Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 15, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
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 | $ 22,794,553 | ||
Entity Common Stock, Shares Outstanding | 18,409,318 | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-38371 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 33-0885351 | ||
Entity Address, Address Line One | 2235 Enterprise Street #110 | ||
Entity Address, City or Town | Escondido | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92029 | ||
City Area Code | 760 | ||
Local Phone Number | 745-9883 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE: None |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 6,316,921 | $ 5,185,321 |
Accounts receivable, net | 7,458,383 | 11,667,157 |
Inventories, net | 9,647,504 | 7,369,356 |
Prepaid expenses and other current assets | 655,708 | 453,938 |
Total current assets | 24,078,516 | 24,675,772 |
Property and equipment, net | 3,487,178 | 3,568,564 |
Deposits and other | 81,709 | 47,146 |
Deferred tax assets, net | 3,698,593 | 3,019,823 |
Goodwill | 7,120,510 | 7,120,510 |
Intangible assets, net | 662,257 | 1,346,192 |
Total Assets | 39,128,763 | 39,778,007 |
Current liabilities | ||
Accounts payable | 976,420 | 4,115,977 |
Accrued expenses and other liabilities | 3,481,444 | 4,607,432 |
Current portion of notes payable, net of debt discount of $2,047 and $7,019, respectively (Note 8) | 1,365,204 | 1,377,751 |
Current portion of related-party notes payable, net of debt discount of $6,726 and $23,060, respectively (Note 8) | 199,943 | 561,441 |
Current portion of senior secured convertible note, net of debt discounts of $256,242 (Note 8) | 1,789,212 | |
Total current liabilities | 7,812,223 | 10,662,601 |
Notes payable, net of current portion and debt discount of $0 and $2,047, respectively (Note 8) | 149,301 | |
Related-party notes payable, net of current portion and debt discount of $0 and $6,726, respectively (Note 8) | 199,943 | |
Senior secured convertible note, net of current portion and debt discounts of $14,107 (Note 8) | 531,347 | |
Paycheck protection program note payable (Note 8) | 1,499,360 | |
Total liabilities | 9,842,930 | 11,011,845 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity | ||
Common stock, $.0001 par value; 50,000,000 shares authorized; 16,684,424 and 16,121,747 shares issued and outstanding, respectively | 1,668 | 1,612 |
Additional paid-in capital | 30,758,354 | 30,537,015 |
Noncontrolling interest | 500 | |
Accumulated other comprehensive income (loss) | 287,547 | (17,773) |
Accumulated deficit | (1,761,736) | (1,755,192) |
Total stockholders’ equity | 29,285,833 | 28,766,162 |
Total liabilities and stockholders' equity | $ 39,128,763 | $ 39,778,007 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt discount on notes payable, current | $ 133,511 | |
Debt discount on senior secured convertible note, current | 256,242 | |
Debt discount on notes payable, noncurrent | 6,867 | |
Debt discount on senior secured convertible note, noncurrent | $ 14,107 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 16,684,424 | 16,121,747 |
Common stock, shares outstanding | 16,684,424 | 16,121,747 |
Notes Payable | ||
Debt discount on notes payable, current | $ 2,047 | $ 7,019 |
Debt discount on notes payable, noncurrent | 0 | 2,047 |
Related Parties | ||
Debt discount on notes payable, current | 6,726 | 23,060 |
Debt discount on notes payable, noncurrent | $ 0 | $ 6,726 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 51,895,388 | $ 58,308,019 |
Cost of revenue | 35,460,774 | 38,905,756 |
Gross profit | 16,434,614 | 19,402,263 |
Operating expenses: | ||
General and administrative | 8,418,358 | 8,501,572 |
Impairment of goodwill | 0 | 1,697,394 |
Marketing and selling | 4,120,778 | 5,138,762 |
Research and development | 4,319,759 | 4,843,554 |
Total operating expenses | 16,858,895 | 20,181,282 |
Income (loss) from operations | (424,281) | (779,019) |
Other (expense) income: | ||
Interest income | 418,379 | 151,113 |
Interest expense | (550,774) | (165,560) |
Other (expense) income, net | (53,612) | 130,381 |
Total other (expense) income, net | (186,007) | 115,934 |
Loss before income taxes | (610,288) | (663,085) |
(Benefit) provision for income taxes | (603,744) | 237,252 |
Net loss | $ (6,544) | $ (900,337) |
Net loss per share: | ||
Basic | $ 0 | $ (0.06) |
Diluted | $ 0 | $ (0.06) |
Weighted average common shares outstanding: | ||
Basic | 16,512,203 | 15,148,613 |
Diluted | 16,512,203 | 15,148,613 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (6,544) | $ (900,337) |
Other comprehensive income (loss): | ||
Reclassification adjustment from unrealized to realized gain | (19,999) | |
Currency translation adjustment, net | 305,320 | (72,819) |
Unrealized gain on forward contracts | 53,904 | |
Total other comprehensive income (loss) | 305,320 | (38,914) |
Comprehensive income (loss) | $ 298,776 | $ (939,251) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock | Additional Paid-in Capital | Noncontrolling Interest | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Balance at Dec. 31, 2018 | $ 26,572,322 | $ 1,422 | $ 27,424,113 | $ 500 | $ 1,142 | $ (854,855) |
Balance, Shares at Dec. 31, 2018 | 14,216,328 | |||||
Stock-based compensation | 649,469 | 649,469 | ||||
Exercise of stock options, RSU's and warrants | 47,334 | $ 35 | 47,299 | |||
Exercise of stock options, RSU's and warrants, Shares | 350,587 | |||||
Relative fair value of warrants issued with notes payable and notes payable to related parties | 60,158 | 60,158 | ||||
Taxes paid on net issuance of employee stock options | (132,017) | (132,017) | ||||
Proceeds from issuance of stock, net of issuance costs | 2,488,148 | $ 155 | 2,487,993 | |||
Proceeds from issuance of stock, net of issuance costs, Shares | 1,554,832 | |||||
Currency translation adjustment | (72,819) | (72,819) | ||||
Gain on forward contract | 53,904 | 53,904 | ||||
Net loss | (900,337) | (900,337) | ||||
Balance at Dec. 31, 2019 | 28,766,162 | $ 1,612 | 30,537,015 | 500 | (17,773) | (1,755,192) |
Balance, Shares at Dec. 31, 2019 | 16,121,747 | |||||
Stock-based compensation | 724,378 | 724,378 | ||||
Exercise of stock options, RSU's and warrants | 181,892 | $ 56 | 181,836 | |||
Exercise of stock options, RSU's and warrants, Shares | 562,677 | |||||
Return of capital upon dissolution of SkyScale | (500) | $ (500) | ||||
Taxes paid on net issuance of employee stock options | (684,875) | (684,875) | ||||
Currency translation adjustment | 305,320 | 305,320 | ||||
Net loss | (6,544) | (6,544) | ||||
Balance at Dec. 31, 2020 | $ 29,285,833 | $ 1,668 | $ 30,758,354 | $ 287,547 | $ (1,761,736) | |
Balance, Shares at Dec. 31, 2020 | 16,684,424 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
Proceed from issuance of stock, issuance costs | $ 212,566 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (6,544) | $ (900,337) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Deferred benefit for income taxes | (663,772) | (112,740) |
Loss (gain) on disposal of property and equipment | 11,586 | (1,785) |
Provision for bad debt, net | 18,141 | 702 |
Impairment of goodwill | 0 | 1,697,394 |
Warranty reserves | (28,031) | 14,348 |
Amortization of deferred gain | (53,838) | (28,555) |
Depreciation | 922,597 | 671,223 |
Amortization | 683,935 | 984,065 |
Inventory reserves | 623,159 | 301,302 |
Amortization of debt discount | 376,004 | 21,303 |
Stock-based compensation expense | 724,378 | 649,469 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,286,294 | (1,165,596) |
Inventories | (2,630,149) | (1,008,980) |
Prepaid expenses and other current assets | (246,310) | 211,325 |
Accounts payable | (3,148,762) | 424,567 |
Accrued expenses and other liabilities | (1,118,861) | 617,163 |
Net cash (used in) provided by operating activities | (250,173) | 2,374,868 |
Cash flows from investing activities: | ||
Purchases of property and equipment, including capitalization of labor costs for test equipment and ERP | (820,336) | (2,386,227) |
Proceeds from sales of property and equipment | 1,542 | 1,050 |
Net cash used in investing activities | (818,794) | (2,385,177) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options and warrants | 181,892 | 47,334 |
Payment of payroll taxes on net issuance of employee stock options | (684,875) | (132,017) |
Proceeds from issuance of common stock | 2,700,714 | |
Stock issuance costs | (212,566) | |
Net repayments on bank lines of credit | (99,410) | (513,590) |
Borrowings from related-party notes payable | 1,150,000 | |
Borrowings from notes payable | 350,000 | |
Repayments of related-party notes payable | (584,502) | (410,931) |
Repayments of notes payable | (177,866) | (56,843) |
Proceeds from senior secured convertible note, net | 2,383,726 | |
Repayments of senior secured convertible note | (409,090) | |
Proceeds from paycheck protection program (PPP) note payable | 1,499,360 | |
Net cash provided by financing activities | 2,109,235 | 2,922,101 |
Net change in cash and cash equivalents | 1,040,268 | 2,911,792 |
Effect of exchange rates on cash | 91,332 | 1,273 |
Cash and cash equivalents, beginning of year | 5,185,321 | 2,272,256 |
Cash and cash equivalents, end of year | 6,316,921 | 5,185,321 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the year for interest | 301,214 | 129,547 |
Cash paid during the year for income taxes | 344,184 | 8,780 |
Supplemental disclosure of non-cash transactions: | ||
Original issue discount on senior secured convertible note | 300,000 | |
Reclassification of inventories to property and equipment | $ 164,856 | 106,502 |
Forward foreign currency contracts | 53,904 | |
Relative fair value of warrants issued in connection with notes and related-party notes payable | $ 60,158 |
The Company and Basis of Presen
The Company and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
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 industrial grade computer systems and components that are based on industry standard computer architectures. The Company markets its products to manufacturers of automated equipment used for media and entertainment, medical, industrial and military applications. During the year ended December 31, 2015, the Company formed a wholly-owned subsidiary in Germany, One Stop Systems, GmbH (“OSS GmbH”). During July 2016, the Company acquired Mission Technologies Group, Inc. (“Magma”) and its operations. In April 2017, the Company and a related entity formed a joint venture named SkyScale, LLC in the State of California (“SkyScale”). In accordance with the Contribution Agreement, each member contributed $750,000 and received a 50% interest in the joint venture. The purpose of SkyScale was to engage in the business of providing high performance computing capabilities as cloud services. As a result of changes in the competitive landscape and downward pressure on pricing from large competitors, the members of the SkyScale joint venture agreement agreed to dissolve SkyScale and ceased operations as of December 31, 2018. On August 31, 2018, the Company acquired Concept Development Inc. (“CDI”) located in Irvine, California. CDI specializes in the design and manufacture of custom high-performance computing systems for airborne in-flight entertainment and networking systems. CDI has been fully integrated into the core operations of OSS as of June 1, 2020. On October 31, 2018, OSS GmbH acquired 100% of the outstanding stock of Bressner Technology GmbH, a Germany limited liability company located near Munich, Germany (“Bressner”). Bressner provides standard and customized servers, panel PCs, and PCIe expansion systems. Bressner also provides manufacturing, test, sales and marketing services for customers throughout Europe. Liquidity, Going Concern Considerations and Management Plans Given our recurring operating losses, the Company’s primary sources of liquidity have been provided by (i) the Company’s February 2018 initial public offering (net proceeds were approximately $16,100,000); (ii) March 2019 notes payable from members of the Board of Directors and others of $1,500,000; (iii) the July 2019 sale of 1,554,546 shares of the Company’s common stock for net cash proceeds of $2,488,148; (iv) the April 24, 2020 sale of $3,000,000 of Senior Secured Convertible Promissory Notes issued at a 10% original issue discount and (v) receipt of approximately $1,500,000 on April 28, 2020 of government loan proceeds under the Paycheck Protection Program, and (vi) a receipt of approximately $9,250,000 on March 3, 2021 in a registered direct offering. As of December 31, 2020, the Company’s cash and cash equivalents were $6,316,921 and working capital was $16,266,293. Cash and cash equivalents held by Bressner totaled $1,062,818 (USD) at December 31, 2020. Bressner’s debt covenants do not permit the use of these funds by its parent company. During the year ended December 31, 2020, the Company experienced an operating loss of $424,281, with cash used in operating activities of $250,173. Our largest customer, engaged in the media and entertainment industry, is having significant financial hardships attributable to the COVID-19 pandemic with aged