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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

     (Mark One)

     
(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the period ended June 29, 2002, or
 
(   )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from __________ to __________

Commission File No. 0-12719

GIGA-TRONICS INCORPORATED

(Exact name of Registrant as specified in its charter)
 
 
     
                 California
(State or other jurisdiction of
incorporation or organization)
  94-2656341
(IRS Employer Identification No.)
 
         
4650 Norris Canyon Road, San Ramon, CA     94583

 
(Address of principal executive offices)     Zip Code

Registrant’s telephone number:   (925) 328-4650

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities
     Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
     reports), and (2) has been subject to such filing requirements for the past 90 days.

                     Yes  [X]    No  [   ]

     Common stock outstanding as of August 2, 2002:      4,661,132

 


TABLE OF CONTENTS

CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II — OTHER INFORMATION
ITEM 6 Exhibits and Reports on Form 8-K
SIGNATURES
Exhibit Index
Exhibit 99.1
Exhibit 99.2


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GIGA-TRONICS INCORPORATED

INDEX
                 
          Page No.  
         
 
PART I — FINANCIAL INFORMATION        
 
    ITEM 1   Condensed Consolidated Financial Statements:        
 
        Condensed Consolidated Balance Sheets as of June 29, 2002 and March 30, 2002 (unaudited)   3    
 
        Condensed Consolidated Statements of Operations, three months ended June 29, 2002 and June 30, 2001 (unaudited)  
4
   
 
        Condensed Consolidated Statements of Cash Flows, three months ended June 29, 2002 and June 30, 2001 (unaudited)  
5
   
 
        Notes to Unaudited Condensed Consolidated Financial Statements   6    
 
    ITEM 2   Management’s Discussion and Analysis of Operations and Financial Condition   9    
 
    ITEM 3   Quantitative and Qualitative Disclosures about Market Risk   12    
 
PART II — OTHER INFORMATION        
 
    ITEM 1   Legal Proceedings
As of August 2, 2002, Giga-tronics has no material pending legal proceedings. From time to time, Giga-tronics is involved in various disputes and litigation matters that arise in the ordinary course of business.
       
 
    ITEM 2 TO 5      Not applicable        
 
    ITEM 6        Exhibits and Reports on Form 8-K        
 
             (a) Exhibits        
 
             (b) Reports on Form 8-K        
 
                   Not applicable        
 
SIGNATURES     13
 
EXHIBIT INDEX     E-1

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GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share data)
                   
      June 29, 2002   March 30, 2002
     
 
Assets
               
Current assets
               
 
Cash and cash equivalents
  $ 5,647     $ 7,180  
 
Trade accounts receivable, net of allowance of $322 and $358, respectively
    3,243       3,881  
 
Inventories
    11,372       11,246  
 
Income tax refund receivable
    730       701  
 
Prepaid expenses
    556       320  
 
Deferred income taxes
    4,841       4,841  
 
   
     
 
Total current assets
    26,389       28,169  
Property and equipment
               
 
Leasehold improvements
    422       408  
 
Machinery and equipment
    16,577       16,590  
 
Office furniture and fixtures
    1,175       1,162  
 
   
     
 
Property and equipment, gross cost
    18,174       18,160  
Less accumulated depreciation and amortization
    14,524       14,098  
 
   
     
 
Property and equipment, net
    3,650       4,062  
Patents and licenses
    16       20  
Other assets
    466       629  
 
   
     
 
Total assets
  $ 30,521     $ 32,880  
 
   
     
 
Liabilities and shareholders’ equity
               
Current liabilities
               
 
Accounts payable
  $ 926     $ 1,426  
 
Accrued commissions
    191       224  
 
Accrued payroll and benefits
    1,050       1,249  
 
Accrued warranty
    773       779  
 
Customer advances
    582       780  
 
Obligation under capital lease
    79       89  
 
Other current liabilities
    803       610  
 
   
     
