Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 28, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | VirTra, Inc | ||
Entity Central Index Key | 0001085243 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 40,508,451 | ||
Entity Common Stock, Shares Outstanding | 7,748,705 | ||
Trading Symbol | VTSI | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,500,381 | $ 5,080,445 |
Certificates of deposit | 3,490,000 | |
Accounts receivable, net | 1,302,010 | 1,478,135 |
Interest receivable | 21,385 | |
That’s Eatertainment (f/k/a MREC) note receivable, net, related party | 292,138 | |
Trade note receivable, net | 96,282 | |
Inventory, net | 1,612,002 | 1,720,438 |
Unbilled revenue | 689,153 | 1,222,047 |
Prepaid expenses and other current assets | 377,520 | 586,439 |
Total current assets | 10,380,871 | 10,087,504 |
LONG-TERM ASSETS | ||
Property and equipment, net | 678,245 | 677,273 |
Trade note receivable, long-term | 6,843 | |
Security deposits, long-term | 339,756 | |
Other assets, long-term | 292,298 | |
Deferred tax asset, net | 2,400,000 | 2,710,182 |
Investment in That's Eatertainment (f/k/a MREC), related party | 1,120,000 | 1,374,933 |
Total long-term assets | 4,837,142 | 4,762,388 |
TOTAL ASSETS | 15,218,013 | 14,849,892 |
CURRENT LIABILITIES | ||
Accounts payable | 429,949 | 535,795 |
Accrued compensation and related costs | 613,691 | 593,491 |
Accrued expenses and other current liabilities | 632,606 | 243,573 |
Note payable, current | 11,250 | 11,250 |
Deferred revenue, short-term | 1,924,307 | 2,992,912 |
Total current liabilities | 3,611,803 | 4,377,021 |
Long-term liabilities: | ||
Deferred revenue, long-term | 962,356 | |
Deferred rent liability | 46,523 | 75,444 |
Note payable, long-term | 11,250 | |
Total long-term liabilities | 1,008,879 | 86,694 |
Total liabilities | 4,620,682 | 4,463,715 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued or outstanding | ||
Common stock, value | 783 | 793 |
Treasury stock at cost; 10,707 shares outstanding as of December 31, 2018 and 23,467 shares outstanding as of December 31, 2017. | (37,308) | (112,109) |
Additional paid-in capital | 14,272,834 | 14,954,563 |
Accumulated deficit | (3,638,978) | (4,457,070) |
Total stockholders' equity | 10,597,331 | 10,386,177 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 15,218,013 | 14,849,892 |
Class A Common Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Common stock, value | ||
Class B Common Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Common stock, value |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 7,827,651 | 7,927,774 |
Common stock, shares outstanding | 7,816,944 | 7,904,307 |
Treasury stock, shares outstanding | 10,707 | 23,467 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 2,500,000 | 2,500,000 |
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 | 7,500,000 | 7,500,000 |
Common stock, shares issued | ||
Common stock, shares outstanding |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES | ||
Total revenue | $ 18,080,126 | $ 16,524,225 |
Cost of sales | 7,030,286 | 6,290,879 |
Gross profit | 11,049,840 | 10,233,346 |
OPERATING EXPENSES | ||
General and administrative | 8,691,957 | 7,641,765 |
Research and development | 1,357,982 | 1,285,000 |
Net operating expense | 10,049,939 | 8,926,829 |
Income/(loss) from operations | 999,901 | 1,306,517 |
OTHER INCOME (EXPENSE) | ||
Other income | 132,757 | 67,837 |
Other expense | (4,568) | (4,123) |
Impairment loss on TEC (f/k/a MREC), related party | (613,241) | |
Net other income | 128,189 | (549,527) |
Income/(loss) before income taxes | 1,128,090 | 756,990 |
Income tax expense/(benefit) | 309,998 | (2,505,292) |
NET INCOME/(LOSS) | $ 818,092 | $ 3,262,282 |
Earnings/(loss) per common share | ||
Basic | $ 0.10 | $ 0.41 |
Diluted | $ 0.10 | $ 0.39 |
Weighted average shares outstanding | ||
Basic | 7,903,801 | 7,919,568 |
Diluted | 8,254,376 | 8,397,377 |
Net Sales [Member] | ||
REVENUES | ||
Total revenue | $ 17,522,913 | $ 16,234,278 |
Royalties/Licensing Fees, Related Party [Member] | ||
REVENUES | ||
Total revenue | 549,568 | 289,947 |
Other Royalties/Licensing Fees [Member] | ||
REVENUES | ||
Total revenue | $ 7,645 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 793 | $ 14,128,837 | $ (7,719,352) | $ 6,410,278 | ||
Balance, shares at Dec. 31, 2016 | 7,927,774 | |||||
Stock warrants vested-TEC (f/k/a MREC), related party | 1,516,246 | 1,516,246 | ||||
Stock warrants repurchased-TEC (f/k/a MREC), related party | (773,495) | (773,495) | ||||
Stock based compensation | 167,475 | 167,475 | ||||
Stock options repurchased | (84,500) | $ (84,500) | ||||
Stock options repurchased, shares | 23,467 | |||||
Treasury stock | (112,109) | $ (112,109) | ||||
Treasury stock cancelled, shares | 23,467 | |||||
Net income | 3,262,282 | $ 3,262,282 | ||||
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 | |||||
Stock based compensation | 7,124 | 7,124 | ||||
Stock options repurchased | (242,625) | $ (242,625) | ||||
Stock options repurchased, shares | 98,063 | |||||
Treasury stock | (381,937) | $ (381,937) | ||||
Stock options exercised | $ 1 | 10,499 | 10,500 | |||
Stock options exercised, shares | 10,700 | |||||
Treasury stock cancelled | $ (11) | (456,727) | 456,738 | |||
Treasury stock cancelled, shares | (110,823) | 87,356 | ||||
Net income | 818,092 | $ 818,092 | ||||
Balance at Dec. 31, 2018 | $ 783 | $ 14,272,834 | $ (37,308) | $ (3,638,978) | $ 10,597,331 | |
Balance, shares at Dec. 31, 2018 | 7,827,651 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 818,092 | $ 3,262,282 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Impairment of Investment in That's Eatertainment (f/k/a MREC), related party | 254,933 | 613,241 |
Depreciation | 291,855 | 270,881 |
Stock compensation | 7,124 | 167,475 |
Compensation associated with stock option repurchase | 160,050 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 176,125 | 1,766,716 |
That’s Eatertainment (f/k/a MREC) note receivable, net, related party | (292,138) | |
Trade note receivable, net | (103,125) | |
Interest receivable | (21,385) | |
Security deposits | (339,756) | |
Inventory | 108,436 | (400,494) |
Deferred taxes | 310,182 | (2,710,182) |
Unbilled revenue | 532,894 | (1,114,750) |
Prepaid expenses and other current assets | 208,919 | (336,372) |
Other assets | (292,298) | |
Accounts payable and other accrued expenses | 303,387 | 92,930 |
Deferred revenue and deferred rent | (135,170) | 880,325 |
Net cash provided by operating activities | 1,828,075 | 2,652,101 |
Cash flows from investing activities: | ||
Purchase of certificates of deposit | (3,960,000) | |
Redemption of certificates of deposit | 470,000 | |
Purchase of property and equipment | (292,827) | (133,831) |
Net cash used in investing activities | (3,782,827) | (133,831) |
Cash flows from financing activities: | ||
Repayment of debt | (11,250) | (11,250) |
Purchase of treasury stock | (381,937) | (112,109) |
Repurchase of stock options | (242,625) | (244,550) |
That's Eatertainment (f/k/a MREC), repurchase of stock warrants, related party | (773,495) | |
Common stock issued for options exercise | 10,500 | |
Net cash used in financing activities | (625,312) | (1,141,404) |
Net increase/(decrease) in cash | (2,580,064) | 1,376,866 |
Cash, beginning of period | 5,080,445 | 3,703,579 |
Cash, end of period | 2,500,381 | 5,080,445 |
Supplemental disclosure of cash flow information: | ||
Cash paid: Taxes | 10,074 | 78,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of accounts to notes receivable | 693,044 | |
Investment in That's Eatertainment (f/k/a MREC), related party | $ 1,516,246 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | Note 1. Organization and Significant Accounting Policies Organization and Business Operations 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, Inc., a Nevada Corporation. Effective March 2, 2018, the Company effected a 1 for 2 reverse stock split of its issued and outstanding Common Stock (the “Reverse Stock Split”). 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 Split. Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). 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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Significant accounting estimates in these financial statements include valuation assumptions for share-based payments, allowance for doubtful accounts and notes receivable, inventory reserves, accrual for warranty reserves, the carrying value of long-lived assets, income tax valuation allowances, the carrying value of cost basis investments, and the allocation of the transaction price to the performance obligations in our contracts with customers. Revenue Recognition Between May 2014 and December 2016, 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. 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 the financial statements. Effective January 1, 2018, the Company records revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers.” Under ASC 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. Significant judgment is necessary when making these determinations. The Company’s primary sources of revenue are derived from simulator and accessories sales, training and installation, the sale of customizable software and the sale of extended service-type warranties. Sales discounts are presented in the financial statements as reductions in determining net revenues. Credit sales are recorded as current assets (accounts receivable). Prepaid deposits received at the time of sale and extended warranties purchased are recorded as current and long-term liabilities (deferred revenue) until earned. The following briefly summarizes the nature of our performance obligations and method of revenue recognition: Performance Obligation Method of Recognition Simulator and accessories Upon transfer of control Installation and training Upon completion or over the period of services being rendered Extended service-type warranty Deferred and recognized over the life of the extended warranty Customized software Upon transfer of control Sales-based royalty exchanged for license of intellectual property Recognized as the performance obligation is satisfied over time – which is as the sales occur. The Company recognizes revenue upon transfer of control or upon completion of the services for the simulator and accessories; for the installation and training and customized software performance obligations as the customer has the right and ability to direct the use of these products and services and the customer obtains substantially all of the remaining benefit from these products and services at that time. For the sales-based royalty exchanged for license of intellectual property, the Company recognized revenue as the sales occur over time. The Company recognizes revenue on a straight-line basis over the period of services being rendered for the extended service-type warranties as these warranties represent a performance obligation to “stand ready to perform” over the duration of the warranties. As such, the warranty service is performed continuously over the warranty period. Each contract states the transaction price. The contracts do not include variable consideration, significant financing components or noncash consideration. The Company has elected to exclude sales and similar taxes from the measurement of the transaction price. The contract’s transaction price is allocated to the performance obligations based upon their stand-alone selling prices. Discounts to the stand-alone selling prices, if any, are allocated proportionately to each performance obligation. Disaggregation of Revenue Under ASC 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 recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Year ended December 31, 2018 2017 Domestic International Total Domestic International Total Simulators and accessories $ 12,562,982 $ 2,018,828 $ 14,581,810 $ 11,006,489 $ 2,502,075 $ 13,508,564 Extended service-type warranties 1,719,347 176,730 1,896,077 1,530,964 211,692 1,742,656 Customized software 485,409 11,940 497,349 489,671 182,200 671,871 Installation and training 400,916 146,761 547,677 299,793 11,394 311,187 Licensing and royalties 557,213 - 557,213 289,947 - 289,947 Total Revenue $ 15,725,867 $ 2,354,259 $ 18,080,126 $ 13,616,864 $ 2,907,361 $ 16,524,225 Prior to the adoption of ASU 2014-09, the Company recognized revenue for its products and services when it was realized or realizable and earned. Revenue was considered realized and earned when: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred and/or services have been rendered; (iii) the price is fixed and determinable; and (iv) collection of the resulting receivable is reasonably assured. Shipping fees charged to customers were recorded as a component of net revenues. Further, certain components of the Company’s sales included multiple elements comprising of both products and services. The Company’s revenue recognition fell under ASC 605-25, Multiple Element Arrangements Customer Deposits Customer deposits are recorded as a current liability under deferred revenue on the accompanying balance sheet and totaled $186,450 and $709,676 as of December 31, 2018 and 2017, respectively. Changes in deferred revenue amounts related to customer deposits will fluctuate from year to year based upon the mix of customers for the year and the Company’s backlog of open contracts. Customer deposits are considered a deferred liability until completion of the customer’s contract performance obligations. When revenue is recognized, the deposit is applied to customer’s receivable balance. Warranty The Company does warranty its products from manufacturing defects on a limited basis for a period of one year after purchase, but also sells separately priced extended service-type warranties for periods of up to four years after the expiration of the standard one-year warranty. During the term of the initial one-year warranty, if the device fails to operate properly from defects in materials and workmanship, the Company will fix or replace the defective product. Deferred revenue for separately priced extended warranties one year or less totaled $1,604,637 and $2,156,950 as of December 31, 2018 and 2017, respectively. Deferred revenue for separately priced extended warranties longer than one year totaled $962,356 and $0 as of December 31, 2018 and 2017, respectively. The accrual for the one-year manufacturer’s warranty liability totaled $200,505 and $135,000 as of December 31, 2018 and 2017, respectively. During the years ended December 31, 2018 and 2017, the Company recognized revenue of $1,896,077 and $1,787,081, respectively, related to the extended service-type warranties that was amortized from the deferred revenue balance. Changes in deferred revenue amounts related to extended service-type warranties will fluctuate from year to year based upon the average remaining life of the warranties at the beginning of the period and new extended service-type warranties sold during the period. Customer Retainage Customer retainage is recorded as a current liability under deferred revenue on the accompanying balance sheet and totaled $133,220 and $126,286 as of December 31, 2018 and 2017, respectively. Changes in deferred revenue amounts related to customer retainage will fluctuate from year to year based upon the customer’s contract completion date allowing the Company to invoice and recover the retainage. Licensing and Royalties with Related Party As discussed further in Note 6. Collaboration Agreement, the Company licenses intellectual property to Modern Round, LLC (“MR”), a wholly-owned subsidiary of That’s Eatertainment Corp. (“TEC”), f/k/a Modern Round Entertainment Corp. (“MREC”), a related party, in exchange for sales-based royalties. Revenues from this agreement are recognized in accordance with the terms of the contract as the sales occur. The Company receives additional immaterial sales-based royalties from strategic partners. Adoption of New Accounting Standards 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. This standard was adopted on January 1, 2018, including all interim reporting periods within the fiscal year. The Company recorded an impairment loss on its investment in TEC, f/k/a MREC, a related party, to fair value in 2018. The adoption of ASU 2016-01 did not have a material impact on the financial statements. Upon adoption, the Company has elected to utilize the cost minus impairment approach as the investment in TEC does not have a readily determinable fair value as of the reporting date. See Note 6. Collaboration Agreement. 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 flows. 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 2016-18 did not have a material impact on the financial statement presentation. In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014- 09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Company adopted this standard on January 1, 2018, and its adoption did not have a material impact on the Company’s revenue recognition. 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 of 2017-05 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 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 adoption of 2017-09 did not have a material impact on the financial statements. In November 2017, the FASB issued ASU No. 2017-14 “Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) (SEC Update)”. The ASU amends SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403, which bring existing guidance into conformity with Topic 606, Revenue from Contracts with Customers. The amendments were effective upon issuance. These amendments did not have a material effect on the Company’s financial statements. Fair Value Measurements ASC Topic 820, Fair Value Measurements Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimate of assumptions that market participants would use in pricing the asset or liability. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, certificates of deposit, accounts receivable, notes and interest receivables, accounts payable, and accrued liabilities. The fair value of financial instruments, except for long-term notes receivable, approximates their carrying values, using level 3 inputs, at December 31, 2018 and 2017 due to their short maturities. The fair value of the notes receivable approximates its carrying value, using level 3 inputs, at December 31, 2018. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. Certificates of Deposit and Mutual Funds The Company invests its excess cash in certificates of deposit and money market mutual funds issued by financial institutions with high credit ratings. The certificates of deposit generally have average maturities of approximately six months and are subject to penalties for early withdrawal. The money market mutual funds are open ended and can be withdrawn at any time without penalty. Accounts and Notes Receivable and Allowance for Doubtful Accounts The Company recognizes an allowance for losses on accounts receivable based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. Accounts receivable do not bear interest and are charged off after all reasonable collection efforts have been taken. As of December 31, 2018, and 2017, the Company maintained an allowance for doubtful accounts of $23,044 and $12,290, respectively. Notes receivable are carried at their estimated collectible amounts. Interest income on notes receivable is recognized using the effective interest method. Notes receivable are periodically evaluated for collectability based on the credit history, the current financial condition of the counter party, and the known and inherent risks in the notes. Notes receivable are placed on nonaccrual status when they become 90 days past due and the customer has not made a payment in over 60 days. Upon suspension of the accrual of interest, interest income is subsequently recognized to the extent cash payments are received. Accrual of interest is resumed when notes are removed from non-accrual status. Notes receivable are charged against the allowance for credit losses when they are deemed to be uncollectible. The allowance for uncollectible notes receivable was nil at December 31, 2017. During 2018, the Company recorded an allowance against a note receivable balance of $369,938. At December 31, 2018, the allowance for uncollectible notes receivable was $266,813. Inventory Inventory is stated at the lower of cost or net realizable value with cost being determined on the average cost method. Work in progress and finished goods inventory includes an allocation for capitalized labor and overhead. The Company routinely evaluates the carrying value of inventory for slow moving and potentially obsolete inventory and, when appropriate, will record an adjustment to reduce inventory to its estimated net realizable value. As of December 31, 2018 and 2017, inventory reserves were $105,031. Investments in Other Companies Minority investments in other companies are accounted for under the cost method of accounting because the Company does not have the ability to exercise significant influence over the other companies’ operations. Under the cost method of accounting, investments in private companies are carried at cost and are only adjusted for other-than- temporary declines in fair value and distribution of earnings. For investments in public companies that have readily determinable fair values, the Company classifies its investments as available-for-sale, and accordingly records these investments at their fair values with unrealized gains and losses included as a separate component of stockholders’ equity and in total comprehensive income (loss). Upon sale or liquidation, realized gains and losses are included in the statements of operations. The adoption of ASU 2016-01 requires investments in other companies that do not have readily determinable fair value be accounted for 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. This standard was adopted on January 1, 2018, including all interim reporting periods within the fiscal year. The adoption of ASU 2016-01 did not have a material impact on the financial statements. Upon adoption, the Company has elected to utilize the cost minus impairment approach because the investment in TEC does not have a readily determinable fair value as of the reporting date. See Note 6. Collaboration Agreement. Management regularly evaluates the recoverability of its investment based on the investee company’s performance and financial position. During the years ended December 31, 2018 and 2017, the Company recognized an impairment loss of $254,933 and $613,241, respectively. Management regularly assesses the classification of its investments. During the year ended December 31, 2017, the $613,241 impairment loss was recorded as Other income (expense) on the Statement of Operations as the Company’s agreement with Investment in That’s Eatertainment (f/k/a MREC) was not considered to be a significant part of the Company’s operations. During 2018, the Company believes that its agreement with That’s Eatertainment has become more significant to the Company’s operations due to the increased royalty revenues, and as such, the $254,933 impairment loss recognized during the year-ended December 31, 2018 has been recorded as an operating expense on the Statement of Operations. Property and Equipment Property and equipment are carried at cost, net of depreciation. Gains or losses related to retirements or disposition of fixed assets are recognized in operations in the period incurred. Costs of normal repairs and maintenance are charged to expense as incurred, while betterments or renewals are capitalized. Depreciation commences at the time the assets are placed in service. Depreciation is provided using the straight-line method over the estimated economic lives of the assets or for leasehold improvements, over the shorter of the estimated useful life or the remaining lease term, which are summarized as follows: Computer equipment 3-5 years Furniture and office equipment 5-7 years Machinery and equipment 5-7 years Leasehold improvements 7 years Cost of Products Sold Cost of products sold represents manufacturing costs, consisting of materials, labor and overhead related to finished goods and components. Cost of products sold does not include depreciation of fixed assets. Shipping costs incurred related to product delivery are included in cost of products sold. Advertising Costs Costs associated with advertising are expensed as incurred. Advertising expense was $762,658 and $866,275 for the years ended December 31, 2018 and 2017, respectively. These costs include domestic and international tradeshows, website, and sales promotional materials. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs primarily include expenses, including labor, directly related to research and development support. Research and development costs were $1,357,982 and $1,285,000 for 2018 and 2017, respectively. Legal Costs Legal costs relating to loss contingencies are expensed as incurred. See Item 3. Legal Proceedings. Concentration of Credit Risk and Major Customers and Suppliers Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, certificates of deposit, accounts receivable and notes receivable. The Company’s cash, cash equivalents and certificates of deposit are maintained with financial institutions with high credit standings and are FDIC insured deposits. The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. The Company had uninsured cash and cash equivalents of $2,014,987 and $4,674,853 as of December 31, 2018 and 2017, respectively. Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated losses. Historically, the Company has experienced minimal charges relative to doubtful accounts. The Company’s notes receivable are due from two counter parties and are unsecured. Management performs ongoing evaluations of the collectability of its notes receivable and maintains an allowance for estimated losses. Historically, the Company primarily sells its products to United States federal and state agencies. For the year ended December 31, 2018, one federal agency comprised 34% of total net sales. By comparison, for the year ended December 31, 2017, two federal agencies comprised 11% and 12%, and one state agency comprised 12% of total net sales, respectively. As of December 31, 2018, one federal agency comprised 26% and one state agency comprised 20% of total accounts receivables. By comparison, as of December 31, 2017, two commercial customers comprised 22% and 10%, and one state agency comprised 12% of total accounts receivables. Income Taxes Deferred tax assets and liabilities are recorded based on the difference between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company calculates a provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment and interpretation of statutes are required. In assessing realizable deferred tax assets, management assesses the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established. The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized. As of December 31, 2017, the Company reversed all previously recorded valuation allowances. As of December 31, 2018, after review of the deferred tax asset and valuation allowance in accordance with ASC 740, management determined that it is more likely than not that the Company will fully realize all of its deferred tax asset and no valuation allowance was needed. As of December 31, 2018, and 2017, the Company did not recognize any assets or liabilities relative to uncertain tax positions. Interest or penalties, if any, will be recognized in income tax expense. Since there are no significant unrecognized tax benefits as a result of tax positions taken, there are no accrued penalties or interest. Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the financial statements. The Company reflects tax benefits, only if it is more likely than not that the Company will be able to sustain the tax return position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. Management does not believe that there are any uncertain tax positions at December 31, 2018 or 2017. The Company is potentially subject to tax audits for its United States federal and Arizona, California, Florida, Georgia, Hawaii, Illinois, Massachusetts, Maryland, Michigan, North Dakota, New Hampshire, New Jersey, New York, Ohio, Idaho, South Carolina, Tennessee, Texas, Virginia, Washington, and West Virginia state income and excise tax returns for tax years between 2014 and 2018; however, earlier years may be subject to audit under certain circumstances. Tax audits by their very nature are often complex and can require several years to complete. Impairment of Long-Lived Assets Long lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the asset. At December 31, 2018 and 2017, the Company concluded that there has been no indication of impairment to the carrying value of its long-lived assets. As such, no impairment has been recorded. Stock Based Compensation The Company measures the cost of awards of equity instruments based on the grant date fair value of the awards. The Company calculates the fair value of stock-based awards using the Black-Scholes-Merton option pricing valuation model, which incorporates various assumptions including volatility, expected term and risk-free interest rates. There were no grants of stock-based awards during the year ended December 31, 2018. The assumptions used for options granted during the year ended December 31, 2017, and the resulting estimates of weighted-average fair value per share of options granted during this period, are as follows: Year Ended December 31, 2017 Expected dividend yield 0% Expected volatility 95% to 147% Risk-free interest rate 1-2% Expected term 7 years Weighted average grant date fair value $1.94 The expected term of the options is the estimated period of time until exercise and was determined using the SEC’s safe harbor rules, using an average of vesting and contractual terms, as we did not have sufficient historical experience of similar awards. The risk-free interest rate is based on the implied yield available on United States Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future. The estimated fair value of stock-based compensation awards and other options is amortized to expense on a straight-line basis over the relevant vesting period. As share-based compensation expense recognized is based on awards ultimately expected to vest, it is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has elected to recognize forfeitures as they occur rather than estimating them at the time of grant. Net Income per Common Share The net income per common share is computed by dividing net income by the weighted average of common shares outstanding. Diluted net income per share reflects the potential dilution, using the treasury stock method that would occur if outstanding stock options and warrants were exercised. Earnings per share computations are as follows: Year Ended December 31, 2018 2017 Net income $ 818,092 $ 3,262,282 Weighted average common stock outstanding 7,903,801 7,919,568 Incremental shares from stock options 350,575 282,324 Incremental shares from warrants - 195,485 Weighted average common stock outstanding - diluted 8,254,376 8,397,377 Net income per common share and common equivalent shares Basic $ 0.10 $ 0.41 Diluted $ 0.10 $ 0.39 The Company has potentially dilutive securities outstanding that are not included in the diluted earnings per share calcu |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Notes Receivable | Note 2. Notes Receivable An unsecured promissory note was executed on March 23, 2018 by a customer converting its past-due trade receivable from the sale of goods and services in the amount of $400,906. This unsecured promissory note is due in full on or before February 2020. The note bears interest at the rate of ten percent (10%) per annum and requires installment payments of $20,000 principal and interest. Payments are due monthly and include late fees. The principal and accrued interest due as of December 31, 2018 was $374,034. During 2018, the Company recorded an allowance against the note receivable balance in the amount of $266,813. The current portion of the remaining note receivable, net of allowance collectible in one year or less was $96,282 principal and $4,096 accrued interest. The remaining portion of the note, classified as long-term was $6,843. The Company accepted an unsecured convertible promissory note (the “Convertible Note”) from TEC, a related party, in the amount of $292,138 for a portion of their minimum royalty payment due as of May 31, 2018. The note bears interest at the rate of five percent (5%) per annum and contains a provision requiring remittance of not less than 20% of the net proceeds of any private or public offering of its securities in reduction of the Convertible Note. The note has a conversion right, at the sole discretion of the Company, to convert the outstanding balance of principal and accrued interest at any time for shares of common stock of TEC. Prior to the due date, the Company may elect to convert the Convertible Note for shares of common stock in TEC at a twenty-five percent (25%) discount to the price of shares sold to the public in a public offering in connection with a go-public transaction. The issuance of common stock upon conversion shall be made without charge to the Company. No fractional shares shall be issued upon conversion and in lieu of fractional shares, TEC will pay the Company the amount of any obligation that is not converted. Any unpaid balance of principal and accrued interest becomes due and collectible on the earlier of (i) August 1, 2019 (maturity date), or (ii) if declared due and payable in the event of Default. The note principal and accrued interest due as of December 31, 2018 was $298,224, and both balances are classified as current. No reserve for collectability has been recorded as of December 31, 2018. See Note 6. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3. Inventory Inventory consisted of the following as of: December 31, 2018 December 31, 2017 Raw materials and work in process $ 1,717,033 $ 1,778,961 Finished goods - 46,508 Reserve (105,031 ) (105,031 ) Total inventory $ 1,612,002 $ 1,720,438 During 2018, the Company evaluated the useful life of its spare parts inventory. As a result of this evaluation, the Company classified $292,298 of spare parts as Other Assets, long-term on the Balance Sheet at December 31, 2018. At December 31, 2017, spare parts in the amount of $298,136 was included in Inventory, net on the Balance Sheet. The balance at December 31, 2017 was not reclassified to conform to the current year presentation as the amount was not deemed material by management. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4. Property and Equipment Property and equipment consisted of the following as of: December 31, 2018 December 31, 2017 Computer equipment $ 1,054,004 $ 861,924 Furniture and office equipment 207,921 202,867 Machinery and equipment 1,021,188 925,495 Leasehold improvements 324,313 324,313 Total property and equipment 2,607,426 2,314,599 Less: Accumulated depreciation (1,929,181 ) (1,637,326 ) Property and equipment, net $ 678,245 $ 677,273 Depreciation expense was $291,855 and $270,881 for the years ended December 31, 2018 and 2017, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 5. Accrued Expenses Accrued compensation and related costs consisted of the following as of: December 31, 2018 December 31, 2017 Salaries and wages payable $ 147,677 $ 115,481 401(k) contributions payable 8,232 30,532 Accrued paid time off 265,962 257,751 Profit sharing payable 191,820 189,727 Total accrued compensation and related costs $ 613,691 $ 593,491 Accrued expenses and other current liabilities consisted of the following as of: December 31, 2018 December 31, 2017 Manufacturer’s warranties $ 200,505 $ 135,000 Warranties-other 189,983 - Loss contingencies 40,000 - Taxes payable 202,118 108,573 Total accrued expenses and other current liabilities $ 632,606 $ 243,573 |
Collaboration Agreement with Re
Collaboration Agreement with Related Party | 12 Months Ended |
Dec. 31, 2018 | |
Collaboration Agreement With Related Party | |
Collaboration Agreement with Related Party | Note 6. Collaboration Agreement with Related Party On January 16, 2015, the Company entered into a Co-Venture Agreement (the “Co-Venture Agreement”) with Modern Round, LLC (“MR”), a wholly-owned subsidiary of TEC, formerly MREC, a related party. The Co-Venture Agreement grants TEC an exclusive non-transferrable license to use the Company’s technology and certain equipment solely for use at locations to operate the concept, as defined in the Co-Venture Agreement. Throughout the duration of the Co-Venture Agreement, TEC 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. Under the terms of the original agreement, 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, TEC may pay to VirTra the difference between the amount of total royalty payments and the minimum specified in the agreement to maintain exclusivity. On August 16, 2017, the Company entered into the first amendment to the Co-Venture Agreement to permit TEC to sublicense the VirTra Technology to third party operators of stand-alone location-based entertainment companies. TEC agreed to pay the Company royalties for any such sublicenses in an amount equal to 10% of the revenue paid to TEC in cases where TEC pays for the cost of the equipment for such location or 14% of the revenue paid to TEC in cases where it does not pay for the cost of the equipment. In April 2018, Modern Round effected a 1 for 12,000 reverse stock split, followed by a 2,000 for 1 forward stock split completed in November 2018. As a result, the Company holds, as of December 31, 2018, 560,000 shares of TEC common stock representing approximately 5.9% of the issued and outstanding common shares of TEC. The Company determined a bona fide offer by TEC to sell investments for an amount less than the carrying amount of the Company’s investment occurred during the years ended December 31, 2018 and 2017, respectively, and an impairment loss of $254,933 and $613,241 was taken to write-down the TEC investment to the estimated fair value. The Company recognized the impairment loss on its investment in TEC as an operating expense. The Company recorded its investment at cost minus impairment as of December 31, 2018 and 2017, respectively, of $1,120,000 and $1,374,933. On July 23, 2018, the Company entered into the second amendment to the Co-Venture Agreement with TEC to (i) confirm the minimum royalty deficiency benefit due for the royalty period ended May 31, 2018; (ii) establish payment terms for the minimum royalty deficiency benefit due, to include both cash and promissory note payment; (iii) clarify the exclusivity provisions of the Agreement; and (iv) amend the minimum royalty calculations to only TEC branded facilities. For the years ended December 31, 2018 and 2017, respectively, the Company recognized license fee income (royalties) from TEC of $549,568 and $289,947. In addition, at December 31, 2018, the Company holds a warrant to purchase 25,577 shares of TEC common stock, adjusted for the 1 for 12,000 reverse stock split and the 2,000 for 1 forward stock split, at an exercise price of $2.4436 per share, as adjusted. This warrant became exercisable on the date of grant of April 14, 2015 and expires on the tenth anniversary of the date of grant, if not earlier pursuant to the terms of the option. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7. Related Party Transactions During the years ended December 31, 2018 and 2017, respectively, the Company issued nil and 41,250 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 $4.42. All options are exercisable within seven years of the grant date. During the years ended December 31, 2018 and 2017, the Company redeemed 220,523 and 67,500 previously awarded options reaching expiration from related parties, including the Company’s CEO, COO, a Board Director and Executives. These redemptions eliminated the stock options and resulted in a total of $551,682 and $160,050 in additional compensation expense in 2018 and 2017, respectively. During the years ended December 31, 2018 and 2017, related parties exercised 10,700 and nil previously awarded options for the exercise price of $10,500 and $0, respectively, resulting in issuance of common stock to the CEO and one member of the Board of Directors. Mr. Saltz, who is a member of our Board of Directors, is also Chairman of the Board of Directors of TEC, as well as, a majority stockholder of TEC. The Company has entered into a Co-venture Agreement with TEC as disclosed in Note 6. In addition, the Company owns 560,000 shares of TEC common stock representing approximately 5.9% of the issued and outstanding shares of TEC common stock. The Company recognized $549,568 and $289,947 for license fees (royalties) for the years ended December 31, 2018 and 2017, pursuant to the terms of the Co-Venture Agreement. As of December 31, 2018, and 2017, TEC had accounts receivable balances outstanding of $16,743 and $81,235, respectively. Mr. Richardson, who is a member of our Board of Directors, is also acting CEO of Natural Point, Inc., a vendor of the Company. In 2018 and 2017, the Company purchased specialized equipment from Natural Point in the amount of $122,758 and $138,569, respectively. As of December 31, 2018, and 2017, respectively, the Company had a prepaid credit balances outstanding with Natural Point of $1,020 in each respective year. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Operating Lease Obligations We lease approximately 37,729 rentable square feet of office and warehouse space from an unaffiliated third party for our corporate office, manufacturing, assembly, warehouse and shipping facility located at 7970 South Kyrene Road, Tempe, Arizona 85284. In addition, we lease approximately 4,529 rentable square feet of office and industrial space from an unaffiliated third party for our machine shop at 2169 East 5th St., Tempe, Arizona 85284. The machine shop lease expires in March 2019. In April, 2019 the Company will relocate the machine shop from the Fifth St. location to 7910 South Kyrene Road, within the same business complex as our main office. The Company executed a lease amendment to add an additional 5,131 rentable square feet for the machine shop and extended its existing lease through April 2024. Future minimum lease payments as of December 31, 2018 under non-cancelable operating leases are as follows: 2019 $ 333,825 2020 357,452 2021 368,060 2022 379,097 2023 390,562 Thereafter 131,152 Total $ 1,960,148 The Company has a deferred rent liability of $46,523 and $75,444 as of December 31, 2018 and 2017, respectively, relative to the increasing future minimum lease payments. Rent expense was $518,020 and $496,564 for the years ended December 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. The Company evaluates contingencies on an on-going basis and has established loss provisions for matters in which losses are probable and the amount of loss can be reasonably estimated. In June, 2018, the Company has initiated a declaratory judgment action in the Superior Court of the State of Arizona. A former customer has raised allegations of breach of contract and breach of warranty and the Company seeks relief and clarification from the Superior Court regarding the allegations and the Company’s obligations under the contract with the former customer. Management believes that the declaratory judgment action will not have a material adverse effect on our results of operations and the Company will vigorously defend against any allegations raised by the former customer. The Company has established a probable and estimated loss contingency of $40,000 as of December 31, 2018. Employment Agreements On April 2, 2012, the Company entered into three-year Employment Agreements with its Chief Executive Officer and Chief Operating Officer that call for base annual salaries of $195,000 and $175,000, respectively, subject to cost of living adjustments, and contain automatic one-year extension provisions. These contracts have been renewed annually with upward adjustments each year. If the Company’s Chief Executive Officer or Chief Operating Officer are terminated by the Company for any reason other than for Cause, or if the Executive voluntarily terminates his own employment for Good Reason but not including a Change in Control, then the Company shall, subject to the terms of the Employment Agreements, be obligated to pay the Executive an amount equal to the greater of (a) the Executive’s annual base salary in effect on the day preceding the date of such termination or (b) the Executive’s annual base salary during the twelve full calendar months preceding the date of such termination, times three. If a Change of Control of the Company occurs while the Executive is an employee of the Company and within 36 months from the date of such Change in Control the Company terminates the Executive’s employment for any reason (except for the death or disability of the Executive or for Cause) or the Executive terminates his employment for any reason, then the Company shall, subject to certain limitations, pay the Executive any earned and accrued but unpaid base salary through the date of termination plus an amount of severance pay equal to the greater of (a) the Executive’s annual base salary in effect on the day preceding the date on which the Change of Control occurred or (b) the Executive’s annual base salary during the twelve full calendar months preceding the date on which the Change of Control occurred, times four. These employment agreements have been automatically extended. Profit Sharing VirTra provides a discretionary profit-sharing program that pays out a percentage of company profits each year as a cash bonus to active and eligible employees. The cash payment is typically split into two equal payments and distributed pro-rata to employees in April and October of the following year after the completion of the annual financial audit. For the years ending December 31, 2018 and 2017, the amount charged to operations was fifteen percent (15%) of net profit, excluding one-time impairment loss and income tax benefit from the reversal of the valuation allowance recorded against the deferred tax assets of the Company. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes The Company accounts for its deferred tax assets and liabilities, including excess tax benefits of share-based payments, based on the tax ordering of deductions to be used on its tax returns. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities is as follows: December 31, December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 586,000 $ 513,000 Deferred revenue 989,000 1,033,000 Non-qualified stock option expense 147,000 410,000 Investment in That’s Eatertainment (f/k/a MREC), a related party 39,000 28,000 Reserves, accruals and other 160,000 93,000 Tax intangible assets and accumulated depreciation/amortization 479,000 633,000 Total deferred tax assets 2,400,000 2,710,000 Less: Valuation allowance - - Net deferred tax assets $ 2,400,000 $ 2,710,000 Prior to the year ended December 31, 2017, the Company maintained a valuation allowance equal to the potential benefit of the net deferred tax assets as it was more likely than not that such assets would not be realized. During the year ended December 31, 2017, the Company re-evaluated the realization of its net deferred tax assets and determined that such assets were likely to be fully realized. As such, during the year ended December 31, 2017, the Company reversed its previously recognized valuation allowance of $4,425,000 and recorded a related income tax benefit of $2,710,000. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S federal corporate tax rate from 35% to 21%. Accordingly, the Company has modified the value of the deferred tax assets and liabilities, including the net operating loss carryforward, at December 31, 2017. Prior to enactment of the new tax reform, the Company had total net deferred tax assets of $4,086,910 at December 31, 2017. Taking the new tax reform into consideration, the total net deferred tax assets was $2,710,000 at December 31, 2017. Internal Revenue Code Section 382 limits the ability to utilize net operating losses if a 50% change in ownership occurs over a three-year period. Such limitation of the net operating losses has not occurred. The Company believes it has approximately $2.4 million of federal net operating loss carry-forwards, as of December 31, 2018, that are available to offset future taxable income that expire in various years through 2034. Significant components of the (provision) benefit for income tax as follows: December 31, December 31, 2018 2017 Current $ - $ 205,000 Deferred 310,000 1,714,000 Change in valuation allowance - (4,425,000 ) Provision for income taxes $ 310,000 $ (2,506,000 ) The Company is subject to federal and state taxes. A reconciliation of the Company’s effective income tax rate to the federal statutory rate is as follows: December 31, December 31, 2018 2017 Federal income tax expense at the statutory rate $ 237,000 $ 257,000 State income taxes, net of federal benefit 62,000 205,000 Permanent differences 72,932 20,000 Tax return true-ups and other (61,932 ) 61,000 Change in federal income tax rates - 1,376,000 Change in valuation allowance - (4,425,000 ) Provision for income taxes $ 310,000 $ (2,506,000) |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 10. Stockholders’ Equity Authorized Capital Common Stock. Authorized Shares Rights and Preferences (i) Each holder of Common Stock shall be entitled to one (1) vote for each share of Common Stock held of record by such holder. The holders of shares of Common Stock shall not have cumulative voting rights. (ii) Each holder of Class A Common Stock shall be entitled to ten (10) votes for each share of Class A Common Stock held of record by such holder. The holders of shares of Class A Common Stock shall not have cumulative voting rights. (iii) The holders of Common Stock and Class A Common Stock shall vote together as a single class on all matters on which stockholders are generally entitled to vote. (iv) The holders of Class B Common Stock shall not be entitled to vote on any matter, except that the holders of Class B Common Stock shall be entitled to vote separately as a class with respect to amendments to the Articles of Incorporation that increase or decrease the aggregate number of authorized shares of such class, increase or decrease the par value of the shares of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely. Preferred Stock Authorized Shares Rights and Preferences On June 23, 2016 the Company filed a Certificate of Amendment with the Secretary of State of Texas designating 25,000 shares of Series A Preferred Stock, par value $0.005 per share (the “Series A Preferred”). Holders of the Series A Preferred are entitled to 300 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event that such votes do not total at least 66.67% of all votes, then regardless of the provisions of this paragraph, in any such case, the votes cast by the holders of the Series A Preferred shall be equal to 66.67% of all votes cast at any meeting of stockholders, or any issue put to the stockholders for voting and the Corporation may state that any such action was had by majority vote of all stockholders. Stock Repurchase On October 25, 2016 the Company’s Board of Directors authorized the repurchase of up to $1,000,000 of its common stock under the US Securities and Exchange Commission (“SEC”) rule 10B-18. Purchases made pursuant to this authorization will be made in the open market, in privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with the SEC Rule. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. Treasury Stock The Company repurchased and cancelled the following treasury shares: Year Ended December 31, 2018 2017 Period: Total Number of Shares Repurchased Average Price Paid per Share Total Number of Shares Repurchased Average Price Paid per Share Repurchased Shares - January-March - $ - - $ - Repurchased Shares - April-June - $ - 3,450 $ 4.00 Repurchased Shares - July-September - $ - 17,489 $ 4.74 Repurchased Shares - October - $ - 2,528 $ 6.12 Repurchased Shares - November 17,942 $ 3.90 - $ - Repurchased Shares - December 80,121 $ 3.89 - $ - Total 98,063 $ 3.89 23,467 $ 4.78 Repurchased Shares Status 2018 2017 Repurchased Shares Cancelled 87,356 23,467 Repurchased Shares Held in Treasury 10,707 - Total 98,063 23,467 Approximate Funds Remaining in Repurchase Plan as of December 31, 2018 $ 506,000 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 option grants are at the discretion of the Board of Directors and are generally seven years. Stock option awards to the Board were suspended effective October 1, 2017. Upon the exercise of these options, the Company expects to issue new authorized shares of its common stock. The following table summarizes all compensation plan stock options as of: December 31, 2018 December 31, 2017 Number of Weighted Number of Weighted Stock Options Exercise Price Stock Options Exercise Price Options outstanding, beginning of year 531,667 $ 1.85 557,917 $ 1.60 Granted - - 41,250 4.42 Redeemed (220,523 ) 1.30 (67,500 ) 1.25 Exercised (10,700 ) 1.40 - - Expired / terminated (21,277 ) 1.40 - - Options outstanding, end of year 279,167 $ 2.34 531,667 $ 1.85 Options exercisable, end of year 279,167 $ 2.34 521,667 $ 1.85 The Company did not have any non-vested stock options outstanding as of December 31, 2018. The weighted average contractual term for options outstanding and exercisable at December 31, 2018 was 7 years. During the year ended December 31, 2018, the Company recorded stock compensation in the amount of $7,124 related to stock options outstanding at December 31, 2017 that vested during 2018. The following table summarizes information about stock options outstanding and exercisable as of December 31, 2018: Range of Exercise Price Number of Options Outstanding Weighted Average Exercise Price Number of Options Exercisable Weighted Average Exercise Price $.40 - $.99 78,750 $ 0.88 78,750 $ 0.88 $1.00 - $1.99 81,250 $ 1.40 81,250 $ 1.40 $2.00 - $2.99 42,500 $ 2.48 42,500 $ 2.48 $3.00 - $3.99 25,000 $ 3.50 25,000 $ 3.50 $4.00 - $4.99 25,000 $ 4.25 25,000 $ 4.25 $5.00 - $5.99 26,667 $ 5.50 26,667 $ 5.50 $.40 - $2.99 279,167 $ 2.25 279,167 $ 2.25 The aggregate intrinsic value of options outstanding and options exercisable were $331,590 and $1,707,621 as of December 31, 2018 and 2017, respectively. The total intrinsic value of options exercised during the year ended December 31, 2018 was $42,973. Further, the Company received a payment in the amount of $10,500 related to the exercise of options. No stock options were exercised during the year ended December 31, 2017. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock for those stock options that have an exercise price lower than the fair value of the Company’s common stock. Options with an exercise price above the fair value of the Company’s common stock are considered to have no intrinsic value. The total fair value of shares vested during the years ended December 31, 2018 and 2017 is $30,700 and $126,200, respectively. 2017 Equity Incentive Plan On August 23, 2017, our board approved, subject to stockholder approval at the annual meeting of stockholders on October 6, 2017, 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 automatically increases 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. 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. As of December 31, 2018, and 2017, there were no options issued under this plan. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11. Subsequent Events On January 9, 2019, VirTra’s Board of Directors authorized an additional $1 million be allocated for the repurchase of VirTra’s stock under the existing 10B-18 plan. The Company has continued to purchase stock under the plan and as of March 28, 2019 had purchased an additional 68,239 shares at an average cost of $3.82 per share. On February 5, 2019, VirTra completed an Asset Purchase Agreement with Tiberius Technology, LLC, to purchase certain patents, inventory and consulting services. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Significant accounting estimates in these financial statements include valuation assumptions for share-based payments, allowance for doubtful accounts and notes receivable, inventory reserves, accrual for warranty reserves, the carrying value of long-lived assets, income tax valuation allowances, the carrying value of cost basis investments, and the allocation of the transaction price to the performance obligations in our contracts with customers. |
