Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 15, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | VirTra, Inc | |
Entity Central Index Key | 1,085,243 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 7,904,307 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,517,620 | $ 5,080,445 |
Accounts receivable, net | 1,271,732 | 1,478,135 |
Note receivable, current | 209,331 | |
Inventory, net | 2,082,354 | 1,720,438 |
Unbilled revenue | 478,081 | 1,222,047 |
Prepaid expenses and other current assets | 729,780 | 586,439 |
Total current assets | 9,288,898 | 10,087,504 |
Property and equipment, net | 776,145 | 677,273 |
Note receivable, long-term | 191,574 | |
Deferred tax assets, net | 2,740,000 | 2,710,182 |
Investment in MREC | 1,374,933 | 1,374,933 |
TOTAL ASSETS | 14,371,550 | 14,849,892 |
CURRENT LIABILITIES | ||
Accounts payable | 785,509 | 535,795 |
Accrued compensation and related costs | 787,121 | 593,491 |
Accrued expenses and other current liabilities | 261,293 | 243,573 |
Note payable, current | 11,250 | 11,250 |
Deferred revenue | 2,151,709 | 2,992,912 |
Total current liabilities | 3,996,882 | 4,377,021 |
Long-term liabilities: | ||
Deferred rent liability | 63,028 | 75,444 |
Note payable, long-term | 11,250 | 11,250 |
Total long-term liabilities | 74,278 | 86,694 |
Total liabilities | 4,071,160 | 4,463,715 |
Commitments and contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock $0.0001 par value; 5,000,000 authorized; no shares issued or outstanding | ||
Common stock, value | 793 | 793 |
Treasury stock at cost; 23,467 shares outstanding as of March 31, 2018 and December 31, 2017. | (112,109) | (112,109) |
Additional paid-in capital | 14,954,563 | 14,954,563 |
Accumulated deficit | (4,542,857) | (4,457,070) |
Total stockholders’ equity | 10,300,390 | 10,386,177 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 14,371,550 | 14,849,892 |
Class A Common Stock [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Common stock, value | ||
Class B Common Stock [Member] | ||
STOCKHOLDERS’ EQUITY | ||
Common stock, value |
Condensed Balance Sheets (Unau3
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 7,927,774 | 7,927,774 |
Common stock, shares outstanding | 7,904,307 | 7,904,307 |
Treasury stock, shares outstanding | 23,467 | 23,467 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, shares issued | ||
Common stock, shares outstanding | ||
Class B Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | ||
Common stock, shares outstanding |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
REVENUES | ||
Net sales | $ 3,198,222 | $ 4,165,476 |
Royalties/licensing fees | 45,968 | 43,812 |
Total revenue | 3,244,190 | 4,209,288 |
Cost of sales | 1,026,156 | 1,778,945 |
Gross profit | 2,218,034 | 2,430,343 |
OPERATING EXPENSES | ||
General and administrative | 2,008,703 | 1,614,498 |
Research and development | 367,544 | 342,190 |
Net operating expense | 2,376,247 | 1,956,688 |
Income/(loss) from operations | (158,213) | 473,655 |
OTHER INCOME (EXPENSE) | ||
Other income | 43,298 | 6,233 |
Other expense | (66) | |
Net other income | 43,232 | 6,233 |
Income/(loss) before income taxes | (114,981) | 479,888 |
Income tax expense/(benefit) | (29,194) | 78,000 |
NET INCOME/(LOSS) | $ (85,787) | $ 401,888 |
Earnings per common share | ||
Basic | $ (0.01) | $ 0.05 |
Diluted | $ (0.01) | $ 0.05 |
Weighted average shares outstanding | ||
Basic | 7,904,307 | 7,927,774 |
Diluted | 7,904,307 | 8,282,308 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 793 | $ 14,954,563 | $ (112,109) | $ (4,457,070) | $ 10,386,177 | |
Balance, shares at Dec. 31, 2017 | 7,927,774 | |||||
Net loss | (85,787) | (85,787) | ||||
Balance at Mar. 31, 2018 | $ 793 | $ 14,954,563 | $ (112,109) | $ (4,542,857) | $ 10,300,390 | |
Balance, shares at Mar. 31, 2018 | 7,927,774 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income/(loss) | $ (85,787) | $ 401,888 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 68,619 | 68,385 |
Stock compensation | 69,163 | |
Cash settlement of stock options | 31,000 | |
Changes in operating assets and liabilities: | ||
Accounts and note receivable | (194,502) | 737,890 |
Inventory | (361,916) | 204,848 |
Deferred taxes | (29,818) | |
Unbilled revenue | 743,966 | (1,173,155) |
Prepaid expenses and other current assets | (143,341) | (117,869) |
Accounts payable and other accrued expenses | 461,062 | 315,941 |
Deferred revenue and deferred rent | (853,618) | 416,926 |
Net cash provided/(used) by operating activities | (395,335) | 955,017 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (167,490) | (46,775) |
Net cash used in investing activities | (167,490) | (46,775) |
Cash flows from financing activities: | ||
Repurchase of stock options | (48,500) | |
Net cash used in financing activities | (48,500) | |
Net increase (decrease) in cash | (562,825) | 859,742 |
Cash, beginning of period | 5,080,445 | 3,703,579 |
Cash, end of period | 4,517,620 | 4,563,321 |
Cash paid: | ||
Taxes | 21,698 | 78,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of account to note receivable | $ 400,906 |
Organization, Business Operatio
Organization, Business Operations and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization, Business Operations and Significant Accounting Policies | NOTE 1. ORGANIZATION, BUSINESS OPERATIONS and significant accounting policies VirTra, Inc. (the “Company” or “VirTra”), located in Tempe, Arizona, is engaged in the sale and development of judgmental use of force training simulators and firearms training simulators for law enforcement, military and commercial uses. The Company sells simulators and related products worldwide through a direct sales force and international distribution partners. The original business started in 1993 as Ferris Productions, Inc. In September 2001, Ferris Productions, Inc. merged with GameCom, Inc. to ultimately become VirTra Systems, Inc., a Texas corporation. Effective as of October 1, 2016 (the “Effective Date”), the Company completed a conversion from a Texas corporation to a Nevada corporation pursuant to a Redomestication Plan of Conversion (the “Plan of Conversion”) that was approved by the Company’s Board of Directors on June 23, 2016 and by its shareholders on September 16, 2016. On the Effective Date, 7,927,774 shares of common stock of VirTra Systems, Inc., a Texas corporation, were converted into 7,927,774 shares of common stock of VirTra Systems, Inc., a Nevada corporation. No shareholders exercised appraisal