outstanding accounts receivables. The Company has formulated a plan whereby extended payment terms have been made available, and our customer is presently honoring those terms. The Company’s revenue growth during the year has slowed due to the effects of COVID-19. However, resulting from a reduction in force and strict cost containment, the Company has been able to mitigate the effects, to some degree, of the reduced revenue attributable to the economic impact of COVID-19. In March 2020, the World Health Organization declared the outbreak of COVID-19, a global pandemic and the United States federal government declared it a national emergency. COVID-19 continues to impact worldwide economic activity. A public health pandemic, including COVID-19, poses the risk that we or our employees, contractors, customers, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. More generally, COVID-19 raises the possibility of an extended global economic downturn, which could affect demand for our products and services and impact our results and financial condition even after the pandemic is contained and remediation/restriction measures are lifted. For example, we may be unable to collect receivables from customers that are significantly impacted by COVID-19. Also, a decrease in orders in a given period could negatively affect our revenues in future periods. COVID-19 may also have the effect of heightening many of the other risks described in the “Risk Factors” section of our Annual Report on this Form 10-K, including risks associated with our customers and supply chain. We will continue to evaluate the nature and extent of the impact of COVID-19 to our business. Presently, it is clear the global economy has been negatively impacted by COVID-19, and demand for some of our products and services have been reduced due to uncertainty and the economic impact of COVID-19. For example, customers in certain of the industries most impacted by COVID-19, have requested, and we expect will continue to request, relief to existing contracts or payment obligations, and the impact of those is uncertain. Furthermore, some customers are delaying payments owed to the Company while they address immediate financial crises in their operations due to COVID-19. In particular, in the media and entertainment industry, demand for the use of outdoor media equipment has been impacted due to restrictions on public gatherings. Until such restrictions improve, we expect that demand for certain of our clients’ products and services will be limited, and may not return to prior levels, and thus, may impact our financial results and operations. Specifically, our business has also begun to be negatively affected by a range of external factors related to COVID-19 that are not within our control. For example, numerous measures have been implemented by governmental authorities across the globe to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, restrictions and limitations of public gatherings, and business limitations and shutdowns. Many of our customers’ businesses have been severely impacted by these measures and some have been required to reduce employee headcount as a result. If a significant number of our customers are unable to continue as a going concern, this would have an adverse impact on our business and financial condition. Though management has been proactively managing through the current known impacts, if the situation further deteriorates or the outbreak results in further restriction on supply and demand factors, our cash flows, financial position and operating results for fiscal year 2020 and beyond will be negatively impacted. Neither the length of time nor the magnitude of the negative impacts can be presently determined. The longer the COVID-19 pandemic persists, the greater the potential for significant adverse impact to our business operations. Quarantines, travel restrictions, prohibitions on non-essential gatherings, shelter-in-place orders and other similar directives and policies intended to reduce the spread of the disease, may reduce our productivity and that of the third parties on which we rely and may disrupt and delay many aspects of our business. The Company is complying with state mandated requirements for safety in the workplace to ensure the health, safety and welling-being of our employees. These measures included personal protective equipment, social distancing, cleanliness of the facilities and daily monitoring of the health of employees in our facilities. We have not developed a specific and comprehensive contingency plan designed to address the challenges and risks presented by the COVID-19 pandemic and, even if and when we do develop such a plan, there can be no assurance that such plan will be effective in mitigating the potential adverse effects on our business, financial condition and results of operations. Management’s plans with respect to the above is to continue its efforts towards responding to the changing economic landscape attributable to COVID-19, to continue to reduce costs, conserve cash, strengthen margins, and improve company-wide execution. Specific actions already implemented by management include a reduction in force, a limited freeze on hiring, reduced work week, minimizing overtime, travel and entertainment, and contractor costs. On April 7, 2020, the Company implemented a cost reduction plan which included the termination of certain employees and elimination of certain costs. Savings from this effort are estimated to be $2.5 million on an annual basis. While management expects these actions to result in prospective cost reductions, management is also committed to securing debt and/or equity financing to ensure that liquidity will be sufficient to meet the Company’s cash requirements through at least a period of the next twelve months. Management believes potential sources of liquidity include at least the following: ▪ In May 2019, the Company filed a Form S-3 prospectus with the Securities and Exchange Commission which became effective on June 19, 2019, and allows the Company to offer up to $100,000,000 aggregate dollar amount of shares of its common stock, preferred stock, debt securities, warrants to purchase its common stock, preferred stock or debt securities, subscription rights to purchase its 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 of more offerings, in amounts, at prices and on the terms that the Company will determine at the time of the offering and which will be set forth in a prospectus supplement and any related free writing prospectus. ▪ On April 24, 2020, the Company completed a $6.0 million debt financing on a non-interest bearing convertible note with a 10% original issue discount. The first tranche of $3.0 million was received on April 27, 2020, with an additional $3.0 million available seven months from the date of closing at the option of the Company conditioned upon meeting certain requirements which have been satisfied. The note is repayable in twenty-two installments beginning three months after closing in cash or shares of the Company’s common stock. ▪ On March 1, 2021, the Company entered into a definitive agreement with an institutional investor for the purchase and sale of 1,497,006 shares of common stock at a purchase price of $6.68 in a registered direct offering priced At-The-Market under Nasdaq rules. Total estimated proceeds are $9,250,000 after commissions and offering costs (see Note 16). As a result of management’s cost reduction plans, the Company’s sources of liquidity and management’s most recent cash flow forecasts, management believes that the Company has sufficient liquidity to satisfy its anticipated cash requirements for at least the next twelve months. However, there can be no assurance that management’s cost reduction efforts will be effective, the forecasted cash flows will be achieved, or that external sources of financing, including the issuance of debt and/or equity securities, will be available at times and on terms acceptable to the Company, or at all. 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 Concept Development Inc., its wholly-owned subsidiary, OSS GmbH, which also includes the acquisition of Bressner Technology GmbH. Intercompany balances and transactions have been eliminated in consolidation. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent assets, liabilities, and expenses at the date of the consolidated financial statements and during the reporting period. Significant estimates made by management include, among others, the fair value of acquired net assets of CDI in August 2018 with reevaluation in April 2019, and Bressner Technology GmbH in October 2018, the allowance for doubtful accounts, fair value of stock options, recoverability of inventories and long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates. 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, 2020, the Company had $4,816,433 in excess of the insurance limits. The Company has not experienced any such losses in these accounts. 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 €669,160 (US$818,256) with banks in excess of the insurance limits. In the years ended December 31, 2020 and December 31, 2019, approximately 24%, and 41%, respectively, of net sales represent customers which are each greater than 10% of our consolidated annual revenue. This concentration is with two customers, disguise and Raytheon. As of December 31, 2020 and 2019, approximately 64% and 72%, respectively, of net trade accounts receivables represent customer balances which are each greater than 10% of our consolidated trade accounts receivable balance. As a result of the recent worldwide economic impact attributable to COVID-19, disguise has been experiencing a slowdown in its business as the entertainment and media markets have been required to scale back or cancel large group gatherings. As a result, during the year, we experienced delays in receipt of scheduled payments and agreed to requests during the year for a modified payment schedule. Disguise has systematically paid down their outstanding balance and, as of March 2021, is current on their payments and outstanding balances are in accordance with pre-established credit policies and limits. 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 18.3% and 11.0% of purchases for the years ended December 31, 2020, and 2019, 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. Accounts Receivable Accounts receivable are presented at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts 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 doubtful accounts 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 quality and aging of the accounts receivable, specific customer circumstances, current economic trends, and historical experience with collections. At December 31, 2020 and 2019, the allowance for doubtful accounts is $32,120 and $14,000, respectively. Revenues earned in excess of related billings are recorded as an asset on the consolidated balance sheet as unbilled receivables. Unbilled receivables as of December 31, 2020 and 2019 were $106 and $25,432, respectively. 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. 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 In April 2019, the Company performed an interim impairment test of goodwill, as a result of a short-fall in the actual overall financial performance of CDI as compared to plan, a recurring need for working capital, and a decrease in the Company’s stock price. As a result of this interim evaluation, the Company recorded an impairment loss to goodwill of $1,697,394, which was charged to operating expenses during the year ended December 31, 2019. 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 completed its qualitative assessment for impairment in December 2020 and determined that there was no impairment as of December 31, 2020. Though there were indicators of impairment attributable to the COVID-19 pandemic that directly impacted our business, as a result of management’s cost containment efforts, raising cash, minimizing working capital requirements and a focus on profitability, during the year the Company improved its financial stability and thus determined that there is no impairment of its intangible and long-lived assets. There can be no assurance; however, that market conditions will not change or demand for the Company’s products will continue, which could result in an impairment of intangible and long-lived assets in the future. 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. Assets and liabilities assumed in the acquisition of the Ion software, Concept Development Inc., and Bressner Technology GmbH were recorded at fair value based upon the Company’s market assumptions which approximated carrying value (except for acquired intangible assets – Note 3) due to the short-term nature of the instruments. The carrying amounts of the Company’s 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 On January 1, 2019, the Company adopted the new accounting standard update ASC 606, Revenue from Contracts with Customers, which superseded nearly all existing revenue recognition guidance under GAAP, to all contracts using the modified retrospective method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. 