Revenue Recognition | Revenue Recognition Between May 2014 and December 2016, 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. 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 the financial statements. Effective January 1, 2018, the Company records revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers.” Under ASC 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. Significant judgment is necessary when making these determinations. The Company’s primary sources of revenue are derived from simulator and accessories sales, training and installation, the sale of customizable software and the sale of extended service-type warranties. Sales discounts are presented in the financial statements as reductions in determining net revenues. Credit sales are recorded as current assets (accounts receivable). Prepaid deposits received at the time of sale and extended warranties purchased are recorded as current and long-term liabilities (deferred revenue) until earned. The following briefly summarizes the nature of our performance obligations and method of revenue recognition: Performance Obligation Method of Recognition Simulator and accessories Upon transfer of control Installation and training Upon completion or over the period of services being rendered Extended service-type warranty Deferred and recognized over the life of the extended warranty Customized software Upon transfer of control Sales-based royalty exchanged for license of intellectual property Recognized as the performance obligation is satisfied over time – which is as the sales occur. The Company recognizes revenue upon transfer of control or upon completion of the services for the simulator and accessories; for the installation and training and customized software performance obligations as the customer has the right and ability to direct the use of these products and services and the customer obtains substantially all of the remaining benefit from these products and services at that time. For the sales-based royalty exchanged for license of intellectual property, the Company recognized revenue as the sales occur over time. The Company recognizes revenue on a straight-line basis over the period of services being rendered for the extended service-type warranties as these warranties represent a performance obligation to “stand ready to perform” over the duration of the warranties. As such, the warranty service is performed continuously over the warranty period. Each contract states the transaction price. The contracts do not include variable consideration, significant financing components or noncash consideration. The Company has elected to exclude sales and similar taxes from the measurement of the transaction price. The contract’s transaction price is allocated to the performance obligations based upon their stand-alone selling prices. Discounts to the stand-alone selling prices, if any, are allocated proportionately to each performance obligation. Disaggregation of Revenue Under ASC 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 recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Year ended December 31, 2018 2017 Domestic International Total Domestic International Total Simulators and accessories $ 12,562,982 $ 2,018,828 $ 14,581,810 $ 11,006,489 $ 2,502,075 $ 13,508,564 Extended service-type warranties 1,719,347 176,730 1,896,077 1,530,964 211,692 1,742,656 Customized software 485,409 11,940 497,349 489,671 182,200 671,871 Installation and training 400,916 146,761 547,677 299,793 11,394 311,187 Licensing and royalties 557,213 - 557,213 289,947 - 289,947 Total Revenue $ 15,725,867 $ 2,354,259 $ 18,080,126 $ 13,616,864 $ 2,907,361 $ 16,524,225 Prior to the adoption of ASU 2014-09, the Company recognized revenue for its products and services when it was realized or realizable and earned. Revenue was considered realized and earned when: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred and/or services have been rendered; (iii) the price is fixed and determinable; and (iv) collection of the resulting receivable is reasonably assured. Shipping fees charged to customers were recorded as a component of net revenues. Further, certain components of the Company’s sales included multiple elements comprising of both products and services. The Company’s revenue recognition fell under ASC 605-25, Multiple Element Arrangements |
Customer Deposits | Customer Deposits Customer deposits are recorded as a current liability under deferred revenue on the accompanying balance sheet and totaled $186,450 and $709,676 as of December 31, 2018 and 2017, respectively. Changes in deferred revenue amounts related to customer deposits will fluctuate from year to year based upon the mix of customers for the year and the Company’s backlog of open contracts. Customer deposits are considered a deferred liability until completion of the customer’s contract performance obligations. When revenue is recognized, the deposit is applied to customer’s receivable balance. |
Warranty | Warranty The Company does warranty its products from manufacturing defects on a limited basis for a period of one year after purchase, but also sells separately priced extended service-type warranties for periods of up to four years after the expiration of the standard one-year warranty. During the term of the initial one-year warranty, if the device fails to operate properly from defects in materials and workmanship, the Company will fix or replace the defective product. Deferred revenue for separately priced extended warranties one year or less totaled $1,604,637 and $2,156,950 as of December 31, 2018 and 2017, respectively. Deferred revenue for separately priced extended warranties longer than one year totaled $962,356 and $0 as of December 31, 2018 and 2017, respectively. The accrual for the one-year manufacturer’s warranty liability totaled $200,505 and $135,000 as of December 31, 2018 and 2017, respectively. During the years ended December 31, 2018 and 2017, the Company recognized revenue of $1,896,077 and $1,787,081, respectively, related to the extended service-type warranties that was amortized from the deferred revenue balance. Changes in deferred revenue amounts related to extended service-type warranties will fluctuate from year to year based upon the average remaining life of the warranties at the beginning of the period and new extended service-type warranties sold during the period. |
Customer Retainage | Customer Retainage Customer retainage is recorded as a current liability under deferred revenue on the accompanying balance sheet and totaled $133,220 and $126,286 as of December 31, 2018 and 2017, respectively. Changes in deferred revenue amounts related to customer retainage will fluctuate from year to year based upon the customer’s contract completion date allowing the Company to invoice and recover the retainage. |
Licensing and Royalties with Related Party | Licensing and Royalties with Related Party As discussed further in Note 6. Collaboration Agreement, the Company licenses intellectual property to Modern Round, LLC (“MR”), a wholly-owned subsidiary of That’s Eatertainment Corp. (“TEC”), f/k/a Modern Round Entertainment Corp. (“MREC”), a related party, in exchange for sales-based royalties. Revenues from this agreement are recognized in accordance with the terms of the contract as the sales occur. The Company receives additional immaterial sales-based royalties from strategic partners. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards 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. This standard was adopted on January 1, 2018, including all interim reporting periods within the fiscal year. The Company recorded an impairment loss on its investment in TEC, f/k/a MREC, a related party, to fair value in 2018. The adoption of ASU 2016-01 did not have a material impact on the financial statements. Upon adoption, the Company has elected to utilize the cost minus impairment approach as the investment in TEC does not have a readily determinable fair value as of the reporting date. See Note 6. Collaboration Agreement. 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 flows. 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 2016-18 did not have a material impact on the financial statement presentation. In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014- 09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Company adopted this standard on January 1, 2018, and its adoption did not have a material impact on the Company’s revenue recognition. 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 of 2017-05 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 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 adoption of 2017-09 did not have a material impact on the financial statements. In November 2017, the FASB issued ASU No. 2017-14 “Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) (SEC Update)”. The ASU amends SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403, which bring existing guidance into conformity with Topic 606, Revenue from Contracts with Customers. The amendments were effective upon issuance. These amendments did not have a material effect on the Company’s financial statements. |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements Level 1: Quoted prices in active markets for identical assets or liabilities; Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimate of assumptions that market participants would use in pricing the asset or liability. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, certificates of deposit, accounts receivable, notes and interest receivables, accounts payable, and accrued liabilities. The fair value of financial instruments, except for long-term notes receivable, approximates their carrying values, using level 3 inputs, at December 31, 2018 and 2017 due to their short maturities. The fair value of the notes receivable approximates its carrying value, using level 3 inputs, at December 31, 2018. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. |
Certificates of Deposit and Mutual Funds | Certificates of Deposit and Mutual Funds The Company invests its excess cash in certificates of deposit and money market mutual funds issued by financial institutions with high credit ratings. The certificates of deposit generally have average maturities of approximately six months and are subject to penalties for early withdrawal. The money market mutual funds are open ended and can be withdrawn at any time without penalty. |
Accounts and Notes Receivable and Allowance for Doubtful Accounts | Accounts and Notes Receivable and Allowance for Doubtful Accounts The Company recognizes an allowance for losses on accounts receivable based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. Accounts receivable do not bear interest and are charged off after all reasonable collection efforts have been taken. As of December 31, 2018, and 2017, the Company maintained an allowance for doubtful accounts of $23,044 and $12,290, respectively. Notes receivable are carried at their estimated collectible amounts. Interest income on notes receivable is recognized using the effective interest method. Notes receivable are periodically evaluated for collectability based on the credit history, the current financial condition of the counter party, and the known and inherent risks in the notes. Notes receivable are placed on nonaccrual status when they become 90 days past due and the customer has not made a payment in over 60 days. Upon suspension of the accrual of interest, interest income is subsequently recognized to the extent cash payments are received. Accrual of interest is resumed when notes are removed from non-accrual status. Notes receivable are charged against the allowance for credit losses when they are deemed to be uncollectible. The allowance for uncollectible notes receivable was nil at December 31, 2017. During 2018, the Company recorded an allowance against a note receivable balance of $369,938. At December 31, 2018, the allowance for uncollectible notes receivable was $266,813. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value with cost being determined on the average cost method. Work in progress and finished goods inventory includes an allocation for capitalized labor and overhead. The Company routinely evaluates the carrying value of inventory for slow moving and potentially obsolete inventory and, when appropriate, will record an adjustment to reduce inventory to its estimated net realizable value. As of December 31, 2018 and 2017, inventory reserves were $105,031. |