rights or dissenters’ rights for such shares in accordance with the Texas Business Organization Code. As part of the Plan of Conversion, the Company filed Articles of Incorporation in Nevada whereby it changed its name from VirTra Systems, Inc. to VirTra, Inc. and revised its capitalization. The Company’s Articles of Incorporation filed in Nevada authorized the Company to issue 62,500,000 shares, of which (1) 60,000,000 shares are common stock, par value $0.0001 per share (the “common stock”), of which (a) 50,000,000 shares are common stock, par value $0.0001, (b) 2,500,000 shares are Class A common stock, par value $0.0001 per share (the “Class A common stock”), and (c) 7,500,000 shares are Class B common stock, par value $0.0001 per share (the “Class B common stock”) and (2) 2,500,000 shares are preferred stock, par value $0.0001 per share, which may, at the sole discretion of the Board of Directors, be issued in one or more series (the “Preferred Stock”). The Company also adopted new bylaws as part of the Plan of Conversion. Effective October 20, 2016, the Company effected a 1-for-10 reverse stock split of its issued and outstanding common stock and effective February 12, 2018, the Company effected a 1-for-2 reverse stock split of its issued and outstanding common stock (together, the “Reverse Stock Splits”). All references to shares of the Company’s common stock in this report refer to the number of shares of common stock after giving effect to the Reverse Stock Splits. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and note disclosures normally included in complete annual financial statements prepared in accordance with GAAP have been condensed or omitted. However, the Company believes that the disclosures included in these unaudited condensed financial statements are adequate to make the information presented not misleading. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, which include normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the three months ended March 31, 2018 are not necessarily indicative of the results for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2018. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to the 2017 financial statements to conform to the 2018 financial statement presentation. These reclassifications had no effect on net earnings or cash flows as previously reported. Significant Accounting Policies Aside from the adoption of ASU Topic 606, as described below, there have been no other material changes to the significant accounting policies or recent accounting pronouncements previously disclosed in the annual financial statements in the Company’s Form 10-K for the fiscal year ended December 31, 2017. Revenue Recognition The Company records revenue from contract with customers in accordance with Accounting Standards Codification (ASU) Topic 606, “Revenue from Contracts with Customers.” Under ASU 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. The Company’s primary sources of revenue are derived from simulator and accessories sales, training and installation, the sale of customized software and sale of extended warranties. Sales discounts and bad debt allowance are presented in the Financial Statements as reductions in determining net revenues. Credit sales are recorded as current assets. Prepaid deposits received at the time of sale and extended warranties purchased are recorded as current liabilities until earned. The following briefly summarizes the nature of our significant provisions: Performance obligation Method of Recognition Simulator and accessories Upon transfer of control Installation and training Upon completion or over period of services being rendered Extended service-type warranty Deferred and recognized over life of extended warranty Customized software Upon transfer of control Disaggregation of Revenue Under ASU 606, disaggregated revenue from contracts with customers depicts the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors. The Company has evaluated revenues, contract assets and liabilities associated with the revenue recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Three months ended March 31, 2018 2017 Domestic International Total Domestic International Total Simulators and accessories $ 894,229 $ 1,552,394 $ 2,446,623 $ 3,295,463 $ 287,170 $ 3,582,633 Warranties 426,685 62,386 489,071 396,878 14,195 411,073 Customized software 132,418 11,940 144,358 38,150 - 38,150 Installation and training 67,950 50,220 118,170 136,620 (3,000 ) 133,620 Licensing and royalties 45,968 - 45,968 43,812 - 43,812 Total Revenue $ 1,567,250 $ 1,676,940 $ 3,244,190 $ 3,910,923 $ 298,365 $ 4,209,288 Adoption of New Accounting Standards Between May 2014 and December 2016, the Financial Accounting Standards Board (the “FASB”) issued several Accounting Standards Updates (each, an “ASU” and collectively, “ASUs”) on Revenue from Contracts with Customers (Topic 606). These ASUs supersede nearly all existing revenue recognition guidance under current GAAP and requires an entity to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, and permit the use of either the full retrospective or modified retrospective transition method. This standard was adopted on January 1, 2018 and the Company elected to use the modified retrospective transition method which requires application of ASU 2014-09 to uncompleted contracts at the date of adoption. The adoption of the ASUs under 2014-09 did not have a material impact on financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. The Company wrote-down its Investment in Modern Round to fair value in 2017, the adoption of ASU 2016-01 did not have a material impact on its financial statements. Upon adoption, the Company has elected to utilize the cost minus impairment approach as the investment in Modern Round does not have a readily determinable fair value as of the reporting date. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force),” to provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flow. The amendments should be applied using a retrospective transition method, and are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this statement did not have a material impact on the Company’s financial statement presentation. In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets,” to clarify the scope of Subtopic 610-20, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets,” and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which is the same time as the amendments in ASU No. 2014-09, and early adoption is permitted. The adoption did not have a material impact on the financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, “Compensation—Stock Compensation,” to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Accounting Standards Codification (“ASC”) 718. The amendments are effective for fiscal years beginning after December 15, 2017 and should be applied prospectively to an award modified on or after the adoption date. The Company does not expect this amendment to have a material impact on its financial statements. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 – “Leases (Topic 842)”, which requires lessees to put most leases on their balance sheets by recognizing lease assets and lease liabilities for those leases classified as operating leases under previous guidance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on its financial statements. In July 2017, the FASB issued ASU No. 2017-11 – “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815)” Part I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II. Simply replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. This ASU is effective for public companies for the annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company does not expect this amendment to have a material impact on its financial statements. |
Note Receivable
Note Receivable | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Note Receivable | NOTE 2. NOTE RECEIVABLE An unsecured promissory note was executed on March 23, 2018 by a customer converting their past-due trade receivable from the sale of goods and services in the amount of $400,906. The note bears interest at the rate of ten percent (10%) per annum and requires installment payments of principal and interest due monthly, including late fees. The current portion of the note receivable is collectible in one year or less with the remainder of the note separately classified as long-term. No allowances for doubtful accounts has been recorded as of March 31, 2018. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 3. INVENTORY Inventory consisted of the following as of: March 31, 2018 December 31, 2017 Raw materials $ 2,187,385 $ 1,825,469 Reserve (105,031 ) (105,031 ) Total inventory $ 2,082,354 $ 1,720,438 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4. Property and Equipment Property and equipment consisted of the following as of: March 31, 2018 December 31, 2017 Computer equipment $ 1,029,415 $ 861,924 Furniture and office equipment 202,867 202,867 Machinery and equipment 925,495 925,495 Leasehold improvements 324,313 324,313 Total property and equipment 2,482,090 2,314,599 Less: Accumulated depreciation (1,705,945 ) (1,637,326 ) Property and equipment, net $ 776,145 $ 677,273 Depreciation expense was $68,619 and $68,385 for the three months ended March 31, 2018 and 2017, respectively. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 5. Accrued Expenses Accrued compensation and related costs consisted of the following as of: March 31, 2018 December 31, 2017 Salaries and wages payable $ 337,456 $ 115,481 401(k) contributions payable 13,533 30,532 Accrued Paid Time Off 246,405 257,751 Profit sharing payable 189,727 189,727 Total accrued compensation and related costs $ 787,121 $ 593,491 Accrued expenses and other current liabilities consisted of the following as of: March 31, 2018 December 31, 2017 Manufacturer’s warranties $ 135,000 $ 135,000 Taxes payable 126,293 108,573 Total accrued expenses and other current liabilities $ 261,293 $ 243,573 |
Collaboration Agreement
Collaboration Agreement | 3 Months Ended |
Mar. 31, 2018 | |
Collaboration Agreement | |
Collaboration Agreement | NOTE 6. Collaboration Agreement On January 16, 2015, the Company entered into a Co-Venture Agreement (the “Co-Venture Agreement”) with Modern Round, LLC (“Modern Round”), a wholly owned subsidiary of Modern Round Entertainment Corporation (“MREC”), a related party. MREC is a restaurant and entertainment concept centered on its indoor virtual reality shooting experience. The Co-Venture Agreement provides Modern Round access to certain software and equipment relating to the Company’s products in exchange for royalties. The Company received 1,365,789 units, representing a 5% ownership interest in Modern Round on the date of the Co-Venture Agreement. The Company recorded the investment at the estimated fair value of the units and which were valued at $0.10 per unit based on Modern Round’s other membership unit sales. The Co-Venture Agreement also provides the Company with conditional warrants to purchase an additional 5% of Modern Round as of the date of that agreement, at an exercise price of $0.25. On April 14, 2015, Modern Round issued the Company an option to purchase 125,000 units of Modern Round. The option fully vested and became exercisable on the date of grant at an exercise price equal to $0.50 per unit and terminates on the tenth anniversary of the date of grant, if not earlier pursuant to the terms of the option. On December 31, 2015, Modern Round merged with a subsidiary of MREC pursuant to a Plan of Merger (the “Merger Agreement”) and each unit of Modern Round issued and outstanding as of the effective time of the merger automatically converted into the right to receive approximately 1.2277 shares of MREC common stock. As a result of the Merger Agreement, the Company held 1,676,748 shares of MREC common stock, options to purchase 153,459 shares of MREC common stock at an exercise price of $0.41 per share, and conditional warrants to purchase 1,676,747 shares of MREC common stock at an exercise price of $0.20 per share. On October 25, 2016, the Company exercised the conditional warrant and purchased 1,676,747 shares of MREC common stock for $335,349, resulting in the Company’s aggregate holdings of MREC increasing to . The MREC equity securities have been recorded as a cost method investment as the Company does not have the ability to exercise significant influence over MREC. As part of the Co-Venture Agreement, the Company granted 459,691 conditional warrants to affiliates of MREC to purchase 5% of the Company’s capital stock on a fully diluted basis as of the date of the Co-Venture Agreement. The conditional warrants are exercisable commencing at the earlier of the first anniversary of MREC opening its first range facility utilizing VirTra technology or after MREC opening its first range facility utilizing VirTra technology and the payment to the Company