TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)	TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)											TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	3 Months Ended September 30						9 Months Ended September 30					3 Months Ended September 30						9 Months Ended September 30
							9 Months Ended September 30					3 Months Ended September 30						9 Months Ended September 30
In thousands, except per share data	3 Months Ended September 30		2022			2021			2022			2021		2023			2022			2023			2022
Revenues:
Digital product sales	$	4,510		$	2,393		$	14,763		$	6,882	$	3,933		$	4,510		$	10,821		$	14,763
Digital product lease and maintenance		279			472			993			1,456		209			279			656			993
Total revenues		4,789			2,865			15,756			8,338		4,142			4,789			11,477			15,756

Cost of revenues:
Cost of digital product sales		4,364			3,010			13,122			8,286		3,698			4,364			10,118			13,122
Cost of digital product lease and maintenance		124			145			431			462		111			124			331			431
Total cost of revenues		4,488			3,155			13,553			8,748		3,809			4,488			10,449			13,553

Gross income (loss)		301			(290)			2,203			(410)
Gross income													333			301			1,028			2,203
General and administrative expenses		(884)			(727)			(2,468)			(2,270)		(995)			(884)			(2,889)			(2,468)
Operating loss		(583)			(1,017)			(265)			(2,680)		(662)			(583)			(1,861)			(265)
Interest expense, net		(110)			(103)			(382)			(363)		(183)			(110)			(521)			(382)
Gain (loss) on foreign currency remeasurement		181			62			241			(10)
Gain on extinguishment of debt		-			-			-			77
Gain on foreign currency remeasurement													60			181			1			241
Gain on forgiveness of PPP loan		-			-			824			-		-			-			-			824
Pension benefit		53			66			158			200
Income (loss) before income taxes		(459)			(992)			576			(2,776)
Pension (expense) benefit													(62)			53			(187)			158
(Loss) income before income taxes													(847)			(459)			(2,568)			576
Income tax expense		(7)			(7)			(19)			(19)		(7)			(7)			(19)			(19)
Net income (loss)	$	(466)		$	(999)		$	557		$	(2,795)
Net (loss) income												$	(854)		$	(466)		$	(2,587)		$	557

The accompanying notes are an integral part of these condensed consolidated financial statements.	The accompanying notes are an integral part of these condensed consolidated financial statements.											The accompanying notes are an integral part of these condensed consolidated financial statements.

TRANS-LUX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)

3 Months Ended
September 30
9 Months Ended
September 30
In thousands
2022

2021

2022

2021
Net income (loss)
$
(466)

$
(999)

$
557

$
(2,795)
Other comprehensive (loss) income:
Unrealized foreign currency translation (loss) gain

(168)

(58)

(212)

10
Total other comprehensive (loss) income, net of tax

(168)

(58)

(212)

10
Comprehensive income (loss)
$
(634)

$
(1,057)

$
345

$
(2,785)

The accompanying notes are an integral part of these condensed consolidated financial statements.

TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited)

	3 Months Ended September 30				9 Months Ended September 30
	3 Months Ended September 30				9 Months Ended September 30
In thousands	2023		2022		2023		2022
Net (loss) income	$	(854)	$	(466)	$	(2,587)	$	557
Other comprehensive (loss) income:
Unrealized foreign currency translation loss		(57)		(168)		(3)		(212)
Total other comprehensive loss, net of tax		(57)		(168)		(3)		(212)
Comprehensive (loss) income	$	(911)	$	(634)	$	(2,590)	$	345

The accompanying notes are an integral part of these condensed consolidated financial statements.

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TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (unaudited)	TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (unaudited)																					TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (unaudited)

															Accumulated Other Comprehensive Loss						Total Stock- holders' Deficit																						Accumulated Other Comprehensive Loss						Total Stock- holders' Deficit
	Preferred Stock										Add'l Paid-in Capital											Preferred Stock															Add'l Paid-in Capital
	Series A			Series B			Common Stock					Accumulated Deficit				Accumulated Other Comprehensive Loss		Treasury Stock				Series A					Series B					Common Stock							Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock
In thousands, except share data	Shares	Amt		Shares	Amt		Shares	Amt				Accumulated Deficit						Treasury Stock	Accumulated Other Comprehensive Loss			Shares		Amt			Shares		Amt			Shares		Amt					Accumulated Deficit		Accumulated Other Comprehensive Loss				Treasury Stock
For the 9 months ended September 30, 2023
Balance January 1, 2023																				-		$	-		-		$	-		13,474,116		$	13		$	41,444			$	(42,652)					$	(6,066)	(3,063)	$	(10,324)
Net loss																					-			-		-			-		-			-			-			(2,587)				-			-		(2,587)
Stock issued to directors/officers																						-			-		-			-		50,000			-			26			-			-			-			26
Issuance of options																						-			-		-			-		-			-			38			-			-			-			38
Other comprehensive loss, net of tax:
Unrealized foreign currency translation loss																						-			-		-			-		-			-			-			-			(3)			-			(3)
Balance September 30, 2023																						-		$	-		-		$	-		13,524,116		$	13		$	41,508		$	(45,239)		$	(6,069)		$	(3,063)		$	(12,850)

For the 3 months ended September 30, 2023
Balance July 1, 2023																						-		$	-		-		$	-		13,524,116		$	13		$	41,508		$	(44,385)		$	(6,012)		$	(3,063)		$	(11,939)
Net loss																						-			-		-			-		-			-			-			(854)			-			-			(854)
Other comprehensive loss, net of tax:
Unrealized foreign currency translation loss																						-			-		-			-		-			-			-			-			(57)			-			(57)
Balance September 30, 2023																						-		$	-		-		$	-		13,524,116		$	13		$	41,508		$	(45,239)		$	(6,069)		$	(3,063)		$	(12,850)

For the 9 months ended September 30, 2022
Balance January 1, 2022	-	$	-	-	$	-	13,474,116	$	13	$	41,330	$	(42,975)	$	(6,253)			$		(3,063)		$	(10,948)	-		$	-		-		$	-		13,474,116		$	13		$	41,330		$	(42,975)		$	(6,253)		$	(3,063)		$	(10,948)
Net income	-		-	-		-	-		-		-		557		-			-				557	-			-		-			-		-			-			-			557			-			-			557
Issuance of options	-		-	-		-	-		-		76		-		-			-			76	-			-		-			-		-			-			76			-			-			-			76
Other comprehensive loss, net of tax:
Unrealized foreign currency translation loss	-		-	-		-	-		-		-		-		(212)			-			(212)	-			-		-			-		-			-			-			-			(212)			-			(212)
Balance September 30, 2022	-	$	-	-	$	-	13,474,116	$	13	$	41,406	$	(42,418)	$	(6,465)		$	(3,063)		$	(10,527)	-		$	-		-		$	-		13,474,116		$	13		$	41,406		$	(42,418)		$	(6,465)		$	(3,063)		$	(10,527)

For the 3 months ended September 30, 2022
Balance July 1, 2022	-	$	-	-	$	-	13,474,116	$	13	$	41,368	$	(41,952)	$	(6,297)		$	(3,063)		$	(9,931)	-		$	-		-			-		13,474,116		$	13		$	41,368		$	(41,952)		$	(6,297)		$	(3,063)		$	(9,931)
Net loss	-		-	-		-	-		-		-		(466)		-			-			(466)	-			-		-			-		-			-			-			(466)			-			-			(466)
Issuance of options	-		-	-		-	-		-		38		-		-			-			38	-			-		-			-		-			-			38			-			-			-			38
Other comprehensive loss, net of tax:
Unrealized foreign currency translation loss	-		-	-		-	-		-		-		-		(168)			-			(168)	-			-		-			-		-			-			-			-			(168)			-			(168)
Balance September 30, 2022	-	$	-	-	$	-	13,474,116	$	13	$	41,406	$	(42,418)	$	(6,465)		$	(3,063)		$	(10,527)	-		$	-		-		$	-		13,474,116		$	13		$	41,406		$	(42,418)		$	(6,465)		$	(3,063)		$	(10,527)

For the 9 months ended September 30, 2021
Balance January 1, 2021	-	$	-	-	$	-	13,474,116	$	13	$	41,330	$	(38,007)	$	(7,322)		$	(3,063)		$	(7,049)
Net loss	-		-	-		-	-		-		-		(2,795)		-			-			(2,795)
Other comprehensive loss, net of tax:
Unrealized foreign currency translation gain	-		-	-		-	-		-		-		-		10			-			10
Balance September 30, 2021	-	$	-	-	$	-	13,474,116	$	13	$	41,330	$	(40,802)	$	(7,312)		$	(3,063)		$	(9,834)

For the 3 months ended September 30, 2021
Balance July 1, 2021	-	$	-	-	$	-	13,474,116	$	13	$	41,330	$	(39,803)	$	(7,254)		$	(3,063)		$	(8,777)
Net loss	-		-	-		-	-		-		-		(999)		-			-			(999)
Other comprehensive income, net of tax:
Unrealized foreign currency translation gain	-		-	-		-	-		-		-		-		(58)			-			(58)
Balance September 30, 2021	-	$	-	-	$	-	13,474,116	$	13	$	41,330	$	(40,802)	$	(7,312)		$	(3,063)		$	(9,834)


The accompanying notes are an integral part of these condensed consolidated financial statements.	The accompanying notes are an integral part of these condensed consolidated financial statements.																					The accompanying notes are an integral part of these condensed consolidated financial statements.