 
Total current liabilities
    4,404       5,157  
Obligations under capital lease, net of current portion
    73       94  
Deferred income taxes
    546       546  
Deferred rent
    410       422  
 
   
     
 
Total liabilities
    5,433       6,219  
 
   
     
 
Shareholders’ equity
               
Preferred stock of no par value
               
 
Authorized 1,000,000 shares; no shares outstanding at June 29, 2002 and March 30, 2002
           
Common stock of no par value;
               
  Authorized 40,000,000 shares; 4,661,132 shares at June 29, 2002 and 4,648,944 shares at March 30, 2002 issued and outstanding     12,660       12,634  
Retained earnings
    12,428       14,027  
 
   
     
 
Total shareholders’ equity
    25,088       26,661  
 
   
     
 
Total liabilities and shareholders’ equity
  $ 30,521     $ 32,880  
 
   
     
 

See Accompanying Notes to Consolidated Financial Statements

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GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
                   
      Three Months Ended
     
      June 29, 2002   June 30, 2001
     
 
Net sales
  $ 6,008     $ 11,797  
Cost of sales
    4,049       8,471  
 
   
     
 
Gross profit
    1,959       3,326  
Product development
    1,772       1,769  
Selling, general and administrative
    1,868       2,518  
Amortization of intangibles
    4       45  
 
   
     
 
Operating expenses
    3,644       4,332  
Operating loss
    (1,685 )     (1,006 )
Other (expense) income, net
    (26 )     44  
Interest income, net
    12       19  
 
   
     
 
Loss before income tax benefit
    (1,699 )     (943 )
Benefit for income taxes
    (100 )     (377 )
 
   
     
 
Net loss
  $ (1,599 )   $ (566 )
 
   
     
 
Basic and diluted net loss per share
  $ (0.34 )   $ (0.12 )
 
   
     
 
Shares used in per share calculation:
               
 
Basic and dilutive
    4,656       4,565  
 
   
     
 

See accompanying notes to unaudited condensed consolidated financial statements.

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GIGA-TRONICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
                 
    Three Months Ended
   
    June 29, 2002   June 30, 2001
   
 
Cash flows provided from operations:
               
Net loss
  $ (1,599 )   $ (566 )
Adjustments to reconcile net loss to net cash (used in) provided by operations:
               
Depreciation and amortization
    492       532  
Gain on sale of equipment
    (4 )     (1 )
Deferred income taxes, net
          (30 )
Changes in operating assets and liabilities
    (496 )     220  
 
   
     
 
Net cash (used in) provided by operations
    (1,607 )     155  
Cash flows from investing activities:
               
Additions to property and equipment
    (79 )     (386 )
Proceeds from sale of equipment
    7       12  
Other assets
    163       (71 )
 
   
     
 
Net cash used in investing activities
    91       (445 )
Cash flows from financing activities:
               
Issuance of common stock
    26       68  
Payments on capital lease and other long term obligations
    (43 )     (50 )
 
   
     
 
Net cash (used in) provided by financing activities
    (17 )     18  
Decrease in cash and cash equivalents
    (1,533 )     (272 )
 
   
     
 
Beginning cash and cash equivalents
    7,180       3,469  
Ending cash and cash equivalents
  $ 5,647     $ 3,197  
 
   
     
 

Supplementary disclosure of cash flow information:

(1)   No cash was paid for interest in the three month periods ended June 29, 2002 and June 30, 2001.

(2)   Cash paid for income taxes in the three month period ended June 29, 2002 was $2. Cash paid for income
taxes in the three month period ended June 30, 2001 was $23.

See accompanying notes to unaudited condensed consolidated financial statements.

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GIGA-TRONICS INCORPORATED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)    Basis of Presentation
 
     The condensed financial statements included herein have been prepared by Giga-tronics (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. For further information, refer to the financial statements and footnotes thereto, included in the Annual Report on Form 10-K, filed with the Securities and Exchange Commission for the year ended March 30, 2002.
 
