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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
{X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended July 31, 1999
---------------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File Number: 0-13011
- --------------------------------
TNR TECHNICAL, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
New York 11-2565202
- ------------------------------ ----------------------
(State of jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
301 Central Park Drive
Sanford, Florida 32771
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (407) 321-3011
--------------
Securities registered pursuant to Section 12(b) of the Act:
None
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.02 Par Value
- --------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in part III of this
Form 10-K or any amendment to this Form 10-K [x].
As of September 30, 1999, the number of shares held by non-affiliates
was approximately 155,000 shares. Due to the limited market for the Company's
Common Stock, no value has been attributed to the shares held by non-affiliates.
The number of shares outstanding of the issuer's Common Stock, as of
September 30, 1999 was 260,918.
PART I
Item 1. Business
- ------- --------
General
- -------
TNR Technical, Inc. (the "Company") was incorporated on October 4, 1979
under the laws of the State of New York. The Company designs, assembles and
markets primary and secondary batteries to a variety of industrial markets. The
Company is an authorized distributor for several major battery manufacturers,
which products are distributed nationally by Company. The Company's business is
conducted principally at its two facilities in Sanford, Florida and Irvine,
California.
The Company is an authorized distributor of nickel-cadmium, Ni-MH,
alkaline, lithium and sealed lead-acid batteries manufactured by Saft America,
Powersonic Battery, Varta Battery, Yuasa, Duracell, Renata, GP Battery, Eveready
Battery, and Sanyo Energy. As an authorized distributor, the Company purchases
cells, assembles them into battery packs and maintains an inventory for resale.
The Company sells its battery cells and/or battery packs to the industrial users
and wholesalers without geographical limitation and on a non-exclusive basis.
The Company also designs and assembles battery packs to customers'
specifications. The Company's batteries supply portable power for tools,
instruments, medical equipment, communications equipment, photography, radios
and remote control airplanes, video recorders, lighting and toys. The Company's
batteries supply standby power for electronic equipment, computer memories,
emergency lighting, fire and burglar alarms, electronic cash registers, logic
systems, medical instruments and communications systems.
Sales under industrial and distribution programs accounted for
substantially all of the Company's total revenues during the Company's past
three fiscal years and no one customer accounted for 10% or more of the
Company's total revenues during these years. At July 31, 1999 and 1998, the
Company had no significant backlog.
Competition
- -----------
There are numerous companies producing and marketing batteries which
compete with those sold by the Company, including larger companies, battery
manufacturers and companies with a wider range of products and greater financial
and technical resources than the Company. It should be noted that the Company's
products and proposed products are technological in nature and that modern
technology often progresses rapidly. Accordingly, the Company's present and
proposed products are subject to the risk of obsolescence because of
technological innovation by competitors.
Employees
- ---------
At July 31, 1999, the Company leases from a non-affiliated party its
staff which includes 27 persons. Such staff includes nine salespersons
(including two executive officers), five clericals, two warehouse and shipping
personnel and eleven factory workers. For a fee which is paid by the Company,
the leasing company provides the payroll, including, workmen's compensation,
401(k) plan and health insurance. The Company's agreement with the leasing
company can be terminated on short notice at any time by the Company.
2
Item 2. Properties
- ------- ----------
The Company's principal executive office, sales, distribution and
assembly facility is located at 301 Central Park Drive, Sanford, Florida 32771.
These facilities, which consist of approximately 8,000 square feet of space, are
leased from RKW Holdings Ltd., a Florida Limited Partnership, controlled by
Wayne Thaw, an executive officer and director of the Company. The Florida lease
provides for a term of ten years with a current monthly rent of $6,173
(including sales taxes) with annual increases of five percent over the preceding
year's base rent. The Company's current base monthly rent is $5,769. The Company
is also responsible for the payment of all insurance, property, and other taxes
related to the leased facilities. Property taxes estimated at $660 per month,
inclusive of sales taxes, are accrued on a monthly basis.
The Company also leases a sales, distribution and assembly facility at
17779 Main Street, Irvine, California 92614. These facilities consist of 1,620
square feet of space. The California lease expires on June 14, 2000. The Company
pays a base rent of approximately $1,588 per month, which increased from $1,377
on June 15, 1999. The Company owns production equipment consisting primarily of
welding, soldering, testing, pneumatic and material handling equipment, and
inspection equipment which has been sufficient for its needs to date.
Item 3. Legal Proceedings
- ------- -----------------
There are no material legal proceedings to which the Company is a
party.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------- ----------------------------------------------------
No matters were submitted to a vote of security holders during the
fourth quarter of fiscal 1999.
3
PART II
Item 5. Market for Registrant's Securities and Related Stockholder Matters.
- ------- -------------------------------------------------------------------
(a) Principal Market and Stock Prices.
----------------------------------
The Company's Common Stock may be quoted in the over-the-counter
market. The high and low sales prices for fiscal 1999 and 1998 of the Common
Stock are shown below for the Company's last two fiscal years ended July 31,
1999.
High Low
---- ---
Fiscal 1999
- -----------
First Quarter $6.75 $5.38
Second Quarter 6.63 6.00
Third Quarter 6.13 5.13
Fourth Quarter 7.50 4.50
Fiscal 1998
- -----------
First Quarter $4.00 $3.38
Second Quarter 3.50 2.88
Third Quarter 3.88 2.88
Fourth Quarter 6.00 3.75
The foregoing quotations represent approximately inter-dealers prices,
without retail markup, markdown or commission and do not represent actual
transactions. Such quotations should not be viewed as necessarily indicative of
the price that could have been obtained on that date for a substantial number of
securities due to the limited market and trading volume for the Company's
securities.
The approximate number of holders of record of the Company's Common
Stock, as of September 15, 1999 was 924 as supplied by the Company's transfer
agent, American Stock Transfer Company, 40 Wall Street, New York, NY 10005.
No cash dividends have been paid by the Company on its Common Stock and
no such payment is anticipated in the foreseeable future.
4
Item 6. SELECTED FINANCIAL DATA
The following selected financial data has been derived from the Company's
financial statements which have been examined by independent certified public
accountants. Such financial statements should be read in conjunction with the
following financial data.