Investments in Other Companies | Investments in Other Companies Minority investments in other companies are accounted for under the cost method of accounting because the Company does not have the ability to exercise significant influence over the other companies’ operations. Under the cost method of accounting, investments in private companies are carried at cost and are only adjusted for other-than- temporary declines in fair value and distribution of earnings. For investments in public companies that have readily determinable fair values, the Company classifies its investments as available-for-sale, and accordingly records these investments at their fair values with unrealized gains and losses included as a separate component of stockholders’ equity and in total comprehensive income (loss). Upon sale or liquidation, realized gains and losses are included in the statements of operations. The adoption of ASU 2016-01 requires investments in other companies that do not have readily determinable fair value be accounted for 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. This standard was adopted on January 1, 2018, including all interim reporting periods within the fiscal year. The adoption of ASU 2016-01 did not have a material impact on the financial statements. Upon adoption, the Company has elected to utilize the cost minus impairment approach because the investment in TEC does not have a readily determinable fair value as of the reporting date. See Note 6. Collaboration Agreement. Management regularly evaluates the recoverability of its investment based on the investee company’s performance and financial position. During the years ended December 31, 2018 and 2017, the Company recognized an impairment loss of $254,933 and $613,241, respectively. Management regularly assesses the classification of its investments. During the year ended December 31, 2017, the $613,241 impairment loss was recorded as Other income (expense) on the Statement of Operations as the Company’s agreement with Investment in That’s Eatertainment (f/k/a MREC) was not considered to be a significant part of the Company’s operations. During 2018, the Company believes that its agreement with That’s Eatertainment has become more significant to the Company’s operations due to the increased royalty revenues, and as such, the $254,933 impairment loss recognized during the year-ended December 31, 2018 has been recorded as an operating expense on the Statement of Operations. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, net of depreciation. Gains or losses related to retirements or disposition of fixed assets are recognized in operations in the period incurred. Costs of normal repairs and maintenance are charged to expense as incurred, while betterments or renewals are capitalized. Depreciation commences at the time the assets are placed in service. Depreciation is provided using the straight-line method over the estimated economic lives of the assets or for leasehold improvements, over the shorter of the estimated useful life or the remaining lease term, which are summarized as follows: Computer equipment 3-5 years Furniture and office equipment 5-7 years Machinery and equipment 5-7 years Leasehold improvements 7 years |
Cost of Products Sold | Cost of Products Sold Cost of products sold represents manufacturing costs, consisting of materials, labor and overhead related to finished goods and components. Cost of products sold does not include depreciation of fixed assets. Shipping costs incurred related to product delivery are included in cost of products sold. |
Advertising Costs | Advertising Costs Costs associated with advertising are expensed as incurred. Advertising expense was $762,658 and $866,275 for the years ended December 31, 2018 and 2017, respectively. These costs include domestic and international tradeshows, website, and sales promotional materials. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development costs primarily include expenses, including labor, directly related to research and development support. Research and development costs were $1,357,982 and $1,285,000 for 2018 and 2017, respectively. |
Legal Costs | Legal Costs Legal costs relating to loss contingencies are expensed as incurred. See Item 3. Legal Proceedings. |
Concentration of Credit Risk and Major Customers and Suppliers | Concentration of Credit Risk and Major Customers and Suppliers Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, certificates of deposit, accounts receivable and notes receivable. The Company’s cash, cash equivalents and certificates of deposit are maintained with financial institutions with high credit standings and are FDIC insured deposits. The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. The Company had uninsured cash and cash equivalents of $2,014,987 and $4,674,853 as of December 31, 2018 and 2017, respectively. Sales are typically made on credit and the Company generally does not require collateral. Management performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for estimated losses. Historically, the Company has experienced minimal charges relative to doubtful accounts. The Company’s notes receivable are due from two counter parties and are unsecured. Management performs ongoing evaluations of the collectability of its notes receivable and maintains an allowance for estimated losses. Historically, the Company primarily sells its products to United States federal and state agencies. For the year ended December 31, 2018, one federal agency comprised 34% of total net sales. By comparison, for the year ended December 31, 2017, two federal agencies comprised 11% and 12%, and one state agency comprised 12% of total net sales, respectively. As of December 31, 2018, one federal agency comprised 26% and one state agency comprised 20% of total accounts receivables. By comparison, as of December 31, 2017, two commercial customers comprised 22% and 10%, and one state agency comprised 12% of total accounts receivables. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recorded based on the difference between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company calculates a provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment and interpretation of statutes are required. In assessing realizable deferred tax assets, management assesses the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established. The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized. As of December 31, 2017, the Company reversed all previously recorded valuation allowances. As of December 31, 2018, after review of the deferred tax asset and valuation allowance in accordance with ASC 740, management determined that it is more likely than not that the Company will fully realize all of its deferred tax asset and no valuation allowance was needed. As of December 31, 2018, and 2017, the Company did not recognize any assets or liabilities relative to uncertain tax positions. Interest or penalties, if any, will be recognized in income tax expense. Since there are no significant unrecognized tax benefits as a result of tax positions taken, there are no accrued penalties or interest. Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the financial statements. The Company reflects tax benefits, only if it is more likely than not that the Company will be able to sustain the tax return position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. Management does not believe that there are any uncertain tax positions at December 31, 2018 or 2017. The Company is potentially subject to tax audits for its United States federal and Arizona, California, Florida, Georgia, Hawaii, Illinois, Massachusetts, Maryland, Michigan, North Dakota, New Hampshire, New Jersey, New York, Ohio, Idaho, South Carolina, Tennessee, Texas, Virginia, Washington, and West Virginia state income and excise tax returns for tax years between 2014 and 2018; however, earlier years may be subject to audit under certain circumstances. Tax audits by their very nature are often complex and can require several years to complete. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets Long lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the asset. At December 31, 2018 and 2017, the Company concluded that there has been no indication of impairment to the carrying value of its long-lived assets. As such, no impairment has been recorded. |
Stock Based Compensation | Stock Based Compensation The Company measures the cost of awards of equity instruments based on the grant date fair value of the awards. The Company calculates the fair value of stock-based awards using the Black-Scholes-Merton option pricing valuation model, which incorporates various assumptions including volatility, expected term and risk-free interest rates. There were no grants of stock-based awards during the year ended December 31, 2018. The assumptions used for options granted during the year ended December 31, 2017, and the resulting estimates of weighted-average fair value per share of options granted during this period, are as follows: Year Ended December 31, 2017 Expected dividend yield 0% Expected volatility 95% to 147% Risk-free interest rate 1-2% Expected term 7 years Weighted average grant date fair value $1.94 The expected term of the options is the estimated period of time until exercise and was determined using the SEC’s safe harbor rules, using an average of vesting and contractual terms, as we did not have sufficient historical experience of similar awards. The risk-free interest rate is based on the implied yield available on United States Treasury zero-coupon issues with an equivalent remaining term. The Company has not paid dividends in the past and does not plan to pay any dividends in the near future. The estimated fair value of stock-based compensation awards and other options is amortized to expense on a straight-line basis over the relevant vesting period. As share-based compensation expense recognized is based on awards ultimately expected to vest, it is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has elected to recognize forfeitures as they occur rather than estimating them at the time of grant. |
Net Income Per Common Share | Net Income per Common Share The net income per common share is computed by dividing net income by the weighted average of common shares outstanding. Diluted net income per share reflects the potential dilution, using the treasury stock method that would occur if outstanding stock options and warrants were exercised. Earnings per share computations are as follows: Year Ended December 31, 2018 2017 Net income $ 818,092 $ 3,262,282 Weighted average common stock outstanding 7,903,801 7,919,568 Incremental shares from stock options 350,575 282,324 Incremental shares from warrants - 195,485 Weighted average common stock outstanding - diluted 8,254,376 8,397,377 Net income per common share and common equivalent shares Basic $ 0.10 $ 0.41 Diluted $ 0.10 $ 0.39 The Company has potentially dilutive securities outstanding that are not included in the diluted earnings per share calculation for the years ended December 31, 2018 and 2017 because their effect would be anti-dilutive. These potentially dilutive securities, comprised entirely of the Company’s stock options, totaled 65,417 for the years ended December 31, 2018 and 2017. |
Recent Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No. 2016-2, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising for leases. For public companies, ASU No. 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. We will adopt the new standard and the related amendments on its effective date of January 1, 2019. We anticipate adoption of the standard will add approximately $400,000 in right-of-use assets and lease liabilities to our balance sheet and will not significantly impact retained earnings. We will elect the practical expedients upon transition that will retain the lease classification and initial direct costs for any leases that exist prior to adoption of the standard. We will not reassess whether any contracts entered into prior to adoption are leases. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” which provides another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date (such as January 1, 2019, for calendar-year-end public business entities) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption consistent with preparers’ requests. This additional transition method changes only “when” an entity is required to initially apply the transition requirements of the new lease standard; it does not change “how” those requirements apply. For entities that have not adopted Topic 842 before the issuance of this ASU, the effective date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. The Company does not expect 2018-11 to have a material impact on the financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), which provides guidance on measuring credit losses on financial instruments. The amended guidance replaces current incurred loss impairment methodology of recognizing credit losses when a loss is probable with a methodology that reflects expected credit losses and requires a broader range of reasonable and supportable information to assess credit loss estimates. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted on January 1, 2019. The Company is assessing what effect the provisions of 2016-13 will have on the 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)” 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 Accounting Standards Codification (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 2017-11 will have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation–Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” to simplify the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contract with Customers. The amendments are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, with early adoption permitted. The Company does not expect 2018-07 to have a material impact on the financial statements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. In addition, Topic 808 precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. This guidance will be effective for the Company beginning January 1, 2020. The Company is currently evaluating the impact of the adoption of 2018-18 on its financial statements. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenues | Under ASC 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 recognized and the following table illustrates the disaggregation disclosure by customer’s location and performance obligation. Year ended December 31, 2018 2017 Domestic International Total Domestic International Total Simulators and accessories $ 12,562,982 $ 2,018,828 $ 14,581,810 $ 11,006,489 $ 2,502,075 $ 13,508,564 Extended service-type warranties 1,719,347 176,730 1,896,077 1,530,964 211,692 1,742,656 Customized software 485,409 11,940 497,349 489,671 182,200 671,871 Installation and training 400,916 146,761 547,677 299,793 11,394 311,187 Licensing and royalties 557,213 - 557,213 289,947 - 289,947 Total Revenue $ 15,725,867 $ 2,354,259 $ 18,080,126 $ 13,616,864 $ 2,907,361 $ 16,524,225 |
Schedule of Estimated Useful Life of Property and Equipment | Computer equipment 3-5 years Furniture and office equipment 5-7 years Machinery and equipment 5-7 years Leasehold improvements 7 years |
