GIGA TRONICS INC (Form: 10-K, Received: 05/30/2019 16:35:00)

1	Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the accounts of Giga-tronics Incorporated (“Giga-tronics”) and its wholly-owned subsidiary, Microsource Incorporated (“Microsource”), collectively the “Company”. The Company’s corporate office and manufacturing facilities are located in Dublin, California.

Principles of Consolidation The consolidated financial statements include the accounts of Giga-tronics and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fiscal Year The Company’s financial reporting year consists of either a 52 week or 53 week period ending on the last Saturday of the month of March. Fiscal year 2019 ended on March 30, 2019 resulting in a 52 week year. Fiscal year 2018 ended on March 31, 2018, which resulted in a 53 week year. All references to years in the consolidated financial statements relate to fiscal years rather than calendar years.

Revenue Recognition and Deferred Revenue Beginning April 1, 2018, the Company follows the provisions of ASU 2014-09 as subsequently amended by the Financial Accounting Standards Board (“FASB”) between 2015 and 2017 and collectively known as ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) . Amounts for prior periods are not adjusted and continue to be reported in accordance with the Company’s prior historic accounting practices. The guidance provides a unified model to determine how revenue is recognized. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identifies the promised goods or services in the contract; (ii) determines whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measures the transaction price, including the constraint on variable consideration; (iv) allocates the transaction price to the performance obligations based on estimated selling prices; and (v) recognizes revenue when (or as) the Company satisfies each performance obligation.

The Company generates revenue through the design, manufacture, and sale of products used in the defense industry to major prime defense contractors, the armed services (primarily in the U.S.) and research institutes. There is generally one performance obligation in the Company’s contracts with its customers. For highly engineered products, the customer typically controls the work in process as evidenced either by contractual termination clauses or by the Company’s right to payment for costs incurred to date plus a reasonable profit for products or services that do not have an alternative use. In these circumstances, the performance obligation is the design and manufacturing service. As control transfers continuously over time on these contracts, revenue is recognized based on the extent of progress towards completion of the performance obligation using a cost-to-cost method. Engineering services are also satisfied over time and recognized on the cost-to-cost method. These types of revenue arrangements are typical for the Company’s defense contracts within the Microsource segment for its RADAR filter products used in fighter jet aircrafts.

For the sale of standard or minimally customized products, the performance obligation is the series of finished products which are recognized at the points in time the units are transferred to the control of the customer, typically upon shipment. This type of revenue arrangement is typical for our commercial contracts within the Giga-tronics segment for its Advanced Signal Generation and Analysis system products used for testing RADAR and Electronic Warfare (“RADAR/EW”) equipment.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. The Company’s performance obligations include:

•	Design and manufacturing services

•	Product supply – Distinct goods or services that are substantially the same

•	Engineering services

The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. The Company’s revenue in fiscal 2019 under ASC 606 primarily relates to design and manufacturing services, there was no product supply, and engineering services were nominal.

Transaction Price

The Company has both fixed and variable consideration. Under the Company’s highly engineered design and manufacturing arrangements, advance payments and unit prices are considered fixed, as the product is not returnable and the Company has an enforceable right to reimbursement in the event of a cancellation. For standard and minimally customized products, payments can include variable consideration, such as product returns and sales allowances. The transaction price in engineering services arrangements may include estimated amounts of variable consideration, including award fees, incentive fees, or other provisions that can either increase or decrease the transaction price. Milestone payments are identified as variable consideration when determining the transaction price. At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. The Company estimates variable consideration at the amount to which they expect to be entitled and determines whether to include estimated amounts as a reduction in the transaction price based largely on an assessment of the conditions that might trigger an adjustment to the transaction price and all information (historical, current and forecasted) that is reasonably available to the Company. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the estimation uncertainty is resolved.

Allocation of Consideration

As part of the accounting for arrangements that contain multiple performance obligations, the Company must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation identified in the contract. When a contract contains more than one performance obligation, the Company uses key assumptions to determine the stand-alone selling price of each performance obligation. Because of the customized nature of products and services, estimated stand-alone selling prices for most performance obligations are estimated using a cost-plus margin approach. For non-customized products, list prices generally represent the standalone selling price. The Company allocates the total transaction price to each performance obligation based on the estimated relative stand-alone selling prices of the promised goods or service underlying each performance obligation.

Timing of Recognition

Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company generally uses the cost-to-cost measure of progress as this measure best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenue is recognized for design and manufacturing services and for engineering services over time proportionate to the costs that the Company has incurred to perform the services using the cost-to-cost input method and for products at a point in time. Approximately 81% of the Company’s revenue is recognized over time, with the remaining 19% recognized at a point in time.

Changes in Estimates

The effect of a contract modification on the transaction price and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

For contracts using the cost-to-cost method, management reviews the progress and execution of the performance obligations. This process requires management judgment relative to estimating contract revenue and cost and making assumptions for delivery schedule. This process requires management’s judgment to make reasonably dependable cost estimates. Since certain contracts extend over a longer period of time, the impact of revisions in cost and revenue estimates during the progress of work may adjust the current period earnings through a cumulative catch-up basis. This method recognizes, in the current period, the cumulative effect of the changes on current and prior quarters. Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly. Revenue recognized over time using the cost-to-cost method represented approximately 81% of revenue for fiscal 2019.

Balance Sheet Presentation

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. Under the typical payment terms of over time contracts, the customer pays either performance-based payments or progress payments. Amounts billed and due from customers are classified as receivables on the Condensed Consolidated Balance Sheet. Interim payments may be made as work progresses, and for some contracts, an advance payment may be made. A liability is recognized for these interim and advance payments in excess of revenue recognized and is presented as a contract liability which is included within accrued liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheet. Contract liabilities typically are not considered a significant financing component because these cash advances are used to meet working capital demands that can be higher in the early stages of a contract. When revenue recognized exceeds the amount billed to the customer, an unbilled receivable (contract asset) is recorded for the amount the Company is entitled to receive based on its enforceable right to payment.

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity).

Recognition Prior to April 1, 2018

Prior to April 1, 2018 under the legacy Generally Accepted Accounting Principles (“GAAP”), the Company recorded revenue when there was persuasive evidence of an arrangement, delivery had occurred, the price was fixed and determinable, and collectability was reasonably assured. This occurred when products were shipped or the customer accepted title transfer. If the arrangement involved acceptance terms, the Company deferred revenue until product acceptance was received. On certain large development contracts, revenue was recognized upon achievement of substantive milestones. Advanced payments were recorded as deferred revenue until the revenue recognition criteria described above had been met. Amounts for periods ending prior to April 1, 2018 have not been adjusted for ASC 606 and continue to be reported in accordance with the Company’s previous accounting practices.

Software Development Costs Development costs included in the research and development of new software products and enhancements to existing software products are expensed as incurred, until technological feasibility in the form of a working model has been established. Capitalized development costs are amortized over the expected life of the product and evaluated each reporting period for impairment.

New Accounting Standards

In June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting,” to simplify the accounting for share based transactions with nonemployees in which the grantor acquires goods or services to be used or consumed. Under the new standard, most of the guidance on recording share-based compensation granted to nonemployees will be aligned with the requirements for share-based compensation granted to employees. This standard will be effective in the first quarter of fiscal 2020, and early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 requires that lessees recognize assets and liabilities for the rights and obligations for leases with a lease term of more than one year. The amendments in this ASU are effective for annual periods ending after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements.

In May 2014, the FASB issued Revenue from Contracts with Customers. In August 2015 and March, April, May and December 2016, the FASB issued additional amendments to the new revenue guidance relating to reporting revenue on a gross versus net basis, identifying performance obligations, licensing arrangements, collectability, noncash consideration, presentation of sales tax, transition, and clarifying examples. Collectively these are referred to as ASC 606, which replaces all legacy GAAP guidance on revenue recognition and eliminates all industry-specific guidance. ASC 606 establishes a broad principle that would require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity identifies the contract with a customer, identifies the separate performance obligations in the contract, determines the transaction price, allocates the transaction price to the separate performance obligations and recognizes revenue when each separate performance obligation is satisfied. ASC 606 was further updated to provide clarification on a number of specific issues as well as requiring additional disclosures. ASC 606 may be applied either retrospectively or through the use of a modified-retrospective method. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies would recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application. ASC 606 is effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted beginning in the first quarter of 2017.

