Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 08, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | OSS | ||
Entity Registrant Name | One Stop Systems, Inc. | ||
Entity Central Index Key | 0001394056 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 48,864,431 | ||
Entity Common Stock, Shares Outstanding | 20,700,435 | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-38371 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 33-0885351 | ||
Entity Address, Address Line One | 2235 Enterprise Street #110 | ||
Entity Address, City or Town | Escondido | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92029 | ||
City Area Code | 760 | ||
Local Phone Number | 745-9883 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Auditor Name | Haskell & White LLP | ||
Auditor Location | Irvine, California, U.S.A. | ||
Auditor Firm ID | 200 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE None |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 4,048,948 | $ 3,112,196 |
Short-term investments (Note 3) | 7,771,820 | 10,123,535 |
Accounts receivable, net (Note 4) | 8,318,247 | 11,327,244 |
Inventories, net (Note 5) | 21,694,748 | 20,775,366 |
Prepaid expenses and other current assets | 611,066 | 502,156 |
Total current assets | 42,444,829 | 45,840,497 |
Property and equipment, net (Note 6) | 2,370,224 | 2,570,124 |
Operating lease right-of use assets | 1,922,784 | 731,043 |
Deposits and other | 38,093 | 60,243 |
Goodwill | 1,489,722 | 7,120,510 |
Intangible assets, net (Note 7) | 42,154 | |
Total Assets | 48,265,652 | 56,364,571 |
Current liabilities | ||
Accounts payable | 1,201,781 | 4,592,713 |
Accrued expenses and other liabilities (Note 8) | 3,202,519 | 3,013,869 |
Current portion of operating lease obligation (Note 13) | 390,926 | 536,588 |
Current portion of notes payable (Note 9) | 2,077,895 | 2,952,447 |
Total current liabilities | 6,873,121 | 11,095,617 |
Long-term debt, net of current portion (Note 9) | 409,294 | |
Deferred tax liability, net | 44,673 | 138,662 |
Operating lease obligation, net of current portion (Note 13) | 1,765,536 | 397,249 |
Total liabilities | 8,683,330 | 12,040,822 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Common stock, $0.0001 par value; 50,000,000 shares authorized;20,661,341 and 20,084,528 shares issued and outstanding, respectively | 2,066 | 2,008 |
Additional paid-in capital | 47,323,673 | 45,513,807 |
Accumulated other comprehensive income | 675,310 | 510,485 |
Accumulated deficit | (8,418,727) | (1,702,551) |
Total stockholders’ equity | 39,582,322 | 44,323,749 |
Total Liabilities and Stockholders' Equity | $ 48,265,652 | $ 56,364,571 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 20,661,341 | 20,084,528 |
Common stock, shares outstanding | 20,661,341 | 20,084,528 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 60,896,797 | $ 72,421,345 |
Cost of revenue | 42,942,175 | 52,023,736 |
Gross profit | 17,954,622 | 20,397,609 |
Operating expenses: | ||
General and administrative | 9,264,447 | 7,279,401 |
Impairment of goodwill | 5,630,788 | |
Marketing and selling | 6,651,516 | 6,806,306 |
Research and development | 4,331,024 | 4,743,574 |
Total operating expenses | 25,877,775 | 18,829,281 |
(Loss) income from operations | (7,923,153) | 1,568,328 |
Other income (expense): | ||
Interest income | 544,958 | 237,751 |
Interest expense | (117,774) | (162,391) |
Employee retention credit (ERC) | 1,716,727 | |
Other (expense) income, net | (9,806) | 550,854 |
Total other income, net | 2,134,105 | 626,214 |
(Loss) income before income taxes | (5,789,048) | 2,194,542 |
Provision for income taxes | 927,128 | 4,423,597 |
Net loss | $ (6,716,176) | $ (2,229,055) |
Net loss per share: | ||
Basic | $ (0.32) | $ (0.11) |
Diluted | $ (0.32) | $ (0.11) |
Weighted average common shares outstanding: | ||
Basic | 20,854,777 | 19,730,698 |
Diluted | 20,854,777 | 19,730,698 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss) | $ (6,716,176) | $ (2,229,055) |
Other comprehensive income (loss): | ||
Net unrealized (loss) income on short-term investments | (9,162) | 26,015 |
Currency translation adjustment | 173,987 | 331,109 |
Total other comprehensive income | 164,825 | 357,124 |
Comprehensive loss | $ (6,551,351) | $ (1,871,931) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Adjustment | Common Stock | Common Stock Adjustment | Additional Paid-in Capital | Additional Paid-in Capital Adjustment | Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Adjustment | Accumulated (Deficit) Earnings | Accumulated (Deficit) Earnings Adjustment |
Balance at Dec. 31, 2021 | $ 41,958,716 | $ 41,914,183 | $ 1,877 | $ 1,877 | $ 41,232,441 | $ 41,232,441 | $ 153,361 | $ 153,361 | $ 571,037 | $ 526,504 |
Balance (ASC 842) at Dec. 31, 2021 | $ (44,533) | $ (44,533) | ||||||||
Balance, Shares at Dec. 31, 2021 | 18,772,214 | 18,772,214 | ||||||||
Stock-based compensation | 1,991,117 | 1,991,117 | ||||||||
Exercise of stock options, RSUs and warrants | 42,162 | $ 27 | 42,135 | |||||||
Exercise of stock options, RSUs and warrants, Shares | 275,949 | |||||||||
Taxes paid on net issuance of employee stock options | (342,691) | (342,691) | ||||||||
Conversion of senior secured convertible debt to equity | 2,590,909 | $ 104 | 2,590,805 | |||||||
Conversion of senior secured convertible debt to equity, Shares | 1,036,365 | |||||||||
Currency translation adjustment | 331,109 | 331,109 | ||||||||
Net unrealized gain on short-term investments | 26,015 | 26,015 | ||||||||
Net loss | (2,229,055) | (2,229,055) | ||||||||
Balance at Dec. 31, 2022 | 44,323,749 | $ 2,008 | 45,513,807 | 510,485 | (1,702,551) | |||||
Balance, Shares at Dec. 31, 2022 | 20,084,528 | |||||||||
Stock-based compensation | 2,345,358 | 2,345,358 | ||||||||
Exercise of stock options, RSUs and warrants | 62,422 | $ 58 | 62,364 | |||||||
Exercise of stock options, RSUs and warrants, Shares | 576,813 | |||||||||
Taxes paid on net issuance of employee stock options | (597,856) | (597,856) | ||||||||
Currency translation adjustment | 173,987 | 173,987 | ||||||||
Net unrealized gain on short-term investments | (9,162) | (9,162) | ||||||||
Net loss | (6,716,176) | (6,716,176) | ||||||||
Balance at Dec. 31, 2023 | $ 39,582,322 | $ 2,066 | $ 47,323,673 | $ 675,310 | $ (8,418,727) | |||||
Balance, Shares at Dec. 31, 2023 | 20,661,341 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (6,716,176) | $ (2,229,055) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred benefit (provision) for income taxes | (95,496) | 3,781,704 |
Loss on disposal of property and equipment | 54,377 | |
Provision for bad debt | 4,160 | 29,154 |
Impairment of goodwill | 5,630,788 | |
Warranty reserves | 11,846 | 33,796 |
Amortization of intangibles | 42,154 | 63,231 |
Depreciation | 1,035,362 | 987,068 |
Inventory reserves | 962,458 | 798,789 |
Amortization of debt discount | 1,224 | |
Stock-based compensation expense | 2,345,358 | 1,991,117 |
Employee retention credit (ERC) | (1,716,727) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,095,701 | (6,253,003) |
Inventories | (1,636,153) | (9,547,390) |
Prepaid expenses and other current assets | (100,848) | 38,080 |
Accounts payable | (3,408,487) | 2,515,000 |
Accrued expenses and other liabilities | 106,381 | (70,117) |
Net cash (used in) operating activities | (439,679) | (7,806,025) |
Cash flows from investing activities: | ||
Redemption of short-term investment grade securities | 2,342,552 | 4,313,231 |
Proceeds from sales of intangible assets | 125,000 | |
Purchases of property and equipment, including capitalization of labor costs for test equipment and ERP | (821,753) | (529,908) |
Net cash provided by investing activities | 1,520,799 | 3,908,323 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options and warrants | 62,422 | 42,162 |
Payment of payroll taxes on net issuance of employee stock options | (597,856) | (342,691) |
Proceeds from notes payable | 2,500,000 | |
Repayments on notes payable | (1,352,637) | (252,918) |
Proceeds on employee retention credit (ERC) | 1,716,727 | |
Net cash (used in) provided by financing activities | (171,344) | 1,946,553 |
Net change in cash and cash equivalents | 909,776 | (1,951,149) |
Effect of exchange rates on cash | 26,976 | (37,829) |
Cash and cash equivalents, beginning of year | 3,112,196 | 5,101,174 |
Cash and cash equivalents, end of year | 4,048,948 | 3,112,196 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the year for interest | 113,155 | 54,403 |
Cash paid during the year for income taxes | 558,334 | 107,061 |
Supplemental disclosure of non-cash transactions: | ||
Reclassification of inventories to property and equipment | 95,803 | 143,492 |
Right of use assets recorded upon adoption of ASC 842 | $ 1,590,568 | 1,203,580 |
Lease Liabilities recorded upon adoption of ASC 842 | 1,477,419 | |
Conversion of senior secured convertible debt to common stock | $ 2,590,909 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (6,716,176) | $ (2,229,055) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule 10b51 Arrangement Modified | false |
Non Rule 10b51 Arrangement Modified | false |
Modified Date | December 31, 2023 |
The Company and Basis of Presen
The Company and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION Nature of Operations One Stop Systems, Inc. (“we,” “our,” “OSS,” or the “Company”) was originally incorporated as a California corporation in 1999, after initially being formed as a California limited liability company in 1998. On December 14, 2017, the Company was reincorporated as a Delaware corporation in connection with its initial public offering. The Company designs, manufactures, and markets specialized rugged high-performance compute, high speed switch fabrics and storage systems, which are designed to target edge applications for artificial intelligence (“AI”)/machine learning (“ML”), sensor processing, sensor fusion and autonomy. The Company markets its products to manufacturers of equipment used for autonomous vehicles, medical, industrial, and military applications, with special focus on platforms that move, such as planes, trucks, ships, submarines and mobile datacenters or command posts where sensor processing, sensor fusion, AI and ML are integrated to support such applications. During the year ended December 31, 2015, the Company formed a wholly owned subsidiary in Germany, One Stop Systems, GmbH (“OSS GmbH”). In July 2016, the Company acquired Mission Technologies Group, Inc. (“Magma”) and its operations that complemented OSS' manufacture of custom high-performance compute servers. On August 31, 2018, the Company acquired Concept Development Inc. (“CDI”) located in Irvine, California. CDI specialized in the design and manufacture of custom high-performance computing systems for airborne in-flight entertainment, flight safety equipment, and networking systems. CDI’s business was fully integrated into the core operations of the Company as of June 1, 2020. On October 31, 2018, OSS GmbH acquired 100 % of the outstanding equity of Bressner Technology GmbH, a limited liability company registered under the laws of Germany and located near Munich, Germany (“Bressner”). Bressner designs and manufactures standard and customized servers, panel PCs, and PCIe accelerator systems. It also operates as a systems integrator with standard and custom all in one hardware systems and components. In addition, Bressner serves as a channel to market for OSS ruggedized datacenter level compute and storage products to the European and Middle Eastern markets. The Company has completed and fulfilled substantially all of its orders associated with its long-term media and entertainment customer and does not anticipate significant business from this customer in the future. This resulted from an acceleration in such customer’s investment in cloud technology and a drive towards less intelligent compute capability at the edge to reduce the costs of their componentry. This is particularly true of their virtual products, which do not require the same level of ruggedization, as this system is not typically operated in harsh environments and for which software is being developed to provide a real-time cloud solution. This customer’s transition to cloud solutions had a negative impact on the Company’s results of operations for the year ended December 31, 2023. With the Company's shifted focus on the development and sale of AI Transportables, we have significantly increased our efforts to penetrate the military and defense sectors in particular. With the recent hiring of Michael Knowles and Robert Kalebaugh, each of whom has extensive experience in contracting in the defense industry, as our new president and chief executive officer and vice president of sales, respectively, we have further increased our emphasis and focus on the pursuit of revenue opportunities with major defense contractors and the military. The lingering negative impacts of the COVID-19 pandemic and the impact on the global economy and capital markets resulting from the geopolitical instability caused in part by the ongoing military conflict between Russia and Ukraine and Israel and Hamas, including inflation and Federal Reserve and European Central Bank interest rate increases, have contributed to global supply chain issues and economic uncertainty, which has negatively affected our operations. Though economists are now suggesting that we should expect to see a soft-landing in the U.S. in the foreseeable future, volatility and recessionary conditions in Europe, and in particular in Germany, are expected to remain a concern for the near term. As a result of the foregoing, there is continued economic uncertainty and volatility in the capital markets in the near term that could negatively affect our operations. We are continuing to experience increased pricing, long lead-times, unavailability of certain product and limited supplies, protracted delivery dates, changes in minimum order quantities to secure product, and/or shortages of certain parts and supplies that are necessary components for the products and services we offer to our customers. As a result, the Company is continuing to carry increased inventory balances to ensure availability of necessary products and to secure pricing. These global issues and concerns regarding general economic decline or recession are impacting our business as well as some of our customers, who are experiencing downturns or uncertainty in their own business operations and revenue, and as a result, these customers may need to decrease or delay their technology spending, request pricing concessions or payment extensions, or seek to renegotiate their contracts. During the year ended December 31, 2023, the Company experienced delays and postponements of committed purchases and orders due to certain customers’ funding or program delays. We have also experienced cancellations of orders due to disruptions in our customers’ businesses or changes in their business plans. Such delays, postponements and cancellations negatively impacted the Company’s results of operations for the year ended December 31, 2023. If such decreases in orders, postponements or cancellations continue in the future, our operating results will be further impacted, and our revenues may decline in future periods. These global issues and events may also have the effect of heightening many risks associated with our customers and supply chain. We may take further actions that alter our operations from time to time, or which we determine are in our best interests. In addition, we may decide to postpone or abandon planned investments in our business in response to changes in our business, which may impact our ability to attract and retain customers and our rate of innovation, either of which could harm our business. As a result of these global issues, as well as other factors discussed in these footnotes, it has been difficult to accurately forecast our revenues or financial results, especially given the near and long-term impacts of the economic and geopolitical issues, inflation, the Federal Reserve and European Central Bank interest rate increases. In addition, while the potential impact and duration of these issues on the economy and our business may be difficult to assess or predict, these world events have resulted in, and may continue to result in, significant disruption of global financial markets, and may reduce our ability to access additional capital, which could negatively affect our liquidity in the future. Our results of operations could be materially below our forecasts as well, which could adversely affect our results of operations, disappoint analysts and investors, or cause our stock price to decline. Management’s plans with respect to the above are to continue their efforts towards responding to the changing economic landscape, to continue to control costs, conserve cash, strengthen margins through the introduction of new product lines focusing on AI compute capabilities for military and industrial applications, autonomous truck diving and improve company-wide execution. Basis of Presentation The accompanying financial statements have been prepared on an accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”), as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of OSS, which include the acquisition of CDI, and its wholly owned subsidiary, OSS GmbH, which also includes the acquisition of Bressner. Intercompany balances and transactions have been eliminated in consolidation. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. On an ongoing basis, our management evaluates these estimates and assumptions, including those related to determination of standalone selling prices of our products and services, allowance for doubtful account and sales reserves, income tax valuations, stock-based compensation, goodwill, intangible assets and inventory valuations and recoverability. We base our estimates on historical data and experience, as well as various other factors that our management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Due to the COVID-19 pandemic, Ukraine war, inflationary pressures, other macroeconomic factors and reduced revenue opportunities with our largest customer there has been uncertainty and disruption in the global economy, financial markets and our ongoing operations. We are not aware of any specific event or circumstance that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities that has not been properly reflected in the consolidated financial statements. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions . Concentration Risks At times, deposits held with financial institutions may exceed the amount of insurance provided by the Federal Deposit Insurance Corporation (“FDIC”) and Securities Investor Protection Corporation (“SIPC”), of which both provide basic deposit coverage with limits up to $ 250,000 per owner. As of December 31, 2023, the Company had $ 250,000 of cash in our accounts that exceeded the insurance limits. The Company has not experienced any such losses in these accounts, and believes that the financial institutions at which such amounts are held are stable; however, no assurances can be provided. In Germany, the deposit insurance is € 100,000 per bank, per customer. Bressner has funds on deposit in both Euro and U.S. dollar denominations of € 914,664 (US$ 1,015,214 ) with banks in excess of the insurance limits. In the years ended December 31, 2023 and 2022, approximately 13 %, representing one customer and 26 %, representing one customer, respectively, of net sales represent customers which are each greater than 10% of our consolidated annual revenue. As of December 31, 2023 and 2022, approximately 22 % and 49 %, respectively, of net trade accounts receivables represent one customer balance which is each greater than 10% of our consolidated trade accounts receivable balance. The Company made purchases from a certain supplier which represented greater than 10% of the Company’s vendor purchases on an annual basis. This vendor represented approximately 37 % and 25 % of purchases for the years ended December 31, 2023, and 2022, respectively. Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit and money market accounts. The Company considers all highly liquid temporary cash investments with an initial maturity of three months or less when acquired to be cash equivalents. Management believes that the carrying amounts of cash equivalents approximate their fair value because of the short maturity period. Short-term Investments Short-term investments consist predominantly of commercial paper, corporate debt securities, U.S. Treasury securities, and asset-backed securities. The Company classifies short-term investments based on the facts and circumstances surrounding the investments at the time of purchase and evaluates such classification as of each balance sheet date. On December 31, 2023, all short-term investments were classified as available-for-sale. Short-term investments are recorded at fair value with unrealized gains and losses included in accumulated other comprehensive income - a component of stockholders’ equity. Realized gains and losses are determined using the specific identification method and are included in other income (expense) in the consolidated statement of operations. The Company evaluates its investments to determine whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before recovery of their cost basis. Accounts Receivable Accounts receivables are presented at net realizable value. This value includes an appropriate allowance for credit losses to reflect any loss anticipated on the trade accounts receivable and unbilled receivables. Unbilled receivables include cost and gross profit earned in excess of billings. The allowance for credit losses is an estimate to cover the losses resulting from the inability of customers to make payments on their outstanding balances and unbilled receivables. In estimating the required allowance, management considers the overall collectability, customer creditworthiness, historical levels of credit losses and future expectations and aging of the accounts receivable, specific customer circumstances, current economic trends, and historical experience with collections. On December 31, 2023 and 2022, the allowance for credit losses is $ 50,032 and $ 45,354 , respectively. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13 , which sets out the principles for the recognition of measurement of credit losses on financial instruments. This standard provides guidance on the impairment of financial instruments that is based on expected losses rather than probable or incurred losses. Under this new guidance, the Company will recognize, as an allowance, our estimate of expected credit losses based upon historical and current information, and reasonable and supportable forecasts of future events and circumstances, as well as estimates of prepayments. Under this model, we are required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. Accounts receivable have been reduced for credit by an allowance for credit losses. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable after considering current market conditions and supportable forecasts when appropriate. This estimate is a result of management's evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. The Company shall recognize an allowance for credit losses rather than a reduction to the carrying value of the asset for debt securities. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. Upon adoption of this standard on January 1, 2023, there was no immediate material impact to the Company's consolidated financial position, results of operations or cash flows. On an ongoing basis, the Company will contemplate forward-looking economic conditions in recording lifetime expected credit losses for the Company’s financial assets measured at cost, such as the Company’s trade receivables and certain short-term investments. The following table represents the changes in the allowance for credit losses associated with our trade receivables for the year ended December 31, 2023: Allowanced for Credit Losses For the Year Ended December 31, 2023 Balance on January 1, 2023 $ 45,354 Provision charged to expense 4,160 Receivables written-off ( 2,943 ) Recoveries of receivables previously written-off 3,155 Effects of change in exchange rates 306 Balance on December 31, 2023 $ 50,032 Inventories Inventories are valued at the lower of cost or net realizable value. The Company uses the average cost method for purposes of determining cost, which approximates the first-in, first-out method. The Company establishes reserves on its inventories to write-down the carrying value of its estimated obsolete or excess inventories to estimated net realizable value based upon observations of historical usage and assumptions about future demand and market conditions. In addition, the Company considers changes in the market value of components in determining the net realizable value of its inventory. Inventory reserves are not typically reversed until the specific inventories are sold or otherwise disposed. Actual demand, product mix and alternative usage may be lower than those that we project, and this difference could have a material adverse effect on our gross margin if inventory write-downs beyond those initially recorded become necessary. Alternatively, if actual demand, product mix and alternative usage are more favorable than those we estimated at the time of such a write-down, our gross margin could be favorably impacted in future periods. Property and Equipment Property and equipment, other than leasehold improvements, are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally from two to seven years . Leasehold improvements are recorded at cost and are amortized using the straight-line method over the shorter of the remaining lease term or the estimated useful life of the related asset. Tooling and test equipment includes capitalized labor costs associated with the development of the related tooling and test equipment. Costs incurred for maintenance and repairs are expensed as incurred, and expenditures for major replacements and improvements are capitalized. Upon retirement or sale, the cost and related accumulated depreciation and amortization of disposed assets are removed from the accounts and any resulting gain or loss is included in other (expense) income, net. Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases” which sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases. A lease must be classified as a finance lease if any of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any of these criteria. The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. Right-of-use assets and liabilities are initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right of use assets are reviewed for impairment. The lease liability is initially measured at the present value of future minimum lease payments over the expected lease term at the commencement date of each lease. The Company measures and records a right-of-use asset and lease liability based on the discount rate implicit in the lease, if known. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor's estimated residual value or the amount of the lessor's deferred initial direct costs. In these cases where the discount rate implicit in the lease is not known, the Company measures the right-of-use assets and lease liabilities using a discount rate equal to the Company's incremental borrowing rate it pays on current debt instruments or would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The Company and its subsidiary have no leases classified as finance leases. The Company and its subsidiary currently lease plant, office facilities and equipment under operating leases expiring through August 2030 . The Company’s lease agreements may include options to extend the lease following the initial term. On a case-by-case basis, the Company’s management determines if it is reasonably certain to exercise the renewal option; such renewal options were included in determining the initial lease term. We elected the package of practical expedients in transition for leases that commenced prior to January 1, 2022, and therefore did not reassess (i) whether any expired or existing contracts are, or contain, leases, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for any existing leases. We elected to use hindsight for transition when considering judgments and estimates such as assessments of lease options to extend, or terminate, a lease, or to purchase the underlying asset. As result of the adoption of ASC 842, the Company recognized an accumulative adjustment to beginning retained earnings for the 2022 fiscal year of $ 44,533 . For all asset classes, we elected to (i) not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less and (ii) not separate non-lease components from lease components, and we have accounted for combined lease and non-lease components as a single lease component. Variable lease payments associated with the Company’s leases are recognized upon occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed. For those leases that are subsequently modified for terms, such changes may require a remeasurement of the lease liability. Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the right-of-use asset on a straight-line basis over the lease term and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually and when we deem that a triggering event has occurred. The Company reviews goodwill for impairment annually on December 31 st . The Company completed its annual assessment for goodwill impairment and determined that goodwill was not impaired as of December 31, 2023, and no adjustment was required. In June and September of 2023, the Company performed an interim impairment test of goodwill, as a result of the overall financial performance of OSS as compared to plan, the transition of and focus on our product strategy of AI Transportables and the defense industry, along with the deferment of certain orders. As a result of these interim evaluations, the Company recorded an adjustment of $ 2,700,000 in June 2023, and an additional impairment loss to goodwill of $ 2,930,788 , which was charged to operating expenses in September 2023. Total goodwill impairment loss for the year ended December 31, 2023, was $ 5,630,788 . Intangible Assets and Long-lived Assets We evaluate our intangible and long-lived assets for impairment when events or circumstances arise that indicate our intangible and long-lived assets may be impaired. Indicators of impairment include, but are not limited to, a significant deterioration in overall economic conditions, a decline in our market capitalization, the loss of significant business, significant decreases in funding for our contracts, or other significant adverse changes in industry or market conditions. The Company has fully amortized recorded intangible assets and as such there is no impairment as of December 31, 2023. Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. These tiers include: • Level 1, defined as quoted market prices in active markets for identical assets or liabilities; • Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3, defined as unobservable inputs that are not corroborated by market data. The carrying value of financial instruments including cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses, and other liabilities approximate fair value due to the short-term nature of these instruments. The carrying amounts of the Company’s short-term investments, notes payable and Bressner’s existing lines of credit and notes payable approximate their fair values at the stated interest rates and are reflective of the prevailing market rates. Revenue Recognition The Company’s revenues are recognized in accordance with ASC 606, Revenue from Contracts with Customers for which the Company’s performance obligations are satisfied over time as work is performed or at a point in time. The majority of the Company’s revenue is recognized at a point in time when products ship and control is transferred to the customer. The Company determines revenue recognition through the following steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when, or as, a performance obligation is satisfied. The Company’s contracts are executed through a combination of written agreements along with purchase orders with all customers including certain general terms and conditions. Generally, purchase orders entail products, quantities and prices, which define the performance obligations of each party and are approved and accepted by the Company. The Company’s contracts with customers typically do not include extended payment terms. Payment terms vary by contract type and type of customer and generally range from 30 to 60 days from invoice. Additionally, taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer and deposited with the relevant government authority, are excluded from revenue. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer adjusted for estimated variable consideration, if any. Variable consideration may include discounts, rights of return, refunds, and other similar obligations. The Company allocates the transaction price to each distinct product and service based on its relative standalone selling price. The standalone selling price for products primarily involves the cost to produce the deliverable plus the anticipated margin and for services is estimated based on the Company’s approved list price. In the normal course of business, the Company does not accept product returns unless the items are defective as manufactured. The Company establishes provisions for estimated returns and warranties. In addition, the Company does not typically provide customers with the right to a refund and does not transact for noncash consideration. Customer agreements include one vendor managed inventory program. The Company recognizes revenue under this arrangement when all of the following criteria are met: (i) the goods have been identified separately as belonging to the customer; (ii) the goods are ready for physical shipment to the customer; (iii) the Company does not have the ability to direct the goods to another customer; and (iv) the arrangement was requested by the customer and that the customer has sufficiently explained a substantial business purpose for the arrangement. Management also considers whether the customer's custodial risks are insured and whether modifications to the Company's normal billing and credit terms were required. The Company recorded revenue from product sales that are held in vendor managed inventory under this agreement of $ 4,858,660 and $ 18,504,677 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, $ 0 and $ 3,446,474 , respectively, of products sold through those dates were held by the Company in the vendor management program. Revenues on certain fixed-price contracts where we provide engineering services, prototypes and completed products are recognized over time based upon the output method as milestones are met and value is delivered to the customer, which depicts the Company’s progress toward fulfilling its performance obligations. These services require that we perform significant, extensive, and complex design, development, modification or implementation of our customers’ systems. Performance will often extend over long periods of time, and our right to receive future payment depends on our future performance in accordance with the agreement. If changes occur in delivery, productivity or other factors used in developing the estimates of costs or revenues, we revise our cost and revenue estimates, which may result in increases or decreases in revenues and costs, and such revisions are reflected in earnings in the period in which the revision becomes known. There were no significant unbilled or incomplete milestone projects as of December 31, 2023 and 2022. The Company’s operating segment revenues, disaggregated by primary geographic market, which is determined based on a customer’s geographic location, for the years ended December 31, 2023 and 2022, are as follows: For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 Entity: Domestic International Total Domestic International Total Customized computers and flash arrays $ 21,221,868 $ 7,588,020 $ 28,809,888 $ 22,506,650 $ 20,780,065 $ 43,286,715 Value-added reseller with minimal - 32,086,909 32,086,909 - 29,134,630 29,134,630 $ 21,221,868 $ 39,674,929 $ 60,896,797 $ 22,506,650 $ 49,914,695 $ 72,421,345 Warranty Reserve The Company offers product warranties that extend for one or two years from the date of sale. Such warranties are considered assurance-type warranties; therefore, they would not be deemed to be a separate performance obligation under ASC 606. Such warranties require the Company to repair or replace defective product returned to the Company during the warranty period at no cost to the customer. The Company records an estimate for warranty‑related costs based on its historical and estimated future product return rates and expected repair or replacement costs (Note 8). While such costs have historically been within management’s expectations and the provisions established, unexpected changes in failure rates could have a material adverse impact on the Company, requiring additional warranty reserves and could adversely affect the Company’s gross profit and gross margins. The Company offers customers extended warranties beyond the standard one-year warranty on the product. The extended warranties are considered service-type warranties and would be considered as a separate performance obligation under ASC 606. The Company is the primary obligor and revenue is recognized on a gross basis ratably over the term of the extended warranty. The customer can purchase extended warranties from one to five years , in the bronze, silver or gold categories. This entails hardware repair or replacement, shipping methods on how the warranties will be returned/delivered, response times and hours of operations to receive support. The value of warranties sold for years ended December 31, 2023 and 2022, were $ 108,265 and $ 302,422 , respectively. The revenue that was recognized for the warranties sold for the years ended December 31, 2023 and 2022, were $ 189,171 and $ 233,010 , respectively. The Company does have recourse with some of its suppliers that offer more than a one-year guarantee on parts, but this is not standard. For the few that offer greater than a year warranty, the Company may be able to recover the cost of the part from the manufacturer for the failed part. The amounts of these costs vary in a wide range, but are not material, due to the infrequency of failure. As of December 31, 2023 and 2022, deferred revenue totaled $ 149,514 and $ 191,952 , respectively. The Company expects to recognize approximately $ 149,514 of unearned revenue amounts from 2024 through 2025 . Shipping and Handling Costs The Company's shipping and handling costs are included in cost of goods sold for all periods presented. Foreign Currency We operate primarily in the United States. Foreign sales of products and services are primarily denominated in U.S. dollars. We also conduct business outside the United States through our foreign subsidiary in Germany, where business is largely transacted in non-U.S. dollar currencies particularly the Euro, which is subject to fluctuations due to changes in foreign currency exchange rates. Accordingly, we are subject to exposure from changes in the exchange rates of local currencies. Foreign currency transaction gains and losses are recorded in other income (expense), net in the consolidated statements of operations. OSS GmbH operates as an extension of OSS’ domestic operations. The functional currency of OSS GmbH is the Euro. Transactions denominated in currencies other than the functional currency are remeasured to the functional currency at the average exchange rate in effect during the period. At the end of each reporting period, monetary assets and liabilities are remeasured using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Consequently, changes in the exchange rates of the currencies may impact the translation of the foreign subsidiaries’ statements of operations into U.S. dollars, which may in turn affect our consolidated statement of operations. The resulting foreign currency translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in the consolidated balance sheets. Derivative Financial Instruments We may employ derivatives to manage certain currency market risks through the use of foreign exchange forward contracts. We do not use derivatives for trading or speculative purposes. Our derivatives are designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). We hedge a portion of the exchange risk involved in anticipation of highly probable foreign currency-denominated transactions. In anticipation of these transactions, we enter into foreign exchange contracts to provide currency at a fixed rate. As of December 31, 2023 and 2022, Bressner had no foreign exchange contract outstanding. Unrealized gains on derivatives designated as cash flow hedges are recorded at fair value as assets, and unrealized losses on derivatives designated as cash flow hedges are recorded at fair value as liabilities. For derivative instruments designated as cash flow hedges, the effective portion is reported as a component of accumulated OCI until reclassified into interest expense in the same period the hedged transaction affects earnings. The gain or loss on the ineffective portion is recognized as “Other (expense) income, net” in the consolidated statements of operations in each period. Stock-Based Compensation The Company accounts for employee and director share-based compensation in accordance with the provisions of ASC Topic 718 “Compensation – Stock Compensation” . Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). All transactions in which goods or services are the consideration received for the issuance of equity instruments to non-employees are accounted for based on the equivalent fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable on the grant date. The measurement date used to determine the estimated fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur. Employee and director stock-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Given that stock-based compensation expense recognized in the accompanying consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company’s estimated average forfeiture rates are based on historical forfeiture experience and estimated future forfeitures. Compensation cost for stock awards, which include restricted stock units (“RSUs”), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service period. The fair value of stock awards is based on the quoted price of our common stock on the grant date. The estimated fair value of common stock option awards is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions regarding future stock price volatility and expected time to exercise, along with assumptions about the risk-free interest rate and expected dividends, all of which affect the estimated fair values of the Company’s common stock option awards. Given a lack of historical stock option exercises, the expected term of options granted is calculated as the average of the weighted vesting period and the contractual expiration date of the option. This calculation is based on a method permitted by the Securities and Exchange Commission in instances where the vesting and exercise terms of options granted meet certain conditions and where limited historical exercise data is available. The expected volatility is based on the historical volatility of the common stock of comparable public companies that operate in similar industries as the Company. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the e |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term Investments | NOTE 3 - SHORT-TERM INVESTMENTS The Company’s short-term investments by significant investment category as of December 31, 2023, were as follows: Description Amortized Gross Gross Accrued Estimated Level 1: (1) Cash alternatives $ 76,709 $ - $ - $ - $ 76,709 Certificates of deposit 7,585,000 5,793 - 104,318 7,695,111 Corporate bonds and notes - - - - - Municipal Securities - - - - - $ 7,661,709 $ 5,793 $ - $ 104,318 $ 7,771,820 The Company’s short-term investments by significant investment category as of December 31, 2022, were as follows: Description Amortized Gross Gross Accrued Estimated Level 1: (1) Cash alternatives $ 5,139,940 $ 22,646 $ - $ 3,506 $ 5,166,092 Certificates of deposit 4,950,527 - ( 7,691 ) 14,607 4,957,443 Corporate bonds and notes - - - - - Municipal Securities - - - - - $ 10,090,467 $ 22,646 $ ( 7,691 ) $ 18,113 $ 10,123,535 (1) Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities. Cash alternatives represents cash balances in savings accounts which are temporarily on-hand that are immediately available for investments in accordance with the Company’s investment policy. The Company typically invests in highly rated securities and its investment policy limits the amount of credit exposure to any one issuer. The policy requires investments in fixed income instruments denominated and payable in U.S. dollars only and requires investments to be investment grade, with a primary objective of minimizing the potential risk of principal loss. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | |
Accounts Receivable | NOTE 4 – ACCOUNTS RECEIVABLE Accounts receivable, net consisted of the following on December 31: December 31, December 31, 2023 2022 Accounts receivable 8,368,279 $ 11,372,598 Less: allowance for credit losses ( 50,032 ) ( 45,354 ) $ 8,318,247 $ 11,327,244 The provision for credit losses related to accounts receivable was $ 4,160 and $ 29,154 for the years ended December 31, 2023 and 2022, respectively. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5 – INVENTORIES Inventories, net consisted of the following on December 31: December 31, December 31, 2023 2022 Raw materials $ 12,975,235 $ 9,370,162 Sub-assemblies 454,181 892,123 Work-in-process 344,685 1,343,239 Finished goods 9,824,987 10,357,452 23,599,088 21,962,976 Less: allowances for obsolete and slow-moving inventories ( 1,904,340 ) ( 1,187,610 ) $ 21,694,748 $ 20,775,366 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following on December 31: December 31, December 31, 2023 2022 Computers and computer equipment $ 1,146,490 $ 825,086 Furniture and office equipment 503,180 469,060 Manufacturing equipment and engineering tools 2,738,520 2,713,137 ERP Financial System 3,081,805 2,585,357 Leasehold improvements 1,045,483 1,036,947 Vehicles 37,746 9,745 8,553,224 7,639,332 Less: accumulated depreciation and amortization ( 6,183,000 ) ( 5,069,208 ) $ 2,370,224 $ 2,570,124 During the years ended December 31, 2023 and 2022, the Company incurred $ 1,035,362 and $ 987,068 of depreciation and amortization expense related to property and equipment, respectively. |
Long-Lived Intangible Assets
Long-Lived Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Long-Lived Intangible Assets | NOTE 7 – LONG LIVED INTANGIBLE ASSETS Definite lived intangible assets related to acquisitions are as follows as of December 31, 2023: Expected Remaining Gross Accumulated Net Customer lists and relationships 36 to 60 months 0 months $ 2,084,515 $ ( 2,084,515 ) $ - Drawings and technology 36 months 0 months 760,207 ( 760,207 ) - Trade name, trademarks & other 24 to 36 months 0 months 447,274 ( 447,274 ) - Non-compete 36 months 0 months 246,797 ( 246,797 ) - $ 3,538,793 $ ( 3,538,793 ) $ - Definite lived intangible assets related to acquisitions were as follows as of December 31, 2022: Expected Remaining Gross Accumulated Net Customer lists and relationships 36 to 60 months 8 months $ 2,084,515 $ ( 2,042,361 ) $ 42,154 Drawings and technology 36 months 0 months 760,207 ( 760,207 ) - Trade name, trademarks & other 24 to 36 months 0 months 447,274 ( 447,274 ) - Non-compete 36 months 0 months 246,797 ( 246,797 ) - $ 3,538,793 $ ( 3,496,639 ) $ 42,154 Amortization expense recognized during the years ended December 31, 2023 and 2022, was $ 42,154 and $ 63,231 , respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Liabilities | NOTE 8 – ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following on December 31: December 31, December 31, 2023 2022 Accrued compensation and related liabilities $ 1,023,902 $ 989,478 Deferred revenue 299,514 378,952 Customer deposits 27,447 61,696 Warranty reserve 607,809 584,268 Trade and other taxes 392,336 225,743 Other accrued expenses 851,511 773,732 $ 3,202,519 $ 3,013,869 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9 – DEBT Bank Lines of Credit In April 2022, the Company obtained a domestic revolving line of credit of $ 2,000,000 with Torrey Pines Bank which was renewed in April 2023, and renews on an annual basis at the current prime rate. To access this line of credit, the Company must maintain cash and investments balances at a minimum of $ 4,000,000 . No balance was outstanding on December 31, 2023 and December 31, 2022, respectively. Bressner has three revolving lines of credit with German institutions, including Uni Credit Bank AG, Commerzbank AG, and VR Bank, with total availability of up to € 2,700,000 (US$ 2,980,522 ) as of December 31, 2023. Borrowings under the lines of credit bear interest at a variable rate of Euribor plus a stated rate. The rates as of December 31, 2023, for the lines of credit ranged from 3.1 % to 5.62 %, with the balances remaining open indefinitely or until occurrence of a defined change of control event. There were no outstanding lines of credit balances as of December 31, 2023 and 2022, respectively. Foreign Debt Obligations Bressner had four term loans outstanding as of December 31, 2023, with an aggregate balance outstanding of € 1,822,327 (US$ 2,077,895 ) as follows: • On February 1, 2022, Bressner converted € 500,000 of its line of credit from VR Bank into a note payable. On August 1, 2022, this note was extended through February 1, 2023, with accrued interest having been paid current as of the original maturity date. On February 1, 2023, this note was further extended through July 31, 2023, and the interest rate was increased to 4.76 %, with accrued interest having been paid current as of February 1, 2023. The balance has been paid in full and there is no outstanding balance as of December 31, 2023. As of December 31, 2022, the balance was € 500,000 (US$ 536,616 ); • On February 16, 2022, Bressner converted € 500,000 of its line of credit from UniCredit Bank into a note payable. On August 16, 2022, this note was extended through February 16, 2023, with accrued interest having been paid current as of the original maturity date. On February 16, 2023, this note was further extended through August 16, 2023, and on August 16, 2023, this note was further extended through February 16, 2024, and the interest rate was increased to 5.63 %, with accrued interest having been paid current as of August 16, 2023. The outstanding balance as of December 31, 2023 and 2022, was € 500,000 (US$ 551,948 ) and € 500,000 (US$ 536,616 ), respectively; • On June 18, 2021, Bressner converted € 500,000 of its line of credit from UniCredit Bank into a note payable. The note was originally due December 17, 2021 , and subsequently extended through June 17, 2022 . On June 17, 2022, this note was further extended through December 19, 2022 , with accrued interest having been paid current as of the revised maturity date. On December 19, 2022, this note was extended through June 19, 2023 . However, on June 19, 2023, this note was further extended through December 19, 2023 , and the interest rate was increased to 5.80 %, with accrued interest having been paid current as of June 19, 2023. On December 29, 2023, this note was further extended through June 19, 2024 , with accrued interest having been paid current as of December 19, 2023. The balance outstanding on the new note as of December 31, 2023 and 2022, was € 500,000 (US$ 551,948 ) and € 500,000 (US$ 536,616 ) respectively; • On April 9, 2021, Bressner converted € 500,000 of its line of credit from Commerzbank AG into a note payable. The note was due on September 30, 2021, with a payment of principal and interest due upon maturity. This loan was paid in full on September 30, 2021, with proceeds from a new note with similar terms. This new note had an original maturity date of June 30, 2022; however, on September 30, 2022, this note was further extended through March 31, 2023, with accrued interest having been paid current as of the revised maturity date. On March 30, 2023, this note was further extended through September 29, 2023, and the interest rate was increased to 4.60 %, with accrued interest having been paid current as of March 30, 2023. On September 29, 2023, this note was further extended through March 28, 2024, and the interest rate was increased to 5.75 %, with accrued interest having been paid current as of September 19, 2023. The balance outstanding on the new note as of December 31, 2023 and 2022, was € 500,000 (US$ 551,949 ), and € 500,000 (US$ 536,616 ), respectively; and • On June 30, 2022, Bressner borrowed € 1,500,000 (US$ 1,468,173 ) from Commerzbank AG, which bears interest at 2.55 %, is due in June 2024, and is repayable in twenty-four month ly installments, with payments beginning July 31, 2022 . The balance outstanding as of December 31, 2023 and 2022, was € 382,327 (US$ 422,050 ) and € 1,132,356 (US$ 1,215,279 ), respectively. This loan is collateralized by accounts receivable attributable to a specific customer. A summary of outstanding debt obligations as of December 31, 2023, are as follows: Loan Description Current Maturity Balance Balance ($) Current Long-term Foreign: Commerzbank AG 2.550 % June-24 € 382,327 $ 422,050 $ 422,050 $ - Commerzbank AG 5.750 % March-24 500,000 $ 551,949 551,949 - Uni Credit Bank AG 5.630 % February-24 500,000 $ 551,948 551,948 - Uni Credit Bank AG 5.800 % June-24 500,000 $ 551,948 551,948 - € 1,882,327 $ 2,077,895 $ 2,077,895 $ - |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 10 – STOCKHOLDERS’ EQUITY The Company’s amended and restated certificate of incorporation, filed with the Delaware Secretary of State on December 14, 2017, authorizes the Company to issue 10,000,000 shares of preferred stock and 50,000,000 shares of common stock. Common Stock The voting, dividend and liquidation rights of the holders of the common stock are subject to rights of preferred stockholders, if any, as designated by the board of directors. Common stockholders have voting rights at all meetings of stockholders and are entitled to one vote for each share held subject to certain limitations otherwise required by law. Dividends may be declared and paid on the common stock as and when determined by the board of directors subject to any preferential dividend or other rights of preferred stockholders. The Company does not anticipate declaring any dividends in the foreseeable future. Upon the dissolution or liquidation of the Company, common stockholders are entitled to receive all assets of the Company, subject to any preferential or other rights of preferred stockholders. Preferred Stock Preferred Stock may be issued from time to time in one or more series, each of these series to have such terms as stated or expressed in resolutions providing for the issue of such series adopted by the board of directors. There is no outstanding preferred stock. Regarding unissued preferred stock, the board of directors is authorized to determine or alter any or all of the rights, preferences, privileges and restrictions granted to or imposed upon wholly unissued series of preferred stock, and to fix or alter the number of shares comprising any such series and the designation thereof, or any of them, and to provide for rights and terms of redemption or conversion of the shares of any such series. S-3 Registration Statement On August 18, 2023, the Company filed with the Securities and Exchange Commission a Registration Statement on Form S-3 in which the Company may offer up to $ 100,000,000 in aggregate dollar amount of shares of our common stock; preferred stock; debt securities; warrants to purchase our common stock, preferred stock or debt securities; subscription rights to purchase our common stock, preferred stock or debt securities; and/or units consisting of some or all of these securities, in any combination, together or separately, in one or more offerings, in amounts, at prices and on the terms that we will determine at the time of the offering and which will be set forth in a prospectus supplement and any related free writing prospectus. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities pursuant to this registration statement with a value more than one-third of the aggregate market value of our common stock held by non-affiliates in any 12-month period, so long as the aggregate market value of our common stock held by non-affiliates is less than $ 75.0 million. In the event that subsequent to the effective date of this registration statement, the aggregate market value of our outstanding common stock held by non-affiliates equals or exceeds $ 75.0 million, then the one-third limitation on sales shall not apply to additional sales made pursuant to this registration statement. We have no t sold any securities pursuant to General Instruction I.B.6 of Form S-3 during the 12 calendar months prior to, and including, the date of filing this Annual Report. S-8 Registration Statement On August 18, 2023, the Company filed a Registration Statement on Form S-8 for the purpose of registering an aggregate of 835,715 shares of its common stock, consisting of (i) 400,000 shares of common stock issuable upon the exercise of non-qualified stock options granted to Michael Knowles, the Company’s recently-appointed President and Chief Executive Officer, on June 5, 2023; (ii) 400,000 shares issuable upon vesting and settlement of RSUs granted to Mr. Knowles on June 5, 2023; and (iii) 35,715 shares issuable upon vesting and settlement of RSUs granted to Robert Kalebaugh, the Company’s recently-appointed Vice President of Sales, on July 17, 2023. The Inducement Grants were granted outside of the Company’s 2017 Equity Incentive Plan, as amended, as an inducement material to Messrs. Knowles and Kalebaugh entering into employment with the Company, were unanimously approved by the Company’s Board of Directors, and were issued pursuant to the “inducement” grant exception under Nasdaq Listing Rule 5635(c)(4). Stock Options In December 2011, the Company adopted a stock option plan (“2011 Plan”) under which the Company may issue up to 1,500,000 shares of the Company’s common stock and, as of December 31, 2022, the Company had 240,000 shares of common stock remaining unissued under the 2011 Plan. The 2011 Plan was terminated by the board of directors on October 10, 2017 , and accordingly, no shares are available for issuance under the 2011 Plan. The 2011 Plan will continue to govern outstanding awards granted thereunder. In December 2015, the Company adopted a stock option plan (“2015 Plan”) under which the Company may issue up to 1,500,000 shares of the Company’s common stock and, as of December 31, 2022, the Company had 840,084 shares of common stock remaining unissued under the 2015 Plan. The 2015 Plan was terminated by the board of directors on October 10, 2017 , and accordingly, no shares are available for issuance under the 2015 Plan. The 2015 Plan will continue to govern outstanding awards granted thereunder. The terms of the 2011 Plan and 2015 Plan provided for the grant of incentive options to employees and non-statutory options to employees, directors and consultants of the Company. The board of directors adopted the 2017 Equity Incentive Plan on October 10, 2017 (the “2017 Plan”). The 2017 Plan allows for the grant of a variety of equity vehicles to provide flexibility in implementing equity awards, including incentive stock options, non-qualified stock options, restricted stock grants, unrestricted stock grants and restricted stock units and stock bonuses and performance-based awards. On December 18, 2017, the Company stockholders approved the 2017 Plan, under which the Company was initially permitted to issue up to 1,500,000 shares of the Company’s common stock. On June 24, 2020, the Company amended the 2017 Plan to increase the maximum number of shares of common stock with respect to one or more Stock Awards (as defined in the 2017 Plan) that may be granted to any one participant under the 2017 Plan during any calendar year from 500,000 shares to 1,000,000 shares. The amendment did not increase the total number of shares of common stock authorized for issuance under the 2017 Plan, and did not require stockholder approval. On May 19, 2021, the Company’s stockholders approved the Company’s proposal to increase the number of shares authorized for issuance under the 2017 Plan from 1,500,000 shares to 3,000,000 shares of common stock of the Company pursuant to the terms and conditions of the 2017 Plan. The amendment took effect upon receipt of stockholder approval. As of December 31, 2023, the Company had 32,952 shares of common stock remaining for issuance under the 2017 Plan. The exercise price per share for options under the 2011 Plan, 2015 Plan and 2017 Plan is determined by the Company’s board of directors, provided that for incentive stock options the exercise price shall not be less than the fair market value of the Company's common stock on the date of grant, except that for incentive options granted to an owner/employee with a greater than 10 % ownership interest in the Company, the exercise price shall not be less than 110 % of the fair market value of the Company's common stock on the date of grant. Options under the plans expire no more than ten years after the date of grant, or within five years after the date of the grant for incentive options granted to an owner/employee with a greater than 10 % ownership interest in the Company. A summary of stock option activity under the plans during the years ended December 31, 2023 and 2022, are as follows: Stock Options Outstanding Number of Underlying Weighted Weighted Aggregate Outstanding on January 1, 2022 1,025,499 $ 2.01 6.35 $ 3,014,448 Granted - $ - - $ - Forfeited / Canceled ( 1,000 ) $ 2.43 - $ - Exercised ( 53,819 ) $ 0.78 - $ - Outstanding on December 31, 2022 970,680 $ 2.07 5.61 $ 988,197 Granted 400,000 $ 2.95 - $ - Forfeited / Canceled ( 8,250 ) $ 2.49 - $ - Exercised ( 38,670 ) $ 0.63 - $ - Outstanding on December 31, 2023 1,323,760 $ 2.37 4.06 $ 169,802 Exercisable on December 31, 2023 923,760 $ 2.12 1.73 $ 169,802 Vested and expected to vest on December 31, 2023 923,760 $ 2.12 1.73 $ 169,802 The following table summarizes information about common stock options outstanding as of December 31, 2023: Stock Options Outstanding Stock Options Exercisable Plan Exercise Price Number of Weighted Weighted Number of Weighted Weighted 2011 $ 0.46 -$ 0.80 40,000 0.54 $ 0.46 40,000 0.54 $ 0.46 2015 $ 1.08 -$ 1.95 324,485 2.30 $ 1.78 324,485 2.30 $ 1.78 2017 $ 2.14 -$ 4.09 559,275 1.48 $ 2.44 559,275 1.48 $ 2.44 Incentive options issued outside of Plans $ 2.95 400,000 9.43 $ 2.95 - - $ - 1,323,760 923,760 The following table presents details of the assumptions used to calculate the weighted-average grant date fair value of common stock options granted by the Company. There were no options granted during the year ended December 31, 2022. For the Year Ended December 31, 2023 2022 Expected term (in years) 6.16 - Expected volatility 72.73 % 0.00 % Risk-free interest rate 3.79 % 0.00 % Weighted average grant date fair value per share $ 2.95 $ - Grant date fair value of options vested $ 927,447 $ 839,409 Intrinsic value of options exercised $ 48,361 $ 119,833 As of December 31, 2023, the amount of unearned stock-based compensation estimated to be expensed through 2027 related to unvested common stock options is $ 682,474 , net of estimated forfeitures. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is 1.96 years. If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense or calculate and record additional expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that the Company grants additional common stock options or other stock-based awards. Exercise of Stock Options During the year ended December 31, 2023, the Company issued 38,670 shares of common stock upon exercise of outstanding stock options for proceeds of $ 24,224 in cash. During the year ended December 31, 2022, the Company issued 53,819 shares of common stock upon exercise of outstanding stock options for proceeds of $ 42,162 in cash related to the exercise of employee and director stock options. Restricted Stock Units Restricted stock units may be granted at the discretion of the compensation committee of the board of directors under the 2017 Plan in connection with the hiring and retention of personnel and are subject to certain conditions. Restricted stock units generally vest quarterly over a period of three years and are typically forfeited if employment is terminated before the restricted stock unit vest. The compensation expense related to the restricted stock units is calculated as the fair value of the common stock on the grant date and is amortized to expense over the vesting period and is adjusted for estimated forfeitures. The Company’s restricted stock unit activity for the years ended December 31, 2023 and 2022, was as follows: Restricted Stock Units Number of Weighted Unvested on January 1, 2022 604,800 $ 4.30 Granted 684,300 $ 3.90 Vested ( 379,655 ) $ 4.15 Canceled ( 1,938 ) $ 5.02 Unvested on December 31, 2022 907,507 $ 4.05 Granted 925,243 $ 2.80 Vested ( 647,943 ) $ 3.94 Canceled ( 91,318 ) $ 4.30 Unvested on December 31, 2023 1,093,489 $ 3.04 During the years ended December 31, 2023 and 2022, the Company issued 510,053 and 222,130 restricted stocks units, net of 207,412 and 88,838 units, respectively, which were retained for income tax purposes. As of December 31, 2023, there was $ 2,609,239 of unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted average period of 1.45 years. Stock-based compensation expense for the years ended December 31, 2023 and 2022, was comprised of the following: For the Year Ended December 31, Stock-based compensation classified as: 2023 2022 General and administrative $ 1,452,774 $ 1,111,129 Production 305,763 269,079 Marketing and selling 322,854 396,187 Research and development 263,967 214,722 $ 2,345,358 $ 1,991,117 Warrants The following table summarizes the Company’s warrant activity during the years ended December 31, 2023 and 2022: Number of Weighted Warrants outstanding on January 1, 2022 451,112 $ 5.37 Warrants granted - $ - Warrants exercised - $ - Warrants outstanding on December 31, 2022 451,112 $ 5.37 Warrants granted - $ - Warrants expired ( 380,000 ) $ 6.00 Warrants exercised ( 28,090 ) $ 1.78 Warrants outstanding on December 31, 2023 43,022 $ 2.15 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | NOTE 11 – EMPLOYEE BENEFIT PLAN The Company has a 401(k) retirement plan. Under the terms of the plan, eligible employees may defer up to 20 % of their pre-tax earnings, subject to the Internal Revenue Service annual contribution limit. Additionally, the plan allows for discretionary matching contributions by the Company. Typically, the matching contributions are 100 % of the employee's contribution up to a maximum of 5 % of the employee’s annual compensation. During the years ended December 31, 2023 and 2022, the Company contributed $ 177,399 and $ 367,124 , respectively to the 401(k) Plan. As of August 2023, the Company temporary suspended contributions to the plan through the end of the year with reinstatement beginning in January 2024. Bressner has an occupational retirement provision for their employees in Germany, which supplements the statutory pension insurance. Currently, this program allows employees to contribute at a maximum 564 Euros per month with the employer match of up to 50 % to the employees’ insurance retirement fund. During the years ended December 31, 2023 and 2022, the Company contributed $ 102,654 and $ 57,605 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 – COMMITMENTS AND CONTINGENCIES Legal We are subject to litigation, claims, investigations, and audits arising from time to time in the ordinary course of our business. When applicable, we record accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in our opinion, individually or in the aggregate, no such lawsuits are expected to have a material effect on our consolidated financial position or results of operations. Guarantees and Indemnities The Company has made certain indemnities, under which it may be required to make payments to an indemnified party, in relation to certain transactions. The Company indemnifies its directors, officers, employees and agents to the maximum extent permitted under the laws of the State of Delaware. In connection with its facility lease, the Company has indemnified its lessor for certain claims arising from the use of the facilities. Also, in connection with the terms of Bressner’s credit agreements (Note 9), Bressner alone has agreed to indemnify its lenders and others related to the use of the proceeds and other matters. The duration of the indemnities varies, and in many cases are indefinite. These indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities in the accompanying consolidated balance sheets. Purchase Commitments In the normal course of business, the Company may enter into purchase commitments for inventory components to be delivered based upon non-cancellable, pre-established, delivery schedules that are over a period that may exceed one year . Total non-cancellable open purchase orders as of December 31, 2023, were approximately $ 4,749,408 and are expected to be delivered in 2024. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Lessee Disclosure [Abstract] | |
Leases | N0TE 13 - LEASES Leases The Company leases its offices, manufacturing, and warehouse facility in San Diego County under a non-cancellable operating lease. Our corporate headquarters are in a leased space comprising of approximately 29,342 square feet in Escondido, California under leases that were modified and extended in September 2023 and expires in August 2030 . The Company also leases a 3,208 square foot facility in Salt Lake City, Utah expiring in June 2025 , that houses our Ion software development team. Additionally, we lease a 1,632 square foot facility located in Anaheim, California, with the lease expiring in June 2025 . Both the Utah and Anaheim leases expired in June 2023 and were renewed for two-year periods on similar terms. The Bressner leases space comprising of 11,836 square feet on a month-to-month basis. For the years ended December 31, 2023 and 2022, rent expense was $ 676,204 and $ 684,224 , respectively. In addition to leases for physical facilities the Company also leases certain office equipment and vehicles. For the years ended December 31, 2023 and 2022, lease expenses, excluding office leases, was $ 99,224 and $ 59,846 , respectively. Other information related to leases as of the year ended December 31, 2023 and 2022 are as follows: For the Year 2023 2022 Operating lease expense $ 676,204 $ 644,120 Total lease expense $ 676,204 $ 644,120 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 551,344 $ 636,990 Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,590,568 - Operating lease obligation for new operating leases $ 1,446,865 - Weighted-average remaining lease term - operating leases 73.0 months 20.2 months Weighted-average discount rate - operating leases 13.6 % 12.8 % The following table presents maturity of the Company's operating lease liabilities as of December 31, 2023: Year Operating Leases 2024 $ 611,381 2025 467,325 2026 405,200 2027 403,771 2028 419,922 Thereafter 735,529 Total lease payments 3,043,128 Less: Amount representing interest ( 886,666 ) Present value of lease payment 2,156,462 Less: current portion of operating lease obligation ( 390,926 ) Operating lease obligation, net of current portion $ 1,765,536 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 14 – RELATED PARTY TRANSACTIONS The Company has appointed certain stockholders to the Board of Directors. Director fees paid by the Company, including stock-based compensation, for the years ended December 31, 2023 and 2022, totaled $ 444,403 and $ 528,146 , respectively, and are included in general and administrative expenses in the accompanying consolidated statements of operations. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 15 – INCOME TAXES For the years ended December 31, 2023 and 2022, pre-tax (loss) income was attributed to the following jurisdictions: For the Year Ended December 31, 2023 2022 Domestic operations $ ( 9,194,652 ) $ ( 292,325 ) Foreign operations 3,405,604 2,486,867 (Loss) income before taxes $ ( 5,789,048 ) $ 2,194,542 The components of the tax provision for income taxes are as follows: For the Year Ended December 31, 2023 2022 Current: Federal $ 24,641 $ - State 23,153 29,695 International 974,830 612,198 1,022,624 641,893 Deferred: Federal ( 95,496 ) 2,345,612 State - 1,436,092 International - - ( 95,496 ) 3,781,704 Total provision for income taxes $ 927,128 $ 4,423,597 Taxes on income vary from the statutory federal income tax rate applied to earnings before tax on income as follows: For the Year Ended December 31, 2023 2022 Provision at federal statutory rates ( 21 % applied to earnings before income $ ( 1,215,486 ) $ 461,219 State income taxes, net of federal benefit ( 252,544 ) 21,044 Other permanent items ( 60,372 ) ( 78,847 ) Stock based compensation 85,990 31,815 Goodwill impairment 704,987 - Research and development credits 800,550 60,734 Amortization of intangibles - 7,410 Change in reserve for uncertain tax positions ( 338,894 ) ( 26,307 ) Change in valuation allowance 984,921 3,805,149 Other 217,976 141,380 $ 927,128 $ 4,423,597 Deferred income tax assets and liabilities arising from differences accounting for financial statement purposes and tax purposes, less valuation reserves at yearend are as follows: For the Year Ended December 31, 2023 2022 Deferred tax assets: Reserves $ 59,564 $ 58,789 Deferred compensation 139,805 150,681 Stock compensation 295,392 395,198 Deferred revenue 87,770 109,361 Inventories 617,929 221,323 Credits and loss carryforward 3,102,512 3,412,820 Capitalized research and experimental expenditures 1,206,082 700,920 Lease liabilities 528,698 181,177 Total deferred tax assets before valuation allowance 6,037,752 5,230,269 Deferred tax liabilities: Property and equipment ( 373,645 ) ( 338,739 ) Intangible assets - ( 641,493 ) Other ( 305,036 ) ( 308,047 ) ROU assets ( 464,187 ) ( 126,016 ) Total deferred tax liabilities ( 1,142,868 ) ( 1,414,295 ) Net deferred tax assets before valuation allowance 4,894,884 3,815,974 Valuation allowance ( 4,939,557 ) ( 3,954,636 ) Net deferred tax liabilities $ ( 44,673 ) $ ( 138,662 ) The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. As of the year ended December 31, 2023, Management believes that it is not more likely than not that the Company will realize the benefits of the net deferred tax assets and has recorded a valuation allowance against its US deferred tax assets. The Company files income tax returns in the U.S. federal jurisdiction, Arizona, Arkansas, California, Florida, Idaho, Massachusetts, Texas, and Utah and Germany and has open tax statutes for U.S. federal taxes for the years ended December 31, 2020 through 2023. For California, the open tax statutes are for years December 31, 2019 through 2023, and for Germany, the open years include December 31, 2021 through 2023. The Company had Federal net operating loss ("NOL") carryforwards as of December 31, 2023, of approximately $ 3,982,000 . The Company may use these NOL carryforwards indefinitely to offset 80 % of Federal taxable income in future years. In addition, the Company has state NOL carryforwards of $ 6,092,000 . State NOLs will carryforward through at least 2040 and may be used to offset future state taxable income. As of December 31, 2023 and 2022, the Company had $ 1,525,000 and $ 1,619,000 respectively, of federal tax credit carryforwards which begin to expire in 2026 and state credit carryforwards of $ 1,000,000 and $ 1,700,000 , respectively, which carryforward indefinitely. The Company completed an analysis of historical R&D credits and recorded an adjustment to reduce the carryforwards during 2023. As of December 31, 2023, unrecognized tax benefits associated with uncertain tax positions was $ 819,280 , of which $ 20,200 is included in other accrued expenses and other liabilities, while $ 774,090 is included as a direct reduction on the net deferred tax assets on the accompanying consolidated balance sheets. If recognized, this would affect the Company’s effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Unrecognized tax benefits balance on December 31, 2021 $ 1,242,717 Gross increases for tax positions of the prior year 25,158 Gross decrease for tax positions of the current year ( 49,479 ) Unrecognized tax benefits balance on December 31, 2022 1,218,396 Gross increases for tax positions of the prior year 55,431 Gross decrease for tax positions of the current year ( 505,258 ) Gross increases for tax positions of the current year 50,711 Unrecognized tax benefits balance on December 31, 2023 $ 819,280 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 16 –NET LOSS PER SHARE Basic and diluted net loss per share was calculated as follows for the years ended December 31, 2023 and 2022: For the Year Ended December 31, 2023 2022 Basic and diluted net (loss) income per share: Numerator: Net loss $ ( 6,716,176 ) $ ( 2,229,055 ) Denominator: Weighted average common shares outstanding - basic 20,854,777 19,730,698 Effect of dilutive securities - - Weighted average common shares outstanding - diluted 20,854,777 19,730,698 Net loss per common share: Basic $ ( 0.32 ) $ ( 0.11 ) Diluted $ ( 0.32 ) $ ( 0.11 ) |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 17 – SEGMENT AND GEOGRAPHIC INFORMATION The Company operates in two reportable segments: OSS design and manufactures high-performance customized computers and flash arrays, in-flight entertainment & connectivity. Bressner operates as a system integrator with standard and custom all-in-one hardware systems and components for many kinds of industrial environments. They also serve as a channel for OSS products sold into European and Middle East markets. The Company evaluates financial performance on a Company-wide basis. Segment detail for the years ended December 31, 2023 and 2022, is as follows: For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 OSS Bressner Total OSS Bressner Total Revenues $ 28,809,887 $ 32,086,910 $ 60,896,797 $ 43,286,715 $ 29,134,630 $ 72,421,345 Cost of revenues ( 18,544,901 ) ( 24,397,274 ) ( 42,942,175 ) ( 29,142,852 ) ( 22,880,884 ) ( 52,023,736 ) Gross profit 10,264,986 7,689,636 17,954,622 14,143,863 6,253,746 20,397,609 Gross profit % 35.6 % 24.0 % 29.5 % 32.7 % 21.5 % 28.2 % Total operating expenses ( 21,742,021 ) ( 4,135,754 ) ( 25,877,775 ) ( 15,182,546 ) ( 3,646,735 ) ( 18,829,281 ) (Loss) income from operations $ ( 11,477,035 ) $ 3,553,882 $ ( 7,923,153 ) $ ( 1,038,683 ) $ 2,607,011 $ 1,568,328 Revenue from customers with non-U.S. billing addresses represented approximately 65 % and 69 % of the Company’s revenue for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, substantially all the Company’s long-lived assets were located in the United States of America, with the exception of assets of $ 345,898 located in Germany. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18 – SUBSEQUENT EVENTS The Company’s management has evaluated subsequent events after the consolidated balance sheet dated as of December 31, 2023, through the date of filing of this Annual Report. Based upon the evaluation, management has determined that, other than as disclosed in the accompanying notes, no subsequent events have occurred that would require recognition in the accompanying consolidated financial statements or disclosure in the notes thereto. The € 500,000 note payable to UniCredit Bank AG, which accrued interest at a rate of 5.63 % and was scheduled to mature in February 2024 , was paid in full February 16, 2024 , and was not replaced. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared on an accrual basis of accounting in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”), as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of OSS, which include the acquisition of CDI, and its wholly owned subsidiary, OSS GmbH, which also includes the acquisition of Bressner. Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions. On an ongoing basis, our management evaluates these estimates and assumptions, including those related to determination of standalone selling prices of our products and services, allowance for doubtful account and sales reserves, income tax valuations, stock-based compensation, goodwill, intangible assets and inventory valuations and recoverability. We base our estimates on historical data and experience, as well as various other factors that our management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Due to the COVID-19 pandemic, Ukraine war, inflationary pressures, other macroeconomic factors and reduced revenue opportunities with our largest customer there has been uncertainty and disruption in the global economy, financial markets and our ongoing operations. We are not aware of any specific event or circumstance that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities that has not been properly reflected in the consolidated financial statements. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions . |
Concentration Risks | Concentration Risks At times, deposits held with financial institutions may exceed the amount of insurance provided by the Federal Deposit Insurance Corporation (“FDIC”) and Securities Investor Protection Corporation (“SIPC”), of which both provide basic deposit coverage with limits up to $ 250,000 per owner. As of December 31, 2023, the Company had $ 250,000 of cash in our accounts that exceeded the insurance limits. The Company has not experienced any such losses in these accounts, and believes that the financial institutions at which such amounts are held are stable; however, no assurances can be provided. In Germany, the deposit insurance is € 100,000 per bank, per customer. Bressner has funds on deposit in both Euro and U.S. dollar denominations of € 914,664 (US$ 1,015,214 ) with banks in excess of the insurance limits. In the years ended December 31, 2023 and 2022, approximately 13 %, representing one customer and 26 %, representing one customer, respectively, of net sales represent customers which are each greater than 10% of our consolidated annual revenue. As of December 31, 2023 and 2022, approximately 22 % and 49 %, respectively, of net trade accounts receivables represent one customer balance which is each greater than 10% of our consolidated trade accounts receivable balance. The Company made purchases from a certain supplier which represented greater than 10% of the Company’s vendor purchases on an annual basis. This vendor represented approximately 37 % and 25 % of purchases for the years ended December 31, 2023, and 2022, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit and money market accounts. The Company considers all highly liquid temporary cash investments with an initial maturity of three months or less when acquired to be cash equivalents. Management believes that the carrying amounts of cash equivalents approximate their fair value because of the short maturity period. |
Short-term Investments | Short-term Investments Short-term investments consist predominantly of commercial paper, corporate debt securities, U.S. Treasury securities, and asset-backed securities. The Company classifies short-term investments based on the facts and circumstances surrounding the investments at the time of purchase and evaluates such classification as of each balance sheet date. On December 31, 2023, all short-term investments were classified as available-for-sale. Short-term investments are recorded at fair value with unrealized gains and losses included in accumulated other comprehensive income - a component of stockholders’ equity. Realized gains and losses are determined using the specific identification method and are included in other income (expense) in the consolidated statement of operations. The Company evaluates its investments to determine whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before recovery of their cost basis. |
Accounts Receivable | Accounts Receivable Accounts receivables are presented at net realizable value. This value includes an appropriate allowance for credit losses to reflect any loss anticipated on the trade accounts receivable and unbilled receivables. Unbilled receivables include cost and gross profit earned in excess of billings. The allowance for credit losses is an estimate to cover the losses resulting from the inability of customers to make payments on their outstanding balances and unbilled receivables. In estimating the required allowance, management considers the overall collectability, customer creditworthiness, historical levels of credit losses and future expectations and aging of the accounts receivable, specific customer circumstances, current economic trends, and historical experience with collections. On December 31, 2023 and 2022, the allowance for credit losses is $ 50,032 and $ 45,354 , respectively. |