(2)    Revenue
 
     Revenues are recognized when there is evidence of an arrangement, delivery has occurred, the price is fixed or determinable, and collectibility is reasonably assured. Revenue is generally recorded when products are shipped and the risk of loss has passed. Upon shipment, the Company also provides for the estimated cost that may be incurred for product warranties. Revenue related to products shipped subject to customers’ evaluation is recognized upon final acceptance.
 
(3)    Inventories
 
     Inventories consist of the following (in thousands):

                 
    June 29, 2002   March 30, 2002
   
 
Raw materials
  $ 5,855     $ 6,034  
Work-in-process
    4,224       3,852  
Finished goods
    696       683  
Demonstration inventory
    597       677  
 
   
     
 
Total inventory
  $ 11,372     $ 11,246  
 
   
     
 

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(4)    Earnings Per Share
 
     Basic earnings per share is calculated by dividing net income or loss by the weighted average common shares outstanding during the period. Diluted earnings per share reflects the net incremental shares that would be issued if dilutive outstanding stock options were exercised, using the treasury stock method. In the case of a net loss, it is assumed that no incremental shares would be issued because they would be antidilutive. In addition, certain options are considered antidilutive because the options’ exercise price was above the average market price during the period. The shares used in per share computations for the three month periods ended June 29, 2002 and June 30, 2001 are as follows (in thousands):

                 
    Three Months Ended
   
    June 29, 2002   June 30, 2001
   
 
Net loss
  $ (1,599 )   $ (566 )
 
   
     
 
Weighted average:
               
Common shares outstanding
    4,656       4,565  
Dilutive potential common shares
           
 
   
     
 
Common shares assuming dilution
    4,656       4,565  
 
   
     
 
Number of stock options excluded in the computation
    606       560  
 
   
     
 

     All stock options outstanding were excluded from the computation of diluted EPS for the three month periods ended June 29, 2002 and June 30, 2001 because the Company experienced a loss from continuing operations and the options are, therefore, antidilutive. The weighted average exercise price of excluded options was $3.74 and $4.04 as of June 29, 2002 and June 30, 2001, respectively.
 
(5)    Significant Customers and Industry Segment Information
 
     The Company has five reportable segments: Giga-tronics Instrument Division, ASCOR, Microsource, DYMATiX and Corporate. Giga-tronics Instrument division produces a broad line of test and measurement equipment used in the development, test and maintenance of wireless communications products and systems, flight navigational equipment, electronic defense systems and automatic testing systems. ASCOR designs, manufactures, and markets a line of switching devices that link together many specific purpose instruments that comprise automatic test systems. Microsource develops and manufactures a broad line of YIG (Yttrium, Iron, Garnet) tuned oscillators, filters and microwave synthesizers, which are used in a wide variety of microwave instruments and devices. DYMATiX manufactures and markets optical inspection equipment used to test semiconductor devices and automation equipment for the test and inspection of silicon wafers. The Corporate segment handles the financing needs of each segment and lends funds to each segment as required.
 
     Information on reportable segments is as follows (in thousands):

                                 
    Three Months Ended
   
    June 29, 2002   June 30, 2001
   
 
            Pre-tax           Pre-tax
    Net Sales   Income (loss)   Net Sales   Income (loss)
   
 
 
 
Giga-tronics Instrument
  $ 2,127     $ (1,743 )   $ 6,734     $ (83 )
ASCOR
    1,212       (73 )     1,080       (18 )
Microsource
    2,392       309       2,440       (983 )
DYMATiX
    277       (368 )     1,543       (169 )
Corporate
          176             310  
 
   
     
     
     
 
Total
  $ 6,008     $ (1,699 )   $ 11,797     $ (943 )
 
   
     
     
     
 

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(6)    Recently Issued Accounting Standards
 
     In July 2001, the FASB issued Statement No. 141, Business Combinations, and Statement No. 142, Goodwill and Other Intangible Assets. Statement No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. Statement No. 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill. Statement No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of Statement No. 142. Statement No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives, and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The Company adopted the provisions of Statement No. 141 as of July 1, 2001. The adoption of Statement No. 141 did not have a material impact on the Company’s financial position or results of operations. The Company adopted the provisions of Statement No. 142 effective March 31, 2002. The adoption of this statement did not have a material effect on the consolidated financial statements of the Company.
 