The Company adopted ASC 606 on April 1, 2018 (beginning of the Company’s fiscal year) using the modified retrospective method. Under this approach, no restatement of fiscal years 2017 or 2018 was required. Rather, the effect of the adoption was recorded as a cumulative adjustment decreasing the opening balance of accumulated deficit at April 1, 2018.

The most significant change relates to the timing of revenue and cost recognition on the Company’s customer contracts. Under ASC 606, revenue is recognized as the customer obtains control of the goods and services promised in the contract. Given the nature of the Company’s products and terms and conditions in the contracts, the customer typically obtains control as the Company performs work under such contract. Therefore, the Company expects to recognize revenue over time for substantially all of its contracts using the percentage-of-completion cost-to-cost method. As a result, the Company now recognizes revenue for these contracts as it incurs costs, as opposed to when units are delivered. This change has generally resulted in earlier revenue recognition in the performance period as compared to the legacy method for those contracts, giving rise to a decrease to the Company’s opening balance of accumulated deficit as of April 1, 2018.

Adopting ASC 606 involves significant new estimates and judgments such as estimating stand-alone selling prices, variable consideration, and total costs to complete the contract. All of the estimates are subject to change during the performance of the contract which may cause more variability due to significant estimates involved in the new accounting.

The cumulative effect of the changes made to the Company’s consolidated April 1, 2018 balance sheet for the adoption of ASC 606 were as follows (in thousands):

	Balance at March 31, 2018			ASC 606 Adjustments			Balance at April 1, 2018
Assets
Prepaid and other current assets	$	87		$	188		$	275
Inventories, net		5,487			(1,581	)		3,906
Liabilities
Deferred revenue	$	3,374		$	(2,568	)	$	806
Shareholders ' Equity
Accumulated deficit	$	(28,682	)	$	1,176		$	(27,506	)

In accordance with the requirements of ASC 606, the disclosure of the impact of adoption on our condensed consolidated income statement and balance sheet for fiscal year ended March 30, 2019 was as follows (in thousands except for net loss per share):

For the fiscal year ended March 30 , 201 9	Without ASC 606 Adoption			ASC 606 Adjustments			As Reported
Assets
Prepaid and other current assets	$	58		$	1,296		$	1,354
Inventories, net		4,815			(2,081	)		2,734
Liabilities
Deferred revenue	$	2,132		$	(2,132	)	$	-
Shareholders ' Equity
Accumulated deficit	$	(28,714	)	$	166		$	(28,548	)
Revenue
Revenue	$	10,477		$	671		$	11,148
Cost of s ales
Cost of sales	$	5,925		$	500		$	6,425
Net loss	$	(1,214	)		171		$	(1,043	)
Net loss per share, basic and fully diluted	$	(0.11	)	$	0.02		$	(0.10	)

The following table presents changes in the Company’s contract assets and liabilities for the fiscal year ended March 30, 2019.

	Balance at Beginning of the Period			Additions			Deductions			Balance at the end of the Period
	(in thousands)
Contract Assets	$	189		$	1,535		$	(428	)	$	1,296
Contract Liabilities: Deferred Revenue	$	(806	)	$	(1,846	)	$	2,652		$	-

During the fiscal year ended March 30, 2019, the Company recognized the following revenues (in thousands):

Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period:
Performance obligations satisfied	$	1,063
New activities in the period:
Changes in estimates		119
Performance obligations satisfied		7,843
Total services revenue	$	9,025

As of March 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $4.0 million, of which the Company expects to recognize $2.7 million into revenue within the next twelve months and $1.3 million after the next twelve months.

Accrued Warranty The Company’s warranty policy generally provides one to three years of coverage depending on the product. The Company records a liability for estimated warranty obligations at the date products are sold. The estimated cost of warranty coverage is based on the Company’s actual historical experience with its current products or similar products. For new products, the required reserve is based on historical experience of similar products until such time as sufficient historical data has been collected on the new product. Adjustments are made as new information becomes available.

Inventories Inventories are stated at the lower of cost or fair value using full absorption and standard costing. Cost is determined on a first-in, first-out basis. Standard costing and overhead allocation rates are reviewed by management periodically, but not less than annually. Overhead rates are recorded to inventory based on capacity management expects for the period the inventory will be held. Reserves are recorded within cost of sales for impaired or obsolete inventory when the cost of inventory exceeds its estimated fair value. Management evaluates the need for inventory reserves based on its estimate of the amount realizable through projected sales including an evaluation of whether a product is reaching the end of its life cycle. When inventory is discarded it is written off against the inventory reserve, as inventory generally has already been fully reserved for at the time it is discarded.

Research and Development Research and development expenditures, which include the cost of materials consumed in research and development activities, salaries, wages and other costs of personnel engaged in research and development, costs of services performed by others for research and development on the Company’s behalf and indirect costs are expensed as operating expenses when incurred. Research and development costs totaled approximately $1.3 million and $1.8 million for the years ended March 30, 2019 and March 31, 2018, respectively.

Property and Equipment Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets, which range from three to ten years for machinery and equipment and office fixtures. Leasehold improvements and assets acquired under capital leases are amortized using the straight-line method over the shorter of the estimated useful lives of the respective assets or the lease term.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such review indicates that the carrying amount of an asset exceeds the sum of its expected future cash flows on an undiscounted basis, the asset’s carrying amount would be written down to fair value. Additionally, the Company reports long-lived assets to be disposed of at the lower of carrying amount or fair value less cost to sell. As of March 30, 2019 and March 31, 2018, management believes there has been no impairment of the Company’s long-lived assets.

Warrants to Purchase Common Stock Warrants are accounted for in accordance with the applicable accounting guidance provided in ASC 815 - Derivatives and Hedging as either derivative liabilities or as equity instruments depending on the specific terms of the agreements. Liability-classified instruments are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations. The Company estimates liability-classified instruments using either a Monte Carlo simulation or the Black Scholes option-pricing model, depending on the nature of the warrant’s terms. The valuation methodologies require management to develop assumptions and inputs that have significant impact on such valuations. The Company periodically evaluates changes in facts and circumstances that could impact the classification of warrants from liability to equity, or vice versa.

On March 26, 2018, the Company and holders of the Company’s liability-classified warrants, Partners For Growth, V L.P. (“PFG”), agreed to eliminate the $217,000 cash “put” provision contained in warrants in exchange for the Company issuing 150,000 shares of the Company’s common stock. Upon removal of the put, the warrants were re-valued using the Black-Scholes option-pricing model prior to being reclassified to equity. The resulting change in fair value of the warrants, along with the fair value of the common stock of approximately of $50,000 issued to PFG, was recognized as gain on adjustment of warrant liability in the consolidated statements of operations.

Embedded Derivatives Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract in the Company’s consolidated balance sheets.

Deferred Rent Rent expense is recognized in an amount equal to the guaranteed base rent plus contractual future minimum rental increases amortized on the straight-line basis over the terms of the leases, including free rent periods.

Income Taxes Income taxes are accounted for using the asset and liability method. 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 and operating loss and tax credit carryforwards. 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. Future tax benefits are subject to a valuation allowance when management is unable to conclude that its deferred tax assets will more likely than not be realized. The ultimate realization of deferred tax assets is dependent upon generation of future taxable income during the periods in which those temporary differences become deductible. Management considers both positive and negative evidence and tax planning strategies in making this assessment.

The Company considers all tax positions recognized in its financial statements for the likelihood of realization. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the positions taken or the amounts of the positions that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above, if any, would be reflected as unrecognized tax benefits, as applicable, in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits as a component of the provision for income taxes in the consolidated statements of operations.

Product Development Costs The Company incurs pre-production costs on certain long-term supply arrangements. The costs, which represent non-recurring engineering and tooling costs, are capitalized as other assets and amortized over their useful life when reimbursable by the customer. All other product development costs are charged to operations as incurred. Capitalized pre-production costs included in inventory were immaterial as of March 30, 2019 and March 31, 2018.