of all required U.S./Canada minimum royalty payments during the first 12-month period. MREC opened its first location on June 1, 2016. The Company also granted 459,691 of additional conditional warrants to affiliates of MREC to purchase another 5% of the Company’s capital stock on a fully diluted basis as of the Agreement date. These conditional warrants are exercisable any time subsequent to MREC’s payment of $2.0 million in cumulative license fees (royalty). Both conditional warrant issuances are for a period of five years with an exercise price of $2.72. These conditional warrants were considered contingent consideration for the equity investment as they did not meet the definition of a derivative under ASC 815. Thus, the contingent consideration was not included in the cost of the equity investment until the contingency was resolved and the warrant became exercisable. On June 1, 2017, the warrants related to the opening of the facility vested and became exercisable at an exercise price equal to $2.72 per unit. On June 1, 2017, these warrants were recorded at the Black-Scholes Merton fair value using annual volatility of 91.5%, an annual risk-free rate of 1.76%, expected term of five years and a fair value of $4.28 a share for a fair value of $1,516,246 as an additional investment in MREC. As of June 1, 2017, the total investment in MREC approximated $1,988,800. During the year ended December 31, 2017, the Company recognized an impairment loss of $613,241 and is accounting for the investment utilizing the cost minus impairment approach. On July 28, 2017, the Company received Notices of Exercise for all 459,691 warrants then exercisable (the “Tranche 1 Warrants”) from all the MREC affiliate holders electing to purchase warrants pursuant to the terms of the net exercise provision set forth in the Warrant Agreement. Mr. Saltz (a member of our Board of Directors who is also Chairman of the Board of Directors of MREC, as well as a majority stockholder of MREC) held 398,122 of the Tranche 1 Warrants prior to the assignment of the warrants to MREC on August 11, 2017. Under the net exercise provision, in lieu of exercising the warrant for cash, the holder may elect to receive shares equal to the value of the warrant (or the portion thereof being exercised) by surrender of the warrant and the Company issuing to holder the number of computed shares. Using the July 28, 2017 OTCQX closing price at $4.36 as fair value and the $2.72 warrant exercise price, upon conversion the 459,691 warrants entitled the holders to receive 172,912 shares of the Company’s Common Stock without payment of any additional consideration pursuant to the net exercise terms of the Tranche 1 Warrants that are currently exercisable. Effective August 16, 2017, the Company and the MREC affiliate holders entered into an agreement (the “Warrant Buyout Agreement”) whereby the Company acknowledged that the affiliates of MREC had assigned the Tranche 1 Warrants to MREC and the Company agreed to repurchase them at a price of $3.924 per share of Common Stock issuable by the Company pursuant to the net exercise terms of the Warrants for a total of $678,505. In addition, the Company agreed to repurchase from MREC an additional 459,691 warrants held by MREC that are not currently exercisable (the “Tranche 2 Warrants”). Mr. Saltz held 364,122 of the Tranche 2 Warrants prior to their assignment to MREC on August 11, 2017. The Warrant Buyout Agreement amended the Tranche 2 Warrants to provide for the immediate exercise on a net exercise basis of 24,208 shares of the Company’s Common Stock. The aggregate purchase price for the Tranche 2 Warrants is $94,990 based on a price of $3.924 per share of Common Stock issuable on a net exercise basis and based on 24,208 shares of the Company’s Common Stock. The aggregate purchase price of the Tranche 1 Warrants and the Tranche 2 Warrants was $773,495. In addition, on August 16, 2017, we entered into an amendment to the Co-Venture Agreement to permit MREC to sublicense the VirTra Technology to third party operators of stand-alone location-based entertainment companies. MREC agreed to pay us royalties for any such sublicenses in an amount equal to 10% of the revenue paid to MREC in cases where MREC pays for the cost of the equipment for such location or 14% of the revenue paid to MREC in cases where it does not pay for the cost of the equipment. The Co-Venture Agreement grants MREC an exclusive non-transferrable license to use the Company’s technology solely for use at locations to operate the concept, as defined in the Co-Venture Agreement. The license would become non-exclusive if the first U.S. location is not opened within 24 months of the effective date and at least one location is opened outside the U.S. and Canada within five years of the Co-Venture Agreement date, the respective milestone dates. Throughout the duration of the Co-Venture Agreement, MREC will pay the Company a royalty based on gross revenue, as defined and subject to certain minimum royalties commencing with the first twelve-month period subsequent to the respective milestone date of June 1, 2017. If the total royalty payments for locations in the United States and Canada together do not total at least the minimum royalty amount specified in the agreement, MREC may pay to VirTra the difference between the amount of total royalty payments and the minimum specified in the agreement to maintain exclusivity. The Company recognized $45,968 and $43,812 for license fee income (royalties) for the three months ended March 31, 2018 and 2017, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 7. RELATED PARTY TRANSACTIONS During the three months ended March 31 2017, the Company issued 13,750 stock options to the CEO, COO and members of the Board of Directors to purchase shares of common stock at a weighted average purchase price of $5.03. All options are exercisable within seven years of grant date. No stock options were granted during the three months ended March 31, 2018. During the three months ended March 31, 2017, the Company redeemed stock options from the CEO and COO that had previously been awarded. No such redemptions occurred during the three months ended March 31, 2018. The Company recorded additional compensation expense as follows: Three Months Ending March 31, 2018 2017 Number of stock options redeemed - 12,500 Redemption value $ - $ 48,500 Amount previously expensed (2011 and 2010) - (17,500 ) Additional compensation expense $ - $ 31,000 Mr. Mitch Saltz, a member of the Company’s Board of Directors, is also Chairman of the Board of Directors and a majority stockholder of MREC. The Company entered into the Co-Venture Agreement with MREC as disclosed in Note 5. Through the terms of that agreement, the Company owns 3,353,495 shares of MREC common stock representing approximately 9.3% of the issued and outstanding shares of MREC common stock. Mr. Saltz has a beneficial ownership in the Company of less than 1% and MREC has 0% ownership in the Company. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8. COMMITMENTS AND CONTINGENCIES The Company’s operating lease obligations relate to the leasing of the Company’s corporate office space located at 7970 South Kyrene Road, Tempe, Arizona 85284, which expires in April 2019, unless renewed and the leasing of the machine shop building located at 2169 East Fifth St., Tempe, Arizona 85284, which expires in September 2018, unless renewed. Future minimum lease payments under non-cancelable operating leases are as follows: Building Lease Schedule 2018 260,702 2019 105,542 Total $ 366,244 The Company has a deferred rent liability of $63,028 and $75,444 as of March 31, 2018 and December 31, 2017, respectively, relative to the increasing future minimum lease payments. Rent expense was $87,345 and $97,391 for the three months ended March 31, 2018 and 2017, respectively. General or Threatened Litigation From time to time, the Company is notified of threatened litigation or that a claim is being made against it. As of the financial statement issuance date, there were no claims or pending litigation. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 9. STOCKHOLDERS’ EQUITY Stock Options The Company periodically issues non-qualified incentive stock options to key employees, officers and directors under a Stock Option Compensation plan approved by the Board of Directors in 2009. Terms of the option grants are at the discretion of the Board of Directors but historically have been seven years. During the three months ended March 31, 2017, the Company issued 13,750 stock options, with a weighted average exercise price of $5.20 per share. No stock options were granted during the three months ended March 31, 2018. 2017 Equity Incentive Plan On August 23, 2017 and October 6, 2017, respectively, the board of directors and shareholders approved the 2017 Equity Incentive Plan (the “Equity Plan”). The Equity Plan is intended to make available incentives that will assist us to attract, retain and motivate employees, including officers, consultants and directors. We may provide these incentives through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards. A total of 1,187,500 shares of our common stock was initially authorized and reserved for issuance under the Equity Plan. This reserve will automatically increase on January 1, 2018 and each subsequent anniversary through 2027, by an amount equal to the smaller of (a) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the board. On January 1, 2018, the amount authorized and reserved increased to 1,424,630 shares. Awards may be granted under the Equity Plan to our employees, including officers, directors or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. All awards will be evidenced by a written agreement between us and the holder of the award and may include any of the following: stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units and cash-based awards and other stock-based awards. To date, there have been no awards under this plan. The assumptions used for the periods ended March 31, 2018 and 2017, and the resulting estimates of weighted-average fair value per share of options granted during those periods, are as follows: Three Months March 31, 2018 2017 Volatility - 99% to 101% Risk-free interest rate - 1-2% Expected term - 7 years The following table summarizes all compensation plan stock options as of March 31: March 31, 2018 March 31, 2017 Number of Stock Weighted Exercise Number of Stock Weighted Exercise Options Price Options Price Options outstanding, beginning of year 531,667 $ 1.80 557,917 $ 1.55 Granted - - 13,750 5.20 Redeemed - - (12,500 ) 1.40 Exercised - - - - Expired / terminated - - - - Options outstanding, end of quarter 531,667 $ 1.80 559,167 $ 1.64 Options exercisable, end of quarter 521,667 $ 1.82 539,167 $ 1.68 Stock compensation expense was $69,163 for the three months ended March 31, 2017. No such expense occurred during the three months ended March 31, 2018. There are 10,000 non-vested stock options as of March 31, 2018 that will vest in October 2018. |
Organization, Business Operat16
Organization, Business Operations and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and note disclosures normally included in complete annual financial statements prepared in accordance with GAAP have been condensed or omitted. However, the Company believes that the disclosures included in these unaudited condensed financial statements are adequate to make the information presented not misleading. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, which include normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the three months ended March 31, 2018 are not necessarily indicative of the results for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2018. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2017 financial statements to conform to the 2018 financial statement presentation. These reclassifications had no effect on net earnings or cash flows as previously reported. |
Significant Accounting Policies | Significant Accounting Policies Aside from the adoption of ASU Topic 606, as described below, there have been no other material changes to the significant accounting policies or recent accounting pronouncements previously disclosed in the annual financial statements in the Company’s Form 10-K for the fiscal year ended December 31, 2017. |
Revenue Recognition | Revenue Recognition The Company records revenue from contract with customers in accordance with Accounting Standards Codification (ASU) Topic 606, “Revenue from Contracts with Customers.” Under ASU 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. The Company’s primary sources of revenue are derived from simulator and accessories sales, training and installation, the sale of customized software and sale of extended warranties. Sales discounts and bad debt allowance are presented in the Financial Statements as reductions in determining net revenues. Credit sales are recorded as current assets. Prepaid deposits received at the time of sale and extended warranties purchased are recorded as current liabilities until earned. The following briefly summarizes the nature of our significant provisions: Performance obligation Method of Recognition Simulator and accessories Upon transfer of control Installation and training Upon completion or over period of services being rendered Extended service-type warranty Deferred and recognized over life of extended warranty Customized software Upon transfer of control |
