Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Dec. 31, 2015 | Feb. 10, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TEL INSTRUMENT ELECTRONICS CORP | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --03-31 | |
Entity Common Stock, Shares Outstanding | 3,256,887 | |
Amendment Flag | false | |
Entity Central Index Key | 96,885 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Dec. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 629,053 | $ 185,932 |
Accounts receivable, net | 1,027,437 | 1,625,171 |
Inventories, net | 4,808,364 | 4,032,074 |
Prepaid expenses and other current assets | 251,417 | 281,002 |
Deferred financing costs | 5,429 | 5,429 |
Deferred income tax asset | 1,064,395 | 1,064,395 |
Total current assets | 7,786,095 | 7,194,003 |
Equipment and leasehold improvements, net | 193,434 | 270,792 |
Deferred financing costs – long-term | 4,720 | 8,792 |
Deferred income tax asset – non-current | 1,764,767 | 2,377,583 |
Other long-term assets | 33,509 | 32,317 |
Total assets | 9,782,525 | 9,883,487 |
Current liabilities: | ||
Current portion of long-term debt, net of debt discount | 411,912 | 387,839 |
Capital lease obligations – current portion | 8,971 | 16,758 |
Accounts payable and accrued liabilities | 2,339,126 | 3,577,566 |
Deferred revenues – current portion | 23,275 | 18,609 |
Accrued payroll, vacation pay and payroll taxes | 809,133 | 594,114 |
Total current liabilities | 3,592,417 | 4,594,886 |
Subordinated notes payable - related parties | 45,000 | 250,000 |
Capital lease obligations – long-term | 0 | 4,561 |
Long-term debt | 411,594 | 708,604 |
Deferred revenues – long-term | 134,385 | 133,650 |
Warrant liability | 1,216,541 | 518,962 |
Other long-term liabilities | 14,100 | 33,000 |
Total liabilities | $ 5,414,037 | $ 6,243,663 |
Commitments | ||
Stockholders' equity: | ||
Common stock, 4,000,000 shares authorized, par value $0.10 per share, 3,256,887 and 3,256,887 shares issued and outstanding, respectively | $ 325,686 | $ 325,686 |
Additional paid-in capital | 8,069,714 | 8,046,168 |
Accumulated deficit | (4,026,912) | (4,732,030) |
Total stockholders' equity | 4,368,488 | 3,639,824 |
Total liabilities and stockholders' equity | $ 9,782,525 | $ 9,883,487 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2015 | Mar. 31, 2015 |
Common stock, par value (in Dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares issued | 3,256,887 | 3,256,887 |
Common stock, shares outstanding | 3,256,887 | 3,256,887 |
Common stock, shares authorized | 4,000,000,000,000 | 4,000,000,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net sales | $ 5,970,865 | $ 5,030,097 | $ 18,635,174 | $ 11,746,847 |
Cost of sales | 3,936,108 | 3,484,310 | 12,541,656 | 8,211,499 |
Gross margin | 2,034,757 | 1,545,787 | 6,093,518 | 3,535,348 |
Operating expenses: | ||||
Selling, general and administrative | 767,923 | 825,261 | 2,517,487 | 2,364,488 |
Engineering, research and development | 541,502 | 494,721 | 1,477,290 | 1,476,343 |
Total operating expenses | 1,309,425 | 1,319,982 | 3,994,777 | 3,840,831 |
Income (loss) from operations | 725,332 | 225,805 | 2,098,741 | (305,483) |
Other income (expense): | ||||
Amortization of debt discount | 0 | (14,373) | 0 | (75,308) |
Loss on extinguishment of debt | 0 | (188,102) | 0 | (188,102) |
Amortization of deferred financing costs | (1,357) | (13,648) | (4,072) | (67,808) |
Change in fair value of common stock warrants | (246,751) | 37,330 | (697,579) | (68,750) |
Interest expense | (23,687) | (39,137) | (79,156) | (159,004) |
Total other expense | (271,795) | (217,930) | (780,807) | (558,972) |
Income (loss) before income taxes | 453,537 | 7,875 | 1,317,934 | (864,455) |
Income tax expense (benefit) | 226,951 | 28,819 | 612,816 | (211,311) |
Net income (loss) | $ 226,586 | $ (20,944) | $ 705,118 | $ (653,144) |
Basic income (loss) per common share (in Dollars per share) | $ 0.07 | $ (0.01) | $ 0.22 | $ (0.20) |
Diluted income (loss) per common share (in Dollars per share) | $ 0.07 | $ (0.01) | $ 0.22 | $ (0.20) |
Weighted average shares outstanding: | ||||
Basic (in Shares) | 3,256,887 | 3,255,028 | 3,256,887 | 3,253,045 |
Diluted (in Shares) | 3,261,690 | 3,255,028 | 3,261,955 | 3,253,045 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 705,118 | $ (653,144) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Deferred income taxes | 612,816 | (211,311) |
Depreciation and amortization | 122,399 | 134,837 |
Provision for bad debts | 1,205 | 0 |
Provision for inventory obsolescence | 35,713 | 5,000 |
Amortization of debt discount | 0 | 75,308 |
Amortization of deferred financing costs | 4,072 | 67,808 |
Loss on extinguishment of debt | 0 | 188,102 |
Change in fair value of common stock warrant | 697,579 | 68,750 |
Non-cash stock-based compensation | 23,546 | 29,733 |
Changes in assets and liabilities: | ||
Decrease in accounts receivable | 596,529 | 1,481,401 |
Increase in inventories | (812,003) | (548,963) |
Decrease (increase) in prepaid expenses & other assets | 28,393 | (184,716) |
(Decrease) increase in accounts payable and other accrued expenses | (1,238,440) | 423,290 |
Increase in accrued payroll, vacation pay & withholdings | 215,019 | 82,990 |
Decrease in deferred revenues | 5,401 | 43,936 |
Decrease in progress billings | 0 | (518,659) |
Decrease in other long-term liabilities | (18,900) | (10,500) |
Net cash provided by operating activities | 978,447 | 473,862 |
Cash flows from investing activities: | ||
Purchases of equipment | (45,041) | (8,541) |
Net cash used in investing activities | (45,041) | (8,541) |
Cash flows from financing activities: | ||
Proceeds from bank loan | 18,000 | 1,200,000 |
Deferred financing costs | 0 | (16,287) |
Repayment of notes to related parties | (205,000) | 0 |
Repayment of long-term debt | (290,937) | (1,499,392) |
Repayment of capitalized lease obligations | (12,348) | (49,769) |
Net cash used in financing activities | (490,285) | (365,448) |
Net increase in cash and cash equivalents | 443,121 | 99,873 |
Cash and cash equivalents at beginning of period | 185,932 | 232,118 |
Cash and cash equivalents at end of period | 629,053 | 331,991 |
Supplemental cash flow information: | ||
Taxes paid | 0 | 20,500 |
Interest paid | 46,793 | 141,180 |
Supplemental non-cash information: | ||
Converted accounts payable to equity | $ 0 | $ 26,610 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Dec. 31, 2015 | |
Disclosure Text Block [Abstract] | |
