the development of the T-36M, under a U.S. Army contract and the development of new products for other markets. In June 1998, the Company signed an exclusive agreement with Muirhead Avionics, based in the United Kingdom, to represent the Company in parts of Europe. The Company had received from Muirhead Avionics a $323,000 contract for its T-48I, which deliveries have been mostly completed. The Company also signed an exclusive agreement with Milspec Services Pty. Ltd. ("Milspec") to represent the Company in Australia and New Zealand. The Company received a $447,000 contract to supply T-47CC ramp test sets to the Australian military, as direct result of Milspec's efforts, for completion in the first quarter of the next fiscal year. The Company believes that the foreign commercial market is larger than the domestic market because many foreign airlines are upgrading to meet U.S. requirements. Sales For the three months ended December 31, 1998 sales decreased $509,097 (34%), as compared to the three months ended December 31, 1997. Commercial sales increased $39,951 (12%) while government sales decreased $549,048 (48%) for the three months ended December 31, 1998 as compared to the same period in the prior fiscal year. Government sales for the three months ended December 31, 1997 included sales to a Defense Department prime contractor for the Company's T-47C in the amount of $564,445 and the final shipments of the T-30CM to the U.S. Air Force in the amount of $198,159, thereby accounting for the decline in fiscal year 1999. These decreases were partially offset by sales to Muirhead Avionics for the T-48I. For the nine months ended December 31, 1998 sales declined $533,092 (17%), as compared to the nine months ended December 31, 1997. Government sales decreased $872,541 (39%), as compared to the same period last year. Government sales for the nine months ended December 31, 1997 included sales to a Defense Department prime contractor for the Company's T-47C in the amount of $743,660 and the final shipments of the T-30CM to the U.S. Air Force in the amount of $836,014. This decline was partially offset by sales to Muirhead for the T-48I and by the increase in commercial sales of $339,449 (36%). The Company is encouraged with the growth in the commercial market for which sales increased 36% in the nine months ended December 31, 1998, as compared to the same period last year. The backlog for commercial sales increased $418,326 (39%) as compared to December 31, 1997. However, there is no assurance that this market will continue to grow. 7 Item 2 MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL POSITION (Continued) Gross Margin For the three months and nine months ended December 31, 1998 gross margin decreased $350,505 (36%) and $451,416 (23%), respectively, as compared to the three and nine months ended December 31, 1997. This decrease is primarily attributed to lower sales. The gross margin percentage was 64% for the three months ended December 31, 1998 as compared to 66% for the three months ended December 31, 1997. For the nine months ended December 31, 1998 the gross margin percentage was 58% as compared to 63% for the nine months ended December 31, 1997. This decrease is primarily attributed to the lower gross margin associated with the documentation and test portion of the U.S. Navy T-47M contract. Operating Expenses Selling, general and administrative expenses decreased $100,842 (30%) for the three months ended December 31, 1998 as compared to the same period last year. This decrease is primarily associated with lower accrued employee incentive compensation expense and a reduction in the level of expenditures related to the Company's efforts to explore additional markets for its technology. Selling, general and administrative expenses decreased $30,790 (4%) for the nine months ended December 31, 1998 as compared to the same period last year. This decrease is primarily associated with lower accrued employee incentive compensation expense and a reduction in the level of expenditures related to the Company's efforts to explore additional markets for its technology, partially offset by an increase in selling expenses and higher administrative salaries. In fiscal year 1998 the Company's President devoted a percentage of his time to research and development activities to ensure that such activities were properly supervised. In fiscal year 1999, the Company hired a Director of Engineering, thus minimizing the President's time in overseeing the research and development function and allowing him to concentrate on Company growth. Engineering, research and development decreased $11,252 (4%) for the three months ended December 31, 1998 as compared to the three months ended December 31, 1997. Lower accrued employee incentive compensation expense was mostly offset by higher consulting fees for work on the development of the T-47M for the U.S. Navy. Engineering, research and development increased $194,367 (30%) for the nine months ended December 31, 1998 as compared to the nine months ended December 31, 1997. This increase reflects the Company's ongoing commitment to developing new products and finalization of the design of the T-47M test sets for the U.S, Navy. Outlays for new product development continue to be high. Income Taxes In accordance with SFAS 109, a provision for income taxes was recognized in the amount of $232,298 for the nine months ended December 31, 1997. For the nine months ended December 31, 1998 the Company recorded a deferred income tax benefit of $7,952, which represents the effective federal and state tax rate on the Company's net loss before taxes of $19,906 (See Note 4 to Notes to Condensed Financial Statements). 