Discontinued Operations The Company reviews its reporting and presentation requirements for discontinued operations as it moves to newer technology within the test and measurement market from legacy products to the newly developed Advanced Signal Generator. The disposal of these product line sales represents an evolution of the Company’s Giga-tronics Division to a more sophisticated product offered to the same or similar customer base. The Company has evaluated the sales of product lines concluding that each product line does not meet the definition of a “component of an entity” as defined by ASC 205-20.The Company is able to distinguish revenue and gross margin information as disclosed in Note 8, Sale of Product Lines to the accompanying financial statements; however, operations and cash flow information is not clearly distinguishable and the company is unable to present meaningful information about results of operations and cash flows from those product lines.

Share-based Compensation The Company records share-based compensation expense for the fair value of all stock options and restricted stock that are ultimately expected to vest as the requisite service is rendered. In fiscal 2018, the Company provided a special grant of nonqualified options to purchase 400,000 shares of common stock at the price of $0.33 per share based on reliance on the exemption afforded by Section 4(2) of the Securities Act. One fourth of the option vests on the first anniversary of the grant date and 1/48 of the option vests on each of the 36 months thereafter.

The cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) are classified as cash flows from financing in the statements of cash flows. These excess tax benefits were not significant for the Company for the fiscal years ended March 30, 2019 or March 31, 2018.

In calculating compensation related to stock option grants, the fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The computation of expected volatility used in the Black-Scholes- Merton option-pricing model is based on the historical volatility of Giga-tronics’ share price. The expected term is estimated based on a review of historical employee exercise behavior with respect to option grants. The risk free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. Expected dividend yield was not considered in the option pricing formula since the Company has not paid dividends and has no current plans to do so in the future.

The fair value of restricted stock awards is based on the fair value of the underlying shares at the date of the grant. Management makes estimates regarding pre-vesting forfeitures that will impact timing of compensation expense recognized for stock option and restricted stock awards.

Earnings or Loss Per Common Share Basic earnings or loss per common share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share incorporate the incremental shares issuable upon the assumed exercise of stock options and warrants using the treasury stock method. Anti-dilutive options are not included in the computation of diluted earnings per share. Non-vested shares of restricted stock have non-forfeitable dividend rights and are considered participating securities for the purpose of calculating basic and diluted earnings per share under the two-class method.

Comprehensive Income or Loss There are no items of comprehensive income or loss other than net income or loss.

Financial Instruments and Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist of cash, cash-equivalents and trade accounts receivable. The Company’s cash-equivalents consist of overnight deposits with federally insured financial institutions. Concentration of credit risk in trade accounts receivable results primarily from sales to major customers. The Company individually evaluates the creditworthiness of its customers and generally does not require collateral or other security. At March 30, 2019, three customers combined accounted for 97% of consolidated gross accounts receivable. At March 31, 2018, one customer accounted for 79% of consolidated gross accounts receivable.

Fair Value of Financial Instruments and Fair Value Measurements The Company’s financial instruments consist principally of cash and cash-equivalents, line of credit, term debt, and warrant derivative liability. The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants to sell the asset or transfer the liability. The Company uses fair value measurements based on quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access as of the measurement date (Level 1), significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data (Level 2), or significant unobservable inputs reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability (Level 3), depending on the nature of the item being valued.

Recently Issued Accounting Standards

12	Income Taxes

Following are the components of the provision for income taxes for fiscal years ended:

	March 30,			March 31,
(in thousands)	2019			2018

Current
Federal	$	—		$	—
State		42			2
		42			2
Deferred
Federal		2			5,547
State		39			(393	)
		41			5,154

Change in liability for uncertain tax positions		1			2
Change in valuation allowance		(42	)		(5,156	)
Provision for income taxes	$	42		$	2

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are as follows:

Fiscal years ended (In thousands)	March 3 0 , 201 9			March 31 , 201 8
Net operating loss carryforwards	$	11,365		$	11,472
Income tax credits		349			347
Inventory reserves and additional costs capitalized		795			787
Accrued vacation		49			40
Deferred rent		21			136
Non-qualified stock options and restricted stock		81			2
Other		159			77
Total deferred tax assets		12,819			12,861

Valuation allowance		(12,819	)		(12,861	)
Net deferred tax assets	$	—		$	—

The following summarizes the difference between the income tax expense and the amount computed by applying the statutory federal income tax rates of 21% and 31.55%, respectively, for the years ended March 30, 2019 and March 31, 2018, to income before income tax. The items comprising these differences consisted of the following for the fiscal years ended March 30, 2019 and March 31, 2018:

Fiscal years ended (In thousands except percentages)	March 3 0 , 20 1 9					March 31 , 201 8
Statutory federal income tax (benefit)	$	(210	)	21	%	$	(955	)	31.6	%
Valuation allowance		(42	)	4.2			(5,156	)	170.1
Effect of reduced corporate tax rates		—		—			6,207		(205.3	)
State income tax, net of federal benefit		(70	)	7.0			(177	)	5.9
Net operating loss expiration		39		(3.9	)		—		—
Non-tax deductible expenses		(15	)	1.5			46		(1.5	)
Tax credits		(2	)	0.2			(4	)	0.1
Adoption of ASC 606 adjustment		329		(32.9	)
Other		13		(1.3	)		41		(0.9	)
Effective income tax	$	42		(4.2	)%	$	2		—

The decrease in the valuation allowance from March 30, 2019 to March 31, 2018 was $42,000.

As of March 30, 2019, the Company had pre-tax federal net operating loss carryforwards of $46,297,000 and state net operating loss carryforwards of $23,523,000 available to reduce future taxable income. The federal and state net operating loss carryforwards begin to expire from fiscal 2022 through 2038 and from 2029 through 2039, respectively. Utilization of net operating loss carryforwards may be subject to annual limitations due to certain ownership change limitations as required by Internal Revenue Code Section 382. In addition, the Tax Cuts and Jobs Act of 2017 imposes new limitations on the utilization of losses incurred in tax years beginning after December 31, 2017. The federal income tax credits begin to expire from 2032 through 2037 and state income tax credit carryforwards are carried forward indefinitely.

The Company has recorded a valuation allowance to reflect the estimated amount of deferred tax assets, which may not be realized. The ultimate realization of deferred tax assets is dependent upon generation of future taxable income during the periods in which those temporary differences become deductible. Management considers both positive and negative evidence and tax planning strategies in making this assessment.

As of March 30, 2019, the Company recorded unrecognized tax benefits of $123,000 related to uncertain tax positions. The unrecognized tax benefit is netted against the non-current deferred tax asset on the consolidated balance sheet. The Company has not recorded a liability for any penalties or interest related to the unrecognized tax benefits.

The Company files U.S. federal and California state tax returns. The Company is generally no longer subject to tax examinations for years prior to fiscal year 2014 for federal purposes and fiscal year 2013 for California purposes, except in certain limited circumstances.

In November 2018, the Franchise Tax Board (“FTB”) issued their final bill regarding their audit findings related to the tax year ending in 2011 disallowing R&D credits. As a result, the Company adjusted the accrued state tax liability along with the accrued interest to $110,000. The Company has an agreement with the FTB to pay the balance over six months.

A reconciliation of the beginning and ending amount of the liability for uncertain tax positions, excluding potential interest and penalties, is as follows:

			Fiscal Year s
(In thousands)	2019		2018
Balance as of beginning of year	$	122	$	120
Additions based on current year tax positions		1		2
Balance as of end of year	$	123	$	122

The total amount of interest and penalties related to unrecognized tax benefits at March 30, 2019 is not material. The amount of tax benefits that would impact the effective rate, if recognized, is not expected to be material. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next twelve (12) months.

13	Share-based Compensation and Employee Benefit Plans

Share-based Compensation During September 2005, the Company established its 2005 Equity Incentive Plan, which provides for the granting of stock options and restricted stock for up to 2,850,000 shares of common stock at 100% of fair market value at the date of grant, with each grant requiring approval by the Board of Directors of the Company. In 2014, the term of the 2005 Equity Incentive Plan was extended to 2025. Options granted generally vest in one or more installments in a four or five year period and must be exercised while the grantee is employed by the Company or within a certain period after termination of employment (or while providing services under a service arrangement in the case of non-employees). Options granted to employees shall not have terms in excess of 10 years from the grant date. Holders of options may be granted stock appreciation rights (SAR), which entitle them to surrender outstanding options for a cash distribution under certain changes in ownership of the Company, as defined in the stock option plan. As of March 30, 2019, no SARs have been granted under the option plan. As of March 30, 2019, no further shares of common stock are available for issuance. All outstanding options have a ten-year life from the date of grant.