Statement of Operations Summary:
- --------------------------------
===================================================================================================================================
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
------------- ------------- ------------- ------------- -------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net sales $6,126,132 $5,719,806 $4,239,423 $3,792,537 $3,710,805
- -----------------------------------------------------------------------------------------------------------------------------------
Net income 321,192 295,012 88,701 135,398 437,982(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Net income per
share 1.23 1.13 .34 .52 1.67
- -----------------------------------------------------------------------------------------------------------------------------------
Cash dividends -0- -0- -0- -0- -0-
===================================================================================================================================
Balance Sheet Data:
- -------------------
===================================================================================================================================
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
------------- ------------- ------------- ------------- -------------
- -----------------------------------------------------------------------------------------------------------------------------------
Working capital $2,430,337 $2,021,076 $1,677,501 $1,569,635 $1,456,548
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets 3,034,415 2,488,793 2,265,123 1,997,399 2,022,611
- -----------------------------------------------------------------------------------------------------------------------------------
Long-term debt
(including capital
leases) 5,390 17,639 -0- -0- -0-
- -----------------------------------------------------------------------------------------------------------------------------------
Total Shareholders'
equity 2,586,716 2,271,643 1,976,751 1,889,814 1,754,416
===================================================================================================================================
(1) Includes a credit for income taxes of $239,000.
5
Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations.
-----------------------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
Working capital amounted to $2,430,337 at July 31, 1999 as compared to
$2,021,076 at July 31, 1998. Cash and short-term investments amounted to
$1,075,161 at July 31, 1999 as compared to $764,864 at July 31, 1998. As more
fully described in the "Statements of Cash Flows" included in the Company's
financial statements elsewhere herein, net cash provided by (used in) operating
activities for the fiscal years ended July 31, 1999, July 31, 1998 and July 31,
1997 were $511,298, $152,675 and $(194,435), respectively.
During the last three years, the Company's net income contributed to
cash flows from operating activities. In 1999, net cash was provided from
operating activities. Sales of short-term investments and an increase in
accounts payable and accrued expenses contributed to such cash flow partially
offset by increases to accounts receivables and inventories. In 1998, net cash
was provided from operating activities partially offset by changes in operating
assets and liabilities including, without limitation, net purchases of
short-term investments and a decrease in accounts payable and accrued expenses.
In 1997 net cash was used in operating activities primarily as a result of
substantial increases in accounts receivable and inventories partially offset by
the Company's net income and increases in accounts payable and accrued expenses.
The substantial increase in inventory was primarily due to low inventory levels
at July 31, 1996 in anticipation of the Company's move to its new facilities in
Sanford, Florida in the summer of 1996. In 1999 and 1998, net cash was used in
investing activities to purchase property and equipment. During 1997, net cash
was provided by investing activities primarily as a result of net maturities in
short term investments partially offset by purchases of property and equipment.
During the past three years, the Company's liquidity needs have been
satisfied from internal sources including cash from operations and amounts
available from the Company's working capital. During fiscal 2000, Management
expects this trend to continue. There are no material commitments for capital
expenditures or any long-term credit arrangements as of July 31, 1999.
Results of Operations
- ---------------------
Sales for 1999 increased by $406,326 or approximately 7% as compared to
fiscal 1998. Sales for 1998 increased by $1,480,383 or approximately 35% as
compared to fiscal 1997. The sales increases were due to increased demand for
the Company's products from the Company's existing client base and from new
customers including customers derived from the Company's expansion of its
operations into California. During the past three years, no customer accounted
for more than 10% of revenues. The Company's gross margin fluctuated slightly
over the past three years primarily due to changes in product mix and a
concerted effort by management to increase and maintain overall targeted profit
margins.
6
Operating (selling, general and administrative) expenses increased
slightly during the past three years substantially due to increases in rent,
insurance, administrative salaries and depreciation resulting from increased
sales activity over this period. Operating expenses when expressed as a
percentage of net sales were 19.0%, 19.5% and 23.0% for fiscal 1999, fiscal 1998
and fiscal 1997, respectively. During the past three years, the Company did not
charge its operations with any research and development costs.
Net income for fiscal 1999 was $321,192 as compared to $295,012 for
fiscal 1998 as compared to $88,701 for fiscal 1997. Net income per share for
fiscal 1999, fiscal 1998 and 1997 were $1.23, $1.13 and $.34, respectively.
Management of TNR Technical, Inc. has received a number of comments
from its odd lot stockholders regarding the costs associated with any sale of
their odd lots. Further, management would like to reduce TNR's expense of
maintaining mailings to odd lot holders. Accordingly, TNR will from time-to-time
privately purchase from odd lot holders of its common stock, such odd lots (i.e.
99 shares or less) from its stockholders of record on December 15, 1995 so long
as such purchases would not have the effect of reducing TNR's record holders to
500 or less. The purchase price to be paid will be based upon the closing asked
price on the NASD electronic bulletin board of TNR's Common Stock for the
preceding trading day. Stockholders will not be permitted to breakup their
stockholdings into odd lots and stockholders or their legal representatives must
affirm to TNR that the odd lot shares submitted for payment represent the
stockholder's entire holdings and that such holdings do not exceed 99 shares.
(This offer shall be open to all odd lot beneficial holders even those held in
street or nominee name so long as the proper representations can be obtained
satisfactory to TNR that the shares are odd lot shares, were owned by the
beneficial stockholder as of December 15, 1995 and represent such stockholder's
entire holdings of TNR). This offer will not be valid in those states or
jurisdictions where such offer or sale would be unlawful.
Year 2000 Issue
- ---------------
Many existing computer programs use only two digits to identify a year
in the date field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not corrected,
many computer applications could fail or create erroneous results by or at the
year 2000. The Company has purchased new computers which are year 2000 compliant
and has upgraded its remaining equipment to correct the problem at a cost of
approximately $20,000. The Company's operations may be impacted by the year 2000
issue to the extent that its customers and/or suppliers are effected thereby.
Item 8. Financial Statements and Supplementary Data.
- ------- --------------------------------------------
The information required by Item 8, and an index thereto, appears at
pages F-1 through F-12 (inclusive) of this Report, which pages follow Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. None.