Measurement of Credit Losses on Financial Instruments | Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13 , which sets out the principles for the recognition of measurement of credit losses on financial instruments. This standard provides guidance on the impairment of financial instruments that is based on expected losses rather than probable or incurred losses. Under this new guidance, the Company will recognize, as an allowance, our estimate of expected credit losses based upon historical and current information, and reasonable and supportable forecasts of future events and circumstances, as well as estimates of prepayments. Under this model, we are required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. Accounts receivable have been reduced for credit by an allowance for credit losses. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable after considering current market conditions and supportable forecasts when appropriate. This estimate is a result of management's evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. The Company shall recognize an allowance for credit losses rather than a reduction to the carrying value of the asset for debt securities. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. Upon adoption of this standard on January 1, 2023, there was no immediate material impact to the Company's consolidated financial position, results of operations or cash flows. On an ongoing basis, the Company will contemplate forward-looking economic conditions in recording lifetime expected credit losses for the Company’s financial assets measured at cost, such as the Company’s trade receivables and certain short-term investments. The following table represents the changes in the allowance for credit losses associated with our trade receivables for the year ended December 31, 2023: Allowanced for Credit Losses For the Year Ended December 31, 2023 Balance on January 1, 2023 $ 45,354 Provision charged to expense 4,160 Receivables written-off ( 2,943 ) Recoveries of receivables previously written-off 3,155 Effects of change in exchange rates 306 Balance on December 31, 2023 $ 50,032 |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. The Company uses the average cost method for purposes of determining cost, which approximates the first-in, first-out method. The Company establishes reserves on its inventories to write-down the carrying value of its estimated obsolete or excess inventories to estimated net realizable value based upon observations of historical usage and assumptions about future demand and market conditions. In addition, the Company considers changes in the market value of components in determining the net realizable value of its inventory. Inventory reserves are not typically reversed until the specific inventories are sold or otherwise disposed. Actual demand, product mix and alternative usage may be lower than those that we project, and this difference could have a material adverse effect on our gross margin if inventory write-downs beyond those initially recorded become necessary. Alternatively, if actual demand, product mix and alternative usage are more favorable than those we estimated at the time of such a write-down, our gross margin could be favorably impacted in future periods. |
Property and Equipment | Property and Equipment Property and equipment, other than leasehold improvements, are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally from two to seven years . Leasehold improvements are recorded at cost and are amortized using the straight-line method over the shorter of the remaining lease term or the estimated useful life of the related asset. Tooling and test equipment includes capitalized labor costs associated with the development of the related tooling and test equipment. Costs incurred for maintenance and repairs are expensed as incurred, and expenditures for major replacements and improvements are capitalized. Upon retirement or sale, the cost and related accumulated depreciation and amortization of disposed assets are removed from the accounts and any resulting gain or loss is included in other (expense) income, net. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases” which sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases. A lease must be classified as a finance lease if any of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any of these criteria. The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. Right-of-use assets and liabilities are initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right of use assets are reviewed for impairment. The lease liability is initially measured at the present value of future minimum lease payments over the expected lease term at the commencement date of each lease. The Company measures and records a right-of-use asset and lease liability based on the discount rate implicit in the lease, if known. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor's estimated residual value or the amount of the lessor's deferred initial direct costs. In these cases where the discount rate implicit in the lease is not known, the Company measures the right-of-use assets and lease liabilities using a discount rate equal to the Company's incremental borrowing rate it pays on current debt instruments or would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The Company and its subsidiary have no leases classified as finance leases. The Company and its subsidiary currently lease plant, office facilities and equipment under operating leases expiring through August 2030 . The Company’s lease agreements may include options to extend the lease following the initial term. On a case-by-case basis, the Company’s management determines if it is reasonably certain to exercise the renewal option; such renewal options were included in determining the initial lease term. We elected the package of practical expedients in transition for leases that commenced prior to January 1, 2022, and therefore did not reassess (i) whether any expired or existing contracts are, or contain, leases, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for any existing leases. We elected to use hindsight for transition when considering judgments and estimates such as assessments of lease options to extend, or terminate, a lease, or to purchase the underlying asset. As result of the adoption of ASC 842, the Company recognized an accumulative adjustment to beginning retained earnings for the 2022 fiscal year of $ 44,533 . For all asset classes, we elected to (i) not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less and (ii) not separate non-lease components from lease components, and we have accounted for combined lease and non-lease components as a single lease component. Variable lease payments associated with the Company’s leases are recognized upon occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed. For those leases that are subsequently modified for terms, such changes may require a remeasurement of the lease liability. Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the right-of-use asset on a straight-line basis over the lease term and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually and when we deem that a triggering event has occurred. The Company reviews goodwill for impairment annually on December 31 st . The Company completed its annual assessment for goodwill impairment and determined that goodwill was not impaired as of December 31, 2023, and no adjustment was required. In June and September of 2023, the Company performed an interim impairment test of goodwill, as a result of the overall financial performance of OSS as compared to plan, the transition of and focus on our product strategy of AI Transportables and the defense industry, along with the deferment of certain orders. As a result of these interim evaluations, the Company recorded an adjustment of $ 2,700,000 in June 2023, and an additional impairment loss to goodwill of $ 2,930,788 , which was charged to operating expenses in September 2023. Total goodwill impairment loss for the year ended December 31, 2023, was $ 5,630,788 . |
Intangible Assets and Long-lived Assets | Intangible Assets and Long-lived Assets We evaluate our intangible and long-lived assets for impairment when events or circumstances arise that indicate our intangible and long-lived assets may be impaired. Indicators of impairment include, but are not limited to, a significant deterioration in overall economic conditions, a decline in our market capitalization, the loss of significant business, significant decreases in funding for our contracts, or other significant adverse changes in industry or market conditions. The Company has fully amortized recorded intangible assets and as such there is no impairment as of December 31, 2023. |
Fair Value Measurements | Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. These tiers include: • Level 1, defined as quoted market prices in active markets for identical assets or liabilities; • Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3, defined as unobservable inputs that are not corroborated by market data. The carrying value of financial instruments including cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses, and other liabilities approximate fair value due to the short-term nature of these instruments. The carrying amounts of the Company’s short-term investments, notes payable and Bressner’s existing lines of credit and notes payable approximate their fair values at the stated interest rates and are reflective of the prevailing market rates. |
Revenue Recognition | Revenue Recognition The Company’s revenues are recognized in accordance with ASC 606, Revenue from Contracts with Customers for which the Company’s performance obligations are satisfied over time as work is performed or at a point in time. The majority of the Company’s revenue is recognized at a point in time when products ship and control is transferred to the customer. The Company determines revenue recognition through the following steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when, or as, a performance obligation is satisfied. The Company’s contracts are executed through a combination of written agreements along with purchase orders with all customers including certain general terms and conditions. Generally, purchase orders entail products, quantities and prices, which define the performance obligations of each party and are approved and accepted by the Company. The Company’s contracts with customers typically do not include extended payment terms. Payment terms vary by contract type and type of customer and generally range from 30 to 60 days from invoice. Additionally, taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer and deposited with the relevant government authority, are excluded from revenue. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer adjusted for estimated variable consideration, if any. Variable consideration may include discounts, rights of return, refunds, and other similar obligations. The Company allocates the transaction price to each distinct product and service based on its relative standalone selling price. The standalone selling price for products primarily involves the cost to produce the deliverable plus the anticipated margin and for services is estimated based on the Company’s approved list price. In the normal course of business, the Company does not accept product returns unless the items are defective as manufactured. The Company establishes provisions for estimated returns and warranties. In addition, the Company does not typically provide customers with the right to a refund and does not transact for noncash consideration. Customer agreements include one vendor managed inventory program. The Company recognizes revenue under this arrangement when all of the following criteria are met: (i) the goods have been identified separately as belonging to the customer; (ii) the goods are ready for physical shipment to the customer; (iii) the Company does not have the ability to direct the goods to another customer; and (iv) the arrangement was requested by the customer and that the customer has sufficiently explained a substantial business purpose for the arrangement. Management also considers whether the customer's custodial risks are insured and whether modifications to the Company's normal billing and credit terms were required. The Company recorded revenue from product sales that are held in vendor managed inventory under this agreement of $ 4,858,660 and $ 18,504,677 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, $ 0 and $ 3,446,474 , respectively, of products sold through those dates were held by the Company in the vendor management program. Revenues on certain fixed-price contracts where we provide engineering services, prototypes and completed products are recognized over time based upon the output method as milestones are met and value is delivered to the customer, which depicts the Company’s progress toward fulfilling its performance obligations. These services require that we perform significant, extensive, and complex design, development, modification or implementation of our customers’ systems. Performance will often extend over long periods of time, and our right to receive future payment depends on our future performance in accordance with the agreement. If changes occur in delivery, productivity or other factors used in developing the estimates of costs or revenues, we revise our cost and revenue estimates, which may result in increases or decreases in revenues and costs, and such revisions are reflected in earnings in the period in which the revision becomes known. There were no significant unbilled or incomplete milestone projects as of December 31, 2023 and 2022. The Company’s operating segment revenues, disaggregated by primary geographic market, which is determined based on a customer’s geographic location, for the years ended December 31, 2023 and 2022, are as follows: For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 Entity: Domestic International Total Domestic International Total Customized computers and flash arrays $ 21,221,868 $ 7,588,020 $ 28,809,888 $ 22,506,650 $ 20,780,065 $ 43,286,715 Value-added reseller with minimal - 32,086,909 32,086,909 - 29,134,630 29,134,630 $ 21,221,868 $ 39,674,929 $ 60,896,797 $ 22,506,650 $ 49,914,695 $ 72,421,345 |
Warranty Reserve | Warranty Reserve The Company offers product warranties that extend for one or two years from the date of sale. Such warranties are considered assurance-type warranties; therefore, they would not be deemed to be a separate performance obligation under ASC 606. Such warranties require the Company to repair or replace defective product returned to the Company during the warranty period at no cost to the customer. The Company records an estimate for warranty‑related costs based on its historical and estimated future product return rates and expected repair or replacement costs (Note 8). While such costs have historically been within management’s expectations and the provisions established, unexpected changes in failure rates could have a material adverse impact on the Company, requiring additional warranty reserves and could adversely affect the Company’s gross profit and gross margins. The Company offers customers extended warranties beyond the standard one-year warranty on the product. The extended warranties are considered service-type warranties and would be considered as a separate performance obligation under ASC 606. The Company is the primary obligor and revenue is recognized on a gross basis ratably over the term of the extended warranty. The customer can purchase extended warranties from one to five years , in the bronze, silver or gold categories. This entails hardware repair or replacement, shipping methods on how the warranties will be returned/delivered, response times and hours of operations to receive support. The value of warranties sold for years ended December 31, 2023 and 2022, were $ 108,265 and $ 302,422 , respectively. The revenue that was recognized for the warranties sold for the years ended December 31, 2023 and 2022, were $ 189,171 and $ 233,010 , respectively. The Company does have recourse with some of its suppliers that offer more than a one-year guarantee on parts, but this is not standard. For the few that offer greater than a year warranty, the Company may be able to recover the cost of the part from the manufacturer for the failed part. The amounts of these costs vary in a wide range, but are not material, due to the infrequency of failure. As of December 31, 2023 and 2022, deferred revenue totaled $ 149,514 and $ 191,952 , respectively. The Company expects to recognize approximately $ 149,514 of unearned revenue amounts from 2024 through 2025 . |
Shipping and Handling Costs | Shipping and Handling Costs The Company's shipping and handling costs are included in cost of goods sold for all periods presented. |
Foreign Currency | Foreign Currency We operate primarily in the United States. Foreign sales of products and services are primarily denominated in U.S. dollars. We also conduct business outside the United States through our foreign subsidiary in Germany, where business is largely transacted in non-U.S. dollar currencies particularly the Euro, which is subject to fluctuations due to changes in foreign currency exchange rates. Accordingly, we are subject to exposure from changes in the exchange rates of local currencies. Foreign currency transaction gains and losses are recorded in other income (expense), net in the consolidated statements of operations. OSS GmbH operates as an extension of OSS’ domestic operations. The functional currency of OSS GmbH is the Euro. Transactions denominated in currencies other than the functional currency are remeasured to the functional currency at the average exchange rate in effect during the period. At the end of each reporting period, monetary assets and liabilities are remeasured using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Consequently, changes in the exchange rates of the currencies may impact the translation of the foreign subsidiaries’ statements of operations into U.S. dollars, which may in turn affect our consolidated statement of operations. The resulting foreign currency translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in the consolidated balance sheets. |
Derivative Financial Instruments | Derivative Financial Instruments We may employ derivatives to manage certain currency market risks through the use of foreign exchange forward contracts. We do not use derivatives for trading or speculative purposes. Our derivatives are designated as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). We hedge a portion of the exchange risk involved in anticipation of highly probable foreign currency-denominated transactions. In anticipation of these transactions, we enter into foreign exchange contracts to provide currency at a fixed rate. As of December 31, 2023 and 2022, Bressner had no foreign exchange contract outstanding. Unrealized gains on derivatives designated as cash flow hedges are recorded at fair value as assets, and unrealized losses on derivatives designated as cash flow hedges are recorded at fair value as liabilities. For derivative instruments designated as cash flow hedges, the effective portion is reported as a component of accumulated OCI until reclassified into interest expense in the same period the hedged transaction affects earnings. The gain or loss on the ineffective portion is recognized as “Other (expense) income, net” in the consolidated statements of operations in each period. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for employee and director share-based compensation in accordance with the provisions of ASC Topic 718 “Compensation – Stock Compensation” . Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). All transactions in which goods or services are the consideration received for the issuance of equity instruments to non-employees are accounted for based on the equivalent fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable on the grant date. The measurement date used to determine the estimated fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur. Employee and director stock-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Given that stock-based compensation expense recognized in the accompanying consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company’s estimated average forfeiture rates are based on historical forfeiture experience and estimated future forfeitures. Compensation cost for stock awards, which include restricted stock units (“RSUs”), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service period. The fair value of stock awards is based on the quoted price of our common stock on the grant date. The estimated fair value of common stock option awards is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions regarding future stock price volatility and expected time to exercise, along with assumptions about the risk-free interest rate and expected dividends, all of which affect the estimated fair values of the Company’s common stock option awards. Given a lack of historical stock option exercises, the expected term of options granted is calculated as the average of the weighted vesting period and the contractual expiration date of the option. This calculation is based on a method permitted by the Securities and Exchange Commission in instances where the vesting and exercise terms of options granted meet certain conditions and where limited historical exercise data is available. The expected volatility is based on the historical volatility of the common stock of comparable public companies that operate in similar industries as the Company. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected term of the grant effective as of the date of the grant. The expected dividend assumption is based on the Company’s history and management’s expectation regarding dividend payouts. Compensation expense for common stock option awards with graded vesting schedules is recognized on a straight-line basis over the requisite service period for the last separately vesting portion of the award, provided that the accumulated cost recognized as of any date at least equals the value of the vested portion of the award. If there are any modifications or cancellations of the underlying vested or unvested stock-based awards, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense, or record additional expense for vested stock-based awards. Future stock-based compensation expense and unearned stock- based compensation may increase to the extent that the Company grants additional common stock options or other stock-based awards. |