On September 20, 2018, our shareholders approved our new 2018 Equity Incentive Plan under which we may issue up to 2,500,000 shares of common stock upon the exercise of options, stock awards and grants. With the adoption of the 2018 Equity Incentive Plan, no further awards will be issued under the Company’s 2005 Equity Incentive Plan, though all awards under the 2005 Equity Incentive Plan that are outstanding will continue to be governed by the terms, conditions and procedures set forth in the plan and any applicable award agreement. Option grants under the Company’s 2000 Stock Option Plan are no longer available.

Options granted generally vest in one or more installments in a four or five-year period and must be exercised while the grantee is employed by the Company (or while providing services under a service arrangement in the case of non-employees) or within a certain period after termination of employment or service arrangement in the case of non-employees. Options granted to employees shall not have terms in excess of 10 years from the grant date. Holders of options may be granted SARs, which entitle them to surrender outstanding awards for a cash distribution under certain changes in ownership of the Company, as defined in the stock option plan. As of March 30, 2019, no SARs have been granted under any option plan. As of March 30, 2019, the total number of shares of common stock available for issuance was 1,686,000. All outstanding options have a ten-year life from the date of grant. The Company records compensation cost associated with share-based compensation equivalent to the estimated fair value of the awards over the requisite service period.

Stock Options

The weighted average grant date fair value of stock options granted during the fiscal years ended March 30, 2019 and March 31, 2018 was $0.25 and $0.93, respectively, and was calculated using the following weighted-average assumptions:

Fiscal years ended	March 30, 2019			March 31, 2018
Dividend yield		—			—
Expected volatility		96	%		91	%
Risk-free interest rate		2.79	%		2.40	%
Expected term (years)		8.35			8.35

A summary of the changes in stock options outstanding for the fiscal years ended March 30, 2019 and March 31, 2018 is presented below:

				Weighted		Weighted Average Remaining
(Dollars in thousands except share prices)	Shares			Average Exercise Price per share		Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at March 25, 2017		1,104,500		$	1.41		6.1	$	3
Granted		856,000			0.34		10.0
Forfeited / Expired		(481,800	)		1.34
Outstanding at March 31, 2018		1,478,700		$	0.56		8.0	$	—
Granted		1,504,000			0.31		9.6
Forfeited / Expired		(248,000	)		0.69
Outstanding at March 30, 2019		2,734,700		$	0.41		8.4	$	—

Exercisable at March 30, 2019		662,300		$	0.66		5.1	$	—

At March 30, 2019, expected to vest in the future		1,489,178		$	0.33		9.4	$	—

As of March 30, 2019, there was $362,000 of total unrecognized compensation cost related to non-vested options granted under the 2005 and 2018 Plans and outside of the Plans. That cost is expected to be recognized over a weighted average period of 3.3 years and will be adjusted for subsequent changes in estimated forfeitures. There were 211,400 and 143,900 options vested during the fiscal years ended March 30, 2019 and March 31, 2018, respectively. The total fair value of options vested during the fiscal years ended March 30, 2019 and March 31, 2018 was $90,000 and $163,000, respectively. There were no exercises in fiscal 2019 and 2018. Share based compensation cost recognized in operating results for the fiscal years ended March 30, 2019 and March 31, 2018 totaled $121,000 and $144,000, respectively.

Restricted Stock

The Company granted 310,000 restricted awards during the fiscal year ended March 30, 2019. The Company granted 586,950 restricted awards during fiscal 2018. The restricted stock awards are considered fixed awards as the number of shares and fair value at the grant date are amortized over the requisite service period net of estimated forfeitures. As of March 30, 2019, there was $111,000 of total unrecognized compensation cost related to non-vested awards. That cost is expected to be recognized over a weighted average period of 0.997 years and will be adjusted for subsequent changes in estimated forfeitures. Compensation cost recognized for restricted and unrestricted stock for fiscal 2019 and fiscal 2018 totaled $125,000 and $107,000, respectively.

A summary of the changes in non-vested restricted stock awards outstanding for the fiscal years ended March 30, 2019 and March 31, 2018 is presented below:

	Shares			Weighted Average Grant Date Fair Value
Non-vested at March 25, 2017		—		$	—
Granted		586,950			0.66
Vested		(51,000	)		(0.60	)
Forfeited or cancelled		(236,000	)		(0.68	)
Non-vested at March 31, 2018		299,950		$	0.65
Granted		310,000			0.31
Vested		(250,000	)		0.32
Forfeited or cancelled		(25,000	)		0.79
Non-vested at March 30, 2019		334,950		$	0.56

401(k) Plan The Company has established a 401(k) plan which cover substantially all employees. Participants may make voluntary contributions to the plan for up to 100% of their defined compensation. The Company matches a percentage of the participant’s contributions in accordance with the plan. Participants vest ratably in Company contributions over a four- year period. Company contributions to the plan for fiscal 2019 and 2018 were approximately $18,000 and $27,000, respectively.

17	Preferred Stock and Warrants

Series E Senior Convertible Voting Perpetual Preferred Stock

On March 26, 2018, the Company entered into a Securities Purchase Agreement for the sale of 43,800 shares of a newly designated series of 6.0% Series E Senior Convertible Voting Perpetual Preferred Stock (“Series E Shares”) to approximately 15 private investors. The sale was completed and the Series E Shares were issued on March 28, 2018.

The purchase price for each Series E Share was $25.00. Gross proceeds received by the Company were approximately $1.095 million (the “Placement”). Net proceeds to the Company after fees and expenses of the Placement were approximately $1.0 million. Placement agent fees incurred in connection with the transaction were 5% of gross proceeds or approximately $57,000 in cash, plus warrants to purchase 5% of the number of common shares into which the Series E shares can be converted (223,000 shares) at an exercise price of $0.25 per share.

Each Series E Share is initially convertible (at the option of the holder) at a conversion price of $0.25 per share of common stock, representing 100 shares of the Company’s common stock per each Series E Share. The conversion ratio is subject to adjustments for stock splits, stock dividends, recapitalizations and similar transactions. As of March 31, 2018, if all 43,800 issued Series E Shares were immediately converted, holders of such shares would acquire 4,380,000 shares of common stock of the Company, or 31% of the pro forma number of shares of common stock that would be outstanding if the conversion had occurred on this date, 27% of the pro forma number of shares of common stock that would be outstanding upon the conversion of the Company’s outstanding shares of Series B, Series C and Series D Convertible Preferred Stock (collectively, the “Previously Issued Preferred Shares”) and 22% of the pro forma number of shares of common stock that would be outstanding if all shares of preferred stock were converted and all warrants exercised as of this date. The Company is entitled to redeem Series E Shares at a price equal to 300% of the Series E Share purchase price, or $75.00 per share, subject to potential adjustment, but the right to redeem is subject to satisfaction of certain conditions related to the market price and trading volume of the Company’s common stock.

Each Series E Share has a liquidation preference of 150% of the purchase price or $37.50, subject to adjustment. In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, a merger, or a sale of the Company’s MSI business line or Simulation and Electronics Warfare business line or their related assets, before any payment or distribution to holders of junior shares (including common stock and Previously Issued Preferred Stock), holders of Series E Shares will be entitled to receive an amount of cash per share of Series E Shares up to the liquidation preference plus all accumulated accrued and unpaid dividends thereon. Upon a sale of the Company’s MSI business line or Simulation and Electronics Warfare business line or their related assets, holders of Series E Shares shall be entitled to receive a pro rata portion of the net sale proceeds after reasonable transaction expenses and amount payable to the Company’s secured creditors for releases of their liens on such assets, up to the liquidation preference plus accrued and unpaid dividends. If the payment per Series E Shares is less than the Series E Shares’ liquidation preference, the liquidation preference and the Series E Share redemption price will be reduced by the amount of the payment received.