---------------------
7
TNR TECHNICAL, INC.
Index to Financial Statements
Independent Auditors' Report...............................................F-1
Financial Statements:
Balance Sheets - July 31, 1999 and 1998.................................F-2
Statements of Operations - Three years ended July 31, 1999..............F-4
Statements of Shareholders' Equity - Three years ended July 31, 1999....F-5
Statements of Cash Flows - Three years ended July 31, 1999..............F-8
Notes to Financial Statements
Independent Auditors' Report
----------------------------
The Shareholders and Board of Directors
TNR Technical, Inc.:
We have audited the accompanying balance sheets of TNR Technical, Inc. as of
July 31, 1999 and 1998, and the related statements of operations, shareholders'
equity and cash flows for the three years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of TNR Technical, Inc. as of July
31, 1999 and 1998 and the results of its operations and its cash flows for the
three years then ended in conformity with generally accepted accounting
principles.
September 10, 1999
Maitland, Florida
F-1
TNR TECHNICAL, INC.
Balance Sheets
July 31, 1999 and 1998
Assets
------
1999 1998
----------- ---------
Current assets:
Cash and cash equivalents $ 1,075,161 597,683
Short-term investments (note 2) - 167,181
Accounts receivable - trade, less allowance for doubtful
accounts of $34,529 in 1999 and $19,300 in 1998 693,032 599,504
Inventories (note 3) 1,062,043 814,605
Prepaid expenses and other current assets 7,410 18,614
Deferred income taxes (note 7) 35,000 23,000
----------- ---------
Total current assets 2,872,646 2,220,587
Deferred income taxes (note 7) - 69,000
Property and equipment, at cost, net of accumulated
depreciation and amortization (notes 4 and 5) 148,157 185,361
Other assets:
Deposits 13,612 13,845
----------- ---------
$ 3,034,415 2,488,793
=========== =========
See accompanying notes to financial statements.
F-2
TNR TECHNICAL, INC.
Balance Sheets
July 31, 1999 and 1998
Liabilities and Shareholders' Equity
------------------------------------
1999 1998
----------- ---------
Current liabilities:
Accounts payable $ 211,346 88,964
Accrued expenses 108,714 75,220
Income taxes payable 110,000 23,989
Current installments of note payable (note 5) 12,249 11,338
----------- ---------
Total current liabilities 442,309 199,511
----------- ---------
Note payable, excluding current installments (note 5) 5,390 17,639
----------- ---------
Total liabilities 447,699 217,150
----------- ---------
Commitment (note 8)
Shareholders' equity:
Common stock - $02. par value, authorized 500,000
shares; issued and outstanding 301,581 shares (note 6) 6,032 6,032
Additional paid in capital 2,640,001 2,640,001
Retained earnings 142,956 (178,236)
----------- ---------
2,788,989 2,467,797
Less cost of treasury stock - 40,663 and 39,630
shares in 1999 and 1998, respectively (202,273) (196,154)
----------- ---------
Total shareholders' equity 2,586,716 2,271,643
----------- ---------
$ 3,034,415 2,488,793
=========== =========
See accompanying notes to financial statements.
F-3
TNR TECHNICAL, INC.
Statements of Operations
Years ended July 31, 1999 and 1998 and 1997
1999 1998 1997
----------- ------------ ---------
Revenues:
Net sales (note 9) $ 6,126,132 5,719,806 4,239,423
----------- --------- ---------
Cost and expenses:
Cost of goods sold 4,473,826 4,213,673 3,170,948
Selling, general and administrative (note 10) 1,164,100 1,114,194 975,757
----------- --------- ---------
5,637,926 5,327,867 4,146,705
----------- --------- ---------
Operating income 488,206 391,939 92,718
Non-operating revenue (expense):
Interest income 33,609 22,763 35,110
----------- --------- ---------
Income before income taxes 521,815 414,702 127,828
Income tax expense (note 7) 200,623 119,690 39,127
----------- --------- ---------
Net income $ 321,192 295,012 88,701
=========== ========= =========
Net income per share $ 1.23 1.13 0.34
=========== ========= =========
Weighted average number of shares 261,480 261,973 262,203
=========== ========= =========
See accompanying notes to financial statements
F-4
TNR TECHNICAL, INC.
Statements of Shareholders' Equity
Years ended July 31, 1999, 1998 and 1997
Additional
Common Stock Paid-in Retained Treasury
Shares Amount Capital Earnings Stock
----------------- ----------------- ---------------- ----------------- -----------------
Balances, July 31, 1996 301,581 $ 6,032 2,640,001 (561,949) (194,270)
Net income 88,701
Purchase of Company
stock - - - - (1,764)
---------- -------- ---------- -------- ---------
Balances, July 31, 1997 301,581 6,032 2,640,001 (473,248) (196,034)
Net income - - - 295,012 -
Purchase of Company
stock - - - - (120)
---------- -------- ---------- -------- ---------
Balances, July 31, 1998 301,581 6,032 2,640,001 (178,236) (196,154)
Net income - - - 321,192 -
Purchase of Company
stock - - - - (6,119)
---------- -------- ---------- -------- ---------
Balances, July 31, 1999 301,581 $ 6,032 2,640,001 142,956 (202,273)
========== ======== ========== ======== =========
See accompanying notes to financial statements.
F-5
TNR TECHNICAL, INC.
Statements of Cash Flows
Years ended July 31, 1999, 1998 and 1997
1999 1998 1997
------ ------- ------
Cash flows from operating activities:
Net income $ 321,192 295,012 88,701
Adjustments to reconcile net income to net cash
provided by operations:
Deferred income taxes 57,000 87,000 31,000
Depreciation and amortization 53,567 49,780 36,875
Unrealized gain on short term investments - (860) (3,037)
Provision for doubtful accounts 18,400 8,400 8,400
Changes in operating assets and liabilities:
Purchases of short term investments - (251,667) (24,995)
Sales of short term investments 167,181 113,378 -
Accounts receivables (111,928) (32,965) (141,158)
Inventories (247,438) (32,216) (341,803)
Prepaid expenses and other assets 11,204 15,103 (28,519)
Accounts payable and accrued expenses 155,876 (124,188) 180,787
Deposits 233 549 (1,011)
Income taxes receivable/payable 86,011 25,349 325
--------- -------- ---------
Net cash provided by (used in) operating activities 511,298 152,675 (194,435)
--------- -------- ---------
Cash flows from investing activities:
Purchase of short-term investments - - (1,010,853)
Maturities of short-term investments - - 1,359,103
Purchase of property and equipment (16,363) (112,285) (49,935)
--------- -------- ---------
Net cash provided by (used in) investing activities (16,363) (112,285) 298,315
--------- -------- ---------
See accompanying notes to financial statements
F-6
TNR TECHNICAL, INC.
