FREQUENCY ELECTRONICS INC 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures . We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance the information required to be disclosed by us in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. In connection with the filing of this Annual Report on Form 10-K, the Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on their evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of April 30, 2023, the Company’s disclosure controls and procedures were effective at a reasonable assurance level. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Remediation of Previously Reported Material Weaknesses Management assessed the effectiveness of the Company’s internal control over financial reporting as of April 30, 2022. Based on this evaluation, the Company’s management initially concluded and disclosed in the 2022 Form 10-K that the Company’s internal control over financial reporting was effective as of April 30, 2022. However, as previously disclosed in the 2022 Form 10-K, management conducted a re-assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2022. In conducting its re-assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2022, management concluded that the Company’s internal control over financial reporting was not effective as of April 30, 2022, because of certain previously unidentified material weaknesses in internal control over financial reporting related to the presentation of contract assets and contract liabilities on the consolidated balance sheet. The material weaknesses were largely due to the calculations, and errors related to the presentation of contract assets and contract liabilities. In response, the Company implemented the following remediation steps to address the material weaknesses: The Company used additional checks and balances surrounding the calculations and formulas used, as well as additional verification checks regarding the presentation of contract assets and contract liabilities to comply with current reporting requirements. As of April 30, 2023, the Company’s management believes the identified material weaknesses have been remediated. Management’s Report on Internal Control Over Financial Reporting The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company’s internal control over financial reporting as of April 30, 2023. In making this assessment, management used the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the Company’s management concluded that the Company’s internal control over financial reporting was effective as of April 30, 2023. 50 Table of Contents Financial Reporting This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding our internal control over financial reporting. Management’s report on internal control over financial reporting is not subject to attestation by our registered public accounting firm. Changes in Internal Control over Financial Reporting. Except as set forth above, there has been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended April 30, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 51 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required to be furnished pursuant to this item with respect to Directors of the Company, compliance with Section 16(a) of the Exchange Act, the Company’s code of ethics and certain corporate governance matters is incorporated herein by reference from the Company’s definitive proxy statement to be filed no later than 120 days after April 30, 2023, for the annual meeting of stockholders to be held on or about October 5, 2023 (the “2023 Proxy Statement”). See “Election of Directors,” “Delinquent Section 16(a) Reports,” “Corporate Governance Matters – Code of Ethics,” and “Certain Information as to Committees and Meetings of the Board” from the Company’s 2023 Proxy Statement. The information required to be furnished pursuant to this item with respect to Executive Officers is set forth, pursuant to General Instruction G(3) of Form 10-K, under Part I of this Annual Report on Form 10-K. Item 11. Executive Compensation This item is incorporated herein by reference from the Company’s 2023 Proxy Statement under “Election of Directors” and “Executive Compensation.” Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This item is incorporated herein by reference from the Company’s 2023 Proxy Statement under “Executive Compensation” and “Stock Ownership of Certain Beneficial Owners and Management.” EQUITY COMPENSATION PLAN INFORMATION Number of securities Number of securities to be issued upon exercise remaining available for of outstanding options, Weighted-average future issuance under warrants and rights exercise price of equity compensation plans and vesting of outstanding options, (excluding securities Plan Category RSU's and PSU's warrants and rights reflected in column (a)) (a) (b) (c) Equity Compensation Plans Approved by Security Holders (1) 537,021 $ 10.77 851,965 (1) The Company’s equity compensation plans are described in Note 11 to the Consolidated Financial Statements. Item 13. Certain Relationships and Related Transactions, and Director Independence This item is incorporated herein by reference from the Company’s 2023 Proxy Statement under “Election of Directors.” Item 14. Principal Accountant Fees and Services This item is incorporated herein by reference from the Company’s 2023 Proxy Statement under “Appointment of Independent Registered Public Accounting Firm” and “Report of the Audit Committee.” 52 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) Index to Financial Statements and Exhibits The financial statements and exhibits are listed below and are filed as part of this report. (1) FINANCIAL STATEMENTS Included in Part II of this report: Page(s) Report of Independent Registered Public Accounting Firm ( BDO USA, P.A. ; Melville, NY ; PCAOB ID# 243 ) 24-25 Consolidated Balance Sheets - April 30, 2023 and 2022 26 Consolidated Statements of Operations and Comprehensive Income (Loss) - Years ended April 30, 2023 and 2022 27 Consolidated Statements of Cash Flows - Years ended April 30, 2023 and 2022 28-29 Consolidated Statements of Changes in Stockholders’ Equity - Years ended April 30, 2023 and 2022 30 Notes to Consolidated Financial Statements 31-49 (2) EXHIBITS Exhibit No. in this Form 10-K Description of Exhibit NOTE 2.1 Stock Purchase Agreement, dated as of February 21, 2012, by and among the Registrant, Elcom Technologies Inc. and the stockholders of Elcom Technologies Inc. identified on the signature pages thereto (11) 3.1 Copy of Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware (1) 3.2 Amendment to Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on March 27, 1981 (2) 3.3 Amendment to Certificate of Incorporation of the Registrant filed with