Basis of Accounting [Text Block] | Note 1 – Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of Tel-Instrument Electronics Corp. (the “Company” or “TIC”) as of December 31, 2015, the results of operations for the three and nine months ended December 31, 2015 and December 31, 2014, and statements of cash flows for the nine months ended December 31, 2015 and December 31, 2014. 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, 2015 balance sheet included herein was derived from the audited financial statements included in the Company’s Annual Report on Form 10-K as of that date. 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, 2015, as filed with the United States Securities and Exchange Commission (the “SEC”) on June 25, 2015 (the “Annual Report). |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2 – Summary of Significant Accounting Policies During the nine months ended December 31, 2015, there have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Annual Report. |
Note 3 - Accounts Receivable, n
Note 3 - Accounts Receivable, net | 9 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 3 – Accounts Receivable, net The following table sets forth the components of accounts receivable: December 31, 2015 March 31, 2015 Government $ 901,705 $ 1,440,378 Commercial 151,732 209,768 Less: Allowance for doubtful accounts (26,000 ) (24,975 ) $ 1,027,437 $ 1,625,171 |
Note 4 - Inventories, net
Note 4 - Inventories, net | 9 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 4 – Inventories, net Inventories consist of: December 31, 2015 March 31, 2015 Purchased parts $ 3,117,916 $ 2,746,671 Work-in-process 1,856,431 1,514,356 Finished goods 99,017 334 Less: Inventory reserve (265,000 ) (229,287 ) $ 4,808,364 $ 4,032,074 |
Note 5 - Income (Loss) Per Shar
Note 5 - Income (Loss) Per Share | 9 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Note 5 – Income (Loss) Per Share Net income (loss) per share has been computed according to FASB ASC 260, “Earnings per Share,” which requires a dual presentation of basic and diluted income (loss) per share (“EPS”). Basic EPS represents net income (loss) divided by the weighted average number of common shares outstanding during a reporting period. Diluted EPS reflects the potential dilution that could occur if securities, including warrants and options, were converted into common stock. The dilutive effect of outstanding warrants and options is reflected in earnings per share by use of the treasury stock method. In applying the treasury stock method for stock-based compensation arrangements, the assumed proceeds are computed as the sum of the amount the employee must pay upon exercise and the amounts of average unrecognized compensation costs attributed to future services. Three Months Ended Three Months Ended December 31, 2015 December 31, 2014 Basic net income (loss) per share computation: Net income (loss) $ 226,586 $ (20,944 ) Weighted-average common shares outstanding 3,256,887 3,255,028 Basic net income (loss) per share $ 0.07 $ (0.01 ) Diluted net income (loss) per share computation Net income (loss) $ 226,586 $ (20,944 ) Add: Change in fair value of warrants - - Diluted income (loss) 226,586 (20,944 ) Weighted-average common shares outstanding 3,256,887 3,255,028 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants 4,803 - Total adjusted weighted-average shares 3,261,690 3,255,028 Diluted net income (loss) per share $ 0.07 $ (0.01 ) Nine Months Ended Nine Months Ended December 31, 2015 December 31, 2014 Basic net income (loss) per share computation: Net income (loss) $ 705,118 $ (653,144 ) Weighted-average common shares outstanding 3,256,887 3,253,045 Basic net income (loss) per share $ 0.22 $ (0.20 ) Diluted net income (loss) per share computation Net income (loss) $ 705,118 $ (653,144 ) Add: Change in fair value of warrants - - Diluted income (loss) 705,118 (653,144 ) Weighted-average common shares outstanding 3,256,887 3,253,045 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants 5,068 - Total adjusted weighted-average shares 3,261,955 3,253,045 Diluted net income (loss) per share $ 0.22 $ (0.20 ) The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share: December 31, 2015 December 31, 2014 Stock options 80,000 85,500 Warrants 286,920 297,336 366,920 382,836 |
Note 6 - Long-Term Debt
Note 6 - Long-Term Debt | 9 Months Ended |
Dec. 31, 2015 | |
Disclosure Text Block [Abstract] | |
Long-term Debt [Text Block] | Note 6 – Long-Term Debt Term Loans with Bank of America In November 2014, the Company entered into a term loan in the amount of $1,200,000 with Bank of America. The term loan is for three years, and expires in November 2017. Monthly payments are at $36,551 including interest at 6%. The term loan is collateralized by substantially all of the assets of the Company. At December 31, 2015 and March 31, 2015, the outstanding balances were $791,539 and $1,076,894, respectively. In July 2015, the Company entered into a term loan in the amount of $18,000 with Bank of America. The term loan is for three years, and expires in July 2018. Monthly payments are at $536 including interest at 4.5%. The term loan is collateralized by substantially all of the assets of the Company. At December 31, 2015 and March 31, 2015, the outstanding balances were $15,646 and $-0-, respectively. Automobile Loan In March 2014, the Company entered into a loan with Ford Credit to purchase a van for the Company in the amount of $23,712. Such note has a term of five (5) years with an annual interest rate of 8.79% with monthly payments of $492. The outstanding balances at December 31, 2015 and March 31, 2015 were $16,321 and $19,549, respectively. |
Note 7 - Segment Information