Schedule of Fair Value of Assumptions Used | Year Ended December 31, 2017 Expected dividend yield 0% Expected volatility 95% to 147% Risk-free interest rate 1-2% Expected term 7 years Weighted average grant date fair value $1.94 |
Schedule of Earnings Per Share | Earnings per share computations are as follows: Year Ended December 31, 2018 2017 Net income $ 818,092 $ 3,262,282 Weighted average common stock outstanding 7,903,801 7,919,568 Incremental shares from stock options 350,575 282,324 Incremental shares from warrants - 195,485 Weighted average common stock outstanding - diluted 8,254,376 8,397,377 Net income per common share and common equivalent shares Basic $ 0.10 $ 0.41 Diluted $ 0.10 $ 0.39 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | Inventory consisted of the following as of: December 31, 2018 December 31, 2017 Raw materials and work in process $ 1,717,033 $ 1,778,961 Finished goods - 46,508 Reserve (105,031 ) (105,031 ) Total inventory $ 1,612,002 $ 1,720,438 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consisted of the following as of: December 31, 2018 December 31, 2017 Computer equipment $ 1,054,004 $ 861,924 Furniture and office equipment 207,921 202,867 Machinery and equipment 1,021,188 925,495 Leasehold improvements 324,313 324,313 Total property and equipment 2,607,426 2,314,599 Less: Accumulated depreciation (1,929,181 ) (1,637,326 ) Property and equipment, net $ 678,245 $ 677,273 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Compensation and Related Costs | Accrued compensation and related costs consisted of the following as of: December 31, 2018 December 31, 2017 Salaries and wages payable $ 147,677 $ 115,481 401(k) contributions payable 8,232 30,532 Accrued paid time off 265,962 257,751 Profit sharing payable 191,820 189,727 Total accrued compensation and related costs $ 613,691 $ 593,491 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following as of: December 31, 2018 December 31, 2017 Manufacturer’s warranties $ 200,505 $ 135,000 Warranties-other 189,983 - Loss contingencies 40,000 - Taxes payable 202,118 108,573 Total accrued expenses and other current liabilities $ 632,606 $ 243,573 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | Future minimum lease payments as of December 31, 2018 under non-cancelable operating leases are as follows: 2019 $ 333,825 2020 357,452 2021 368,060 2022 379,097 2023 390,562 Thereafter 131,152 Total $ 1,960,148 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities is as follows: December 31, December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 586,000 $ 513,000 Deferred revenue 989,000 1,033,000 Non-qualified stock option expense 147,000 410,000 Investment in That’s Eatertainment (f/k/a MREC), a related party 39,000 28,000 Reserves, accruals and other 160,000 93,000 Tax intangible assets and accumulated depreciation/amortization 479,000 633,000 Total deferred tax assets 2,400,000 2,710,000 Less: Valuation allowance - - Net deferred tax assets $ 2,400,000 $ 2,710,000 |
Schedule of Significant Component of Income Tax Provision | Significant components of the (provision) benefit for income tax as follows: December 31, December 31, 2018 2017 Current $ - $ 205,000 Deferred 310,000 1,714,000 Change in valuation allowance - (4,425,000 ) Provision for income taxes $ 310,000 $ (2,506,000 ) |
Schedule of Reconciliation of Income Tax Rate | The Company is subject to federal and state taxes. A reconciliation of the Company’s effective income tax rate to the federal statutory rate is as follows: December 31, December 31, 2018 2017 Federal income tax expense at the statutory rate $ 237,000 $ 257,000 State income taxes, net of federal benefit 62,000 205,000 Permanent differences 72,932 20,000 Tax return true-ups and other (61,932 ) 61,000 Change in federal income tax rates - 1,376,000 Change in valuation allowance - (4,425,000 ) Provision for income taxes $ 310,000 $ (2,506,000) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Repurchased and Cancelled Treasury Shares | The Company repurchased and cancelled the following treasury shares: Year Ended December 31, 2018 2017 Period: Total Number of Shares Repurchased Average Price Paid per Share Total Number of Shares Repurchased Average Price Paid per Share Repurchased Shares - January-March - $ - - $ - Repurchased Shares - April-June - $ - 3,450 $ 4.00 Repurchased Shares - July-September - $ - 17,489 $ 4.74 Repurchased Shares - October - $ - 2,528 $ 6.12 Repurchased Shares - November 17,942 $ 3.90 - $ - Repurchased Shares - December 80,121 $ 3.89 - $ - Total 98,063 $ 3.89 23,467 $ 4.78 Repurchased Shares Status 2018 2017 Repurchased Shares Cancelled 87,356 23,467 Repurchased Shares Held in Treasury 10,707 - Total 98,063 23,467 Approximate Funds Remaining in Repurchase Plan as of December 31, 2018 $ 506,000 |
Schedule of Stock Options Activity | The following table summarizes all compensation plan stock options as of: December 31, 2018 December 31, 2017 Number of Weighted Number of Weighted Stock Options Exercise Price Stock Options Exercise Price Options outstanding, beginning of year 531,667 $ 1.85 557,917 $ 1.60 Granted - - 41,250 4.42 Redeemed (220,523 ) 1.30 (67,500 ) 1.25 Exercised (10,700 ) 1.40 - - Expired / terminated (21,277 ) 1.40 - - Options outstanding, end of year 279,167 $ 2.34 531,667 $ 1.85 Options exercisable, end of year 279,167 $ 2.34 521,667 $ 1.85 |
Schedule of Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2018: Range of Exercise Price Number of Options Outstanding Weighted Average Exercise Price Number of Options Exercisable Weighted Average Exercise Price $.40 - $.99 78,750 $ 0.88 78,750 $ 0.88 $1.00 - $1.99 81,250 $ 1.40 81,250 $ 1.40 $2.00 - $2.99 42,500 $ 2.48 42,500 $ 2.48 $3.00 - $3.99 25,000 $ 3.50 25,000 $ 3.50 $4.00 - $4.99 25,000 $ 4.25 25,000 $ 4.25 $5.00 - $5.99 26,667 $ 5.50 26,667 $ 5.50 $.40 - $2.99 279,167 $ 2.25 279,167 $ 2.25 |
Organization and Significant _4
Organization and Significant Accounting Policies (Details Narrative) - USD ($) | Apr. 01, 2018 | Mar. 02, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Reverse stock split | Modern Round effected a 1 for 12,000 reverse stock split, followed by a 2,000 for 1 forward stock split completed in November 2018. | 1 for 2 reverse stock split | In April 2018, Modern Round effected a 1 for 12,000 reverse stock split, followed by a 1 for 2,000 forward stock split completed in November 2018. | |
Deferred revenue liability current | $ 1,924,307 | $ 2,992,912 | ||
Extended warranties description | The Company does warranty its products from manufacturing defects on a limited basis for a period of one year after purchase, but also sells separately priced extended service-type warranties for periods of up to four years after the expiration of the standard one-year warranty. During the term of the initial one-year warranty, if the device fails to operate properly from defects in materials and workmanship, the Company will fix or replace the defective product. | |||
Recognized revenue | $ 1,896,077 | 1,787,081 | ||
Customer Retainage | $ 133,220 | 126,286 | ||
Liquid investment maturity description | The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. | |||
Allowance for doubtful accounts | $ 266,813 | 12,290 | ||
Allowance uncollectible notes receivables | 266,813 | |||
Inventory reserves | 105,031 | 105,031 | ||
Impairment loss | (613,241) | |||
Advertising expense | 762,658 | 866,275 | ||
Research and development | 1,357,982 | 1,285,000 | ||
Deposit insurance coverage limit | 250,000 | |||
Uninsured cash and cash equivalents | $ 2,014,987 | $ 4,674,853 | ||
Potentially dilutive securities total shares | 65,417 | 65,417 | ||
Right of use asset and liabilities | $ 400,000 | |||
One Commercial Customers [Member] | ||||
Concentration of credit risk | 22.00% | |||
Two Commercial Customers [Member] | ||||
Concentration of credit risk | 10.00% | |||
One Federal Agency [Member] | Total Net Sales [Member] | ||||
Concentration of credit risk | 34.00% | 11.00% | ||
One Federal Agency [Member] | Accounts Receivables [Member] | ||||
Concentration of credit risk | 26.00% | |||
Two Federal Agency [Member] | Total Net Sales [Member] | ||||
Concentration of credit risk | 12.00% | |||
One State Agency [Member] | Total Net Sales [Member] | ||||
Concentration of credit risk | 12.00% | |||
One State Agency [Member] | Accounts Receivables [Member] | ||||
Concentration of credit risk | 20.00% | 12.00% | ||
Eatertainment [Member] | ||||
Impairment loss | $ 254,933 | $ 613,241 | ||
Note Receivable [Member] | ||||
Allowance for doubtful accounts | 369,938 | |||
Warrants [Member] | Less Than One Year [Member] | ||||
Extended warranties | 1,604,637 | 2,156,950 | ||
Warrants [Member] | Longer Than One Year [Member] | ||||
Extended warranties | 962,356 | 0 | ||
Warrants [Member] | One Year [Member] | ||||
Extended warranties | 200,505 | 135,000 | ||
Customer Deposits [Member] | ||||
Deferred revenue liability current | $ 186,450 | $ 709,676 |
Organization and Significant _5
Organization and Significant Accounting Policies - Schedule of Disaggregation of Revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Simulators and accessories | $ 14,581,810 | $ 13,508,564 |
Extended service-type warranties | 1,896,077 | 1,742,656 |
Customized software | 497,349 | 671,871 |
Installation and training | 547,677 | 311,187 |
Licensing and royalties | 557,213 | 289,947 |
Total Revenue | 18,080,126 | 16,524,225 |
Domestic [Member] | ||
Simulators and accessories | 12,562,982 | 11,006,489 |
Extended service-type warranties | 1,719,347 | 1,530,964 |
Customized software | 485,409 | 489,671 |
Installation and training | 400,916 | 299,793 |
Licensing and royalties | 557,213 | 289,947 |
Total Revenue | 15,725,867 | 13,616,864 |
International [Member] | ||
Simulators and accessories | 2,018,828 | 2,502,075 |
Extended service-type warranties | 176,730 | 211,692 |
Customized software | 11,940 | 182,200 |
Installation and training | 146,761 | 11,394 |
Licensing and royalties | ||
Total Revenue | $ 2,354,259 | $ 2,907,361 |
Organization and Significant _6
Organization and Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Computer Equipment [Member] | Minimum [Member] | |
Estimated useful lives of assets | P3Y |
Computer Equipment [Member] | Maximum [Member] | |
Estimated useful lives of assets | P5Y |
Furniture and Office Equipment [Member] | Minimum [Member] | |
Estimated useful lives of assets | P5Y |
Furniture and Office Equipment [Member] | Maximum [Member] | |
Estimated useful lives of assets | P7Y |
Machinery and Equipment [Member] | Minimum [Member] | |
Estimated useful lives of assets | P5Y |
Machinery and Equipment [Member] | Maximum [Member] | |
Estimated useful lives of assets | P7Y |
Leasehold Improvements [Member] | |
Estimated useful lives of assets | P7Y |
Organization and Significant _7
Organization and Significant Accounting Policies - Schedule of Fair Value of Assumptions Used (Details) | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Expected dividend yield | 0.00% |
Expected term | 7 years |
Weighted average grant date fair value | $ 1.94 |
Minimum [Member] | |
Expected volatility | 95.00% |
Risk-free interest rate | 1.00% |
Maximum [Member] | |
Expected volatility | 147.00% |
Risk-free interest rate | 2.00% |
Organization and Significant _8
Organization and Significant Accounting Policies - Schedule of Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Net income | $ 818,092 | $ 3,262,282 |
Weighted average common stock outstanding | 7,903,801 | 7,919,568 |
Incremental shares from stock options | 350,575 | 282,324 |
Incremental shares from warrants | 195,485 | |
Weighted average common stock outstanding - diluted | 8,254,376 | 8,397,377 |
Net income per common share and common equivalent shares Basic | $ 0.10 | $ 0.41 |
Net income per common share and common equivalent shares Diluted | $ 0.10 | $ 0.39 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | Mar. 23, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Conversion of past due trade receivable | $ 400,906 | $ 693,044 | |
Interest rate | 10.00% | ||
Debt instrument, maturity date, description | This unsecured promissory note is due in full on or before February 2020. | ||
Debt instrument principal and accrued interest | $ 20,000 | $ 374,034 | |
Allowance for doubtful accounts | 266,813 | $ 12,290 | |
Remaining note receivable net of allowance | 96,282 | ||
Debt instrument accrued interest | 4,096 | ||
Notes receivable noncurrent | $ 6,843 | ||
TEC [Member] | |||
Interest rate | 5.00% | ||
Debt instrument principal and accrued interest | $ 298,224 | ||
Convertible promissory notes | $ 292,138 | ||
Royalty payment, due date | May 31, 2018 | ||
Debt, description | The note bears interest at the rate of five percent (5%) per annum and contains a provision requiring remittance of not less than 20% of the net proceeds of any private or public offering of its securities in reduction of the Convertible Note. The note has a conversion right, at the sole discretion of the Company, to convert the outstanding balance of principal and accrued interest at any time for shares of common stock of TEC. Prior to the due date, the Company may elect to convert the Convertible Note for shares of common stock in TEC at a twenty-five percent (25%) discount to the price of shares sold to the public in a public offering in connection with a go-public transaction. The issuance of common stock upon conversion shall be made without charge to the Company. No fractional shares shall be issued upon conversion and in lieu of fractional shares, TEC will pay the Company the amount of any obligation that is not converted. Any unpaid balance of principal and accrued interest becomes due and collectible on the earlier of (i) August 1, 2019 (maturity date), or (ii) if declared due and payable in the event of Default. | ||
Debt instrument, maturity date | Aug. 1, 2019 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Spare parts as other assets, long-term | $ 292,298 | |
Inventory spare parts | $ 298,136 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Net (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 1,717,033 | $ 1,778,961 |
Finished goods | 46,508 | |
Reserve | (105,031) | (105,031) |