Disaggregation of Revenue | Disaggregation of Revenue Under ASU 606, disaggregated revenue from contracts with customers depicts the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors. The Company has evaluated revenues, contract assets and liabilities associated with the revenue recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Three months ended March 31, 2018 2017 Domestic International Total Domestic International Total Simulators and accessories $ 894,229 $ 1,552,394 $ 2,446,623 $ 3,295,463 $ 287,170 $ 3,582,633 Warranties 426,685 62,386 489,071 396,878 14,195 411,073 Customized software 132,418 11,940 144,358 38,150 - 38,150 Installation and training 67,950 50,220 118,170 136,620 (3,000 ) 133,620 Licensing and royalties 45,968 - 45,968 43,812 - 43,812 Total Revenue $ 1,567,250 $ 1,676,940 $ 3,244,190 $ 3,910,923 $ 298,365 $ 4,209,288 |
Adoption of New Accounting Standards | Adoption of New Accounting Standards Between May 2014 and December 2016, the Financial Accounting Standards Board (the “FASB”) issued several Accounting Standards Updates (each, an “ASU” and collectively, “ASUs”) on Revenue from Contracts with Customers (Topic 606). These ASUs supersede nearly all existing revenue recognition guidance under current GAAP and requires an entity to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, and permit the use of either the full retrospective or modified retrospective transition method. This standard was adopted on January 1, 2018 and the Company elected to use the modified retrospective transition method which requires application of ASU 2014-09 to uncompleted contracts at the date of adoption. The adoption of the ASUs under 2014-09 did not have a material impact on financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. The Company wrote-down its Investment in Modern Round to fair value in 2017, the adoption of ASU 2016-01 did not have a material impact on its financial statements. Upon adoption, the Company has elected to utilize the cost minus impairment approach as the investment in Modern Round does not have a readily determinable fair value as of the reporting date. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force),” to provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flow. The amendments should be applied using a retrospective transition method, and are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this statement did not have a material impact on the Company’s financial statement presentation. In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets,” to clarify the scope of Subtopic 610-20, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets,” and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which is the same time as the amendments in ASU No. 2014-09, and early adoption is permitted. The adoption did not have a material impact on the financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, “Compensation—Stock Compensation,” to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Accounting Standards Codification (“ASC”) 718. The amendments are effective for fiscal years beginning after December 15, 2017 and should be applied prospectively to an award modified on or after the adoption date. The Company does not expect this amendment to have a material impact on its financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 – “Leases (Topic 842)”, which requires lessees to put most leases on their balance sheets by recognizing lease assets and lease liabilities for those leases classified as operating leases under previous guidance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on its financial statements. In July 2017, the FASB issued ASU No. 2017-11 – “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815)” Part I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II. Simply replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. This ASU is effective for public companies for the annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company does not expect this amendment to have a material impact on its financial statements. |
Organization, Business Operat17
Organization, Business Operations and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenues | The Company has evaluated revenues, contract assets and liabilities associated with the revenue recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Three months ended March 31, 2018 2017 Domestic International Total Domestic International Total Simulators and accessories $ 894,229 $ 1,552,394 $ 2,446,623 $ 3,295,463 $ 287,170 $ 3,582,633 Warranties 426,685 62,386 489,071 396,878 14,195 411,073 Customized software 132,418 11,940 144,358 38,150 - 38,150 Installation and training 67,950 50,220 118,170 136,620 (3,000 ) 133,620 Licensing and royalties 45,968 - 45,968 43,812 - 43,812 Total Revenue $ 1,567,250 $ 1,676,940 $ 3,244,190 $ 3,910,923 $ 298,365 $ 4,209,288 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of: March 31, 2018 December 31, 2017 Raw materials $ 2,187,385 $ 1,825,469 Reserve (105,031 ) (105,031 ) Total inventory $ 2,082,354 $ 1,720,438 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of: March 31, 2018 December 31, 2017 Computer equipment $ 1,029,415 $ 861,924 Furniture and office equipment 202,867 202,867 Machinery and equipment 925,495 925,495 Leasehold improvements 324,313 324,313 Total property and equipment 2,482,090 2,314,599 Less: Accumulated depreciation (1,705,945 ) (1,637,326 ) Property and equipment, net $ 776,145 $ 677,273 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Compensation and Related Costs | Accrued compensation and related costs consisted of the following as of: March 31, 2018 December 31, 2017 Salaries and wages payable $ 337,456 $ 115,481 401(k) contributions payable 13,533 30,532 Accrued Paid Time Off 246,405 257,751 Profit sharing payable 189,727 189,727 Total accrued compensation and related costs $ 787,121 $ 593,491 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following