What changed in this filing

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Item 1. Business

2023-07-27 compared with 2022-07-14 · 26 added, 28 removed, 220 unchanged (20% of the section changed)

20 unchanged sentences

Furthermore, the U.S.

Government is expected to contract options for additional GPS III satellites, and the Company is well positioned to compete for the onboard clock ensemble with its high-precision digital Rubidium atomic frequency standard.

Government is expected to contract options for additional GPS III satellites, and the Company believes it is well positioned to compete for the onboard clock ensemble with its high-precision digital Rubidium atomic frequency standard.

For the terrestrial secure command control and communications systems market, the Company’s products support multiple C4ISR and EW applications for the U.S.

9 unchanged sentences

(“FEI-Zyfer”).

Frequency Electronics has made a strategic decision to focus on satellite payloads, C4ISR and EW market segments, because these business areas represent significant opportunities for revenue growth.

Frequency Electronics has made a strategic decision to focus on satellite payloads, C4ISR and EW market segments, because the Company believes these business areas represent significant opportunities for revenue growth.

FEI-NY – U.S.

14 unchanged sentences

The Company’s relationship with Morion, which includes ownership of 4.6% of the outstanding shares of Morion’s common stock, permits the Company to secure a cost-effective source for high precision quartz resonators and crystal oscillators.

The Morion investment was accounted for under the cost method.

Until April 30, 2022, the Morion investment was accounted for under the cost method.

Due to the current Russian-Ukraine conflict and resulting sanctions, the future status of FEI’s equity investment in Morion is uncertain.

In response to these conditions, in connection with the preparation of the audited financial statements included in this annual report on Form 10-K, the Company impaired its investment in Morion in full.

In response to these conditions, in connection with the preparation of the audited financial statements included in the annual report on Form 10-K, for the fiscal year ended April 30, 2022, as amended (the “2022 Form 10-K”), the Company impaired its investment in Morion in full.

For more information regarding the Company’s investment in Morion, see Note 10 to the Consolidated Financial Statements.

16 unchanged sentences

(The sum of annual sales percentages exceeds 100% due to intersegment sales.)

Consolidated revenues include sales to end-users in countries located outside of the U.S., primarily in Europe and China.

Consolidated revenues include sales to end-users in countries located outside of the U.S., primarily in Europe and Asia.

During fiscal years 2023 and 2022, foreign sales comprised 3% and 2%, respectively, of consolidated revenues.

17 unchanged sentences

In the years ahead, the Company expects that the DOD will require more secure communication capabilities, more assets in space and greater bandwidth.

The Global Positioning Satellite System, the MILSTAR Satellite System and the AEHF Satellite System are examples of the programs in which the Company has participated or will participate - programs which management believes are important to the success of the U.S.

The Global Positioning Satellite System, the MILSTAR Satellite System and the AEHF Satellite System are examples of the programs in which the Company has participated or plans to participate - programs which management believes are important to the success of the U.S.

Government’s communication, intelligence and Precision Navigation and Timing (“PNT”) needs.

It is likely that the DOD will move to adopt smaller and less expensive satellites for LEO applications, necessitating adaptation of the Company’s products or development of new products to better suit this type of satellite architecture.

It is likely that the DOD will move to adopt smaller and less expensive satellites for Low Earth Orbit (“LEO”) applications, which the Company anticipates will necessitate the adaptation of the Company’s products or development of new products to better suit this type of satellite architecture.

The Company previously manufactured the master clock for the Trident missile, the basic timing system for the Voyager I and Voyager II deep space exploratory missions and the quartz timing system for the Space Shuttle.

12 unchanged sentences

Government programs for both space and non-space applications are generally made under fixed price or cost-plus contracts either directly with U.S.

Government agencies or indirectly through subcontracts intended for government end-use.

Government agencies or indirectly through subcontracts intended for U.S.

Government end-use.

For fixed-price contracts, the price paid to the Company is not subject to adjustment by reason of costs incurred by the Company in the performance of the contract, except for costs incurred due to contract changes ordered by the customer.

9 unchanged sentences

Government appropriations cycles and shifting priorities.

Government canceled or delayed, even temporarily, programs and/or purchases involving Company products, the Company’s business could suffer a material adverse effect.

Negotiations on U.S.

Government contracts are sometimes based in part on Certificates of Current Costs.

An inaccuracy in such certificates may entitle the government to an appropriate recovery.

An inaccuracy in such certificates may entitle the U.S.

Government to an appropriate recovery.

The Company’s accounts with respect to these contracts are subject to audit by the Defense Contract Audit Agency (“DCAA”).

6 unchanged sentences

In the event of a termination for convenience, the Company is entitled to receive compensation as provided under the specific terms of such contracts.

There were no end-use contracts terminated for the year ended April 30, 2022.

There were no end-use contracts terminated for the fiscal year ended April 30, 2023.

FEI-Zyfer Segment:

7 unchanged sentences

More than 86% of FEI-Zyfer’s revenues are derived from sales where the end user is the U.S.