Holders of Series E Shares are entitled to receive, when, as and if declared by the Company’s Board of Directors, cumulative preferential dividends, payable semiannual in cash at a rate per annum equal to 6.0% of the initial purchase price of $25.00 per share or in-kind (at the Company’s election) through the issuance of shares of the Company’s common stock, based on the 10 day volume weighted average price of the common stock.

Holders of Series E Shares generally vote together with the common stock on an as-converted basis on each matter submitted to the vote or approval of the holders of common stock, and vote as a separate class with respect to certain actions that adversely affect the rights of the holders of Series E Shares and on other matters as required by law. In addition, the approval of the Holders of the Series E shares is generally required prior to the Company’s issuance of any securities having rights senior to or in parity with the Series E Shares with respect to dividends or liquidation preferences. The Series E Shares’ right to approve parity securities will terminate at such time that (1) fewer than 22,300 Series E Shares, which is 50% of the number of Series E Shares first issued, remain outstanding or (2) the volume weighted average closing price of the Company’s common stock for any 20 trading days within any 30 trading day period is $0.75 or more, the average daily trading volume over such 30 trading day period is 100,000 shares or more and there is either an effective registration statement covering resale of the shares of common stock that holders of Series E Shares would be entitled to receive upon conversion and any shares received as pay-in-kind dividends, or such share could be freely sold pursuant to Rule 144 under the Securities Act of 1933, as amended.

The Company and each Series E investor entered into an Investor Rights Agreement. Under this agreement, the Company agreed to, among other things, use best efforts to file certain registration statements for the resale of common stock of the Company that the investor may acquire upon conversion of the Series E Shares and may potentially receive as payment-in-kind dividends during the two years following the date of the agreement. The Company also agreed that it would not issue additional debt without the approval by holders of at least 66.6% of the Series E Shares, other than trade debt incurred in the normal course and commercial bank working capital debt, whether revolving or term debt. Concurrent with the execution of the Securities Purchase Agreement for the Series E Shares, the Company and PFG entered into a modification agreement providing for the restructuring of certain terms associated with approximately $1.7 million in indebtedness owed to PFG (see Note 6 – Term Loan and Warrants).

In connection with the sale of Series E Shares, the Company agreed to reduce the exercise price of certain warrants issued in connection with the Company’s private placement in January 2016 (see Note 16 – Private Placement Offering), in which the Company sold (in part) 2,787,872 warrants (a “2016 Warrant”). Each 2016 Warrant entitled the holder to purchase 0.75 shares of the Company’s common stock at the price of $1.15 per whole share. The Company agreed to reduce the exercise price of 2016 Warrants that are held by the 2016 Investors purchasing Series E Shares from $1.15 to $0.25 per share as follows: A 2016 Investor purchasing an amount equal to or exceeding the lesser of $200,000 or 50% of the amount it invested in the 2016 Private Placement will have the exercise price of all of its 2016 Warrants reduced to $0.25, and 2016 Investors purchasing less than the lesser of $200,000 or 50% of the amount it invested in the January 2016 Private Placement will have the exercise price of a ratable percentage of the 2016 Warrants reduced to $0.25. In connection with its sale of the Series E Shares, the Company reduced the exercise price of 1,759,268 of the outstanding 2016 Warrants to $0.25.

The fair value attributable to re-pricing the 2016 Warrants, provided to the participating 2016 Investors, of approximately $203,000, was deducted from the Series E gross proceeds to arrive at the initial discounted carrying value of the Series E Shares. The initial discounted carrying value resulted in recognition of a beneficial conversion feature of approximately $557,000, further reducing the initial carrying value of the Series E Shares. The discount to the aggregate stated value of the Series E Shares, resulting from recognition of the beneficial conversion feature, was immediately accreted as a reduction of common stock and an increase in the carrying value of the Series E Shares. The accretion is presented as a deemed dividend in the consolidated statements of operations.

In addition, warrants to purchase 292,727 shares of common stock held by the placement agent, as a result of a prior transaction, were amended to reduce the exercise price from $1.15 per share to $0.25 per share. The fair value attributable to re-pricing the placement agent warrants of approximately $53,000 was recognized as additional Series E issuance costs and recognized net in the carrying value of Series E Shares.

During the fiscal year ended March 30, 2019, the Company issued an additional 56,200 Series E shares to new investors at a purchase price of $25.00 per share for total gross proceeds of $1,405,000. Each Series E Share is initially convertible (at the option of the holder) at a conversion price of $0.25 per share of common stock, representing 100 shares of the Company’s common stock per each Series E Share. As of March 30, 2019, 1,600 issued Series E Shares were converted at the request of the holders and the Company had issued an aggregate of 160,000 common stock upon conversion.

Series B, C, D Convertible Voting Perpetual Preferred Stock and Warrants

On November 10, 2011, the Company received $2,199,000 in cash proceeds from Alara Capital AVI II, LLC, a Delaware limited liability company (the “Investor”), an investment vehicle sponsored by Active Value Investors, LLC, under a Securities Purchase Agreement entered into on October 31, 2011. Under the terms of the Securities Purchase Agreement, the Company issued 9,997 shares of its Series B Convertible Voting Perpetual Preferred Stock (“Series B Preferred Stock”) to the Investor at a price of $220 per share. The Company has recorded $2.0 million as Series B Preferred Stock on the consolidated balance sheet which is net of stock offering costs of approximately $202,000 and represents the value attributable to both the convertible preferred stock and warrants issued to the Investor. After considering the value of the warrants, the effective conversion price of the preferred stock was greater than the common stock price on date of issue and therefore no beneficial conversion feature was present.

On February 19, 2013, the Company entered into a Securities Purchase Agreement pursuant to which it agreed to sell 3,424.65 shares of its Series C Convertible Voting Perpetual Preferred Stock (“Series C Preferred Stock”) to the Investor, for aggregate consideration of $500,000, which is approximately $146.00 per share. The Company has recorded $457,000 as Series C Preferred Stock on the consolidated balance sheet, which is net of stock offering costs of approximately $43,000. As part of this transaction, the Company and the Investor agreed to reduce the number of shares exercisable under the previously issued warrant, and after considering the reduction in the value of the warrant, the effective conversion price of the preferred stock was greater than the common stock price on the date of issue and therefore no beneficial conversion feature was present.

On July 8, 2013 the Company received $817,000 in net cash proceeds from the Investor under a Securities Purchase Agreement. The Company sold to the Investor 5,111.86 shares of its Series D Convertible Voting Perpetual Preferred Stock (Series D Preferred Stock) and a warrant to purchase up to 511,186 additional shares of common stock at the price of $1.43 per share. The allocation of the $858,000 in gross proceeds from issuance of Series D Preferred Stock based on the relative fair values resulted in an allocation of $498,000 (which was recorded net of $41,000 of issuance costs) to Series D Preferred Stock and $360,000 to Common Stock. In addition, because the effective conversion rate based on the $498,000 allocated to Series D Preferred Stock was $0.97 per common share which was less than the Company’s stock price on the date of issuance, a beneficial conversion feature was present at the issuance date. The beneficial conversion feature totaled $238,000 and was recorded as a reduction of common stock and an increase to accumulated deficit.

Each share of Series B, Series C and Series D Preferred Stock is convertible into one hundred shares of the Company’s common stock. In connection with the preferred stock issuance described above, the Company issued to the investor warrants to purchase a total of 1,017,405 common shares at an exercise price of $1.43 per share. These warrants were exercised in February 2015, and May 2015. The Company received funds from Alara in separate closings dated February 16, 2015 and February 23, 2015. Alara exercised a total of 1,002,818 of its existing Series C and Series D warrants to purchase common shares, all of which had an exercise price of $1.43 per share for total cash proceeds of $1,434,000, which was recorded net of $42,000 of stock issuance costs. As part of the consideration for this exercise, the Company sold to Alara two new warrants to purchase an additional 898,634 and 194,437 common shares at an exercise price of $1.78 and $1.76 per share, respectively, for a total purchase price of $137,000 or $0.125 per share. The new warrants have a term of five years and may be paid in cash or through a cashless net share settlement. The Company and Alara amended the remaining 14,587 warrants as part of the February closings. On May 14, 2015, Alara exercised the remaining 14,587 warrants by acquiring 7,216 of shares of the Company’s common stock through a cashless net share settlement.