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 $6,692,752 and $10,075,756 for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, $1,482,186 and $459,893 respectively, of product 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 based upon milestones delivered that are provided during the period and compared to milestone goals to be provided over the entire contract. 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. 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, 2020 and 2019 is as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Entity: Domestic International Total Domestic International Total Customized computers and flash arrays $ 21,698,400 $ 10,611,133 $ 32,309,533 $ 19,436,784 $ 18,081,290 $ 37,518,074 In-flight entertainment & connectivity 1,123,664 216,821 1,340,485 2,030,596 506,738 2,537,334 Value-added reseller with minimal customization 92,511 18,152,859 18,245,370 473,489 17,779,122 18,252,611 $ 22,914,575 $ 28,980,813 $ 51,895,388 $ 21,940,869 $ 36,367,150 $ 58,308,019 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 7). 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 amount of warranties sold for years ended December 31, 2020 and 2019 were $373,847 and $377,768, respectively. The revenue that was recognized for the warranties sold for the years ended December 31, 2020 and 2019 were $401,915 and $392,532, 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. 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, 2020 and 2019, deferred revenue totaled $407,768 and $394,571, respectively. The Company expects to recognize $407,768 of unearned revenue amounts from 2020 through 2024. 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. Derivative Financial Instruments We 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, 2020 and 2019, 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” 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 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 3. Debt Discounts Debt discounts, which originate from the relative fair value of warrants issued in connection with notes payable and related-party notes payable, are recorded against the noted payable and related-party notes payable in the accompanying consolidated balance sheets. Amortization of the debt discounts are calculated using the straight-line method over the term of the applicable notes which approximates the effective interest method and are recorded in interest expense in the accompanying consolidated statements of operations. Amortization of debt discounts of $376,006 and $21,303 was recognized as interest expense for the years ended December 31, 2020 and 2019, respectively. 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, 2020 and 2019 were $377,105 and $352,080, respectively. 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. 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. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (2017 Tax Act). Corporate taxpayers may carryback net operating losses (NOLs) originating during 2018 through 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act resulted in two adjustments to our income tax provision for the year ended December 31, 2020, relating to a projected 2018 NOL utilization and tax benefits from NOL carrybacks. We have recorded a benefit of $41,561 in our income tax provision for the year ended December 31, 2020 related to the CARES Act. 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 Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted-average common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net 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 In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Recently Implemented Accounting Pronouncements In September 2018, the FASB issued ASU No. 2018-07, Stock-based Compensation: Improvements to Nonemployee Share-based Payment Accounting t materially impact the Company’s consolidated financial statements In May 2014, the FASB i |
Long-Lived Intangible Assets
Long-Lived Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Long-Lived Intangible Assets | NOTE 3 – LONG LIVED INTANGIBLE ASSETS Concept Development Inc. On August 31, 2018, the Company acquired 100% of the outstanding common stock of Concept Development Inc. (“CDI”). The Company paid cash of $646,759 and issued 1,266,364 shares of the Company’s common stock to the CDI Stockholder for 100% of CDI outstanding common stock. The fair value assigned to the shares of common stock was $4,194,673, which was based upon the closing price of OSS’ stock on August 31, 2018 of $3.63 less a discount of 8.75% for lack of marketability for a one-year period. This transaction was accounted for using the acquisition method pursuant to ASC Topic 805, Business Combinations The preliminary determination of fair value for the identifiable net assets acquired in the acquisition was initially determined by management after consideration of the results of a third-party appraisal. At the time of acquisition, management preliminarily assessed the value and recorded goodwill of $3,100,361 and other intangible assets of $1,770,000. Subsequently in April 2019, and within the one year finalization period prescribed by ASC Topic 805, management finalized the purchase price allocation, including certain assumptions in the initial financial models used for the determination of intangible asset values. As a result, identified intangible assets were reduced from $1,770,000 to $575,000 with the difference of $1,195,000 being allocated to goodwill. The change in identified intangible assets is as follows: Preliminary Valuation Revised Valuation Change Customer lists and relationships $ 1,470,000 $ 470,000 $ (1,000,000 ) Trade name 100,000 90,000 (10,000 ) Non-compete 200,000 15,000 (185,000 ) $ 1,770,000 $ 575,000 $ (1,195,000 ) Additionally, as a result of a short-fall in the actual overall financial performance of CDI as compared to plan, a recurring need for working capital, and a decrease in the Company’s stock price, the Company performed an interim test of impairment of goodwill as there was indication that the carrying value of the assets may not be recoverable. To evaluate whether goodwill is impaired, the Company compares the estimated fair value of CDI to CDI’s carrying value, including goodwill. The Company determined that the carrying value of CDI exceeded its estimated fair value thereby requiring the measurement of the impairment loss. After consideration of the results of an additional third-party appraisal, it was determined by management that the goodwill associated with CDI was impaired by $1,697,394. As a result, the Company recognized a charge to operating expenses which is included in the 2019 accompanying consolidated statements of operations. Definite lived intangible assets related to acquisitions are as follows as of December 31, 2020: Expected Life Remaining Months Gross Intangible Assets Accumulated Amortization Net Intangible Assets Customer lists and relationships 36 to 60 months 10 to 32 months $ 2,084,515 $ (1,578,178 ) $ 506,337 Drawings and technology 36 months 0 months 760,207 (760,207 ) - Trade name, trademarks & other 24 to 36 months 10 months 447,274 (355,742 ) 91,532 Non-compete 36 months 10 months 246,797 (182,409 ) 64,388 $ 3,538,793 $ (2,876,536 ) $ 662,257 Definite lived intangible assets related to acquisitions are as follows as of December 31, 2019: Expected Life Remaining Months Gross Intangible Assets Accumulated Amortization Net Intangible Assets Customer lists and relationships 36 to 60 months 22 to 44 months $ 2,084,515 $ (1,109,681 ) $ 974,834 Drawings and technology 36 months 0 months 760,207 (760,207 ) - Trade name, trademarks & other 24 to 36 months 8 to 22 months 447,274 (217,570 ) 229,704 Non-compete 36 months 22 months 246,797 (105,143 ) 141,654 $ 3,538,793 $ (2,192,601 ) $ 1,346,192 The amortization expense of the definite lived intangible assets for the years remaining is as follows: 2021 2022 2023 Total $ 556,872 $ 63,231 $ 42,154 $ 662,257 Amortization expense recognized during the year ended December 31, 2020 and 2019 was $683,935 and $984,065, respectively. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Receivable Net Current [Abstract] | |
Accounts Receivable | NOTE 4 – ACCOUNTS RECEIVABLE Accounts receivable, net consists of the following at December 31: December 31, December 31, 2020 2019 Accounts receivable $ 7,491,397 $ 11,655,725 Unbilled receivables 106 25,432 7,491,503 11,681,157 Less: allowance for doubtful accounts (33,120 ) (14,000 ) $ 7,458,383 $ 11,667,157 Unbilled receivables include amounts associated with percentage of completion and milestone billing accounting, which includes cost and gross profit earned in excess of billing, not currently billable due to contractual provisions. The provision for . |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5 – INVENTORIES Inventories, net consist of the following at December 31: December 31, December 31, 2020 2019 Raw materials $ 5,210,327 $ 2,478,882 Sub-assemblies 255,699 1,857,004 Work-in-process 407,328 493,276 Finished goods 4,424,603 3,087,529 10,297,957 7,916,691 Less: reserves for obsolete and slow-moving inventories (650,453 ) (547,335 ) $ 9,647,504 $ 7,369,356 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment, net consists of the following at December 31: December 31, December 31, 2020 2019 Computers and computer equipment $ 748,392 $ 633,546 Furniture and office equipment 329,725 340,801 Manufacturing equipment and engineering tools 2,710,784 2,501,020 Software implementation 2,203,484 1,709,125 Leasehold improvements 943,194 892,097 Vehicles 4,315 - 6,939,894 6,076,589 Less: accumulated depreciation and amortization (3,452,716 ) (2,508,025 ) $ 3,487,178 $ 3,568,564 During the years ended December 31, 2020 and 2019, the Company incurred $922,597 and $671,223 of depreciation and amortization expense related to property and equipment, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Accrued Expenses and Other Liabilities | NOTE 7 – ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following at December 31: December 31, December 31, 2020 2019 Accrued compensation and related liabilities $ 932,988 $ 1,621,177 Deferred revenue and customer deposits 1,096,672 1,260,126 Warranty reserve 425,636 424,011 Deferred rent 312,909 373,354 Other accrued expenses 713,239 928,764 $ 3,481,444 $ 4,607,432 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 8 – DEBT Bank Lines of Credit Bressner Technology GmbH has two revolving lines of credit with German institutions totaling €2,200,000 (US$2,690,184). Borrowing under the lines of credit bear interest at a variable rate of Euribor plus a stated rate. The current rates for the lines of credit are 3.89% and 4.0%. One million euros of the credit line expires in January 2024, with the remaining balance being open indefinitely or until occurrence of a defined change of control event. There were no outstanding line of credit balances as of December 31, 2020 and 2019. Foreign Debt Obligations Bressner Technology GmbH has three term loans outstanding as of December 31, 2020 with a total balance outstanding of €1,066,446 (US$1,304,063) as follows: On April 9, 2020, Bressner converted €500,000 of its line of credit from UniCredit Bank to a one year term loan at 1.9% interest with a balloon payment of principal and interest due upon maturity. The balance outstanding as of December 31, 2020 is €500,000 (US$611,406); Bressner entered into a note payable in June 2019 in the amount of €500,000 (US$586,189) which bears interest at 1.70% and matured on June 25, 2020 with a balloon payment of principal and interest. This loan was subsequently extended to June 18, 2021, with an interest rate of 1.87% The amount outstanding as of December 31, 2020 and 2019 is €500,000 (US$611,406) and €508,679 (US$571,095), respectively; Bressner entered into a note payable in April 2019 in the amount of €500,000 (US$586,189) which bears interest at 2.25% and matures on March 30, 2021 with monthly payments of principal and interest of €22,232 (US$24,960). The balance outstanding as of December 31, 2020 and 2019 is €66,446 (US$81,251) and €328,525 (US$368,835), respectively; Bressner entered into a note payable in September 2019 in the amount of €300,000 (US$336,810) which bore interest at 1.65% and matured on March 24, 2020, with a balloon payment of principal and interest. The outstanding balance was paid in full as of March 31, 2020. At December 31, 2019, the outstanding balance was €301,650 (US$338,663); and Bressner entered into a note payable in September 2017, in the amount of €400,000 (US$436,272) which bore interest at 2.125% and matured on January 31, 2020 and has been paid in full. Quarterly principal payments of €25,000 (US$28,068) were due in January, April, July and November of 2019. The balance outstanding as of December 31, 2019 was €25,000 (US$28,068). Notes Payable In April 2019, the Company borrowed $350,000 from three individuals for a two-year period at an interest rate of 9.5% which requires the Company