Business Combinations | Business Combinations We utilize the acquisition method of accounting for business combinations and allocate the purchase price of an acquisition to the various tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. We primarily establish fair value using the income approach based upon a discounted cash flow model. The income approach requires the use of many assumptions and estimates including future revenues and expenses, as well as discount factors and income tax rates. Other estimates include: • estimated step-ups or write-downs for fixed assets and inventory; • estimated fair values of intangible assets; and • estimated income tax assets and liabilities assumed from the target. While we use our best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business acquisition date, our estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the purchase price allocation period, which is generally one year from the business acquisition date, we record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. For changes in the valuation of intangible assets between preliminary and final purchase price allocation, the related amortization is adjusted in the period it occurs. Subsequent to the purchase price allocation period any adjustment to assets acquired or liabilities assumed is included in operating results in the period in which the adjustment is determined. Should we issue shares of our common stock in an acquisition, we will be required to estimate the fair value of the shares issued. See Note 7. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and included in marketing and selling expense in the accompanying consolidated statements of operations. Advertising costs for the years ended December 31, 2023 and 2022, were $ 547,132 and $ 510,676 , respectively. |
Research and Development Expenses | Research and Development Expenses Research and development expenditures are expensed in the period incurred. Research and development expenses primarily consist of salaries, benefits and stock-based compensation, as well as consulting expenses and allocated facilities and other overhead costs. Research and development activities include the development of new technologies, features and functionality in support of the Company’s products and customer needs. |
Employee Retention Credit | Employee Retention Credit On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") to provide certain relief as a result of the COVID-19 pandemic. The CARES Act provides tax relief, along with other stimulus measures, including a provision for an Employee Retention Credit (“ERC”) The ERC was designed to encourage businesses to keep employees on the payroll during the COVID-19 pandemic. As there is no authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities, we accounted for the ERC funding consistent with our accounting treatment and reporting of the forgiveness of our Paycheck Protection Program ("PPP") Loan. The credit is based upon the number of employees in specific quarters in years 2020 and 2021. For the year 2020, the maximum credit is based upon the lesser of 50 % of eligible wages or $ 5,000 for the year. For the first three quarters only of the year 2021, the maximum quarterly credit is based upon the lesser of 70 % of eligible wages or $ 7,000 per quarter. The total maximum program credit per employee is $ 26,000 . The Company applied for the ERC program and as of December 31, 2023, has received a total of $ 2,004,382 in credits, including interest, and paid commissions of $ 287,656 to a vendor who assisted with the calculations and filing of the application. The net proceeds of $ 1,716,727 have been reported as other income in the accompanying consolidated statements of operations. Income is recognized when reasonably assured of receipt based upon notice. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Under ASC Topic 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50 % likelihood of being sustained. Additionally, ASC Topic 740 provides requirements for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company files income tax returns in the U.S. federal jurisdiction, California and various other state jurisdictions, and Germany. The Company has elected to treat the tax effect of Global Intangible Low Tax Income (“GILTI”) as a current-period expense when occurred. The Company does not foresee material changes to its gross liability of uncertain tax positions within the next twelve months. On August 16, 2022, Congress passed, and the President signed into law, the Inflation Reduction Act, 2022 (“the “IRA”), which includes certain business tax provisions. The Company does not expect the IRA to have a material impact on the Company’s effective tax rate or income tax provision for the year ending December 31, 2023. On March 11, 2021, Congress passed, and the President signed into law, the American Rescue Plan Act, 2021 (the “ARP”), which includes certain business tax provisions. At this point, we do not believe that these changes will have a material impact on our income tax provision for 2023. We will continue to evaluate the impact of new legislation on our financial position, results of operations, and cash flows. The U.S. Tax Cuts and Jobs Act (“TCJA”) was signed into law on December 22, 2017. Guidance continues to be issued clarifying the application of this legislation and recent proposed legislation known as Build Back Better is under consideration within both houses of U.S. Congress. Significant business and international provisions have been proposed in various versions of the framework of the bill that could increase our total tax expense. We cannot predict the overall impact that the additional guidance and proposed changes may have on our business. Some jurisdictions have raised tax rates, and it is reasonable to expect that other global taxing authorities will be reviewing current legislation for potential modifications in reaction to the implementation of U.S. tax legislation, current economic conditions, and COVID-19 response costs. Due to the COVID-19 pandemic, economic uncertainty, inflation, increases in interest rates, capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine, and supply chain issues, our business, financial condition and results of operations could be materially adversely affected by any negative impact from these events. We are not aware of any specific event or circumstance that would require an update to our estimates or assumptions or a revision of the carrying value of our assets or liabilities as of December 31, 2023. These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions. |
Interest Expense | Interest Expense Interest expense consists primarily of interest associated with the Company’s issued debt including the amortization of debt discounts. The Company recognizes the amortization of debt discounts and the amortization of interest costs using a straight-line method which approximates the effective interest method. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average common shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average shares and dilutive potential common shares outstanding during the period. Dilutive potential shares consist of dilutive shares issuable and the exercise or vesting of outstanding stock options, restricted stock units and warrants, respectively, computed using the treasury stock method. During a period where a net loss is incurred, dilutive potential shares are excluded from the computation of dilutive net loss per share, as inclusion is anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management has evaluated recent accounting pronouncements through the date of these consolidated financial statements and believes that the following accounting pronouncements that will require disclosure in the Company's financial statements when effective. On December 14, 2023, the FASB issued ASU 2023-09, Improvement to Income Tax Disclosure (Topic 740) which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. The Company must also further disaggregate income taxes paid. The objective of these disclosure requirements is for an entity, particularly an entity operating in multiple jurisdictions, to disclose sufficient information to enable users of financial statements to understand the nature and magnitude of factors contributing to the difference between the effective tax rate and the statutory tax rate. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This guidance applies to annual periods beginning after December 15, 2024. On November 27, 2023, the FASB issued ASU 2023-07 "Segment Reporting (Topic 280): Improvements to reportable segment disclosures." This amendment enhanced disclosures about significant segment expenses.” In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows.” We do not believe that the implementation of this amendment will have a material impact on the consolidated financial statements of the Company. This guidance is effective for fiscal years beginning after December 15, 2023. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Changes in the Allowance for Credit Losses | The following table represents the changes in the allowance for credit losses associated with our trade receivables for the year ended December 31, 2023: Allowanced for Credit Losses For the Year Ended December 31, 2023 Balance on January 1, 2023 $ 45,354 Provision charged to expense 4,160 Receivables written-off ( 2,943 ) Recoveries of receivables previously written-off 3,155 Effects of change in exchange rates 306 Balance on December 31, 2023 $ 50,032 |
Schedule of Operating Segment Revenues Disaggregated by Primary Geographic Market Based on Customer's Geographic Location | The Company’s operating segment revenues, disaggregated by primary geographic market, which is determined based on a customer’s geographic location, for the years ended December 31, 2023 and 2022, are as follows: For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 Entity: Domestic International Total Domestic International Total Customized computers and flash arrays $ 21,221,868 $ 7,588,020 $ 28,809,888 $ 22,506,650 $ 20,780,065 $ 43,286,715 Value-added reseller with minimal - 32,086,909 32,086,909 - 29,134,630 29,134,630 $ 21,221,868 $ 39,674,929 $ 60,896,797 $ 22,506,650 $ 49,914,695 $ 72,421,345 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Short-Term Investments by Significant Investment Category | The Company’s short-term investments by significant investment category as of December 31, 2023, were as follows: Description Amortized Gross Gross Accrued Estimated Level 1: (1) Cash alternatives $ 76,709 $ - $ - $ - $ 76,709 Certificates of deposit 7,585,000 5,793 - 104,318 7,695,111 Corporate bonds and notes - - - - - Municipal Securities - - - - - $ 7,661,709 $ 5,793 $ - $ 104,318 $ 7,771,820 The Company’s short-term investments by significant investment category as of December 31, 2022, were as follows: Description Amortized Gross Gross Accrued Estimated Level 1: (1) Cash alternatives $ 5,139,940 $ 22,646 $ - $ 3,506 $ 5,166,092 Certificates of deposit 4,950,527 - ( 7,691 ) 14,607 4,957,443 Corporate bonds and notes - - - - - Municipal Securities - - - - - $ 10,090,467 $ 22,646 $ ( 7,691 ) $ 18,113 $ 10,123,535 (1) Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net consisted of the following on December 31: December 31, December 31, 2023 2022 Accounts receivable 8,368,279 $ 11,372,598 Less: allowance for credit losses ( 50,032 ) ( 45,354 ) $ 8,318,247 $ 11,327,244 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories, Net | Inventories, net consisted of the following on December 31: December 31, December 31, 2023 2022 Raw materials $ 12,975,235 $ 9,370,162 Sub-assemblies 454,181 892,123 Work-in-process 344,685 1,343,239 Finished goods 9,824,987 10,357,452 23,599,088 21,962,976 Less: allowances for obsolete and slow-moving inventories ( 1,904,340 ) ( 1,187,610 ) $ 21,694,748 $ 20,775,366 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net consisted of the following on December 31: December 31, December 31, 2023 2022 Computers and computer equipment $ 1,146,490 $ 825,086 Furniture and office equipment 503,180 469,060 Manufacturing equipment and engineering tools 2,738,520 2,713,137 ERP Financial System 3,081,805 2,585,357 Leasehold improvements 1,045,483 1,036,947 Vehicles 37,746 9,745 8,553,224 7,639,332 Less: accumulated depreciation and amortization ( 6,183,000 ) ( 5,069,208 ) $ 2,370,224 $ 2,570,124 |
Long-Lived Intangible Assets (T
Long-Lived Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Definite Lived Intangible Assets | Definite lived intangible assets related to acquisitions are as follows as of December 31, 2023: Expected Remaining Gross Accumulated Net Customer lists and relationships 36 to 60 months 0 months $ 2,084,515 $ ( 2,084,515 ) $ - Drawings and technology 36 months 0 months 760,207 ( 760,207 ) - Trade name, trademarks & other 24 to 36 months 0 months 447,274 ( 447,274 ) - Non-compete 36 months 0 months 246,797 ( 246,797 ) - $ 3,538,793 $ ( 3,538,793 ) $ - Definite lived intangible assets related to acquisitions were as follows as of December 31, 2022: Expected Remaining Gross Accumulated Net Customer lists and relationships 36 to 60 months 8 months $ 2,084,515 $ ( 2,042,361 ) $ 42,154 Drawings and technology 36 months 0 months 760,207 ( 760,207 ) - Trade name, trademarks & other 24 to 36 months 0 months 447,274 ( 447,274 ) - Non-compete 36 months 0 months 246,797 ( 246,797 ) - $ 3,538,793 $ ( 3,496,639 ) $ 42,154 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following on December 31: December 31, December 31, 2023 2022 Accrued compensation and related liabilities $ 1,023,902 $ 989,478 Deferred revenue 299,514 378,952 Customer deposits 27,447 61,696 Warranty reserve 607,809 584,268 Trade and other taxes 392,336 225,743 Other accrued expenses 851,511 773,732 $ 3,202,519 $ 3,013,869 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt Obligations | A summary of outstanding debt obligations as of December 31, 2023, are as follows: Loan Description Current Maturity Balance Balance ($) Current Long-term Foreign: Commerzbank AG 2.550 % June-24 € 382,327 $ 422,050 $ 422,050 $ - Commerzbank AG 5.750 % March-24 500,000 $ 551,949 551,949 - Uni Credit Bank AG 5.630 % February-24 500,000 $ 551,948 551,948 - Uni Credit Bank AG 5.800 % June-24 500,000 $ 551,948 551,948 - € 1,882,327 $ 2,077,895 $ 2,077,895 $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity under the plans during the years ended December 31, 2023 and 2022, are as follows: Stock Options Outstanding Number of Underlying Weighted Weighted Aggregate Outstanding on January 1, 2022 1,025,499 $ 2.01 6.35 $ 3,014,448 Granted - $ - - $ - Forfeited / Canceled ( 1,000 ) $ 2.43 - $ - Exercised ( 53,819 ) $ 0.78 - $ - Outstanding on December 31, 2022 970,680 $ 2.07 5.61 $ 988,197 Granted 400,000 $ 2.95 - $ - Forfeited / Canceled ( 8,250 ) $ 2.49 - $ - Exercised ( 38,670 ) $ 0.63 - $ - Outstanding on December 31, 2023 1,323,760 $ 2.37 4.06 $ 169,802 Exercisable on December 31, 2023 923,760 $ 2.12 1.73 $ 169,802 Vested and expected to vest on December 31, 2023 923,760 $ 2.12 1.73 $ 169,802 |
Summary of Common Stock Options Outstanding | The following table summarizes information about common stock options outstanding as of December 31, 2023: Stock Options Outstanding Stock Options Exercisable Plan Exercise Price Number of Weighted Weighted Number of Weighted Weighted 2011 $ 0.46 -$ 0.80 40,000 0.54 $ 0.46 40,000 0.54 $ 0.46 2015 $ 1.08 -$ 1.95 324,485 2.30 $ 1.78 324,485 2.30 $ 1.78 2017 $ 2.14 -$ 4.09 559,275 1.48 $ 2.44 559,275 1.48 $ 2.44 Incentive options issued outside of Plans $ 2.95 400,000 9.43 $ 2.95 - - $ - 1,323,760 923,760 |
Schedule of Assumption to Calculate Weighted Average Grant Date Fair Value of Options Grant | The following table presents details of the assumptions used to calculate the weighted-average grant date fair value of common stock options granted by the Company. There were no options granted during the year ended December 31, 2022. For the Year Ended December 31, 2023 2022 Expected term (in years) 6.16 - Expected volatility 72.73 % 0.00 % Risk-free interest rate 3.79 % 0.00 % Weighted average grant date fair value per share $ 2.95 $ - Grant date fair value of options vested $ 927,447 $ 839,409 Intrinsic value of options exercised $ 48,361 $ 119,833 |
Schedule of Restricted Stock Unit Activity | The Company’s restricted stock unit activity for the years ended December 31, 2023 and 2022, was as follows: Restricted Stock Units Number of Weighted Unvested on January 1, 2022 604,800 $ 4.30 Granted 684,300 $ 3.90 Vested ( 379,655 ) $ 4.15 Canceled ( 1,938 ) $ 5.02 Unvested on December 31, 2022 907,507 $ 4.05 Granted 925,243 $ 2.80 Vested ( 647,943 ) $ 3.94 Canceled ( 91,318 ) $ 4.30 Unvested on December 31, 2023 1,093,489 $ 3.04 |
Summary of Stock-Based Compensation Expense | Stock-based compensation expense for the years ended December 31, 2023 and 2022, was comprised of the following: For the Year Ended December 31, Stock-based compensation classified as: 2023 2022 General and administrative $ 1,452,774 $ 1,111,129 Production 305,763 269,079 Marketing and selling 322,854 396,187 Research and development 263,967 214,722 $ 2,345,358 $ 1,991,117 |
Schedule of Warrant Activity | The following table summarizes the Company’s warrant activity during the years ended December 31, 2023 and 2022: Number of Weighted Warrants outstanding on January 1, 2022 451,112 $ 5.37 Warrants granted - $ - Warrants exercised - $ - Warrants outstanding on December 31, 2022 451,112 $ 5.37 Warrants granted - $ - Warrants expired ( 380,000 ) $ 6.00 Warrants exercised ( 28,090 ) $ 1.78 Warrants outstanding on December 31, 2023 43,022 $ 2.15 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Lessee Disclosure [Abstract] | |
Schedule of Other information Related to Leases | Other information related to leases as of the year ended December 31, 2023 and 2022 are as follows: For the Year 2023 2022 Operating lease expense $ 676,204 $ 644,120 Total lease expense $ 676,204 $ 644,120 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 551,344 $ 636,990 Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,590,568 - Operating lease obligation for new operating leases $ 1,446,865 - Weighted-average remaining lease term - operating leases 73.0 months 20.2 months Weighted-average discount rate - operating leases 13.6 % 12.8 % |
Summary of Maturity of Operating Lease Liabilities | The following table presents maturity of the Company's operating lease liabilities as of December 31, 2023: Year Operating Leases 2024 $ 611,381 2025 467,325 2026 405,200 2027 403,771 2028 419,922 Thereafter 735,529 Total lease payments 3,043,128 Less: Amount representing interest ( 886,666 ) Present value of lease payment 2,156,462 Less: current portion of operating lease obligation ( 390,926 ) Operating lease obligation, net of current portion $ 1,765,536 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Pre-tax (Loss) Income | For the years ended December 31, 2023 and 2022, pre-tax (loss) income was attributed to the following jurisdictions: For the Year Ended December 31, 2023 2022 Domestic operations $ ( 9,194,652 ) $ ( 292,325 ) Foreign operations 3,405,604 2,486,867 (Loss) income before taxes $ ( 5,789,048 ) $ 2,194,542 |
Schedule of Tax Provision for Income Taxes | The components of the tax provision for income taxes are as follows: For the Year Ended December 31, 2023 2022 Current: Federal $ 24,641 $ - State 23,153 29,695 International 974,830 612,198 1,022,624 641,893 Deferred: Federal ( 95,496 ) 2,345,612 State - 1,436,092 International - - ( 95,496 ) 3,781,704 Total provision for income taxes $ 927,128 $ 4,423,597 |