On December 31, 2018, Alara Capital AVI II, LLC effected an in-kind distribution, without consideration, of all of its shares of common stock, convertible preferred stock and warrants of Giga-tronics Incorporated (“Issuer”) to its limited partners of their respective interests of the Company’s securities held by Alara Capital AVI II, LLC in connection with the wind-up and dissolution of Alara Capital AVI II, LLC. As a result, Alara Capital AVI II, LLC no longer beneficially owns more than 5% of the common stock.

The table below presents information for the fiscal years ended March 30, 2019 and March 31, 2018:

Preferred Stock

As of March 3 0 , 201 9 and March 31 , 201 8

	Designated		Shares		Shares		Liquidation Preference
	Shares		Issued		Outstanding		(in thousands)
Series B		10,000.00		9,997.00		9,997.00	$	2,309
Series C		3,500.00		3,424.65		3,424.65		500
Series D		6,000.00		5,111.86		5,111.86		731
Series E		60,000.00		43,800.00		43,800.00		1,643
Total at March 31, 2018		79,500.00		62,333.51		62,333.51	$	5,183
Series E		40,000.00		56,200.00		54,600.00		2,047
Total at March 30, 2019		119,500.00		118,533.51		116,933.51	$	7,230

California		94-2656341
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

5990 Gleason Drive, Dublin, CA		94568
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, No par value		GIGA		OTCQB Market

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[X]
Emerging growth company	[ ]

PART OF FORM 10-K	DOCUMENT
PART III	Registrant’s proxy statement for its 2018 Annual Meeting of Shareholders to be filed no later than 120 days after the close of the fiscal year ended March 30, 2019.

		Page
PART I
ITEM 1.	Business	3
ITEM 1A.	Risk Factors	9
ITEM 1B.	Unresolved Staff Comments	14
ITEM 2.	Properties	14
ITEM 3.	Legal Proceedings	14
ITEM 4.	Mine Safety Disclosures	14

PART II

ITEM 5.	Market for Common Equity, Related Shareholder Matters and Issuer Repurchases of Equity Securities	14
ITEM 6.	Selected Financial Data	16
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	26
ITEM 8.	Financial Statements and Supplementary Data	27
	Consolidated Balance Sheets as of March 30, 2019 and March 31, 2018	28
	Consolidated Statements of Operations for the years ended March 30, 2019 and March 31, 2018	29
	Consolidated Statements of Shareholders' Equity for the years ended March 30, 2019 and March 31, 2018	30
	Consolidated Statements of Cash Flows for the years ended March 30, 2019 and March 31, 2018	31
	Notes to Consolidated Financial Statements	32
	Report of Independent Registered Public Accounting Firm	53
ITEM 9.	Changes In and Disagreements With Accountants On Accounting and Financial Disclosure	54
ITEM 9A.	Controls and Procedures	54
ITEM 9B.	Other Information	55

PART III

ITEM 10.	Directors, Executive Officers and Corporate Governance	56
ITEM 11.	Executive Compensation	56
ITEM 12.	Security Ownership Of Certain Beneficial Owners and Management and Related Shareholder Matters	56
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	56
ITEM 14.	Principal Accountant Fees and Services	56

PART IV

ITEM 15.	Exhibits and Financial Statements Schedules	57
SIGNATURES		60

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended March 3 0 , 201 9

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to .

Geographic Distribution of Net Sales
(Dollars in thousands)	Fiscal 2019		Fiscal 2018		Fiscal 2019			Fiscal 2018
Domestic	$	11,054		9,058		99	%		92	%
International		94		742		1	%		8	%
Total	$	11,148	$	9,800		100	%		100	%

	Fiscal Quarter					Fiscal Quarter
	201 9	High		Low		201 8	High		Low
First Quarter	(4/01 - 6/30)	$	0.35	$	0.23	(3/26 - 6/24)	$	0.90	$	0.73
Second Quarter	(7/01 - 9/29)		0.46		0.30	(6/25 - 9/30)		0.89		0.58
Third Quarter	(9/30 - 12/29)		0.35		0.23	(10/01 - 12/30)		0.85		0.37
Fourth Quarter	(12/30 - 3/30)		0.45		0.24	(12/31 - 3/31)		0.42		0.26

Date	Number of Series E Shares Sold		Gross Proceeds		Placement Agent Compensation Fees		Warrants to Purchase Common Stock
November 21, 2018		2,000	$	50,000	$	2,500		200,000
November 30, 2018		5,400	$	135,000	$	6,750		540,000
December 7, 2018		1,400	$	35,000	$	1,750		140,000
December 28, 2018		1,600	$	40,000	$	2,000		160,000
January 23, 2019		600	$	15,000	$	750		60,000
February 7, 2019		7,400	$	185,000	$	9,250		740,000
February 8, 2019		2,000	$	50,000	$	2,500		200,000
March 6, 2019		9,600	$	240,000	$	12,000		960,000

New Orders							% change
(Dollars in thousands)	201 9		201 8		201 7		201 9 vs. 201 8			201 8 vs. 201 7
ASGA Products	$	3,935	$	1,813	$	4,803		117	%		(62	)%
Legacy Products		165		238		2,724		(31	)%		(91	)%
Giga-tronics Division	$	4,100	$	2,051	$	7,527		100	%		(73	)%
Microsource		5,327		7,550		7,567		(29	)%		(0.2	)%
Total	$	9,427	$	9,601	$	15,094		(2	)%		(36	)%

B acklog							% change
							201 9 vs.			201 8 vs.
(Dollars in thousands)	201 9		201 8		201 7		20 18			201 7
ASGA Products	$	2,195	$	20	$	562		10875	%		(96	)%
Legacy Products		47		57		201		(18	)%		(72	)%
Giga-tronics Division		2,242		77		763		2811	%		(90	)%
Microsource		4,446		11,088		10,601		(60	)%		4.6	%
Backlog of unfilled orders	$	6,688	$	11,165	$	11,364		(40	)%		(1.8	)%
ASGA Products		2,195		20		562		10875	%		(96	)%
Legacy Products		47		57		201		(18	)%		(72	)%
Giga-tronics Division		2,242		77		763		2811	%		(90	)%
Microsource		2,239		7,342		4,917		(70	)%		49	%
Backlog of unfilled orders shippable within one year	$	4,481	$	7,419	$	5,680		(40	)%		31	%
ASGA Products		—		—		—	—				—
Legacy Products		—		—		—		—			—
Giga-tronics Division		—		—		—		—			—
Microsource		2,207		3,746		5,684		(41	)%		(34	)%
Backlog of unfilled orders shippable after one year	$	2,207	$	3,746	$	5,684		(41	)%		(34	)%

A llocation of Net Sales								% change
							201 9 vs.			201 8 vs.
(Dollars in thousands)	201 9		20 18		201 7		201 8			201 7
ASGA Sales	$	1,760	$	2,205	$	5,286		(20	)%		(58	)%
Legacy Product Sales		175		532		2,735		(67	)%		(81	)%
Giga-tronics Division	$	1,935	$	2,737	$	8,021		(29	)%		(66	)%
Microsource		9,213		7,063		8,246		30	%		(14	)%
Total	$	11,148	$	9,800	$	16,267		14	%		(40	)%

Gross Profit								% change
								201 9 vs.			201 8 vs.
(Dollars in thousands)	201 9		201 8			201 7		201 8			20 17
Giga-tronics Division	$	1,097	$	(12	)	$	1,512		9242	%		(101	)%
Microsource		3,626		2,748			3,039		32	%		(10	)%
Total	$	4,723	$	2,736		$	4,551		73	%		(40	)%

Operating Expenses							% change
(Dollars in thousands)	201 9		201 8		201 7		201 9 vs. 201 8			201 8 vs. 201 7
Engineering	$	1,304	$	1,794	$	2,254		(27	)%		(20	)%
Selling, general and administrative		3,707		4,076		4,641		(9	)%		(12	)%
Total	$	5,011	$	5,870	$	6,895		(15	)%		(15	)%

