Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 04, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AIR INDUSTRIES GROUP | |
Entity Central Index Key | 0001009891 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 29,003,533 | |
Entity File Number | 001-35927 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and Cash Equivalents | $ 333,000 | $ 2,012,000 |
Accounts Receivable, Net of Allowance for Doubtful Accounts of $595,000 and $524,000, respectively | 6,427,000 | 6,522,000 |
Inventory, Net | 30,352,000 | 29,051,000 |
Prepaid Expenses and Other Current Assets | 568,000 | 414,000 |
Prepaid Taxes | 6,000 | 49,000 |
Total Current Assets | 37,686,000 | 38,048,000 |
Property and Equipment, Net | 8,132,000 | 8,777,000 |
Operating Lease Right-Of-Use-Asset | 3,741,000 | |
Deferred Financing Costs, Net, Deposits and Other Assets | 1,029,000 | 768,000 |
Goodwill | 163,000 | 163,000 |
TOTAL ASSETS | 50,751,000 | 47,756,000 |
Current Liabilities | ||
Notes Payable and Finance Lease Obligations - Current Portion | 17,899,000 | 16,793,000 |
Notes Payable - Related Party - Current Portion | 3,981,000 | 2,552,000 |
Operating Lease Liabilities - Current Portion | 672,000 | |
Accounts Payable and Accrued Expenses | 9,291,000 | 8,723,000 |
Deferred Gain on Sale - Current Portion | 38,000 | 38,000 |
Deferred Revenue | 895,000 | 881,000 |
Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary - Current Portion | 200,000 | |
Income Taxes Payable | 20,000 | 20,000 |
Total Current Liabilities | 32,996,000 | 29,007,000 |
Long Term Liabilities | ||
Notes Payable and Finance Lease Obligations - Net of Current Portion | 267,000 | 3,438,000 |
Notes Payable - Related Party - Net of Current Portion | 1,817,000 | 2,283,000 |
Deferred Gain on Sale - Net of Current Portion | 228,000 | 257,000 |
Operating Lease Liabilities - Net of Current Portion | 4,420,000 | |
Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary - Net of Current Portion | 462,000 | |
Deferred Rent | 1,165,000 | |
TOTAL LIABILITIES | 40,190,000 | 36,150,000 |
Contingencies | ||
Stockholders' Equity | ||
Preferred Stock, par value $.001 - Authorized 3,000,000 shares, 0 shares outstanding, at both September 30, 2019 and December 31, 2018. | ||
Common Stock - Par Value $.001 - Authorized 60,000,000 and 50,000,000 Shares, 28,951,194 and 28,392,853 Shares Issued and Outstanding as of September 30, 2019 and December 31, 2018, respectively | 28,000 | 28,000 |
Additional Paid-In Capital | 76,527,000 | 76,101,000 |
Accumulated Deficit | (65,994,000) | (64,523,000) |
TOTAL STOCKHOLDERS' EQUITY | 10,561,000 | 11,606,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 50,751,000 | $ 47,756,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 595,000 | $ 524,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 60,000,000 | 50,000,000 |
Common stock, shares issued | 28,951,194 | 28,392,853 |
Common stock, shares outstanding | 28,951,194 | 28,392,853 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net Sales | $ 13,997,000 | $ 10,733,000 | $ 41,243,000 | $ 33,615,000 |
Cost of Sales | 11,034,000 | 9,366,000 | 33,815,000 | 28,749,000 |
Gross Profit | 2,963,000 | 1,367,000 | 7,428,000 | 4,866,000 |
Operating Expenses | 1,808,000 | 2,183,000 | 5,842,000 | 6,830,000 |
Loss on Lease Abandonment | (275,000) | |||
Income (loss) from Operations | 1,155,000 | (816,000) | 1,311,000 | (1,964,000) |
Interest and Financing Costs | (835,000) | (830,000) | (2,790,000) | (2,466,000) |
Other Income, Net | 100,000 | 88,000 | 169,000 | 175,000 |
Income (Loss before Provision for Income Taxes | 420,000 | (1,558,000) | (1,310,000) | (4,255,000) |
Provision for income taxes | 22,000 | 22,000 | ||
Income (Loss) from Continuing Operations | 398,000 | (1,558,000) | (1,332,000) | (4,255,000) |
Loss from Discontinued Operations, net of income tax | (211,000) | (1,572,000) | (139,000) | (158,000) |
Net Income (Loss) | $ 187,000 | $ (3,130,000) | $ (1,471,000) | $ (4,413,000) |
Net Income (Loss) per share - Basic | ||||
Continuing Operations | $ 0.01 | $ (0.06) | $ (0.05) | $ (0.16) |
Discontinued Operations | (0.01) | (0.06) | 0 | (0.01) |
Net Income (Loss) per share - Diluted | ||||
Continuing Operations | 0.01 | (0.06) | (0.05) | (0.16) |
Discontinued Operations | $ (0.01) | $ (0.06) | $ 0 | $ (0.01) |
Weighted average shares outstanding - Basic - continuing operations | 28,909,072 | 26,768,914 | 28,774,041 | 26,295,703 |
Weighted average shares outstanding - Diluted - continuing operations | 29,040,530 | 26,768,914 | 28,774,041 | 26,295,703 |
Weighted average shares outstanding - Basic and Diluted - discontinued operations | 28,909,072 | 26,768,914 | 28,774,041 | 26,295,703 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2017 | $ 25,000 | $ 71,272,000 | $ (53,531,000) | $ 17,766,000 |
Balance, shares at Dec. 31, 2017 | 25,213,805 | |||
Common stock issued for legal fees | 200,000 | 200,000 | ||
Common stock issued for legal fees, shares | 123,456 | |||
Issuance of Common stock | $ 1,000 | 979,000 | 980,000 | |
Issuance of Common stock, shares | 868,080 | |||
Stock Compensation Expense | 83,000 | 83,000 | ||
Other Adjustment - Rounding | (2,000) | (2,000) | ||
Net Loss | (1,468,000) | (1,468,000) | ||
Balance at Mar. 31, 2018 | $ 26,000 | 72,534,000 | (55,001,000) | 17,559,000 |
Balance, shares at Mar. 31, 2018 | 26,205,341 | |||
Balance at Dec. 31, 2017 | $ 25,000 | 71,272,000 | (53,531,000) | 17,766,000 |
Balance, shares at Dec. 31, 2017 | 25,213,805 | |||
Balance at Sep. 30, 2018 | $ 26,000 | 73,594,000 | (56,381,000) | 17,239,000 |
Balance, shares at Sep. 30, 2018 | 26,768,914 | |||
Balance at Mar. 31, 2018 | $ 26,000 | 72,534,000 | (55,001,000) | 17,559,000 |
Balance, shares at Mar. 31, 2018 | 26,205,341 | |||
Issuance of Common stock | 374,000 | 374,000 | ||
Issuance of Common stock, shares | 222,253 | |||
Stock Compensation Expense | 142,000 | 142,000 | ||
Other Adjustment - Rounding | 2,000 | 2,000 | ||
Net Loss | 185,000 | 185,000 | ||
Balance at Jun. 30, 2018 | $ 26,000 | 73,050,000 | (54,814,000) | 18,262,000 |
Balance, shares at Jun. 30, 2018 | 26,427,594 | |||
Issuance of Common stock | 461,000 | 461,000 | ||
Issuance of Common stock, shares | 341,320 | |||
Stock Compensation Expense | 83,000 | 83,000 | ||
Net Loss | (3,130,000) | (3,130,000) | ||
Balance at Sep. 30, 2018 | $ 26,000 | 73,594,000 | (56,381,000) | 17,239,000 |
Balance, shares at Sep. 30, 2018 | 26,768,914 | |||
Balance at Dec. 31, 2018 | $ 28,000 | 76,101,000 | (64,523,000) | 11,606,000 |
Balance, shares at Dec. 31, 2018 | 28,392,853 | |||
Common stock issued for directors fees | $ 131,000 | 131,000 | ||
Common stock issued for directors fees, shares | 147,830 | |||
Stock Compensation Expense | $ 233,000 | $ 233,000 | ||
Other Adjustments - Shares Issued, shares | 144,899 | |||
Share Issuance Costs | $ (58,000) | $ (58,000) | ||
Other Adjustments - Fair Value allocation | (185,000) | (185,000) | ||
Net Loss | (923,000) | (923,000) | ||
Balance at Mar. 31, 2019 | $ 28,000 | 76,222,000 | (65,446,000) | 10,804,000 |
Balance, shares at Mar. 31, 2019 | 28,685,582 | |||
Balance at Dec. 31, 2018 | $ 28,000 | 76,101,000 | (64,523,000) | 11,606,000 |
Balance, shares at Dec. 31, 2018 | 28,392,853 | |||
Balance at Sep. 30, 2019 | $ 28,000 | 76,527,000 | (65,994,000) | 10,561,000 |
Balance, shares at Sep. 30, 2019 | 28,951,194 | |||
Balance at Mar. 31, 2019 | $ 28,000 | 76,222,000 | (65,446,000) | 10,804,000 |
Balance, shares at Mar. 31, 2019 | 28,685,582 | |||
Issuance of Common stock | $ 1,000 | 186,000 | 187,000 | |
Issuance of Common stock, shares | 180,000 | |||
Stock Compensation Expense | 93,000 | 93,000 | ||
Other Adjustments - Shares Issued, shares | 25,401 | |||
Share Issuance Costs | (55,000) | (55,000) | ||
Net Loss | (735,000) | (735,000) | ||
Balance at Jun. 30, 2019 | $ 29,000 | 76,446,000 | (66,181,000) | 10,294,000 |
Balance, shares at Jun. 30, 2019 | 28,890,983 | |||
Common stock issued for directors fees | 56,000 | 56,000 | ||
Common stock issued for directors fees, shares | 57,433 | |||
Issuance of Common stock, shares | 2,778 | |||
Stock Compensation Expense | 25,000 | 25,000 | ||
Other Adjustment - Rounding | $ (1,000) | (1,000) | ||
Net Loss | 187,000 | 187,000 | ||
Balance at Sep. 30, 2019 | $ 28,000 | $ 76,527,000 | $ (65,994,000) | $ 10,561,000 |
Balance, shares at Sep. 30, 2019 | 28,951,194 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,471,000) | $ (4,413,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation of property and equipment | 2,085,000 | 2,165,000 |
Non-cash employee stock compensation expense | 351,000 | 308,000 |
Non-cash directors compensation | 95,000 | |
Non-cash other income recognized | (198,000) | |
Non-cash interest expense | 60,000 | |
Loss on abandonment of lease | 275,000 | |
Amortization of Right-of-Use-Asset | 352,000 | |
Deferred gain on sale of real estate | (29,000) | (29,000) |
Loss on sale of equipment | 42,000 | |
Amortization of debt discount on convertible notes payable | 370,000 | 740,000 |
Amortization of capitalized engineering costs | 493,000 | |
Bad debt expense | 46,000 | 190,000 |
Gain on assets held for sale | 930,000 | |
Amortization of deferred financing costs | 158,000 | |
Changes in Assets and Liabilities | ||
Accounts receivable | 49,000 | (1,167,000) |
Inventory | (1,301,000) | (836,000) |
Prepaid expenses and other current assets | (154,000) | 89,000 |
Prepaid taxes | 43,000 | |
Deposits and other assets | (261,000) | (1,275,000) |
Increase (Decrease) in Operating Liabilities: | ||
Accounts payable and accrued expenses | 343,000 | (1,736,000) |
Operating lease liabilities | (441,000) | |
Deferred rent | 4,000 | |
Deferred revenue | 14,000 | 1,513,000 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 270,000 | (2,866,000) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capitalized engineering costs | (400,000) | |
Purchase of property and equipment | (397,000) | (629,000) |
NET CASH USED IN INVESTING ACTIVITIES | (397,000) | (1,029,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Note payable - revolver - net | (597,000) | 3,615,000 |
Payments of note payable - term notes | (1,108,000) | (1,108,000) |
Proceeds from sale of future proceeds from disposition of subsidiary | 800,000 | |
Transaction costs from sale of future proceeds from disposition of subsidiary | (3,000) | |
Proceeds from issuance of common stock | 1,885,000 | |
Payments of finance lease obligations | (899,000) | (958,000) |
Share issuance costs | (113,000) | |
Proceeds from notes payable issuances- related party | 500,000 | 803,000 |
Payments of notes payable issuances - related party | (16,000) | |
Payments of loan payable - financed assets | (116,000) | |
Deferred financing costs | (125,000) | |
Proceeds from notes payable issuances - third party | 70,000 | |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (1,552,000) | 4,182,000 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (1,679,000) | 287,000 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 2,012,000 | 630,000 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 333,000 | 917,000 |
Supplemental cash flow information | ||
Cash paid during the period for interest | 1,260,000 | 1,053,000 |
Supplemental disclosure of non-cash transactions | ||
Right of Use Asset additions under ASC 842 | 4,368,000 | |
Operating Lease Liabilities under ASC 842 | 5,397,000 | |
Write-off deferred rent under ASC 842 | 1,165,000 | |
Supplemental schedule of non-cash investing and financing activities | ||
Common Stock issued in lieu of cash for services | 187,000 | |
Common Stock issued for notes payable - related party | 330,000 | |
Common Stock issued for notes payable | 30,000 | |
Issuance of notes payable - related party | $ 34,000 |
Formation and Basis of Presenta
Formation and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Formation and Basis of Presentation [Abstract] | |
FORMATION AND BASIS OF PRESENTATION | Note 1. FORMATION AND BASIS OF PRESENTATION Organization Air Industries Group is a Nevada corporation ("AIRI"). As of and for the three and nine months ended September 30, 2019, the accompanying condensed consolidated financial statements presented are those of AIRI, and its wholly-owned subsidiaries; Air Industries Machining Corp. ("AIM"), Nassau Tool Works, Inc. ("NTW"), Eur-Pac Corporation ("Eur-Pac" or "EPC"), Electronic Connection Corporation ("ECC"), Air Realty Group, LLC ("Air Realty"), and The Sterling Engineering Corporation ("Sterling"), (together, the "Company"). As of and for the three and nine months ended September 30, 2018, the accompanying condensed consolidated financial statements also include the Company's former subsidiaries all of which are included in income from discontinued operations: Welding Metallurgy, Inc. ("WMI") including its wholly owned subsidiaries Miller Stuart, Inc. ("Miller Stuart"), Woodbine Products, Inc. ("Woodbine" or "WPI"), Decimal Industries, Inc. ("Decimal") and Compac Development Corporation ("Compac"), (collectively "WMI Group"). See Note 2 for details of discontinued operations. Going Concern Although the Company generated income from operations for the three and nine months ended September 30, 2019, the Company has used a substantial amount of cash during the nine months ended September 30, 2019 for debt service and capital expenditures. Additionally, the Company incurred losses from operations, as well as negative cash flows from operations for the years ended December 31, 2018 and 2017. Since 2016, the Company has required significant debt and equity cash infusions from related and third parties, in order to maintain operating activities. The foregoing raises substantial doubt about the Company's ability to continue as a going concern. In the past several years, the Company has repositioned its business, hired new management and has renewed focus on achieving long-term profitability with a sharp focus on customer satisfaction. The continuation of the Company's business is dependent upon its ability to achieve profitability and positive cash flows and, pending such achievement, future issuances of equity or other financing to fund ongoing operations. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. Reclassifications Certain 2018 amounts in the condensed consolidated financial statements, and notes thereto, have been reclassified to conform to current period presentation. Sale of Welding Metallurgy Inc. On December 20, 2018, the Company sold all of the outstanding shares of WMI Group to CPI Aerostructures, Inc. ("CPI"), pursuant to a Stock Purchase Agreement ("SPA") for a purchase price of $9,000,000, reduced by an estimated working capital adjustment of ($1,093,000). The sale required an escrow deposit of $2,000,000 to cover the final working capital adjustment and the Company's obligation to indemnify CPI against damages arising out of the breach of the Company's representations and warranties and obligations under the SPA. The amount of the final working capital adjustment, which has been contested by CPI and is currently the subject of litigation between the Company and CPI. See Note 8 for further discussion. Closing of EPC and ECC The Company completed its shut-down of EPC and ECC and closed related operations on March 31, 2019. In connection with the shut-down, the Company had recognized a loss on abandoned assets of $386,000 during the fourth quarter of 2018, which was included in loss from continuing operations in the 2018 consolidated financial statements. Additionally, the Company determined that goodwill for ECC in the amount of $109,000 had been impaired and is included in the loss from continuing operations for the year ended December 31, 2018. Adoption of ASC 842 On January 1, 2019, the Company adopted FASB Accounting Standards Codification, or ASC, Topic 842, Leases Leases The Company adopted ASC 842 using a modified retrospective approach for all leases existing at January 1, 2019. The adoption of ASC 842 had a substantial impact on the Company's balance sheet. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. The accounting of finance leases was substantially unchanged. Accordingly, upon adoption, leases that were classified as operating leases under ASC 840 were classified as operating leases under ASC 842, and the Company recorded an adjustment of $4,368,000 to operating lease right-of-use assets and the related lease liability. The lease liability is based on the present value of the remaining minimum lease payments, determined under ASC 840, discounted using the Company's incremental borrowing rate at the effective date of January 1, 2019, using the original lease term as the term. As permitted under ASC 842, the Company elected several practical expedients that permits it to not reassess (1) whether a contract is or contains a lease, (2) the classification of existing leases, and (3) whether previously capitalized costs continue to qualify as initial indirect costs. The application of the practical expedients did not have a significant impact on the measurement of the operating lease liability. In Mach 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements, which removed the requirement for an entity to disclose in the interim periods after adoption, the effect of the change on income from continuing operations, net income, any other affected financial statement line item, and any affected per share amount. For lessors, the new leasing standard requires leases to be classifies as a sales-type, direct financing or operating lease. These criteria focus on the transfer of control of the underlying lease asset. This standard and related updates were effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The impact of the adoption of ASC 842 on the balance sheet at December 31, 2018 was: As Reported December 31, Adoption of Balance Operating Lease Right-Of-Use-Asset $ — $ 4,368,000 $ 4,368,000 Total Assets $ 47,756,000 $ 4,368,000 $ 52,124,000 Operating Leases Liabilities – Current Portion $ — $ 547,000 $ 547,000 Total Current Liabilities $ 29,007,000 $ 547,000 $ 29,554,000 Operating Leases Liabilities – Net of Current Portion $ — $ 4,986,000 $ 4,986,000 Deferred Rent $ 1,165,000 $ (1,165,000 ) $ — Total Liabilities $ 36,150,000 $ 4,368,000 $ 40,518,000 Total Liabilities and Stockholders' Equity $ 47,756,000 $ 4,368,000 $ 52,124,000 September 30, (unaudited) Weighted Average Remaining Lease Term – in years 6.53 Weighted Average discount rate - % 9.50 % The aggregate undiscounted cash flows of operating lease payments, with remaining terms greater than one year are as follows: Amount For the twelve months ended (unaudited) December 31, 2019 (remaining three months) $ 279,000 December 31, 2020 1,136,000 December 31, 2021 1,118,000 December 31, 2022 868,000 December 31, 2023 895,000 Thereafter 2,604,000 Total future minimum lease payments 6,900,000 Less: discount (1,808,000 ) Total operating lease maturities 5,092,000 Less: current portion of operating lease liabilities (672,000 ) Total long term portion of operating lease maturities $ 4,420,000 The Company leases substantially all of its office space, technology equipment and office equipment used to conduct its business. The Company adopted ASC 842 effective January 1, 2019. For contracts entered into on or after the effective date, at the inception of a contract it assesses whether the contract is, or contains, a lease. The Company's assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether its obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. Leases entered into prior to January 1, 2019, are accounted for under ASC 840 and were not reassessed. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. Substantially all the Company's operating leases are comprised of office space leases and substantially all its finance leases are comprised of office furniture and technology equipment. For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate for the same term as the underlying lease. For the Company's real estate and other operating leases, the Company uses its incremental borrowing rate. For the Company's finance leases, it uses the rate implicit in the lease or its incremental borrowing rate if the implicit lease rate cannot be determined. Lease payments included in the measurement of the lease liability comprise the following: the fixed non-cancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Some of the Company's real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and separated into lease and non-lease components based on the initial amount stated in the lease or standalone selling prices. Lease components are included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate, or payments based on a change in the Company's portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in re-measurement of the lease liability. Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the right-of-use asset on a straight-line basis over the lease term and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. The effect of short-term leases on its right-of-use asset and lease liability was not material. As part of the effort to reduce costs, corporate executive offices were moved to an existing 5.4 acre corporate campus in Bay Shore, New York. The Company remains liable under the lease for the office in Hauppauge, New York which is now vacant. This lease has a term which ends January 2022. The annual rent was approximately $113,000 for the lease year which began in January 2019 and increases by approximately 3% per annum each year thereafter. Accordingly, the Company recognized an impairment of $275,000 to its Operating Lease Right-of-Use-Asset for the nine months ended September 30, 2019. Subsequent Events Management has evaluated subsequent events through the date of this filing. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | Note 2. DISCONTINUED OPERATIONS As discussed in Note 1, the Company sold WMI Group to CPI in December 2018. As such, these businesses are reported as discontinued operations for the three and nine months ended September 30, 2018. During the three and nine months ended September 30, 2019, costs related to WMI Group were recorded for the settlement of an action brought by the former landlord of Compac Development Corporation, additionally costs were accrued for legal counsel relating to the lawsuit brought by CPI. The Company has not segregated the cash flows of these businesses in the condensed consolidated statements of cash flows. Management was also required to make certain assumptions and apply judgment to determine historical expenses related to the discontinued operations presented in prior periods. Unless noted otherwise, discussion in the Notes to Condensed Consolidated Financial Statements refers to the Company's continuing operations. Also discussed in Note 1, the Company completed its shut-down of its EPC and ECC subsidiaries on March 31, 2019. As required, the Company has retrospectively recast its condensed consolidated statements of operations for all periods presented. As such, these businesses are reported as discontinued operations for the three and nine months ended September 30, 2019 and 2018. Management was also required to make certain assumptions and apply judgment to determine historical expenses related to the discontinued operations presented in prior periods. Unless noted otherwise, discussion in the Notes to Condensed Consolidated Financial Statements refers to the Company's continuing operations. For the year ended December 31, 2018, the Company recorded a loss on abandoned assets of $386,000, which together with a goodwill impairment charge of ECC in the amount of $109,000 was included in loss from continuing operations in 2018 as a result of the Company's decision to close its EPC and ECC businesses. The following table presents a reconciliation of the major financial lines constituting the results of operations for discontinued operations to the net loss from discontinued operations presented separately in the condensed consolidated statement of operations for the three and nine months ended September 30, 2019 and 2018: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (unaudited) (unaudited) (unaudited) (unaudited) Net revenue $ $ 5,262,000 $ 132,000 $ 12,982,000 Cost of goods sold — 4,252,000 105,000 10,769,000 Gross profit — 1,010,000 27,000 2,213,000 Operating expenses: Selling, general and administrative 100,000 91,000 155,000 1,442,000 Loss on assets held for sale — (2,493,000 ) — (930,000 ) Total operating loss (100,000 ) (1,574,000 ) (128,000 ) (159,000 ) Interest expense — (2,000 ) (1,000 ) (4,000 ) Other (expense) income (111,000 ) 4,000 (10,000 ) 7,000 Loss from discontinued operations before income taxes (211,000 ) (1,572,000 ) (139,000 ) (156,000 ) Provision for income taxes — — — 2,000 Loss from discontinued operations, net of income tax $ (211,000 ) $ (1,572,000 ) $ (139,000 ) $ (158,000 ) Non-cash operating amounts for discontinued operations for the three and nine months ended September 30, 2019 include depreciation of $0 and $6,000, respectively. The Company did not incur any capital expenditures for discontinued operations for the three and nine months ended September 30, 2019. There were no other significant non-cash operating amounts or investing items of the discontinued operations for the period. Non-cash operating amounts for discontinued operations for the three and nine months ended September 30, 2018 include depreciation of $49,000 and $146,000, respectively. The Company did not incur any capital expenditures for discontinued operations for the three and nine months ended September 30, 2018. There were no other significant non-cash operating amounts or investing items of the discontinued operations for the period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principal Business Activity The Company, through its AIM subsidiary, is primarily engaged in manufacturing aircraft structural parts and assemblies for prime defense contractors in the aerospace industry in the United States. NTW is a manufacturer of aerospace components, principally landing gear for F-16 and F-18 fighter aircraft. Sterling manufactures components and provides services for jet engines and ground-power turbines. The Company's customers consist mainly of publicly traded companies in the aerospace industry. Inventory Valuation For annual periods, the Company values inventory at the lower of cost on a first-in-first-out basis or estimated net realizable value. The Company does not take physical inventories at interim quarterly reporting periods. As such, substantially all of the inventory value at September 30, 2019 has been estimated using a gross profit percentage based on historical gross profit percentages of previous periods as applied to the net sales of the current period, as management believes that the gross profit percentage on these items are materially consistent from period to period. The remainder of the inventory value at September 30, 2019 is estimated based on the Company's standard cost perpetual inventory system, as management believes the perpetual system computed value for these items provides a better estimate of value for that inventory. Adjustments to reconcile the annual physical inventory to the Company's books are treated as changes in accounting estimates and are recorded in the fourth quarter. Inventories consist of the following at: September 30, December 31, 2019 2018 (Unaudited) Raw Materials $ 4,369,000 $ 4,622,000 Work In Progress 20,298,000 17,530,000 Finished Goods 9,966,000 10,915,000 Inventory Reserve (4,281,000 ) (4,016,000 ) Total Inventory $ 30,352,000 $ 29,051,000 Credit and Concentration Risks There were two customers that represented 61.7% and three customers that represented 69.3% of total net sales for the three months ended September 30, 2019 and 2018, respectively. This is set forth in the table below. Customer Percentage of Sales September 30, September 30, (Unaudited) (Unaudited) 1 35.0 27.1 2 26.7 28.5 3 * 13.7 * Customer was less than 10% of sales for the three months ended September 30, 2019. There were three customers that represented 73.4% and 72.3% of total sales for the nine months ended September 30, 2019 and 2018, respectively. This is set forth in the table below. Customer Percentage of Sales September 30, September 30, (Unaudited) (Unaudited) 1 31.1 27.5 2 31.0 33.3 3 11.3 11.5 There were three customers that represented 54.6% and two customers that represented 64.9% of gross accounts receivable at September 30, 2019 and December 31, 2018, respectively. This is set forth in the table below. Customer Percentage of Receivables September 30, December 31, (Unaudited) 1 24.0 38.5 2 19.5 26.4 3 11.1 * * Customer was less than 10% of gross receivables at December 31, 2018. During the year, the Company had occasionally maintained balances in its bank accounts that were in excess of the FDIC limit. The