Statements of Cash Flows
Years ended July 31, 1999, 1998 and 1997
1999 1998 1997
--------- -------- -------
Cash flows from financing activities:
Purchase of treasury stock $ (6,119) (120) (1,764)
Proceeds from issuance of note payable - 35,198 -
Principal payments on note payable (11,338) (6,221) -
---------- ------- --------
Net cash provided by (used in)
financing activities (17,457) 28,857 (1,764)
---------- ------- --------
Increase in cash and cash equivalents 477,478 69,247 102,116
Cash and cash equivalents - beginning of year 597,683 528,436 426,320
---------- ------- --------
Cash and cash equivalents - end of year $1,075,161 597,683 528,436
========== ======= ========
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ 1,849 1,914 -
========== ======= ========
Cash paid during the year for income taxes $ 57,612 7,341 7,803
========== ======= ========
See accompanying notes to financial statements
F-7
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(1) Summary of Significant Policies
-------------------------------
(a) Nature of Operations
--------------------
TNR Technical, Inc. (TNR or the Company) designs, assembles and
markets batteries and multi-cell battery packs to a wide variety of
industrial markets. The Company is a distributor for a number of
major U.S. battery manufacturers and markets its products nationally.
(b) Inventories
-----------
Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method.
(c) Property and Equipment
----------------------
Property and equipment are recorded at cost. The Company provides
depreciation for machinery and equipment using the straight-line
method over the estimated useful lives of the respective assets,
which range from five to ten years. Amortization of leasehold
improvements is computed using the straight-line method over the
lesser of the lease term or estimated useful lives of the
improvements.
(d) Research and Development Costs
------------------------------
Research and development costs are charged against income in the year
incurred.
(e) Revenue Recognition
-------------------
The Company recognizes revenue upon shipment of its product from its
warehouse facilities.
(f) Advertising Costs
-----------------
Advertising expenditures relating to product distribution and
marketing efforts consisting primarily of product presentation
material, catalog preparation, printing and postage expenses are
amortized over the period during which the benefits are expected.
(Continued)
F-8
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(1) Summary of Significant Policies - Continued
-------------------------------------------
(g) Use of Estimates
----------------
Management of the Company has made certain estimates and assumptions
relating to the reporting of assets and liabilities and disclosure of
contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
(h) Financial Instruments Fair Value, Concentration of Business and
Credit Risks
----------------------------------------------------------------
The carrying amount reported in the balance sheet for cash,
short-term investments, accounts receivable, accounts payable and
accrued expenses approximates fair value because of the immediate or
short-term maturity of these financial instruments. The carrying
amount reported in the accompanying balance sheet for note payable
approximates fair value because the actual interest rate does not
significantly differ from current rates offered for instruments with
similar characteristics. Financial instruments, which potentially
subject the Company to concentrations of credit risk, consist
principally of trade accounts receivable which amount to
approximately $700,000 and money market funds amounting to
approximately $948,000. The Company performs periodic credit
evaluations of its trade customers and generally does not require
collateral. The Company maintains its cash balances at certain
financial institutions in which balances are insured by the Federal
Deposit Insurance Corporation up to $100,000. The Company's uninsured
balances amount to approximately $850,000 and $400,000 at July 31,
1999 and 1998, respectively.
(i) Stock-Based Compensation
------------------------
In October 1995, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123) which sets forth accounting and
disclosure requirements for stock-based compensation arrangements.
The new statement encourages but does not require, companies to
measure stock-based compensation using a fair value method, rather
than the intrinsic value method prescribed by Accounting Principles
Board Opinion No. 25 ("APB no. 25".) The Company has adopted
disclosure requirements of SFAS 123 and has elected to continue to
record stock-based compensation expense using the intrinsic value
approach prescribed by APB
(Continued)
F-9
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(1) Summary of Significant Policies - Continued
-------------------------------------------
(i) Stock-Based Compensation - Continued
------------------------------------
No. 25. Accordingly, the Company computes compensation cost for each
employee stock option granted as the amount by which the quoted
market price of the Company's common stock on the date of grant
exceeds the amount the employee must pay to acquire the stock. The
amount of compensation cost, if any, will be charged to operations
over the vesting period.
(j) Income Taxes
------------
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
In the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(k) Cash Flows
----------
For purposes of cash flows, the Company considers all highly liquid
investments with an initial maturity of three months or less to be
cash equivalents.
(l) Earnings Per Common Share
-------------------------
Earnings per common share have been computed based upon the weighted
average number of common shares outstanding during the years
presented. Common stock equivalents resulting from the issuance of
the stock options have not been included in the per share
calculations because such inclusion would not have a material effort
on earnings per common share.
(m) Reclassifications
-----------------
Certain amounts from 1998 and 1997 have been reclassified to conform
with the 1999 presentation.
F-10
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(2) Short-Term Investments
----------------------
Short-term investments are classified as trading securities and are
presented below:
1999 1998
---- ----
Common Stock $ - 57,250
Equity (Unit Investment) Trusts - 109,931
-------- -------
$ - 167,181
======== =======
The Company's trading securities are normally carried at fair value,
which was not materially different than cost at July 31, 1998. Net
realized and unrealized gains and losses on trading securities are
included in net income.