Note 7 - Segment Information | 9 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 7 – Segment Information In accordance with FASB ASC 280, “Disclosures about Segments of an Enterprise and related information”, the Company determined it has two reportable segments - avionics government and avionics commercial. There are no inter-segment revenues. The Company is organized primarily on the basis of its avionics products. The avionics government segment consists primarily of the design, manufacture, and sale of test equipment to the U.S. and foreign governments and militaries either directly or through distributors. The avionics commercial segment consists of design, manufacture, and sale of test equipment to domestic and foreign airlines, directly or through commercial distributors, and to general aviation repair and maintenance shops. The Company develops and designs test equipment for the avionics industry and as such, the Company’s products and designs cross segments. Management evaluates the performance of its segments and allocates resources to them based on gross margin. The Company’s general and administrative costs and sales and marketing expenses, and engineering costs are not segment specific. As a result, all operating expenses are not managed on a segment basis. Net interest includes expenses on debt and income earned on cash balances, both maintained at the corporate level. Segment assets include accounts receivable and work-in-process inventory. Asset information, other than accounts receivable and work-in-process inventory, is not reported, since the Company does not produce such information internally. All long-lived assets are located in the U.S. The table below presents information about reportable segments within the avionics business for the three and nine month periods ending December 31, 2015 and 2014: Three Months Ended December 31, 2015 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 5,658,695 $ 312,170 $ 5,970,865 $ - $ 5,970,865 Cost of sales 3,709,998 226,110 3,936,108 - 3,936,108 Gross margin 1,948,697 86,060 2,034,757 - 2,034,757 Engineering, research, and development 541,502 - 541,502 Selling, general and administrative 203,249 564,674 767,923 Amortization of deferred financing costs - 1,357 1,357 Change in fair value of common stock warrants - 246,751 246,751 Interest expense, net - 23,687 23,687 Total expenses 744,751 836,469 1,581,220 Income (loss) before income taxes $ 1,290,006 $ (836,469 ) $ 453,537 Three Months Ended December 31, 2014 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 4,455,399 $ 574,698 $ 5,030,097 - $ 5,030,097 Cost of sales 3,015,359 468,951 3,484,310 - 3,484,310 Gross margin 1,440,040 105,747 1,545,787 - 1,545,787 Engineering, research, and development 494,721 - 494,721 Selling, general and administrative 323,862 501,399 825,261 Amortization of debt discount - 14,373 14,373 Amortization of deferred financing costs - 13,648 13,648 Loss on extinguishment of debt - 188,102 188,102 Change in fair value of common stock warrants - (37,330 ) (37,330 ) Interest expense, net - 39,137 39,137 Total expenses 818,583 719,329 1,537,912 Income (loss) before income taxes $ 727,204 $ (719,329 ) $ 7,875 Nine Months Ended December 31, 2015 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 17,248,766 $ 1,386,408 $ 18,635,174 $ - $ 18,635,174 Cost of sales 11,506,710 1,034,946 12,541,656 - 12,541,656 Gross margin 5,742,056 351,462 6,093,518 - 6,093,518 Engineering, research, and development 1,477,290 - 1,477,290 Selling, general and administrative 908,829 1,608,658 2,517,487 Amortization of deferred financing costs - 4,072 4,072 Change in fair value of common stock warrants - 697,579 697,579 Interest expense, net - 79,156 79,156 Total expenses 2,386,119 2,389,465 4,775,584 Income (loss) before income taxes $ 3,707,399 $ (2,389,465 ) $ 1,317,934 Nine Months Ended December 31, 2014 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 10,002,850 $ 1,743,997 $ 11,746,847 - $ 11,746,847 Cost of sales 6,800,031 1,411,468 8,211,499 - 8,211,499 Gross margin 3,202,819 332,529 3,535,348 - 3,535,348 Engineering, research, and development 1,476,343 - 1,476,343 Selling, general and administrative 899,579 1,464,909 2,364,488 Amortization of debt discount - 75,308 75,308 Amortization of deferred financing costs - 67,808 67,808 Loss on extinguishment of debt 188,102 188,102 Change in fair value of common stock warrants - 68,750 68,750 Interest expense, net - 159,004 159,004 Total expenses 2,375,922 2,023,881 4,399,803 Income (loss) before income taxes $ 1,159,426 $ (2,023,881 ) $ (864,455 ) |
Note 8 - Income Taxes
Note 8 - Income Taxes | 9 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 8 – Income Taxes FASB ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC 740-10”) prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company does not have any unrecognized tax benefits. The tax effect of temporary differences, primarily net operating loss carryforwards, asset reserves and accrued liabilities, gave rise to the Company’s deferred tax asset in the accompanying December 31, 2015 and March 31, 2015 condensed consolidated balance sheets. Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse. |
Note 9 - Fair Value Measurement
Note 9 - Fair Value Measurements | 9 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 9 – Fair Value Measurements FASB ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. As defined in ASC 820-10, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observation of those inputs. ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy defined by ASC 820-10 are as follows: · Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. · Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. · Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The valuation techniques that may be used to measure fair value are as follows: · Market approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. · Income approach — Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method. · Cost approach — Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). The carrying value of the Company’s borrowings is a reasonable estimate of its fair value as borrowings under the Company’s credit facility reflect currently available terms and conditions for similar debt. The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2015 and March 31, 2015. As required by ASC 820-10, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. December 31, 2015 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - 1,216,541 1,216,541 Total Liabilities $ - $ - $ 1,216,541 $ 1,216,541 March 31, 2015 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - 518,962 518,962 Total Liabilities $ - $ - $ 518,962 $ 518,962 The Company adopted the guidance of ASC 815 “Derivative and Hedging”, which requires that we mark the value of our warrant liability to market and recognize the change in valuation in our statement of operations each reporting period. Determining the warrant liability to be recorded requires us to develop estimates to be used in calculating the fair value of the warrant. The fair value of the warrants prior to the quarter ended December 31, 2014 was calculated using the Black-Scholes valuation model. The following table provides a summary