to make monthly principal and interest payments of $16,100 per month. These loans are secured by the assets of the Company. In connection with these loans, the Company issued to the noteholders warrants to purchase shares of the Company’s common stock equal to 10% of the original principal at a price per share equal to $2.15 per share. Accordingly, the Company issued to the noteholders warrants to purchase 16,276 shares of the Company’s common stock at an exercise price of $2.15 per share. The relative fair value of each warrant was $0.90. The relative fair value of warrants was estimated using Black-Scholes with the following weighted-average assumptions: fair value of the Company’s common stock at issuance of $2.15 per share; five year contractual term; 44.60% volatility; 0.0% dividend rate; and a risk-free interest rate of 2.307%. The total relative fair value of the warrants issued is $14,037. The balance outstanding as of December 31, 2020 and 2019 is $63,188 and $241,054, respectively. Notes Payable – Related Parties In April 2019, the Company borrowed $1,150,000 from three individuals who serve on the Company’s board of directors for a two year period at an interest rate of 9.5% which requires the Company to make monthly principal and interest payments of $52,900 per month. These loans are secured by the assets of the Company. In connection with these loans, the Company issued to the noteholders warrants to purchase shares of the Company’s common stock equal to 10% of the original principal at a price per share equal to $2.15 per share. Accordingly, the Company issued to the noteholders warrants to purchase 53,490 shares of the Company’s common stock at an exercise price of $2.15 per share. The relative fair value of each warrant was $0.90. The relative fair value of warrants was estimated using Black-Scholes with the following weighted-average assumptions: fair value of the Company’s common stock at issuance of $2.15 per share; five year contractual term; 42.60% volatility; 0.0% dividend rate; and a risk-free interest rate of 2.3067%. The relative fair value of warrants issued is $46,121. The balance outstanding as of December 31, 2020 and 2019 is $206,669 and $791,170, respectively. Paycheck Protection Program Loan On April 28, 2020, One Stop Systems, Inc. received authorization pursuant to the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) as administered by the U.S. Small Business Administration (the “SBA”) for a “PPP” loan. On May 11, 2020, the Loan was funded and the Company received proceeds in the amount of $1,499,360 (the “PPP Loan”). The PPP Loan, which took the form of a two-year promissory note (the “PPP Note”), matures on April 28, 2022 and bears interest at a rate of 1.0% per annum. Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), was initially to commence on October 28, 2020. The Company did not provide any collateral or guarantees for the PPP Loan, nor did the Company pay any facility charge to obtain the PPP Loan. The PPP Note provides for customary events of default, including, among others, those relating to failure to make payment, breaches of any term, obligation, covenant or condition contained in the PPP Note and payment of unauthorized expenses or use of proceeds contrary to CARES Act rules. The Company may prepay the principal of the PPP Loan at any time without incurring any prepayment charges. Under the original rules, all or a portion of the PPP Loan may be forgiven by the SBA and lender upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, and covered utilities during the eight-week period beginning on the date of loan approval. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100,000, prorated annually. Not more than 25% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually are reduced by more than 25%. In the event the PPP Loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. However, the original rules governing loans granted under the PPP have been subsequently updated. The time period to spend the received funds has been extended from the original eight weeks to twenty-four weeks. Payroll is only required to be 60%, and the commencement date for the repayment has also been extended accordingly. The Company has submitted an application with the lender to forgive the PPP Loan, in accordance with SBA Procedural Notice, Control No. 5000-20057, effective as of October 2, 2020 and is awaiting notice of receipt of forgiveness. Because the Company expects the PPP loan to be forgiven in full, all related amounts have been presented as noncurrent liabilities. Senior Secured Convertible Note: On April 20, 2020, the Company entered into a Securities Purchase Agreement with an institutional investor, providing for the issuance of the Company’s Senior Secured Convertible Promissory Notes with a principal face amount of up to $6,000,000. The notes are, subject to certain conditions, convertible into shares of the Company’s common stock, par value $0.0001 per share, at an initial conversion price per share of $2.50. The notes will be issued with a 10% original issue discount. At the initial closing of this offering, the Company issued notes of $3,000,000, and can consummate additional closings of up to $3,000,000, subject to the prior satisfaction of certain closing conditions which have been satisfied. The initial investor purchased the notes for an aggregate purchase price of $2,700,000 at the initial closing. The notes bear no interest rate (except upon event of default) and, unless earlier converted or redeemed, will mature on April 1, 2022. The Notes are convertible at any time, in whole or in part, at the option of the investors, into shares of common stock at the initial conversion price of $2.50 per share. The conversion price is subject to adjustment for issuances of securities below the conversion price then in effect and for stock splits, combinations or similar events. If immediately following the close of business on the six month anniversary of the issuance date of each note, the conversion price then in effect exceeds 135% of the volume weighted average price VWAP (the “Market Price”), the initial conversion price under any such note will be automatically lowered to the Market Price. Commencing July 1, 2020, the Company has made monthly amortization payments equal to 1/22nd of the initial principal, any accrued and unpaid interest and late charges and any deferred or accelerated amount, of such note, which may be satisfied in cash at a redemption price equal to 105% of such installment amount (110% of such installment amount on notes issued at additional closings). As of December 31, 2020, the holder has elected to defer receipt of three installment payments as allowed per the agreement. Subject to the satisfaction of certain equity conditions set forth in the notes, installment amounts may be satisfied in shares of our common stock, with such installment conversion at a conversion price equal to the lower of (i) the conversion price then in effect and (ii) the greater of (x) the floor price of $1.00 (80% of the Nasdaq market price at date of purchase agreement) and (y) the lower of (I) 82.5% the volume weighted average price of our common stock on the trading day immediately before the applicable installment date and (II) 82.5% of the quotient of (A) the sum of the volume weighted average price of our common stock for each of the three (3) trading days with the lowest volume weighted average price of our common stock during the twenty (20) consecutive trading day period ending and including the trading day immediately prior to the applicable installment date, divided by (B) three (3). Shares of our common stock to be issued with respect to any such installment will be pre-delivered on the second trading day after the applicable installment notice date (as defined in the notes) with a true-up on the applicable installment date. The market value of any installment amount below the floor price will be cash settled on the applicable installment date. Management evaluated the embedded conversion feature to determine whether bifurcation was required as a separate derivative liability. Management first determined that the conversion feature was not within the scope of ASC 480. It then determined that the embedded derivative should be separated from the host instrument and accounted for as a derivative instrument because it met the criteria of ASC 815-15-25-1, primarily because the contract provides for delivery of an asset that puts the recipient in substantially the same position as net settlement. However, in part due to the Company’s adoption of ASC 2017-11 on April 1, 2020, which allowed management to disregard the down round provisions of the conversion feature, management determined that a scope exception to derivative accounting existed by satisfying the additional conditions necessary for equity classification specified by ASC 815-10-15-74 and ASC 815-40-25. As a result of management’s analysis, the conversion feature was not accounted for separately from the debt instrument and the Company will recognize the contingent beneficial conversion feature when, or if, such is triggered. The original issue discount of 10% on the Senior Secured Convertible Note was recorded as a debt discount, decreasing the note payable. This debt discount is amortized to interest expense using the effective interest rate method over the term of the loan. For the year ended December 31, 2020, total debt discount amortization was $168,395, and such amount is included in interest expense in the accompanying consolidated statements of operations. Debt issuance costs in the amount of $316,274 related to this indebtedness were deducted from the face value of the note. Such costs are amortized to interest expense using the effective interest rate method over the term of the loan. Total debt issuance costs amortized during the year ended December 31, 2020 was $177,530, and such amount is included in interest expense in the accompanying consolidated statements of operations. Debt Discount The relative fair value of warrants issued in connection with the notes payable described above were recorded as debt discount, decreasing notes payable and related-party notes payable and increasing additional paid-in-capital on the accompanying consolidated balance sheets. The debt discounts are being amortized to interest expense over the term of the corresponding notes payable using the straight-line method which approximates the effective interest method. For the years ended December 31, 2020 and 2019, total debt discount amortization was $30,079 and $21,303, respectively, and such amounts are included in interest expense in the accompanying consolidated statements of operations. A summary of outstanding debt obligations as of December 31, 2020 is as follows: Loan Description Current Interest Rate Maturity Date Balance (€) Balance ($) Current Portion Long-term Portion Domestic: Notes payable - third party 9.50% April-21 € - $ 63,188 $ 63,188 $ - Related party notes payable 9.50% April-21 - 206,669 206,669 - Convertible senior secured note 10% OID April-22 - 2,590,908 2,045,454 545,454 PPP loan 1.00% April-22 - 1,499,360 - 1,499,360 € - $ 4,360,125 $ 2,315,311 $ 2,044,814 Foreign: Uni Credit Bank AG 1.87% June-21 € 500,000 $ 611,406 $ 611,406 $ - Uni Credit Bank AG 2.25% March-21 66,446 81,251 81,251 - Uni Credit Bank AG 1.90% April-21 500,000 611,406 611,406 - € 1,066,446 $ 1,304,063 $ 1,304,063 $ - $ 5,664,188 $ 3,619,374 $ 2,044,814 Outstanding debt obligations as of December 31, 2020 consist of the following: Year Ended December 31, 2020 Related Parties Third Parties Convertible Note PPP Loan Foreign Total Current portion: Principal $ 206,669 $ 63,188 $ 2,045,454 $ - $ 1,304,063 $ 3,619,374 Less discount (6,726 ) (2,047 ) (124,738 ) - - (133,511 ) Less loan origination costs - - (131,504 ) - - (131,504 ) Net liability $ 199,943 $ 61,141 $ 1,789,212 $ - $ 1,304,063 $ 3,354,359 Long-term portion: Principal $ - $ - $ 545,454 $ 1,499,360 $ - $ 2,044,814 Less discount - - (6,867 ) - - (6,867 ) Less loan origination costs - - (7,240 ) - - (7,240 ) Net liability $ - $ - $ 531,347 $ 1,499,360 $ - $ 2,030,707 Total: Principal $ 206,669 $ 63,188 $ 2,590,908 $ 1,499,360 $ 1,304,063 $ 5,664,188 Less discount (6,726 ) (2,047 ) (131,605 ) - - (140,378 ) Less loan origination costs - - (138,744 ) - - (138,744 ) Net liability $ 199,943 $ 61,141 $ 2,320,559 $ 1,499,360 $ 1,304,063 $ 5,385,066 Total future payments under the notes payable and related notes payable described above as of December 31, 2020 are as follows: Year Ending December 31, Related Parties Third Parties Convertible Note PPP Loan Foreign Total Discount / Loan Original Costs 2021 $ 206,669 $ 63,188 $ 2,045,454 $ - $ 1,304,063 $ 3,619,374 $ (265,015 ) 2022 - - 545,454 1,499,360 - 2,044,814 (14,107 ) Total minimum payments 206,669 63,188 2,590,908 1,499,360 1,304,063 5,664,188 (279,122 ) Current portion of notes payable (206,669 ) (63,188 ) (2,045,454 ) - (1,304,063 ) (3,619,374 ) 265,015 Notes payable, net of current portion $ - $ - $ 545,454 $ 1,499,360 $ - $ 2,044,814 $ (14,107 ) |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | NOTE 9 – STOCKHOLDERS’ EQUITY The Company’s amended and restated certificate of incorporation filed 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. Stock Options The Company maintained a stock option plan that was established in 2000 (“2000 Plan”). In November 2008, the Company increased the maximum number of shares of the Company's common stock that were issuable under the 2000 Plan to 3,000,000 shares of the Company's common stock. The 2000 Plan has expired, and no future grants may be awarded under the 2000 Plan. 