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TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)	TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)				TRANS-LUX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	9 Months Ended September 30
	9 Months Ended September 30
In thousands					9 Months Ended September 30
In thousands	2022		2021		2023		2022
Cash flows from operating activities
Net income (loss)	$	557	$	(2,795)
Adjustment to reconcile net income to net cash (used in) provided by operating activities:
Net (loss) income					$	(2,587)	$	557
Adjustment to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		328		371		278		328
Amortization of right of use assets		295		219		320		295
Gain on forgiveness of PPP loan		(824)		-		-		(824)
Amortization of deferred financing fees and debt discount		52		95		-		52
Gain on extinguishment of debt		-		(77)
(Gain) loss on foreign currency remeasurement		(241)		10
Loss on foreign currency remeasurement						(1)		(241)
Issuance of common stock for compensation						26		-
Amortization of stock options		76		-		38		76
Bad debt expense		-		58
Allowance for credit losses						(36)		-
Changes in operating assets and liabilities:
Accounts receivable		(1,019)		(383)		425		(1,019)
Inventories		(3,517)		321		(284)		(3,517)
Prepaids and other assets		247		(296)		660		247
Accounts payable		766		3,792		1,867		766
Accrued liabilities		600		24		606		600
Operating lease liabilities		(291)		(224)		(335)		(291)
Customer deposits		1,133		(458)		(99)		1,133
Deferred pension liability and other		(158)		(52)		(441)		(158)
Net cash (used in) provided by operating activities		(1,996)		605
Net cash provided by (used in) operating activities						437		(1,996)
Cash flows from investing activities
Purchases of property, plant and equipment		(18)		-		(277)		(18)
Net cash used in investing activities		(18)		-		(277)		(18)
Cash flows from financing activities
Proceeds from long-term debt		1,510		-		200		1,510
Payments of long-term debt		-		(362)		(200)		-
Net cash provided by (used in) financing activities		1,510		(362)
Net (decrease) increase in cash and cash equivalents		(504)		243
Cash and cash equivalents at beginning of year		524		43
Cash and cash equivalents at end of period	$	20	$	286
Net cash provided by financing activities						-		1,510
Effect of exchange rate changes						(2)		-
Net increase (decrease) in cash, cash equivalents and restricted cash						158		(504)
Cash, cash equivalents and restricted cash at beginning of year						48		524
Cash, cash equivalents and restricted cash at end of period					$	206	$	20
Supplemental disclosure of cash flow information:
Interest paid	$	-	$	197	$	23	$	-
Income taxes paid		10		9		10		10
Reconciliation of cash, cash equivalents and restricted cash to amounts reported in the Condensed Consolidated Balance Sheets at end of period:
Current assets
Cash and cash equivalents					$	6	$	20
Long-term assets
Restricted cash						200		-
Cash, cash equivalents and restricted cash at end of period					$	206	$	20

The accompanying notes are an integral part of these condensed consolidated financial statements.	The accompanying notes are an integral part of these condensed consolidated financial statements.				The accompanying notes are an integral part of these condensed consolidated financial statements.

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TRANS-LUX CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, ~~2022~~2023

(unaudited)

Note 1 – Basis of Presentation

As used in this report, “Trans-Lux,” the “Company,” “we,” “us,” and “our” refer to Trans-Lux Corporation and its subsidiaries.

Financial information included herein is unaudited, however, such information reflects all adjustments (of a normal and recurring nature), which are, in the opinion of management, necessary for the fair presentation of the Condensed Consolidated Financial Statements for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”) and therefore do not include all information and footnote disclosures required under accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Financial Statements included herein should be read in conjunction with the Consolidated Financial Statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. The Condensed Consolidated Balance Sheet at December 31, ~~2021~~2022 is derived from the December 31, ~~2021~~2022 audited financial statements.

Critical Accounting Policies and Estimates

Accounting policies used in the preparation of our financial statements may involve the use of management judgments and estimates. Certain of our accounting policies are considered critical as they are both important to the portrayal of our financial statements and require significant or complex judgments on the part of management. Our judgments and estimates are based on experience and assumptions that we believe are reasonable under the circumstances. Further, we evaluate our judgments and estimates from time to time as circumstances change. Actual financial results based on judgments or estimates may vary under different assumptions or circumstances. Our critical accounting policies are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on March 31, 2023.

Restricted cash: The Company classifies cash as restricted when the cash is unavailable for withdrawal or usage for general operations. Restrictions may include legally restricted deposits, contracts entered into with others, or the Company’s statements of intention with regard to particular deposits. As of September 30, 2023, the Company had $200,000 of Restricted cash. The Company had no Restricted cash as of December 31, 2022.

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The following new accounting pronouncements were adopted in 2023:

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2022. The Company adopted the new guidance on January 1, 2023 and determined it did not have a material impact on its consolidated financial statements.

The following new accounting pronouncements, and related impacts on adoption, are being evaluated by the Company:

None.

Note 2 – Liquidity and Going Concern

A fundamental principle of the preparation of financial statements in accordance with GAAP is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. This principle is applicable to all entities except for entities in liquidation or entities for which liquidation appears imminent. In accordance with this requirement, the Company has prepared its accompanying Condensed Consolidated Financial Statements assuming the Company will continue as a going concern.

~~Due~~The Company has incurred recurring operating losses and continues to ~~the onset~~have a working capital deficiency including being in default of ~~the COVID-19 pandemic in 2020, the Company experienced a reduction in sales orders from customers in 2020 and 2021, which has just recently started to rebound.~~ several debt obligations.The Company recorded ~~net income~~a loss of ~~$557,000~~$2.6 million in the nine months ended September 30, ~~2022 but recorded~~2023, and had a ~~net loss of $5.0 million in the year ended December 31, 2021. The Company had~~ working capital ~~deficiencies~~deficiency of ~~$9.3 million and $9.8~~$12.5 million as of September 30, ~~2022 and~~2023.In addition, the Company’s obligations under the Loan Agreement mature on December 31, ~~2021, respectively.~~

2023.As of December 31, 2022, the Company had a working capital deficiency of $9.3 million.The Company is dependent on future operating performance in order to generate sufficient cash flows in order to continue to run its businesses.Future operating performance is dependent on general economic conditions, as well as financial, competitive and other factors beyond our control, including the impact of the current economic environment, the spread of major epidemics (including coronavirus), increases in interest rates and other related uncertainties such as government-imposed travel restrictions, interruptions to supply chains, extended shut down of businesses and the impact of inflation.In order to more effectively manage its cash resources, the Company ~~had,~~has, from time to time, increased the timetable of its payment of some of its payables, which delayed certain product deliveries from our vendors, which in turn delayed certain deliveries to our customers.

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If we are unable to (i) obtain additional liquidity for working capital, (ii) make the required minimum funding contributions to the defined benefit pension plan, (iii) make the required principal and interest payments on our outstanding 8¼% Limited convertible senior subordinated notes due 2012 (the “Notes”) and 9½% Subordinated debentures due 2012 (the “Debentures”) ~~and/or~~, (iv) repay our obligations under our Loan Agreement (hereinafter defined) with Unilumin and/or (v) repay our obligations under our loan agreements with Carlisle, there would be a significant adverse impact on our financial position and operating results. The Company continually evaluates the need and availability of long-term capital in order to meet its cash requirements and fund potential new opportunities. Due to the above, there is substantial doubt as to whether we will have adequate liquidity, including access to the debt and equity capital markets, to continue as a going concern over the next 12 months from the date of issuance of this Form 10-Q.

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Note 3 – Revenue Recognition

We recognize revenue in accordance with two different accounting standards: 1) Accounting Standards Codification (“ASC”) Topic 606 and 2) ASC Topic 842. Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. None of the Company’s contracts contained a significant financing component as of September 30, ~~2022.~~2023. Revenue from the Company’s digital product and maintenance service is recognized ratably over the lease term in accordance with ASC Topic 842.

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Disaggregated Revenues

The following table represents a disaggregation of revenue from contracts with customers for the three and nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, along with the reportable segment for each category:

Three months ended

Nine months ended
In thousands
September 30 2022

September 30 2021

September 30 2022

September 30 2021
Digital product sales:

Catalog and small customized products
$
4,510

$
2,393

$
14,763

$
6,882
Large customized products

-

-

-

-
Subtotal

4,510

2,393

14,763

6,882
Digital product lease and maintenance:

Operating leases

135

196

446

615
Maintenance agreements

144

276

547

841
Subtotal

279

472

993

1,456
Total
$
4,789

$
2,865

$
15,756

$
8,338

~~Performance Obligations~~

	Three months ended				Nine months ended
In thousands	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Digital product sales:
Catalog and small customized products	$	3,933	$	4,510	$	10,821	$	14,763
Large customized products		-		-		-		-
Subtotal		3,933		4,510		10,821		14,763
Digital product lease and maintenance:
Operating leases		113		135		361		446
Maintenance agreements		96		144		295		547
Subtotal		209		279		656		993
Total	$	4,142	$	4,789	$	11,477	$	15,756

The Company has two primary revenue streams which are Digital product sales and Digital product lease and maintenance.