Schedule of Taxes on Income Vary from Statutory Federal Income Tax Rate Applied to Earnings Before Tax on Income | Taxes on income vary from the statutory federal income tax rate applied to earnings before tax on income as follows: For the Year Ended December 31, 2023 2022 Provision at federal statutory rates ( 21 % applied to earnings before income $ ( 1,215,486 ) $ 461,219 State income taxes, net of federal benefit ( 252,544 ) 21,044 Other permanent items ( 60,372 ) ( 78,847 ) Stock based compensation 85,990 31,815 Goodwill impairment 704,987 - Research and development credits 800,550 60,734 Amortization of intangibles - 7,410 Change in reserve for uncertain tax positions ( 338,894 ) ( 26,307 ) Change in valuation allowance 984,921 3,805,149 Other 217,976 141,380 $ 927,128 $ 4,423,597 |
Schedule of Deferred Income Tax Assets and Liabilities | Deferred income tax assets and liabilities arising from differences accounting for financial statement purposes and tax purposes, less valuation reserves at yearend are as follows: For the Year Ended December 31, 2023 2022 Deferred tax assets: Reserves $ 59,564 $ 58,789 Deferred compensation 139,805 150,681 Stock compensation 295,392 395,198 Deferred revenue 87,770 109,361 Inventories 617,929 221,323 Credits and loss carryforward 3,102,512 3,412,820 Capitalized research and experimental expenditures 1,206,082 700,920 Lease liabilities 528,698 181,177 Total deferred tax assets before valuation allowance 6,037,752 5,230,269 Deferred tax liabilities: Property and equipment ( 373,645 ) ( 338,739 ) Intangible assets - ( 641,493 ) Other ( 305,036 ) ( 308,047 ) ROU assets ( 464,187 ) ( 126,016 ) Total deferred tax liabilities ( 1,142,868 ) ( 1,414,295 ) Net deferred tax assets before valuation allowance 4,894,884 3,815,974 Valuation allowance ( 4,939,557 ) ( 3,954,636 ) Net deferred tax liabilities $ ( 44,673 ) $ ( 138,662 ) |
Schedule of Reconciliation Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Unrecognized tax benefits balance on December 31, 2021 $ 1,242,717 Gross increases for tax positions of the prior year 25,158 Gross decrease for tax positions of the current year ( 49,479 ) Unrecognized tax benefits balance on December 31, 2022 1,218,396 Gross increases for tax positions of the prior year 55,431 Gross decrease for tax positions of the current year ( 505,258 ) Gross increases for tax positions of the current year 50,711 Unrecognized tax benefits balance on December 31, 2023 $ 819,280 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss Per Share | Basic and diluted net loss per share was calculated as follows for the years ended December 31, 2023 and 2022: For the Year Ended December 31, 2023 2022 Basic and diluted net (loss) income per share: Numerator: Net loss $ ( 6,716,176 ) $ ( 2,229,055 ) Denominator: Weighted average common shares outstanding - basic 20,854,777 19,730,698 Effect of dilutive securities - - Weighted average common shares outstanding - diluted 20,854,777 19,730,698 Net loss per common share: Basic $ ( 0.32 ) $ ( 0.11 ) Diluted $ ( 0.32 ) $ ( 0.11 ) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of (Loss) Income from Operations by Reporting Segments | Segment detail for the years ended December 31, 2023 and 2022, is as follows: For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 OSS Bressner Total OSS Bressner Total Revenues $ 28,809,887 $ 32,086,910 $ 60,896,797 $ 43,286,715 $ 29,134,630 $ 72,421,345 Cost of revenues ( 18,544,901 ) ( 24,397,274 ) ( 42,942,175 ) ( 29,142,852 ) ( 22,880,884 ) ( 52,023,736 ) Gross profit 10,264,986 7,689,636 17,954,622 14,143,863 6,253,746 20,397,609 Gross profit % 35.6 % 24.0 % 29.5 % 32.7 % 21.5 % 28.2 % Total operating expenses ( 21,742,021 ) ( 4,135,754 ) ( 25,877,775 ) ( 15,182,546 ) ( 3,646,735 ) ( 18,829,281 ) (Loss) income from operations $ ( 11,477,035 ) $ 3,553,882 $ ( 7,923,153 ) $ ( 1,038,683 ) $ 2,607,011 $ 1,568,328 |
The Company and Basis of Pres_2
The Company and Basis of Presentation - Additional Information (Details) | Oct. 31, 2018 |
OSS Europe | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Percentage of shares acquired | 100% |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) Contract Customer Project | Dec. 31, 2022 USD ($) Customer Contract Project | Dec. 31, 2020 USD ($) | Dec. 31, 2023 EUR (€) Project | |
Significant Accounting Policies [Line Items] | |||||||
Maximum basic deposit coverage per owner | $ 250,000 | ||||||
Maximum basic securities coverage per owner | 250,000 | ||||||
Aggregate amount of deposits coverage in excess of insurance limits | 250,000 | ||||||
Allowance for credit losses | $ 50,032 | $ 45,354 | |||||
Operating lease, expiration date | Aug. 31, 2024 | ||||||
Weighted average remaining lease term for operating leases | 73 months | 20 months 6 days | 73 months | ||||
Weighted average discount rate for operating leases | 13.60% | 12.80% | 13.60% | ||||
Accumulative adjustment to beginning retained earnings | $ (8,418,727) | $ (1,702,551) | |||||
Impairment loss to goodwill | $ 2,700,000 | 5,630,788 | |||||
Additional impairment loss to goodwill | $ 2,930,788 | ||||||
Impairment of intangible and long-lived assets | 0 | ||||||
Amount of warranties sold | $ 60,896,797 | $ 72,421,345 | |||||
Number of unbilled or incomplete milestone projects | Project | 0 | 0 | 0 | ||||
Customers extended warranties, description | The Company offers customers extended warranties beyond the standard one-year warranty on the product. The extended warranties are considered service-type warranties and would be considered as a separate performance obligation under ASC 606. The Company is the primary obligor and revenue is recognized on a gross basis ratably over the term of the extended warranty. The customer can purchase extended warranties from one to five years, in the bronze, silver or gold categories. | ||||||
Deferred revenue | $ 149,514 | $ 191,952 | |||||
Deferred revenue to be recognize | $ 149,514 | ||||||
Unearned revenue recognition period | 2024 through 2025 | ||||||
Purchase price allocation period | 1 year | ||||||
Advertising costs | $ 547,132 | 510,676 | |||||
Employee retention credit maximum percentage of eligible wages | 70% | 50% | |||||
Employee retention credit annual wages | $ 7,000 | $ 5,000 | |||||
Maximum program credit per employee | 26,000 | ||||||
Employee retention credit recieved | 2,004,382 | ||||||
Employee retention credit commission paid | 287,656 | ||||||
Other Income | |||||||
Significant Accounting Policies [Line Items] | |||||||
Employee retention credit (ERC) | $ 1,716,727 | ||||||
Adjustment | |||||||
Significant Accounting Policies [Line Items] | |||||||
Accumulative adjustment to beginning retained earnings | 44,533 | ||||||
ASU 2016-13 | |||||||
Significant Accounting Policies [Line Items] | |||||||
Change in accounting principle, ASU, adopted | true | true | |||||
Product Warranty | |||||||
Significant Accounting Policies [Line Items] | |||||||
Amount of warranties sold | $ 108,265 | 302,422 | |||||
Revenue recognized | 189,171 | 233,010 | |||||
Vendor Managed Inventory Program Agreement | |||||||
Significant Accounting Policies [Line Items] | |||||||
Amount of warranties sold | 4,858,660 | 18,504,677 | |||||
Product sold but held in inventory | $ 0 | $ 3,446,474 | |||||
Minimum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Estimated useful lives | 2 years | 2 years | |||||
Contracts with customers payment terms | 30 days | ||||||
Term of customers product extended warranty | 1 year | ||||||
Maximum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Estimated useful lives | 7 years | 7 years | |||||
Contracts with customers payment terms | 60 days | ||||||
Term of customers product extended warranty | 5 years | ||||||
Percentage of uncertain income tax positions not recognized | 50% | ||||||
Sales Revenue, Net | Customer Concentration Risk | |||||||
Significant Accounting Policies [Line Items] | |||||||
Concentration risk, number of customers | Customer | 1 | 1 | |||||
Sales Revenue, Net | Disguise and Raytheon | Customer Concentration Risk | |||||||
Significant Accounting Policies [Line Items] | |||||||
Concentration risk, percentage | 13% | 26% | |||||
Accounts Receivable | Customer Concentration Risk | |||||||
Significant Accounting Policies [Line Items] | |||||||
Concentration risk, number of customers | Customer | 1 | 1 | |||||
Accounts Receivable | Disguise and Raytheon | Customer Concentration Risk | |||||||
Significant Accounting Policies [Line Items] | |||||||
Concentration risk, percentage | 22% | 49% | |||||
Cost of Goods, Total | Certain Supplier | Supplier Concentration Risk | |||||||
Significant Accounting Policies [Line Items] | |||||||
Concentration risk, percentage | 37% | 25% | |||||
OSS Europe | |||||||
Significant Accounting Policies [Line Items] | |||||||
Maximum basic deposit coverage per owner | € | € 100,000 | ||||||
Aggregate amount of deposits coverage in excess of insurance limits | $ 1,015,214 | € 914,664 | |||||
OSS Europe | Designated as Hedging Instrument | |||||||
Significant Accounting Policies [Line Items] | |||||||
Number of foreign exchange contracts | Contract | 0 | 0 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Changes in the Allowance for Credit Losses (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Allowanced for credit losses | |
Balance on January 1, 2023 | $ 45,354 |
Provision charged to expense | 4,160 |
Receivables written-off | (2,943) |
Recoveries of receivables previously written-off | 3,155 |
Effects of change in exchange rates | 306 |
Balance on December 31, 2023 | $ 50,032 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Operating Segment Revenues Disaggregated by Primary Geographic Market Based on Customer's Geographic Location (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | $ 60,896,797 | $ 72,421,345 |
Customized Computers and Flash Arrays | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 28,809,888 | 43,286,715 |
Value-added Reseller with Minimal Customization | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 32,086,909 | 29,134,630 |
Domestic | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 21,221,868 | 22,506,650 |
Domestic | Customized Computers and Flash Arrays | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 21,221,868 | 22,506,650 |
International | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 39,674,929 | 49,914,695 |
International | Customized Computers and Flash Arrays | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 7,588,020 | 20,780,065 |
International | Value-added Reseller with Minimal Customization | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | $ 32,086,909 | $ 29,134,630 |
Short-Term Investments - Summar
Short-Term Investments - Summary of Short-Term Investments by Significant Investment Category (Details) - Level 1 - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | [1] | $ 7,661,709 | $ 10,090,467 |
Gross Unrealized Gains | [1] | 5,793 | 22,646 |
Gross Unrealized Losses | [1] | (7,691) | |
Accrued Interest | [1] | $ 104,318 | $ 18,113 |
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Current, Statement of Financial Position [Extensible Enumeration] | Short-Term Investments | Short-Term Investments | |
Estimated Fair Value | [1] | $ 7,771,820 | $ 10,123,535 |
Cash Alternatives | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | [1] | 76,709 | 5,139,940 |
Gross Unrealized Gains | [1] | 22,646 | |
Accrued Interest | [1] | 3,506 | |
Estimated Fair Value | [1] | 76,709 | 5,166,092 |
Certificates of Deposit | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | [1] | 7,585,000 | 4,950,527 |
Gross Unrealized Gains | [1] | 5,793 | |
Gross Unrealized Losses | [1] | (7,691) | |
Accrued Interest | [1] | 104,318 | 14,607 |
Estimated Fair Value | [1] | $ 7,695,111 | $ 4,957,443 |
[1] Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities. |
Short-Term Investments - Additi
Short-Term Investments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 Issuer | |
Maximum | |
Schedule Of Available For Sale Securities [Line Items] | |
Number of issuer, investment policy limits the amount of credit exposure | 1 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable, Net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts Notes And Loans Receivable [Line Items] | ||
Less: allowance for credit losses | $ (50,032) | $ (45,354) |
Accounts receivable, total | 8,318,247 | 11,327,244 |
Accounts Receivable | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts receivable gross | $ 8,368,279 | $ 11,372,598 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | ||
Provision for credit losses | $ 4,160 | $ 29,154 |
Inventories - Summary of Invent
Inventories - Summary of Inventories, Net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 12,975,235 | $ 9,370,162 |
Sub-assemblies | 454,181 | 892,123 |
Work-in-process | 344,685 | 1,343,239 |
Finished goods | 9,824,987 | 10,357,452 |
Inventory gross | 23,599,088 | 21,962,976 |
Less: allowances for obsolete and slow-moving inventories | (1,904,340) | (1,187,610) |
Inventory net | $ 21,694,748 | $ 20,775,366 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 8,553,224 | $ 7,639,332 |
Less: accumulated depreciation and amortization | (6,183,000) | (5,069,208) |
Property plant and equipment, net excluding construction in progress and software implementation | 2,370,224 | 2,570,124 |
Computers and Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,146,490 | 825,086 |
Furniture and Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 503,180 | 469,060 |
Manufacturing Equipment and Engineering Tools | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,738,520 | 2,713,137 |
ERP Financial System | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 3,081,805 | 2,585,357 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,045,483 | 1,036,947 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 37,746 | $ 9,745 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Depreciation and amortization | $ 1,035,362 | $ 987,068 |
Long-Lived Intangible Assets -
Long-Lived Intangible Assets - Schedule of Definite Lived Intangible Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Gross | $ 3,538,793 | $ 3,538,793 |
Definite lived intangible assets, Accumulated Amortization | $ (3,538,793) | (3,496,639) |
Definite lived intangible assets, Net | $ 42,154 | |
Customer Lists and Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Remaining Months | 0 months | 8 months |
Definite lived intangible assets, Gross | $ 2,084,515 | $ 2,084,515 |
Definite lived intangible assets, Accumulated Amortization | $ (2,084,515) | (2,042,361) |
Definite lived intangible assets, Net | $ 42,154 | |
Drawings and Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 36 months | 36 months |
Definite lived intangible assets, Remaining Months | 0 months | 0 months |
Definite lived intangible assets, Gross | $ 760,207 | $ 760,207 |
Definite lived intangible assets, Accumulated Amortization | $ (760,207) | $ (760,207) |
Trade name, Trademarks & other | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Remaining Months | 0 months | 0 months |
Definite lived intangible assets, Gross | $ 447,274 | $ 447,274 |
Definite lived intangible assets, Accumulated Amortization | $ (447,274) | $ (447,274) |
Non-Compete | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 36 months | 36 months |
Definite lived intangible assets, Remaining Months | 0 months | 0 months |
Definite lived intangible assets, Gross | $ 246,797 | $ 246,797 |
Definite lived intangible assets, Accumulated Amortization | $ (246,797) | $ (246,797) |
Minimum | Customer Lists and Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 36 months | 36 months |
Minimum | Trade name, Trademarks & other | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 24 months | 24 months |
Maximum | Customer Lists and Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 60 months | 60 months |
Maximum | Trade name, Trademarks & other | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 36 months | 36 months |
Long-Lived Intangible Assets _2
Long-Lived Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 42,154 | $ 63,231 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued compensation and related liabilities | $ 1,023,902 | $ 989,478 |
Deferred revenue | 299,514 | 378,952 |
Customer deposits | 27,447 | 61,696 |
Warranty reserve | 607,809 | 584,268 |
Trade and other taxes | 392,336 | 225,743 |
Other accrued expenses | 851,511 | 773,732 |
Accrued expenses and other liabilities | $ 3,202,519 | $ 3,013,869 |
Debt - Additional Information (
Debt - Additional Information (Details) | 12 Months Ended | |||||||||||||||||
Dec. 29, 2023 | Jun. 19, 2023 | Dec. 19, 2022 | Jun. 30, 2022 USD ($) | Jun. 17, 2022 | Jun. 18, 2021 EUR (€) | Dec. 31, 2023 USD ($) LineofCredit TermLoan $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2023 EUR (€) LineofCredit TermLoan | Sep. 29, 2023 | Mar. 30, 2023 | Feb. 01, 2023 | Dec. 31, 2022 EUR (€) | Jun. 30, 2022 EUR (€) | Apr. 30, 2022 USD ($) | Feb. 16, 2022 EUR (€) | Feb. 01, 2022 EUR (€) | Apr. 09, 2021 EUR (€) | |
Debt Instrument [Line Items] | ||||||||||||||||||
Debt discount amortization | $ 1,224 | |||||||||||||||||
Proceeds from loan | $ 2,500,000 | |||||||||||||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||||||
Bressner Technology GmbH | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Number of term loans outstanding | TermLoan | 4 | 4 | ||||||||||||||||
Debt instrument, face amount | € | € 500,000 | € 500,000 | € 500,000 | € 500,000 | ||||||||||||||
Debt instrument, modified interest rate | 5.80% | |||||||||||||||||
Commerzbank AG | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate balance outstanding | $ 422,050 | $ 1,215,279 | € 382,327 | € 1,132,356 | ||||||||||||||
Debt instrument, face amount | $ 1,468,173 | € 1,500,000 | ||||||||||||||||
Debt installments payment beginning date | Jul. 31, 2022 | |||||||||||||||||
Debt installment term | 24 months | |||||||||||||||||
Term Loans | Bressner Technology GmbH | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate balance outstanding | $ 2,077,895 | € 1,822,327 | ||||||||||||||||
Debt instrument, maturity date | Dec. 17, 2021 | |||||||||||||||||
Debt instrument, extended maturity date | Jun. 19, 2024 | Dec. 19, 2023 | Jun. 19, 2023 | Dec. 19, 2022 | Jun. 17, 2022 | |||||||||||||
Debt instrument, modified interest rate | 5.75% | 4.60% | 4.76% | 5.63% | ||||||||||||||
Term Loans | Commerzbank AG | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument, interest rate | 2.55% | 2.55% | ||||||||||||||||
German Institutions | Revolving Credit Facility | Bressner Technology GmbH | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Number of lines of credit | LineofCredit | 3 | 3 | ||||||||||||||||
Total outstanding balance | $ 0 | 0 | ||||||||||||||||
German Institutions | Revolving Credit Facility | Bressner Technology GmbH | Minimum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Line of credit current rate | 3.10% | |||||||||||||||||
German Institutions | Revolving Credit Facility | Bressner Technology GmbH | Maximum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,980,522 | € 2,700,000 | ||||||||||||||||
Line of credit current rate | 5.62% | |||||||||||||||||
Torrey Pines Bank | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Total outstanding balance | $ 0 | 0 | ||||||||||||||||
Torrey Pines Bank | Revolving Credit Facility | Minimum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Cash and investments balances maintained | 4,000,000 | |||||||||||||||||
Torrey Pines Bank | Revolving Credit Facility | Maximum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000 | |||||||||||||||||
Line of Credit from UniCredit Bank | Term Loans | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate balance outstanding | 551,948 | 536,616 | 500,000 | 500,000 | ||||||||||||||
Line of Credit from UniCredit Bank | Term Loans | Bressner Technology GmbH | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate balance outstanding | 551,948 | 536,616 | 500,000 | 500,000 | ||||||||||||||
Line Of Credit From V R Bank | Term Loans | Bressner Technology GmbH | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate balance outstanding | 536,616 | 500,000 | ||||||||||||||||
Line of Credit from Commerzbank AG | Term Loans | Bressner Technology GmbH | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Aggregate balance outstanding | $ 551,949 | $ 536,616 | € 500,000 | € 500,000 |
Debt - Summary of Outstanding D
Debt - Summary of Outstanding Debt Obligations (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||
Long-term debt, net of current portion | $ 409,294 | ||
Foreign | |||
Debt Instrument [Line Items] | |||
Balance | $ 2,077,895 | € 1,882,327 | |
Current Portion | $ 2,077,895 | ||
Foreign | Uni Credit Bank AGUni Credit Bank AG | Notes Payable Maturing on June 30, 2024 | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 5.80% | 5.80% | |
Maturity Date | Jun. 30, 2024 | ||
Balance | $ 551,948 | € 500,000 | |
Current Portion | $ 551,948 | ||
Foreign | Uni Credit Bank AGUni Credit Bank AG | Note Payable Maturing on February 29, 2024 | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 5.63% | 5.63% | |
Maturity Date | Feb. 29, 2024 | ||