Total inventory | $ 1,612,002 | $ 1,720,438 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 291,855 | $ 270,881 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Total property and equipment | $ 2,607,426 | $ 2,314,599 |
Less: Accumulated depreciation | (1,929,181) | (1,637,326) |
Property and equipment, net | 678,245 | 677,273 |
Computer Equipment [Member] | ||
Total property and equipment | 1,054,004 | 861,924 |
Furniture and Office Equipment [Member] | ||
Total property and equipment | 207,921 | 202,867 |
Machinery and Equipment [Member] | ||
Total property and equipment | 1,021,188 | 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 ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Salaries and wages payable | $ 147,677 | $ 115,481 |
401(k) contributions payable | 8,232 | 30,532 |
Accrued paid time off | 265,962 | 257,751 |
Profit sharing payable | 191,820 | 189,727 |
Total accrued compensation and related costs | $ 613,691 | $ 593,491 |
Accrued Expenses - Schedule o_2
Accrued Expenses - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Manufacturer's warranties | $ 200,505 | $ 135,000 |
Warranties-other | 189,983 | |
Loss contingencies | 40,000 | |
Taxes payable | 202,118 | 108,573 |
Total accrued expenses and other current liabilities | $ 632,606 | $ 243,573 |
Collaboration Agreement with _2
Collaboration Agreement with Related Party (Details Narrative) - USD ($) | Apr. 01, 2018 | Mar. 02, 2018 | Aug. 16, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Reverse stock split | Modern Round effected a 1 for 12,000 reverse stock split, followed by a 2,000 for 1 forward stock split completed in November 2018. | 1 for 2 reverse stock split | In April 2018, Modern Round effected a 1 for 12,000 reverse stock split, followed by a 1 for 2,000 forward stock split completed in November 2018. | ||
Impairment loss | $ 613,241 | ||||
Royalties/license fee income | 549,568 | 289,947 | |||
TEC [Member] | |||||
Number of common stock held | $ 560,000 | ||||
Issued and outstanding percentage | 5.90% | ||||
Impairment loss write-down investment to the estimated fair value | $ 254,933 | 613,241 | |||
Impairment loss | 120,000 | 1,374,933 | |||
Royalties/license fee income | $ 549,568 | $ 289,947 | |||
Number of warrants to purchase shares of common stock | 25,577 | ||||
Warrant exercise price per share | $ 2.4436 | ||||
Warrant description | This warrant became exercisable on the date of grant of April 14, 2015 and expires on the tenth anniversary of the date of grant, if not earlier pursuant to the terms of the option. | ||||
TEC [Member] | Warrants [Member] | |||||
Reverse stock split | 1 for 12,000 reverse stock split and the 2,000 for 1 forward stock split | ||||
Amendment To Co-Venture Agreement [Member] | |||||
Royalty percentage | 10.00% | ||||
Percentage of revenue paid for cost of equipment | 14.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of stock options issued to purchase common stock | 41,250 | |
Weighted average purchase price of stock options issued | $ 4.42 | |
Options exercisable term | 7 years | |
Number of previously awarded options redeemed | 220,523 | 67,500 |
Redeemed shares value | $ 551,682 | $ 160,050 |
Exercise price amount | $ 10,500 | |
Common stock shares owned | 7,816,944 | 7,904,307 |
Ownership percentage | 50.00% | |
Royalties/license fee income | $ 549,568 | $ 289,947 |
Accounts receivable | 16,743 | 81,235 |
Natural Point, Inc [Member] | ||
Purchased specialized equipment amount | 122,758 | 138,569 |
Prepaid credit balance | $ 1,020 | $ 1,020 |
Co-Venture Agreement [Member] | ||
Common stock shares owned | 560,000 | |
Ownership percentage | 5.90% | |
CEO and Board of Directors [Member] | ||
Related party exercised options | 10,700 | |
Exercise price amount | $ 10,500 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Apr. 02, 2018USD ($) | Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) |
Deferred rent liability | $ 46,523 | $ 75,444 | |
Rent expense | 518,020 | $ 496,564 | |
Estimated loss contingency | $ 40,000 | ||
Lease term | 3 years | ||
Amount of net profit charged to operations | (15.00%) | 15.00% | |
Lease Amendment [Member] | |||
Rentable square feet | ft² | 5,131 | ||
Lease expires | Apr. 30, 2024 | ||
Chief Executive Officer [Member] | Three Year Employment Agreements [Member] | |||
Annual salaries | $ 195,000 | ||
Chief Operating Officer [Member] | Three Year Employment Agreements [Member] | |||
Annual salaries | $ 175,000 | ||
Office and Warehouse Space [Member] | Unaffiliated Third Party [Member] | |||
Rentable square feet | ft² | 37,729 | ||
Office and Industrial Space [Member] | Unaffiliated Third Party [Member] | |||
Rentable square feet | ft² | 4,529 | ||
Lease expires | Mar. 31, 2019 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 333,825 |
2020 | 357,452 |
2021 | 368,060 |
2022 | 379,097 |
2023 | 390,562 |
Thereafter | 131,152 |
Total | $ 1,960,148 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax assets, valuation allowance | ||
Income tax benefit | $ 309,998 | (2,505,292) |
U.S Federal corporate tax rate | 21.00% | |
Income tax description | The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act reduces the U.S federal corporate tax rate from 35% to 21%. | |
Deferred tax assets | 4,086,910 | |
Deferred tax assets in consideration of tax reform | $ 2,710,000 | |
Ownership percentage | 50.00% | |
Federal net operating loss carry-forwards | $ 2,400,000 | |
Operating loss carry-forwards expiration description | Expire in various years through 2034 | |
Deferred Tax Assets [Member] | ||
Deferred tax assets, valuation allowance | 4,425,000 | |
Income tax benefit | $ 2,710,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 586,000 | $ 513,000 |
Deferred revenue | 989,000 | 1,033,000 |
Non-qualified stock option expense | 147,000 | 410,000 |
Investment in That's Eatertainment (f/k/a MREC), a related party | 39,000 | 28,000 |
Reserves, accruals and other | 160,000 | 93,000 |
Tax intangible assets and accumulated depreciation/amortization | 479,000 | 633,000 |
Total deferred tax assets | 2,400,000 | 2,710,000 |
Less: Valuation allowance | ||
Net deferred tax assets | $ 2,400,000 | $ 2,710,000 |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Component of Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 205,000 | |
Deferred | 310,000 | 1,714,000 |
Change in valuation allowance | (4,425,000) | |
Provision for income taxes | $ 309,998 | $ (2,505,292) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax expense at the statutory rate | $ 237,000 | $ 257,000 |
State income taxes, net of federal benefit | 62,000 | 205,000 |
Permanent differences | 72,932 | 20,000 |
Tax return true-ups and other | (61,932) | 61,000 |
Change in federal income tax rates | 1,376,000 | |
Change in valuation allowance | (4,425,000) | |
Provision for income taxes | $ 309,998 | $ (2,505,292) |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jun. 23, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 23, 2017 | Oct. 25, 2016 |
Common stock shares authorized | 50,000,000 | 50,000,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Preferred stock shares authorized | 2,500,000 | 2,500,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||
Options term | 7 years | ||||
Non-vested stock options outstanding | |||||
Stock compensation | $ 7,124 | ||||
Options outstanding exercisable intrinsic value | $ 42,973 | $ 10,500 | |||
Options issued | 41,250 | ||||
Class A Common Stock [Member] | |||||
Common stock shares authorized | 2,500,000 | 2,500,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Common stock voting rights | Ten (10) votes for each share of Class A Common Stock held of record by such holde | ||||
Class B Common Stock [Member] | |||||
Common stock shares authorized | 7,500,000 | 7,500,000 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Preferred Stock [Member] | |||||
Preferred stock shares authorized | 2,500,000 | ||||
Preferred stock, par value | $ 0.0001 | ||||
Series A Preferred Stock [Member] | |||||
Preferred stock, par value | $ 0.005 | ||||
Preferred stock designated shares | 25,000 | ||||
Preferred stock voting rights | Holders of the Series A Preferred are entitled to 300 votes on all matters submitted to a vote of the stockholders of the Corporation | ||||
Percentage of votes cast equal to all votes cast of meeting of shareholders | 66.67% | ||||
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] | |||||
Options issued | |||||
Common Stock [Member] | |||||
Common stock shares authorized | 60,000,000 | ||||
Common stock, par value | $ 0.0001 | ||||
Common stock voting rights | one (1) vote for each share of Common Stock held of record by such holder | ||||
Common Stock [Member] | |||||
Common stock shares authorized | 50,000,000 | ||||
Common stock, par value | $ 0.0001 | ||||
Stock Options [Member] | |||||
Options outstanding exercisable intrinsic value | $ 331,590 | $ 1,707,621 | |||
Options vested fair value | $ 30,700 | $ 126,200 | |||
Board of Directors [Member] | |||||
Common stock shares authorized to repurchase | 1,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Repurchased and Cancelled Treasury Shares (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total Number of Shares Repurchased | 98,063 | 23,467 |
Average Price Paid per Share | $ 3.89 | $ 4.78 |
Repurchased Shares Cancelled | 87,356 | 23,467 |
Repurchased Shares Held in Treasury | 10,707 | |
Approximate Funds Remaining in Repurchase Plan as of December 31, 2018 | $ 506,000 | |
January to March [Member] | ||
Total Number of Shares Repurchased | ||
Average Price Paid per Share | ||
April to June [Member] | ||
Total Number of Shares Repurchased | 3,450 | |
Average Price Paid per Share | $ 4 | |
July To September [Member] | ||
Total Number of Shares Repurchased | 17,489 | |
Average Price Paid per Share | $ 4.74 | |
October [Member] | ||
Total Number of Shares Repurchased | 2,528 | |
Average Price Paid per Share | $ 6.12 | |
November [Member] | ||
Total Number of Shares Repurchased | 17,942 | |
Average Price Paid per Share | $ 3.90 | |
December [Member] | ||
Total Number of Shares Repurchased | 80,121 | |
Average Price Paid per Share | $ 3.89 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock Options Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of options, granted / vested | 41,250 | |
Weighted average exercise price, granted / vested | $ 4.42 | |
Stock Option [Member] | ||
Options outstanding, beginning of year | 531,667 | 557,917 |
Number of options, granted / vested | 41,250 | |
Number of options, redeemed | (220,523) | (67,500) |
Number of options, exercised | (10,700) | |
Number of options, expired / terminated | (21,277) | |
Number of options outstanding, end of year | 279,167 | 531,667 |
Number of options exercisable, end of year | 279,167 | 521,667 |
Weighted exercise price outstanding, beginning of year | $ 1.85 | $ 1.60 |
Weighted average exercise price, granted / vested | 4.42 | |
Weighted average exercise price, redeemed | 1.30 | 1.25 |
Weighted average exercise price, exercised | 1.40 | |
Weighted average exercise price, expired / terminated | 1.40 | |
Weighted average exercise price outstanding, end of year | 2.34 | 1.85 |
Weighted average exercise price exercisable, end of year | $ 2.34 | $ 1.85 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Stock Options Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Range of exercise price, lower range limit | $ 0.40 |
Number of options outstanding, upper range limit | $ 2.99 |
Number of options outstanding | shares | 279,167 |
Weighted average exercise price | $ 2.25 |
Number of options exercisable | shares | 279,167 |
Weighted average exercise price | $ 2.25 |
Exercise Price Range One [Member] | |
Range of exercise price, lower range limit | 0.40 |
Number of options outstanding, upper range limit | $ 0.99 |
Number of options outstanding | shares | 78,750 |
Weighted average exercise price | $ 0.88 |
Number of options exercisable | shares | 78,750 |
Weighted average exercise price | $ 0.88 |
Exercise Price Range Two [Member] | |
Range of exercise price, lower range limit | 1 |
Number of options outstanding, upper range limit | $ 1.99 |
Number of options outstanding | shares | 81,250 |
Weighted average exercise price | $ 1.40 |
Number of options exercisable | shares | 81,250 |
Weighted average exercise price | $ 1.40 |
Exercise Price Range Three [Member] | |
Range of exercise price, lower range limit | 2 |
Number of options outstanding, upper range limit | $ 2.99 |
Number of options outstanding | shares | 45,000 |
Weighted average exercise price | $ 2.48 |
Number of options exercisable | shares | 42,500 |
Weighted average exercise price | $ 2.48 |
Exercise Price Range Four [Member] | |
Range of exercise price, lower range limit | 3 |
Number of options outstanding, upper range limit | $ 3.99 |
Number of options outstanding | shares | 25,000 |
Weighted average exercise price | $ 3.50 |
Number of options exercisable | shares | 25,000 |
Weighted average exercise price | $ 3.50 |
Exercise Price Range Five [Member] | |
Range of exercise price, lower range limit | 4 |
Number of options outstanding, upper range limit | $ 4.99 |
Number of options outstanding | shares | 25,000 |
Weighted average exercise price | $ 4.25 |
Number of options exercisable | shares | 25,000 |
Weighted average exercise price | $ 4.25 |
Exercise Price Range Six [Member] | |
Range of exercise price, lower range limit | 5 |
Number of options outstanding, upper range limit | $ 5.99 |
Number of options outstanding | shares | 26,667 |
Weighted average exercise price | $ 5.50 |
Number of options exercisable | shares | 26,667 |
Weighted average exercise price | $ 5.50 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 28, 2019 | Jan. 09, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Number of shares repurchased common stock, value | $ 242,625 | $ 84,500 | ||
Number of shares repurchased common stock | 98,063 | 23,467 | ||
Subsequent Event [Member] | ||||
Number of shares repurchased common stock | 68,239 | |||
Average cost per shares | $ 3.82 | |||
Subsequent Event [Member] | Board of Directors [Member] | ||||
Number of shares repurchased common stock, value | $ 1,000,000 |