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Digital Product Sales

The Company recognizes net revenue on digital product sales to its distribution partners and to end users related to digital display solutions and fixed digit scoreboards. For the Company’s catalog products, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. For the Company’s customized products, revenue is either recognized at a point in time or over time depending on the length of the contract. For those customized product contracts that are smaller in size, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. For those customized product contracts that are larger in size, revenue is recognized over time based on incurred costs as compared to projected costs using the input method, as this best reflects the Company’s progress in transferring control of the customized product to the customer. The Company may also contract with a customer to perform installation services of digital display products. Similar to the larger customized products, the Company recognizes the revenue associated with installation services using the input method, whereby the basis is the total contract costs incurred to date compared to the total expected costs to be incurred.

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Revenue on sales to distribution partners are recorded net of prompt-pay discounts, if offered, and other deductions. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method to which the Company expects to be entitled. In the case of prompt-pay discounts, there are only two possible outcomes: either the customer pays on-time or does not. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary. The Company offers an assurance-type warranty that the digital display products will conform to the published specifications. Returns may only be made subject to this warranty and not for convenience.

Digital Product Lease and Maintenance

Digital product lease revenues represent revenues from leasing equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease and do not generate material revenue from sales of equipment under such options. Our lease revenues do not include material amounts of variable payments. Digital product maintenance revenues represent revenues from maintenance agreements for equipment that we do not own. Lease and maintenance contracts generally run for periods of one month to 10 years. A contract entered into by the Company with a customer may contain both lease and maintenance services (either or both services may be agreed upon based on the individual customer contract). Maintenance services may consist of providing labor, parts and software maintenance as may be required to maintain the customer’s equipment in proper operating condition at the customer’s service location. The Company concluded the lease and maintenance services represent a series of distinct services and the most representative method for measuring progress towards satisfying the performance obligation of these services is the input method. Additionally, maintenance services require the Company to “stand ready” to provide support to the customer when and if needed. As there is no discernable pattern of efforts other than evenly over the lease and maintenance terms, the Company will recognize revenue straight-line over the lease and maintenance terms of service.

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The Company has an enforceable right to payment for performance completed to date, as evidenced by the requirement that the customer pay upfront for each month of services. Lease and maintenance service amounts billed ahead of revenue recognition are recorded in deferred revenue and are included in accrued liabilities in the Condensed Consolidated Financial Statements.

Revenues from equipment lease and maintenance contracts are recognized during the term of the respective agreements. At September 30, ~~2022,~~2023, the future minimum lease payments due to the Company under operating leases that expire at varying dates through ~~2029~~2030 for its rental equipment and maintenance contracts, assuming no renewals of existing leases or any new leases, aggregating ~~$1,529,000~~$1,281,000 are as follows: ~~$113,000~~$106,000 – remainder of ~~2022, $457,000 –~~ 2023, ~~$349,000~~$391,000 – 2024, ~~$266,000~~$305,000 – 2025, ~~$186,000~~$235,000 – 2026, $176,000 – 2027 and ~~$158,000~~$68,000 thereafter.

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Contract Balances with Customers

Contract assets primarily relate to rights to consideration for goods or services transferred to the customer when the right is conditional on something other than the passage of time. The contract assets are transferred to the receivables when the rights become unconditional. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had no contract assets. The contract liabilities primarily relate to the advance consideration received from customers for contracts prior to the transfer of control to the customer and therefore revenue is recognized on completion of delivery. Contract liabilities are classified as deferred revenue by the Company and are included in customer deposits and accrued liabilities in the Condensed Consolidated Balance Sheets.

The following table presents the balances in the Company’s receivables and contract liabilities with customers:

In thousands	September 30, 2022		December 31, 2021		September 30, 2023		December 31, 2022
Gross receivables	$	3,565	$	2,572	$	2,588	$	3,123
Allowance for bad debts		397		423
Allowance for credit loss						145		291
Net receivables		3,168		2,149		2,443		2,832
Contract liabilities		3,196		2,011		1,147		1,229

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During the three and nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods:

        Three months ended

Nine months ended
In thousands

September 30
2022

September 30
2021

September 30
2022

September 30
2021
Revenue recognized in the period from:

Amounts included in the contract liability at the
   beginning of the period

$
335

$
-

$
1,895

$
484
Performance obligations satisfied in previous periods
   (for example, due to changes in transaction price)

-

-

-

-

	Three months ended September 30				Nine months ended September 30
In thousands	2023		2022		2023		2022
Revenue recognized in the period from:
Amounts included in the contract liability at the beginning of the period	$	382	$	335	$	1,128	$	1,895
Performance obligations satisfied in previous periods (for example, due to changes in transaction price)		-		-		-		-

Transaction Price Allocated to Future Performance Obligations

As of September 30, ~~2022,~~2023, the aggregate amount of the transaction price allocated to remaining performance obligations for digital product sales was ~~$3.4~~$2.6 million and digital product lease and maintenance was ~~$1.5~~$1.3 million.

The Company expects to recognize revenue on approximately ~~79%~~78%, ~~13%~~15% and 8%7% of the remaining performance obligations over the next 12 months, 13 to 36 months and 37 or more months, respectively.

Costs to Obtain or Fulfill a Customer Contract

The Company capitalizes incremental costs of obtaining customer contracts. Capitalized commissions are amortized based on the transfer of the products or services to which the assets relate. Applying the practical expedient, ~~in ASC paragraph 340-40-25-4,~~ the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in General and administrative expenses.

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The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. When shipping and handling costs are incurred after a customer obtains control of the products, the Company also has elected to account for these as costs to fulfill the promise and not as a separate performance obligation. Shipping and handling costs associated with the distribution of finished products to customers are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer.

Note 4 – Inventories

Inventories consist of the following:

	September 30 2022			December 31 2021
In thousands	September 30 2022			December 31 2021		September 30 2023		December 31 2022
In thousands	September 30 2022			December 31 2021		September 30 2023		December 31 2022
Raw materials	September 30 2022			December 31 2021		$	2,219	$	2,535
Work-in-progress			314		-	Work-in-progress	-		-
Finished goods			1,803		404		787		187
		$	4,388	$	871	$	3,006	$	2,722

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Note 5 – Rental Equipment, net

Rental equipment consists of the following:

	September 30 2022			December 31 2021
In thousands	September 30 2022			December 31 2021			September 30 2023		December 31 2022
Rental equipment		$	3,664	$	3,664	$	2,077	$	2,077
Less accumulated depreciation			3,392		3,253		1,938		1,852
Net rental equipment		$	272	$	411	$	139	$	225

Depreciation expense for rental equipment for the nine months ended September 30, 2023 and 2022 was $86,000 and ~~2021 was~~ $139,000, ~~and $184,000,~~ respectively. Depreciation expense for rental equipment for the three months ended September 30, 2023 and 2022 was $29,000 and ~~2021 was~~ $46,000, ~~and $61,000,~~ respectively.

Note 6 – Property, Plant and Equipment, net

Property, plant and equipment consists of the following:

In thousands

September 30
2022

December 31
2021
Machinery, fixtures and equipment

$
2,920

$
2,908
Leaseholds and improvements

23

23

2,949

2,931
Less accumulated depreciation

1,170

981
Net property, plant and equipment

$
1,779

$
1,950

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In thousands		September 30 2023		December 31 2022
Machinery, fixtures and equipment	$	3,133	$	2,856
Leaseholds and improvements		23		23
		3,156		2,879
Less accumulated depreciation		1,356		1,164
Net property, plant and equipment	$	1,800	$	1,715

Machinery, fixtures and equipment having a net book value of $1.8 million and ~~$2.0~~$1.7 million at September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, were pledged as collateral under various financing agreements.

Depreciation expense for property, plant and equipment for the nine months ended September 30, 2023 and 2022 was $192,000 and ~~2021 was~~ $189,000, ~~and $187,000,~~ respectively. Depreciation expense for property, plant and equipment for the three months ended September 30, 2023 and 2022 was $67,000 and ~~2021 was~~ $63,000, ~~and $56,000,~~ respectively.

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Note 7 –Long-Term Debt

Long-term debt consists of the following:

In thousands	September 30 2022			December 31 2021		September 30 2023		December 31 2022
In thousands	September 30 2022			December 31 2021		September 30 2023		December 31 2022
8¼% Limited convertible senior subordinated notes due 2012		$	302	$	302	$	302	$	302
9½% Subordinated debentures due 2012			220		220		220		220
Revolving credit line – related party			2,246		1,189		2,246		2,246
Term loans – related party			1,000		1,000		1,000		1,000
Term loans			500		871		500		500
Total debt			4,268		3,582		4,268		4,268
Less deferred financing costs and debt discount			-		52		-		-
Net debt			4,268		3,530		4,268		4,268
Less portion due within one year			3,768		3,030		3,768		3,768
Net long-term debt		$	500	$	500	$	500	$	500

On September 16, 2019, the Company entered into a loan agreement (the “Loan Agreement”) with ~~MidCap. On June 3, 2020, March 23, 2021 and May 31, 2021, the Company and~~ MidCap, ~~entered into modification agreements to the Loan Agreement.~~which was subsequently modified. On July 30, 2021, MidCap assigned the loan to Unilumin. On March 20, 2023, the Company and Unilumin entered into a modification agreement to the Loan Agreement effective December 31, 2022. The Loan Agreement ~~terminated~~matures on ~~September 16, 2022, but as of the time of this filing, Unilumin has not demanded repayment.~~December 31, 2023. The Loan Agreement ~~allowed~~allows the Company to borrow up to an aggregate of ~~$4.0~~$2.2 million at an interest rate of the ~~3-month LIBOR interest rate~~Prime Rate as published in the Wall Street Journal plus 4.75% ~~(12.00%~~(13.25% at September 30, ~~2022)~~2023) on a revolving credit loan based on accounts receivable, inventory and equipment for general working capital purposes. As of September 30, ~~2022,~~2023, the balance outstanding under the Loan Agreement was $2.2 million, including $250,000 of borrowings in the nine months ended September 30, 2022. The Loan Agreement also requires the payment of certain fees, including a facility fee, an unused credit line fee and a collateral monitoring charge. The Loan Agreement contains financial and other covenant requirements, including financial covenants that require the Company to attain certain EBITDA amounts for certain periods, including the period ended September 16, 2022. The Company was not in compliance with this covenant. As such, Unilumin has the right to demand payment of the outstanding balance, but no such demand has been made as of the time of this filing.million. The Loan Agreement is secured by substantially all of the Company’s assets.

