{"url_path":"/sec/cik-0000096885/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-30","source_url":"https://www.sec.gov/Archives/edgar/data/96885/0001185185-26-002742-index.html","accession_number":"0001185185-26-002742","cik":"0000096885","ticker":null,"issuer_name":"TEL INSTRUMENT ELECTRONICS CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/96885/0001185185-26-002742-index.html","primary_entity_key":"0000096885","primary_entity_name":"TEL INSTRUMENT ELECTRONICS CORP"},"word_count":887,"has_tables":true,"body_markdown":"**Item\n7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)**\n\n \n\n**Liquidity and Going Concern (continued)**\n\n \n\n*Cash provided by financing activities.* For\nthe year ended March 31, 2025 the Company received $310,000 from draws on the bank line of credit and $120,500 in related party loans.\nFor the year ended March 31, 2024 the Company received $721,000 from proceeds received from issuance of Preferred Stock.\n\n \n\nCurrently,\nthe Company has no material future capital expenditure requirements.\n\n \n\nThere\nwas no significant impact on the Company’s operations as a result of inflation for the year ended March 31, 2025.\n\n \n\n**Critical\nAccounting Estimates**\n\n \n\nWe\nprepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“US GAAP”),\nwhich require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent\nassets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods.\nTo the extent that there are material differences between these estimates and actual results, our financial condition or results of operations\nwould be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after\ntaking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an\nongoing basis.\n\n \n\nWe\nconsider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were\nhighly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from\nperiod to period or use of different estimates that we reasonably could have used in the current period, would have a material impact\non our financial condition or results of operations. There are items within our financial statements that require estimation but are\nnot deemed critical, as defined above.\n\n \n\nFor\na detailed discussion of our significant accounting policies and related judgments, see Note 2 of the Notes to Consolidated Financial\nStatements in “Item 8. Financial Statements and Supplementary Data” of this report.\n\n \n\n**Off\nBalance Sheet Arrangements**\n\n \n\nThe\nCompany is not party to any off-balance sheet arrangements that may affect its financial position or its results of operations.\n\n \n\n**Impact of Recently Issued Accounting Standards**\n\n \n\nIn\nNovember 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures*, which\naims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.\nIn addition, the amendments in the ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose\nmultiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment,\nand contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall\nperformance and assess potential future cash flows. The ASU applies to all public entities that are required to report segment information\nin accordance with ASC 280, and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years\nbeginning after December 15, 2024. Early adoption is permitted. We initially adopted the disclosure requirements of ASU 2023-07 during\nthe annual reporting period ended March 31, 2025. Due to certain changes in the composition of reportable segments, we recast prior year\ninformation to conform to current year classification, as allowed by ASU 2023-07. See Note 19. Our adoption of this ASU did not have a significant impact on our consolidated financial statements.\n\n \n\nIn\nDecember 2023, the FASB issued ASU 2023-09, *Improvements to Income Tax Disclosures,*which requires disaggregated information about\nour effective tax rate reconciliation as well as information on income taxes paid. The guidance will first be effective in our annual\ndisclosures for the year ending March 31, 2026, and should be applied on a prospective basis with the option to apply retrospectively.\nEarly adoption is permitted. The Company is in the process of assessing the impact of ASU 2023-09 on our disclosures.\n\n \n\nIn\nNovember 2024, the FASB issued ASU 2024-03, Disaggregation of *Income Statement-Reporting Expenses Disclosures,* where public companies\nmust now disclose disaggregated information about specific expenses within relevant income statement captions. The standard is effective\nfor fiscal years beginning after December 15, 2026. Early adoption is permitted. The Company is in the process of assessing the impact\nof ASU 2024-03 on our disclosures.\n\n \n\nIn\nJuly 2025, the FASB released ASU 2025-05, “Measurement of Credit Losses for Accounts Receivable and Contract Assets.” (“ASU\n2025-05”). ASU 2025-05 amends ASC Subtopic 326-20 to provide a practical expedient for all entities and an accounting policy election\nfor all entities, other than public business entities, that elect the practical expedient related to the estimation of expected credit\nlosses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. ASU 2025-05\naddresses concerns from stakeholders that estimating expected credit losses can be costly and complex for such transactions. ASU 2025-05\nis effective for all business entities for annual periods beginning after December 15, 2025, with early adoption permitted. The Company\nis currently assessing the impact of this update on the Company’s financial statements.\n\n \n\nNo\nother recently issued accounting pronouncements had or are expected to have a material impact on the Company’s audited consolidated\nfinancial statements.\n\n \n\n16\n\n[Table of Contents](#TableOfContents)"}