Company has not experienced any losses on these accounts. The Company has several key sole-source suppliers of various parts that are important for one or more of its products. These suppliers are its only source for such parts and, therefore, in the event any of them were to go out of business or be unable or unwilling to provide parts for any reason, its business could be severely harmed. Earnings per share Basic earnings per share is computed by dividing the net income applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Potentially dilutive shares, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. The following is a reconciliation of the denominators of basic and diluted earnings per share computations: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Weighted average shares outstanding used to compute basic earnings per share 28,909,072 26,768,914 28,774,041 26,295,703 Effect of dilutive stock options and warrants 131,458 — — — Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share 29,040,530 26,768,914 28,774,041 26,295,703 The following securities have been excluded from the calculation as the exercise price was greater than the average market price of the common shares: Three and Nine Months Ended September 30, September 30, (Unaudited) (Unaudited) Stock Options 852,000 215,000 Warrants 2,183,000 1,480,000 3,035,000 1,695,000 The following securities have been excluded from the calculation even though the exercise price was less than the average market price of the common shares during the periods set forth below because the effect of including these potential shares was anti-dilutive due to the net loss incurred during these periods: Nine Months Ended Three and Nine Months Ended September 30, September 30, (Unaudited) (Unaudited) Stock Options 500,000 695,000 Warrants — 480,000 500,000 1,175,000 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718, "Compensation – Stock Compensation." Under the fair value recognition provision of the ASC, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options and warrants granted using the Black-Scholes-Merton option pricing model. Stock based compensation expense for employees and directors amounted to $81,000 and $83,000 for the three months ended September 30, 2019 and 2018, respectively, and $446,000 and $308,000 for the nine months ended September 30, 2019 and 2018, respectively, and was included in operating expenses on the accompanying Condensed Consolidated Statements of Operations. Goodwill Goodwill represents the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. The goodwill amount of $163,000 at September 30, 2019 and December 31, 2018 relates to the acquisition of NTW. Goodwill is not amortized, but is tested at least annually for impairment, or if circumstances occur that more likely than not reduce the fair value of the reporting unit below its carrying amount. The Company has determined that there has been no impairment of goodwill at September 30, 2019. Recently Issued Accounting Pronouncements In October 2018, the FASB issued ASU No. 2018-17, "Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities" ("ASU 2018-17"). This ASU reduces the cost and complexity of financial reporting associated with consolidation of variable interest entities (VIEs). A VIE is an organization in which consolidation is not based on a majority of voting rights. The new guidance supersedes the private company alternative for common control leasing arrangements issued in 2014 and expands it to all qualifying common control arrangements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of ASU 2018-17 is not expected to have a material impact on the Company's condensed consolidated financial statements. The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed consolidated financial statements. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Note 4. PROPERTY AND EQUIPMENT The components of property and equipment at September 30, 2019 and December 31, 2018 consisted of the following: September 30, December 31, 2019 2018 (unaudited) Land $ 300,000 $ 300,000 Buildings and Improvements 1,650,000 1,708,000 31.5 years Machinery and Equipment 12,309,000 11,579,000 5 - 8 years Finance Lease Machinery and Equipment 6,495,000 6,495,000 5 - 8 years Tools and Instruments 10,682,000 9,882,000 1.5 - 7 years Automotive Equipment 177,000 177,000 5 years Furniture and Fixtures 290,000 303,000 5 - 8 years Leasehold Improvements 530,000 520,000 Term of Lease Computers and Software 425,000 425,000 4 - 6 years Total Property and Equipment 32,858,000 31,389,000 Less: Accumulated Depreciation (24,726,000 ) (22,612,000 ) Property and Equipment, net $ 8,132,000 $ 8,777,000 Depreciation expense for the three months ended September 30, 2019 and 2018 was $712,000 and $681,000, respectively. Depreciation expense for the nine months ended September 30, 2019 and 2018 was $2,085,000 and $2,165,000, respectively. Assets held under financed lease obligations are depreciated over the shorter of their related lease terms or their estimated productive lives. Depreciation of assets under finance leases is included in depreciation expense for 2019 and 2018. Accumulated depreciation on these assets was approximately $5,683,000 and $4,827,000 as of September 30, 2019 and December 31, 2018, respectively. |
Notes Payable, Related Party No
Notes Payable, Related Party Notes Payable and Finance Lease Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Notes and Loans Payable [Abstract] | |
NOTES PAYABLE, RELATED PARTY NOTES PAYABLE AND FINANCE LEASE OBLIGATIONS | Note 5. NOTES PAYABLE, RELATED PARTY NOTES PAYABLE AND FINANCE LEASE OBLIGATIONS Notes payable and finance lease obligations at September 30, 2019 and December 31, 2018 consisted of the following: September 30, December 31, 2019 2018 (unaudited) Revolving credit note payable to PNC Bank N.A. $ 13,446,000 $ 14,043,000 Term loans, PNC 464,000 1,572,000 Finance lease obligations 887,000 1,786,000 Loan Payable – financed asset 455,000 - Related party notes payable, net of debt discount 5,798,000 4,835,000 Convertible notes payable-third parties, net of debt discount 2,914,000 2,830,000 Subtotal 23,964,000 25,066,000 Less: Current portion of notes and finance lease obligations (21,880,000 ) (19,345,000 ) Notes payable and finance lease obligations, net of current portion $ 2,084,000 $ 5,721,000 PNC Bank N.A. ("PNC") The Company has a Loan Facility with PNC that has been amended many times during its term. Substantially all of its assets are pledged as collateral under the Loan Facility. The Company is required to maintain a lockbox account with PNC, into which substantially all of its cash receipts are paid. The Loan Facility provides for a $15,000,000 revolving loan and a term loan (the "Term Loan"). The repayment terms of the Term Loan provide for monthly principal installments in the amount of $123,133, payable on the first business day of each month, with a final payment of any unpaid balance of principal and interest payable on the scheduled maturity date. The terms of the Loan Facility require, among other things, that the Company maintain a minimum EBITDA (as defined in the Loan Facility) for specified periods. In addition, the Company is limited in the amount of capital expenditures it can make. The Company is also limited to the amount of dividends it can pay as defined in the Loan Facility. The Loan Facility was amended most recently on May 30, 2018 (the "Sixteenth Amendment"), January 2, 2019 (the "Seventeenth Amendment") and February 8, 2019 (the "Eighteenth Amendment"). The Sixteenth Amendment waived Fixed Charge Coverage Ratio covenant violations for the periods ending September 30, 2017, December 31, 2017 and March 31, 2018. The Sixteenth Amendment imposes minimum EBITDA (as defined in the Loan Agreement) covenants of not less than (i) $75,000 for the three-month period ending March 31, 2018, (ii) $485,000 for the six-month period ending June 30, 2018, and (iii) $1,200,000 for the nine-month period ending September 30, 2018. The Company complied with these new covenants for the three-months ended March 31, 2018, the six-month period ended June 30, 2018 and the nine-month period ended September 30, 2018. In addition, the Company is prohibited from paying dividends to its stockholders and making capital expenditures above prescribed amounts. Under the terms of the Seventeenth Amendment, the revolving loan and the Term Loan bear interest at a rate equal to the sum of the Alternate Base Rate (as defined in the Loan Agreement) plus four percent (4%). In addition to the amounts available as revolving loans secured by inventory and receivables pursuant to the formula set forth in the Loan Agreement, PNC has agreed to permit the revolving advances to exceed the formula amount by $1,000,000 as of December 31, 2018, provided that the Company reduces the "Out-of-Formula Loan" by $25,000 per week commencing April 1, 2019, with the unpaid balance payable in full on December 31, 2019. The indebtedness under the revolving loan and the Term Loan are classified with the current portion of notes payable and financing lease obligations. Both the revolving loan, inclusive of the Out-of-Formula Loan, and the Term Loan mature on December 31, 2019. As a condition to the agreement to extend the maturity of the obligations due under the Loan Agreement (the "Obligations") to December 31, 2019, the Company is obligated to pay PNC an extension fee of (i) $250,000 on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) June 30, 2019, (ii) $125,000 on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) December 31, 2019, which amount is deemed earned in full if the Obligations have not been satisfied as of July 1, 2019, (iii) $125,000 on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) December 31, 2019, which amount is deemed earned in full if the Obligations have not been satisfied as of October 1, 2019 (iv) $500,000 on December 31, 2019, which amount is deemed earned in full if the Obligations have not been satisfied as of December 31, 2019. As of September 30, 2019, the Company has paid the extension fee of (i) $250,000 and has accrued (ii) $125,000 which is due and payable on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) December 31, 2019. As a further condition to PNC's agreement to extend the maturity of the Obligations, Michael and Robert Taglich purchased $2,000,000 principal amount of the Company's Senior Subordinated Convertible Notes and arranged a financing giving purchasers a right to receive a pro rata portion of the AMK Revenue Stream Payments (referred to in Note 6) resulting in gross proceeds of $800,000, including $275,000 from Michael and Robert Taglich. The Eighteenth Amendment requires the Company to maintain a minimum EBITDA of not less than (i) $1,500,000 for the twelve-month period ending December 31, 2018, (ii) $655,000 for the three-month period ending March 31, 2019, (iii) $1,860,000 for the six-month period ending June 30, 2019 and (iv) $3,110,000 for the nine-month period ending September 30, 2019. At September 30, 2019, June 30, 2019, March 31, 2019 and December 31, 2018 the Company was in compliance with the minimum EBITDA covenant. As of September 30, 2019, the Company's debt to PNC of $13,910,000 consisted of the revolving credit loan in the amount of $13,446,000 and the Term Loan in the amount of $464,000. The revolver balance was increased to include the Company's negative general ledger balances of its controlled disbursement cash accounts. As of December 31, 2018, the Company's debt to PNC of $15,615,000 consisted of the revolving credit note of $14,043,000 and the Term Loan of $1,572,000. Each day, the Company's cash collections are swept directly by the bank to reduce the revolving loans and the Company then borrows according to a borrowing base formula. The Company's receivables are payable directly into a lockbox controlled by PNC (subject to the terms of the Loan Facility). PNC may use some elements of subjective business judgment in determining whether a material adverse change has occurred in the Company's condition, results of operations, assets, business, properties or prospects allowing it to demand repayment of the Loan Facility. Interest expense related to these credit facilities amounted to approximately $391,000 and $288,000 for the three months ended September 30, 2019 and 2018, respectively, and $954,000 and $981,000 for the nine months ended September 30, 2019 and 2018, respectively. Finance Lease Obligations – Equipment The Company is committed under several financing leases for manufacturing and computer equipment. All leases have bargain purchase options exercisable at the termination of each lease. Financing lease obligations totaled $887,000 and $1,786,000 as of September 30, 2019 and December 31, 2018, respectively, with various interest rates ranging from approximately 4% to 9%. The aggregate future minimum lease payments, including imputed interest, with remaining terms of greater than one year are as follows: For the twelve months ending Amount December 31, 2019 (remainder of the year) $ 301,000 December 31, 2020 542,000 December 31, 2021 52,000 December 31, 2022 22,000 December 31, 2023 — Thereafter — Present value of finance lease obligations 917,000 Less: imputed interest (30,000 ) Less: current portion (783,000 ) Total Long Term Portion $ 104,000 Related Party Notes Payable Taglich Brothers, Inc. is a corporation co-founded by two directors of the Company, Michael and Robert Taglich. In addition, a third director of the Company is a vice president of Taglich Brothers, Inc. Taglich Brothers, Inc. has acted as placement agent for various debt and equity financing transactions and has received cash and equity compensation for their services. On January 15, 2019, the Company issued its 7% senior subordinated convertible promissory notes due December 31, 2020, each in the principal amount of $1,000,000 (together, the "7% Notes"), to Michael Taglich and Robert Taglich, each for a purchase price of $1,000,000. The 7% Notes bear interest at the rate of 7% per annum, are convertible into shares of the Company's common stock at a conversion price of $0.93 per share, subject to the anti-dilution adjustments set forth in the 7% Notes, are subordinate to the Company's indebtedness under its credit facility with PNC Bank, National Association, and mature at December 31, 2020, or earlier upon an Event