     In June 2002, the Financial Accounting Standards Board (FASB) issued Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This Statement requires recording costs associated with exit or disposal activities at their fair values when a liability has been incurred. Under previous guidance, certain exit costs were accrued upon management’s commitment to an exit plan, which is generally before an actual liability has been incurred. This Statement is effective for exit or disposal activities initiated after December 31, 2002; however, early application of the Statement is encouraged. The Company has not yet determined what impact the adoption of Statement 146 will have on its financial position or results of operations.

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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION

This report includes forward-looking statements. Generally, words such as “believes”, “anticipates”, “estimates”, “expects”, “intends” and words of similar import, which reflect management’s best judgment based on factors currently known, indicate forward looking information and, therefore, involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including but not limited to those listed in the Giga-tronics’ annual report on Form 10-K for the fiscal year ended March 30, 2002 Part I, under the heading “Certain Factors Which May Adversely Affect Future Operations or an Investment in Giga-tronics”, and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations”. See also “Forward-looking Statements” set forth below in this report.

GENERAL

Giga-tronics designs, manufactures, and markets microwave and radio frequency signal generation and power measurement instruments, switching devices, and YIG tuned oscillators. These products have broad applications in both defense electronics and wireless telecommunications. Giga-tronics also manufactures a line of inspection and handling equipment used in the production of semiconductor devices.

THREE MONTHS ENDED JUNE 29, 2002 AND JUNE 30, 2001

During the quarter, a contract with a long-term customer at the Microsource division was restructured resulting in an order reversal of $750,000. Orders for the three-month period were $4,430,000, before the order reversal, versus $11,839,000 for the same period a year ago. Due to the continuing softness in the wireless industry, our orders were 63% lower ($7,409,000) than the comparable period last year. Orders for the Instrument division were 38% lower ($1,287,000) in the first quarter of 2003 versus the prior year. Orders for ASCOR increased 107% ($579,000) for the first quarter versus last year. Orders for Microsource were 95% ($5,537,000) lower than the comparable quarter last year. DYMATiX orders were 58% lower ($1,164,000) in the first three months ended June 29, 2002 versus the same period a year ago. Backlog at June 29, 2002 was $19,059,000 (about $5.6 million is expected to be shipped within one year) as compared to $40,006,000 (about $21.8 million expected to be shipped within one year) on June 30, 2001.

Net sales for the three-month period ended June 29, 2002 decreased 49% ($5,789,000) compared with the same period last year. Sales for Microsource decreased 2% ($48,000) primarily due to timing of delivery commitments for the existing backlog. Giga-tronics Instrument division sales decreased 68% ($4,607,000) primarily due to weak orders. Sales at ASCOR increased by 12% ($132,000) during the quarter due increased orders. Sales for DYMATiX decreased 82% ($1,266,000) in the quarter primarily due to weak orders due to a slowdown in capital equipment purchases affecting the semiconductor manufacturing market.

Cost of Sales decreased 52% ($4,422,000) in the quarter ended June 29, 2002 from the similar period a year ago. The decrease in the first quarter of fiscal 2003 was attributable to the 49% decline in sales coupled with lower manufacturing material costs and manufacturing labor for the products shipped during the quarter.

Operating expenses for the three-month period decreased 16% ($688,000) compared with the same period last year. Research and development expenses for the three-month period were flat compared with the prior year due to increased new product development at DYMATiX and the Instrument division offset by reductions at Microsource. Selling, general and administrative expenses were down 26% ($650,000) compared with the same period a year ago due to lower commission expense of $173,000 because of lower sales coupled with decreases in marketing expenses of $260,000 and administrative expenses of $217,000. These expense reductions were primarily personnel related. Amortization of intangibles decreased 91% ($41,000) as compared to the prior year. The decrease in the amortization of intangibles is a result of the goodwill being fully amortized at March 30, 2002. Interest income for the three-month period decreased from the prior year due to lower interest rates on cash available for investment.