(3) Inventories
-----------
Inventories consist of the following:
1999 1998
---- ----
Finished goods $ 1,031,244 790,982
Work-in-process 30,799 23,623
----------- -------
$ 1,062,043 814,605
=========== =======
(4) Property and Equipment
----------------------
Property and equipment consists of the following:
1999 1998
---- ----
Machinery and equipment $ 282,905 266,542
Leasehold improvements 27,457 27,457
--------- -------
310,362 293,999
Less accumulated depreciation and
amortization 162,205 108,638
--------- -------
$ 148,157 $185,361
========= ========
F-11
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(5) Note Payable
------------
Note payable consists of an obligation payable in monthly installments of
$1,099 including interest at 7.75% expiring December 2000. The note is
secured by vehicles. Total annual principal payments on this obligation
as of July 31, 1999 are as follows:
Year Ending July 31,
--------------------
2000 $ 12,249
2001 5,390
--------
$ 17,639
========
(6) Stock Option Plans
------------------
In November 1992, the Board of Directors approved an Incentive and
Non-Qualified Stock Option Plan (Plan), which was ratified by the
stockholders in January 1993. The Plan covers 60,000 shares of Common
Stock, subject to adjustment of shares under the anti-dilution provisions
of the Plan. The Plan authorizes the issuance of the options covered
thereby as either "Incentive Stock Options" within the meaning of the
Internal Revenue Code of 1986, as amended, or as "Non-Statutory Stock
Options." No options may be granted after November 16, 2002. Under the
Plan the aggregate fair market value (determined at the time the option
is granted) of the optioned stock for which Incentive Stock Options are
exercisable for the first time by any employee during any calendar year
shall not exceed $100,000.
In December 1996, the Company granted options to purchase 30,000 shares
of stock at an exercise price of $3.25 per share to three to its officers
and directors. The options are exercisable for a ten-year period expiring
in December 2006. In December 1998, the Company granted additional stock
options to purchase 7,000 shares at an exercise price of $5.00 per share
to three of its directors. The options are exercisable through December
2008.
The 1998 Incentive and Non-Qualified Stock Option Plan, (the "1998
Plan"), was approved by the Board of Directors effective December 15,
1998 subject to stockholder approval within 12 months. The 1998 Plan
covers 30,000 shares of Common Stock, subject to adjustment of shares
under the anti-dilution provisions of the 1998 Plan. The 1998 Plan
authorizes the issuance of the options covered thereby as either
"Incentive Stock Options" within the meaning of the Internal Revenue Code
of 1986, as amended, or as "Non-Statutory Stock Options." Persons
eligible to
(Continued)
F-12
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(6) Stock Option Plan - Continued
-----------------------------
receive options under the 1998 Plan includes employees, directors,
officers, consultants or advisors, provided that bona fide services shall
be rendered by consultants or advisors and such services must not be in
connection with the offer or sale of securities in a capital raising
transaction; however, only employees (who may also be officers and/or
directors) are eligible to receive an Incentive Stock Option. The 1998
Plan also provides that no options may be granted after December 15,
2008. Except for the foregoing, the 1998 Plan is identical to the 1992
Plan. As of July 31, 1999, no options have been granted under the 1998
Plan.
The Company continues to account for stock-based compensation using the
intrinsic value method prescribed by Accounting Principles Board Opinion
No. 25 under which no compensation cost for stock options is recognized
for stock option awards granted at or above fair market value.
Had compensation expense been determined based upon fair values at the
grant date for the award of options as described herein in accordance
with SFAS No. 123, "Accounting for Stock-Based Compensation," the
Company's net earnings and earnings per share would not be materially
changed from the amounts as reported in the accompanying financial
statements.
Accordingly, management has not presented the pro forma effects of the
application of SFAS No. 123 herein with respect to net earnings and
earnings per share for the years ended July 31, 1999, 1998 and 1997.
(7) Income Taxes
------------
The income tax provision for the years ended July 31, 1999, 1998 and 1997
consists of the following:
1999 1998 1997
---- ---- ----
Current:
Federal $128,623 - -
State 15,000 20,000 7,000
-------- -------- -------
143,623 20,000 7,000
-------- -------- -------
Deferred:
Federal 51,000 98,500 31,000
State 6,000 1,190 1,127
-------- -------- -------
57,000 99,690 32,127
-------- -------- -------
Total $200,623 119,690 39,127
======== ======== =======
(Continued)
F-13
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(7) Income Taxes - Continued
------------------------
Income tax expense attributable to income before income tax differed from
the amount computed by applying the U.S. Federal income tax rate of 34%
to income from operations before income taxes as a result of the
following:
1999 1998 1997
---- ---- ----
Computed "expected" tax expense $ 178,000 140,000 43,500
Increase (reduction) in income tax expense
resulting from:
State income taxes, net of federal
income tax benefit 24,000 14,000 4,500
Adjustment to deferred tax assets to
reflect current effective tax rates (1,377) (34,310) (8,873)
-------- -------- -------
$ 200,623 119,690 39,127
========= ======= =======
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets at July 31, 1999 and 1998 are
presented below:
1999 1998
---- ----
Deferred tax assets:
Inventories, principally due to additional costs
inventoried for tax purposes $ 25,000 18,000
Accounts receivable, due to allowance for
uncollectible accounts 10,000 5,000
Net operating losses - 69,000
-------- ------
35,000 92,000
Less valuation allowance - -
-------- ------
Total $ 35,000 92,000
======== ======
(Continued)
F-14
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(7) Income Taxes - Continued
------------------------
Deferred taxes are presented in the accompanying balance sheets as:
1999 1998
---- ----
Current deferred tax assets $ 35,000 23,000
Noncurrent deferred tax assets - 69,000
-------- ------
$ 35,000 92,000
======== ======
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of
the deferred tax assets will be realized. Management considers the
projected future taxable income and tax planning strategies in making
this assessment. The Company believes that future earnings in addition to
the amount of the taxable differences which will reverse in future
periods, will be sufficient to offset recorded deferred tax assets and,
accordingly, a valuation allowance is not considered necessary at July
31, 1999 and 1998.
(8) Lease Commitment
----------------
Commencing in June 1996, the Company entered into an agreement to lease
its Florida office, warehouse and distribution facilities from a
partnership controlled by an executive officer, shareholder and director
of TNR. The lease agreement provides payment of real estate taxes and
insurance and extends for a term of ten years. Future minimum rental
payments associated with this lease are indicated below.