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, 2020, 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, 2020, the Company had 790,000 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 may issue up to 1,500,000 shares of the Company’s common stock. The Company has 26,235 shares of common stock remaining unissued 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, 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 and/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. Effective June 24, 2020, the Company entered into an employment agreement with Mr. Raun to serve as the Company’s president and chief executive officer. Pursuant to the terms of the employment agreement, Mr. Raun is entitled to receive 412,125 restricted stock units (“RSUs”) that shall vest over three years, with one third of the RSUs vesting following the one-year anniversary of the date of grant, and the remaining RSUs vesting in four equal installments, commencing six months after the one-year anniversary of the date of grant and every six months thereafter until fully vested; and 412,125 Incentive Stock Options (“ISOs”) pursuant to the Company’s 2017 Equity Incentive Plan, whereby the exercise price for the ISOs shall be no less than the fair market value of the Company’s common stock at the date of grant, ($2.14). The ISOs shall vest at the end of each the second and fourth quarters, the price of the Company’s common stock as of the end of quarter two or quarter four, as applicable, shall be determined using the ten-day trailing volume weighted average price (“VWAP”) after reporting of quarter two and quarter four earnings, as applicable. The date of each such determination shall be referred to as a “Determination Date.” If on any Determination Date the Company’s stock price has increased from the prior Determination Date, then a portion of the ISOs shall become vested. The number of ISOs that shall become vested on a Determinate Date is determined as follows: ((Price at Determination Date – Price at prior Determination Date) x 100) * 1,177.52 = Vested ISOs. If on any Determination Date the Company’s stock price is $5.50 per share, all ISOs shall immediately become vested. In the event that Mr. Raun’s employment agreement is terminated for a reason other than “good cause” or for “good reason”, Mr. Raun, upon executing an effective waiver and release of claims, unvested RSUs shall accelerate so that an additional twelve (12) months of RSUs shall vest from the termination date. A summary of stock option activity under the plans during the years ended December 31, 2020 and 2019 are as follows: Stock Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2019 2,018,747 $ 1.13 4.08 $ 2,013,516 Granted 106,000 $ 2.14 Forfeited / Canceled (62,000 ) $ 2.04 Exercised (376,303 ) $ 0.46 Outstanding at December 31, 2019 1,686,444 $ 1.13 4.84 $ 2,013,516 Granted 432,125 $ 2.17 Forfeited / Canceled (38,197 ) $ 2.32 Exercised (760,105 ) $ 0.88 Outstanding at December 31, 2020 1,320,267 $ 1.81 6.43 $ 2,889,274 Exercisable at December 31, 2020 842,871 $ 1.56 4.81 $ 2,060,542 Vested and expected to vest at December 31, 2020 1,305,945 $ 1.81 6.40 $ 2,864,412 The following table summarizes information about common stock options outstanding as of December 31, 2020: Stock Options Outstanding Stock Options Exercisable Plan Exercise Price Range Number of Shares Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price 2011 $0.46-$0.80 309,895 2.15 $ 0.63 309,895 2.15 $ 0.63 2015 $1.78-$1.95 424,610 6.00 $ 1.74 423,881 6.00 $ 1.74 2017 $2.14-$4.09 585,762 9.01 $ 2.49 109,095 7.73 $ 3.48 1,320,267 842,871 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: For the Year Ended December 31, 2020 2019 Expected term (in years) 5.04 4.6 - 5.9 Expected volatility 43.5 - 47.8% 43.7 - 44.4 % Risk-free interest rate 0.33 % 2.30 - 2.49% Weighted average grant date fair value per share $ 0.83 $ 1.09 Grant date fair value of options vested $ 554,575 $ 706,417 Intrinsic value of options exercised $ 2,370,491 $ 559,237 As of December 31, 2020, the amount of unearned stock-based compensation estimated to be expensed from 2020 through 2029 related to unvested common stock options is $325,414, net of estimated forfeitures. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is 2.18 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, 2020, the Company issued 314,236 shares of common stock for proceeds of $86,892 in cash related to the exercise of stock options. Of the total shares issued, 240,381 shares of common stock were issued as a cashless exercise of stock options. During the year ended December 31, 2019, the Company issued 350,587 shares of common stock for proceeds of $47,334, in cash related to the exercise of stock options. Of the total shares issued, 273,600 shares of common stock were issued as a cashless exercise of 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, 2020 and 2019 is as follows: Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2019 173,335 $ 4.13 Granted 167,500 $ 2.43 Vested (116,665 ) $ (3.86 ) Canceled (7,500 ) $ (2.34 ) Unvested at December 31, 2019 216,670 $ 3.02 Granted 554,251 $ 2.63 Vested (151,251 ) $ 3.16 Canceled (43,748 ) $ 2.43 Unvested at December 31, 2020 575,922 $ 2.65 During the year ended December 31, 2020, the Company issued 123,440 restricted stocks units, net of 27,811 units retained for income tax purposes. As of December 31, 2020, there was $918,475 of unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted average period of 2.22 years. Stock-based compensation expense for the years ended December 31, 2020 and 2019 was comprised of the following: For the Year Ended December 31, Stock-based compensation classified as: 2020 2019 General and administrative $ 556,935 $ 469,714 Production 65,631 70,243 Marketing and selling 65,580 59,486 Research and development 36,232 50,026 $ 724,378 $ 649,469 Warrants In connection with the issuance of notes payable and related notes payable in April 2019, the Company issued warrants to debt holders’ share of common stock at an exercise price of $2.15 per share. See Note 8. The following table summarizes the Company’s warrant activity during the years ended December 31, 2020 and 2019: Number of Warrants Weighted Average Exercise Price Warrants outstanding – January 1, 2019 578,996 $ 4.32 Warrants granted 69,766 $ 2.15 Warrants exercised (17,815 ) $ 1.40 Warrants outstanding – December 31, 2019 630,947 $ 4.16 Warrants granted - $ - Warrants exercised (125,001 ) $ 0.76 Warrants outstanding – December 31, 2020 505,946 $ 5.00 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | NOTE 10 – 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. In 2020 and 2019, the matching contributions were 100% of the employee's contribution up to a maximum of 5% of the employee’s annual compensation. During the years ended December 31, 2020 and 2019, the Company contributed $124,993 and $376,878, respectively to the 401(k) Plan. As of May 2020, the Company suspended matching contributions to the 401(k) as part of its cost containment program. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 – 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. On September 29, 2020, the Company’s former Chief Executive Officer, Stephen D. Cooper, commenced an action entitled Stephen D. Cooper v. One Stop Systems, Inc. et al The Company has denied Mr. Cooper’s allegations. On December 8, 2020, the Company filed a cross-complaint (“Cross Complaint”) against Mr. Cooper for (1) breach of contract (in connection with a binding commitment letter and Mr. Cooper’s employment agreement), (2) intentional misrepresentation, (3) negligent misrepresentation, and (4) breach of fiduciary duty. The Company is seeking compensatory damages, punitive damages, pre-judgment interest, attorneys’ fees, and the cost of suit incurred in connection with Mr. Cooper’s complaint and the Cross Complaint. The Company intends to vigorously defend all allegations. 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 8), the Company has agreed to indemnify its lender and others related to the use of the proceeds and other matters. The duration of the indemnities varies, and in many cases is 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. Leases The Company leases its offices, manufacturing, and warehouse facility in San Diego County under a non-cancelable operating lease. Our corporate headquarters are in a leased space comprising of approximately 29,342 square feet in Escondido, California under a lease that was modified in February 2019 and expires in August 2024. The Company also lease a 3,208 square foot facility in Salt Lake City, Utah that houses our Ion software development team. The Company is the lessee of 12,880 square feet located in Irvine, California with the lease expiring in June 2021. Bressner Technology leases space comprising of 8,073 square feet on a month-to-month basis. For the years ended December 31, 2020 and 2019, rent expense was $673,089 and $692,158, respectively. Future annual minimum rental commitments under operating leases as of December 31, 2020 are as follows: Year Ending December 31, Amount payable 2021 $ 526,339 2022 302,362 2023 311,433 2024 211,734 Thereafter - Total minimum lease payments $ 1,351,868 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 – RELATED PARTY TRANSACTIONS In April 2019, certain members of the Company’s Board of Directors executed definitive agreements to commit funds of up to $4,000,000 as a credit facility. The Company initially borrowed $1,150,000 from members of the Board of Directors and $350,000 from other shareholders for a two year period at an interest rate of 9.5% which requires the Company to make monthly principal and interest payment of $69,000 per month. In connection with these loans, the Company issued to these note holders warrants to purchase shares of the Company’s common stock equal to 10% of the original principal as a price per share equal to $2.15 per share. Accordingly, the Company issued to these note holders warrants to purchase 69,766 share of the Company’s common stock. The relative fair value of the warrants issued was $60,158. Additionally, the Company paid a 1% loan origination fee and a monthly commitment fee of 0.25% on unused committed funds through the term of the loan. The Company engages an advertising firm whose president was a member of the Board of Directors of the Company during 2019 and though June 3, 2020. Amounts paid to this company are included in marketing and selling expense in the accompanying consolidated statements of operations and for the years ended December 31, 2020 and 2019, totaled $33,000 and $40,006, respectively. 