Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 06, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Sunworks, Inc. | |
Entity Central Index Key | 0001172631 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,628,992 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 5,471 | $ 3,154 |
Restricted cash | 385 | 385 |
Accounts receivable, net | 6,753 | 7,606 |
Inventory, net | 2,007 | 2,970 |
Contract assets | 5,154 | 4,864 |
Other current assets | 697 | 275 |
Total Current Assets | 20,467 | 19,254 |
Property and Equipment, net | 457 | 511 |
Operating lease right-of-use asset | 1,374 | 1,505 |
Other Assets | ||
Other deposits | 69 | 69 |
Goodwill | 5,464 | 9,464 |
Total Other Assets | 5,533 | 9,533 |
Total Assets | 27,831 | 30,803 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 10,234 | 11,221 |
Contract liabilities | 3,435 | 4,616 |
Customer deposits | 604 | 753 |
Operating lease liability, current portion | 893 | 864 |
Loan payable, current portion | 57 | 88 |
Promissory note payable, current portion | 2,127 | |
Acquisition promissory note, current portion | 252 | |
Total Current Liabilities | 17,350 | 17,794 |
Long-Term Liabilities | ||
Operating lease liability | 481 | 641 |
Promissory note payable, net | 3,484 | |
Warranty liability | 471 | 441 |
Total Long-Term Liabilities | 952 | 4,566 |
Total Liabilities | 18,302 | 22,360 |
Shareholders' Equity | ||
Preferred stock Series B, $001 par value; 5,000,000 authorized shares; 0 and 0 issued and outstanding, respectively | ||
Common stock, $.001 par value; 200,000,000 authorized shares; 16,628,992 and 6,805,697 issued and outstanding, respectively | 17 | 7 |
Additional paid in capital | 88,956 | 81,132 |
Accumulated deficit | (79,444) | (72,696) |
Total Shareholders' Equity | 9,529 | 8,443 |
Total Liabilities and Shareholders' Equity | $ 27,831 | $ 30,803 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 16,628,992 | 6,805,697 |
Common stock, shares outstanding | 16,628,992 | 6,805,697 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 12,361 | $ 9,268 |
Cost of Goods Sold | 11,405 | 9,912 |
Gross Profit (Loss) | 956 | (644) |
Operating Expenses | ||
Selling and marketing expenses | 657 | 782 |
General and administrative expenses | 2,599 | 2,676 |
Goodwill impairment | 4,000 | |
Stock-based compensation | 98 | 124 |
Depreciation and amortization | 81 | 92 |
Total Operating Expenses | 7,435 | 3,674 |
Loss before Other Income/(Expenses) | (6,479) | (4,318) |
Other Income/(Expenses) | ||
Other income (expense) | (10) | (8) |
Interest expense | (259) | (209) |
Total Other Income/(Expenses) | (269) | (217) |
Loss Before Income Taxes | (6,748) | (4,535) |
Income Tax Expense | ||
Net Loss | $ (6,748) | $ (4,535) |
LOSS PER SHARE: | ||
Basic | $ (0.60) | $ (1.21) |
Diluted | $ (0.60) | $ (1.21) |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||
Basic | 11,163,902 | 3,733,858 |
Diluted | 11,163,902 | 3,733,858 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 4 | $ 73,502 | $ (63,510) | $ 9,996 |
Balance, shares at Dec. 31, 2018 | 3,730,110 | |||
Stock-based compensation | 62 | 62 | ||
Issuance of common stock under terms of restricted stock grants | 62 | 62 | ||
Issuance of common stock under terms of restricted stock grants, shares | 5,952 | |||
Net loss | (4,535) | (4,535) | ||
Balance at Mar. 31, 2019 | $ 4 | 73,626 | (68,045) | 5,585 |
Balance, shares at Mar. 31, 2019 | 3,736,062 | |||
Balance at Dec. 31, 2019 | $ 7 | 81,132 | (72,696) | 8,443 |
Balance, shares at Dec. 31, 2019 | 6,805,697 | |||
Stock-based compensation | 35 | 35 | ||
Issuance of common stock under terms of restricted stock grants | 63 | 63 | ||
Issuance of common stock under terms of restricted stock grants, shares | 5,952 | |||
Sales of common stock pursuant to S-3 registration statement | $ 10 | 7,726 | 7,736 | |
Sales of common stock pursuant to S-3 registration statement, shares | 9,817,343 | |||
Net loss | (6,748) | (6,748) | ||
Balance at Mar. 31, 2020 | $ 17 | $ 88,956 | $ (79,444) | $ 9,529 |
Balance, shares at Mar. 31, 2020 | 16,628,992 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) | $ (6,748) | $ (4,535) |
Adjustments to reconcile net (loss) to net cash used in operating activities | ||
Depreciation and amortization | 81 | 92 |
Amortization of right-of-use asset | 131 | 183 |
Stock-based compensation | 98 | 124 |
Goodwill impairment | 4,000 | |
Amortization of debt issuance costs | 143 | 13 |
Bad debt expense | 122 | 23 |
(Increase) Decrease in: | ||
Accounts receivable | 731 | 1,756 |
Inventory | 963 | 208 |
Deposits and other current assets | (422) | (268) |
Contract assets | (290) | 3,125 |
Increase (Decrease) in: | ||
Accounts payable and accrued liabilities | (987) | (3,048) |
Contract liabilities | (1,181) | 65 |
Customer deposits | (149) | 542 |
Warranty and other liability | 30 | 30 |
Operating lease liability | (131) | (183) |
NET CASH USED IN OPERATING ACTIVITIES | (3,609) | (1,873) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (27) | |
NET CASH USED IN INVESTING ACTIVITIES | (27) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Loans payable repayments | (31) | (59) |
Acquisition promissory note | (252) | (151) |
Promissory note payable repayment | (1,500) | |
Proceeds from sale of common stock, net | 7,736 | |
NET CASH PROVIDED BY (USED) IN FINANCING ACTIVITIES | 5,953 | (210) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 2,317 | (2,083) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF PERIOD | 3,539 | 4,075 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 5,856 | 1,992 |
CASH PAID FOR: | ||
Interest | 83 | 126 |
Taxes | ||
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS | ||
Operating right-of-use asset and operating lease liability upon adoption of ASU 2016-02, Leases (Topic 842) | $ 2,153 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. At the Company’s Annual Meeting of Stockholders on August 7, 2019, the stockholders of the Company approved a reverse stock split of its issued and outstanding common stock at a ratio not less than 1-for-3 and not greater than 1-for-10. On August 29, 2019, the Company’s Board of Directors approved the reverse stock split at a ratio of 1-for-7 which went into effect at the open of trading on August 30, 2019. At the effective time of the reverse stock split, every seven shares of issued and outstanding common stock was converted into one share of issued and outstanding common stock. The authorized shares of 200,000,000 and the par value of $0.001 remain the same. All shares and related financial information in this Quarterly Report on Form 10-Q are retroactively stated to reflect this 1-for-7 reverse stock split. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements. There have been no significant changes in the Company’s accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2019. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Sunworks, Inc., and its wholly owned operating subsidiaries, Sunworks United, MD Energy, and Plan B. All material intercompany transactions have been eliminated upon consolidation of these entities. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s goodwill, impairments and estimations of long-lived assets, revenue recognition on construction contracts, allowances for uncollectible accounts, operating lease right-of-use-assets and liabilities, warranty reserves, inventory valuation, debt beneficial conversion features, valuations of non-cash capital stock issuances and the valuation allowance on deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Revenue Recognition Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). The cost of uninstalled materials or equipment will generally be excluded from the Company’s recognition of profit, unless specifically produced or manufactured for a project, because such costs are not considered to be a measure of progress. All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss in the period it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Accounts Receivable Accounts receivable are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Retention receivable is the amount withheld by a customer until a contract is completed. Retention receivables of $824 and $1,027 were included in the balance of trade accounts receivable as of March 31, 2020 and December 31, 2019, respectively. The Company performs ongoing credit evaluation of its customers. Management monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, age of receivables and other information, and records bad debts using the allowance method. Accounts receivable are presented net of an allowance of $350 for doubtful accounts at March 31, 2020, and $350 for doubtful accounts at December 31, 2019. During the three months ended March 31, 2020 and 2019, $122 and $23 was recorded as bad debt expense, respectively. Customer Deposits Customer deposits are recorded for funds remitted by the Company’s customers in advance of progress billings being completed. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash The Company considers restricted cash to be cash balances that have legal and/or contractual restrictions imposed by a third party and are restricted as to withdrawal or use except for the specified purpose. Concentration Risk Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Corporation (“FDIC”) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of March 31, 2020, the cash balance in excess of the FDIC limits was $5,516. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. Inventory Inventory is valued at the lower of cost or market, and is determined by the first-in, first-out method. Inventory primarily consists of panels, inverters, and mounting racks and other materials. The Company also carries a reserve for inventory obsolescence that may arise from technological advancement or changes in government regulation. Inventory is presented net of an allowance of $50 at March 31, 2020, and $50 at December 31, 2019. Property and Equipment Property and equipment are stated at cost. Depreciation for property and equipment commences when property and equipment are put into service and are depreciated using the straight-line method over the property and equipment’s estimated useful lives: Machinery & equipment 3-7 Years Furniture & fixtures 5-7 Years Computer equipment 3-5 Years Vehicles 5-7 Years Leaseholder improvements 3-5 Years Depreciation expense for the three months ended March 31, 2020 and 2019 was $81 and $92, respectively. Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the condensed consolidated balance sheet. If the Company had finance lease ROU assets, such assets would be presented within other assets, and finance lease liabilities would be presented appropriately within liabilities. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and the Company recognizes such lease payments on a straight-line basis over the lease term. Advertising and Marketing The Company expenses advertising and marketing costs as incurred. Advertising and marketing costs include primarily printed material, sponsorships, tradeshow costs, magazine, and catalog advertisement. Included within selling and marketing expenses are advertising and marketing costs for the three months ended March 31, 2020 and 2019 of $23 and $43, respectively. Warranty Liability The Company establishes warranty liability reserves to provide for estimated future expenses as a result of installation and product defects, product recalls and litigation incidental to the Company’s business. Liability estimates are determined based on management’s judgment, considering such factors as historical experience, the likely current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, and consultations with third party experts such as engineers. Solar panel manufacturers currently provide substantial warranties between ten to twenty-five years with full reimbursement to replace and install replacement panels. Inverter manufacturers currently provide warranties covering ten to fifteen-year replacement and installation. The warranty liability for estimated future warranty costs is $471 and $441 at March 31, 2020 and December 31, 2019, respectively. Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock options and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. Basic and Diluted Net (Loss) per Share Calculations (Loss) per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The shares for employee options, restricted stock, warrants and convertible notes were not used in the calculation of the net loss per share. A net loss causes all outstanding common stock options, warrants, convertible preferred stock, and convertible notes to be anti-dilutive. As a result, the basic and diluted losses per common share are the same for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the potentially dilutive securities that have been excluded from the computations of weighted average shares outstanding include 142,195 stock options. During the quarter ended March 31, 2020, the remaining restricted stock grants were issued and the outstanding warrants expired unexercised. As of March 31, 2019, the potentially dilutive securities that have been excluded from the computations of weighted average shares outstanding include 136,071 stock options, 25,792 restricted stock grants, 428,143 warrants, and shares underlying convertible notes. Dilutive per share amounts are computed using the weighted-average number of common shares outstanding and potentially dilutive securities, using the treasury stock method, if their effect would be dilutive. Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by management at least annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Indefinite Lived Intangibles and Goodwill Assets The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company retains a valuation consulting firm to test for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of an asset exceeds its fair value and may not be recoverable. In accordance with the Company’s policies, the Company performed a quantitative assessment of indefinite lived intangibles and goodwill at December 31, 2019, no impairment was found. As a result of the events and circumstances resulting from the COVID-19 pandemic, the Company’s outlook for revenue, profitability and cash flow have deteriorated. Therefore, the Company performed another quantitative assessment of indefinite lived intangibles and goodwill at March 31, 2020. It was determined that the carrying value of goodwill exceeded its fair value at March 31, 2020 and, as a result, recorded an impairment of $4,000. Fair Value of Financial Instruments Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2020, the amounts reported for cash, accrued interest and other expenses, and notes payable approximate the fair value because of their short maturities. The Company accounts for financial instruments measured at fair value on a recurring basis under ASC Topic 820. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Income Taxes The Company uses the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The measurement of deferred tax assets and liabilities is based on provisions of applicable tax law. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance based on the amount of tax benefits that, based on available evidence, is not expected to be realized. Reclassifications Certain reclassifications have been made to prior year’s financial statement to conform to classifications used in the current year. Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. The Company currently has one reportable segment for financial reporting purposes, which represents the Company’s core business. New Accounting Pronouncements Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Accounting for Leases. This update requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at lease commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and shall continue to depend on its classification as a finance or operating lease. The Company adopted the ASU and related amendments on January 1, 2019 and elected certain practical expedients permitted under the transition guidance. The Company elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. Under the new guidance, the majority of the Company’s leases continued to be classified as operating. During the first quarter of 2019, the Company completed its implementation of its processes and policies to support the new lease accounting and reporting requirements. Based on the Company’s lease portfolio as of January 1, 2019, the impact of adopting ASU 2016-02 increased both the Company’s total assets and total liabilities by $2,153. The adoption of this ASU did not have a significant impact on the Company’s Consolidated Statements of Operations or Cash Flows. See Note 4 for more information regarding the new standard for leases. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, current U.S. GAAP requires the performance of procedures to determine the fair value at the impairment testing date of assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the amendments under this ASU require the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU became effective for the Company on January 1, 2020 and was followed in the preparation of a quantitative assessment of indefinite lived intangibles and goodwill at March 31, 2020. It was determined that the carrying value of goodwill exceeded its fair value at March 31, 2020 and, as a result, we recorded an impairment of $4,000. Management reviewed currently issued pronouncements during the three months ended March 31, 2020, and believes that any other recently issued, but not yet effective, accounting standards, if currently adopted, would not have a material effect on the accompanying consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 3. REVENUE FROM CONTRACTS WITH CUSTOMERS Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with ASC 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). The cost of uninstalled materials or equipment will generally be excluded from our recognition of profit, unless specifically produced or manufactured for a project, because such costs are not considered to be a measure of progress. The following table represents a disaggregation of revenue by customer type from contracts with customers for the three months ended March 31, 2020 and 2019: Three Months Ended 2020 2019 Agricultural, Commercial, and Industrial (ACI) $ 4,610 $ 4,037 Public Works 3,978 1,318 Residential 3,773 3,913 Total $ 12,361 $ 9,268 Contract assets represent revenue recognized in excess of amounts billed on contracts in progress. Contract liabilities represent billings in excess of revenue recognized on contracts in progress. At March 31, 2020 and December 31, 2019, the contract asset balances were $5,154 and $4,864, respectively, and the contract liability balances were $3,435 and $4,616, respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 4. Leases The Company has operating leases for offices, warehouses, vehicles, and office equipment. The Company’s leases have remaining lease terms of 1 year to 3 years, some of which include options to extend. The Company’s lease expense for the three months ended March 31, 2020 and 2019 was entirely comprised of operating leases and amounted to $260 and $299, respectively. Operating lease payments, which reduced operating cash flows for the three months ended March 31, 2020 and 2019, amounted to $260 and $299 respectively. The difference between the ROU asset amortization of $131 and the associated lease expense of $260 consists of interest, new vehicles, and lease extensions originated during the three months ended March 31, 2020. Supplemental balance sheet information related to leases was as follows: March 31, 2020 (in thousands) Operating lease right-of-use assets $ 1,374 Operating lease liabilities—short term 893 Operating lease liabilities—long term 481 Total operating lease liabilities $ 1,374 As of March 31, 2020, the weighted average remaining lease term was 1.5 years and the discount rates for the Company’s leases was 10.0%. Maturities for leases were as follows: Operating Leases (in thousands) Remainder of 2020 $ 751 2021 671 2022 49 2023 6 2024 - Thereafter - Total lease payments $ 1,477 Less: imputed interest 103 Total $ 1,374 |
Loans Payable
Loans Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Loans Payable | 5. LOANS PAYABLE On January 5, 2016, the Company entered into a loan agreement for the acquisition of a pile driver in the principal amount of $182 bearing interest at 5.5%. The loan agreement called for monthly payments of $4 and matured on January 15, 2020. The loan was secured by the equipment. At March 31, 2020, there was no remaining loan balance. On September 8, 2016, the Company entered into a loan agreement for the acquisition of a pile driver in the principal amount of $174 bearing interest at 5.5%. The loan agreement calls for monthly payments of $4 and is scheduled to mature on September 15, 2020. The loan is secured by the pile driver. The outstanding balance at March 31, 2020 was $24. On November 14, 2016, the Company entered into a 0% interest loan agreement for the acquisition of an excavator in the principal amount of $59. The loan agreement calls for monthly payments of $1 and is scheduled to mature on November 13, 2020. The loan is secured by the excavator. The outstanding balance at March 31, 2020 was $9. On December 23, 2016, the Company entered into a loan agreement for the acquisition of modular office systems and related furniture in the principal amount of $172 bearing interest at 4.99%. The loan agreement calls for 16 quarterly payments of $12 and is scheduled to mature in September 2020. The loan is secured by the modular office systems and related furniture. The outstanding balance at March 31, 2020 was $24. As of March 31, 2020 and December 31, 2019, loans payable (“Loans Payable”) are summarized as follows: March 31, 2020 December 31, 2019 Equipment notes payable 57 88 Subtotal 57 88 Less: Current position (57 ) (88 ) Long-term position $ - $ - |
Acquisition Convertible Promiss
Acquisition Convertible Promissory Note | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisition Convertible Promissory Note | 6. ACQUISITION CONVERTIBLE PROMISSORY NOTE On February 28, 2015, the Company issued a 4% convertible promissory note in the aggregate principal amount of $2,650 as part of the consideration paid to acquire 100% of the total outstanding stock of MD Energy. The note was convertible into shares of common stock on or after each of the following dates: November 30, 2015, November 30, 2016 and November 30, 2017. The conversion price was $2.60 per share. A beneficial conversion feature of $3,262 was calculated but capped at the $2,650 value of the note. The beneficial conversion feature was calculated by multiplying the difference between the fair value of stock at the date of the note, $5.80, less the conversion price of $2.60 multiplied by the maximum number of shares subject to conversion, 1,019,231. In November 2015, the Company issued 339,743 shares of common stock upon conversion of the principal amount of $883. Commencing on March 31, 2015, and each quarter thereafter during the first two (2) years of the note, the Company made quarterly interest only payments to the noteholder for accrued interest on the note during the quarter. Commencing with the quarter ending on June 30, 2017, the Company began to make quarterly payments of interest accrued on the convertible note during the prior quarter plus $151 with the final payment of all outstanding principal and accrued but unpaid interest on the convertible note due and payable on February 28, 2020, the maturity date. This convertible promissory note was paid in full at maturity. The debt discount is fully amortized and has a zero balance. The Company recorded interest expense of $3 and $7 during the three months ended March 31, 2020 and 2019, respectively. The outstanding balances at March 31, 2020 and December 31, 2019 were $0 and $252, respectively. We evaluated the foregoing financing transactions in accordance with ASC Topic 470, Debt with Conversion and Other Options |
Convertible Promissory Notes
Convertible Promissory Notes | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | 7. CONVERTIBLE PROMISSORY NOTES On February 11, 2014, the Company entered into a securities purchase agreement providing for the sale of a 10% convertible promissory note in the principal amount of $100. The note was convertible into shares of common stock of the Company at a price equal to a variable conversion price equal to the lesser of $9.10 per share, or fifty percent (50%) of the lowest trading price after the effective date. As of September 30, 2014, the note was exchanged for a new convertible note with a fixed conversion price of $2.37. Per ASC 815, the derivative liability on the note was extinguished and the new note was re-valued per ASC 470, as a beneficial conversion feature. The note matured on various dates from the effective date of each advance with respect to each advance. At the sole discretion of the lender, the lender was able to modify the maturity date to be twelve (12) months from the effective date of each advance. The note matured on various dates in 2014, and was extended to September 30, 2016, and in March 2016 was subsequently extended to June 30, 2019 with zero interest. The Company recorded no interest expense during the years ended December 31, 2019 and 2018. On April 10, 2019, all remaining principal and accrued interest due under the convertible promissory note was converted into 68,082 shares of common stock (post-split). The balances converted included $100 of principal and $61 of accrued interest with a remaining principal balance of $0. |
Promissory Notes Payable
Promissory Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Promissory Notes Payable | 8. PROMISSORY NOTES PAYABLE On April 27, 2018, the Company entered into a Loan Agreement (the “Loan Agreement”) with CrowdOut Capital, Inc. (“CrowdOut”) pursuant to which the Company issued an aggregate of $3,750 in promissory notes (the “Notes”), of which $3,000 is a Senior Note and $750 are Subordinated Notes. The Subordinated Notes were funded by the Company’s Chief Executive Officer, Charles Cargile and the Company’s President of Commercial Operations, Kirk Short. The Notes bear interest at the rate of the one-month LIBOR plus 950 basis points and were originally scheduled to mature on June 30, 2020. The maturity date of the Notes was subsequently extended to January 31, 2021. On June 3, 2019, the Company entered into an amendment to its Loan Agreement (the “First Amendment”), pursuant to which the maturity date of the $3,000 Senior Note and $750 Subordinated Notes was extended from June 30, 2020 to January 31, 2021. In connection with entering into the First Amendment, the Company agreed to issue to CrowdOut, as the holder of the Senior Note, 57,143 shares of common stock (post-split) as an amendment fee (the “Amendment Fee”) pursuant to the Company’s shelf registration statement on Form S-3. On January 28, 2020, the Company entered into a second amendment to its Loan Agreement (the “Second Amendment” and, together with the First