of the changes in fair value of our Level 3 financial liabilities from March 31, 2015 through December 31, 2015, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to the liability held at December 31, 2015: Level 3 Reconciliation Beginning at beginning of period (Gains) and losses for the period (realized and unrealized) Purchases, issuances, sales and settlements, net Transfers in or out of Level 3 Balance at the end of period Warrant liability $ 518,962 $ 697,579 $ - $ - $ 1,216,541 Total Liabilities $ 518,962 $ 697,579 $ - $ - $ 1,216,541 The common stock warrants were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign corporation. The warrants do not qualify for hedge accounting, and, as such, all changes in the fair value of these warrants are recognized as other income/expense in the statement of operations until such time as the warrants are exercised or expire. Since these common stock warrants do not trade in an active securities market, the Company recognized a warrant liability and estimated the fair value of these warrants using the Black-Scholes options model using the following assumptions until the payment of the loan in November 2014. With the payment of the loan in November 2014, the holder has the right, exercisable at any time, in writing (the “Warrant Put Notice”), to cause the Company, subject to the terms and conditions hereof, to purchase from the holder all, or any portion, of the warrant for the warrant put repurchase price (the “Repurchase Price”). The Repurchase Price is the greater of 1) Adjusted EBITDA (as defined below) per share as of the date of the Warrant Put Notice, less $0.01, multiplied by the number of warrants or 2) the product of the current market price per share as of the date of the Warrant Put Notice, less the purchase price of the warrant or warrants, multiplied by the number of warrants, if this amount is higher. “Adjusted EBITDA” means EBITDA, multiplied by 5, plus cash and cash equivalents less unpaid debt divided by the number of shares outstanding on a fully diluted basis. As such, the values of the warrants at December 31, 2015, reflect the higher of these two options for each specific warrant. Values at Inception Date of Warrant Expiration Date Number of Warrants Exercise Price Fair Market Value Per Share Expected Volatility Remaining Life in Years Risk Free Interest Rate Warrant Liability 09-10-2010 09-10-2019 136,920 $ 6.70 $ 6.70 28.51 % 9 2.81 % $ 267,848 09-10-2010 09-10-2015 10,416 $ 6.70 $ 6.70 28.51 % 5 1.59 % $ 13,808 07-26-2012 09-10-2019 50,000 $ 3.35 $ 3.90 42.04 % 7 0.94 % $ 66,193 07-26-2012 09-10-2019 20,000 $ 3.35 $ 3.90 42.04 % 7 0.94 % $ 26,477 11-20-2012 09-10-2019 20,000 $ 3.56 $ 3.50 42.45 % 6.83 1.09 % $ 21,441 02-14-2013 09-10-2019 20,000 $ 3.58 $ 3.80 41.25 % 6.58 1.43 % $ 23,714 07-12-2013 09-10-2019 20,000 $ 3.33 $ 3.32 40.26 % 6.17 2.00 % $ 19,523 08-12-2013 09-10-2019 20,000 $ 3.69 $ 3.69 40.20 % 6.08 2.01 % $ 21,587 Values at March 31, 2015 Date of Warrant Expiration Date Number of Warrants Exercise Price Fair Market Value Per Share Put Option Value Market Price Option Remaining Life in Years Warrant Liability 09-10-2010 09-10-2019 136,920 $ 6.70 $ 6.42 $ 68,460 NA 4.45 $ 68,460 09-10-2010 09-10-2015 10,416 $ 6.70 $ 6.42 NA NA 0.45 $ 7,002 * 07-26-2012 09-10-2019 50,000 $ 3.35 $ 6.42 $ 30,000 153,500 4.45 $ 153,500 07-26-2012 09-10-2019 20,000 $ 3.35 $ 6.42 $ 13,200 61,400 4.45 $ 61,400 11-20-2012 09-10-2019 20,000 $ 3.56 $ 6.42 $ 13,200 57,200 4.45 $ 57,200 02-14-2013 09-10-2019 20,000 $ 3.58 $ 6.42 $ 13,200 55,000 4.45 $ 55,000 07-12-2013 09-10-2019 20,000 $ 3.33 $ 6.42 $ 13,200 61,800 4.45 $ 61,800 08-12-2013 09-10-2019 20,000 $ 3.69 $ 6.42 $ 13,200 54,600 4.45 $ 54,600 * Based on Black-Scholes Calculation and expired in September 2015. Values at December 31, 2015 Date of Warrant Expiration Date Number of Warrants Exercise Price Fair Market Value Per Share Put Option Value Market Price Option Remaining Life in Years Warrant Liability 09-10-2010 09-10-2019 136,920 $ 6.70 $ 4.85 $ 580,541 NA 3.70 $ 580,541 07-26-2012 09-10-2019 50,000 $ 3.35 $ 4.85 $ 212,000 75,000 3.70 $ 212,000 07-26-2012 09-10-2019 20,000 $ 3.35 $ 4.85 $ 84,800 30,000 3.70 $ 84,800 11-20-2012 09-10-2019 20,000 $ 3.56 $ 4.85 $ 84,800 25,800 3.70 $ 84,800 02-14-2013 09-10-2019 20,000 $ 3.58 $ 4.85 $ 84,800 23,600 3.70 $ 84,800 07-12-2013 09-10-2019 20,000 $ 3.33 $ 4.85 $ 84,800 30,400 3.70 $ 84,800 08-12-2013 09-10-2019 20,000 $ 3.69 $ 4.85 $ 84,800 23,200 3.70 $ 84,800 |
Note 10 - Reclassifications
Note 10 - Reclassifications | 9 Months Ended |
Dec. 31, 2015 | |
Disclosure Text Block [Abstract] | |
Reclassifications [Text Block] | Note 10 – Reclassifications Certain prior year and period amounts have been reclassified to conform to the current period presentation. |
Note 11 - Litigation
Note 11 - Litigation | 9 Months Ended |
Dec. 31, 2015 | |
Disclosure Text Block Supplement [Abstract] | |
Legal Matters and Contingencies [Text Block] | Note 11 – Litigation On March 24, 2009, Aeroflex Wichita, Inc. (“Aeroflex”) filed a petition against the Company and two of its employees in the District Court, Sedgwick County, Kansas, Case No. 09 CV 1141 (the “Aeroflex Action”), alleging that the Company and its two employees misappropriated Aeroflex’s proprietary technology in connection with the Company winning a substantial contract from the U.S. Army (the “Award”), to develop new Mode-5 radar test sets and kits to upgrade the existing TS-4530 radar test sets to Mode 5. Aeroflex’s petition alleges that in connection with the Award, the Company and its named employees misappropriated Aeroflex’s trade secrets; tortiously interfered with its business relationship; conspired to harm Aeroflex and tortiously interfered with its contract and seeks injunctive relief and damages. The central basis of all the claims in the Aeroflex Action is that the Company misappropriated and used Aeroflex proprietary technology and confidential information in winning the Award. In February 2009, subsequent to the Company winning the Award, Aeroflex filed a protest of the Award with the Government Accounting Office (“GAO”). In its protest, Aeroflex alleged, inter alia, that the Company used Aeroflex’s proprietary technology in order to win the Award, the same material allegations as were later alleged in the Aeroflex Action. On or about March 17, 2009, the U.S. Army Contracts Attorney and the U.S. Army Contracting Officer each filed a statement with the