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The loss before income taxes for the three-month period increased $756,000 compared to the same period last year. The change was primarily due to lower revenues offset by lower operating expenses. Income tax benefit for the three-month period ended June 29, 2002, decreased in comparison to the same period in the prior year, due to a valuation allowance established for net operating loss carryforwards arising in the current period.

FINANCIAL CONDITION

Giga-tronics had working capital of $21,985,000 and a ratio of current assets to current liabilities of 6.0 to 1.0 at June 29, 2002. Giga-tronics continues to fund all of its working capital needs from cash provided by operations. Cash used by operations, for the three months ended June 29, 2002, was $1,607,000.

Cash and cash equivalents at June 29, 2002 decreased $1,533,000 from year end. Giga-tronics spent $79,000 on new manufacturing and test equipment and other capital items. Giga-tronics intends to continue investing in capital items that support new product development, raise productivity, and improve the quality of its products. Historically, the Company has satisfied its cash needs internally for both operating and capital expenditures, and management expects to continue to do so for the foreseeable future.

Management believes that cash reserves and investments remain adequate to meet anticipated operating needs. In addition, the Company has an unsecured revolving line of credit for $7 million, none of which has been utilized. This line of credit expires September 30, 2002. The Company is currently in violation on one of the bank’s covenants. Giga-tronics has requested and currently expects to receive a waiver from the bank. It is also the Company’s intention to maintain research and development expenditures for the purpose of broadening its product base. From time to time, the Company considers a variety of acquisition opportunities to also broaden its product lines and expand its market. Such acquisition activity could also increase the Company’s operating expenses and require the additional use of capital resources.

OUTLOOK

With the broad softening in the wireless industry, Giga-tronics’ outlook for 2003 remains cautious. Giga-tronics is uncertain of the duration and severity of the current economic downturn in the markets we serve and the ultimate impact this will have on the Company. While there are some indications of increased strength in defense, the economic downturn has impacted capital spending in many of our commercial markets and has resulted in declining new orders. In response to the current market conditions, Giga-tronics has implemented aggressive cost reduction programs. However, Giga-tronics remains committed to the investment in new product development in order to expand our product lines and update our existing lines with additional features. While the Microsource segment is expected to improve in the current year, its short-term growth will be less than previously anticipated as there are timing delays associated with currently booked orders.

CRITICAL ACCOUNTING POLICIES

Revenue

Revenues are recognized when there is evidence of an arrangement, delivery has occurred, the price is fixed or determinable, and collectibility is reasonably assured. Revenue is generally recorded when products are shipped and the risk of loss has passed. Upon shipment, the Company also provides for the estimated cost that may be incurred for product warranties. Revenue related to products shipped subject to customers’ evaluation is recognized upon final acceptance.

Inventory

Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. The Company has reduced the carrying value of inventory to market where changes to product specifications, inventory trends and market conditions have rendered such inventory excessive or obsolete.

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Accounts Receivable

Accounts receivable are stated at net realizable value. The Company has estimated an allowance for uncollectible accounts based on analysis of outstanding receivables, consideration of the age of those receivables, and the Company’s historical collection experience.

Deferred Tax Assets

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 projected future taxable income and tax planning strategies in making this assessment. Based on the historical taxable income and projections for future taxable income over the periods in which the deferred tax assets become deductible, management believes it more likely than not that the Company will realize benefits of these deductible differences, net of valuation allowances as of June 29, 2002.