Amendment, the “Amendments”) pursuant to which the Loan Agreement was amended to permit the partial prepayment of One Million Five Hundred Thousand Dollars ($1,500) of the loan amount without any prepayment fees. In addition, the Second Amendment provides that, unless an event of default occurs under the Loan Agreement, CrowdOut will no longer have the right to designate a member to the Company’s Board of Directors. Based upon the closing price of the Company’s common stock on June 17, 2019, the day of issuance, the 57,143 shares were valued at $344. The $344 Amendment Fee plus $7 for CrowdOut Amendment related legal fees have been added to the debt issuance costs and are being amortized over the remaining life of the loan. The Notes may be prepaid in whole without the consent of the lender or in part with the consent of the lender. At the time the Notes are paid in full, the Company shall pay CrowdOut, as the holder of the Senior Note, an exit fee of $435 The Company is accruing the exit fee of $435 over the extended remaining life of the Loan Agreement and recognizing the exit fee as interest expense. For the three months ended March 31, 2020 and 2019, the exit fee recorded as interest expense was $33 and $50, respectively. In connection with the issuance of the Senior Note, the Company entered into a security agreement (the “Security Agreement”) pursuant to which the Company granted to Crowdout a security interest in certain of the Company’s assets to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the Senior Note. The Company also entered into a subordination agreement with the holders of the Subordinated Notes and the Senior Note pursuant to which the Subordinated Notes are subordinated to the Senior Note. The Loan Agreement contains certain customary Events of Default including, but not limited to, default in payment of any sum payable thereunder, breaches of representations or warranties thereunder, the occurrence of an event of default under the transaction documents, change in control of the Company, filing of bankruptcy and the entering or filing of certain monetary judgments against the Company. Upon the occurrence of an Event of Default the outstanding principal amount of the Notes, plus accrued but unpaid interest and other amounts owing in respect thereof, shall become, at the giving of notice by CrowdOut, immediately due and payable. Interest on overdue payments upon the occurrence of an Event of Default shall accrue interest at a rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. Additionally, the Loan Agreement includes a subjective Event of Default clause if CrowdOut reasonably determines that an event has occurred that would reasonably be expected to have a “Material Adverse Effect”. In January 2020, $1,500 of the $3,000 Senior Note was paid. In conjunction with the Loan Agreement and Amendment, the Company recorded $468 of capitalized debt issuance costs. The debt issuance costs are being amortized over the life of the Loan Agreement and recognized as interest expense. The balance payable under the Notes is reported net of the unamortized portion of the debt issuance costs. The Company recorded amortization of the debt issuance cost of $143 and $13 as interest expense during the three months ended March 31, 2020 and 2019, respectively. The $143 recorded as amortization of the debt issuance costs during the three months ended March 31, 2020 includes $98 of expense required as a result of the $1,500 prepayment of the $3,000 Senior Note and required write-off of a proportionate share of the associated debt issuance cost. Promissory notes payable at March 31, 2020 and December 31, 2019 are as follows: March 31, 2020 December 31, 2019 Promissory notes payable $ 2,250 $ 3,750 Less, debt issuance costs (123 ) (266 ) Promissory notes payable, net $ 2,127 $ 3,484 |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Capital Stock | 9. CAPITAL STOCK Common Stock At the Company’s Annual Meeting of Stockholders on August 7, 2019, the stockholders of the Company approved a reverse stock split of the Company’s issued and outstanding common stock at a ratio not less than 1-for-3 and not greater than 1-for-10. On August 29, 2019, the board of directors of the Company approved the reverse stock split at a ratio of 1-for-7 which went into effect at the open of trading on August 30, 2019. At the effective time of the reverse stock split, every seven shares of issued and outstanding common stock was converted into one share of issued and outstanding common stock. The authorized shares of 200,000,000 and the par value of $0.001 remain the same. All shares and related financial information in this Quarterly Report are retroactively stated to reflect this 1-for-7 reverse stock split. On March 13, 2020, the Company received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company has failed to comply with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2). Nasdaq Listing Rule 5550(a)(2) requires that companies listed on the Nasdaq Capital Market maintain a minimum closing bid price of at least $1.00 per share. Under Nasdaq Listing Rule 5810(c)(3)(A), the Company had a 180-calendar-day grace period to regain compliance by meeting the continued listing standard. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this grace period. Given the current extraordinary market conditions, Nasdaq has determined to toll the compliance periods for bid price and market value of publicly held shares requirements through June 30, 2020. Therefore, the Company will have until November 23, 2020 to regain compliance with the minimum bid price requirement. The Company is monitoring the bid price of its common stock and will consider options available to it to achieve compliance. During the three months ended March 31, 2020 and 2019, 5,952 shares of common stock were issued during each respective period to the Company’s Chief Executive Officer, Charles Cargile pursuant to the terms of a restricted stock grant agreement (the “March 2017 RSGA”) effective March 29, 2017. See Note 10 for more information regarding the March 2017 RSGA. On April 10, 2019, the remaining principal of $100 and accrued interest of $61 due under the convertible promissory notes dated January 31, 2014 and February 11, 2014 were converted into 68,082 shares of common stock. Pursuant to an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley FBR, Inc. (the “Agent”) the Company could offer and sell from time to time up to an aggregate of $15,000 of shares of the Company’s common stock, par value $0.001 per share (the “Placement Shares”), through the Agent. The Placement Shares were registered under the Securities Act of 1933, as amended, pursuant to the Registration Statement (“Registration Statement”) on Form S-3 (File No. 333-231653), which was originally filed with the Securities and Exchange Commission (“SEC”) on May 21, 2019 and declared effective by the SEC on May 31, 2019. The base prospectus was contained within the Registration Statement, and a prospectus supplement was filed with the SEC on June 6, 2019. Sales of the Placement Shares, pursuant to the ATM Agreement, were made in sales deemed to be “at the market offerings” as defined in Rule 415 promulgated under the Securities Act. The Agent acted as sales agent and used commercially reasonable efforts to sell on the Company’s behalf all of the Placement Shares requested to be sold by the Company, consistent with its normal trading and sales practices, on mutually agreed terms between the Agent and the Company. The Company had no obligation to sell any of the Placement Shares under the ATM Agreement and could at any time suspend offers under the ATM Agreement or terminate the ATM Agreement. The Company intends to use the net proceeds from this offering for general corporate purposes, including, without limitation, sales and marketing activities, product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, repayment of indebtedness, and for working capital needs. Placement Shares sold between June 6, 2019 and December 31, 2019 totaled 2,920,968 shares. Total gross proceeds for the shares were $7,023 or $2.404 per share. Net proceeds, less issuance, costs were $6,691 or $2.291 per share as of December 31, 2019. Placement Shares sold between January 1, 2020 and March 26, 2020 totaled 9,817,343 shares. Total gross proceeds for the shares were $7,976 or $0.812 per share. Net proceeds, less issuance, costs were $7,736 or $0.788 per share as of March 31, 2020. With the sale of the Placement Shares sold in the three months ended March 31, 2020, the Company has sold the maximum amount allowed under its prospectus supplement and no further Placement Shares under the ATM Agreement will be sold without the Company filing an additional prospectus supplement with the SEC. The Registration Statement was filed in reliance on Instruction I.B.6. of Form S-3, which imposes a limitation on the maximum amount of securities that the Company may sell pursuant to the Registration Statement during any twelve-month period. At the time the Company sells securities pursuant to the Registration Statement, the amount of securities to be sold plus the amount of any securities the Company has sold during the prior twelve months in reliance on Instruction I.B.6. may not exceed one-third of the aggregate market value of the Company’s outstanding common stock held by non-affiliates as of a day during the 60 days immediately preceding such sale as computed in accordance with Instruction I.B.6. Therefore, the Company is not currently eligible to sell additional shares under the Registration Statement. |