GAO, expressly rejecting Aeroflex’s allegations that the Company used or infringed Aeroflex proprietary technology in winning the Award, and concluding that the Company had used only its own proprietary technology. On April 6, 2009, Aeroflex withdrew its protest. In December 2009, the Kansas District Court dismissed the Aeroflex Action on jurisdiction grounds. Aeroflex appealed this decision. In May 2012, the Kansas Supreme Court reversed the decision and remanded the Aeroflex Action to the Kansas District Court for further proceedings. The Company has been engaged in discovery and depositions for the last three quarters, which has resulted in substantially higher legal expense. The August 31, 2015 Amended Supplemental Modified Scheduling Order has the trial date set for October 24, 2016 and is estimated to last three weeks, but this date may be subject to postponement. The Company is optimistic as to the outcome of this litigation. However, the outcome of any litigation is unpredictable and an adverse decision in this matter could have a material adverse effect on our financial condition, results of operations or liquidity. Other than the matters outlined above, we are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of executive officers of our Company, threatened against or affecting our Company, or our common stock in which an adverse decision could have a material effect. |
Note 12 - New Accounting Pronou
Note 12 - New Accounting Pronouncements | 9 Months Ended |
Dec. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Note 12 – New Accounting Pronouncements In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01 (Accounting Standards Codification (“ASC”) Subtopic 825-10), Financial Instruments- Overall Recognition and Measurement of Financial Assets and Financial Liabilities . In November 2015, the FASB issued ASU 2015-17 (ASC Topic 740), Income Taxes Balance Sheet Classification of Deferred Taxes . In September 2015, the FASB issued ASU 2015-16 (ASC Topic 805), Business Combinations Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize measurement period adjustments in the period in which the adjustments are determined. The income effects of such measurement period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The amendments in this update are for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this new guidance is not expected to have a material impact on the Company’s consolidated financial statements and disclosures. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs with Line-of-Credit Arrangements (ASU 2015-15). The previous guidance in ASU 2015-03, as defined below, did not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). To simplify presentation of debt issuance costs, ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. ASU 2015-03 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted and entities shall apply the guidance retrospectively to all prior year periods presented. The Company is in the process of assessing the effects of the application of the new guidance. In May 2014, the FASB issued ASU 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact, if any, it will have on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern”, which requires management to evaluate whether conditions or events raise substantial doubt about the entity’s ability to continue as a going concern and, if so, to provide related footnote disclosures. The guidance is effective for annual or interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated Financial Statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. This ASU applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (“LILO”). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures. No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s condensed consolidated financial statements. |
Note 3 - Accounts Receivable,18
Note 3 - Accounts Receivable, net (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The following table sets forth the components of accounts receivable: December 31, 2015 March 31, 2015 Government $ 901,705 $ 1,440,378 Commercial 151,732 209,768 Less: Allowance for doubtful accounts (26,000 ) (24,975 ) $ 1,027,437 $ 1,625,171 |
Note 4 - Inventories, net (Tabl
Note 4 - Inventories, net (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories consist of: December 31, 2015 March 31, 2015 Purchased parts $ 3,117,916 $ 2,746,671 Work-in-process 1,856,431 1,514,356 Finished goods 99,017 334 Less: Inventory reserve (265,000 ) (229,287 ) $ 4,808,364 $ 4,032,074 |
Note 5 - Income (Loss) Per Sh20
Note 5 - Income (Loss) Per Share (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended Three Months Ended December 31, 2015 December 31, 2014 Basic net income (loss) per share computation: Net income (loss) $ 226,586 $ (20,944 ) Weighted-average common shares outstanding 3,256,887 3,255,028 Basic net income (loss) per share $ 0.07 $ (0.01 ) Diluted net income (loss) per share computation Net income (loss) $ 226,586 $ (20,944 ) Add: Change in fair value of warrants - - Diluted income (loss) 226,586 (20,944 ) Weighted-average common shares outstanding 3,256,887 3,255,028 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants 4,803 - Total adjusted weighted-average shares 3,261,690 3,255,028 Diluted net income (loss) per share $ 0.07 $ (0.01 ) Nine Months Ended Nine Months Ended December 31, 2015 December 31, 2014 Basic net income (loss) per share computation: Net income (loss) $ 705,118 $ (653,144 ) Weighted-average common shares outstanding 3,256,887 3,253,045 Basic net income (loss) per share $ 0.22 $ (0.20 ) Diluted net income (loss) per share computation Net income (loss) $ 705,118 $ (653,144 ) Add: Change in fair value of warrants - - Diluted income (loss) 705,118 (653,144 ) Weighted-average common shares outstanding 3,256,887 3,253,045 Incremental shares attributable to the assumed exercise of outstanding stock options and warrants 5,068 - Total adjusted weighted-average shares 3,261,955 3,253,045 Diluted net income (loss) per share $ 0.22 $ (0.20 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share: December 31, 2015 December 31, 2014 Stock options 80,000 85,500 Warrants 286,920 297,336 366,920 382,836 |
Note 7 - Segment Information (T