Net Inventories							% change
							2019 vs.			2018 vs.
(Dollars in thousands)	March 3 0 , 201 9		March 31 , 201 8		March 2 5 , 201 7		201 8			201 7
Raw materials	$	759	$	2,290	$	1,775		(67	)%		29	%
Work-in-progress		1,523		2,100		2,155		(27	)%		(3	)%
Finished goods		57		561		473		(90	)%		19	%
Demonstration inventory		395		536		408		(26	)%		31	%
Total	$	2,734	$	5,487	$	4,811		(50	)%		14	%

	Fiscal Year Ended
	March 3 0 , 201 9		March 31 , 201 8
Cash and cash equivalents	$	878	$	1,485
Total current assets		5,534		7,423
Total current liabilities		3,913		7,809
Working capital	$	1,621	$	(386	)
Current ratio		1.41		0.95

	Fiscal Year Ended
	March 3 0 , 201 9			March 31 , 201 8
Net cash used in operating activities	$	(1,307	)	$	(1,617	)
Net cash used in investing activities		-			(688	)
Net cash provided by financing activities	$	700		$	2,369

Financial Statements	Page

Consolidated Balance Sheets - As of March 30, 2019 and March 31, 2018	28

Consolidated Statements of Operations - Years ended March 30, 2019 and March 31, 2018	29

Consolidated Statements of Shareholders’ Equity - Years ended March 30, 2019 and March 31, 2018	30

Consolidated Statements of Cash Flows - Years ended March 30, 2019 and March 31, 2018	31

Notes to Consolidated Financial Statements	32

Notes to Consolidated Financial Statements	32-52

Report of Independent Registered Public Accounting Firm	53

		Years Ended
	March 3 0 , 201 9			March 31, 2018
Net r evenue
Goods	$	2,123		$	2,915
Services		9,025			6,885
Total revenue		11,148			9,800
Cost of sales		6,425			7,064
Gross profit		4,723			2,736

Operating expenses:
Engineering		1,304			1,794
Selling, general and administrative		3,707			4,076
Total operating expenses		5,011			5,870

Operating loss		(288	)		(3,134	)

Gain on adjustment of warrant liability to fair value		—			172
Gain on sale of product line		—			324
Interest expense, net		(713	)		(461	)
Loss before income taxes		(1,001	)		(3,099	)
Provision for income taxes		42			2
Net loss	$	(1,043	)	$	(3,101	)
Deemed dividend on Series E shares		—			(557	)

Net loss attributable to common shareholders	$	(1,043	)	$	(3,658	)

Loss per common share – basic	$	(0.10	)	$	(0.38	)
Loss per common share – diluted	$	(0.10	)	$	(0.38	)

Weighted average common shares used in per share calculation:
Basic		10,775			9,738
Diluted		10,775			9,738

	Preferred Stock						Common Stock						Accumulated
	Shares			Amount			Shares			Amount			Deficit				Total
Balance at March 2 5 , 201 7		18,534		$	2,911			9,594,203		$	24,390		$	(25,581	)	$	1,720
Net loss		—			—			—			—			(3,101	)		(3,101	)
Restricted stock granted		—			—			586,950			—			—			—
Restricted stock forfeited		—			—			(236,000	)		—			—			—
Stock based compensation		—			—			—			251			—			251
Shares issued related to loan agreement		—			—			367,500			224			—			224
Proceeds from issuance of Series E preferred stock, net of issuance costs of $102		43,800			993			—			—			—			993
Repriced 2016 investor warrants		—			(203	)		—			203			—			—
Fair value of the warrants issued to EGE as issuance cost of Series E		—			(54	)		—			54			—			—
Repricing of warrants issued to EGE related to 2016 private placement		—			(34	)		—			34			—			—
Fair value of modified PFG warrants		—			—			—			44			—			44
Beneficial conversion feature (BCF) upon issuance of Series E preferred shares		—			(557	)		—			557			—			—
Deemed dividend of discount to Series E preferred shares resulting from recognition of BCF		—			557			—			(557	)		—			—
Balance at March 31, 2018		62,334			3,613			10,312,653			25,200			(28,682	)		131
Cumulative effect of ASC 606 Adoption		—			—			—			—			1,177			1,177
Net loss		—			—			—			—			(1,043	)		(1,043	)
Restricted stock granted		—			—			310,000			—			—			—
Restricted stock forfeited		—			—			(25,000	)		—			—			—
Share based compensation		—			—			—			245			—			245
Shares issued related to loan agreement		—			—			30,000			—			—			—
Proceeds from issuance of Series E preferred stock, net of issuance costs of $212		56,200			1,193			—			—			—			1,193
Warrants exercises		—			—			572,858			112			—			112
Shares issued from conversion of Series E preferred stock		(1,600	)		—			160,000			—			—			—
Balance at March 30, 2019		116,934		$	4,806			11,360,511		$	25,557		$	(28,548	)	$	1,815

	March 3 0 , 201 9			March 31 , 201 8
Cash flows from operating activities:
Net loss	$	(1,043	)	$	(3,101	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		264			1,116
Share based compensation		245			251
Accretion of discounts and issuance costs on debt		224			127
Adjustment of warrant liability to fair value		—			(172	)
Change in fair value of equity forward		—			(16	)
Gain on sale of product line		—			(324	)
Accrued interest and fees on loan payable		111			98
Change in deferred rent		(55	)		487
Changes in operating assets and liabilities:
Trade accounts receivable		(204	)		590
Inventories		1,172			(676	)
Prepaid expenses and other current assets		(1,078	)		365
Accounts payable		(249	)		(111	)
Accrued payroll and benefits		133			(240	)
Deferred revenue		(807	)		(240	)
Other current and non-current liabilities		(20	)		229
Net cash used in operating activities		(1,307	)		(1,617	)

Cash flows from investing activities:
Purchases of property and equipment		—			(688	)
Net cash u sed in investing activities		—			(688	)

Cash flows from financing activities:

Payments on capital leases		(52	)		(50	)
Repayments of line of credit		(552	)		(30	)
Proceeds from loan payable, net of issuance costs		—			1,456
Proceeds from issuance of Series E preferred stock, net of issuance costs		1,192			993
Proceeds from exercise of warrants		112			—
Net cash provided by financing activities		700			2,369

Increase (decrease) in cash and cash-equivalents		(607	)		64

Beginning cash and cash-equivalents		1,485			1,421
Ending cash and cash-equivalents	$	878		$	1,485

Supplementary disclosure of cash flow information:
Cash paid for income taxes	$	32		$	2
Cash paid for interest	$	248		$	282
Supplementary disclosure of noncash investing and financing activities:
Cumulative effect of adoption ASC 606 on inventory	$	(1,581	)	$	—
Cumulative effect of adoption ASC 606 on prepaid expenses and other current assets	$	188		$	—
Cumulative effect of adoption of ASC 606 on deferred revenue	$	2,568		$	—
Fair value of warrants issued to EGE as issuance costs for Series E	$	—		$	54
Fair value of modified warrants	$	—		$	281
Common stock issued in connection with debt issuance	$	—		$	224
Equipment disposal	$	—		$	380

(Dollars in thousands)	March 3 0 , 20 19		March 31 , 201 8
Raw materials	$	759	$	2,290
Work-in-progress		1,523		2,100
Finished goods		57		561
Demonstration inventory		395		536
Total	$	2,734	$	5,487

(Dollars in thousands)	March 3 0 , 201 9			March 31 , 201 8
Leasehold improvements	$	633			633
Machinery and equipment		4,333			4,333
Computer and software		681			681
Furniture and office equipment		227			227
Subtotal		5,874			5,874
Less: accumulated depreciation and amortization		(5,305	)		(5,041	)
Total	$	569		$	833

Fees paid to the lender and third parties	$	44,000
Back-end fee		76,000
Estimated fair value of embedded equity forward		49,000
Fair value of 190,000 shares of common stock issued to lender		157,000
Aggregate discount amount	$	326,000

March 30, 2019 (Dollars in thousands)	Giga-tronics Division			Microsource		Total
Revenue	$	1,935		$	9,213	$	11,148
Interest expense, net		(713	)		—		(713	)
Depreciation and amortization		257			7		264
Income/(loss) before income taxes		(4,627	)		3,626		(1,001	)
Assets		3,979			2,300		6,279