Stock Options, Restricted Stock
Stock Options, Restricted Stock, and Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options, Restricted Stock, and Warrants | 10. STOCK OPTIONS, RESTRICTED STOCK, AND WARRANTS Options As of March 31, 2020, the Company has 142,195 non-qualified stock options outstanding to purchase 142,195 shares of common stock, per the terms set forth in the option agreements. The stock options vest at various times and are exercisable for a period of five years from the date of grant at exercise prices ranging from $2.10 to $21.70 per share, the market value of the Company’s common stock on the date of each grant. The Company determined the fair market value of these options by using the Black Scholes option valuation model. March 31, 2020 Number Weighted average of Options exercise price Outstanding, beginning December 31, 2019 143,623 $ 8.99 Granted - - Exercised - - Forfeited (1,428 ) $ 18.76 Outstanding, end of March 31, 2020 142,195 $ 8.81 Exercisable at the end of March 31, 2020 92,136 $ 11.48 During the three months ended March 31, 2020 and 2019, the Company charged a total of $35 and $62, respectively, to operations to recognize stock-based compensation expense for stock options. Restricted Stock Grant to CEO With an effective date of March 29, 2017, subject to the Sunworks, Inc. 2016 Equity Incentive Plan, (the “2016 Plan”) the Company entered into the March 2017 RSGA with its Chief Executive Officer, Charles Cargile. All shares issuable under the March 2017 RSGA are valued as of the grant date at $10.50 per share. The March 2017 RSGA provides for the issuance of up to 71,429 shares of the Company’s common stock. The restricted shares shall vest as follows: 23,810 of the restricted shares shall vest on the one (1) year anniversary of the effective date, and the balance, or 47,619 restricted shares, shall vest in twenty-four (24) equal monthly installments commencing on the one (1) year anniversary of the effective date. In the three months ended March 31, 2020 and 2019 stock-based compensation expense of $63 and $62, respectively was recognized for the March 29, 2017 RSGA. The total combined option and restricted stock compensation expense recognized, in the statement of operations, during the three months ended March 31, 2020 and 2019 was $98 and $124, respectively. Warrants As of March 31, 2020, the Company had no remaining stock purchase warrants outstanding. The 428,143 warrants previously issued on March 9, 2015 with an average exercise price of $0.65 expired unexercised on March 9, 2020. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. RELATED PARTY TRANSACTIONS The Subordinated Notes (Note 8) were funded by the Company’s Chief Executive Officer and the Company’s Vice President of Commercial Operations. The Company rents a facility in Durham, California from the Company’s President of Commercial Operations for $9 per month. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. SUBSEQUENT EVENTS On April 28, 2020, Sunworks entered into a Third Amendment to Loan Agreement (“Third Amendment) for the promissory note payable with CrowdOut. The Third Amendment provides approval for the Paycheck Protection Plan (“PPP”) loan to be obtained by the Company. On April 28, 2020, the Company received a loan under the PPP of $2,847. Proceeds from the loan used to cover documented expenses related to payroll, rent and utilities, during the 8-week period, subsequent to the cash being received by the Company, are eligible to be forgiven. The forgiveness amount allows for not more than 25% of the forgiveness to be for non-payroll items and is subject to reduction if employees are terminated or wages are reduced. The remaining unforgiven amount of the loan bears interest at 1% per annum and matures on April 28, 2022. Initial principal payments are deferred for the first six months; however, interest still accrues during this time. There are no collateral requirements or prepayment penalties associated with the loan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Sunworks, Inc., and its wholly owned operating subsidiaries, Sunworks United, MD Energy, and Plan B. All material intercompany transactions have been eliminated upon consolidation of these entities. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s goodwill, impairments and estimations of long-lived assets, revenue recognition on construction contracts, allowances for uncollectible accounts, operating lease right-of-use-assets and liabilities, warranty reserves, inventory valuation, debt beneficial conversion features, valuations of non-cash capital stock issuances and the valuation allowance on deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Revenue Recognition | Revenue Recognition Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). The cost of uninstalled materials or equipment will generally be excluded from our recognition of profit, unless specifically produced or manufactured for a project, because such costs are not considered to be a measure of progress. All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss in the period it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined. |
Accounts Receivables | Accounts Receivable Accounts receivable are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Retention receivable is the amount withheld by a customer until a contract is completed. Retention receivables of $824 and $1,027 were included in the balance of trade accounts receivable as of March 31, 2020 and December 31, 2019, respectively. We perform ongoing credit evaluation of our customers. Management monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, age of receivables and other information, and records bad debts using the allowance method. Accounts receivable are presented net of an allowance of $350 for doubtful accounts at March 31, 2020, and $350 for doubtful accounts at December 31, 2019. During the three months ended March 31, 2020 and 2019, $122 and $23 was recorded as bad debt expense, respectively. |
Customer Deposits | Customer Deposits Customer deposits are recorded for funds remitted by our customers in advance of progress billings being completed. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Restricted Cash | Restricted Cash We consider restricted cash to be cash balances that have legal and/or contractual restrictions imposed by a third party and are restricted as to withdrawal or use except for the specified purpose. |
Concentration Risk | Concentration Risk Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Corporation (“FDIC”) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of March 31, 2020, the cash balance in excess of the FDIC limits was $5,516. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. |
Inventory | Inventory Inventory is valued at the lower of cost or market, and is determined by the first-in, first-out method. Inventory primarily consists of panels, inverters, and mounting racks and other materials. The Company also carries a reserve for inventory obsolescence that may arise from technological advancement or changes in government regulation. Inventory is presented net of an allowance of $50 at March 31, 2020, and $50 at December 31, 2019. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation for property and equipment commences when property and equipment are put into service and are depreciated using the straight-line method over the property and equipment’s estimated useful lives: Machinery & equipment 3-7 Years Furniture & fixtures 5-7 Years Computer equipment 3-5 Years Vehicles 5-7 Years Leaseholder improvements 3-5 Years Depreciation expense for the three months ended March 31, 2020 and 2019 was $81 and $92, respectively. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the condensed consolidated balance sheet. If the Company had finance lease ROU assets, such assets would be presented within other assets, and finance lease liabilities would be presented appropriately within liabilities. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and the Company recognizes such lease payments on a straight-line basis over the lease term. |
Advertising and Marketing | Advertising and Marketing The Company expenses advertising and marketing costs as incurred. Advertising and marketing costs include primarily printed material, sponsorships, tradeshow costs, magazine, and catalog advertisement. Included within selling and marketing expenses are advertising and marketing costs for the three months ended March 31, 2020 and 2019 of $23 and $43, respectively. |