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, 2020 and 2019 totaled $271,200 and $160,726, respectively, and are included in general and administrative expenses in the accompanying consolidated statements of operations. The Company has engaged a related-party law firm (a principal of that firm owns shares in the Company) to provide legal services. Legal fees paid to this firm for the years ended December 31, 2020 and 2019 totaled $9,000 and $37,800, respectively, and are included in general and administrative expenses in the accompanying consolidated statements of operations. Interest expense on all related-party notes payable for the years ended December 31, 2020 and 2019 totaled $50,298 and $67,197, respectively. Effective August 1, 2016, the Company entered into a management services agreement with a company owned by the former Chief Executive Officer of Magma. The agreement calls for payments of $180,000 per year for the first two years paid in monthly installments. In year three, the amount is reduced to $37,500 for the year paid in monthly installments. Additionally, the Company granted 30,000 options in conjunction with execution of this agreement. Payments for the year ended December 31, 2020 and 2019 were $0 and $21,875, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 13 – INCOME TAXES For the years ended December 31, 2020 and 2019, pre-tax income (loss) was attributed to the following jurisdictions: For the Years Ended December 31, 2020 2019 Domestic operations $ (760,603 ) $ (947,350 ) Foreign operations 150,315 284,265 $ (610,288 ) $ (663,085 ) Set forth below is the (benefit) provision for income taxes for the years ended December 31: For the Years Ended December 31, 2020 2019 Current: Federal $ (26,951 ) $ - State 16,058 19,676 International 149,958 439,662 139,065 459,338 Deferred: Federal (563,107 ) (164,662 ) State (180,059 ) (57,424 ) International 357 - (742,809 ) (222,086 ) Total (benefit) provision for income taxes $ (603,744 ) $ 237,252 The reconciliation of the (benefit) provision for income taxes computed at federal statutory rates to the (benefit) provision for income taxes for the years ended December 31, 2020 and 2019 are as follows: For the Years Ended December 31, 2020 2019 Provision at federal statutory rates (21% applied to earnings before income taxes) $ (128,161 ) $ (200,212 ) State income taxes, net of federal benefit 7,685 38,764 Other permanent items (164,300 ) 320,208 Research and development credits (364,843 ) (510,568 ) Stock based compensation (178,552 ) (48,499 ) Amortization and impairment 132,934 550,454 Uncertain tax positions 48,492 54,452 Other 43,001 32,653 $ (603,744 ) $ 237,252 Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred taxes as of December 31, 2020 and 2019 were as follows: For the Years Ended December 31, 2020 2019 Deferred tax assets: Reserves $ 23,735 $ 21,677 Deferred compensation 166,740 66,460 Stock compensation 183,742 191,855 Deferred revenue 132,814 126,428 Inventories 212,226 182,189 Credits and loss carryforward 4,314,653 3,794,279 Total deferred tax assets before valuation allowance 5,033,910 4,382,888 Less: valuation allowance - (178,593 ) Total deferred tax assets 5,033,910 4,204,295 Deferred tax liabilities: Property and equipment (229,042 ) (369,004 ) Intangible assets (602,277 ) (527,447 ) Other (327,288 ) (288,021 ) Total deferred tax liabilities (1,158,607 ) (1,184,472 ) Deferred tax assets 3,875,303 3,019,823 Valuation allowance (176,710 ) - Net deferred assets $ 3,698,593 $ 3,019,823 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. Management believes that it is more likely than not that the Company will realize the benefits of the net deferred tax assets as of December 31, 2020 and 2019. The Company files income tax returns in the U.S. federal jurisdiction, California, Arizona, Idaho, Massachusetts, Texas, and Utah and Germany and has open tax statutes for U.S. federal taxes for the years ended December 31, 2016 through 2020. For California, the open tax statutes are for years December 31, 2017 through 2020, and for Germany, the open years include December 31, 2017 through 2020. The Company has Pre-2017 Federal net operating loss (“NOL”) carryforwards of $1,111,176. The Company may use these NOL carryforwards to offset Federal taxable income in future years through 2037, when the last (Pre-2017) NOL carryforwards expire. The Company also has a Post-2017 Federal NOL carryforward as of December 31, 2020 and 2019, of $4,916,876 and $3,934,533, respectively. The Company may use these Post-2017 NOL carryforwards indefinitely to offset 80% of Federal taxable income in future years. In addition, the Company has state NOL carryforwards of $2,366,620. State NOLs will carry forward through at least 2038 and may be used to offset future state taxable income. As of December 31, 2020 and 2019, the Company has $1,706,344 and $1,430,122, respectively, of Federal tax credit carryforwards which begin to expire in 2026 and state credit carryforwards of $1,479,256 and $1,290,046, respectively, which carryforward indefinitely. As of December 31, 2020, unrecognized tax benefits associated with uncertain tax positions was $371,688, and such amount is included in other accrued expenses and other liabilities in 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 at December 31, 2018 $ 262,784 Gross increases for tax positions of the current year 54,452 Unrecognized tax benefits balance at December 31, 2019 317,236 Gross increases for tax positions of the current year 54,452 Unrecognized tax benefits balance at December 31, 2020 $ 371,688 The liability for uncertain tax positions is reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations with taxing authorities, identification of new issues, and enactment of new legislation, regulations or promulgation of new case law. Management believes that adequate amounts of tax and related interest, if any, have been provided for any adjustments that may result from these examinations of uncertain tax positions. The Company does not expect the liability for uncertain tax positions to change significantly over the next year. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2020, we had $3,698,593 in net deferred tax assets (DTAs). These DTAs include $3,185,600 of tax credit carryforwards and $1,474,896 related to net operating loss carryforwards that can be used to offset taxable income in future periods and reduce our income taxes payable in those future periods. At this time, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that economic conditions may |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 14 –NET LOSS PER SHARE Basic and diluted net loss per share was calculated as follows for the years ended December 31, 2020 and 2019: For the Year Ended December 31, 2020 2019 Basic and diluted net loss per share: Numerator: Net loss $ (6,544 ) $ (900,337 ) Denominator: Weighted average common shares outstanding - basic 16,512,203 15,148,613 Effect of dilutive securities - - Weighted average common shares outstanding - diluted 16,512,203 15,148,613 Net loss per common share: Basic $ (0.00 ) $ (0.06 ) Diluted $ (0.00 ) $ (0.06 ) |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 15 – SEGMENT AND GEOGRAPHIC INFORMATION The Company operates in two reportable segments: the design and manufacture of high-performance customized computers and flash arrays, in-flight entertainment & connectivity and value-added reseller with minimal customization. The Company evaluates financial performance on a company-wide basis. Segment detail for the years ended December 31, 2020 and 2019 is as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2029 OSS Bressner Total OSS Bressner Total Revenues $ 33,650,019 $ 18,245,369 $ 51,895,388 $ 40,055,408 $ 18,252,611 $ 58,308,019 Cost of revenues (21,081,787 ) (14,378,987 ) (35,460,774 ) (24,762,812 ) (14,142,944 ) (38,905,756 ) Gross profit 12,568,232 3,866,382 16,434,614 15,292,596 4,109,667 19,402,263 Gross profit % 37.3 % 21.2 % 31.7 % 38.2 % 22.5 % 33.3 % Total operating expenses (13,129,857 ) (3,729,038 ) (16,858,895 ) (16,391,427 ) (3,789,855 ) (20,181,282 ) (Loss) income from operations $ (561,625 ) $ 137,344 $ (424,281 ) $ (1,098,831 ) $ 319,812 $ (779,019 ) Revenue from customers with non-U.S. billing addresses represented approximately 56% and 62% of the Company’s revenue for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, substantially all the Company’s long-lived assets were located in the United States of America, with the exception of assets of $238,211 located in Germany. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 – SUBSEQUENT EVENTS The Company has evaluated subsequent events after the consolidated balance sheet date of December 31, 2020 through the date of filing. Based upon the Company’s evaluation, management has determined that, no subsequent events have occurred that would require recognition in the accompanying consolidated financial statements or disclosure in the notes thereto, other than as disclosed in the accompanying notes and as set forth below: On March 1, 2021, the Company entered into a Securities Purchase Agreement with an accredited investor, pursuant to which the Company agreed to issue and sell, in a registered direct offering, 1,497,006 shares of the Company’s common stock, par value $0.0001 per share, to the purchaser at an offering price of $6.68 per share. The registered offering was conducted pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-231513), which was initially filed with the Securities and Exchange Commission on May 15, 2019; and was declared effective on June 19, 2019. As compensation for their services, the Company paid to the placement agents a fee equal to 7% of the gross proceeds received by the Company as a result of the registered offering, and reimbursed the placement agents for certain expenses incurred in connection with such offering. The Company estimates that the net proceeds from the registered offering will be approximately $9.25 million after deducting certain fees due to the placement agents’ and the Company’s estimated transaction expenses. The net proceeds received by the Company will be used for general corporate and working capital purposes. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Liquidity, Going Concern Considerations and Management Plans | Liquidity, Going Concern Considerations and Management Plans Given our recurring operating losses, the Company’s primary sources of liquidity have been provided by (i) the Company’s February 2018 initial public offering (net proceeds were approximately $16,100,000); (ii) March 2019 notes payable from members of the Board of Directors and others of $1,500,000; (iii) the July 2019 sale of 1,554,546 shares of the Company’s common stock for net cash proceeds of $2,488,148; (iv) the April 24, 2020 sale of $3,000,000 of Senior Secured Convertible Promissory Notes issued at a 10% original issue discount and (v) receipt of approximately $1,500,000 on April 28, 2020 of government loan proceeds under the Paycheck Protection Program, and (vi) a receipt of approximately $9,250,000 on March 3, 2021 in a registered direct offering. As of December 31, 2020, the Company’s cash and cash equivalents were $6,316,921 and working capital was $16,266,293. Cash and cash equivalents held by Bressner totaled $1,062,818 (USD) at December 31, 2020. Bressner’s debt covenants do not permit the use of these funds by its parent company. During the year ended December 31, 2020, the Company experienced an operating loss of $424,281, with cash used in operating activities of $250,173. Our largest customer, engaged in the media and entertainment industry, is having significant financial hardships attributable to the COVID-19 pandemic with aged outstanding accounts receivables. The Company has formulated a plan whereby extended payment terms have been made available, and our customer is presently honoring those terms. The Company’s revenue growth during the year has slowed due to the effects of COVID-19. However, resulting from a reduction in force and strict cost containment, the Company has been able to mitigate the effects, to some degree, of the reduced revenue attributable to the economic impact of COVID-19. In March 2020, the World Health Organization declared the outbreak of COVID-19, a global pandemic and the United States federal government declared it a national emergency. COVID-19 continues to impact worldwide economic activity. A public health pandemic, including COVID-19, poses the risk that we or our employees, contractors, customers, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. More generally, COVID-19 raises the possibility of an extended global economic downturn, which could affect demand for our products and services and impact our results and financial condition even after the pandemic is contained and remediation/restriction measures are lifted. For example, we may be unable to collect receivables from customers that are significantly impacted by COVID-19. Also, a decrease in orders in a given period could negatively affect our revenues in future periods. COVID-19 may also have the effect of heightening many of the other risks described in the “Risk Factors” section of our Annual Report on this Form 10-K, including risks associated with our customers and supply chain. We will continue to evaluate the nature and extent of the impact of COVID-19 to our business. Presently, it is clear the global economy has been negatively impacted by COVID-19, and demand for some of our products and services have been reduced due to uncertainty and the economic impact of COVID-19. For example, customers in certain of the industries most impacted by COVID-19, have requested, and we expect will continue to request, relief to existing contracts or payment obligations, and the impact of those is uncertain. Furthermore, some customers are delaying payments owed to the Company while they address immediate financial crises in their operations due to COVID-19. In particular, in the media and entertainment industry, demand for the use of outdoor media equipment has been impacted due to restrictions on public gatherings. Until such restrictions improve, we expect that demand for certain of our clients’ products and services will be limited, and may not return to prior levels, and thus, may impact our financial results and operations. Specifically, our business has also begun to be negatively affected by a range of external factors related to COVID-19 that are not within our control. For example, numerous measures have been implemented by governmental authorities across the globe to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, restrictions and limitations of public gatherings, and business limitations and shutdowns. Many of our customers’ businesses have been severely impacted by these measures and some have been required to reduce employee headcount as a result. If a significant number of our customers are unable to continue as a going concern, this would have an adverse impact on our business and financial condition. Though management has been proactively