as of: March 31, 2018 December 31, 2017 Manufacturer’s warranties $ 135,000 $ 135,000 Taxes payable 126,293 108,573 Total accrued expenses and other current liabilities $ 261,293 $ 243,573 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Additional Compensation Expense | The Company recorded additional compensation expense as follows: Three Months Ending March 31, 2018 2017 Number of stock options redeemed - 12,500 Redemption value $ - $ 48,500 Amount previously expensed (2011 and 2010) - (17,500 ) Additional compensation expense $ - $ 31,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases are as follows: Building Lease Schedule 2018 260,702 2019 105,542 Total $ 366,244 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Estimated Weighted Average Fair Value of Options Granted | The assumptions used for the periods ended March 31, 2018 and 2017, and the resulting estimates of weighted-average fair value per share of options granted during those periods, are as follows: Three Months March 31, 2018 2017 Volatility - 99% to 101% Risk-free interest rate - 1-2% Expected term - 7 years |
Schedule of Stock Options Activity | The following table summarizes all compensation plan stock options as of March 31: March 31, 2018 March 31, 2017 Number of Stock Weighted Exercise Number of Stock Weighted Exercise Options Price Options Price Options outstanding, beginning of year 531,667 $ 1.80 557,917 $ 1.55 Granted - - 13,750 5.20 Redeemed - - (12,500 ) 1.40 Exercised - - - - Expired / terminated - - - - Options outstanding, end of quarter 531,667 $ 1.80 559,167 $ 1.64 Options exercisable, end of quarter 521,667 $ 1.82 539,167 $ 1.68 |
Organization, Business Operat24
Organization, Business Operations and Significant Accounting Policies (Details Narrative) - $ / shares | Feb. 12, 2018 | Oct. 20, 2016 | Oct. 01, 2016 | Mar. 31, 2018 | Dec. 31, 2017 |
Number of common stock shares converted | 7,927,774 | ||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
Reverse stock split | 1 for 2 reverse stock split | 1 for 10 reverse stock split | |||
Board of Directors [Member] | |||||
Preferred stock shares authorized | 2,500,000 | ||||
Preferred stock, par value | $ 0.0001 | ||||
Class A Common Stock [Member] | |||||
Common stock, shares authorized | 5,000,000 | 5,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Class B Common Stock [Member] | |||||
Common stock, shares authorized | 15,000,000 | 15,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common Stock [Member] | |||||
Common stock, shares authorized | 62,500,000 | 60,000,000 | |||
Common stock, par value | $ 0.0001 |
Organization, Business Operat25
Organization, Business Operations and Significant Accounting Policies - Schedule of Disaggregation of Revenues (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Simulators and accessories | $ 2,446,623 | $ 3,582,633 |
Warranties | 489,071 | 411,073 |
Customized software | 144,358 | 38,150 |
Installation and training | 118,170 | 133,620 |
Licensing and royalties | 45,968 | 43,812 |
Total Revenue | 3,244,190 | 4,209,288 |
Domestic [Member] | ||
Simulators and accessories | 894,229 | 3,295,463 |
Warranties | 426,685 | 396,878 |
Customized software | 132,418 | 38,150 |
Installation and training | 67,950 | 136,620 |
Licensing and royalties | 45,968 | 43,812 |
Total Revenue | 1,567,250 | 3,910,923 |
International [Member] | ||
Simulators and accessories | 1,552,394 | 287,170 |
Warranties | 62,386 | 14,195 |
Customized software | 11,940 | |
Installation and training | 50,220 | (3,000) |
Licensing and royalties | ||
Total Revenue | $ 1,676,940 | $ 298,365 |
Note Receivable (Details Narrat
Note Receivable (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Receivables [Abstract] | |
Sale of goods and services | $ 400,906 |
Interest rate | 10.00% |
Allowance for doubtful accounts |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,187,385 | $ 1,825,469 |
Reserve | (105,031) | (105,031) |
Total inventory | $ 2,082,354 | $ 1,720,438 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 68,619 | $ 68,385 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Total property and equipment | $ 2,482,090 | $ 2,314,599 |
Less: Accumulated depreciation | (1,705,945) | (1,637,326) |
Property and equipment, net | 776,145 | 677,273 |
Computer Equipment [Member] | ||
Total property and equipment | 1,029,415 | 861,925 |
Furniture and Office Equipment [Member] | ||
Total property and equipment | 202,867 | 202,867 |
Machinery and Equipment [Member] | ||
Total property and equipment | 925,495 | 925,495 |
Leasehold Improvements [Member] | ||
Total property and equipment | $ 324,313 | $ 324,313 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Compensation and Related Costs (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Salaries and wages payable | $ 337,456 | $ 115,481 |
401(k) contributions payable | 13,533 | 30,532 |
Accrued Paid Time Off | 246,405 | 257,751 |
Profit sharing payable | 189,727 | 189,727 |
Total accrued compensation and related costs | $ 787,121 | $ 593,491 |
Accrued Expenses - Schedule o31
Accrued Expenses - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Manufacturer's warranties | $ 135,000 | $ 135,000 |
Taxes payable | 126,293 | 108,573 |
Total accrued expenses and other current liabilities | $ 261,293 | $ 243,573 |
Collaboration Agreement (Detail
Collaboration Agreement (Details Narrative) - USD ($) | Aug. 16, 2017 | Aug. 11, 2017 | Jul. 28, 2017 | Jun. 01, 2017 | Oct. 25, 2016 | Apr. 14, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2015 |
Warrant exercise price per share | $ 2.72 | |||||||||
Number of stock options issued to purchase common stock | 13,750 | |||||||||
Options exercisable weighted average exercise price | $ 1.82 | $ 1.68 | ||||||||
Volatility rate | 91.50% | |||||||||
Risk free rate | 1.76% | |||||||||
Expected term | 5 years | |||||||||
Fair value per share | $ 4.28 | |||||||||
Fair value, investment | $ 1,516,246 | |||||||||
Modern Round [Member] | ||||||||||
Ownership percentage | 8.90% | |||||||||
Number of stock options issued to purchase common stock | 125,000 | |||||||||
Options exercisable weighted average exercise price | $ 0.50 | |||||||||
Impairment loss | $ 613,241 | |||||||||
Modern Round Entertainment Corporation [Member] | ||||||||||
Ownership percentage | 0.00% | |||||||||
Fair value, investment | $ 1,988,800 | |||||||||
Conditional Warrants [Member] | ||||||||||
Warrant exercise price per share | $ 2.72 | |||||||||