Note 7 - Segment Information (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The table below presents information about reportable segments within the avionics business for the three and nine month periods ending December 31, 2015 and 2014: Three Months Ended December 31, 2015 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 5,658,695 $ 312,170 $ 5,970,865 $ - $ 5,970,865 Cost of sales 3,709,998 226,110 3,936,108 - 3,936,108 Gross margin 1,948,697 86,060 2,034,757 - 2,034,757 Engineering, research, and development 541,502 - 541,502 Selling, general and administrative 203,249 564,674 767,923 Amortization of deferred financing costs - 1,357 1,357 Change in fair value of common stock warrants - 246,751 246,751 Interest expense, net - 23,687 23,687 Total expenses 744,751 836,469 1,581,220 Income (loss) before income taxes $ 1,290,006 $ (836,469 ) $ 453,537 Three Months Ended December 31, 2014 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 4,455,399 $ 574,698 $ 5,030,097 - $ 5,030,097 Cost of sales 3,015,359 468,951 3,484,310 - 3,484,310 Gross margin 1,440,040 105,747 1,545,787 - 1,545,787 Engineering, research, and development 494,721 - 494,721 Selling, general and administrative 323,862 501,399 825,261 Amortization of debt discount - 14,373 14,373 Amortization of deferred financing costs - 13,648 13,648 Loss on extinguishment of debt - 188,102 188,102 Change in fair value of common stock warrants - (37,330 ) (37,330 ) Interest expense, net - 39,137 39,137 Total expenses 818,583 719,329 1,537,912 Income (loss) before income taxes $ 727,204 $ (719,329 ) $ 7,875 Nine Months Ended December 31, 2015 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 17,248,766 $ 1,386,408 $ 18,635,174 $ - $ 18,635,174 Cost of sales 11,506,710 1,034,946 12,541,656 - 12,541,656 Gross margin 5,742,056 351,462 6,093,518 - 6,093,518 Engineering, research, and development 1,477,290 - 1,477,290 Selling, general and administrative 908,829 1,608,658 2,517,487 Amortization of deferred financing costs - 4,072 4,072 Change in fair value of common stock warrants - 697,579 697,579 Interest expense, net - 79,156 79,156 Total expenses 2,386,119 2,389,465 4,775,584 Income (loss) before income taxes $ 3,707,399 $ (2,389,465 ) $ 1,317,934 Nine Months Ended December 31, 2014 Avionics Government Avionics Commercial Avionics Total Corporate Items Total Net sales $ 10,002,850 $ 1,743,997 $ 11,746,847 - $ 11,746,847 Cost of sales 6,800,031 1,411,468 8,211,499 - 8,211,499 Gross margin 3,202,819 332,529 3,535,348 - 3,535,348 Engineering, research, and development 1,476,343 - 1,476,343 Selling, general and administrative 899,579 1,464,909 2,364,488 Amortization of debt discount - 75,308 75,308 Amortization of deferred financing costs - 67,808 67,808 Loss on extinguishment of debt 188,102 188,102 Change in fair value of common stock warrants - 68,750 68,750 Interest expense, net - 159,004 159,004 Total expenses 2,375,922 2,023,881 4,399,803 Income (loss) before income taxes $ 1,159,426 $ (2,023,881 ) $ (864,455 ) |
Note 9 - Fair Value Measureme22
Note 9 - Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. December 31, 2015 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - 1,216,541 1,216,541 Total Liabilities $ - $ - $ 1,216,541 $ 1,216,541 March 31, 2015 Level I Level II Level III Total Total Assets $ - $ - $ - $ - Warrant liability - - 518,962 518,962 Total Liabilities $ - $ - $ 518,962 $ 518,962 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table provides a summary of the changes in fair value of our Level 3 financial liabilities from March 31, 2015 through December 31, 2015, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to the liability held at December 31, 2015: Level 3 Reconciliation Beginning at beginning of period (Gains) and losses for the period (realized and unrealized) Purchases, issuances, sales and settlements, net Transfers in or out of Level 3 Balance at the end of period Warrant liability $ 518,962 $ 697,579 $ - $ - $ 1,216,541 Total Liabilities $ 518,962 $ 697,579 $ - $ - $ 1,216,541 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | Date of Warrant Expiration Date Number of Warrants Exercise Price Fair Market Value Per Share Expected Volatility Remaining Life in Years Risk Free Interest Rate Warrant Liability 09-10-2010 09-10-2019 136,920 $ 6.70 $ 6.70 28.51 % 9 2.81 % $ 267,848 09-10-2010 09-10-2015 10,416 $ 6.70 $ 6.70 28.51 % 5 1.59 % $ 13,808 07-26-2012 09-10-2019 50,000 $ 3.35 $ 3.90 42.04 % 7 0.94 % $ 66,193 07-26-2012 09-10-2019 20,000 $ 3.35 $ 3.90 42.04 % 7 0.94 % $ 26,477 11-20-2012 09-10-2019 20,000 $ 3.56 $ 3.50 42.45 % 6.83 1.09 % $ 21,441 02-14-2013 09-10-2019 20,000 $ 3.58 $ 3.80 41.25 % 6.58 1.43 % $ 23,714 07-12-2013 09-10-2019 20,000 $ 3.33 $ 3.32 40.26 % 6.17 2.00 % $ 19,523 08-12-2013 09-10-2019 20,000 $ 3.69 $ 3.69 40.20 % 6.08 2.01 % $ 21,587 Date of Warrant Expiration Date Number of Warrants Exercise Price Fair Market Value Per Share Put Option Value Market Price Option Remaining Life in Years Warrant Liability 09-10-2010 09-10-2019 136,920 $ 6.70 $ 6.42 $ 68,460 NA 4.45 $ 68,460 09-10-2010 09-10-2015 10,416 $ 6.70 $ 6.42 NA NA 0.45 $ 7,002 * 07-26-2012 09-10-2019 50,000 $ 3.35 $ 6.42 $ 30,000 153,500 4.45 $ 153,500 07-26-2012 09-10-2019 20,000 $ 3.35 $ 6.42 $ 13,200 61,400 4.45 $ 61,400 11-20-2012 09-10-2019 20,000 $ 3.56 $ 6.42 $ 13,200 57,200 4.45 $ 57,200 02-14-2013 09-10-2019 20,000 $ 3.58 $ 6.42 $ 13,200 55,000 4.45 $ 55,000 07-12-2013 09-10-2019 20,000 $ 3.33 $ 6.42 $ 13,200 61,800 4.45 $ 61,800 08-12-2013 09-10-2019 20,000 $ 3.69 $ 6.42 $ 13,200 54,600 4.45 $ 54,600 Date of Warrant Expiration Date Number of Warrants Exercise Price Fair Market Value Per Share Put Option Value Market Price Option Remaining Life in Years Warrant Liability 09-10-2010 09-10-2019 136,920 $ 6.70 $ 4.85 $ 580,541 NA 3.70 $ 580,541 07-26-2012 09-10-2019 50,000 $ 3.35 $ 4.85 $ 212,000 75,000 3.70 $ 212,000 07-26-2012 09-10-2019 20,000 $ 3.35 $ 4.85 $ 84,800 30,000 3.70 $ 84,800 11-20-2012 09-10-2019 20,000 $ 3.56 $ 4.85 $ 84,800 25,800 3.70 $ 84,800 02-14-2013 09-10-2019 20,000 $ 3.58 $ 4.85 $ 84,800 23,600 3.70 $ 84,800 07-12-2013 09-10-2019 20,000 $ 3.33 $ 4.85 $ 84,800 30,400 3.70 $ 84,800 08-12-2013 09-10-2019 20,000 $ 3.69 $ 4.85 $ 84,800 23,200 3.70 $ 84,800 |
Note 3 - Accounts Receivable,23
Note 3 - Accounts Receivable, net (Details) - Schedule of Accounts, Notes, Loans and Financing Receivable - USD ($) | Dec. 31, 2015 | Mar. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Less: Allowance for doubtful accounts | $ (26,000) | $ (24,975) |
1,027,437 | 1,625,171 | |
Government Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | 901,705 | 1,440,378 |