managing through the current known impacts, if the situation further deteriorates or the outbreak results in further restriction on supply and demand factors, our cash flows, financial position and operating results for fiscal year 2020 and beyond will be negatively impacted. Neither the length of time nor the magnitude of the negative impacts can be presently determined. The longer the COVID-19 pandemic persists, the greater the potential for significant adverse impact to our business operations. Quarantines, travel restrictions, prohibitions on non-essential gatherings, shelter-in-place orders and other similar directives and policies intended to reduce the spread of the disease, may reduce our productivity and that of the third parties on which we rely and may disrupt and delay many aspects of our business. The Company is complying with state mandated requirements for safety in the workplace to ensure the health, safety and welling-being of our employees. These measures included personal protective equipment, social distancing, cleanliness of the facilities and daily monitoring of the health of employees in our facilities. We have not developed a specific and comprehensive contingency plan designed to address the challenges and risks presented by the COVID-19 pandemic and, even if and when we do develop such a plan, there can be no assurance that such plan will be effective in mitigating the potential adverse effects on our business, financial condition and results of operations. Management’s plans with respect to the above is to continue its efforts towards responding to the changing economic landscape attributable to COVID-19, to continue to reduce costs, conserve cash, strengthen margins, and improve company-wide execution. Specific actions already implemented by management include a reduction in force, a limited freeze on hiring, reduced work week, minimizing overtime, travel and entertainment, and contractor costs. On April 7, 2020, the Company implemented a cost reduction plan which included the termination of certain employees and elimination of certain costs. Savings from this effort are estimated to be $2.5 million on an annual basis. While management expects these actions to result in prospective cost reductions, management is also committed to securing debt and/or equity financing to ensure that liquidity will be sufficient to meet the Company’s cash requirements through at least a period of the next twelve months. Management believes potential sources of liquidity include at least the following: ▪ In May 2019, the Company filed a Form S-3 prospectus with the Securities and Exchange Commission which became effective on June 19, 2019, and allows the Company to offer up to $100,000,000 aggregate dollar amount of shares of its common stock, preferred stock, debt securities, warrants to purchase its common stock, preferred stock or debt securities, subscription rights to purchase its 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 of more offerings, in amounts, at prices and on the terms that the Company will determine at the time of the offering and which will be set forth in a prospectus supplement and any related free writing prospectus. ▪ On April 24, 2020, the Company completed a $6.0 million debt financing on a non-interest bearing convertible note with a 10% original issue discount. The first tranche of $3.0 million was received on April 27, 2020, with an additional $3.0 million available seven months from the date of closing at the option of the Company conditioned upon meeting certain requirements which have been satisfied. The note is repayable in twenty-two installments beginning three months after closing in cash or shares of the Company’s common stock. ▪ On March 1, 2021, the Company entered into a definitive agreement with an institutional investor for the purchase and sale of 1,497,006 shares of common stock at a purchase price of $6.68 in a registered direct offering priced At-The-Market under Nasdaq rules. Total estimated proceeds are $9,250,000 after commissions and offering costs (see Note 16). As a result of management’s cost reduction plans, the Company’s sources of liquidity and management’s most recent cash flow forecasts, management believes that the Company has sufficient liquidity to satisfy its anticipated cash requirements for at least the next twelve months. However, there can be no assurance that management’s cost reduction efforts will be effective, the forecasted cash flows will be achieved, or that external sources of financing, including the issuance of debt and/or equity securities, will be available at times and on terms acceptable to the Company, or at all. |
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 Concept Development Inc., its wholly-owned subsidiary, OSS GmbH, which also includes the acquisition of Bressner Technology GmbH. Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent assets, liabilities, and expenses at the date of the consolidated financial statements and during the reporting period. Significant estimates made by management include, among others, the fair value of acquired net assets of CDI in August 2018 with reevaluation in April 2019, and Bressner Technology GmbH in October 2018, the allowance for doubtful accounts, fair value of stock options, recoverability of inventories and long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates. |
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, 2020, the Company had $4,816,433 in excess of the insurance limits. The Company has not experienced any such losses in these accounts. 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 €669,160 (US$818,256) with banks in excess of the insurance limits. In the years ended December 31, 2020 and December 31, 2019, approximately 24%, and 41%, respectively, of net sales represent customers which are each greater than 10% of our consolidated annual revenue. This concentration is with two customers, disguise and Raytheon. As of December 31, 2020 and 2019, approximately 64% and 72%, respectively, of net trade accounts receivables represent customer balances which are each greater than 10% of our consolidated trade accounts receivable balance. As a result of the recent worldwide economic impact attributable to COVID-19, disguise has been experiencing a slowdown in its business as the entertainment and media markets have been required to scale back or cancel large group gatherings. As a result, during the year, we experienced delays in receipt of scheduled payments and agreed to requests during the year for a modified payment schedule. Disguise has systematically paid down their outstanding balance and, as of March 2021, is current on their payments and outstanding balances are in accordance with pre-established credit policies and limits. 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 18.3% and 11.0% of purchases for the years ended December 31, 2020, and 2019, 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. |
Accounts Receivable | Accounts Receivable Accounts receivable are presented at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts 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 doubtful accounts 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 quality and aging of the accounts receivable, specific customer circumstances, current economic trends, and historical experience with collections. At December 31, 2020 and 2019, the allowance for doubtful accounts is $32,120 and $14,000, respectively. Revenues earned in excess of related billings are recorded as an asset on the consolidated balance sheet as unbilled receivables. Unbilled receivables as of December 31, 2020 and 2019 were $106 and $25,432, respectively. |
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. |
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. |
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 In April 2019, the Company performed an interim impairment test of goodwill, as a result of a short-fall in the actual overall financial performance of CDI as compared to plan, a recurring need for working capital, and a decrease in the Company’s stock price. As a result of this interim evaluation, the Company recorded an impairment loss to goodwill of $1,697,394, which was charged to operating expenses during the year ended December 31, 2019. |
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 completed its qualitative assessment for impairment in December 2020 and determined that there was no impairment as of December 31, 2020. Though there were indicators of impairment attributable to the COVID-19 pandemic that directly impacted our business, as a result of management’s cost containment efforts, raising cash, minimizing working capital requirements and a focus on profitability, during the year the Company improved its financial stability and thus determined that there is no impairment of its intangible and long-lived assets. There can be no assurance; however, that market conditions will not change or demand for the Company’s products will continue, which could result in an impairment of intangible and long-lived assets in the future. |
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. Assets and liabilities assumed in the acquisition of the Ion software, Concept Development Inc., and Bressner Technology GmbH were recorded at fair value based upon the Company’s market assumptions which approximated carrying value (except for acquired intangible assets – Note 3) due to the short-term nature of the instruments. The carrying amounts of the Company’s 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 On January 1, 2019, the Company adopted the new accounting standard update ASC 606, Revenue from Contracts with Customers, which superseded nearly all existing revenue recognition guidance under GAAP, to all contracts using the modified retrospective method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. 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 $6,692,752 and $10,075,756 for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, $1,482,186 and $459,893 respectively, of product 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 based upon milestones delivered that are provided during the period and compared to milestone goals to be provided over the entire contract. 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. 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, 2020 and 2019 is as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Entity: Domestic International Total Domestic International Total Customized computers and flash arrays $ 21,698,400 $ 10,611,133 $ 32,309,533 $ 19,436,784 $ 18,081,290 $ 37,518,074 In-flight entertainment & connectivity 1,123,664 216,821 1,340,485 2,030,596 506,738 2,537,334 Value-added reseller with minimal customization 92,511 18,152,859 18,245,370 473,489 17,779,122 18,252,611 $ 22,914,575 $ 28,980,813 $ 51,895,388 $ 21,940,869 $ 36,367,150 $ 58,308,019 |
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 7). 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 amount of warranties sold for years ended December 31, 2020 and 2019 were $373,847 and $377,768, respectively. The revenue that was recognized for the warranties sold for the years ended December 31, 2020 and 2019 were $401,915 and $392,532, 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. 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, 2020 and 2019, deferred revenue totaled $407,768 and $394,571, respectively. The Company expects to recognize $407,768 of unearned revenue amounts from 2020 through 2024. |
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. |
Derivative Financial Instruments | Derivative Financial Instruments We 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, 2020 and 2019, 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” 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 3. |
Debt Discounts | Debt Discounts Debt discounts, which originate from the relative fair value of warrants issued in connection with notes payable and related-party notes payable, are recorded against the noted payable and related-party notes payable in the accompanying consolidated balance sheets. Amortization of the debt discounts are calculated using the straight-line method over the term of the applicable notes which approximates the effective interest method and are recorded in interest expense in the accompanying consolidated statements of operations. Amortization of debt discounts of $376,006 and $21,303 was recognized as interest expense for the years ended December 31, 2020 and 2019, respectively. |
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, 2020 and 2019 were $377,105 and $352,080, respectively. |
Research and Development Expense | 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. |
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. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (2017 Tax Act). Corporate taxpayers may carryback net operating losses (NOLs) originating during 2018 through 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act resulted in two adjustments to our income tax provision for the year ended December 31, 2020, relating to a projected 2018 NOL utilization and tax benefits from NOL carrybacks. We have recorded a benefit of $41,561 in our income tax provision for the year ended December 31, 2020 related to the CARES Act. |