Year Ending July 31,
--------------------
2000 $ 69,804
2001 73,293
2002 76,598
2003 80,806
2004 85,960
Thereafter 165,643
--------
$552,104
========
(Continued)
F-15
TNR TECHNICAL, INC.
Notes to Financial Statements
July 31, 1999 and 1998
(8) Lease Commitment - Continued
----------------------------
Total lease and rental expense amounted to $95,953, $93,732 and $83,928
in 1999, 1998 and 1997, respectively. In 1999, 1998 and 1997 lease
expense associated with related parties amounted approximately to
$78,000, $78,000 and $64,000, respectively.
(9) Sales to Major Customers
------------------------
During the years ended July 31, 1999, 1998 and 1997 no customer accounted
for more than 10% of total revenues.
(10) Supplementary Information
-------------------------
1999 1998 1997
---- ---- ----
Advertising costs $54,390 64,654 53,103
Provision for doubtful accounts $18,400 8,400 8,400
The provision for doubtful accounts and advertising costs are included in
selling, general and administrative costs in the accompanying statements
of operations.
F-16
PART III
Item 10. Directors and Executive Officers of the Registrant.
- -------- ---------------------------------------------------
The names, ages and principal occupations of the Company's present
directors, and the date on which their term of office commenced and expires, are
listed below.
Term First
of Became Principal
Name Age Office Director Occupation
- ---- --- ------ -------- ----------
Jerrold Lazarus 67 (1) 1987 Chairman of the
Board and Chief
Executive Officer
Norman L. Thaw 66 (1) 1979 President of
Stride Rite
Stables, Inc.,
Private Investor
Wayne Thaw 42 (1) 1983 President and
Chief Operating
Officer
Kathie Thaw 44 (1) 1996 Vice-President
Mitchell Thaw 43 (1) 1998 Director of
Institutional Options-
Schroder & Co., Inc.
Patrick Hoscoe 36 (1) 1998 Vice President and
Operations Manager
of the Company's West
Coast Division
- ----------------
(1) Directors are elected at the annual meeting of stockholders and hold
office to the following annual meeting.
Jerrold Lazarus is Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, Secretary and Treasurer of the Company. Wayne Thaw is
President and Chief Operating Officer of the Company. Kathie Thaw and Patrick
Hoscoe each serve as a Vice President of the Company. The terms of all officers
expire at the annual meeting of directors following the annual stockholders
meeting. Officers may be removed, either with or without cause, by the Board of
Directors, and a successor elected by a majority vote of the Board of Directors,
at any time.
8
Jerrold Lazarus has been a full time employee of the Company since
October 1987 and has served as an Executive Officer of the Company since 1987.
Norman L. Thaw is one of the founders of the Company and served as
its Chairman and Chief Executive Officer between March 1987 and April 1988. For
more than the past five years, Mr. Thaw's principal occupation is the President
of Stride Rite Stables, Inc., a thoroughbred racing and breeding farm in South
Florida.
Wayne Thaw has been a full time employee of the Company since 1980
and has served as an Executive Officer of the Company since 1981.
Kathie Thaw has been Vice-President and a director of the Company
since December 1996. Kathie Thaw has been associated with the Company for the
past five years as a consultant to the President.
Mitchell Thaw has been director of the Company since December 1998.
Since April 1999, Mr. Thaw has served as a Director of Institutional Options at
Schroder & Co., Inc. From 1988 through April 1998, Mr. Thaw was an executive for
UBS Securities. Between April 1998 and March 1999, Mr. Thaw was not associated
with any firms and was temporarily retired.
Patrick Hoscoe has been Vice President and a director of the Company
since 1998. Mr. Hoscoe also serves as Operations Manager of the Company's West
Coast operations. Mr. Hoscoe has 18 years experience in the battery industry and
worked for House of Batteries for the past five years prior to joining the
Company in 1997.
Family Relationships
- --------------------
Norman L. Thaw is the father of Wayne Thaw and Mitchell Thaw. Wayne
Thaw and Kathie Thaw are married.
9
Item 11. Compensation of Directors and Executive Officers.
The following table provides a summary compensation table with respect
to the compensation of the Company's two executive officers for the past three
fiscal years. During the past three fiscal years, the Company has not granted
restricted stock awards or stock appreciation rights. In addition, the Company
does not have a defined benefit or actuarial plan.
SUMMARY COMPENSATION TABLE
====================================================================================================================================
Long Term Compensation
--------------------------------------------
Annual Compensation Awards Payouts
- --------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name Annual Restricted Other
and Compen- Stock Number LTIP Compen-
Principal sation Award(s) of Payouts sation
Position Year Salary ($) Bonus ($) ($)(1) ($) Options ($) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Jerrold Lazarus 1999 75,400 18,000 0 0 2,000 0 0
-----------------------------------------------------------------------------------------------------------
CEO, Chairman of the 1998 75,690 7,200 0 0 0 0 0
Board -----------------------------------------------------------------------------------------------------------
1997 67,901 1,000 0 0 10,000 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Wayne Thaw, 1999 107,042 17,000 0 0 3,000 0 0
President -----------------------------------------------------------------------------------------------------------
1998 104,500 9,503 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------
1997 105,751 1,250 0 0 10,000 0 0
====================================================================================================================================
- ----------
(1) Does not include the value of a leased or company owned automobile
provided to each officer for business purposes.
10
The Company has no employment contracts with its executive officers.
Jerrold Lazarus and Wayne Thaw are currently receiving a monthly salary of
$6,283 and $9,100, respectively. Directors do not presently receive compensation
for serving on the Board or on its committees. Depending on the number of
meetings and the time required for the Company's operations, the Company may
decide to compensate its directors in the future.
The Company provides each of its two above named executive officers
with an automobile. The Company has no annuity, pension, or retirement benefits
for its employees. The Company has not afforded any of its officers or directors
any other personal benefits, the value of which exceeds 10% of his cash
compensation, which is not directly related to job performance or provided
generally to all salaried employees.