of Default. In connection with the 7% Notes, the Company paid Taglich Brothers, Inc. a fee of $80,000 (4% of the purchase price of the 7% Notes), paid in the form of a promissory note having terms substantially identical to the 7% Notes. On June 26, 2019, the Company was advanced $250,000 from each of Michael and Robert Taglich. The maturity date of these notes is June 30, 2020 which correspond with the maturity date of the Subordinated Notes due May 2019, ("The "2019 Notes"), that were extended to June 30, 2020. These notes bear interest at a rate of 12% per annum. In connection with these notes the Company issued 37,500 shares of stock to each of Michael and Robert Taglich. On October 21, 2019, the Company was advanced $1,000,000 from Michael Taglich. As of the date of this report, the terms of the advance have not been finalized. Private Placement of Subordinated Notes due May 31, 2019, together with Shares of Common Stock On March 29, 2018 and April 4, 2018, Michael Taglich and Robert Taglich advanced $1,000,000 and $100,000, respectively, to the Company for use as working capital. The Company subsequently issued its Subordinated Notes due May 31, 2019 (the "2019 Notes") to Michael Taglich and Robert Taglich, to evidence its obligation to repay the foregoing advances, together with shares of common stock. In May 2018, the Company issued $1,200,000 of Subordinated Notes due May 31, 2019, together with a total of 214,762 shares of common stock (the "Shares"), to Michael Taglich, Robert Taglich and another accredited investor. As part of the financing, the Company issued to Michael Taglich $1,000,000 principal amount of 2019 Notes and 178,571 shares of common stock for a purchase price of $1,000,000 and the Company issued to Robert Taglich $100,000 principal amount of 2019 Notes and 17,857 shares of common stock. The Company issued and sold a 2019 Note in the principal amount of $100,000, plus 18,334 shares of common stock, to the other accredited investor for a purchase price of $100,000. Seventy percent (70%) of the total purchase price for the 2019 Notes and Shares purchased by each investor has been allocated to the 2019 Notes with the remaining thirty percent (30%) allocated to the Shares purchased. The number of Shares purchased by Michael Taglich and Robert Taglich was calculated based upon $1.68, the closing price of the common stock on May 20, 2018, the trading day immediately preceding the date they purchased the 2019 Notes and shares of common stock. Interest on the 2019 Notes is payable on the outstanding principal amount thereof at the rate of one percent (1%) per month, payable monthly commencing June 30, 2018. Upon the occurrence and continuation of a failure to pay accrued interest, interest shall accrue and be payable on such amount at the rate of 1.25% per month; provided that upon the occurrence and continuation of a failure to timely pay the principal amount of the 2019 Note, interest shall accrue and be payable on such principal amount at the rate of 1.25% per month and shall no longer be payable on interest accrued but unpaid. The 2019 Notes are subordinate to the Company's obligations to PNC. Taglich Brothers, Inc. acted as placement agent for the offering and received a commission in the aggregate amount of 4% of the amount invested which was paid in kind. The gross proceeds of $1,200,000 was completed in the following closings: Date Gross Proceeds Promissory Note $ Common Stock Price Shares 3/29/2018 $ 1,000,000 $ 700,000 $ 300,000 1.68 178,571 4/4/2018 100,000 70,000 30,000 1.68 17,857 5/21/2018 100,000 70,000 30,000 1.64 18,334 Total $ 1,200,000 $ 840,000 $ 360,000 214,762 During the second quarter of 2019, the maturity date of the 2019 Notes was extended to June 30, 2020. The interest rate of the notes remains at 12% per annum. In connection with the extension, 180,000 shares of common stock were issued on a pro-rata basis to each of the note holders, including 150,000 shares to Michael Taglich and 15,000 shares to Robert Taglich at $1.01 per share or $182,000. The costs have been recorded as a debt discount, and are being accreted over the revised term. Related party advances and notes payable, net of debt discounts to Michael and Robert Taglich, and their affiliated entities, totaled $5,798,000 and $4,835,000, as of September 30, 2019 and December 31, 2018, respectively. Interest incurred on these related party notes amounted to approximately $265,000 and $526,000 for the three months ended September 30, 2019 and 2018, respectively, and $1,393,000 and $1,324,000 for the nine months ended September 30, 2019 and 2018, respectively. These costs are included in interest and financing costs in the condensed consolidated statement of operations. |
Liability Related to the Sale o
Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary | 9 Months Ended |
Sep. 30, 2019 | |
Placement invested percentage [Abstract] | |
LIABILITY RELATED TO THE SALE OF FUTURE PROCEEDS FROM DISPOSITION OF SUBSIDIARY | NOTE 6. LIABILITY RELATED TO THE SALE OF FUTURE PROCEEDS FROM DISPOSITION OF SUBSIDIARY In connection with the sale of the Company's wholly-owned subsidiary, AMK Welding, Inc. ("AMK") to Meyer Tool, Inc., ("Meyer") in 2017, Meyer was obligated to pay the Company within 30 days after the end of each calendar quarter, commencing April 1, 2017, an amount equal to five (5%) percent of the net sales of AMK for that quarter until the aggregate payments made to the Company (the "Meyer Agreement") equals $1,500,000 (the "Maximum Amount"). As of December 31, 2018, the Company received an aggregate of $363,000 under the Meyer Agreement. In order to increase liquidity, on January 15, 2019, the Company entered into a "Purchase Agreement" with 15 accredited investors (the "Purchasers"), including Michael and Robert Taglich, pursuant to which the Company assigned to the Purchasers all of their rights, title and interest to the remaining $1,137,000 of the $1,500,000 in payments due from Meyer for the sale of AMK (the "Remaining Amount") for an immediate payment of $800,000, including $100,000 from each of Michael and Robert Taglich, and $75,000 for the benefit of the children of Michael Taglich. The timing of the payments is based upon the net sales of AMK. If the Purchasers have not received the entire Remaining Amount by March 31, 2023, they have the right to demand payment of their pro rata portion of the unpaid Remaining Amount from the Company ("Put Right"). To the extent the Purchasers exercise their Put Right, the remaining payments from Meyer will be retained by the Company. The Purchasers have agreed to pay Taglich Brothers a fee equal to 2% per annum of the purchase price paid by such Purchasers, payable quarterly, to be deducted from the payments of the Remaining Amount, for acting as paying agent in connection with the payments from Meyer. Although the Company sold all of its rights to the Remaining Amount, as a result of its obligation to the Purchasers, the Company is required to account for the Remaining Amount or portion thereof as income when earned. The Company recorded the $800,000 in proceeds as a liability on its condensed consolidated balance sheet, net of transaction costs of $3,000. Transaction costs will be amortized to interest expense over the estimated life of the Purchase Agreement. As payments are remitted to the Purchasers, the balance of the recorded liability will be effectively repaid over the life of the Purchase Agreement. To determine the amortization of the recorded liability, the Company is required to estimate the total amount of future payment to be received by the Purchasers. The Company estimates that the entire Remaining Amount will be received, and accordingly, the Remaining Amount less the $800,000 purchase price received (the "Discount") will be amortized into the liability balance and recorded as interest expense. The Discount will be amortized through the earliest date that the Purchasers can exercise their Put Right, using the straight line method (which is not materially different than the effective interest method) over the estimated life of the Purchase Agreement with the Purchasers. Periodically, the Company will assess the estimated payments to be made to the Purchasers related to the Meyer Agreement, and to the extent the amount or timing of the payments is materially different from their original estimates, the Company will prospectively adjust the amortization of the liability. The amount or timing of the payments from Meyer are not within the Company's control. Since the inception of the Purchase Agreement, the Company estimates the effective annual interest rate over the life of the agreement to be approximately 18%. The liability is classified between the current and non-current portion of liability related to sale of future proceeds from disposition of subsidiary based on the estimated recognition of the payments to be received by the purchasers in the next 12 months from the financial statements reporting date. During the three and nine months ended September 30, 2019, the Company recognized $89,000 and $198,000, respectively, of non-cash income reflected in "other income, net" on the condensed consolidated statement of operations and recorded $27,000 and $60,000, respectively, of related non-cash interest expense related to the Purchase Agreement. The table below shows the activity within the liability account for the nine months ended September 30, 2019: Liabilities related to sale of future proceeds from disposition of subsidiaries – beginning balance $ — Cash received from sale of future proceeds from disposition of subsidiary 800,000 Non-Cash other income recognized (198,000 ) Non-Cash interest expense recognized 60,000 Liabilities related to sale of future proceeds from disposition of subsidiary – ending balance 662,000 Less: unamortized transaction costs (3,000 ) Liability related to sale of future proceeds from disposition of subsidiary, net $ 659,000 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Note 7. STOCKHOLDERS' EQUITY Common Stock - Sale of Unregistered Equity Securities On November 29, 2017, Air Industries Group entered into a Placement Agency Agreement with Taglich Brothers, Inc., a related party, as placement agent (the "Placement Agent"), pursuant to which the Placement Agent agreed to offer on behalf of the Company, on a best efforts basis, up to 1,600,000 shares of the Company's common stock (the "Shares") to accredited investors (the "Offering"), together with five-year warrants to purchase 24,000 shares of common stock (the "Warrants") for each $100,000 of shares purchased, in a private placement exempt from the registration requirements of the Securities Act. Total Shares Warrants Date Investment # of shares Price # of warrants Ex Price 11/29/2017 $ 300,000 217,390 $ 1.38 72,000 $ 1.50 12/5/2017 400,000 320,000 $ 1.25 96,000 $ 1.50 12/29/2017 235,000 188,000 $ 1.25 56,400 $ 1.50 Subtotal- 2017 935,000 725,390 224,400 1/9/2018 1,065,000 852,000 $ 1.25 255,600 $ 1.50 Total Offering $ 2,000,000 1,577,390 480,000 On January 9, 2018, the Company issued and sold to 35 accredited investors an aggregate of 852,000 Shares and Warrants to purchase an additional 255,600 shares of common stock, for gross proceeds of $1,065,000 pursuant to the Offering. The purchase price for the Shares and Warrants was $1.25 per Share. The Company had previously sold a total of 725,390 Shares and Warrants to purchase an additional 224,400 shares of common stock for gross proceeds of $935,000 on November 29, 2017, December 5, 2017 and December 29, 2017 pursuant to the Offering. The Warrants have an exercise price of $1.50 per share, subject to certain anti-dilution and other adjustments, including stock splits, and in the event of certain fundamental transactions such as mergers and other business combinations, and may be exercised on a cashless basis for a lesser number of shares depending upon prevailing market prices at the time of exercise. The Warrants may be exercised until November 30, 2022. In connection with the Offering completed from November 2017 through January 2018, Taglich Brothers, Inc., is entitled to a placement agent fee equal to $160,000 (8% of the amounts invested), payable at the Company's option, in cash or additional shares of common stock and warrants having the same terms and conditions as the Shares and Warrants. Michael Taglich and Robert Taglich, directors of the Company, are principals of Taglich Brothers, Inc. The placement agent fee was $0 and $85,200 for the three and nine months ended September 30, 2019 and 2018, respectively. The Company issued 123,456 shares of common stock in lieu of cash payment for legal fees provided to the Company, for the nine months ended September 30, 2018. In connection with the extension of the maturity date of the Subordinated Notes due May 31, 2019 to June 30, 2020, the Company issued 180,000 shares of common stock on a pro-rata basis to each of the note holders during the quarter ended June 30, 2019. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | Note 8. CONTINGENCIES Loss Contingencies A number of legal actions have been commenced against us by vendors, former landlords and others, including a third party claim as a result of an injury suffered on a portion of a leased property not occupied by us. As certain of these claims represent amounts included in accounts payable or accrued expenses they are not specifically discussed herein. An employee of the Company commenced an action against, among others, Rechler Equity B-2, LLC and Air Industries Group, in the Supreme Court State of New York, Suffolk County, seeking compensation in an undetermined amount for injuries suffered while leaving the premises occupied by Welding Metallurgy, Inc. Rechler Equity B-2, LLC, has served a Third Party Complaint in this action against Air Industries Group, Inc. and Welding Metallurgy, Inc. The action remains in the early pleading stage. The Company believes it is not liable to the employee and any amount it might have to pay would be covered by insurance. An employee of the Company commenced an action against, among others, Sterling Engineering and Air Industries Group, before the Connecticut Commission on Human Rights and Opportunities, seeking lost wages in an undetermined amount for the employee's termination. The action remains in the early pleading stage. The Company believes it is not liable to the employee and any amount it might have to pay would be covered by insurance. On October 2, 2018, Contract Pharmacal Corp. commenced an action, relating to a Sublease entered into in May 2018 with respect to the property we occupied at 110 Plant Avenue, Hauppauge, New York. In the action Contract Pharmacal seeks damages of approximately $600,000 for the Company's failure to make the entire premises available by the Sublease commencement date. The Company disputes the validity of the claims asserted by Contract Pharmacal and believes it has meritorious defenses to those claims and recently submitted a motion in opposition to its motion for summary judgement. On December 20, 2018, pursuant to a Stock Purchase Agreement dated as of March 21, 2018 ("SPA"), the Company completed the sale of all of the outstanding shares of its subsidiary, Welding Metallurgy, Inc. to CPI Aerostructures. On March 19, 2019, in accordance with the procedures set forth in the SPA with CPI Aerostructures, the Company received a notice from CPI claiming that the working capital deficit used to compute the purchase price was understated. The issue of the amount of the working capital deficit was submitted to BDO USA, LLP ("BDO"), acting as an expert, and it issued a report dated September 3, 2019, where it determined that the amount of the working capital deficit was approximately $4,145,870. On September 9, 2019 the Company received a demand from CPI for payment of such amount. The Company advised CPI that the determination of BDO is void because, among other things, it believes BDO exceeded the scope of its authority as set forth in the SPA. On September 27, 2019, CPI filed a notice of motion in the Supreme Court of the State of New York, County of New York, against the Company seeking, among other things, an order of specific performance requiring delivery of the funds deposited in escrow, together with the balance of the working capital deficit which it claimed, and a judgment against the Company in the amount of approximately $4,200,000 of which $2,000,000 would be satisfied by delivery of the funds in escrow. On October 7, 2019, the Company agreed to the release of $619,316 of the funds held in escrow in respect of claims related to the working capital deficit not related to the value of WMI's inventory. As of December 31, 2018, the Company has placed a reserve against substantially all of the escrowed amount and cannot estimate the amount of loss. Additionally, outside counsel for the Company has advised that they cannot offer an opinion as to the probable outcome at this stage in the proceedings. For, among others, the reasons stated above the Company intends to contest vigorously any claim CPI may make for payment based on the BDO Report. From time to time, the Company also may be engaged in various lawsuits and legal proceedings in the ordinary course of the Company's business. The Company is currently not aware of any legal proceedings the ultimate outcome of which, in its judgment based on information currently available, would have a material adverse effect on its business, financial condition or operating results. The Company, however, has had claims brought against it by a number of vendors due to their liquidity constraints. There are no proceedings in which any of its directors, officers or affiliates, or any registered or beneficial stockholder of the Company's common stock, is an adverse party or has a material interest adverse to the Company's interest. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Note 9. INCOME TAXES The Company recorded no Federal income tax expense or benefit for the three and nine months ended September 30, 2019. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company's annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives. As of September 30, 2019 and December 31, 2018, the Company provided a valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized. The provision for income taxes as of September 30, is set forth below: 2019 2018 (unaudited) (unaudited) Current Federal $ — $ — State 22,000 — Prior Year Under accrual Federal — — State — — Total Current Expense 22,000 — Deferred Tax Benefit — — Valuation Allowance — — Provision for Income Taxes $ 22,000 $ — |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | Note 10. SEGMENT REPORTING In accordance with FASB ASC 280, "Segment Reporting" ("ASC 280"), the Company discloses financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company follows ASC 280, which establishes standards for reporting information about operating segments in annual and interim financial statements, and requires that companies report financial and descriptive information about their reportable segments based on a management approach. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company currently divides its operations into two operating segments: Complex Machining which consists of AIM and NTW and Turbine Engine Components which consists of Sterling. Along with the Company's operating subsidiaries, the Company reports the results of its corporate division as an independent segment. In March 2018, the Company announced its intent to divest WMI Group and related operations which divestiture was completed in December 2018 enabling it to focus on complex, machined products for aircraft landing gear, flight critical / flight safety equipment and jet turbine applications. Although WMI Group and the related operations had been classified as a discontinued operation, the Company continued to operate these businesses until the sale closed on December 20, 2018. In November 2018, the Company's EPC subsidiary received a notice of debarment from bidding on or fulfilling future government contracts. The existing contracts that had already been awarded have been completed and the operations of the entity were closed on March 31, 2019. For reporting purposes, WMI Group and EPC and ECC have been classified as discontinued operations for the three and nine months ending September 30, 2019 and 2018. The accounting policies of each of the segments are the same as those described in the Summary of Significant Accounting Policies. The Company evaluates performance based on revenue, gross profit contribution and assets employed. Corporate level operating costs are allocated to segments. These costs include corporate costs such as legal, audit, tax and other professional fees including those related to being a public company. Financial information about the Company's operating segments for the three and nine months ended September 30, 2019 and 2018 are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) COMPLEX MACHINING Net Sales $ 12,283,000 $ 9,690,000 $ 36,402,000 $ 30,022,000 Gross Profit 2,762,000 1,434,000 7,070,000 4,926,000 Pretax income from continuing operations 2,003,000 530,000 4,797,000 1,303,000 Assets 45,033,000 43,418,000 45,033,000 43,418,000 TURBINE ENGINE COMPONENTS Net Sales 1,714,000 1,043,000 4,841,000 3,593,000 Gross Profit 201,000 (67,000 ) 358,000 (60,000 ) Pretax loss from continuing operations (11,000 ) (245,000 ) (292,000 ) (817,000 ) Assets 5,122,000 5,661,000 5,122,000 5,661,000 CORPORATE Net Sales — — — — Gross Profit — — — — Pretax loss from continuing operations (1,572,000 ) (1,843,000 ) (5,815,000 ) (4,741,000 ) Assets 596,000 272,000 596,000 272,000 CONSOLIDATED Net Sales 13,997,000 10,733,000 41,243,000 33,615,000 Gross Profit 2,963,000 1,367,000 7,428,000 4,866,000 Pretax net income (loss) from continuing operations 420,000 (1,558,000 ) (1,310,000 ) (4,255,000 ) Provision for Income Taxes 22,000 — 22,000 — Loss from Discontinued Operations, net of income tax (211,000 ) (1,572,000 ) (139,000 ) (158,000 ) Net Income (Loss) 187,000 (3,130,000 ) (1,471,000 ) (4,413,000 ) Assets $ 50,751,000 $ 49,351,000 $ 50,751,000 $ 49,351,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principal Business Activity | Principal Business Activity The Company, through its AIM subsidiary, is primarily engaged in manufacturing aircraft structural parts and assemblies for prime defense contractors in the aerospace industry in the United States. NTW is a manufacturer of aerospace components, principally landing gear for F-16 and F-18 fighter aircraft. Sterling manufactures components and provides services for jet engines and ground-power turbines. The Company's customers consist mainly of publicly traded companies in the aerospace industry. |
Inventory Valuation | Inventory Valuation For annual periods, the Company values inventory at the lower of cost on a first-in-first-out basis or estimated net realizable value. The Company does not take physical inventories at interim quarterly reporting periods. As such, substantially all of the inventory value at September 30, 2019 has been estimated using a gross profit percentage based on historical gross profit percentages of previous periods as applied to the net sales of the current period, as management believes that the gross profit percentage on these items are materially consistent from period to period. The remainder of the inventory value at September 30, 2019 is estimated based on the Company's standard cost perpetual inventory system, as management believes the perpetual system computed value for these items provides a better estimate of value for that inventory. Adjustments to reconcile the annual physical inventory to the Company's books are treated as changes in accounting estimates and are recorded in the fourth quarter. Inventories consist of the following at: September 30, December 31, 2019 2018 (Unaudited) Raw Materials $ 4,369,000 $ 4,622,000 Work In Progress 20,298,000 17,530,000 Finished Goods 9,966,000 10,915,000 Inventory Reserve (4,281,000 ) (4,016,000 ) Total Inventory $ 30,352,000 $ 29,051,000 |
Credit and Concentration Risks | Credit and Concentration Risks There were two customers that represented 61.7% and three customers that represented 69.3% of total net sales for the three months ended September 30, 2019 and 2018, respectively. This is set forth in the table below. Customer Percentage of Sales September 30, September 30, (Unaudited) (Unaudited) 1 35.0 27.1 2 26.7 28.5 3 * 13.7 * Customer was less than 10% of sales for the three months ended September 30, 2019. There were three customers that represented 73.4% and 72.3% of total sales for the nine months ended September 30, 2019 and 2018, respectively. This is set forth in the table below. Customer Percentage of Sales September 30, September 30, (Unaudited) (Unaudited) 1 31.1 27.5 2 31.0 33.3 3 11.3 11.5 There were three customers that represented 54.6% and two customers that represented 64.9% of gross accounts receivable at September 30, 2019 and December 31, 2018, respectively. This is set forth in the table below. Customer Percentage of Receivables September 30, December 31, (Unaudited) 1 24.0 38.5 2 19.5 26.4 3 11.1 * * Customer was less than 10% of gross receivables at December 31, 2018. During the year, the Company had occasionally maintained balances in its bank accounts that were in excess of the FDIC limit. The Company has not experienced any losses on these accounts. The Company has several key sole-source suppliers of various parts that are important for one or more of its products. These suppliers are its only source for such parts and, therefore, in the event any of them were to go out of business or be unable or unwilling to provide parts for any reason, its business could be severely harmed. |
Earnings per share | Earnings per share Basic earnings per share is computed by dividing the net income applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Potentially dilutive shares, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. The following is a reconciliation of the denominators of basic and diluted earnings per share computations: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Weighted average shares outstanding used to compute basic earnings per share 28,909,072 26,768,914 28,774,041 26,295,703 Effect of dilutive stock options and warrants 131,458 — — — Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share 29,040,530 26,768,914 28,774,041 26,295,703 The following securities have been excluded from the calculation as the exercise price was greater than the average market price of the common shares: Three and Nine Months Ended September 30, September 30, (Unaudited) (Unaudited) Stock Options 852,000 215,000 Warrants 2,183,000 1,480,000 3,035,000 1,695,000 The following securities have been excluded from the calculation even though the exercise price was less than the average market price of the common shares during the periods set forth below because the effect of including these potential shares was anti-dilutive due to the net loss incurred during these periods: Nine Months Ended Three and Nine Months Ended September 30, September 30, (Unaudited) (Unaudited) Stock Options 500,000 695,000 Warrants — 480,000 500,000 1,175,000 |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718, "Compensation – Stock Compensation." Under the fair value recognition provision of the ASC, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options and warrants granted using the Black-Scholes-Merton option pricing model. Stock based compensation expense for employees and directors amounted to $25,000 and $83,000 for the three months ended September 30, 2019 and 2018, respectively, and $351,000 and $308,000 for the nine months ended September 30, 2019 and 2018, respectively, and was included in operating expenses on the accompanying Condensed Consolidated Statements of Operations. |
Goodwill | Goodwill Goodwill represents the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. The goodwill amount of $163,000 at September 30, 2019 and December 31, 2018 relates to the acquisition of NTW. Goodwill is not amortized, but is tested at least annually for impairment, or if circumstances occur that more likely than not reduce the fair value of the reporting unit below its carrying amount. The Company has determined that there has been no impairment of goodwill at September 30, 2019. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In October 2018, the FASB issued ASU No. 2018-17, "Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities" ("ASU 2018-17"). This ASU reduces the cost and complexity of financial reporting associated with consolidation of variable interest entities (VIEs). A VIE is an organization in which consolidation is not based on a majority of voting rights. The new guidance supersedes the private company alternative for common control leasing arrangements issued in 2014 and expands it to all qualifying common control arrangements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of ASU 2018-17 is not expected to have material impact on the Company's condensed consolidated financial statements. The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed consolidated financial statements. |