Commercial Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts Receivable | $ 151,732 | $ 209,768 |
Note 4 - Inventories, net (Det
Note 4 - Inventories, net (Details) - Schedule of Inventory, Current - USD ($) | Dec. 31, 2015 | Mar. 31, 2015 |
Schedule of Inventory, Current [Abstract] | ||
Purchased parts | $ 3,117,916 | $ 2,746,671 |
Work-in-process | 1,856,431 | 1,514,356 |
Finished goods | 99,017 | 334 |
Less: Inventory reserve | (265,000) | (229,287) |
$ 4,808,364 | $ 4,032,074 |
Note 5 - Income (Loss) Per Sh25
Note 5 - Income (Loss) Per Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic net income (loss) per share computation: | ||||
Net income (loss) | $ 226,586 | $ (20,944) | $ 705,118 | $ (653,144) |
Weighted-average common shares outstanding | 3,256,887 | 3,255,028 | 3,256,887 | 3,253,045 |
Basic net income (loss) per share | $ 0.07 | $ (0.01) | $ 0.22 | $ (0.20) |
Diluted net income (loss) per share computation | ||||
Net income (loss) | $ 226,586 | $ (20,944) | $ 705,118 | $ (653,144) |
Add: Change in fair value of warrants | 0 | 0 | 0 | 0 |
Diluted income (loss) | $ 226,586 | $ (20,944) | $ 705,118 | $ (653,144) |
Weighted-average common shares outstanding | 3,256,887 | 3,255,028 | 3,256,887 | 3,253,045 |
Incremental shares attributable to the assumed exercise of outstanding stock options and warrants | 4,803 | 0 | 5,068 | 0 |
Total adjusted weighted-average shares | 3,261,690 | 3,255,028 | 3,261,955 | 3,253,045 |
Diluted net income (loss) per share | $ 0.07 | $ (0.01) | $ 0.22 | $ (0.20) |
Note 5 - Income (Loss) Per Sh26
Note 5 - Income (Loss) Per Share (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share - shares | 9 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Securities | 366,920 | 382,836 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Securities | 80,000 | 85,500 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-Dilutive Securities | 286,920 | 297,336 |
Note 6 - Long-Term Debt (Detail
Note 6 - Long-Term Debt (Details) - USD ($) | 1 Months Ended | ||||
Jul. 31, 2015 | Nov. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Mar. 31, 2015 | |
Note to Bank #1 [Member] | Notes Payable to Banks [Member] | |||||
Note 6 - Long-Term Debt (Details) [Line Items] | |||||
$ 1,200,000 | |||||
Debt Instrument, Term | 3 years | ||||
Debt Instrument, Maturity Date, Description | November 2,017 | ||||
Debt Instrument, Frequency of Periodic Payment | Monthly | ||||
Debt Instrument, Periodic Payment | $ 36,551 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||||
Notes Payable | $ 791,539 | $ 1,076,894 | |||
Debt Instrument, Collateral | collateralized by substantially all of the assets of the Company | ||||
Note to Bank #2 [Member] | Notes Payable to Banks [Member] | |||||
Note 6 - Long-Term Debt (Details) [Line Items] | |||||
$ 18,000 | |||||
Debt Instrument, Term | 3 years | ||||
Debt Instrument, Frequency of Periodic Payment | Monthly | ||||
Debt Instrument, Periodic Payment | $ 536 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | ||||
Notes Payable | 15,646 | 0 | |||
Debt Instrument, Collateral | collateralized by substantially all of the assets of the Company | ||||
Automobiles [Member] | Notes Payable, Other Payables [Member] | |||||
Note 6 - Long-Term Debt (Details) [Line Items] | |||||
$ 23,712 | |||||
Debt Instrument, Term | 5 years | ||||
Debt Instrument, Frequency of Periodic Payment | monthly | ||||
Debt Instrument, Periodic Payment | $ 492 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 8.79% | ||||
Notes Payable | $ 16,321 | $ 19,549 |
Note 7 - Segment Information (D
Note 7 - Segment Information (Details) | 9 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Note 7 - Segment Information (
Note 7 - Segment Information (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 5,970,865 | $ 5,030,097 | $ 18,635,174 | $ 11,746,847 |
Cost of sales | 3,936,108 | 3,484,310 | 12,541,656 | 8,211,499 |
Gross margin | 2,034,757 | 1,545,787 | 6,093,518 | 3,535,348 |
Engineering, research, and development | 541,502 | 494,721 | 1,477,290 | 1,476,343 |
Selling, general and administrative | 767,923 | 825,261 | 2,517,487 | 2,364,488 |
Amortization of debt discount | 0 | 14,373 | 0 | 75,308 |
Amortization of deferred financing costs | 1,357 | 13,648 | 4,072 | 67,808 |
Loss on extinguishment of debt | 0 | 188,102 | 0 | 188,102 |
Change in fair value of common stock warrants | 246,751 | (37,330) | 697,579 | 68,750 |
Interest (income) expense, net | 23,687 | 39,137 | 79,156 | 159,004 |
Total expenses | 1,581,220 | 1,537,912 | 4,775,584 | 4,399,803 |
Income (loss) before income taxes | 453,537 | 7,875 | 1,317,934 | (864,455) |
Avionics Government [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 5,658,695 | 4,455,399 | 17,248,766 | 10,002,850 |
Cost of sales | 3,709,998 | 3,015,359 | 11,506,710 | 6,800,031 |
Gross margin | 1,948,697 | 1,440,040 | 5,742,056 | 3,202,819 |
Avionics Commercial [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 312,170 | 574,698 | 1,386,408 | 1,743,997 |
Cost of sales | 226,110 | 468,951 | 1,034,946 | 1,411,468 |
Gross margin | 86,060 | 105,747 | 351,462 | 332,529 |
Avionics Total [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 5,970,865 | 5,030,097 | 18,635,174 | 11,746,847 |
Cost of sales | 3,936,108 | 3,484,310 | 12,541,656 | 8,211,499 |
Gross margin | 2,034,757 | 1,545,787 | 6,093,518 | 3,535,348 |
Engineering, research, and development | 541,502 | 494,721 | 1,477,290 | 1,476,343 |
Selling, general and administrative | 203,249 | 323,862 | 908,829 | 899,579 |
Amortization of debt discount | 0 | 0 | ||
Amortization of deferred financing costs | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | 0 | ||
Change in fair value of common stock warrants | 0 | 0 | 0 | 0 |
Interest (income) expense, net | 0 | 0 | 0 | 0 |
Total expenses | 744,751 | 818,583 | 2,386,119 | 2,375,922 |
Income (loss) before income taxes | 1,290,006 | 727,204 | 3,707,399 | 1,159,426 |
Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Cost of sales | 0 | 0 | 0 | 0 |
Gross margin | 0 | 0 | 0 | 0 |
Engineering, research, and development | 0 | 0 | 0 | 0 |
Selling, general and administrative | 564,674 | 501,399 | 1,608,658 | 1,464,909 |
Amortization of debt discount | 14,373 | 75,308 | ||
Amortization of deferred financing costs | 1,357 | 13,648 | 4,072 | 67,808 |
Loss on extinguishment of debt | 188,102 | 188,102 | ||
Change in fair value of common stock warrants | 246,751 | (37,330) | 697,579 | 68,750 |
Interest (income) expense, net | 23,687 | 39,137 | 79,156 | 159,004 |