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The Company entered into a loan note (the ~~“EIDL~~“SBA Loan Note”) with the ~~SBA~~Small Business Administration of the United States of America (“~~Lender”~~SBA”) as lender (“SBA Lender”) under their Economic Injury Disaster Loan (“EIDL”) program, dated as of December 10, 2021.Under the ~~EIDL~~SBA Loan Note, the Company borrowed $500,000 from SBA Lender under the EIDL Program.As of September 30, ~~2022,~~2023, $500,000 was outstanding.The loan matures on December 10, 2051 and carries an interest rate of 3.75%.As of September 30, 2023 and December 31, 2022, the Company had accrued ~~$15,000~~$34,000 and $20,000, respectively, of interest related to the ~~EIDL~~SBA Loan Note, which is included in Accrued liabilities in the Consolidated Balance Sheets.

On April 23, 2020, the Company entered into a loan note (the ~~“Loan~~“CARES Loan Note”) with Enterprise Bank and Trust (“CARES Lender”) as lender under the CARES Act of the ~~Small Business Administration of the United States of America (“SBA”),~~SBA, dated as of April 20, 2020.Under the CARES Loan Note, the Company borrowed ~~$810,800~~$811,000 from CARES Lender under the Paycheck Protection Program (“PPP”) included in the SBA’s CARES Act.The CARES Loan Note proceeds were forgivable as long as the Company uses the loan proceeds for eligible purposes including payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leave; rent; utilities; and maintains its payroll levels.In January 2022, the loan was forgiven in full and the payments that had previously been paid were refunded.Refund proceeds in the amount of ~~$452,631~~$453,000 are included in proceeds from long-term debt in the accompanying condensed consolidated statements of Cash Flows for the nine months ended September 30, 2022.

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The Company has a $500,000 loan from Carlisle Investments Inc. (“Carlisle”)~~, a related party managed by a shareholder and former director~~ at a fixed interest rate of 12.00%, which matured on April 27, 2019 with a bullet payment of all principal due at such time. Interest is payable monthly. Carlisle had agreed to not demand payment on the loan through at least December 31, 2020, and has not made any such demands on principal or interest as of the date of this filing. As of September 30, ~~2022,~~2023, the entire amount was outstanding and is included in current portion of long-term debt in the Consolidated Balance Sheets. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued ~~$285,000~~$345,000 and ~~$240,000,~~$300,000, respectively, of interest related to this loan, which are included in accrued liabilities in the Condensed Consolidated Balance Sheets. Marco Elser, a director of the Company, exercises voting and dispositive power as investment manager of Carlisle.

The Company has an additional $500,000 loan from Carlisle at a fixed interest rate of 12.00%, which matured on December 10, 2017 with a bullet payment of all principal due at such time (the “Second Carlisle Agreement”). Interest is payable monthly. Carlisle had agreed to not demand payment on the loan through at least December 31, 2020, and has not made any such demands on principal or interest as of the date of this filing. As of September 30, ~~2022,~~2023, the entire amount was outstanding and is included in current portion of long-term debt Consolidated Balance Sheets. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued ~~$285,000~~$345,000 and ~~$240,000,~~$300,000, respectively, of interest related to this loan, which are included in accrued liabilities in the Condensed Consolidated Balance Sheets. Under the Second Carlisle Agreement, the Company granted a security interest to Carlisle in accounts receivable, materials and intangibles relating to a certain purchase order for equipment issued in April 2017.

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had outstanding $302,000 of Notes. The Notes matured as of March 1, 2012 and are currently in default. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued ~~$326,000~~$351,000 and ~~$307,000,~~$332,000, respectively, of interest related to the Notes, which is included in Accrued liabilities in the Consolidated Balance Sheets. The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Notes outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately. On January 15, 2021, holders of $50,000 of the Notes accepted the Company’s offer to exchange each $1,000 of principal, forgiving any related interest, for $400 in cash, for an aggregate payment by the Company of $20,000. As a result of the transaction, the Company recorded a gain on the extinguishment of debt, net of expenses, of $77,000 in the nine months ended September 30, 2021.

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As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had outstanding $220,000 of Debentures. The Debentures matured as of December 1, 2012 and are currently in default. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued ~~$268,000~~$289,000 and ~~$253,000,~~$273,000, respectively, of interest related to the Debentures, which is included in Accrued liabilities in the Consolidated Balance Sheets. The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Debentures outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately.

Note 8 – Pension Plan

As of December 31, 2003, the benefit service under the pension plan had been frozen and, accordingly, there is no service cost. As of April 30, 2009, the compensation increments had been frozen and, accordingly, no additional benefits are being accrued under the pension plan.

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The following table presents the components of net periodic pension cost for the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:

	Three months ended September 30				Nine months ended September 30				Three months ended September 30				Nine months ended September 30
In thousands	2022		2021		2022		2021		2023		2022		2023		2022
Interest cost	$	75	$	64	$	227	$	190	$	134	$	75	$	402	$	227
Expected return on plan assets		(200)		(210)		(600)		(630)		(145)		(200)		(436)		(600)
Amortization of net actuarial loss		72		80		215		240		73		72		221		215
Net periodic pension (benefit) expense	$	(53)	$	(66)	$	(158)	$	(200)
Net periodic pension expense (benefit)									$	62	$	(53)	$	187	$	(158)

As of September 30, ~~2022 and December 31, 2021,~~2023, the Company had recorded a current pension liability of ~~$0 and $129,000, respectively,~~$629,000, which is included in accrued liabilities in the Condensed Consolidated Balance Sheets, and a long-term pension liability of ~~$3.2~~$2.4 million, ~~and $3.4 million, respectively,~~ which is included in deferred pension liability and other in the Condensed Consolidated Balance Sheets. ~~The~~As of December 31, 2022, all pension contributions were due more than one year from the reporting date, so the Company did not record a current pension liability, and the Company had recorded a long-term pension liability of $2.9 million. There is not expected to be a minimum required contribution in ~~2022 is expected to be $138,000,~~ ~~which the Company has already contributed~~ ~~as of September 30, 2022.~~2023.

Note 9 –Leases

The Company leases administrative and manufacturing facilities through operating lease agreements. The Company has no finance leases as of September 30, ~~2022.~~2023. Our leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common area or other maintenance costs). The facility leases include one or more options to renew. The exercise of lease renewal options is typically at our sole discretion, therefore, the renewals to extend the lease terms are not included in our right of use (“ROU”) assets or lease liabilities as they are not reasonably certain of exercise. We regularly evaluate the renewal options and, when they are reasonably certain of exercise, we include the renewal period in our lease term.

~~Table of Contents~~ In April 2023, the Company exercised its 5-year renewal option at its Hazelwood, MO facility. In connection with the renewal, the Company remeasured its lease liability, which increased the ROU asset and lease liability by $1.6 million on the remeasurement date.

Operating leases result in the recognition of ROU assets and lease liabilities on the Condensed Consolidated Balance Sheets. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets. The primary leases we enter into with initial terms of 12 months or less are for equipment.

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Supplemental information regarding leases:

	September 30 2022		September 30 2023
In thousands, unless otherwise noted	September 30 2022		September 30 2023
Balance Sheet:
ROU assets	$	867	$	2,046
Current lease liabilities – operating		441		471
Non-current lease liabilities - operating		470		1,600
Total lease liabilities		911		2,071
Weighted average remaining lease term (years)		2.0		4.2
Weighted average discount rate		7.7%		10.4%
Future minimum lease payments:
Remainder of 2022	$	123
2023		437
Remainder of 2023			$	99
2024		146		545
2025		149		560
2026		152		577
2027				451
Thereafter		13		414
Total		1,020		2,646
Less: Imputed interest		109		575
Total lease liabilities		911		2,071
Less: Current lease liabilities		441		471
Long-term lease liabilities	$	470	$	1,600

Supplemental cash flow information regarding leases:

	For the three months ended September 30, 2022			For the nine months ended September 30, 2022
In thousands			For the three months ended September 30, 2023				For the nine months ended September 30, 2023
In thousands	For the three months ended September 30, 2022	For the three months ended September 30, 2022				For the nine months ended September 30, 2022
Operating cash flow information:		For the three months ended September 30, 2022				For the nine months ended September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities	$	122		$	354	$	124	$	372
Non-cash activity:
ROU assets obtained in exchange for lease liabilities		-			-		-		1,601

Total operating lease expense was $355,000 and $357,000 for the nine months ended September 30, ~~2022.~~2023 and 2022, respectively. Total operating lease expense was $118,000 and $118,000 for the three months ended September 30, ~~2022.~~2023 and 2022, respectively. There was no short-term lease expense for the nine months or three months ended September 30, ~~2022. Total operating lease expense~~2023 and short-term lease expense was $284,000 and $5,000, respectively, for the nine months ended September 30, 2021. Total operating lease expense and short-term lease expense was $94,000 and $2,000, respectively, for the three months ended September 30, 2021.2022.