Formation and Basis of Presen_2
Formation and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Formation and Basis of Presentation [Abstract] | |
Schedule of impact of the adoption of ASC 842 on the balance sheet | As Reported December 31, Adoption of Balance Operating Lease Right-Of-Use-Asset $ — $ 4,368,000 $ 4,368,000 Total Assets $ 47,756,000 $ 4,368,000 $ 52,124,000 Operating Leases Liabilities – Current Portion $ — $ 547,000 $ 547,000 Total Current Liabilities $ 29,007,000 $ 547,000 $ 29,554,000 Operating Leases Liabilities – Net of Current Portion $ — $ 4,986,000 $ 4,986,000 Deferred Rent $ 1,165,000 $ (1,165,000 ) $ — Total Liabilities $ 36,150,000 $ 4,368,000 $ 40,518,000 Total Liabilities and Stockholders' Equity $ 47,756,000 $ 4,368,000 $ 52,124,000 |
Components of lease costs, lease term and discount rate | September 30, (unaudited) Weighted Average Remaining Lease Term – in years 6.53 Weighted Average discount rate - % 9.50 % |
Maturities of lease liabilities | Amount For the twelve months ended (unaudited) December 31, 2019 (remaining three months) $ 279,000 December 31, 2020 1,136,000 December 31, 2021 1,118,000 December 31, 2022 868,000 December 31, 2023 895,000 Thereafter 2,604,000 Total future minimum lease payments 6,900,000 Less: discount (1,808,000 ) Total operating lease maturities 5,092,000 Less: current portion of operating lease liabilities (672,000 ) Total long term portion of operating lease maturities $ 4,420,000 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of reconciliation of the major financial lines constituting the results of operations for discontinued operations | Three Months Ended Nine Months Ended 2019 2018 2019 2018 (unaudited) (unaudited) (unaudited) (unaudited) Net revenue $ $ 5,262,000 $ 132,000 $ 12,982,000 Cost of goods sold — 4,252,000 105,000 10,769,000 Gross profit — 1,010,000 27,000 2,213,000 Operating expenses: Selling, general and administrative 100,000 91,000 155,000 1,442,000 Loss on assets held for sale — (2,493,000 ) — (930,000 ) Total operating loss (100,000 ) (1,574,000 ) (128,000 ) (159,000 ) Interest expense — (2,000 ) (1,000 ) (4,000 ) Other (expense) income (111,000 ) 4,000 (10,000 ) 7,000 Loss from discontinued operations before income taxes (211,000 ) (1,572,000 ) (139,000 ) (156,000 ) Provision for income taxes — — — 2,000 Loss from discontinued operations, net of income tax $ (211,000 ) $ (1,572,000 ) $ (139,000 ) $ (158,000 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of inventory valuation | September 30, December 31, 2019 2018 (Unaudited) Raw Materials $ 4,369,000 $ 4,622,000 Work In Progress 20,298,000 17,530,000 Finished Goods 9,966,000 10,915,000 Inventory Reserve (4,281,000 ) (4,016,000 ) Total Inventory $ 30,352,000 $ 29,051,000 |
Schedule of credit and concentration risks | Customer Percentage of Sales September 30, September 30, (Unaudited) (Unaudited) 1 35.0 27.1 2 26.7 28.5 3 * 13.7 * Customer was less than 10% of sales for the three months ended September 30, 2019. Customer Percentage of Sales September 30, September 30, (Unaudited) (Unaudited) 1 31.1 27.5 2 31.0 33.3 3 11.3 11.5 Customer Percentage of Receivables September 30, December 31, (Unaudited) 1 24.0 38.5 2 19.5 26.4 3 11.1 * * Customer was less than 10% of gross receivables at December 31, 2018. |
Schedule of earnings per share | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Weighted average shares outstanding used to compute basic earnings per share 28,909,072 26,768,914 28,774,041 26,295,703 Effect of dilutive stock options and warrants 131,458 — — — Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share 29,040,530 26,768,914 28,774,041 26,295,703 |
Schedule of anti-dilutive securities | Three and Nine Months Ended September 30, September 30, (Unaudited) (Unaudited) Stock Options 852,000 215,000 Warrants 2,183,000 1,480,000 3,035,000 1,695,000 Nine Months Ended Three and Nine Months Ended September 30, September 30, (Unaudited) (Unaudited) Stock Options 500,000 695,000 Warrants — 480,000 500,000 1,175,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, 2019 2018 (unaudited) Land $ 300,000 $ 300,000 Buildings and Improvements 1,650,000 1,708,000 31.5 years Machinery and Equipment 12,309,000 11,579,000 5 - 8 years Finance Lease Machinery and Equipment 6,495,000 6,495,000 5 - 8 years Tools and Instruments 10,682,000 9,882,000 1.5 - 7 years Automotive Equipment 177,000 177,000 5 years Furniture and Fixtures 290,000 303,000 5 - 8 years Leasehold Improvements 530,000 520,000 Term of Lease Computers and Software 425,000 425,000 4 - 6 years Total Property and Equipment 32,858,000 31,389,000 Less: Accumulated Depreciation (24,726,000 ) (22,612,000 ) Property and Equipment, net $ 8,132,000 $ 8,777,000 |
Notes Payable, Related Party _2
Notes Payable, Related Party Notes Payable and Finance Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes and Loans Payable [Abstract] | |
Schedule of notes payable and capital lease obligations | September 30, December 31, 2019 2018 (unaudited) Revolving credit note payable to PNC Bank N.A. $ 13,446,000 $ 14,043,000 Term loans, PNC 464,000 1,572,000 Finance lease obligations 887,000 1,786,000 Loan Payable – financed asset 455,000 - Related party notes payable, net of debt discount 5,798,000 4,835,000 Convertible notes payable-third parties, net of debt discount 2,914,000 2,830,000 Subtotal 23,964,000 25,066,000 Less: Current portion of notes and finance lease obligations (21,880,000 ) (19,345,000 ) Notes payable and finance lease obligations, net of current portion $ 2,084,000 $ 5,721,000 |
Schedule of future minimum lease payments, including imputed interest | For the twelve months ending Amount December 31, 2019 (remainder of the year) $ 301,000 December 31, 2020 542,000 December 31, 2021 52,000 December 31, 2022 22,000 December 31, 2023 — Thereafter — Present value of finance lease obligations 917,000 Less: imputed interest (30,000 ) Less: current portion (783,000 ) Total Long Term Portion $ 104,000 |
Schedule of related party advances and notes payable | Date Gross Proceeds Promissory Note $ Common Stock Price Shares 3/29/2018 $ 1,000,000 $ 700,000 $ 300,000 1.68 178,571 4/4/2018 100,000 70,000 30,000 1.68 17,857 5/21/2018 100,000 70,000 30,000 1.64 18,334 Total $ 1,200,000 $ 840,000 $ 360,000 214,762 |
Liability Related to the Sale_2
Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Liability Related To Sale Of Future Proceeds From Disposition Of Subsidiary Tables Abstract | |
Schedule of activity within the liability account | Liabilities related to sale of future proceeds from disposition of subsidiaries – beginning balance $ — Cash received from sale of future proceeds from disposition of subsidiary 800,000 Non-Cash other income recognized (198,000 ) Non-Cash interest expense recognized 60,000 Liabilities related to sale of future proceeds from disposition of subsidiary – ending balance 662,000 Less: unamortized transaction costs (3,000 ) Liability related to sale of future proceeds from disposition of subsidiary, net $ 659,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of stockholders' equity | Total Shares Warrants Date Investment # of shares Price # of warrants Ex Price 11/29/2017 $ 300,000 217,390 $ 1.38 72,000 $ 1.50 12/5/2017 400,000 320,000 $ 1.25 96,000 $ 1.50 12/29/2017 235,000 188,000 $ 1.25 56,400 $ 1.50 Subtotal- 2017 935,000 725,390 224,400 1/9/2018 1,065,000 852,000 $ 1.25 255,600 $ 1.50 Total Offering $ 2,000,000 1,577,390 480,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for (benefit from) income taxes | 2019 2018 (unaudited) (unaudited) Current Federal $ — $ — State 22,000 — Prior Year Under accrual Federal — — State — — Total Current Expense 22,000 — Deferred Tax Benefit — — Valuation Allowance — — Provision for Income Taxes $ 22,000 $ — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of operating segments | Three Months Ended Nine Months Ended 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) COMPLEX MACHINING Net Sales $ 12,283,000 $ 9,690,000 $ 36,402,000 $ 30,022,000 Gross Profit 2,762,000 1,434,000 7,070,000 4,926,000 Pretax income from continuing operations 2,003,000 530,000 4,797,000 1,303,000 Assets 45,033,000 43,418,000 45,033,000 43,418,000 TURBINE ENGINE COMPONENTS Net Sales 1,714,000 1,043,000 4,841,000 3,593,000 Gross Profit 201,000 (67,000 ) 358,000 (60,000 ) Pretax loss from continuing operations (11,000 ) (245,000 ) (292,000 ) (817,000 ) Assets 5,122,000 5,661,000 5,122,000 5,661,000 CORPORATE Net Sales — — — — Gross Profit — — — — Pretax loss from continuing operations (1,572,000 ) (1,843,000 ) (5,815,000 ) (4,741,000 ) Assets 596,000 272,000 596,000 272,000 CONSOLIDATED Net Sales 13,997,000 10,733,000 41,243,000 33,615,000 Gross Profit 2,963,000 1,367,000 7,428,000 4,866,000 Pretax net income (loss) from continuing operations 420,000 (1,558,000 ) (1,310,000 ) (4,255,000 ) Provision for Income Taxes 22,000 — 22,000 — Loss from Discontinued Operations, net of income tax (211,000 ) (1,572,000 ) (139,000 ) (158,000 ) Net Income (Loss) 187,000 (3,130,000 ) (1,471,000 ) (4,413,000 ) Assets $ 50,751,000 $ 49,351,000 $ 50,751,000 $ 49,351,000 |
Formation and Basis of Presen_3
Formation and Basis of Presentation (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Operating Lease Right-Of-Use-Asset | ||
Total Assets | $ 50,751,000 | 47,756,000 |
Operating Leases Liabilities - Current Portion | 672,000 | |
Total Current Liabilities | 32,996,000 | 29,007,000 |
Operating Leases Liabilities - Net of Current Portion | 4,420,000 | |
Deferred Rent | 1,165,000 | |
Total Liabilities | 40,190,000 | 36,150,000 |
Total Liabilities and Stockholders' Equity | $ 50,751,000 | 47,756,000 |
Balance January 1, 2019 [Member] | ||
Operating Lease Right-Of-Use-Asset | 4,368,000 | |
Total Assets | 52,124,000 | |
Operating Leases Liabilities - Current Portion | 547,000 | |
Total Current Liabilities | 29,554,000 | |
Operating Leases Liabilities - Net of Current Portion | 4,986,000 | |
Deferred Rent | ||
Total Liabilities | 40,518,000 | |
Total Liabilities and Stockholders' Equity | 52,124,000 | |
Adoption of ASC 842 Increase (Decrease) [Member] | ||
Operating Lease Right-Of-Use-Asset | 4,368,000 | |
Total Assets | 4,368,000 | |
Operating Leases Liabilities - Current Portion | 547,000 | |
Total Current Liabilities | 547,000 | |
Operating Leases Liabilities - Net of Current Portion | 4,986,000 | |
Deferred Rent | (1,165,000) | |
Total Liabilities | 4,368,000 | |
Total Liabilities and Stockholders' Equity | $ 4,368,000 |
Formation and Basis of Presen_4
Formation and Basis of Presentation (Details 1) | Sep. 30, 2019 |
Net of a working capital adjustment | |
Weighted Average Remaining Lease Term - in years | 6 years 6 months 10 days |
Weighted Average discount rate - % | 9.50% |
Formation and Basis of Presen_5
Formation and Basis of Presentation (Details 2) | Sep. 30, 2019USD ($) |
For the twelve months ended | |
December 31, 2019 (remaining three months) | $ 279,000 |
December 31, 2020 | 1,136,000 |
December 31, 2021 | 1,118,000 |
December 31, 2022 | 868,000 |
December 31, 2023 | 895,000 |
Thereafter | 2,604,000 |
Total future minimum lease payments | 6,900,000 |
Less: discount | (1,808,000) |
Total operating lease maturities | 5,092,000 |
Less: current portion of operating lease liabilities | (672,000) |
Total long term portion of operating lease maturities | $ 4,420,000 |
Formation and Basis of Presen_6
Formation and Basis of Presentation (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 20, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Jan. 02, 2019 | |
Formation and Basis of Presentation (Textual) | ||||
Purchase price | $ 9,000,000 | |||
Net of a working capital adjustment | (1,093,000) | |||
Escrow deposit | $ 2,000,000 | |||
Operating lease, description | As part of the effort to reduce costs, corporate executive offices were moved to an existing 5.4 acre corporate campus in Bay Shore, New York. The Company remains liable under the lease for the office in Hauppauge, New York which is now vacant. This lease has a term which ends January 2022. The annual rent was approximately $113,000 for the lease year which began in January 2019 and increases by approximately 3% per annum each year thereafter. Accordingly, the Company recognized an impairment of $275,000 to its Operating Lease Right-of-Use-Asset for the nine months end September 30, 2019. | |||
Lease right-of-use assets | $ 4,368,000 | |||
EPC [Member] | ||||
Formation and Basis of Presentation (Textual) | ||||
Loss on abandoned assets | $ 386,000 | |||
ECC [Member] | ||||
Formation and Basis of Presentation (Textual) | ||||
Goodwill | $ 109,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Net revenue | $ 5,262,000 | $ 132,000 | $ 12,982,000 | |
Cost of goods sold | 4,252,000 | 105,000 | 10,769,000 | |
Gross profit | 1,010,000 | 27,000 | 2,213,000 | |
Operating expenses: | ||||
Selling, general and administrative | 100,000 | 91,000 | 155,000 | 1,442,000 |
Loss on assets held for sale | (2,493,000) | (930,000) | ||
Total operating loss | (100,000) | (1,574,000) | (128,000) | (159,000) |
Interest expense | (2,000) | (1,000) | (4,000) | |
Other (expense) income | (111,000) | 4,000 | (10,000) | 7,000 |
Income from discontinued operations before income taxes | (211,000) | (1,572,000) | (139,000) | (156,000) |
Provision for income taxes | 2,000 | |||
Income from discontinued operations, net of income tax | $ (211,000) | $ (1,572,000) | $ (139,000) | $ (158,000) |
Discontinued Operations (Deta_2
Discontinued Operations (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Discontinued Operations (Textual) | |||||
Non-cash operating amounts for discontinued operations depreciation | $ 0 | $ 49,000 | $ 6,000 | $ 146,000 | |
EPC [Member] | |||||
Discontinued Operations (Textual) | |||||
Loss on abandoned assets | $ 386,000 | ||||
ECC [Member] | |||||
Discontinued Operations (Textual) | |||||
Goodwill | $ 109,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Raw Materials | $ 4,369,000 | $ 4,622,000 |