Warranty Liability | Warranty Liability We establish warranty liability reserves to provide for estimated future expenses as a result of installation and product defects, product recalls and litigation incidental to our business. Liability estimates are determined based on management’s judgment, considering such factors as historical experience, the likely current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, and consultations with third party experts such as engineers. Solar panel manufacturers currently provide substantial warranties between ten to twenty-five years with full reimbursement to replace and install replacement panels. Inverter manufacturers currently provide warranties covering ten to fifteen-year replacement and installation. The warranty liability for estimated future warranty costs is $471 and $441 at March 31, 2020 and December 31, 2019, respectively. |
Stock-based Compensation | Stock-Based Compensation The Company periodically issues stock options and warrants to employees and non-employees. We account for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) whereas the value of the award is measured on the date of grant and recognized over the vesting period. We account for stock options and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. |
Basic and Diluted Net (Loss) per Share Calculations | Basic and Diluted Net (Loss) per Share Calculations (Loss) per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The shares for employee options, restricted stock, warrants and convertible notes were not used in the calculation of the net loss per share. A net loss causes all outstanding common stock options, warrants, convertible preferred stock, and convertible notes to be anti-dilutive. As a result, the basic and diluted losses per common share are the same for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the potentially dilutive securities that have been excluded from the computations of weighted average shares outstanding include 142,195 stock options. During the quarter ended March 31, 2020, the remaining restricted stock grants were issued and the outstanding warrants expired unexercised. As of March 31, 2019, the potentially dilutive securities that have been excluded from the computations of weighted average shares outstanding include 136,071 stock options, 25,792 restricted stock grants, 428,143 warrants, and shares underlying convertible notes. Dilutive per share amounts are computed using the weighted-average number of common shares outstanding and potentially dilutive securities, using the treasury stock method, if their effect would be dilutive. |
Long-lived Assets | Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by management at least annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. |
Indefinite Lived Intangibles and Goodwill Assets | Indefinite Lived Intangibles and Goodwill Assets We account for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. We retain a valuation consulting firm to test for indefinite lived intangibles and goodwill impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of an asset exceeds its fair value and may not be recoverable. In accordance with our policies, we performed a quantitative assessment of indefinite lived intangibles and goodwill at December 31, 2019, no impairment was found. As a result of the events and circumstances resulting from the COVID-19 pandemic, our outlook for revenue, profitability and cash flow have deteriorated. Therefore, we performed another quantitative assessment of indefinite lived intangibles and goodwill at March 31, 2020. It was determined that the carrying value of goodwill exceeded its fair value at March 31, 2020 and, as a result, recorded an impairment of $4,000. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Disclosures about fair value of financial instruments, require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2020, the amounts reported for cash, accrued interest and other expenses, and notes payable approximate the fair value because of their short maturities. We account for financial instruments measured at fair value on a recurring basis under ASC Topic 820. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Business Combinations | Business Combinations We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer lists, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Income Taxes | Income Taxes We use the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The measurement of deferred tax assets and liabilities is based on provisions of applicable tax law. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance based on the amount of tax benefits that, based on available evidence, is not expected to be realized. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year’s financial statement to conform to classifications used in the current year. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. The Company currently has one reportable segment for financial reporting purposes, which represents the Company’s core business. |
New Accounting Pronouncements | New Accounting Pronouncements Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Accounting for Leases. This update requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at lease commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and shall continue to depend on its classification as a finance or operating lease. The Company adopted the ASU and related amendments on January 1, 2019 and elected certain practical expedients permitted under the transition guidance. The Company elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. Under the new guidance, the majority of the Company’s leases continued to be classified as operating. During the first quarter of 2019, the Company completed its implementation of its processes and policies to support the new lease accounting and reporting requirements. Based on the Company’s lease portfolio as of January 1, 2019, the impact of adopting ASU 2016-02 increased both the Company’s total assets and total liabilities by $2,153. The adoption of this ASU did not have a significant impact on the Company’s Consolidated Statements of Operations or Cash Flows. See Note 4 for more information regarding the new standard for leases. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, current U.S. GAAP requires the performance of procedures to determine the fair value at the impairment testing date of assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the amendments under this ASU require the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU became effective for the Company on January 1, 2020 and was followed in the preparation of a quantitative assessment of indefinite lived intangibles and goodwill at March 31, 2020. It was determined that the carrying value of goodwill exceeded its fair value at March 31, 2020 and, as a result, we recorded an impairment of $4,000. Management reviewed currently issued pronouncements during the three months ended March 31, 2020, and believes that any other recently issued, but not yet effective, accounting standards, if currently adopted, would not have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment | Depreciation for property and equipment commences when property and equipment are put into service and are depreciated using the straight-line method over the property and equipment’s estimated useful lives: Machinery & equipment 3-7 Years Furniture & fixtures 5-7 Years Computer equipment 3-5 Years Vehicles 5-7 Years Leaseholder improvements 3-5 Years |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents a disaggregation of revenue by customer type from contracts with customers for the three months ended March 31, 2020 and 2019: Three Months Ended 2020 2019 Agricultural, Commercial, and Industrial (ACI) $ 4,610 $ 4,037 Public Works 3,978 1,318 Residential 3,773 3,913 Total $ 12,361 $ 9,268 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Lease | Supplemental balance sheet information related to leases was as follows: March 31, 2020 (in thousands) Operating lease right-of-use assets $ 1,374 Operating lease liabilities—short term 893 Operating lease liabilities—long term 481 Total operating lease liabilities $ 1,374 |
Schedule of Maturities for Leases | Maturities for leases were as follows: Operating Leases (in thousands) Remainder of 2020 $ 751 2021 671 2022 49 2023 6 2024 - Thereafter - Total lease payments $ 1,477 Less: imputed interest 103 Total $ 1,374 |
Loans Payable (Tables)
Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Loans Payable | As of March 31, 2020 and December 31, 2019, loans payable (“Loans Payable”) are summarized as follows: March 31, 2020 December 31, 2019 Equipment notes payable 57 88 Subtotal 57 88 Less: Current position (57 ) (88 ) Long-term position $ - $ - |
Promissory Notes Payable (Table
Promissory Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Promissory Notes Payable | Promissory notes payable at March 31, 2020 and December 31, 2019 are as follows: March 31, 2020 December 31, 2019 Promissory notes payable $ 2,250 $ 3,750 Less, debt issuance costs (123 ) (266 ) Promissory notes payable, net $ 2,127 $ 3,484 |