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Note 10 – Stockholders’ Deficit and (Loss) Income ~~(Loss)~~ Per Share

The following table presents the calculation of (loss) income ~~(loss)~~ per share for the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:

	Three months ended September 30				Nine months ended September 30
In thousands, except per share data									Three months ended September 30				Nine months ended September 30
In thousands, except per share data	2022		2021		2022		2021		2023		2022		2023		2022
Numerator:
Net (loss) income, as reported	$	(466)	$	(999)	$	557	$	(2,795)	$	(854)	$	(466)	$	(2,587)	$	557
Denominator:
Weighted average shares outstanding – basic and diluted		13,446		13,446		13,446		13,595		13,496		13,446		13,478		13,446
(Loss) earnings per share – basic and diluted	$	(0.03)	$	(0.07)	$	0.04	$	(0.21)	$	(0.06)	$	(0.03)	$	(0.19)	$	0.04

Basic (loss) earnings ~~(loss)~~ per common share is computed by dividing net (loss) income ~~(loss)~~ attributable to common shares by the weighted average number of common shares outstanding for the period. Diluted (loss) earnings ~~(loss)~~ per common share is computed by dividing net (loss) income ~~(loss)~~ attributable to common shares, by the weighted average number of common shares outstanding, adjusted for shares that would be assumed outstanding after warrants and stock options vested under the treasury stock method.

As of September 30, 2022, the Company included the effects of the stock options to purchase 280,000 shares outstanding in the calculation of diluted earnings per share. As of September 30, 2022 and 2021, the Company had other warrants to purchase 1.6 million shares of Common Stock outstanding, which were excluded from the calculation of diluted earnings (loss) per share because their exercise price was greater than the average stock price for the period and their inclusion would have been anti-dilutive.

On March 28, 2022, the Company ~~granted~~issued stock options to purchase 280,000 shares to executives and employees at an exercise price of $0.40 per share, which ~~become~~ vested on March 28, 2023. The options were valued at the grant date using the Black-Scholes model with the following inputs: expiration date March 28, 2026; risk-free rate of return 2.55%; and volatility 108%.

As of September 30, 2023, the Company excluded the effects of the outstanding stock options to purchase 235,000 shares in the calculation of diluted loss per share since their inclusion would have been anti-dilutive. As of September 30, 2023 and 2022, the Company had warrants to purchase 1.6 million shares of Common Stock outstanding, which were excluded from the calculation of diluted (loss) income per share because their exercise price was greater than the average stock price for the period and their inclusion would have been anti-dilutive.

A summary of the status of the Company’s stock options as of September 30, ~~2022~~2023 and the changes during the nine months then ended is presented below:

	Number of Options		Weighted Average Exercise Price		Weighted average remaining contractual life (in years)		Average intrinsic value		Number of Options		Weighted Average Exercise Price		Weighted average remaining contractual life (in years)		Average intrinsic value
Outstanding at December 31, 2021		-		-		-		-
Outstanding at December 31, 2022										280,000	$	0.40		3.3	$	0.19
Granted		280,000	$	0.40						-		-
Expired		-		-						45,000	$	0.40			$	0.19
Outstanding at September 30, 2022		280,000	$	0.40		3.5	$	0.19
Outstanding at September 30, 2023										235,000	$	0.40		2.5	$	0.19
Exercisable at the end of the period		-		-		-		-		235,000	$	0.40		2.5	$	0.19

15Equity based compensation was $38,000 and $76,000 for the nine months ended September 30, 2023 and 2022, respectively. There was no equity based compensation for the three months ended September 30, 2023. Equity based compensation was $38,000 for the three months ended September 30, 2022. There is no unrecognized equity based compensation cost related to unvested stock options as of September 30, 2023.

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Equity based compensation was $76,000 and $0 for the nine months ended September 30, 2022 and 2021, respectively. Equity based compensation was $38,000 and $0 for the three months ended September 30, 2022 and 2021, respectively. The total unrecognized equity based compensation cost related to unvested stock options was approximately $76,000 as of September 30, 2022 and will be recognized over the remainder of the vesting period.

Note 11 – Contingencies

The Company is subject to legal proceedings and claims which arise in the ordinary course of its business and/or which are covered by insurance. The Company has accrued reserves individually and in the aggregate for such legal proceedings. Should actual litigation results differ from the Company’s estimates, revisions to increase or decrease the accrued reserves may be required. There are no open matters atthat the ~~time of this report.~~Company deems material.

Note 12 – Related Party Transactions

The Company has the following related party transactions:

As of September 30, ~~2022,~~2023, Unilumin USA (“Unilumin”) owns ~~52.0%~~51.8% of the Company’s Common Stock and beneficially owns ~~53.7%~~53.5% of the Company’s Common Stock. Nicholas J. Fazio, ~~Yang Liu~~Jie Feng and Yantao Yu, each directors of the Company, are each directors and/or officers of Unilumin. Mr. Fazio and Mr. Yu are both executive officers of the Company, but had not yet been added to the Company’s payroll until January 2023 at annual rates of compensation of $125,000 and $26,000, respectively. In 2022 and prior, they had been compensated solely by Unilumin, with no charge to the Company. In 2023, they continue to receive some compensation directly from Unilumin. The Company purchased ~~$5.9~~$2.7 million and ~~$1.1~~$5.9 million of product from Unilumin in the nine months ended September 30, 2023 and 2022, respectively, and ~~2021, respectively,~~purchased $1.7 million and $2.1 million and $568,000 in the three months ended September 30, 2022 and 2021, respectively. The Company borrowed $250,000 under the revolving credit line with Unilumin in the nine months ended September 30, 2022. The Company did not borrow any funds under the revolving credit line withof product from Unilumin in the three months ended September 30, ~~2022.~~2023 and 2022, respectively. The ~~revolving credit line expired on September 15, 2022 and the Company is currently in default of the Loan Agreement. The~~total amount payable by the Company to Unilumin, including accounts payable, accrued interest and long-term debt, was ~~$6.7~~$9.6 million and ~~$3.7~~$7.3 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The Company occupies space at no cost in a New York office that is leased by Unilumin. In addition, Unilumin is currently the lender under the Loan Agreement described in Note 7 – Long-Term Debt.

Marco Elser, a director of the Company, exercises voting and dispositive power as investment manager of Carlisle. The total amount payable by the Company to Carlisle, including accrued interest and long-term debt, was $1.7 million and $1.6 million as of September 30, 2023 and December 31, 2022, respectively.

Note 13 – Business Segment Data

Operating segments are based on the Company’s business components ~~about~~for which separate financial information is available and are evaluated regularly by the Company’s chief operating decision makers in deciding how to allocate resources and in assessing performance of the business.

The Company evaluates segment performance and allocates resources based upon operating income (loss). The Company’s operations are managed in two reportable business segments: Digital product sales and Digital product lease and maintenance. Both design and produce large-scale, multi-color, real-time digital displays. Both operating segments are conducted on a global basis, primarily through operations in the United States. The Company also has operations in Canada. The Digital product sales segment sells equipment and the Digital product lease and maintenance segment leases and maintains equipment. Corporate general and administrative items relate to costs that are not directly identifiable with a segment. There are no intersegment sales.

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Foreign revenues represent less than 10% of the Company’s revenues in the nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022. The Company’s foreign operation does not manufacture its own equipment; the domestic operation provides the equipment that the foreign operation leases or sells. The foreign operation operates similarly to the domestic operation and has similar profit margins. Foreign assets are immaterial.