Work In Progress | 20,298,000 | 17,530,000 |
Finished Goods | 9,966,000 | 10,915,000 |
Inventory Reserve | (4,281,000) | (4,016,000) |
Total Inventory | $ 30,352,000 | $ 29,051,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |||
Sales [Member] | |||||||
Percentage of Sales | 61.70% | 69.30% | 73.40% | 72.30% | |||
Sales [Member] | Customer 1 [Member] | |||||||
Percentage of Sales | 35.00% | 27.10% | 31.10% | 27.50% | |||
Sales [Member] | Customer 2 [Member] | |||||||
Percentage of Sales | 26.70% | 28.50% | 31.00% | 33.30% | |||
Sales [Member] | Customer 3 [Member] | |||||||
Percentage of Sales | [1] | 13.70% | 11.30% | 11.50% | |||
Receivables [Member] | |||||||
Percentage of Sales | 54.60% | 64.90% | |||||
Receivables [Member] | Customer 1 [Member] | |||||||
Percentage of Sales | 24.00% | 38.50% | |||||
Receivables [Member] | Customer 2 [Member] | |||||||
Percentage of Sales | 19.50% | 26.40% | |||||
Receivables [Member] | Customer 3 [Member] | |||||||
Percentage of Sales | 11.10% | [2] | |||||
[1] | Customer was less than 10% of sales for the three months ended September 30, 2019. | ||||||
[2] | Customer was less than 10% of gross receivables at December 31, 2018. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Weighted average shares outstanding used to compute basic earnings per share | 28,909,072 | 26,768,914 | 28,774,041 | 26,295,703 |
Effect of dilutive stock options and warrants | 131,458 | |||
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share | 29,040,530 | 26,768,914 | 28,774,041 | 26,295,703 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Average market price of common shares | 3,035,000 | 1,695,000 | |
Average market price of common shares including potential shares was anti-dilutive | 1,175,000 | 500,000 | 1,175,000 |
Warrants [Member] | |||
Average market price of common shares | 2,183,000 | 1,480,000 | |
Average market price of common shares including potential shares was anti-dilutive | 480,000 | 480,000 | |
Stock Options [Member] | |||
Average market price of common shares | 852,000 | 215,000 | |
Average market price of common shares including potential shares was anti-dilutive | 695,000 | 500,000 | 695,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)Customer / Customers | Sep. 30, 2018USD ($)Customer / Customers | Sep. 30, 2019USD ($)Customer / Customers | Sep. 30, 2018USD ($)Customer / Customers | Dec. 31, 2018USD ($)Customer / Customers | |
Summary of Significant Accounting Policies (Textual) | |||||
Stock-based compensation | $ 81,000 | $ 83,000 | $ 446,000 | $ 308,000 | |
Goodwill | 163,000 | 163,000 | $ 163,000 | ||
NTW [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Goodwill | $ 163,000 | $ 163,000 | $ 163,000 | ||
Sales [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Number of customers | Customer / Customers | 2 | 3 | 3 | 3 | |
Concentration risks | 61.70% | 69.30% | 73.40% | 72.30% | |
Receivables [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Number of customers | Customer / Customers | 3 | 2 | |||
Concentration risks | 54.60% | 64.90% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Total Property and Equipment | $ 32,858,000 | $ 31,389,000 |
Less: Accumulated Depreciation | (24,726,000) | (22,612,000) |
Property and Equipment, net | 8,132,000 | 8,777,000 |
Land [Member] | ||
Total Property and Equipment | 300,000 | 300,000 |
Buildings and Improvements [Member] | ||
Total Property and Equipment | $ 1,650,000 | 1,708,000 |
Property and Equipment, Useful Life | 31 years 6 months | |
Machinery and Equipment [Member] | ||
Total Property and Equipment | $ 12,309,000 | 11,579,000 |
Machinery and Equipment [Member] | Minimum | ||
Property and Equipment, Useful Life | 5 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property and Equipment, Useful Life | 8 years | |
Finance Lease Machinery and Equipment [Member] | ||
Total Property and Equipment | $ 6,495,000 | 6,495,000 |
Finance Lease Machinery and Equipment [Member] | Minimum | ||
Property and Equipment, Useful Life | 5 years | |
Finance Lease Machinery and Equipment [Member] | Maximum [Member] | ||
Property and Equipment, Useful Life | 8 years | |
Tools and Instruments [Member] | ||
Total Property and Equipment | $ 10,682,000 | 9,882,000 |
Tools and Instruments [Member] | Minimum | ||
Property and Equipment, Useful Life | 1 year 6 months | |
Tools and Instruments [Member] | Maximum [Member] | ||
Property and Equipment, Useful Life | 7 years | |
Automotive Equipment [Member] | ||
Total Property and Equipment | $ 177,000 | 177,000 |
Property and Equipment, Useful Life | 5 years | |
Furniture and Fixtures [Member] | ||
Total Property and Equipment | $ 290,000 | 303,000 |
Furniture and Fixtures [Member] | Minimum | ||
Property and Equipment, Useful Life | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property and Equipment, Useful Life | 8 years | |
Leasehold Improvements [Member] | ||
Total Property and Equipment | $ 530,000 | 520,000 |
Property and Equipment, Useful Life, description | Term of Lease | |
Computers and Software [Member] | ||
Total Property and Equipment | $ 425,000 | $ 425,000 |
Computers and Software [Member] | Minimum | ||
Property and Equipment, Useful Life | 4 years | |
Computers and Software [Member] | Maximum [Member] | ||
Property and Equipment, Useful Life | 6 years |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment (Textual) | |||||
Depreciation expense | $ 712,000 | $ 681,000 | $ 2,085,000 | $ 2,165,000 | |
Accumulated depreciation | $ 5,683,000 | $ 5,683,000 | $ 4,827,000 |
Notes Payable, Related Party _3
Notes Payable, Related Party Notes Payable and Finance Lease Obligations (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Notes and Loans Payable [Abstract] | ||
Revolving credit note payable to PNC Bank N.A. | $ 13,446,000 | $ 14,043,000 |
Term loans, PNC | 464,000 | 1,572,000 |
Finance lease obligations | 887,000 | 1,786,000 |
Loan Payable - financed asset | 455,000 | |
Related party notes payable, net of debt discount | 5,798,000 | 4,835,000 |
Convertible notes payable-third parties, net of debt discount | 2,914,000 | 2,830,000 |
Subtotal | 23,964,000 | 25,066,000 |
Less: Current portion of notes and finance lease obligations | (21,880,000) | (19,345,000) |
Notes payable and finance lease obligations, net of current portion | $ 2,084,000 | $ 5,721,000 |
Notes Payable, Related Party _4
Notes Payable, Related Party Notes Payable and Finance Lease Obligations (Details 1) | Sep. 30, 2019USD ($) |
For the twelve months ending | |
December 31, 2019 (remainder of the year) | $ 301,000 |
December 31, 2020 | 542,000 |
December 31, 2021 | 52,000 |
December 31, 2022 | 22,000 |
December 31, 2023 | |
Thereafter | |
Present value of finance lease obligations | 917,000 |
Less: imputed interest | (30,000) |
Less: current portion | (783,000) |
Total Long Term Portion | $ 104,000 |
Notes Payable, Related Party _5
Notes Payable, Related Party Notes Payable and Finance Lease Obligations (Details 2) | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Gross Proceeds | $ 1,200,000 |
Promissory Note | 840,000 |
Related party advances and notes payable | $ 360,000 |
Shares Issued | shares | 214,762 |
3/29/2018 [Member] | |
Gross Proceeds | $ 1,000,000 |
Promissory Note | 700,000 |
Related party advances and notes payable | $ 300,000 |
Common Stock Price | $ / shares | $ 1.68 |
Shares Issued | shares | 178,571 |
4/4/2018 [Member] | |
Gross Proceeds | $ 100,000 |
Promissory Note | 70,000 |
Related party advances and notes payable | $ 30,000 |
Common Stock Price | $ / shares | $ 1.68 |
Shares Issued | shares | 17,857 |
5/21/2018 [Member] | |
Gross Proceeds | $ 100,000 |
Promissory Note | 70,000 |
Related party advances and notes payable | $ 30,000 |
Common Stock Price | $ / shares | $ 1.64 |
Shares Issued | shares | 18,334 |
Notes Payable, Related Party _6
Notes Payable, Related Party Notes Payable and Finance Lease Obligations (Details Textual) - USD ($) | Jun. 26, 2019 | Oct. 21, 2019 | May 31, 2019 | Jan. 31, 2019 | May 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Apr. 04, 2018 | Mar. 29, 2018 |
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Received gross proceeds | $ 1,200,000 | ||||||||||||||
Common stock purchased, shares | 180,000 | ||||||||||||||
Common stock purchase price | $ 182,000 | ||||||||||||||
Related party advances and notes payable, net of debt discounts | $ 5,798,000 | $ 5,798,000 | $ 4,835,000 | ||||||||||||
Subordinated Notes Maturity Date | Jun. 30, 2020 | ||||||||||||||
Issuance of common stock | $ 187,000 | $ 461,000 | $ 374,000 | $ 980,000 | |||||||||||
Notes payable percentage | 18.00% | 18.00% | |||||||||||||
Unpaid balance payable | $ 25,000 | ||||||||||||||
Financing lease obligations | $ 887,000 | 887,000 | 1,786,000 | ||||||||||||
Proceeds from related party debt | 500,000 | $ 803,000 | |||||||||||||
PNC Bank [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Initial principal amount | 13,910,000 | 13,910,000 | 15,615,000 | ||||||||||||
Term loan | 464,000 | 464,000 | 1,572,000 | ||||||||||||
Revolving loan | 13,446,000 | $ 13,446,000 | $ 14,043,000 | ||||||||||||
Loan facility, description | The Loan Facility provides for a $15,000,000 revolving loan and a term loan (the "Term Loan"). The repayment terms of the Term Loan provide for monthly principal installments in the amount of $123,133, payable on the first business day of each month, with a final payment of any unpaid balance of principal and interest payable on the scheduled maturity date. | ||||||||||||||
Interest expense | $ 391,000 | 288,000 | $ 954,000 | 981,000 | |||||||||||
PNC Bank [Member] | Loan Agreement [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Loan facility, description | The Company is obligated to pay PNC an extension fee of (i) $250,000 on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) June 30, 2019, (ii) $125,000 on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) December 31, 2019, which amount is deemed earned in full if the Obligations have not been satisfied as of July 1, 2019, (iii) $125,000 on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) December 31, 2019, which amount is deemed earned in full if the Obligations have not been satisfied as of October 1, 2019 (iv) $500,000 on December 31, 2019, which amount is deemed earned in full if the Obligations have not been satisfied as of December 31, 2019. As of September 30, 2019, the Company has paid the extension fee of (i) $250,000 and has accrued (ii) $125,000 which is due and payable on the earlier of (a) the date the Obligations are indefeasibly paid in full or (b) December 31, 2019. As a further condition to PNC's agreement to extend the maturity of the Obligations, Michael and Robert Taglich purchased $2,000,000 principal amount of the Company's Senior Subordinated Convertible Notes and arranged a financing giving purchasers a right to receive a pro rata portion of the AMK Revenue Stream Payments (referred to in Note 6) resulting in gross proceeds of $800,000, including $275,000 from Michael and Robert Taglich. | ||||||||||||||
PNC Bank [Member] | Sixteenth Amendment [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Coverage ratio, description | The Sixteenth Amendment imposes minimum EBITDA (as defined in the Loan Agreement) covenants of not less than (i) $75,000 for the three-month period ending March 31, 2018, (ii) $485,000 for the six-month period ending June 30, 2018, and (iii) $1,200,000 for the nine-month period ending September 30, 2018. The Company complied with these new covenants for the three-months ended March 31, 2018, the six-month period ended June 30, 2018 and the nine-month period ended September 30, 2018. In addition, the Company is prohibited from paying dividends to its stockholders and making capital expenditures above prescribed amounts. | ||||||||||||||
PNC Bank [Member] | Seventeenth Amendment [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Coverage ratio, description | Under the terms of the Seventeenth Amendment, the revolving loan and the Term Loan bear interest at a rate equal to the sum of the Alternate Base Rate (as defined in the Loan Agreement) plus four percent (4%). In addition to the amounts available as revolving loans secured by inventory and receivables pursuant to the formula set forth in the Loan Agreement, PNC has agreed to permit the revolving advances to exceed the formula amount by $1,000,000 as of December 31, 2018, provided that the Company reduces the "Out-of-Formula Loan" by $25,000 per week commencing April 1, 2019, with the unpaid balance payable in full on December 31, 2019. The indebtedness under the revolving loan and the Term Loan are classified with the current portion of notes payable and financing lease obligations. | ||||||||||||||
PNC Bank [Member] | Eighteenth Amendment [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Loan facility, description | (i) $1,500,000 for the twelve-month period ending December 31, 2018, (ii) $655,000 for the three-month period ending March 31, 2019, (iii) $1,860,000 for the six-month period ending June 30, 2019 and (iv) $3,110,000 for the nine-month period ending September 30, 2019. At September 30, 2019, June 30, 2019, March 31,2019 and December 31, 2018 the Company was in compliance with the minimum EBITDA covenant. | ||||||||||||||
2019 Notes [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Notes payable percentage | 12.00% | 12.00% | |||||||||||||
2019 [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Initial principal amount | $ 100,000 | ||||||||||||||
Interest-bearing, description | Interest on the 2019 Notes is payable on the outstanding principal amount thereof at the rate of one percent (1%) per month, payable monthly commencing June 30, 2018. Upon the occurrence and continuation of a failure to pay accrued interest, interest shall accrue and be payable on such amount at the rate of 1.25% per month; provided that upon the occurrence and continuation of a failure to timely pay the principal amount of the 2019 Note, interest shall accrue and be payable on such principal amount at the rate of 1.25% per month and shall no longer be payable on interest accrued but unpaid. The 2019 Notes are subordinate to the Company’s obligations to PNC. | ||||||||||||||
Common stock purchased, shares | 18,334 | ||||||||||||||
Common stock purchase price | $ 100,000 | ||||||||||||||
Aggregate principal amount | $ 1,200,000 | ||||||||||||||