As of April 30, 2022, the Company’s consolidated backlog amounted to approximately $40 million, the same as at the end of the prior fiscal year.

As of April 30, 2023, the Company’s consolidated backlog amounted to approximately $57 million compared to $40 million, at the end of the prior fiscal year.

Approximately 75% of the current backlog is expected to be filled during the Company’s fiscal year ending April 30, 2024.

13 unchanged sentences

Government end-use.

During fiscal year 2022, Northrop Grumman Company (“Northrop Grumman”), Lockheed Martin Corporation (“Lockheed Martin”) and BAE Systems each accounted for more than 10% of the Company’s consolidated revenues.

During fiscal year 2021, Northrop Grumman and Lockheed Martin each accounted for more than 10% of the Company’s consolidated revenues.

During fiscal year 2023, Lockheed Martin Corporation (“Lockheed Martin”), Northrop Grumman Company (“Northrop Grumman”), Office of Naval Research and BAE Systems each accounted for more than 10% of the Company’s consolidated revenues.

During fiscal year 2022, Northrop Grumman, Lockheed Martin, and BAE Systems each accounted for more than 10% of the Company’s consolidated revenues.

The loss by the Company of any one of these customers could have a material adverse effect on the Company’s business.

2 unchanged sentences

Government contracts;

however, the cancellation or significant reduction of the Company’s commercial or existing U.S.

Government contracts could also have a material adverse effect of the Company’s business.

The Company purchases a variety of electrical and other components and materials for use in the manufacture of its products.

4 unchanged sentences

FEI is dependent on a limited number of suppliers for space qualified parts.

If these suppliers were unable to deliver in reasonable time frames, then prompt qualification of alternate suppliers may not be feasible or cost effective.

If these suppliers were unable to deliver in reasonable time frames, then the prompt qualification of alternate suppliers may not be feasible or cost effective.

Consequently, the Company could experience delays in delivery of its end products or costs in excess of what was originally quoted.

2 unchanged sentences

The Company has focused its internal R&D efforts on improving the core physics and electronic performance in its time and frequency products, conducting research to develop new time and frequency technologies and capabilities, improving product manufacturability by seeking to reduce its production costs through product redesign and process improvements and other measures to take advantage of lower cost components.

The Company continues to focus a significant portion of its own resources and efforts on developing hardware for satellite (commercial and U.S.

The Company continues to focus a significant portion of its own resources and efforts on developing hardware for satellites (commercial and U.S.

Government) and terrestrial commercial communications systems, including wireless and GPS-related systems.

23 unchanged sentences

and Mercury Systems.

The Company has previously outsourced certain manufacturing processes to third parties and to Russia-based Morion, in which the Company is a minority shareholder.

The Company has previously outsourced certain manufacturing processes to third parties and to Russia-based Morion, in which the Company is a minority stockholder.

The Company believes its ability to obtain raw materials, manufacture finished products, integrate them into systems and sub-systems and interface these systems with highly sophisticated end-user applications provides a strong competitive edge.

1 unchanged sentence

The Company develops its workforce using a broad-based recruiting process to select talented individuals and by offering competitive compensation and benefits.

The Company currently employs approximately 197 employees, all based in the U.S.

The Company currently employs 196 employees (187 full-time and 9 part-time), all based in the U.S.

No employees are represented by labor unions.

11 unchanged sentences

Thomas McClelland

Interim President and Chief Executive Officer and Chief Scientist

President and Chief Executive Officer

Oleandro Mancini

Senior Vice President, Business Development

Adrian Lalicata

Vice President, RF & Microwave Systems

Chief Financial Officer and Secretary and Treasurer

5 unchanged sentences

On July 8, 2022, Dr.

McClelland was appointed the Company’s Interim President and Chief Executive Officer, in addition to his existing positions and responsibilities with the Company, following the resignation of Dr.

Sloane, the Company’s former President and Chief Executive Officer, on July 8, 2022.

McClelland was appointed the Company’s Interim President and Chief Executive Officer, in addition to his existing positions and responsibilities with the Company, following the resignation of the Company’s former President and Chief Executive Officer, on July 8, 2022.

On January 17, 2023, Dr.

McClelland was appointed the Company’s President and Chief Executive Officer.

Oleandro Mancini, age 74, joined the Company in August 2000 as Vice President, Business Development and was promoted to Senior Vice President in 2010.

3 unchanged sentences

From 1987 to 1995, he held the position of Vice President, Engineering at Cardion, Inc.

Adrian Lalicata, age 75, joined the Company in 2006 as Vice President, RF & Microwave Systems.

Prior to joining the Company, Mr.

Lalicata served as Vice President of Engineering at Herley-CTI and Communication Techniques, a Dover Company.

Lalicata has also served as Director of Engineering at Microphase Corp.

and Adcomm, Inc.

He also held leading engineering positions at Loral Electronic Systems, Cardion Electronics, and Airborne Instruments Laboratories.

Bernstein, age 58, joined the Company in April 2010 as its Controller and was appointed to the position of Chief Financial Officer in April 2016.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business