Information about the Company’s operations in its two business segments for thethree and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 is as follows:

	Three months ended September 30				Nine months ended September 30				Three months ended September 30				Nine months ended September 30
In thousands	2022		2021		2022		2021		2023		2022		2023		2022
Revenues:
Digital product sales	$	4,510	$	2,393	$	14,763	$	6,882	$	3,933	$	4,510	$	10,821	$	14,763
Digital product lease and maintenance		279		472		993		1,456		209		279		656		993
Total revenues	$	4,789	$	2,865	$	15,756	$	8,338	$	4,142	$	4,789	$	11,477	$	15,756
Operating (loss) income:
Digital product sales	$	(385)	$	(1,093)	$	375	$	(2,814)	$	(357)	$	(385)	$	(839)	$	375
Digital product lease and maintenance		148		335		538		977		98		148		330		538
Corporate general and administrative expenses		(346)		(259)		(1,178)		(843)		(403)		(346)		(1,352)		(1,178)
Total operating loss		(583)		(1,017)		(265)		(2,680)		(662)		(583)		(1,861)		(265)
Interest expense, net		(110)		(103)		(382)		(363)		(183)		(110)		(521)		(382)
Gain (loss) on foreign currency remeasurement		181		62		241		(10)
Gain on extinguishment of debt		-		-		-		77
Gain on foreign currency remeasurement										60		181		1		241
Gain on forgiveness of PPP loan		-		-		824		-		-		-		-		824
Pension benefit		53		66		158		200
Pension (expense) benefit										(62)		53		(187)		158
(Loss) income before income taxes		(459)		(992)		576		(2,776)		(847)		(459)		(2,568)		576
Income tax expense		(7)		(7)		(19)		(19)		(7)		(7)		(19)		(19)
Net (loss) income	$	(466)	$	(999)	$	557	$	(2,795)	$	(854)	$	(466)	$	(2,587)	$	557

	September 30 2022		December 31 2021		September 30 2023		December 31 2022
	September 30 2022		December 31 2021		September 30 2023		December 31 2022
Assets
Digital product sales	$	10,439	$	6,379	$	7,769	$	8,221
Digital product lease and maintenance		1,372		1,748		2,310		1,143
Total identifiable assets		11,811		8,127		10,079		9,364
General corporate		20		524		6		48
Total assets	$	11,831	$	8,651	$	10,085	$	9,412

Note 14 – Subsequent Events

The Company has evaluated events and transactions subsequent to September 30, ~~2022~~2023 and through the date these Condensed Consolidated Financial Statements were included in this Form 10-Q and filed with the SEC.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Trans-Lux is a leading supplier of LED technology for display applications. The essential elements of these systems are the real-time, programmable digital products that we design, manufacture, distribute and service. Designed to meet the digital signage solutions for any size venue’s indoor and outdoor needs, these displays are used primarily in applications for the financial, banking, gaming, corporate, advertising, transportation, entertainment and sports markets. The Company operates in two reportable segments: Digital product sales and Digital product lease and maintenance.

The Digital product sales segment includes worldwide revenues and related expenses from the sales of both indoor and outdoor digital product signage. This segment includes the financial, government/private, gaming, scoreboards and outdoor advertising markets. The Digital product lease and maintenance segment includes worldwide revenues and related expenses from the lease and maintenance of both indoor and outdoor digital product signage. This segment includes the lease and maintenance of digital product signage across all markets.

Critical Accounting Estimates

There have been no changes to the Company’s critical accounting estimates as previously reported in the Company’s ~~2021~~2022 Form 10-K.

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Results of Operations

Nine Months Ended September 30, ~~2022~~2023 Compared to Nine Months Ended September 30, ~~2021~~2022

The following table presents our Statements of Operations data, expressed as a percentage of revenue for the nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:

Nine months ended September 30
In thousands, except percentages
2022

2021
Revenues:

Digital product sales
$
14,763

93.7
%

$
6,882

82.5
%
Digital product lease and maintenance

993

6.3
%

1,456

17.5
%
Total revenues

15,756

100.0
%

8,338

100.0
%
Cost of revenues:

Cost of digital product sales

13,122

83.3
%

8,286

99.3
%
Cost of digital product lease and maintenance

431

2.7
%

462

5.6
%
Total cost of revenues

13,553

86.0
%

8,748

104.9
%
Gross income (loss)

2,203

14.0
%

(410)

(4.9)
%
General and administrative expenses

(2,468)

(15.7)
%

(2,270)

(27.2)
%
Operating loss

(265)

(1.7)
%

(2,680)

(32.1)
%
Interest expense, net

(382)

(2.4)
%

(363)

(4.4)
%
Gain (loss) on foreign currency remeasurement

241

1.5
%

(10)

(0.1)
%
Gain on extinguishment of debt

-

-
%

77

0.9
%
Gain on forgiveness of PPP loan

824

5.3
%

-

-
%
Pension benefit

158

1.0
%

200

2.4
%
Income (loss) before income taxes

576

3.7
%

(2,776)

(33.3)
%
Income tax expense

(19)

(0.2)
%

(19)

(0.2)
%
Net income (loss)
$
557

3.5
%

$
(2,795)

(33.5)
%

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	Nine months ended September 30
In thousands, except percentages	2023				2022
Revenues:
Digital product sales	$	10,821	94.3	%	$	14,763	93.7	%
Digital product lease and maintenance		656	5.7	%		993	6.3	%
Total revenues		11,477	100.0	%		15,756	100.0	%
Cost of revenues:
Cost of digital product sales		10,118	88.1	%		13,122	83.3	%
Cost of digital product lease and maintenance		331	2.9	%		431	2.7	%
Total cost of revenues		10,449	91.0	%		13,553	86.0	%
Gross income		1,028	9.0	%		2,203	14.0	%
General and administrative expenses		(2,889)	(25.2)	%		(2,468)	(15.7)	%
Operating loss		(1,861)	(16.2)	%		(265)	(1.7)	%
Interest expense, net		(521)	(4.5)	%		(382)	(2.4)	%
Gain on foreign currency remeasurement		1	-	%		241	1.5	%
Gain on forgiveness of PPP loan		-	-	%		824	5.3	%
Pension (expense) benefit		(187)	(1.6)	%		158	1.0	%
(Loss) income before income taxes		(2,568)	(22.3)	%		576	3.7	%
Income tax expense		(19)	(0.2)	%		(19)	(0.2)	%
Net (loss) income	$	(2,587)	(22.5)	%	$	557	3.5	%

Total revenues for the nine months ended September 30, ~~2022 increased $7.4~~2023 decreased $4.3 million or ~~89.0%~~27.2% to ~~$15.8~~$11.5 million from ~~$8.3~~$15.8 million for the nine months ended September 30, ~~2021,~~2022, primarily due to ~~an increase~~a decrease in Digital product sales, ~~revenues, partially offset by~~as well as a decrease in Digital ~~product~~ lease and maintenance revenues.

Digital product sales revenues ~~increased $7.9~~decreased $3.9 million or ~~114.5%~~26.7% for the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021,~~2022, primarily due to the ~~return~~non-recurrence of ~~customer orders since COVID-19 pandemic restrictions have been reduced or eliminated over~~a couple of large sales that were delivered in the ~~past year.~~nine months ended September 30, 2022.

Digital product lease and maintenance revenues decreased ~~$463,000~~$337,000 or ~~31.8%~~33.9% for the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021,~~2022, primarily due to the continued expected revenue decline in the older outdoor display equipment rental bases acquired in the early 1990s. The financial services market continues to be negatively impacted by the current investment climate resulting in consolidation within that industry and the wider use of flat-panel screens for smaller applications.

Total operating loss for the nine months ended September 30, ~~2022 decreased $2.4~~2023 increased $1.6 million to $1.9 million compared to $265,000 ~~from $2.7 million~~ for the nine months ended September 30, ~~2021,~~2022, principally due to the decrease in revenues and an increase in ~~revenues.~~general and administrative expenses.

Digital product sales operating income (loss) ~~increased $3.2~~decreased $1.2 million to a loss of $839,000 for the nine months ended September 30, 2023 compared to income of $375,000 for the nine months ended September 30, 2022, ~~compared to a loss of $2.8 million for the nine months ended September 30, 2021,~~ primarily due to the ~~increase in revenues and a~~ decrease in the cost of revenues as a percentage of revenues, as well as a decrease in general and administrative expenses. The cost of Digital product sales increased $4.8 million or 58.4%, primarily due to the increase in revenues. The cost of Digital product sales decreased $3.0 million or 22.9%, primarily due to the decrease in revenues and an increase in the cost of revenue as a percentage of revenues. The cost of Digital product sales represented ~~88.9%~~93.5% of related revenues in ~~2022~~2023 compared to ~~120.4%~~88.9% in ~~2021.~~2022. This ~~decrease~~increase as a percentage of revenues is primarily due to the ~~increase~~loss of some manufacturing efficiencies due to the decrease in revenues. General and administrative expenses for Digital product sales ~~decreased $144,000~~increased $276,000 or ~~10.2%~~21.8%, primarily due to ~~decreases~~increases in ~~consulting~~supplies, employees’ expenses and ~~bad debt~~marketing expenses, partially offset by ~~an increase~~a decrease in ~~employees’~~consulting expenses.

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Digital product lease and maintenance operating income decreased ~~$439,000~~$208,000 or ~~44.9%~~38.7% for the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021,~~2022, primarily as a result of the decrease in revenues. The cost of Digital product lease and maintenance decreased ~~$31,000~~$100,000 or ~~6.7%~~23.2%, primarily due to a decrease in depreciation ~~expense, partially offset by an increase in service agents.~~expense. The cost of Digital product lease and maintenance revenues represented ~~43.4%~~50.5% of related revenues in ~~2022~~2023 compared to ~~31.7%~~43.4% in ~~2021.~~2022. The cost of Digital product lease and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. General and administrative expenses for Digital product lease and maintenance ~~increased $7,000~~decreased $29,000 or ~~41.2%~~120.8%, primarily due to ~~an increase~~a reduction in bad debt expenses.

Corporate general and administrative expenses increased ~~$335,000~~$174,000 or ~~39.7%~~14.8% for the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021,~~2022, primarily due to ~~an increase~~increases in employees’ ~~expenses, partially offset by a decrease in~~and consulting expenses.

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Net interest expense increased ~~$19,000~~$139,000 or ~~5.2%~~36.4% for the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021,~~2022, primarily due to ~~an increase~~increases in interest rates and outstanding debt.