Subordinated Notes Maturity Date | May 31, 2019 | ||||||||||||||
Issuance of common stock | $ 214,762 | ||||||||||||||
Related party notes payable allocated percentage, description | Seventy percent (70%) of the total purchase price for the 2019 Notes and Shares purchased by each investor has been allocated to the 2019 Notes with the remaining thirty percent (30%) allocated to the Shares purchased. The number of Shares purchased by Michael Taglich and Robert Taglich was calculated based upon $1.68, the closing price of the common stock on May 20, 2018, the trading day immediately preceding the date they purchased the 2019 Notes and shares of common stock. | ||||||||||||||
Accrued interest on notes payable | 1.25% | ||||||||||||||
Placement agent fee | 4.00% | ||||||||||||||
Minimum [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Finance lease obligations interest rates | 4.00% | ||||||||||||||
Maximum [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Finance lease obligations interest rates | 9.00% | ||||||||||||||
Robert Taglich [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Loan facility, description | The maturity date of these notes is June 30, 2020 which correspond with the maturity date of the Subordinated Notes due May 2019, ("The "2019 Notes"), that were extended to June 30, 2020. These notes bear interest at a rate of 12% per annum. | ||||||||||||||
Common stock purchased, shares | 150,000 | ||||||||||||||
Common stock purchase price, per share | $ 1.01 | ||||||||||||||
Advanced from related parties | $ 500,000 | ||||||||||||||
Issuance of common stock, shares | 37,500 | ||||||||||||||
Robert Taglich [Member] | 2019 [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Placement invested percentage | 4.00% | ||||||||||||||
Aggregate principal amount | $ 1,000,000 | ||||||||||||||
Issuance of common stock | 178,571 | ||||||||||||||
Total purchase price | 1,000,000 | ||||||||||||||
Michael Taglich [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Loan facility, description | The maturity date of these notes is June 30, 2020 which correspond with the maturity date of the Subordinated Notes due May 2019, ("The "2019 Notes"), that were extended to June 30, 2020. These notes bear interest at a rate of 12% per annum. | ||||||||||||||
Common stock purchased, shares | 15,000 | ||||||||||||||
Common stock purchase price, per share | $ 1.01 | ||||||||||||||
Advanced from related parties | $ 250,000 | ||||||||||||||
Issuance of common stock, shares | 37,500 | ||||||||||||||
Proceeds from related party debt | $ 1,000,000 | ||||||||||||||
Michael Taglich [Member] | Robert Taglich [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Advanced from related parties | $ 100,000 | $ 1,000,000 | |||||||||||||
Michael Taglich [Member] | 2019 [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Aggregate principal amount | $ 100,000 | ||||||||||||||
Issuance of common stock, shares | 17,857 | ||||||||||||||
Robert and Michael Taglich [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Interest expense | $ 265,000 | $ 526,000 | $ 1,393,000 | $ 1,324,000 | |||||||||||
Robert and Michael Taglich [Member] | Subordinated Convertible Notes [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Loan facility, description | The Company issued its 7% senior subordinated convertible promissory notes due December 31, 2020, each in the principal amount of $1,000,000 (together, the "7% Notes"), to Michael Taglich and Robert Taglich, each for a purchase price of $1,000,000. The 7% Notes bear interest at the rate of 7% per annum, are convertible into shares of the Company's common stock at a conversion price of $0.93 per share, subject to the anti-dilution adjustments set forth in the 7% Notes, are subordinate to the Company's indebtedness under its credit facility with PNC Bank, National Association, and mature at December 31, 2020, or earlier upon an Event of Default. | ||||||||||||||
Taglich Brothers, Inc., [Member] | |||||||||||||||
Notes Payable and Capital Lease Obligations (Textual) | |||||||||||||||
Fee amount | $ 80,000 | $ 80,000 | |||||||||||||
Finance lease obligations interest rates | 7.00% | ||||||||||||||
Related party notes payable allocated percentage, description | 4% of the purchase price of the 7% Notes |
Liability Related to the Sale_3
Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Liability Related To Sale Of Future Proceeds From Disposition Of Subsidiary Details Abstract | ||
Liabilities related to sale of future proceeds from disposition of subsidiaries - beginning balance | ||
Cash received from sale of future proceeds from disposition of subsidiary | 800,000 | |
Non-Cash other income recognized | $ (89,000) | (198,000) |
Non-Cash interest expense recognized | 27,000 | 60,000 |
Liabilities related to sale of future proceeds from disposition of subsidiary - ending balance | $ 662,000 | 662,000 |
Less: unamortized transaction costs | (3,000) | |
Liability related to sale of future proceeds from disposition of subsidiary, net | $ 659,000 |
Liability Related to the Sale_4
Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jan. 16, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary (Textual) | ||||
Sale of subsidiary, description | AMK Welding, Inc. ("AMK") to Meyer Tool, Inc., ("Meyer") in 2017, Meyer was obligated to pay the Company within 30 days after the end of each calendar quarter, commencing April 1, 2017, an amount equal to five (5%) percent of the net sales of AMK for that quarter until the aggregate payments made to the Company (the "Meyer Agreement") equals $1,500,000 (the "Maximum Amount"). | |||
Aggregate of amount received | $ 363,000 | |||
Purchase agreement, description | The Company entered into a "Purchase Agreement" with 15 accredited investors (the "Purchasers"), including Michael and Robert Taglich, pursuant to which the Company assigned to the Purchasers all of their rights, title and interest to the remaining $1,137,000 of the $1,500,000 in payments due from Meyer for the sale of AMK (the "Remaining Amount") for an immediate payment of $800,000, including $100,000 from each of Michael and Robert Taglich, and $75,000 for the benefit of the children of Michael Taglich. The timing of the payments is based upon the net sales of AMK. If the Purchasers have not received the entire Remaining Amount by March 31, 2023, they have the right to demand payment of their pro rata portion of the unpaid Remaining Amount from the Company ("Put Right"). To the extent the Purchasers exercise their Put Right, the remaining payments from Meyer will be retained by the Company. | |||
Purchase price per annum | 2.00% | |||
Proceeds as liability amount | $ 800,000 | $ 800,000 | ||
Net of transaction costs | $ (3,000) | |||
Annual interest rate percentage | 18.00% | 18.00% | ||
Non-cash other income recognized | $ 89,000 | $ 198,000 | ||
Non-cash interest expense recognized | $ 27,000 | $ 60,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Total Investment | $ | $ 2,000,000 |
Number of shares | 1,577,390 |
Number of warrants | 480,000 |
11/29/2017 [Member] | |
Total Investment | $ | $ 300,000 |
Number of shares | 217,390 |
Price | $ / shares | $ 1.38 |
Number of warrants | 72,000 |
Ex Price | $ / shares | $ 1.50 |
12/5/2017 [Member] | |
Total Investment | $ | $ 400,000 |
Number of shares | 320,000 |
Price | $ / shares | $ 1.25 |
Number of warrants | 96,000 |
Ex Price | $ / shares | $ 1.50 |
12/29/2017 [Member] | |
Total Investment | $ | $ 235,000 |
Number of shares | 188,000 |
Price | $ / shares | $ 1.25 |
Number of warrants | 56,400 |
Ex Price | $ / shares | $ 1.50 |
2017 [Member] | |
Total Investment | $ | $ 935,000 |
Number of shares | 725,390 |
Price | $ / shares | |
Number of warrants | 224,400 |
Ex Price | $ / shares | |
1/9/2018 [Member] | |
Total Investment | $ | $ 1,065,000 |
Number of shares | 852,000 |
Price | $ / shares | $ 1.25 |
Number of warrants | 255,600 |
Ex Price | $ / shares | $ 1.50 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) | Jan. 09, 2018USD ($)Investors / Number$ / sharesshares | Nov. 29, 2017USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018shares | Dec. 31, 2018USD ($) |
Stockholders' Equity (Textual) | |||||
Common stock shares offered | 214,762 | ||||
Purchase of common stock, shares | 224,400 | ||||
Gross proceeds from offering | $ | $ 935,000 | ||||
Warrants exercise price, per share | $ / shares | $ 1.50 | ||||
Warrants exercisable date | Nov. 30, 2022 | ||||
Common stock issued in lieu of cash payment | 123,456 | ||||
Related party advances and notes payable, net of debt discounts | $ | $ 5,798,000 | $ 4,835,000 | |||
Subordinated notes maturity date | Jun. 30, 2020 | ||||
Placement Agency Agreement [Member] | |||||
Stockholders' Equity (Textual) | |||||
Common stock shares offered | 852,000 | 1,600,000 | 0 | 85,200 | |
Warrants term | 5 years | ||||
Purchase of common stock, shares | 255,600 | 24,000 | |||
Purchase of common stock, value | $ | $ 100,000 | ||||
Number of accredited investors issued and sold | Investors / Number | 35 | ||||
Gross proceeds from offering | $ | $ 1,065,000 | ||||
Warrants exercise price, per share | $ / shares | $ 1.25 | ||||
Shares and warrants offering, description | The Company had previously sold a total of 725,390 Shares and Warrants to purchase an additional 224,400 shares of common stock for gross proceeds of $935,000 on November 29, 2017, December 5, 2017 and December 29, 2017 pursuant to the Offering. | In connection with the Offering completed from November 2017 through January 2018, Taglich Brothers, Inc., is entitled to a placement agent fee equal to $160,000 (8% of the amounts invested), payable at the Company's option, in cash or additional shares of common stock and warrants having the same terms and conditions as the Shares and Warrants. | |||
Description of placement agent fee | The placement agent fee was $0 and $85,200 for the three and nine months ended September 30, 2019 and 2018, respectively. |
Contingencies (Details)
Contingencies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 03, 2019 | |
Commitments and Contingencies (Textual) | ||
Working capital deficit | $ 4,145,870 | |
Loss contingencies description | On December 20, 2018, pursuant to a Stock Purchase Agreement dated as of March 21, 2018 (“SPA”), the Company completed the sale of all of the outstanding shares of its subsidiary, Welding Metallurgy, Inc. to CPI Aerostructures. On March 19, 2019, in accordance with the procedures set forth in the SPA with CPI Aerostructures, the Company received a notice from CPI claiming that the working capital deficit used to compute the purchase price was understated. The issue of the amount of the working capital deficit was submitted to BDO USA, LLP (“BDO”), acting as an expert, and it issued a report dated September 3, 2019, where it determined that the amount of the working capital deficit was approximately $4,145,870. On September 9, 2019 the Company received a demand from CPI for payment of such amount. The Company advised CPI that the determination of BDO is void because, among other things, it believes BDO exceeded the scope of its authority as set forth in the SPA. On September 27, 2019, CPI filed a notice of motion in the Supreme Court of the State of New York, County of New York, against the Company seeking, among other things, an order of specific performance requiring delivery of the funds deposited in escrow, together with the balance of the working capital deficit which it claimed, and a judgment against the Company in the amount of approximately $4,200,000 of which $2,000,000 would be satisfied by delivery of the funds in escrow. On October 7, 2019, the Company agreed to the release of $619,316 of the funds held in escrow in respect of claims related to the working capital deficit not related to the value of WMI’s inventory. For, among others, the reasons stated above the Company intends to contest vigorously any claim CPI may make for payment based on the BDO Report. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Current | ||||
Federal | ||||
State | 22,000 | |||
Prior Year Under accrual | ||||
Federal | ||||
State | ||||
Total Current Expense | 22,000 | |||
Deferred Tax Benefit | ||||
Valuation Allowance | ||||
Provision for Income Taxes | $ 22,000 | $ 22,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Net Sales | $ 13,997,000 | $ 10,733,000 | $ 41,243,000 | $ 33,615,000 | |||||
Gross Profit | 2,963,000 | 1,367,000 | 7,428,000 | 4,866,000 | |||||
Pretax income/loss from continuing operations | 420,000 | (1,558,000) | (1,310,000) | (4,255,000) | |||||
Provision for Income Taxes | 22,000 | 22,000 | |||||||
Net Income (Loss) | 187,000 | $ (735,000) | $ (923,000) | (3,130,000) | $ 185,000 | $ (1,468,000) | |||
Assets | 50,751,000 | 50,751,000 | $ 47,756,000 | ||||||
COMPLEX MACHINING [Member] | |||||||||
Net Sales | 12,283,000 | 9,690,000 | 36,402,000 | 30,022,000 | |||||
Gross Profit | 2,762,000 | 1,434,000 | 7,070,000 | 4,926,000 | |||||
Pretax income/loss from continuing operations | 2,003,000 | 530,000 | 4,797,000 | 1,303,000 | |||||
Assets | 45,033,000 | 43,418,000 | 45,033,000 | 43,418,000 | |||||
TURBINE ENGINE COMPONENTS [Member] | |||||||||
Net Sales | 1,714,000 | 1,043,000 | 4,841,000 | 3,593,000 | |||||
Gross Profit | 201,000 | (67,000) | 358,000 | (60,000) | |||||
Pretax income/loss from continuing operations | (11,000) | (245,000) | (292,000) | (817,000) | |||||
Assets | 5,122,000 | 5,661,000 | 5,122,000 | 5,661,000 | |||||
CORPORATE [Member] | |||||||||
Net Sales | |||||||||
Gross Profit | |||||||||
Pretax income/loss from continuing operations | (1,572,000) | (1,843,000) | (5,815,000) | (4,741,000) | |||||
Assets | 596,000 | 272,000 | 596,000 | 272,000 | |||||
CONSOLIDATED [Member] | |||||||||
Net Sales | 13,997,000 | 10,733,000 | 41,243,000 | 33,615,000 | |||||
Gross Profit | 2,963,000 | 1,367,000 | 7,428,000 | 4,866,000 | |||||
Pretax income/loss from continuing operations | 420,000 | (1,558,000) | (1,310,000) | (4,255,000) | |||||
Provision for Income Taxes | 22,000 | 22,000 | |||||||
Loss from Discontinued Operations, net of income tax | (211,000) | (1,572,000) | (139,000) | (158,000) | |||||
Net Income (Loss) | 187,000 | (3,130,000) | (1,471,000) | (4,413,000) | |||||
Assets | $ 50,751,000 | $ 49,351,000 | $ 50,751,000 | $ 49,351,000 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 9 Months Ended |
Sep. 30, 2019Segments | |
Segment Reporting (Textual) | |
Number of reportable segments | 2 |