Secretary of State of Delaware on October 26, 1984 (5) 3.4 Amendment to Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on October 22, 1986 (7) 3.5 Amended and Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on October 26, 1987 (9) 3.6 Amended Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on November 2, 1989 (9) 3.7 Amended and Restated By-Laws of the Registrant, as amended (13) 4.1 Specimen of Common Stock certificate (1) 4.2 Description of Capital Stock (24) 53 Table of Contents Exhibit No. in this Form 10-K Description of Exhibit NOTE 10.1 Settlement Agreement dated as of September 13, 2016, by and among Registrant, Privet Fund LP, Privet Fund Management LLC, Ryan J. Levenson and General Lance W. Lord (14) 10.2* Frequency Electronics, Inc. 2005 Stock Plan (16) 10.3 Lease Agreement between Registrant and Reckson Operating Partnership, L.P. dated January 6, 1998 (15) 10.4 First Amendment to Lease Amendment between Registrant and RA 55 CLB LLC (as successor-in-interest to Reckson Operating Partnership, L.P.) dated July 25, 2018 (17) 10.5* Registrant’s Cash or Deferral Profit Sharing Plan and Trust under Internal Revenue Code Section 401, dated April 1, 1985 (6) 10.6 Amendment dated Jan. 1, 1988 to Registrant’s Cash or Deferred Profit Sharing Plan and Trust under Section 401 of Internal Revenue Code (8) 10.7* Form of Deferred Compensation Agreement (18) 10.8* Form of Stock Appreciation Rights Agreement (19) 10.9* Employment Agreement effective as of May 1, 2018, between Stanton Sloane and the Registrant (21) 10.10 Promissory Note, dated April 12, 2020, by and between Registrant and JPMorgan Chase Bank, N.A. (23) 21 List of Subsidiaries of Registrant (25) 23.1 Consent of BDO USA, P.A. Filed herewith 31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 32 Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith 101 The following materials from the Frequency Electronics, Inc. Annual Report on Form 10-K for the fiscal year ended April 30, 2023 formatted in Inline eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (loss), (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Changes in Stockholders’ Equity and (v) Notes to Consolidated Financial Statements 104 Cover Page Interaction Data File (formatted as inline XBRL and contained in Exhibit 101) 54 Table of Contents * Denoted compensatory plans or arrangements or management contracts NOTES: (1) Filed with the SEC as an exhibit, numbered as indicated above, to the registration statement of Registrant on Form S-1, File No. 2-29609, which exhibit is incorporated herein by reference. (2) Filed with the SEC as Exhibit 3.2 to the registration statement of Registrant on Form S-1, File No. 2-71727, which exhibit is incorporated herein by reference. (3) [Intentionally Omitted] (4) [Intentionally Omitted] (5) Filed with the SEC as Exhibit 3.3 to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 1985, which exhibit is incorporated herein by reference. (6) Filed with the SEC as Exhibit 10.16 to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 1986, which exhibit is incorporated herein by reference. (7) Filed with the SEC as Exhibit 3.4 to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 1987, which exhibit is incorporated herein by reference. (8) Filed with the SEC as Exhibit 10.24 to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 1989, which exhibit is incorporated herein by reference. (9) Filed with the SEC as an exhibit, numbered as indicated above, to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 1990, which exhibit is incorporated herein by reference. (10) [Intentionally Omitted] (11) Filed with the SEC as Exhibit 2.1 to the current report of Registrant on Form 8-K, File No. 1-8061, on February 27, 2012, which exhibit is incorporated herein by reference. (12) [Intentionally Omitted] (13) Filed with the SEC as Exhibit 3.1 to a current report of the Registrant on Form 8-K, File No. 1-8061, on June 25, 2020, which exhibit is incorporated herein by reference. (14) Filed with the SEC as Exhibit 10.1 to a current report of the Registrant on Form 8-K, File No. 1-8061, on September 16, 2016, which exhibit is incorporated herein by reference. (15) Filed with the SEC as Exhibit 10.13 to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 1998, which exhibit is incorporated herein by reference. (16) Filed with the SEC as Exhibit 10.1 to a current report of the Registrant on Form 8-K, File No. 1-8061, on October 4, 2005, which exhibit is incorporated herein by reference. (17) Filed with the SEC as Exhibit 10.13 to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 2018, which exhibit is incorporated herein by reference. (18) Filed with the SEC as Exhibit 10.17 to Amendment No. 1 on Form 10-K/A to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 2018, which exhibit is incorporated herein by reference. (19) Filed with the SEC as Exhibit 10.18 to Amendment No. 1 on Form 10-K/A to the annual report of Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 2018, which exhibit is incorporated herein by reference. (20) [Intentionally Omitted] (21) Filed with the SEC as Exhibit 10.11 to the annual report of the Registrant on Form 10-K, File No. 1-8061, for the year ended April 30, 2019, which exhibit is incorporated herein by reference. (22) Filed with the SEC as Exhibit 16.1 to a current report of the Registrant on Form 8-K, File No. 1-8061, on July 30, 2019, which exhibit is incorporated herein by reference. (23) Filed with the SEC as Exhibit 10.11 to the annual report of the Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 2020, which exhibit is incorporated herein by reference. (24) Filed with the SEC as Exhibit 4.2 to the annual report of the Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 2021, which exhibit is incorporated herein by reference. (25) Filed with the SEC as Exhibit 21 to the annual report of the Registrant on Form 10-K, File No. 1-8061, for the fiscal year ended April 30, 2022, which exhibit is incorporated herein by reference. Item 16. Form 10-K Summary. None. 55 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FREQUENCY ELECTRONICS, INC. By: /s/ Thomas McClelland Thomas McClelland President and Chief Executive Officer (Principal Executive Officer) By: /s/ Steven L. Bernstein Steven L. Bernstein Chief Financial Officer, Secretary and Treasurer (Principal Financial and Accounting Officer) Dated: July 27, 2023 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: Signature Title Date /s/ Jonathan Brolin Lead Independent Director July 27, 2023 Jonathan Brolin /s/ Richard Schwartz Director July 27, 2023 Richard Schwartz /s/ Russell M. Sarachek Chairman of the Board July 27, 2023 Russell M. Sarachek /s/ GEN Lance W. Lord, USAF, ret Director July 27, 2023 Lance W. Lord 56