8 Item 2 MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL POSITION (Continued) Liquidity and Capital Resources At December 31, 1998 the Company had positive working capital of $788,622 as compared to $864,061 at March 31, 1998. For the nine months ended December 31, 1998, cash used in operations was $474,680 as compared to $11,283 for the nine months ended December 31, 1997. This reduction in available cash is primarily associated with increases in accounts receivable, unbilled revenues, and inventories. The Company continues to invest heavily in research and development. The Company expects these investments will finalize the design for the T-47M for the U.S. Navy and complete the development of projects, such as the T-47N, T-36M and T-47CC. The company will then begin to ship these units now in the backlog, which should increase sales, cash flow and profits. However, there is no assurance that sales and profits will increase. The Company has received a commitment from Summit Bank for a credit line of $350,000. As of December 31, 1998, the Company has no outstanding balance against this line. Based upon the current backlog, available working capital, and the available credit line, the Company believes that it has sufficient working capital to fund its plans for the next twelve months. At present, the Company does not expect to incur significant long-term needs for capital outside of its normal operating activities, although it may use some of its credit line with Summit Bank on a short term basis. There was no significant impact on the Company's operations as a result of inflation for the nine months ended December 31, 1998. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K to the Securities and Exchange Commission for the fiscal year ended March 31, 1998. Year 2000 Issue Many existing computer programs use a two-digit suffix to identify year references with an assumed prefix of "19". This limits those systems to recognizing dates between 1900 and 1999. As a result, in a little less than a year, computer systems and/or software used by many companies in a wide variety of applications may experience operating difficulties unless they are modified or upgraded to adequately process information involving, related to or dependent upon the century change. If not corrected, systems and/or applications could fail or create erroneous results at or in connection with applications after December 31, 1999. Significant uncertainty exists concerning the scope and magnitude of problems associated with the century change. The Company has reviewed its information and operational systems and manufacturing processes in order to identify those products, services or systems that are not Year 2000 compliant. As a result of its initial assessment, the Company does not believe, based upon available information, that any material exposure to significant business interruption exists as a result of Year 2000 compliance issues. Accordingly, the Company has not adopted any formal contingency plan. However, there can be no assurance that the Company can identify and remediate all significant Year 2000 problems, that remedial efforts will not involve significant time and expense, or that such problems will not have a material adverse effect on the Company's business, results of operations or financial position. 9 Item 2 MANAGEMENT'S DISCUSSION OF RESULTS OF OPERATIONS AND ANALYSIS OF FINANCIAL POSITION (Continued) Year 2000 Issue (continued) The Company also faces risk to the extent that suppliers of products, services and systems purchased by it and others whom the Company transacts business on a worldwide basis do not comply with Year 2000 requirements. The Company will initiate written communications with significant suppliers and customers to determine the extent to which it is vulnerable to these third parties' failure to remediate their own Year 2000 issues. In the event any such third parties cannot provide the Company with products, services or systems that meet the Year 2000 requirements on a timely basis, or in the event Year 2000 issues prevent such third parties from timely delivery of products or services required by the Company, its results of operations could be materially adversely affected. To the extent Year 2000 issues cause significant delays in, or cancellation of, decisions to purchase the Company's products or services, its business, results of operations and financial position could be materially adversely affected. Due to the uncertainty, both internally and externally, inherent in the Year 2000 problem resulting, in part, from the uncertainty of its Year 2000 readiness of third parties, suppliers and customers, the Company is unable to accurately predict at this time whether the consequences of Year 2000 failures will have a material impact on the Company's results of operations, liquidity or financial condition. The discussion of the Company's efforts, and management's expectations, relating to Year 2000 compliance are forward-looking statements. The Company's ability to achieve Year 2000 compliance and the level of incremental costs associated therewith, could be adversely impacted by, among other things, the availability and cost of programming and testing resources, vendors' ability to modify proprietary software, and unanticipated problems identified in the ongoing compliance review. 10 Part II Other Information Item 4 Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Shareholders was held on December 1, 1998 (the "Annual Meeting"). (b) Not applicable because (i) proxies for the Annual Meeting were not solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934; (ii) there was no solicitation in opposition to management's nominees as listed in the Company's proxy statement; and (iii) all of such nominees were elected. (c) At the Annual Meeting, the Company's shareholders voted in favor of management's nominees for election as directors of the Company as follows: For Against --- ------- Harold K. Fletcher 1,376,464 0 George F. Leon 1,376,464 0 Robert J. Melnick 1,376,464 0 Jeff C. O'Hara 1,376,464 0 Robert J. Walker 1.376,464 0 The shareholders also voted all 1,376,464 shares in favor of PricewaterhouseCoopers L.L.P. as the Company's certified public accountants for the fiscal year ending March 31, 1999. The shareholders also voted all 1,376,464 shares for ratification of the Company's 1998 Stock Option Plan. (d) Not applicable SIGNATURES Pursuant to the requirements 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. Date: 02/12/99 By: /s/ Harold K. Fletcher ------------------------------ Harold K. Fletcher Chairman and President 11 EX-27 2 FDS --
5 1,000 9-MOS MAR-31-1999 APR-01-1998 DEC-31-1999 56 0 463 (16) 503 1,361 758 (649) 1,925 572 0 0 0 211 842 1,925 2,664 2,664 1,111 1,111 1,549 0 (23) (20) (8) (12) 0 0 0 (12) (.01) (.01)
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