Balance | $ 551,948 | € 500,000 | |
Current Portion | $ 551,948 | ||
Foreign | Commerzbank AG | Notes Payable Maturing on June 30, 2024 | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 2.55% | 2.55% | |
Maturity Date | Jun. 30, 2024 | ||
Balance | $ 422,050 | € 382,327 | |
Current Portion | $ 422,050 | ||
Foreign | Commerzbank AG | Note Payable Maturing on March 31, 2024 | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 5.75% | 5.75% | |
Maturity Date | Mar. 31, 2024 | ||
Balance | $ 551,949 | € 500,000 | |
Current Portion | $ 551,949 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Aug. 18, 2023 | Oct. 10, 2017 | Dec. 31, 2015 | Dec. 31, 2011 | Dec. 31, 2023 | Dec. 31, 2022 | May 19, 2021 | May 18, 2021 | Dec. 31, 2020 | Jun. 24, 2020 | Jun. 23, 2020 | Dec. 18, 2017 | |
Class Of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized | 10,000,000 | |||||||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||||||||
Common stock voting rights | one vote for each share | |||||||||||
Preferred stock, shares outstanding | 0 | |||||||||||
Number of shares granted | 0 | |||||||||||
Unvested common stock options, net of estimated forfeitures | $ 682,474 | |||||||||||
Unearned stock-based compensation expected to be recognized | 1 year 11 months 15 days | |||||||||||
S-3 Registration Statement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Share sold | 0 | |||||||||||
S-8 Registration Statement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Common stock, shares authorized | 835,715 | |||||||||||
Restricted Stock Units | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Number of Shares, Granted | 925,243 | 684,300 | ||||||||||
Weighted average exercise price | $ 2.80 | $ 3.9 | ||||||||||
Unvested common stock options, net of estimated forfeitures | $ 2,609,239 | |||||||||||
Unearned stock-based compensation expected to be recognized | 1 year 5 months 12 days | |||||||||||
Number of shares issued during the period | 510,053 | 222,130 | ||||||||||
Number of shares retained for income tax purposes | 207,412 | 88,838 | ||||||||||
2017 Equity Incentive Plan | Restricted Stock Units | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Vesting period | 3 years | |||||||||||
Common Stock | 2017 Equity Incentive Plan | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares available for grant | 32,952 | |||||||||||
Shares authorized for issuance | 3,000,000 | 1,500,000 | ||||||||||
Common Stock | Amendment to 2017 Equity Incentive Plan | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares authorized for issuance | 1,000,000 | 500,000 | ||||||||||
2011 Plan | Common Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares available for grant | 240,000 | |||||||||||
2015 Plan | Common Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares available for grant | 840,084 | |||||||||||
Employee and Director Stock Options | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Number of common stock issued upon exercise of outstanding stock options | 38,670 | 53,819 | ||||||||||
Proceeds from stock options exercised | $ 24,224 | $ 42,162 | ||||||||||
Maximum | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Ownership interest percentage | 10% | |||||||||||
Options expiration period date of grant | 10 years | |||||||||||
Maximum | S-3 Registration Statement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Share issued | 100,000,000 | |||||||||||
Aggregate market value of common stock held by non-affiliates | $ 75,000,000 | |||||||||||
Maximum | Common Stock | 2017 Equity Incentive Plan | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares authorized for issuance | 1,500,000 | |||||||||||
Maximum | 2011 Plan | Common Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Number of shares granted | 1,500,000 | |||||||||||
Maximum | 2015 Plan | Common Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Number of shares granted | 1,500,000 | |||||||||||
Minimum | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Fair market value of common stock on date of grant | 110% | |||||||||||
Options expiration period date of grant | 5 years | |||||||||||
Minimum | S-3 Registration Statement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Aggregate market value of common stock held by non-affiliates | $ 75,000,000 | |||||||||||
Board of Directors | 2011 Plan | Common Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares available for grant | 0 | |||||||||||
Stock options, termination date | Oct. 10, 2017 | |||||||||||
Board of Directors | 2015 Plan | Common Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares available for grant | 0 | |||||||||||
Stock options, termination date | Oct. 10, 2017 | |||||||||||
Michael Knowles | Restricted Stock Units | S-8 Registration Statement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares Issuable Upon Vesting and Settlement of Restricted Stock Units | 400,000 | |||||||||||
Michael Knowles | Common Stock | S-8 Registration Statement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Number of common stock issued upon exercise of outstanding stock options | 400,000 | |||||||||||
Robert Kalebaugh | Restricted Stock Units | S-8 Registration Statement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Shares Issuable Upon Vesting and Settlement of Restricted Stock Units | 35,715 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Underlying Shares, Granted | 0 | ||
Employee Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number Underlying of Shares, Outstanding beginning balance | 970,680 | 1,025,499 | |
Number of Underlying Shares, Granted | 400,000 | ||
Number of Underlying Shares, Forfeited / Canceled | (8,250) | (1,000) | |
Number of Underlying Shares, Exercised | (38,670) | (53,819) | |
Number of Underlying Shares, Outstanding ending balance | 1,323,760 | 970,680 | 1,025,499 |
Number of Underlying Shares, Exercisable ending balance | 923,760 | ||
Number of Underlying Shares, Vested and expected to vest ending balance | 923,760 | ||
Weighted Average Exercise Price, Outstanding beginning balance | $ 2.07 | $ 2.01 | |
Weighted Average Exercise Price, Granted | 2.95 | ||
Weighted Average Exercise Price, Forfeited / Canceled | 2.49 | 2.43 | |
Weighted Average Exercise Price, Exercised | 0.63 | 0.78 | |
Weighted Average Exercise Price, Outstanding ending balance | 2.37 | $ 2.07 | $ 2.01 |
Weighted Average Exercise Price, Exercisable ending balance | 2.12 | ||
Weighted Average Exercise Price, Vested and expected to vest ending balance | $ 2.12 | ||
Weighted Average Remaining Contractual Life (in years), Outstanding balance | 4 years 21 days | 5 years 7 months 9 days | 6 years 4 months 6 days |
Weighted Average Remaining Contractual Life (in years), Exercisable balance | 1 year 8 months 23 days | ||
Weighted Average Remaining Contractual Life (in years), Vested and expected to vest balance | 1 year 8 months 23 days | ||
Aggregate Intrinsic Value, Outstanding balance | $ 169,802 | $ 988,197 | $ 3,014,448 |
Aggregate Intrinsic Value, Exercisable balance | 169,802 | ||
Aggregate Intrinsic Value, Vested and expected to vest balance | $ 169,802 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Common Stock Options Outstanding (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares Outstanding | shares | 1,323,760 |
Number of Shares Exercisable | shares | 923,760 |
2011 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Exercise Price Range, Lower Limit | $ 0.46 |
Exercise Price Range, Upper Limit | $ 0.8 |
Number of Shares Outstanding | shares | 40,000 |
Weighted Average Remaining Contractual Life (in years) | 6 months 14 days |
Weighted Average Exercise Price | $ 0.46 |
Number of Shares Exercisable | shares | 40,000 |
Weighted Average Remaining Contractual Life (in years) | 6 months 14 days |
Weighted Average Exercise Price | $ 0.46 |
2015 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Exercise Price Range, Lower Limit | 1.08 |
Exercise Price Range, Upper Limit | $ 1.95 |
Number of Shares Outstanding | shares | 324,485 |
Weighted Average Remaining Contractual Life (in years) | 2 years 3 months 18 days |
Weighted Average Exercise Price | $ 1.78 |
Number of Shares Exercisable | shares | 324,485 |
Weighted Average Remaining Contractual Life (in years) | 2 years 3 months 18 days |
Weighted Average Exercise Price | $ 1.78 |
2017 Equity Incentive Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Exercise Price Range, Lower Limit | 2.14 |
Exercise Price Range, Upper Limit | $ 4.09 |
Number of Shares Outstanding | shares | 559,275 |
Weighted Average Remaining Contractual Life (in years) | 1 year 5 months 23 days |
Weighted Average Exercise Price | $ 2.44 |
Number of Shares Exercisable | shares | 559,275 |
Weighted Average Remaining Contractual Life (in years) | 1 year 5 months 23 days |
Weighted Average Exercise Price | $ 2.44 |
Incentive Options Issued Outside of Plans | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Exercise Price Range | $ 2.95 |
Number of Shares Outstanding | shares | 400,000 |
Weighted Average Remaining Contractual Life (in years) | 9 years 5 months 4 days |
Weighted Average Exercise Price | $ 2.95 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Assumption to Calculate Weighted Average Grant Date Fair Value of Options Grant (Details) - Common Stock - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Class Of Stock [Line Items] | ||
Expected term (in years) | 6 years 1 month 28 days | |
Expected volatility | 72.73% | 0% |
Risk-free interest rate | 3.79% | 0% |
Weighted average grant date fair value per share | $ 2.95 | |
Grant date fair value of options vested | $ 927,447 | $ 839,409 |
Intrinsic value of options exercised | $ 48,361 | $ 119,833 |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Outstanding beginning balance | 907,507 | 604,800 |
Number of Shares, Granted | 925,243 | 684,300 |
Number of shares, Vested | (647,943) | (379,655) |
Number of Shares, Canceled | (91,318) | (1,938) |
Number of Shares, Outstanding ending balance | 1,093,489 | 907,507 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ 4.05 | $ 4.30 |
Weighted Average Grant Date Fair Value, Granted | 2.80 | 3.9 |
Weighted Average Grant Date Fair Value, Vested | 3.94 | 4.15 |
Weighted Average Grant Date Fair Value, Canceled | 4.3 | 5.02 |
Weighted Average Grant Date Fair Value / Exercise Price, Outstanding ending balance | $ 3.04 | $ 4.05 |
Stockholders' Equity - Summar_4
Stockholders' Equity - Summary of Stock-Based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 2,345,358 | $ 1,991,117 |
General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,452,774 | 1,111,129 |
Production | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 305,763 | 269,079 |
Marketing and Selling | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 322,854 | 396,187 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 263,967 | $ 214,722 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Warrant Activity (Details) - Warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Class Of Stock [Line Items] | ||
Number of Shares, Beginning Warrants outstanding | 451,112 | 451,112 |
Number of shares, Warrants expired | (380,000) | |
Number of Shares, Warrants exercised | (28,090) | |
Number of Shares, Ending Warrants outstanding | 43,022 | 451,112 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ 5.37 | $ 5.37 |
Weighted Average Exercise Price, Warrants expired | 6 | |
Weighted Average Exercise Price, Warrant exercised | 1.78 | |
Weighted Average Grant Date Fair Value / Exercise Price, Outstanding ending balance | $ 2.15 | $ 5.37 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2022 USD ($) | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan name | 401(k) | 401(k) | |
Employee pre-tax earnings | 20% | 20% | |
Maximum pretax contribution per employee | 100% | 100% | |
Defined contribution plan, employer matching contribution, percent | 5% | 5% | |
Contributions made by company | $ 177,399 | $ 367,124 | |
Germany | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan Maximum Monthly Contributions Per Employee Amount | € | € 564 | ||
Contributions made by company | $ 102,654 | $ 57,605 | |
Maximum | Germany | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, employer matching contribution, percent | 50% | 50% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Lawsuits expected | $ 0 |
Purchase commitments description | In the normal course of business, the Company may enter into purchase commitments for inventory components to be delivered based upon non-cancellable, pre-established, delivery schedules that are over a period that may exceed one year |
Non-cancellable open purchase commitments | $ 4,749,408 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2023 USD ($) ft² | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease, expiration date | Aug. 31, 2024 | |
Rent expense | $ | $ 676,204 | $ 684,224 |
Lease expenses, excluding office leases | $ | $ 99,224 | $ 59,846 |
Offices, Manufacturing and Warehouse Facility | Bressner Technology GmbH | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, area | 11,836 | |
Escondido, California | Offices, Manufacturing and Warehouse Facility | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, area | 29,342 | |
Operating lease modified and extended date | 2023-09 | |
Operating lease, expiration date | Aug. 31, 2030 | |
Salt Lake City, Utah | Offices, Manufacturing and Warehouse Facility | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, area | 3,208 | |
Operating lease, expiration date | Jun. 30, 2025 | |
Anaheim, California | Offices, Manufacturing and Warehouse Facility | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, area | 1,632 | |
Operating lease, expiration date | Jun. 30, 2025 |
Leases - Schedule of Other info
Leases - Schedule of Other information Related to Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lessee Disclosure [Abstract] | ||
Operating lease expense | $ 676,204 | $ 644,120 |
Total lease expense | 676,204 | 644,120 |
Cash paid for amounts included in the measurement of operating lease liabilities: | ||
Operating cash flows from operating leases | 551,344 | 636,990 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,590,568 | $ 1,203,580 |
Operating lease obligation for new operating leases | $ 1,446,865 | |
Weighted-average remaining lease term - operating leases | 73 months | 20 months 6 days |
Weighted-average discount rate - operating leases | 13.60% | 12.80% |
Leases - Summary of Maturity of
Leases - Summary of Maturity of Operating Lease Liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | ||
2024 | $ 611,381 | |
2025 | 467,325 | |
2026 | 405,200 | |
2027 | 403,771 | |
2028 | 419,922 | |
Thereafter | 735,529 | |
Total lease payments | 3,043,128 | |
Less: Amount representing interest | (886,666) | |
Present value of lease payment | 2,156,462 | |
Less: current portion of operating lease obligation | (390,926) | $ (536,588) |
Operating lease obligation, net of current portion | $ 1,765,536 | $ 397,249 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Board of Directors | ||
Related Party Transaction [Line Items] | ||
Board of directors fees including stock-based Compensation | $ 444,403 | $ 528,146 |
Income Taxes - Schedule of Pre-
Income Taxes - Schedule of Pre-tax Income (Loss) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Domestic operations | $ (9,194,652) | $ (292,325) |
Foreign operations | 3,405,604 | 2,486,867 |
(Loss) income before income taxes | $ (5,789,048) | $ 2,194,542 |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ 24,641 | |
State | 23,153 | $ 29,695 |
International | 974,830 | 612,198 |
Current income tax (benefit) expense | 1,022,624 | 641,893 |
Deferred: | ||
Federal | (95,496) | 2,345,612 |
State | 1,436,092 | |
Deferred income tax (benefit) expense | (95,496) | 3,781,704 |
Total provision for income taxes | $ 927,128 | $ 4,423,597 |
Income Taxes - Schedule of Taxe
Income Taxes - Schedule of Taxes on Income Vary from Statutory Federal Income Tax Rate Applied to Earnings Before Tax on Income (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Provision at federal statutory rates (21% applied to earnings before income taxes) | $ (1,215,486) | $ 461,219 |
State income taxes, net of federal benefit | (252,544) | 21,044 |
Other permanent items | (60,372) | (78,847) |
Stock based compensation | 85,990 | 31,815 |
Impairment of goodwill | 704,987 | |
Research and development credits | (800,550) | (60,734) |
Amortization of intangibles | (7,410) | |
Change in reserve for uncertain tax positions | (338,894) | (26,307) |
Change in valuation allowance | 984,921 | 3,805,149 |
Other | 217,976 | 141,380 |
Total provision for income taxes | $ 927,128 | $ 4,423,597 |
Income Taxes - Schedule of Ta_2
Income Taxes - Schedule of Taxes on Income Vary from Statutory Federal Income Tax Rate Applied to Earnings Before Tax on Income (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Corporate tax rate | 21% | 21% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Reserves | $ 59,564 | $ 58,789 |
Deferred compensation | 139,805 | 150,681 |
Stock compensation | 295,392 | 395,198 |
Deferred revenue | 87,770 | 109,361 |
Inventories | 617,929 | 221,323 |
Credits and loss carryforward | 3,102,512 | 3,412,820 |
Capitalized research and experimental expenditures | 1,206,082 | 700,920 |
Lease liabilities | 528,698 | 181,177 |
Total deferred tax assets before valuation allowance | 6,037,752 | 5,230,269 |
Deferred tax liabilities: | ||
Property and equipment | (373,645) | (338,739) |
Intangible assets | (641,493) | |
Other | (305,036) | (308,047) |
ROU assets | (464,187) | (126,016) |
Total deferred tax liabilities | (1,142,868) | (1,414,295) |
Net deferred tax assets before valuation allowance | 4,894,884 | 3,815,974 |
Valuation allowance | (4,939,557) | (3,954,636) |
Net deferred tax liabilities | $ (44,673) | $ (138,662) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits | $ 819,280 | $ 1,218,396 | $ 1,242,717 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 3,982,000 | ||
Tax credit carryforwards | $ 1,525,000 | 1,619,000 | |
Tax credit carry forward expiration year | 2026 | ||
Unrecognized tax benefits | $ 819,280 | ||
Federal | Other Accrued Expenses and Other Liabilities | |||
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits | 20,200 | ||
Federal | Deferred Tax Assets, Net | |||
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits | $ 774,090 | ||
Federal | Tax Year 2021 | |||
Operating Loss Carryforwards [Line Items] | |||
Percentage of taxable income for offsetting operating loss carryforwards | 80% | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 6,092,000 | ||
Tax credit carryforwards | $ 1,000,000 | $ 1,700,000 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits balance at beginning of period | $ 1,218,396 | $ 1,242,717 |
Gross increases for tax positions of the prior year | 55,431 | 25,158 |
Gross decrease for tax positions of the current year | (505,258) | (49,479) |
Gross increases for tax positions of the current year | 50,711 | |
Unrecognized tax benefits balance at end of period | $ 819,280 | $ 1,218,396 |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Basic and Diluted Net Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net Income (Loss) | $ (6,716,176) | $ (2,229,055) |
Denominator: | ||
Weighted average common shares outstanding - basic | 20,854,777 | 19,730,698 |
Weighted average common shares outstanding - diluted | 20,854,777 | 19,730,698 |
Net loss per common share: | ||
Basic | $ (0.32) | $ (0.11) |
Diluted | $ (0.32) | $ (0.11) |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2023 USD ($) Segment | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Number of Reportable Segments | Segment | 2 | |
Germany | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Exception of Long-Lived Assets | $ | $ 345,898 | |
Revenue | Customer Concentration Risk | Non-U.S. | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage | 65% | 69% |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of (Loss) Income from Operations by Reporting Segments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Revenue | $ 60,896,797 | $ 72,421,345 |
Cost of revenues | (42,942,175) | (52,023,736) |
Gross profit | $ 17,954,622 | $ 20,397,609 |
Gross profit % | 29.50% | 28.20% |
Total operating expenses | $ (25,877,775) | $ (18,829,281) |
(Loss) income from operations | (7,923,153) | 1,568,328 |
OSS | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Revenue | 28,809,887 | 43,286,715 |
Cost of revenues | (18,544,901) | (29,142,852) |
Gross profit | $ 10,264,986 | $ 14,143,863 |
Gross profit % | 35.60% | 32.70% |
Total operating expenses | $ (21,742,021) | $ (15,182,546) |
(Loss) income from operations | (11,477,035) | (1,038,683) |
Bressner | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Revenue | 32,086,910 | 29,134,630 |
Cost of revenues | (24,397,274) | (22,880,884) |
Gross profit | $ 7,689,636 | $ 6,253,746 |
Gross profit % | 24% | 21.50% |
Total operating expenses | $ (4,135,754) | $ (3,646,735) |
(Loss) income from operations | $ 3,553,882 | $ 2,607,011 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - UniCredit Bank - EUR (€) | 1 Months Ended | |
Feb. 16, 2024 | Feb. 29, 2024 | |
Subsequent Event [Line Items] | ||
Note payable to bank | € 500,000 | |
Interest rate | 5.63% | |
Notes payable mature date | 2024-02 | |
Notes fully paid date | Feb. 16, 2024 |