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Item 9A. Controls and Procedures

2024-08-02 compared with 2023-07-27 · 48 added, 29 removed, 170 unchanged (31% of the section changed)

4 unchanged sentences

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.

Based on their evaluation, the Company’s chief executive officer and chief financial officer have concluded that, because of the material weakness in internal control over financial reporting disclosed below, as of April 30, 2024, the Company’s disclosure controls and procedures were not 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

Management’s Annual 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.

4 unchanged sentences

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.

Based on this evaluation, the Company’s management concluded that the Company’s internal control over financial reporting was not effective as of April 30, 2024, because of the material weakness in internal control over financial reporting discussed below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

In the course of preparing the Company’s consolidated financial statements as of April 30, 2024 and for the year then ended, management identified a material weakness in internal control over the calculation of loss provision accruals in contracts with customers.

The Company’s controls over loss provision accruals were not sufficiently designed to capture previously recognized contract losses when calculating the required balance of loss provision accruals as of the end of the reporting period.

The errors resulting from this material weakness did not cause material misstatements in previously issued annual or interim financial statements.

Such errors were corrected prior to the issuance of the Company’s consolidated financial statements as of April 30, 2024 and for the year then ended.

If not remediated timely, the deficiency described above could result in a material misstatement in future annual or interim consolidated financial statements.

The Company concluded that the item noted above constituted a material weakness in the Company’s internal control over financial reporting as of April 30, 2024.

Notwithstanding the existence of the material weakness described above, management believes that the audited consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented, in conformity with GAAP.

Plan to Remediate Material Weakness

The Company is currently in the process of remediating the material weakness and has taken actions to address the underlying causes of the material weakness including improving controls over the calculation of loss provision accruals.

The Company has updated its method of calculating loss provision accruals by considering previously recognized contract losses.

The Company has also started to implement enhanced review, reconciliation, and monitoring controls over loss provision accruals and its underlying calculations.

The Company intends to remediate these deficiencies as soon as possible and believes these actions will be sufficient to remediate the identified material weaknesses and strengthen the Company's internal control over financial reporting.

As the Company continues to evaluate and improve its internal control over financial reporting, management may determine that additional measures or modifications to the remediation plan are necessary to address the material weakness.

Moreover, the Company cannot provide assurance that additional material weaknesses will not arise in the future.

Financial Reporting

2 unchanged sentences

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.

Other than the material weakness described 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, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information

During the three months ended April 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

1 unchanged sentence

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”).

The information required 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, 2024, for the annual meeting of stockholders to be held on or about October 8, 2024 (the “2024 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 2024 Proxy Statement.

1 unchanged sentence

Executive Compensation

This item is incorporated herein by reference from the Company’s 2023 Proxy Statement under “Election of Directors” and “Executive Compensation.”

The information required pursuant to this item is incorporated herein by reference from the Company’s 2024 Proxy Statement under “Election of Directors” and “Executive Compensation.”

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.”

The information required pursuant to this item is incorporated herein by reference from the Company’s 2024 Proxy Statement under “Executive Compensation” and “Stock Ownership of Certain Beneficial Owners and Management.”

EQUITY COMPENSATION PLAN INFORMATION

20 unchanged sentences

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.”

The information required pursuant to this item is incorporated herein by reference from the Company’s 2024 Proxy Statement under “Election of Directors.”

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.”

The information required pursuant to this item is incorporated herein by reference from the Company’s 2024 Proxy Statement under “Appointment of Independent Registered Public Accounting Firm” and “Report of the Audit Committee.”

Exhibits and Financial Statement Schedules

3 unchanged sentences

Included in Part II of this report:

Report of Independent Registered Public Accounting Firm ( BDO USA, P.A.

Report of Independent Registered Public Accounting Firm ( GRANT THORNTON LLP .;

Melville, NY ;

PCAOB ID# 248 )

Report of Independent Registered Public Accounting Firm (BDO USA, P.A.;

New York, NY;

PCAOB ID#243) 27

Consolidated Balance Sheets

37 unchanged sentences

Promissory Note, dated April 12, 2020, by and between Registrant and JPMorgan Chase Bank, N.A.

Letter from BDO USA, P.C.

(formerly BDO USA, P.A.), dated July 31, 2023

List of Subsidiaries of Registrant

Consent of BDO USA, P.A.

Filed herewith

Consent of GRANT THORNTON LLP

Filed herewith

Consent of BDO USA, P.C.

(formerly BDO USA, P.A.)

Filed herewith

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

4 unchanged sentences

Filed herewith

Frequency Electronics, Inc.

Clawback Policy

Filed herewith

The following materials from the Frequency Electronics, Inc.

42 unchanged sentences

1-8061, for the year ended April 30, 2019, which exhibit is incorporated herein by reference.

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.

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.

[Intentionally Omitted]

Filed with the SEC as Exhibit 10.11 to the annual report of the Registrant on Form 10-K, File No.

2 unchanged sentences

1-8061, for the fiscal year ended April 30, 2021, which exhibit is incorporated herein by reference.

Filed with the SEC as Exhibit 16.1 to a current report of the Registrant on Form 8-K, File No.

1-8061, on August 1, 2023, which exhibit is incorporated herein by reference.

Form 10-K Summary.

8 unchanged sentences

(Principal Financial and Accounting Officer)

July 27, 2023

August 2, 2024

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:

1 unchanged sentence

Lead Independent Director

July 27, 2023

August 2, 2024

Jonathan Brolin

/s/ Richard Schwartz

July 27, 2023

August 2, 2024

Richard Schwartz

1 unchanged sentence

Chairman of the Board

July 27, 2023

August 2, 2024

/s/ GEN Lance W.

Lord, USAF, ret

July 27, 2023

August 2, 2024

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 9A. Controls and Procedures