Number of warrants to purchase shares of common stock | 1,676,747 | |||||||||
Aggregate warrants exercised | $ 335,349 | |||||||||
Number of warrants exercised | 3,353,495 | |||||||||
Cumulative license fees | $ 2,000,000 | |||||||||
Warrant term | 5 years | |||||||||
Conditional Warrants [Member] | Date of Co Venture Agreement [Member] | ||||||||||
Number of warrants to purchase shares of common stock | 459,691 | |||||||||
Warrants issued to purchase capital stock, percent | 5.00% | |||||||||
Conditional Warrants [Member] | Agreement Date [Member] | ||||||||||
Number of warrants to purchase shares of common stock | 459,691 | |||||||||
Warrants issued to purchase capital stock, percent | 5.00% | |||||||||
Tranche 1 Warrants [Member] | ||||||||||
Warrant exercise price per share | $ 2.72 | |||||||||
Number of common shares held | 398,122 | |||||||||
Number of warrants to purchase shares of common stock | 172,912 | |||||||||
Number of warrants exercisable | 459,691 | |||||||||
Warrants fair value | $ 4.36 | |||||||||
Tranche 2 Warrants [Member] | ||||||||||
Number of warrants held | 364,122 | |||||||||
Co-Venture Agreement [Member] | ||||||||||
License income | $ 45,968 | $ 43,812 | ||||||||
Co-Venture Agreement [Member] | Modern Round [Member] | ||||||||||
Number of capital units received | 1,365,789 | |||||||||
Ownership percentage | 5.00% | |||||||||
Fair value per unit | $ 0.10 | |||||||||
Warrant exercise price per share | $ 0.25 | |||||||||
Merger Agreement [Member] | ||||||||||
Number of stock options issued to purchase common stock | 153,459 | |||||||||
Options exercisable weighted average exercise price | $ 0.41 | |||||||||
Number of common shares held | 1,676,748 | |||||||||
Merger Agreement [Member] | Modern Round Entertainment Corporation [Member] | ||||||||||
Number of issued and outstanding units converted into common stock | 1.2277 | |||||||||
Merger Agreement [Member] | Warrants [Member] | ||||||||||
Warrant exercise price per share | $ 0.20 | |||||||||
Number of warrants to purchase shares of common stock | 1,676,747 | |||||||||
Warrant Buyout Agreement [Member] | Tranche 1 Warrants [Member] | ||||||||||
Number of warrants exercised | 678,505 | |||||||||
Shares issued price per share | $ 3.924 | |||||||||
Warrant Buyout Agreement [Member] | Tranche 2 Warrants [Member] | ||||||||||
Number of warrants to purchase shares of common stock | 459,691 | |||||||||
Number of warrants exercised | 94,990 | |||||||||
Shares issued price per share | $ 3.924 | |||||||||
Warrants purchase price | $ 773,495 | |||||||||
Warrant Buyout Agreement [Member] | Tranche 2 Warrants [Member] | Common Stock [Member] | ||||||||||
Number of warrants to exercise common stock | 24,208 | |||||||||
Amendment To Co-Venture Agreement [Member] | ||||||||||
Royalties percentage equal to revenue paid | 10.00% | |||||||||
Percentage of revenue paid for cost of equipment | 14.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - $ / shares | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Number of stock options issued to purchase common stock | 13,750 | ||
Weighted average purchase price of stock options issued | $ 5.20 | ||
Common stock shares owned | 7,904,307 | 7,904,307 | |
Modern Round Entertainment Corporation [Member] | |||
Ownership percentage | 0.00% | ||
Mr.Saltz [Member] | Maximum [Member] | |||
Ownership percentage | 1.00% | ||
Co-Venture Agreement [Member] | |||
Common stock shares owned | 3,353,495 | ||
Common stock percentage | 9.30% | ||
CEO, COO and Members of Board of Directors[Member] | |||
Number of stock options issued to purchase common stock | 13,750 | ||
Weighted average purchase price of stock options issued | $ 5.03 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Additional Compensation Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Related Party Transactions [Abstract] | ||
Number of stock options redeemed | 12,500 | |
Redemption value | $ 48,500 | |
Amount previously expensed (2011 and 2010) | (17,500) | |
Additional compensation expense | $ 31,000 |
Commitments and Contingencies35
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Deferred rent liability | $ 63,028 | $ 75,444 | |
Rent expense | $ 87,345 | $ 97,391 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 260,702 |
2,019 | 105,542 |
Total | $ 366,244 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 02, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of stock options issued to purchase common stock | 13,750 | ||||
Stock options weighted average exercise price | $ 1.80 | $ 1.64 | $ 1.80 | $ 1.55 | |
Stock compensation expense | $ 69,163 | ||||
Number of nonvested stock options issued | 10,000 | ||||
Options vesting period description | There are 10,000 non-vested stock options as of March 31, 2018 that will vest in October 2018. | ||||
2017 Equity Incentive Plan [Member] | |||||
Number of common stock capital shares reserved for future issuance | 1,187,500 | ||||
Percentage of common stock shares issued and outstanding | 3.00% | ||||
2017 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Number of common stock capital shares reserved for future issuance | 1,424,630 | ||||
Stock Options [Member] | |||||
Stock options weighted average exercise price | $ 5.20 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Weighted Average Fair Value of Options Granted (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | ||
Volatility rate minimum | 99.00% | |
Volatility rate maximum | 101.00% | |
Risk-free interest rate minimum | 1.00% | |
Risk-free interest rate maximum | 2.00% | |
Expected term | 7 years | 0 years |
Stockholders' Equity - Schedu39
Stockholders' Equity - Schedule of Stock Options Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | ||
Options outstanding, beginning of year | 531,667 | 557,917 |
Number of options, Granted / Vested | 13,750 | |
Number of options, Redeemed | (12,500) | |
Number of options, Exercised | ||
Number of options, Expired / terminated | ||
Number of options outstanding, end of year | 531,667 | 559,167 |
Number of options exercisable, end of year | 521,667 | 539,167 |
Weighted Exercise Price outstanding, beginning of year | $ 1.80 | $ 1.55 |
Weighted average exercise price, Granted / Vested | 5.20 | |
Weighted average exercise price, Redeemed | 1.40 | |
Weighted average exercise price, Exercised | ||
Weighted average exercise price, Expired / terminated | ||
Weighted average exercise price outstanding, end of year | 1.80 | 1.64 |
Weighted average exercise price exercisable, end of year | $ 1.82 | $ 1.68 |