Total expenses | 836,469 | 719,329 | 2,389,465 | 2,023,881 |
Income (loss) before income taxes | $ (836,469) | $ (719,329) | $ (2,389,465) | $ (2,023,881) |
Note 9 - Fair Value Measureme30
Note 9 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis - USD ($) | Dec. 31, 2015 | Mar. 31, 2015 |
Note 9 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | $ 0 | $ 0 |
Warrant liability | 1,216,541 | 518,962 |
Total Liabilities | 1,216,541 | 518,962 |
Fair Value, Inputs, Level 1 [Member] | ||
Note 9 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Warrant liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Note 9 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Warrant liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Note 9 - Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Total Assets | 0 | 0 |
Warrant liability | 1,216,541 | 518,962 |
Total Liabilities | $ 1,216,541 | $ 518,962 |
Note 9 - Fair Value Measureme31
Note 9 - Fair Value Measurements (Details) - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation - Fair Value, Inputs, Level 3 [Member] | 9 Months Ended |
Dec. 31, 2015USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at beginning of period | $ 518,962 |
Gains and losses for the period (realized and unrealized) | 697,579 |
Purchases, issuances, sales and settlements, net | 0 |
Transfers in or out of Level 3 | 0 |
Balance at the end of period | 1,216,541 |
Warrant [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at beginning of period | 518,962 |
Gains and losses for the period (realized and unrealized) | 697,579 |
Purchases, issuances, sales and settlements, net | 0 |
Transfers in or out of Level 3 | 0 |
Balance at the end of period | $ 1,216,541 |
Note 9 - Fair Value Measureme32
Note 9 - Fair Value Measurements (Details) - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques - Warrant [Member] - USD ($) | Aug. 12, 2013 | Jul. 12, 2013 | Feb. 14, 2013 | Nov. 20, 2012 | Jul. 26, 2012 | Sep. 10, 2010 | Dec. 31, 2015 | Mar. 31, 2015 |
Warrant Issued 09-10-2010 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | |||||
Warrant, Number of Warrants | 136,920 | 136,920 | 136,920 | |||||
Warrant, Exercise Price | $ 6.70 | $ 6.70 | $ 6.70 | |||||
Warrant, Fair Market Value Per Share | $ 6.70 | $ 4.85 | $ 6.42 | |||||
Warrant, Put Option | $ 0.2851 | $ 580,541 | $ 68,460 | |||||
Warrant, Market Price Option | $ 9 | $ 0 | $ 0 | |||||
Warrant, Expected Volatility | 2.81% | 3.70% | 4.45% | |||||
Warrant, Remaining Life in Years | 267848 years | 580541 years | 68460 years | |||||
Warrant Issued 09-10-2010 #2 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2015 | Sep. 10, 2015 | ||||||
Warrant, Number of Warrants | 10,416 | 10,416 | ||||||
Warrant, Exercise Price | $ 6.70 | $ 6.70 | ||||||
Warrant, Fair Market Value Per Share | $ 6.70 | $ 6.42 | ||||||
Warrant, Put Option | $ 0.2851 | $ 0 | ||||||
Warrant, Market Price Option | $ 5 | $ 0 | ||||||
Warrant, Expected Volatility | 1.59% | 0.45% | ||||||
Warrant, Remaining Life in Years | 13808 years | 7002 years | ||||||
Warrant Issued 07-26-2012 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | |||||
Warrant, Number of Warrants | 50,000 | 50,000 | 50,000 | |||||
Warrant, Exercise Price | $ 3.35 | $ 3.35 | $ 3.35 | |||||
Warrant, Fair Market Value Per Share | $ 3.90 | $ 4.85 | $ 6.42 | |||||
Warrant, Put Option | $ 0.4204 | $ 212,000 | $ 30,000 | |||||
Warrant, Market Price Option | $ 7 | $ 75,000 | $ 153,500 | |||||
Warrant, Expected Volatility | 0.94% | 3.70% | 4.45% | |||||
Warrant, Remaining Life in Years | 66193 years | 212000 years | 153500 years | |||||
Warrant Issued 07-26-2012 #2 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | |||||
Warrant, Number of Warrants | 20,000 | 20,000 | 20,000 | |||||
Warrant, Exercise Price | $ 3.35 | $ 3.35 | $ 3.35 | |||||
Warrant, Fair Market Value Per Share | $ 3.90 | $ 4.85 | $ 6.42 | |||||
Warrant, Put Option | $ 0.4204 | $ 84,800 | $ 13,200 | |||||
Warrant, Market Price Option | $ 7 | $ 30,000 | $ 61,400 | |||||
Warrant, Expected Volatility | 0.94% | 3.70% | 4.45% | |||||
Warrant, Remaining Life in Years | 26477 years | 84800 years | 61400 years | |||||
Warrant Issued 11-20-2012 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | |||||
Warrant, Number of Warrants | 20,000 | 20,000 | 20,000 | |||||
Warrant, Exercise Price | $ 3.56 | $ 3.56 | $ 3.56 | |||||
Warrant, Fair Market Value Per Share | $ 3.50 | $ 4.85 | $ 6.42 | |||||
Warrant, Put Option | $ 0.4245 | $ 84,800 | $ 13,200 | |||||
Warrant, Market Price Option | $ 6.83 | $ 25,800 | $ 57,200 | |||||
Warrant, Expected Volatility | 1.09% | 3.70% | 4.45% | |||||
Warrant, Remaining Life in Years | 21441 years | 84800 years | 57200 years | |||||
Warrant Issued 02-14-2013 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | |||||
Warrant, Number of Warrants | 20,000 | 20,000 | 20,000 | |||||
Warrant, Exercise Price | $ 3.58 | $ 3.58 | $ 3.58 | |||||
Warrant, Fair Market Value Per Share | $ 3.80 | $ 4.85 | $ 6.42 | |||||
Warrant, Put Option | $ 0.4125 | $ 84,800 | $ 13,200 | |||||
Warrant, Market Price Option | $ 6.58 | $ 23,600 | $ 55,000 | |||||
Warrant, Expected Volatility | 1.43% | 3.70% | 4.45% | |||||
Warrant, Remaining Life in Years | 23714 years | 84800 years | 55000 years | |||||
Warrant Issued 07-12-2013 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | |||||
Warrant, Number of Warrants | 20,000 | 20,000 | 20,000 | |||||
Warrant, Exercise Price | $ 3.33 | $ 3.33 | $ 3.33 | |||||
Warrant, Fair Market Value Per Share | $ 3.32 | $ 4.85 | $ 6.42 | |||||
Warrant, Put Option | $ 0.4026 | $ 84,800 | $ 13,200 | |||||
Warrant, Market Price Option | $ 6.17 | $ 30,400 | $ 61,800 | |||||
Warrant, Expected Volatility | 2.00% | 3.70% | 4.45% | |||||
Warrant, Remaining Life in Years | 19523 years | 84800 years | 61800 years | |||||
Warrant Issued 08-12-2013 [Member] | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||||||
Warrant, Expiration Date | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | |||||
Warrant, Number of Warrants | 20,000 | 20,000 | 20,000 | |||||
Warrant, Exercise Price | $ 3.69 | $ 3.69 | $ 3.69 | |||||
Warrant, Fair Market Value Per Share | $ 3.69 | $ 4.85 | $ 6.42 | |||||
Warrant, Put Option | $ 0.4020 | $ 84,800 | $ 13,200 | |||||
Warrant, Market Price Option | $ 6.08 | $ 23,200 | $ 54,600 | |||||
Warrant, Expected Volatility | 2.01% | 3.70% | 4.45% | |||||
Warrant, Remaining Life in Years | 21587 years | 84800 years | 54600 years |