The effective tax rate for the nine months ended September 30, 2023 and 2022 was 0.7% and ~~2021 was~~ 3.3% ~~and 0.7%~~, respectively. Both the ~~2022~~2023 and ~~2021~~2022 tax rates are being affected by the valuation allowance on the Company’s deferred tax assets as a result of reporting pre-tax losses.

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Three Months Ended September 30, ~~2022~~2023 Compared to Three Months Ended September 30, ~~2021~~2022

The following table presents our Statements of Operations data, expressed as a percentage of revenue for the three months ended September 30, ~~2022~~2023 and ~~2021:~~2022:

	Three months ended September 30								Three months ended September 30
In thousands, except percentages	2022				2021				2023				2022
Revenues:
Digital product sales	$	4,510	94.2	%	$	2,393	83.5	%	$	3,933	95.0	%	$	4,510	94.2	%
Digital product lease and maintenance		279	5.8	%		472	16.5	%		209	5.0	%		279	5.8	%
Total revenues		4,789	100.0	%		2,865	100.0	%		4,142	100.0	%		4,789	100.0	%
Cost of revenues:
Cost of digital product sales		4,364	91.1	%		3,010	105.0	%		3,698	89.3	%		4,364	91.1	%
Cost of digital product lease and maintenance		124	2.6	%		145	5.1	%		111	2.7	%		124	2.6	%
Total cost of revenues		4,488	93.7	%		3,155	110.1	%		3,809	92.0	%		4,488	93.7	%
Gross income (loss)		301	6.3	%		(290)	(10.1)	%
Gross income										333	8.0	%		301	6.3	%
General and administrative expenses		(884)	(18.5)	%		(727)	(25.4)	%		(995)	(24.0)	%		(884)	(18.5)	%
Operating loss		(583)	(12.2)	%		(1,017)	(35.5)	%		(662)	(16.0)	%		(583)	(12.2)	%
Interest expense, net		(110)	(2.3)	%		(103)	(3.6)	%		(183)	(4.4)	%		(110)	(2.3)	%
Income on foreign currency remeasurement		181	3.8	%		62	2.2	%
Pension benefit		53	1.1	%		66	2.3	%
Gain on foreign currency remeasurement										60	1.5	%		181	3.8	%
Pension (expense) benefit										(62)	(1.5)	%		53	1.1	%
Loss before income taxes		(459)	(9.6)	%		(992)	(34.6)	%		(847)	(20.4)	%		(459)	(9.6)	%
Income tax expense		(7)	(0.1)	%		(7)	(0.3)	%		(7)	(0.2)	%		(7)	(0.1)	%
Net loss	$	(466)	(9.7)	%	$	(999)	(34.9)	%	$	(854)	(20.6)	%	$	(466)	(9.7)	%

Total revenues for the three months ended September 30, ~~2022 increased $1.9 million~~2023 decreased $647,000 or ~~67.2%~~13.5% to ~~$4.8~~$4.1 million from ~~$2.9~~$4.8 million for the three months ended September 30, ~~2021,~~2022, primarily due to ~~an increase~~a decrease in Digital product ~~sales.~~sales, as well as a decrease in Digital lease and maintenance revenues.

Digital product sales revenues ~~increased $2.1 million~~decreased $577,000 or ~~88.5%~~12.8% for the three months ended September 30, ~~2022~~2023 compared to the three months ended September 30, ~~2021,~~2022, primarily due to the ~~return~~non-recurrence of ~~customer orders since COVID-19 pandemic restrictions have been reduced or eliminated over~~a large sale that were delivered in the ~~past year.~~three months ended September 30, 2022.

Digital product lease and maintenance revenues decreased ~~$193,000~~$70,000 or ~~40.9%~~25.1% for the three months ended September 30, ~~2022~~2023 compared to the three months ended September 30, ~~2021,~~2022, primarily due to the continued expected revenue decline in the older outdoor display equipment rental bases acquired in the early 1990s. The financial services market continues to be negatively impacted by the current investment climate resulting in consolidation within that industry and the wider use of flat-panel screens for smaller applications.

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Total operating loss for the three months ended September 30, ~~2022 decreased $434,000~~2023 increased $79,000 to ~~$583,000~~$662,000 from ~~$1.0 million~~$583,000 for the three months ended September 30, ~~2021,~~2022, principally due to the decrease in revenues and an increase in general and administrative expenses.

Digital product sales operating loss decreased $28,000 to $357,000 for the three months ended September 30, 2023 compared to $385,000 for the three months ended September 30, 2022, primarily due to a decrease in the cost of revenues as a percentage of revenues. The cost of Digital product sales decreased $666,000 or 15.3%, primarily due to the decrease in revenues and a decrease in the cost of revenue as a percentage of ~~revenues, partially offset by an increase in general and administrative expenses.~~

Digital product sales operating loss decreased $708,000 to $385,000 for the three months ended September 30, 2022 compared to $1.1 million for the three months ended September 30, 2021, primarily due to the increase in revenues and a decrease in the cost of revenue as a percentage of revenues, partially offset by an increase in general and administrative expenses. The cost of Digital product sales increased $1.4 million or 45.0%, primarily due to the increase in revenues. The cost of Digital product sales represented ~~96.8%~~94.0% of related revenues in ~~2022~~2023 compared to ~~125.8%~~96.8% in ~~2021.~~2022. This decrease as a percentage of revenues is primarily due to the gain of some manufacturing ~~efficiencies due to the increase in revenues.~~efficiencies. General and administrative expenses for Digital product sales increased ~~$55,000~~$61,000 or ~~11.6%~~11.5%, primarily due to ~~decreases~~increases in ~~consulting~~employees’ expenses and bad debt expenses, partially offset by ~~an increase~~a decrease in ~~employees’~~supplies and consulting expenses.

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Digital product lease and maintenance operating income decreased ~~$187,000~~$50,000 or ~~55.8%~~33.8% for the three months ended September 30, ~~2022~~2023 compared to the three months ended September 30, ~~2021,~~2022, primarily as a result of the decrease in revenues. The cost of Digital product lease and maintenance decreased ~~$21,000~~$13,000 or ~~14.5%~~10.5%, primarily due to a ~~decreases~~decrease in depreciation ~~expense and employees’ expenses.~~expense. The cost of Digital product lease and maintenance revenues represented ~~44.4%~~53.1% of related revenues in ~~2022~~2023 compared to ~~30.7%~~44.4% in ~~2021.~~2022. The cost of Digital product lease and maintenance includes field service expenses, plant repair costs, maintenance and depreciation. General and administrative expenses for Digital product lease and maintenance ~~increased $15,000~~decreased $7,000 or ~~187.5%~~100.0%, primarily due to ~~an increase~~a decrease in bad debt expenses.

Corporate general and administrative expenses increased ~~$87,000~~$57,000 or ~~33.6%~~16.5% for the three months ended September 30, ~~2022~~2023 compared to the three months ended September 30, ~~2021,~~2022, primarily due to an increase in ~~employees’~~consulting expenses, partially offset by a decrease in ~~consulting fees.~~employees’ expenses.

Net interest expense increased ~~$7,000~~$73,000 or ~~6.8%~~66.4% for the three months ended September 30, ~~2022~~2023 compared to the three months ended September 30, ~~2021,~~2022, primarily due to ~~an increase~~increases in interest rates and outstanding debt.

The effective tax rate for the three months ended September 30, 2023 and 2022 was 0.8% and ~~2021 was~~ 1.5% ~~and 0.7%~~, respectively. Both the ~~2022~~2023 and ~~2021~~2022 tax rates are being affected by the valuation allowance on the Company’s deferred tax assets as a result of reporting pre-tax losses.

Liquidity and Capital Resources

Current Liquidity

The Company has incurred significant recurring losses and continues to have a significant working capital ~~deficiency. As described below, as of September 30, 2022, the Company had $20,000 of Cash and cash equivalents.~~

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deficiency, including being in default on several debt obligations. The Company recorded ~~income~~a loss of ~~$557,000~~$2.6 million in the nine months ended September 30, ~~2022, which included the gain on forgiveness of the PPP loan of $824,000, but recorded a loss of $5.0 million in the year ended December 31, 2021.~~2023. The Company had working capital deficiencies of ~~$9.3~~$12.5 million and ~~$9.8~~$9.3 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The ~~change~~increase in the working capital deficiency was primarily affected by increases in ~~the~~ accounts ~~receivable~~payable, accrued liabilities and ~~inventories, partially offset by a~~current lease liabilities, as well as decreases in ~~cash and~~ prepaids and other assets, ~~as well as increases~~receivables and cash. These changes were partially offset by an increase in ~~accounts payable, accrued liabilities, current portion of long-term debt, current lease liabilities~~inventory and a decrease in customer deposits.

The Company is dependent on future operating performance in order to generate sufficient cash flows in order to continue to run its businesses. Future operating performance is dependent on general economic conditions, as well as financial, competitive and other factors beyond our control, including the impact of the current economic environment, the spread of major epidemics (including coronavirus) and other related uncertainties such as government imposed travel restrictions, interruptions to supply chains, extended shut down of businesses and the impact of inflation. In order to more effectively manage its cash resources, the Company had, from time to time, increased the timetable of its payment of some of its payables, which delayed certain product deliveries from our vendors, which in turn delayed certain deliveries to our customers.