Stock Option Plans
- ------------------
The 1992 Plan
-------------
The 1992 Incentive and Non-Qualified Stock Option Plan, (the "1992
Plan"), was approved by the Board of Directors on November 17, 1992 and ratified
by stockholders on January 29, 1993. The 1992 Plan covers 60,000 shares of
Common Stock, subject to adjustment of shares under the anti-dilution provisions
of the 1992 Plan. The 1992 Plan authorizes the issuance of the options covered
thereby as either "Incentive Stock Options" within the meaning of the Internal
Revenue Code of 1986, as amended, or as "Non-Statutory Stock Options." Persons
eligible to receive options under the 1992 Plan includes employees, directors,
officers, consultants or advisors, provided that bona fide services shall be
rendered by consultants or advisors and such services must not be in connection
with the offer or sale of securities in a capital raising transaction; however,
only employees (who may also be officers and/or directors) are eligible to
receive an Incentive Stock Option. The 1992 Plan also provides that no options
may be granted after November 16, 2002. In December 1996, the Company has
granted ten year non-statutory options to purchase 30,000 shares at an exercise
price of $3.25 per share to Wayne Thaw (10,000 shares), Jerrold Lazarus (10,000
shares) and Kathie Thaw (10,000 shares). In December 1998, the Company granted
ten year non-statutory stock options to purchase 7,000 shares at an exercise
price of $5.00 per share to Jerrold Lazarus (2,000 shares), Wayne Thaw (3,000
shares) and Patrick Hoscoe (2,000 shares).
The 1992 Plan is administered by the Company's Board of Directors or a
stock option committee consisting of three members of the Board which has the
authority to determine the persons to whom options shall be granted, whether any
particular option shall be an Incentive Option or a Non-Statutory Option, the
number of shares to be covered by each option, the time or times at which
options will be granted or may be exercised and the other terms and provisions
of the Options.
Under the 1992 Plan, the aggregate fair market value (determined at the
time the option is granted) of the optioned stock for which Incentive Stock
Options are exercisable for the first time by any employee during any calendar
year (under all such Plans of the individual's Employer Corporation and its
parent and subsidiary corporation) shall not exceed $100,000.
11
The 1992 Plan also provides that the Board of directors shall determine
the exercise price of the Common Stock under each option. The 1992 Plan also
provides that: (I) the exercise price of Incentive Stock Options granted
thereunder shall not be less than 100% (110% if the optionee owns 10% or more of
the outstanding voting securities of the Company) of the fair market value of
such shares on the date of grant, as determined by the Board or Committee, and
(ii) no option by its terms may be exercised more than ten years (five years in
the case of an Incentive Stock Option, where the optionee owns 10% or more of
the outstanding voting securities of the Company) after the date of grant. Any
options which are canceled or not exercised within the option period become
available for future grants. All Stock Options are non-transferable except by
will or the laws of descent and distribution.
The 1998 Plan
-------------
The 1998 Incentive and Non-Qualified Stock Option Plan, (the "1998
Plan"), was approved by the Board of Directors effective December 15, 1998
subject to stockholder approval within 12 months. The 1998 Plan covers 30,000
shares of Common Stock, subject to adjustment of shares under the anti-dilution
provisions of the 1998 Plan. The 1998 Plan authorizes the issuance of the
options covered thereby as either "Incentive Stock Options" within the meaning
of the Internal Revenue Code of 1986, as amended, or as "Non-Statutory Stock
Options." Persons eligible to receive options under the 1998 Plan includes
employees, directors, officers, consultants or advisors, provided that bona fide
services shall be rendered by consultants or advisors and such services must not
be in connection with the offer or sale of securities in a capital raising
transaction; however, only employees (who may also be officers and/or directors)
are eligible to receive an Incentive Stock Option. The 1998 Plan also provides
that no options may be granted after December 15, 2008. Except for the
foregoing, the 1998 Plan is identical to the 1992 Plan. As of September 30,
1999, no options have been granted under the 1998 Plan.
12
OPTION GRANTS TABLE
The information provided in the table below provides information with
respect to individual grants of stock options during fiscal 1999 of each of the
executive officers named in the summary compensation table above. The Company
did not grant any stock appreciation rights during 1999.
Option Grants in Last Fiscal Year
====================================================================================================================================
Potential
Realizable Value at
Assumed Annual
Individual Grants Rates of Stock Price
Appreciation
for Option Term (2)
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of
Total
Options/
Granted to
Options Employees Exercise Expira-
Granted in Fiscal Price tion
Name (#) Year (1) ($/Sh) Date 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Wayne Thaw 3,000 43% 5.00 12/15/08 9.433 23,910
- ------------------------------------------------------------------------------------------------------------------------------------
Jerrold Lazarus 2,000 29% 5.00 12/15/08 6.289 15,940
====================================================================================================================================
N/A - Not Applicable.
(1) The percentage of total options granted to employees in fiscal year is
based upon options granted to officers, directors and employees.
(2) The potential realizable value of each grant of options assumes that the
market price of the Company's Common Stock appreciates in value from the
date of grant to the end of the option term at annualized rates of 5% and
10%, respectively, and after subtracting the exercise price from the
potential realizable value.
13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
The information provided in the table below provides information with
respect to each exercise of stock option during fiscal 1999 by each of the
executive officers named in the summary compensation table and the fiscal year
end value of unexercised options.
================================================================================
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Shares Unexercised In-the-Money
Acquired Options at Options
on Value FY-End (#) at Fy-End($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($)(1) Unexercisable Unexercisable(1)
- --------------------------------------------------------------------------------
Wayne Thaw -0- -0- 13,000/0 0/0
- --------------------------------------------------------------------------------
Jerrold Lazarus -0- -0- 12,000/0 0/0
================================================================================
- --------------
(1) The aggregate dollar values in column (c) and (e) are calculated by
determining the difference between the fair market value of the Common
Stock underlying the options and the exercise price of the options at
exercise or fiscal year end, respectively. In calculating the dollar
value realized upon exercise, the value of any payment of the exercise
price is not included. Fiscal year end value based upon a market price of
$5.00 per share.
Report of the Board of Directors on Executive Compensation
- ----------------------------------------------------------
During fiscal 1999, the entire Board which consists of Norman Thaw,
Jerrold Lazarus, Wayne Thaw, Kathie Thaw , Mitchell Thaw and Patrick Hoscoe,
held primary responsibility for determining executive compensation levels. The
goals of the Company's compensation program is to align compensation with
business objectives and performance and to enable the Company to attract, retain
and reward executive officers and other key employees who contribute to the
long-term success of the Company. The Company has provided on a prospective
basis annual incentive opportunity to several of its key employees sufficient to
provide motivation to achieve specific operating goals. The foregoing report has
been approved by all members of the board of directors.