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 owned by the Company, are capitalized as other assets and amortized over their useful life when reimbursable by the customer. Otherwise, they are expensed as incurred. Included in other assets as of June 29, 2002 and March 30, 2002 are capitalized pre-production costs of $374,000 and $538,000, respectively.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this report are forward-looking. While Giga-tronics believes that these statements are accurate, Giga-tronics’ business is dependent upon general economic conditions and various conditions specific to the test and measurement, wireless and semiconductor industries. Future trends and these factors could cause actual results to differ materially from the forward-looking statements that we have made. In particular:

Giga-tronics’ core business is test and measurement, as well as components for the wireless communications market, which continues to remain soft. The Company’s commercial product backlog has a number of risks and uncertainties such as the cancellation or deferral of orders, dispute over performance and our ability to collect amounts due. If the commercial market should decline further, then shipments in the current year could fall short of plan resulting in a decline in earnings. Also, Giga-tronics has a significant number of defense-related orders. While Giga-tronics has seen some improvement in the defense sector, it is not significant enough to offset the decline in the commercial sector. If the defense market should decline, shipments in the current year could be less than anticipated and cause a decrease in earnings.

The market for electronics equipment is characterized by rapidly changing technology and evolving industry standards. Giga-tronics believes that its future success will depend, in part, upon its ability to develop and commercialize its existing products, develop new products and applications and in part to develop, manufacture and successfully introduce new products and product lines with improved capabilities and continue enhancing existing products. There can be no assurance that Giga-tronics will successfully complete the development of current or future products or that such products will achieve market acceptance. Giga-tronics may also experience difficulty obtaining critical parts or components required in the manufacturing of our products, resulting in our inability to fulfill orders in a timely manner, which may have a negative impact on our earnings. Also, the Company may not timely ramp manufacturing capacity to meet order demand and quickly adapt cost structures to changing market conditions.

As part of our business strategy, Giga-tronics intends to broaden its product lines and expand its markets, in part through the acquisition of other business entities. The Company acquired Microsource, Inc. in fiscal 1999 in a transaction accounted for as a purchase. The Company is subject to various risks in connection with past and any future acquisitions. Such risks include, among other things, the difficulty of assimilating the operations and personnel of the acquired companies, the potential disruption of the Company’s business, the inability of the Company’s management to maximize the financial and strategic position of the Company by the successful

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incorporation of acquired technology and rights into the Company’s product offerings, the maintenance of uniform standards, controls, procedures and policies, and the potential loss of key employees of acquired companies. No assurance can be given that any acquisition by Giga-tronics will or will not occur, that if an acquisition does occur, that it will not materially and adversely affect the Company or that any such acquisition will be successful in enhancing the Company’s business. Giga-tronics currently contemplates that future acquisitions may involve the issuance of additional shares of the Company’s common stock. Any such issuance may result in dilution to all shareholders of the Company, and sales of such shares in significant volume by the shareholders of acquired companies may depress the price of the Company’s common stock.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Financial instruments that expose the company to market risk are cash and cash equivalents. The investments are held in recognized financial institutions and have limited market risk due to the short-term maturities of the instruments.

PART II — OTHER INFORMATION

     
ITEM 6   Exhibits and Reports on Form 8-K
     
(a)   Exhibit.
The Exhibit list required by this item is incorporated by reference to the Exhibit Index attached hereto.
 
(b)   Reports on Form 8-K

Not applicable

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  GIGA-TRONICS INCORPORATED
                    (Registrant)

  By:

         
Date:   08/02/02

  /s/    GEORGE H. BRUNS, JR.

George H. Bruns, Jr.
Chairman and Chief Executive Officer
(Principal Executive Officer)
 
 
 
Date:   08/02/02

  /s/    MARK H. COSMEZ II

Mark H. Cosmez II
Vice President, Finance
Chief Financial Officer and Secretary
(Principal Accounting Officer)

 

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Table of Contents

Exhibit Index

     
Exhibit   Description

 
 
99.1   Certification of Registrant’s Chief Executive Officer Pursuant To 18 U.S.C. Section 1350
 
99.2   Certification of Registrant’s Chief Financial Officer Pursuant To 18 U.S.C. Section 1350

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