March 31 , 201 8 (Dollars in thousands)	Giga-tronics Division			Microsource		Total
Revenue	$	2,737		$	7,063	$	9,800
Interest expense, net		(461	)		—		(461	)
Depreciation and amortization		1,116			1		1,117
Capital expenditures		(688	)		—		(688	)
Income/(loss) before income taxes		(5,847	)		2,748		(3,099	)
Assets		5,253			3,178		8,431

Stock options not included in computation that could potentially dilute EPS in the future	2,735	1,479
Restricted stock awards not included in computation that could potentially dilute EPS in the future	335	300
Convertible preferred stock not included in computation that could potentially dilute EPS in the future	11,693	1,858
Warrants not included in computation that could potentially dilute EPS in the future	3,452	3,960
	18,215	7,597

Fiscal year (Dollars in thousands)
2020	$	468
2021		479
2022		479
2023		487
Thereafter		209
Total	$	2,122

Fiscal year (Dollars in thousands)	Principal		Interest		Total
2020	$	41	$	5	$	46
2021		23		1		24
Total	$	64	$	6	$	70

3.1	Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-K for the fiscal year ended March 27, 1999)
3.2	Certificate of Determination of Preferences of Preferred Stock Series A of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-K for the fiscal year ended March 27, 1999)
3.3	Certificate of Determination of Series B Convertible Voting Perpetual Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on November 14, 2011)
3.4	Certificate of Determination of Series C Convertible Voting Perpetual Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on February 25, 2013)
3.5	Certificate of Determination of Series D Convertible Voting Perpetual Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on July 3, 2013)
3.6	Certificate of Determination of 6.0% Series E Senior Convertible Voting Perpetual Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed on March 30, 2018)
3.7	Certificate of Amendment to Certificate of Determination of 6.0% Series E Senior Convertible Voting Perpetual Preferred Stock of the Company (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed on August 20, 2018)
3.8	Certificate of Amendment to Certificate of Determination of 6.0% Series E Senior Convertible Voting Perpetual Preferred Stock of the Company (incorporated by reference to Exhibit 3.3 to the Company's Form 8-K filed on November 27, 2018)
3.9	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Form 10-K for the fiscal year ended March 29, 2008)
10.1	Form of Indemnification Agreement between the Company and each of its directors and officers (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-K for the fiscal year ended March 27, 2010)
10.2	2005 Equity Incentive Plan (incorporated by reference to Attachment A to the Company’s Proxy Statement on Form DEF 14A filed on July 21, 2005) *
10.3	Second Amended and Restated Warrant between the Company and Partners for Growth IV, L.P. dated March 26, 2018
10.4	Second Amended and Restated Warrant between the Company and SVB Financial Group dated March 26, 2018
10.5	Second Amended and Restated Warrant between the Company and PFG Equity Investors, LLC dated March 26, 2018
10.6	Securities Purchase Agreement between the Company and Alara Capital AVI II, LLC dated June 27, 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on July 3, 2013)
10.7	Securities Purchase Agreement between the Company and Alara Capital AVI II, LLC dated February 16, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on February 20, 2015)
10.8	Warrant to Purchase 898,634 Shares of Common Stock between the Company and Alara Capital AVI II, LLC dated February 16, 2015 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8- K filed on February 20, 2015)
10.9	Warrant to Purchase 194,437 Shares of Common Stock between the Company and Alara Capital AVI II, LLC dated February 23, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8- K filed on February 27, 2015)
10.10	Investor Rights Agreement between the Company and Alara Capital AVI II, LLC dated November 10, 2011 (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed on November 14, 2011)
10.11	Investor Rights Agreement between the Company and Alara Capital AVI II, LLC dated July 8, 2013 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on July 12, 2013)
10.12	Investor Rights Agreement between the Company and Alara Capital AVI II, LLC dated February 16, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on February 20, 2015)
10.13	Amendment No. 1 to Securities Purchase Agreement and Investor Rights Agreement between the Company and Alara Capital AVI II, LLC dated February 23, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on February 27, 2015)
10.14	Severance Agreement between the Company and John R. Regazzi dated June 3, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 9, 2010) *
10.15	Severance Agreement between the Company and Tim Ursprung dated July 2, 2018 *
10.16	Severance Agreement between the Company and Traci Mitchell dated March 21, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 26, 2019) *

10.17	Severance Agreement between the Company and Armand Pantalone dated March 21, 2019 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on March 26, 2019) *
10.18	Severance Agreement between the Company and Lutz Henckels dated April 11, 2019 *
10.19	Lease Agreement between the Company and SF II Creekside LLC dated January 5, 2017 (incorporated by reference to Exhibit 10.17 to the Company’s Form 10-K for the year ended March 31, 2018).
10.20	Loan and Security Agreement between the Company and Partners for Growth V, L.P. dated April 27, 2017 (incorporated by reference to Exhibit 10.18 to the Company’s Form 10-K for the year ended March 31, 2018).
10.21	Asset Purchase Agreement between the Company and Spanawave Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on February 8, 2016).
10.22	Form of Securities Purchase Agreement dated January 19, 2016, between the Company and individual investors (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-3 (File No. 333- 210157) filed on March 14, 2016).
10.23	Form of Warrant Agreement dated January 29, 2016, between the Company and individual investors (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-3 (File No. 333-210157) filed on March 14, 2016.
10.24	Investor Rights Agreement dated January 15, 2016, between the Company and individual investors (incorporated by reference to Exhibit 10.22 to the Company’s Form 10-K for the year ended March 31, 2018)
10.25	Investor Rights Agreement dated March 26, 2018, between the Company and the investor parties thereto, (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on March 30, 2018)
10.26	Conditional Waiver and Modification to Loan and Security Agreement dated March 26, 2018 between the Company and Partners For Growth (incorporated by reference to Exhibit 10.24 to the Company’s Form 10-K for the year ended March 31, 2018)
10.27	Modification No. 2 to Loan and Security Agreement dated December 12, 2018 between the Company and Partners for Growth V. L.P. (incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed on December 21, 2018)
10.28	Modification No. 3 to Loan and Security Agreement dated March 11, 2019 between the Company and Partners for Growth V. L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 14, 2019)
10.29	Amended and Restated Business Financing Agreement between the Company, Microsource, Inc. and Western Alliance Bank (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on March 14, 2019)
10.30	Stock Option Award Agreement between the Company and Lutz Henckels dated June 6, 2018 (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K for the year ended March 31, 2018)*
10.31	2018 Equity Incentive Plan (incorporated by reference to Attachment A to the Company’s Proxy Statement on Form DEF 14A filed on July 30, 2018) *
10.32	Form of Option Agreement for Directors under 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on February 6, 2019)*
10.33	Form of Option Agreement for Certain Grants to Executive Officers under 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on February 6, 2019)*
10.34	Form of Option Agreement for Employees and Executive Officers (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on February 6, 2019)*
16	Letter from the Company’s former certifying accountants dated January 9, 2018 (incorporated by reference to Exhibit 16.1 to the Company’s Form 8-K filed on January 9, 2018)
21	Significant Subsidiaries (incorporated by reference to Exhibit 20 to the Company’s Form 10-K filed on June 19, 2018)
23.1	Consent of Armanino LLP
31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

	GIGA-TRONICS INCORPORATED

By:	/s/ JOHN R. REGAZZI	May 30, 2019
	Chief Executive Officer Date	Date

/s/ WILLIAM J. THOMPSON	Chairman of the Board of	May 30, 2019
William J. Thompson	Directors	Date

/s/ JOHN R. REGAZZI	Chief Executive Officer and	May 30, 2019
John R. Regazzi	Director	Date

/s/ LUTZ P. HENCKELS	Chief Financial Officer	May 30, 2019
Lutz P. Henckels	and Director (Principal	Date
	Financial Officer)

/s/ TRACI K. MITCHELL	Corporate Controller (Principal	May 30, 2019
Traci K. Mitchell	Accounting Officer)	Date

/s/ GORDON L. ALMQUIST	Director	May 30, 2019
Gordon L. Almquist		Date

/s/ JAMIE WESTON	Director	May 30, 2019
Jamie Weston		Date