Stock Options, Restricted Sto_2
Stock Options, Restricted Stock, and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Stock Options Activity | The Company determined the fair market value of these options by using the Black Scholes option valuation model. March 31, 2020 Number Weighted average of Options exercise price Outstanding, beginning December 31, 2019 143,623 $ 8.99 Granted - - Exercised - - Forfeited (1,428 ) $ 18.76 Outstanding, end of March 31, 2020 142,195 $ 8.81 Exercisable at the end of March 31, 2020 92,136 $ 11.48 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - $ / shares | Aug. 29, 2019 | Aug. 07, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Reverse stock split, description | Reverse stock split at a ratio of 1-for-7 | Ratio not less than 1-for-3 and not greater than 1-for-10 | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($)Segmentshares | Mar. 31, 2019USD ($)shares | Dec. 31, 2019USD ($) | Jan. 02, 2019USD ($) | |
Retention receivables | $ 824 | $ 1,027 | ||
Allowance for doubtful accounts receivable | 350 | 350 | ||
Bad debts | 122 | $ 23 | ||
Cash balance in excess of FDIC limits | 5,516 | |||
Inventory allowance, net | 50 | 50 | ||
Depreciation expense | 81 | 92 | ||
Advertising and marketing expenses | 23 | 43 | ||
Warranty reserve liability | 471 | 441 | ||
Goodwill impairment | $ 4,000 | |||
Number of reportable segments | Segment | 1 | |||
Operating lease, right-of-use asset | $ 1,374 | 1,505 | ||
Operating lease liability | $ 1,374 | $ 1,505 | ||
Accounting Standards Update 2016-02 [Member] | ||||
Operating lease, right-of-use asset | $ 2,153 | |||
Operating lease liability | $ 2,153 | |||
Stock Options [Member] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | shares | 142,195 | 136,071 | ||
Restricted Stock [Member] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | shares | 25,792 | |||
Warrants [Member] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | shares | 428,143 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Machinery & Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Machinery & Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Furniture & Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Furniture & Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 5,154 | $ 4,864 |
Contract liabilities | $ 3,435 | $ 4,616 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total | $ 12,361 | $ 9,268 |
Agricultural, Commercial, and Industrial (ACI) [Member] | ||
Total | 4,610 | 4,037 |
Public Works [Member] | ||
Total | 3,978 | 1,318 |
Residential [Member] | ||
Total | $ 3,773 | $ 3,913 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating leases expense | $ 260 | $ 299 |
Operating lease payments | 260 | 299 |
Amortization of right-of-use asset | 131 | $ 183 |
Finance lease expense | $ 260 | |
Weighted average remaining lease term | 1 year 6 months | |
Weighted average lease discount rate | 10.00% | |
Minimum [Member] | ||
Remaining lease term | 1 year | |
Maximum [Member] | ||
Remaining lease term | 3 years |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Lease (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 1,374 | $ 1,505 |
Operating lease liabilities-short term | 893 | 864 |
Operating lease liabilities-long term | 481 | 641 |
Total operating lease liabilities | $ 1,374 | $ 1,505 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities for Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Remainder of 2020 | $ 751 | |
2021 | 671 | |
2022 | 49 | |
2023 | 6 | |
2024 | ||
Thereafter | ||
Total lease payments | 1,477 | |
Less: imputed interest | 103 | |
Total operating lease liabilities | $ 1,374 | $ 1,505 |
Loans Payable (Details Narrativ
Loans Payable (Details Narrative) - USD ($) $ in Thousands | Apr. 27, 2018 | Dec. 23, 2016 | Nov. 14, 2016 | Sep. 08, 2016 | Jan. 05, 2016 | Mar. 31, 2020 | Dec. 31, 2019 |
Loans payable, current | $ 57 | $ 88 | |||||
Loan Agreement [Member] | |||||||
Debt instrument, face amount | $ 172 | $ 174 | $ 182 | ||||
Debt instrument, interest rate, stated percentage | 4.99% | 5.50% | 5.50% | ||||
Debt instrument, periodic payment | $ 12 | $ 4 | $ 4 | ||||
Debt instrument, maturity date | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 15, 2020 | Jan. 15, 2020 | |||
Debt instrument, collateral | The loan is secured by the modular office systems and related furniture. | The loan is secured by the pile driver. | The loan was secured by the equipment. | ||||
Loans payable, current | |||||||
Debt instrument, payment term | The loan agreement calls for 16 quarterly payments. | ||||||
Loan Agreement [Member] | Note Dated September 8, 2016 [Member] | |||||||
Loans payable, current | 24 | ||||||
Loan Agreement [Member] | Note Dated December 23, 2016 [Member] | |||||||
Loans payable, current | 24 | ||||||
0% Interest Loan Agreement [Member] | |||||||
Debt instrument, face amount | $ 59 | ||||||
Debt instrument, interest rate, stated percentage | 0.00% | ||||||
Debt instrument, periodic payment | $ 1 | ||||||
Debt instrument, maturity date | Nov. 13, 2020 | ||||||
Debt instrument, collateral | The loan is secured by the excavator. | ||||||
0% Interest Loan Agreement [Member] | Note Dated November 14, 2016 [Member] | |||||||
Loans payable, current | $ 9 |
Loans Payable - Schedule of Loa
Loans Payable - Schedule of Loans Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loan payable Subtotal | $ 57 | $ 88 |
Less: Current position | (57) | (88) |
Long-term position | ||
Equipment Notes Payable [Member] | ||
Loan payable Subtotal | $ 57 | $ 88 |
Acquisition Convertible Promi_2
Acquisition Convertible Promissory Note (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2015 | Feb. 28, 2015 | Feb. 28, 2015 | Nov. 30, 2015 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2017 | Dec. 31, 2019 |
Outstanding balances promissory note | $ 0 | $ 252 | ||||||
MD Energy LLC [Member] | ||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | 100.00% | ||||||
MD Energy LLC [Member] | Convertible Debt [Member] | ||||||||
Debt instrument, interest rate, stated percentage | 4.00% | 4.00% | ||||||
Debt instrument, face amount | $ 2,650 | $ 2,650 | ||||||
Debt instrument, convertible, terms of conversion feature | The note was convertible into shares of common stock on or after each of the following dates: November 30, 2015, November 30, 2016 and November 30, 2017. The conversion price was $2.60 per share. | |||||||
Debt instrument, convertible, conversion price | $ 2.60 | $ 2.60 | ||||||
Debt beneficial conversion feature | $ 3,262 | |||||||
Debt conversion, converted instrument, shares issued | 339,743 | |||||||
Debt conversion, original debt, amount | $ 883 | |||||||
Debt instrument, term | 2 years | |||||||
Debt instrument, payment terms | Commencing on March 31, 2015, and each quarter thereafter during the first two (2) years of the note, the Company made quarterly interest only payments to the noteholder for accrued interest on the note during the quarter. Commencing with the quarter ending on June 30, 2017, the Company began to make quarterly payments of interest accrued on the convertible note during the prior quarter plus $151 with the final payment of all outstanding principal and accrued but unpaid interest on the convertible note due and payable on February 28, 2020, the maturity date. | |||||||
Debt final payment of outstanding principal and interest | $ 151 | |||||||
Debt instrument, maturity date | Feb. 28, 2020 | |||||||
Amortization of debt | 0 | $ 0 | ||||||
Interest expense | $ 7 | $ 3 | ||||||
MD Energy LLC [Member] | Convertible Debt [Member] | Maximum [Member] | ||||||||
Debt instrument, convertible, conversion price | $ 5.80 | $ 5.80 | ||||||
Debt conversion, converted instrument, shares issued | 1,019,231 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Apr. 10, 2019 | Feb. 11, 2014 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2014 |
Interest expense, debt | $ 98 | |||||
Post-split Shares [Member] | ||||||
Debt conversion, converted instrument, shares issued | 68,082 | |||||
Convertible Promissory Notes [Member] | ||||||
Debt instrument, face amount | $ 0 | |||||
Convertible notes payable | 100 | |||||
Accrued interest | $ 61 | |||||
Debt conversion, converted instrument, shares issued | 68,082 | |||||
Convertible Notes Payable One [Member] | ||||||
Debt instrument, convertible, conversion price | $ 2.37 | |||||
Securities Purchase Agreement [Member] | ||||||
Debt instrument, interest rate, stated percentage | 10.00% | |||||
Debt instrument, face amount | $ 100 | |||||
Debt instrument, convertible, terms of conversion feature | The note was convertible into shares of common stock of the Company at a price equal to a variable conversion price equal to the lesser of $9.10 per share, or fifty percent (50%) of the lowest trading price after the effective date. | |||||
Debt instrument, convertible, conversion price | $ 9.10 | |||||