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There is substantial doubt as to whether we will have adequate liquidity, including access to the debt and equity capital markets, to ~~operate our business~~continue as a going concern over the next 12 months from the date of issuance of this Form 10-Q. To address the Company’s cash shortfall, the Company is exploring various financing alternatives, of which there can be no assurance that the Company will be able to obtain financing. Failure to obtain financing will jeopardize the Company’s ability to continue as a going concern. The Company continually evaluates the need and availability of long-term capital in order to meet its cash requirements and fund potential new opportunities.

The Company generated cash of $437,000 and used cash of $2.0 million ~~and provided cash of $605,000~~ from operating activities for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The Company has implemented several initiatives to improve operational results and cash flows over future periods, including reducing head count, reorganizing its sales department and outsourcing certain administrative functions. The Company continues to explore ways to reduce operational and overhead costs. The Company periodically takes steps to reduce the cost to maintain the digital products on lease and maintenance agreements.

Cash, ~~and~~ cash equivalents ~~decreased $504,000~~and restricted cash increased $158,000 in the nine months ended September 30, ~~2022~~2023 to ~~$20,000~~$206,000 at September 30, ~~2022~~2023 from ~~$524,000~~$48,000 at December 31, ~~2021.~~2022. The ~~decrease~~increase is primarily attributable to cash ~~used in~~provided by operating activities of ~~$2.0 million,~~$437,000, partially offset by ~~proceeds from long-term debt borrowings~~purchases of ~~$1.1 million and refund proceeds from loan forgiveness~~equipment of ~~$453,000.~~$277,000. The current economic environment has increased the Company’s trade receivables collection cycle, and its allowances for uncollectible accounts receivable, but collections continue to be favorable.

Under various agreements, the Company is obligated to make future cash payments in fixed amounts. These include payments under the Company’s current and long-term debt agreements, pension plan minimum required contributions, employment agreement payments and rent payments required under operating lease agreements. The Company has both variable and fixed interest rate debt. Interest payments are projected based on actual interest payments incurred in ~~2022~~2023 until the underlying debts mature. As interest rates have increased in ~~2022,~~2023, and may continue to increase, the amounts the Company pays for interest could exceed the projected amounts.

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The following table summarizes the Company’s fixed cash obligations as of September 30, ~~2022~~2023 for the remainder of ~~2022~~2023 and over the next four fiscal years:

In thousands	Remainder of 2022		2023		2024		2025		2026		Remainder of 2023		2024		2025		2026		2027
Long-term debt, including interest	$	4,933	$	-	$	31	$	31	$	31	$	5,273	$	31	$	31	$	31	$	31
Pension plan payments		-		-		179		129		60		-		702		364		323		298
Estimated warranty liability		138		113		91		63		49		24		81		63		53		41
Operating lease payments		123		438		146		149		152		99		545		560		577		451
Total	$	5,194	$	551	$	447	$	372	$	292	$	5,396	$	1,359	$	1,018	$	984	$	821

AsThe Company’s obligations under the Loan Agreement mature on December 31, 2023.In addition as of September 30, ~~2022,~~2023, the Company had outstanding $302,000 of Notes which matured as of March 1, 2012. The Company also had outstanding $220,000 of Debentures which matured on December 1, 2012. The Company continues to consider future exchanges of the Notes and Debentures, but has no agreements, commitments or understandings with respect to any further such exchanges.

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The Company may still seek additional financing in order to provide enough cash to cover our remaining current fixed cash obligations as well as providing working capital. However, there can be no assurance as to the amounts, if any, the Company will receive in any such financing or the terms thereof. The Company has no agreements, commitments or understandings with respect to any such financings. To the extent the Company issues additional equity securities, it could be dilutive to existing shareholders.

For a further description of the Company’s long-term debt, see Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt.

Pension Plan Contributions

~~The~~There is not expected to be a minimum required pension plan contribution for ~~2022 is expected to be $138,000, which the Company contributed as of September 30, 2022.~~2023. See Note 8 to the Condensed Consolidated Financial Statements – Pension Plan for further details.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

The Company may, from time to time, provide estimates as to future performance. These forward-looking statements will be estimates and may or may not be realized by the Company. The Company undertakes no duty to update such forward-looking statements. Many factors could cause actual results to differ from these forward-looking statements, including loss of market share through competition, introduction of competing products by others, pressure on prices from competition or purchasers of the Company’s products, interest rate and foreign exchange fluctuations, the impact of inflation, terrorist acts and war.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company is subject to interest rate risk on its long-term debt. The Company manages its exposure to changes in interest rates by the use of variable and fixed interest rate debt. The fair value of the Company’s fixed rate long-term debt is disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt. Every 1-percentage-point change in interest rates would result in an annual interest expense fluctuation of approximately ~~$27,000.~~$22,000. In addition, the Company is exposed to foreign currency exchange rate risk mainly as a result of its investment in its Canadian subsidiary. A 10% change in the Canadian dollar relative to the U.S. dollar would result in a currency remeasurement expense fluctuation of approximately ~~$243,000,~~$246,000, based on dealer quotes, considering current exchange rates. The Company does not enter into derivatives for trading or speculative purposes and did not hold any derivative financial instruments at September 30, ~~2022~~2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (our principal executive officer) and our Chief Accounting Officer (our principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Our Chief Executive Officer and Chief Accounting Officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management (including our Chief Executive Officer and our Chief Accounting Officer) to allow timely decisions regarding required disclosures. Based on such evaluation, our Chief Executive Officer and Chief Accounting Officer have concluded that these disclosure controls are effective as of September 30, ~~2022.~~2023.

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Changes in Internal Control over Financial Reporting. There has been no change in the Company’s internal control over financial reporting that occurred in the quarter ended September 30, ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

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Item 1A. Risk Factors

The Company is subject to a number of risks including general business and financial risk factors. Any or all of such factors could have a material adverse effect on the business, financial condition or results of operations of the Company. You should carefully consider the risk factors identified in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds and Issuer Purchases of Equity Securities

None.

Item 3. Defaults upon Senior Securities

As disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt, the Company had outstanding $302,000 of Notes which are no longer convertible into common shares. The Notes matured as of March 1, 2012 and are currently in default. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued ~~$326,000~~$351,000 and ~~$307,000,~~$332,000, respectively, of interest related to the Notes, which is included in accrued liabilities in the Condensed Consolidated Balance Sheets.

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As disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt, the Company has outstanding $220,000 of Debentures. The Debentures matured as of December 1, 2012 and are currently in default. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued ~~$268,000~~$289,000 and ~~$253,000,~~$273,000, respectively, of interest related to the Debentures, which is included in accrued liabilities in the Condensed Consolidated Balance Sheets. The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Debentures outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately.

As disclosed in Note 7 to the Condensed Consolidated Financial Statements – Long-Term Debt, the Company has outstanding $2.2 million under the Loan Agreement with Unilumin. The Loan Agreement matured as of September 15, 2012 and the Company is currently in default. As of September 30, 2022 and December 31, 2021, the Company had accrued $309,000 and $132,000, respectively, of interest related to the Unilumin, which is included in accrued liabilities in the Condensed Consolidated Balance Sheets. Unilumin may declare the outstanding principal plus interest due and payable immediately.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

None.

Item 6. Exhibits

31.1 Certification of Nicholas J. Fazio, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed ~~herewith.~~herewith.

31.2 Certification of Todd Dupee, Senior Vice President and Chief Accounting Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed ~~herewith~~herewith..

32.1 Certification of Nicholas J. Fazio, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.2 Certification of Todd Dupee, Senior Vice President and Chief Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed ~~herewith.~~herewith.

101 The following financial information from the Company’s Form 10-Q for the quarterly period ended September 30, ~~2022~~2023 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Deficit, and (v) Notes to Condensed Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)

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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.

	TRANS-LUX CORPORATION
	(Registrant)

	by	/s/ Nicholas J. Fazio
		Nicholas J. Fazio
		Chief Executive Officer

	by	/s/ Todd Dupee
		Todd Dupee
		Senior Vice President and Chief Accounting Officer

Date: November ~~10, 2022~~9, 2023

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Delaware		13-1394750
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

254 West 31^st Street, 12^th Floor, New York, New York		10001
(Address of principal executive offices)		(Zip code)

	(800) 243-5544
(Registrant's telephone number, including area code)

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

Date		Class		Shares Outstanding
11/~~9/22~~8/23		Common Stock - $0.001 Par Value		~~13,446,276~~13,496,276

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		Page No.
Part I - Financial Information (unaudited)

Item 1.1.	Condensed Consolidated Balance Sheets – September 30, ~~2022~~2023 and December 31, ~~2021~~2022 (see Note 1)	1

	Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022	2

	Condensed Consolidated Statements of Comprehensive Loss (Income)– Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022	2

	Condensed Consolidated Statements of Changes in Stockholders’ Deficit – Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022	3

	Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1819

Item 3.3.	Quantitative and Qualitative Disclosures about Market Risk	2425

Item 4.4.	Controls and Procedures	2425

Part II - Other Information

Item 11..	Legal Proceedings	2426

Item 1A.	Risk Factors	2526

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds and Issuer Purchases of Equity Securities	2526

Item 3.	Defaults upon Senior Securities	2527

Item 4.	Mine Safety Disclosures	2527

Item 5.	Other Information	2627

Item 6.	Exhibits	2627

Signatures		2728

Exhibits