Jerrold Lazarus-Chairman
Norman Thaw
Wayne Thaw
Kathie Thaw
Mitchell Thaw
Patrick Hoscoe
14
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
During fiscal 1999, Jerrold Lazarus, Wayne Thaw, Kathie Thaw and
Patrick Hoscoe, executive officers of the Company, were involved in determining
executive officer compensation levels as members of the Board of Directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- -------- ---------------------------------------------------------------
As of September 30, 1999, the Company had outstanding approximately
261,000 shares of Common Stock. The only persons of record who presently hold or
are known to own (or believed by the Company to own) beneficially more than 5%
of the outstanding shares of such class of stock is listed below. The following
table also sets forth certain information as to holdings of the Company's Common
Stock of all officers and directors individually, and all officers and directors
as a group. (The shares shown in the table below for Norman Thaw and his sons,
Wayne Thaw and Mitchell Thaw are not beneficially owned by each other and are
listed separately).
================================================================================
Name and
Address of
Beneficial Number of Approximate
Title of Class Owner (1) Shares Percent
- --------------------------------------------------------------------------------
Common Stock Wayne Thaw (3)(8) 64,592 22.6
- --------------------------------------------------------------------------------
Common Stock Norman L. Thaw 55,228 21.1
(2)(8)
- --------------------------------------------------------------------------------
Common Stock Jerrold Lazarus (5) 12,691 3.9
- --------------------------------------------------------------------------------
Common Stock Kathie Thaw (4)(8) 10,000 3.7
- --------------------------------------------------------------------------------
Common Stock Patrick Hoscoe (6) 2,000 *
- --------------------------------------------------------------------------------
Common Stock Mitchell A. Thaw (8) 21,525 8.3
- --------------------------------------------------------------------------------
Common Stock All Directors and 166,036 55.5
Officers as a group
(six persons) (7)
================================================================================
- ---------------
* Owns less than 1% of the issued and outstanding shares of the Company's
Common Stock.
15
(1) All shares are directly owned, and the sole investment and voting power
is held, by the persons named. The address for all officers and directors
is 301 Central Park Drive, Sanford, Florida 32771.
(2) May be deemed to be a parent and/or founder of the Company under the
Securities Act of 1933, as amended and may be deemed to be a "control
person" of the Company within the meaning of the Securities Exchange Act
of 1934.
(3) Includes options to purchase 13,000 shares.
(4) Includes options to purchase 10,000 shares.
(5) Includes options to purchase 12,000 shares.
(6) Includes options to purchase 2,000 shares.
(7) Includes options to purchase 37,000 shares granted to officers and
directors.
(8) Wayne Thaw and Kathie Thaw are married and their individual stock
ownership is shown separately. Both Wayne Thaw and Kathie Thaw may be
deemed to also own the shares owned by the other person. Norman Thaw is
the father of Wayne Thaw and Mitchell A. Thaw.
The Company does not know of any arrangement or pledge of its securities
by persons now considered in control of the Company that might result in a
change of control of the Company.
Item 13. Certain Relationships and Related Transactions.
- -------- -----------------------------------------------
See Item 2 regarding the description of lease between the Company and a
RKW Holding Ltd. ("RKW"), a Florida Limited Partnership, controlled by Wayne
Thaw. In fiscal 1999, $71,133 was paid by the Company to RKW, which amount is
expected to increase by approximately 5% for fiscal 2000.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- -------- -----------------------------------------------------------------
(a)(1)(2) Financial Statements and Financial Statement Schedules.
-------------------------------------------------------
A list of the Financial Statements and Financial Statement
Schedules filed as a part of this Report is set forth in Item
8, and appears at Page F-1 of this Report, which list is
incorporated herein by reference.
16
(a)(3) Exhibits
--------
3 Certificate of Incorporation and Amendments thereto. (1)
3(A) By-Laws. (1)
3(B) February 1992 Certificate of Amendment to Certificate of
Incorporation (2)
10 Lease Agreement dated January 17, 1996 by and between RKW
Holding Ltd. and the Registrant (3)
11 Earnings per share. See Financial Statements
27 Selected Financial Data*
99 1998 Incentive and Non-Statutory Stock Option Plan*
- ----------
* Filed herewith
(1) Exhibits 3 and 3(A) are incorporated by reference from Registration No.
2-85110 which were filed in a Registration Statement on Form S-18.
(2) Incorporated by reference to Form 10-K for the fiscal year ended July 31,
1992.
(3) Incorporated by reference to Form 10-K for the fiscal year ended July 31,
1996.
(b) Reports on Form 8-K.
--------------------
No Reports on Form 8-K were filed or required to be filed
during the quarter ended July 31, 1999.
17
SIGNATURES
Pursuant to the requirements Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TNR TECHNICAL, INC.
By:/s/ Jerrold Lazarus
----------------------------------------
Jerrold Lazarus, Chief Executive Officer
Dated: Sanford, Florida
October 21, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signatures Title Date
- ---------- ----- ------
/s/ Norman L. Thaw Director October 21, 1999
- -------------------------
Norman L. Thaw
/s/ Wayne Thaw President, Chief October 21, 1999
- ------------------------- Operating
Wayne Thaw Officer and
Director
/s/ Jerrold Lazarus Chairman of the October 21, 1999
- ------------------------- Board, Chief
Jerrold Lazarus Executive Officer
Chief Financial
and Accounting
Officer, Treasurer
and Secretary
/s/ Kathie Thaw Vice President October 21, 1999
- ------------------------- and Director
Kathie Thaw
/s/ Mitchell Thaw Director October 21, 1999
- -------------------------
Mitchell Thaw
/s/ Patrick Hoscoe Vice President October 21, 1999
- ------------------------- and Director
Patrick Hoscoe
Norman Thaw, Kathie Thaw, Wayne Thaw, Mitchell Thaw, Patrick Hoscoe and Jerrold
Lazarus represent all the members of the Board of Directors.
18