Debt instrument, maturity date, description | The note matured on various dates from the effective date of each advance with respect to each advance. At the sole discretion of the lender, the lender was able to modify the maturity date to be twelve (12) months from the effective date of each advance. The note matured on various dates in 2014, and was extended to September 30, 2016, and in March 2016 was subsequently extended to June 30, 2019 with zero interest. | |||||
Debt instrument, maturity date | Jun. 30, 2019 | |||||
Interest expense, debt | $ 0 | $ 0 |
Promissory Notes Payable (Detai
Promissory Notes Payable (Details Narrative) - USD ($) $ in Thousands | Jan. 28, 2020 | Jun. 17, 2019 | Jun. 03, 2019 | Apr. 27, 2018 | Dec. 23, 2016 | Sep. 08, 2016 | Jan. 05, 2016 | Mar. 31, 2020 | Mar. 31, 2019 | Jan. 31, 2020 |
Interest expenses | $ 98 | |||||||||
Amortization of debt issuance costs | 143 | $ 13 | ||||||||
Prepayment of senior note | 1,500 | |||||||||
Senior note | $ 3,000 | |||||||||
Loan Agreement [Member] | ||||||||||
Promissory notes | $ 172 | $ 174 | $ 182 | |||||||
Debt instrument, interest rate description | The Notes bear interest at the rate of the one-month LIBOR plus 950 basis points | |||||||||
Debt instrument, maturity date | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 15, 2020 | Jan. 15, 2020 | ||||||
Issuance of common stock in as fees paid for the extension of maturity date of debt, shares | 57,143 | |||||||||
Issuance of common stock in as fees paid for the extension of maturity date of debt | $ 344 | |||||||||
Legal fees | $ 7 | |||||||||
Description of event of default | Upon the occurrence of an Event of Default the outstanding principal amount of the Notes, plus accrued but unpaid interest and other amounts owing in respect thereof, shall become, at the giving of notice by CrowdOut, immediately due and payable. Interest on overdue payments upon the occurrence of an Event of Default shall accrue interest at a rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. | |||||||||
Interest expenses | $ 33 | $ 0 | ||||||||
Notes payable | $ 1,500 | |||||||||
Loan Agreement [Member] | Senior Note [Member] | ||||||||||
Notes payable | $ 3,000 | |||||||||
Loan Agreement [Member] | Senior Note [Member] | ||||||||||
Promissory notes | $ 3,000 | $ 3,000 | ||||||||
Debt instrument exit fees | $ 435 | |||||||||
Loan Agreement [Member] | Subordinated Notes [Member] | ||||||||||
Promissory notes | $ 750 | 750 | ||||||||
Loan Agreement [Member] | CrowdOut Capital, Inc [Member] | ||||||||||
Promissory notes | 3,750 | |||||||||
Debt issuance cost capitalized | $ 468 | |||||||||
Loan Agreement [Member] | CrowdOut Capital, Inc [Member] | Extended Maturity [Member] | ||||||||||
Debt instrument, maturity date | Jan. 31, 2021 | |||||||||
Second Amendment Loan Agreement [Member] | ||||||||||
Prepayment of senior note | $ 1,500 |
Promissory Notes Payable - Sche
Promissory Notes Payable - Schedule of Promissory Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Promissory notes payable, net | $ 3,484 | |
Promissory Notes Payable [Member] | ||
Promissory notes payable | 2,250 | 3,750 |
Less, debt issuance costs | (123) | (266) |
Promissory notes payable, net | $ 2,127 | $ 3,484 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Aug. 29, 2019 | Aug. 07, 2019 | Jun. 17, 2019 | Apr. 10, 2019 | Mar. 31, 2020 | Mar. 26, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Mar. 13, 2020 | Jun. 03, 2019 | Apr. 27, 2018 | Dec. 23, 2016 | Sep. 08, 2016 | Jan. 05, 2016 |
Reverse stock split | Reverse stock split at a ratio of 1-for-7 | Ratio not less than 1-for-3 and not greater than 1-for-10 | |||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Minimum closing bid price per share | $ 1 | ||||||||||||||
Placement Shares [Member] | |||||||||||||||
Sale of shares of common stock | 9,817,343 | ||||||||||||||
Proceeds from private placement | $ 7,736 | $ 7,976 | $ 6,691 | ||||||||||||
Sale of stock, price per share | $ 0.788 | $ 0.812 | $ 2.291 | $ 2.291 | |||||||||||
Placement Shares [Member] | June 6, 2019 and December 31, 2019 [Member] | |||||||||||||||
Sale of shares of common stock | 2,920,968 | ||||||||||||||
Proceeds from private placement | $ 7,023 | ||||||||||||||
Sale of stock, price per share | $ 2.404 | $ 2.404 | |||||||||||||
Convertible Promissory Notes [Member] | |||||||||||||||
Convertible notes payable | $ 100 | ||||||||||||||
Accrued interest | $ 61 | ||||||||||||||
Number of shares issued converted | 68,082 | ||||||||||||||
Promissory notes | $ 0 | ||||||||||||||
Loan Agreement [Member] | |||||||||||||||
Promissory notes | $ 172 | $ 174 | $ 182 | ||||||||||||
Issuance of common stock in as fees paid for the extension of maturity date of debt | $ 344 | ||||||||||||||
Loan Agreement [Member] | Senior Note [Member] | |||||||||||||||
Promissory notes | $ 3,000 | $ 3,000 | |||||||||||||
ATM Agreement [Member] | Agent [Member] | |||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||
Aggregate sale value of common stock | $ 15,000 | ||||||||||||||
Charles Cargile, Chief Executive Officer [Member] | Restricted Stock Grant Agreement [Member] | |||||||||||||||
Number of common stock shares issued | 5,952 | 5,952 |
Stock Options, Restricted Sto_3
Stock Options, Restricted Stock, and Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 29, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Number of non-qualified stock options outstanding to purchase shares of common stock | 142,195 | 143,623 | ||
Exercise price per share | $ 8.81 | $ 8.99 | ||
Share-based compensation | $ 98 | $ 124 | ||
Warrants [Member] | Previously Issued [Member] | ||||
Number of common stock purchase warrants outstanding | 428,143 | |||
Warrant exercise price | $ 0.65 | |||
Warrant expiration | Mar. 9, 2020 | |||
Restricted Stock Grant Agreement [Member] | March 29, 2017 [Member] | ||||
Share-based compensation | $ 63 | 62 | ||
Restricted Stock Grant Agreement [Member] | Charles F. Cargile [Member] | ||||
Exercise price per share | $ 10.50 | |||
Restricted shares shall vest, description | The March 2017 RSGA provides for the issuance of up to 71,429 shares of the Company's common stock. The restricted shares shall vest as follows: 23,810 of the restricted shares shall vest on the one (1) year anniversary of the effective date, and the balance, or 47,619 restricted shares, shall vest in twenty-four (24) equal monthly installments commencing on the one (1) year anniversary of the effective date. | |||
Maximum [Member] | Restricted Stock Grant Agreement [Member] | Charles F. Cargile [Member] | ||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 71,429 | |||
Stock Option [Member] | ||||
Number of non-qualified stock options outstanding to purchase shares of common stock | 142,195 | |||
Stock options vest at various time and exercisable period | 5 years | |||
Share-based compensation | $ 35 | $ 62 | ||
Stock Option [Member] | Minimum [Member] | ||||
Exercise price per share | $ 2.10 | |||
Stock Option [Member] | Maximum [Member] | ||||
Exercise price per share | $ 21.70 | |||
One Year Anniversary [Member] | Restricted Stock Grant Agreement [Member] | Charles F. Cargile [Member] | ||||
Restricted shares shall vest | 23,810 | |||
24 Equal Monthly Installments [Member] | Restricted Stock Grant Agreement [Member] | Charles F. Cargile [Member] | ||||
Restricted shares shall vest | 47,619 |
Stock Options, Restricted Sto_4
Stock Options, Restricted Stock, and Warrants - Schedule of Share-based Compensation, Stock Options Activity (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Options, Outstanding, beginning | shares | 143,623 |
Number of Options, Granted | shares | |
Number of Options, Exercised | shares | |
Number of Options, Forfeited | shares | (1,428) |
Number of Options, Outstanding, end | shares | 142,195 |
Number of Options, Exercisable at the end | shares | 92,136 |
Weighted Average Exercise Price, Outstanding, beginning | $ / shares | $ 8.99 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | 18.76 |
Weighted Average Exercise Price, Outstanding, end | $ / shares | 8.81 |
Weighted Average Exercise Price, Exercisable at the end | $ / shares | $ 11.48 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
President [Member] | |
Rent paid to related party | $ 9 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ in Thousands | Apr. 28, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Loan | $ 57 | $ 88 | |
Subsequent Event [Member] | Paycheck Protection Plan [Member] | |||
Loan | $ 2,847 | ||
Debt instrument, forgiveness amount percentage | 25.00% | ||
Debt instrument, interest rate, stated percentage | 1.00% | ||
Debt instrument, maturity date | Apr. 28, 2022 | ||
Debt instrument, payment term | During the 8-week period, subsequent to the cash being received by the Company, are eligible to be forgiven. The forgiveness amount allows for not more than 25% of the forgiveness to be for non-payroll items. The remaining unforgiven amount of the loan bears interest at 1% per annum and matures on April 28, 2022. Initial principal payments are deferred for the first six months; however, interest still accrues during this time. There are no collateral requirements or prepayment penalties associated with the loan. |