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 Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted-average common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net 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 In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. |
Recently Implemented Accounting Pronouncements | Recently Implemented Accounting Pronouncements In September 2018, the FASB issued ASU No. 2018-07, Stock-based Compensation: Improvements to Nonemployee Share-based Payment Accounting t materially impact the Company’s consolidated financial statements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Revenue Recognition In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In July 2017, the FASB issued Accounting Standards Update No. 2017-11, Accounting for financial instruments with down rounds features (I) , II and the existence of s often result in an accounting conclusion that the evaluated feature or instrument is i was adopted early by the Company on April 1, 2020 ’s April 2020 convertible note payable described in Note 8 possesses In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
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, 2020 and 2019 is as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Entity: Domestic International Total Domestic International Total Customized computers and flash arrays $ 21,698,400 $ 10,611,133 $ 32,309,533 $ 19,436,784 $ 18,081,290 $ 37,518,074 In-flight entertainment & connectivity 1,123,664 216,821 1,340,485 2,030,596 506,738 2,537,334 Value-added reseller with minimal customization 92,511 18,152,859 18,245,370 473,489 17,779,122 18,252,611 $ 22,914,575 $ 28,980,813 $ 51,895,388 $ 21,940,869 $ 36,367,150 $ 58,308,019 |
Long-Lived Intangible Assets (T
Long-Lived Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Change in Identified Intangible Assets | The change in identified intangible assets is as follows Preliminary Valuation Revised Valuation Change Customer lists and relationships $ 1,470,000 $ 470,000 $ (1,000,000 ) Trade name 100,000 90,000 (10,000 ) Non-compete 200,000 15,000 (185,000 ) $ 1,770,000 $ 575,000 $ (1,195,000 ) |
Schedule of Definite Lived Intangible Assets | Definite lived intangible assets related to acquisitions are as follows as of December 31, 2020: Expected Life Remaining Months Gross Intangible Assets Accumulated Amortization Net Intangible Assets Customer lists and relationships 36 to 60 months 10 to 32 months $ 2,084,515 $ (1,578,178 ) $ 506,337 Drawings and technology 36 months 0 months 760,207 (760,207 ) - Trade name, trademarks & other 24 to 36 months 10 months 447,274 (355,742 ) 91,532 Non-compete 36 months 10 months 246,797 (182,409 ) 64,388 $ 3,538,793 $ (2,876,536 ) $ 662,257 Definite lived intangible assets related to acquisitions are as follows as of December 31, 2019: Expected Life Remaining Months Gross Intangible Assets Accumulated Amortization Net Intangible Assets Customer lists and relationships 36 to 60 months 22 to 44 months $ 2,084,515 $ (1,109,681 ) $ 974,834 Drawings and technology 36 months 0 months 760,207 (760,207 ) - Trade name, trademarks & other 24 to 36 months 8 to 22 months 447,274 (217,570 ) 229,704 Non-compete 36 months 22 months 246,797 (105,143 ) 141,654 $ 3,538,793 $ (2,192,601 ) $ 1,346,192 |
Schedule of Amortization Expense of Definite Lived Intangible Assets | The amortization expense of the definite lived intangible assets for the years remaining is as follows: 2021 2022 2023 Total $ 556,872 $ 63,231 $ 42,154 $ 662,257 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Receivable Net Current [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net consists of the following at December 31: December 31, December 31, 2020 2019 Accounts receivable $ 7,491,397 $ 11,655,725 Unbilled receivables 106 25,432 7,491,503 11,681,157 Less: allowance for doubtful accounts (33,120 ) (14,000 ) $ 7,458,383 $ 11,667,157 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories, Net | Inventories, net consist of the following at December 31: December 31, December 31, 2020 2019 Raw materials $ 5,210,327 $ 2,478,882 Sub-assemblies 255,699 1,857,004 Work-in-process 407,328 493,276 Finished goods 4,424,603 3,087,529 10,297,957 7,916,691 Less: reserves for obsolete and slow-moving inventories (650,453 ) (547,335 ) $ 9,647,504 $ 7,369,356 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net consists of the following at December 31: December 31, December 31, 2020 2019 Computers and computer equipment $ 748,392 $ 633,546 Furniture and office equipment 329,725 340,801 Manufacturing equipment and engineering tools 2,710,784 2,501,020 Software implementation 2,203,484 1,709,125 Leasehold improvements 943,194 892,097 Vehicles 4,315 - 6,939,894 6,076,589 Less: accumulated depreciation and amortization (3,452,716 ) (2,508,025 ) $ 3,487,178 $ 3,568,564 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following at December 31: December 31, December 31, 2020 2019 Accrued compensation and related liabilities $ 932,988 $ 1,621,177 Deferred revenue and customer deposits 1,096,672 1,260,126 Warranty reserve 425,636 424,011 Deferred rent 312,909 373,354 Other accrued expenses 713,239 928,764 $ 3,481,444 $ 4,607,432 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt Obligations | A summary of outstanding debt obligations as of December 31, 2020 is as follows: Loan Description Current Interest Rate Maturity Date Balance (€) Balance ($) Current Portion Long-term Portion Domestic: Notes payable - third party 9.50% April-21 € - $ 63,188 $ 63,188 $ - Related party notes payable 9.50% April-21 - 206,669 206,669 - Convertible senior secured note 10% OID April-22 - 2,590,908 2,045,454 545,454 PPP loan 1.00% April-22 - 1,499,360 - 1,499,360 € - $ 4,360,125 $ 2,315,311 $ 2,044,814 Foreign: Uni Credit Bank AG 1.87% June-21 € 500,000 $ 611,406 $ 611,406 $ - Uni Credit Bank AG 2.25% March-21 66,446 81,251 81,251 - Uni Credit Bank AG 1.90% April-21 500,000 611,406 611,406 - € 1,066,446 $ 1,304,063 $ 1,304,063 $ - $ 5,664,188 $ 3,619,374 $ 2,044,814 Outstanding debt obligations as of December 31, 2020 consist of the following: Year Ended December 31, 2020 Related Parties Third Parties Convertible Note PPP Loan Foreign Total Current portion: Principal $ 206,669 $ 63,188 $ 2,045,454 $ - $ 1,304,063 $ 3,619,374 Less discount (6,726 ) (2,047 ) (124,738 ) - - (133,511 ) Less loan origination costs - - (131,504 ) - - (131,504 ) Net liability $ 199,943 $ 61,141 $ 1,789,212 $ - $ 1,304,063 $ 3,354,359 Long-term portion: Principal $ - $ - $ 545,454 $ 1,499,360 $ - $ 2,044,814 Less discount - - (6,867 ) - - (6,867 ) Less loan origination costs - - (7,240 ) - - (7,240 ) Net liability $ - $ - $ 531,347 $ 1,499,360 $ - $ 2,030,707 Total: Principal $ 206,669 $ 63,188 $ 2,590,908 $ 1,499,360 $ 1,304,063 $ 5,664,188 Less discount (6,726 ) (2,047 ) (131,605 ) - - (140,378 ) Less loan origination costs - - (138,744 ) - - (138,744 ) Net liability $ 199,943 $ 61,141 $ 2,320,559 $ 1,499,360 $ 1,304,063 $ 5,385,066 |
Schedule of Total Future Payments under Notes Payable and Related Party Notes Payable | Total future payments under the notes payable and related notes payable described above as of December 31, 2020 are as follows: Year Ending December 31, Related Parties Third Parties Convertible Note PPP Loan Foreign Total Discount / Loan Original Costs 2021 $ 206,669 $ 63,188 $ 2,045,454 $ - $ 1,304,063 $ 3,619,374 $ (265,015 ) 2022 - - 545,454 1,499,360 - 2,044,814 (14,107 ) Total minimum payments 206,669 63,188 2,590,908 1,499,360 1,304,063 5,664,188 (279,122 ) Current portion of notes payable (206,669 ) (63,188 ) (2,045,454 ) - (1,304,063 ) (3,619,374 ) 265,015 Notes payable, net of current portion $ - $ - $ 545,454 $ 1,499,360 $ - $ 2,044,814 $ (14,107 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
Summary of Stock Option Activity | A summary of stock option activity under the plans during the years ended December 31, 2020 and 2019 are as follows: Stock Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at January 1, 2019 2,018,747 $ 1.13 4.08 $ 2,013,516 Granted 106,000 $ 2.14 Forfeited / Canceled (62,000 ) $ 2.04 Exercised (376,303 ) $ 0.46 Outstanding at December 31, 2019 1,686,444 $ 1.13 4.84 $ 2,013,516 Granted 432,125 $ 2.17 Forfeited / Canceled (38,197 ) $ 2.32 Exercised (760,105 ) $ 0.88 Outstanding at December 31, 2020 1,320,267 $ 1.81 6.43 $ 2,889,274 Exercisable at December 31, 2020 842,871 $ 1.56 4.81 $ 2,060,542 Vested and expected to vest at December 31, 2020 1,305,945 $ 1.81 6.40 $ 2,864,412 |
Summary of Common Stock Options Outstanding | The following table summarizes information about common stock options outstanding as of December 31, 2020: Stock Options Outstanding Stock Options Exercisable Plan Exercise Price Range Number of Shares Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number of Shares Exercisable Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price 2011 $0.46-$0.80 309,895 2.15 $ 0.63 309,895 2.15 $ 0.63 2015 $1.78-$1.95 424,610 6.00 $ 1.74 423,881 6.00 $ 1.74 2017 $2.14-$4.09 585,762 9.01 $ 2.49 109,095 7.73 $ 3.48 1,320,267 842,871 |
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: For the Year Ended December 31, 2020 2019 Expected term (in years) 5.04 4.6 - 5.9 Expected volatility 43.5 - 47.8% 43.7 - 44.4 % Risk-free interest rate 0.33 % 2.30 - 2.49% Weighted average grant date fair value per share $ 0.83 $ 1.09 Grant date fair value of options vested $ 554,575 $ 706,417 Intrinsic value of options exercised $ 2,370,491 $ 559,237 |
Schedule of Restricted Stock Unit Activity | The Company’s restricted stock unit activity for the years ended December 31, 2020 and 2019 is as follows: Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2019 173,335 $ 4.13 Granted 167,500 $ 2.43 Vested (116,665 ) $ (3.86 ) Canceled (7,500 ) $ (2.34 ) Unvested at December 31, 2019 216,670 $ 3.02 Granted 554,251 $ 2.63 Vested (151,251 ) $ 3.16 Canceled (43,748 ) $ 2.43 Unvested at December 31, 2020 575,922 $ 2.65 |
Summary of Stock-Based Compensation Expense | Stock-based compensation expense for the years ended December 31, 2020 and 2019 was comprised of the following: For the Year Ended December 31, Stock-based compensation classified as: 2020 2019 General and administrative $ 556,935 $ 469,714 Production 65,631 70,243 Marketing and selling 65,580 59,486 Research and development 36,232 50,026 $ 724,378 $ 649,469 |
Schedule of Warrant Activity | The following table summarizes the Company’s warrant activity during the years ended December 31, 2020 and 2019: Number of Warrants Weighted Average Exercise Price Warrants outstanding – January 1, 2019 578,996 $ 4.32 Warrants granted 69,766 $ 2.15 Warrants exercised (17,815 ) $ 1.40 Warrants outstanding – December 31, 2019 630,947 $ 4.16 Warrants granted - $ - Warrants exercised (125,001 ) $ 0.76 Warrants outstanding – December 31, 2020 505,946 $ 5.00 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Commitments Under Operating Leases | Future annual minimum rental commitments under operating leases as of December 31, 2020 are as follows: Year Ending December 31, Amount payable 2021 $ 526,339 2022 302,362 2023 311,433 2024 211,734 Thereafter - Total minimum lease payments $ 1,351,868 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Pre-tax Income (Loss) | For the years ended December 31, 2020 and 2019, pre-tax income (loss) was attributed to the following jurisdictions: For the Years Ended December 31, 2020 2019 Domestic operations $ (760,603 ) $ (947,350 ) Foreign operations 150,315 284,265 $ (610,288 ) $ (663,085 ) |
Schedule of (Benefit) Provision for Income Taxes | Set forth below is the (benefit) provision for income taxes for the years ended December 31: For the Years Ended December 31, 2020 2019 Current: Federal $ (26,951 ) $ - State 16,058 19,676 International 149,958 439,662 139,065 459,338 Deferred: Federal (563,107 ) (164,662 ) State (180,059 ) (57,424 ) International 357 - (742,809 ) (222,086 ) Total (benefit) provision for income taxes $ (603,744 ) $ 237,252 |
Schedule of Reconciliation of (Benefit) Provision for Income Taxes Computed at Federal Statutory Rates (Benefit) Provision for Income Taxes | The reconciliation of the (benefit) provision for income taxes computed at federal statutory rates to the (benefit) provision for income taxes for the years ended December 31, 2020 and 2019 are as follows: For the Years Ended December 31, 2020 2019 Provision at federal statutory rates (21% applied to earnings before income taxes) $ (128,161 ) $ (200,212 ) State income taxes, net of federal benefit 7,685 38,764 Other permanent items (164,300 ) 320,208 Research and development credits (364,843 ) (510,568 ) Stock based compensation (178,552 ) (48,499 ) Amortization and impairment 132,934 550,454 Uncertain tax positions 48,492 54,452 Other 43,001 32,653 $ (603,744 ) $ 237,252 |
Schedule of Components of Deferred Taxes | Significant components of deferred taxes as of December 31, 2020 and 2019 were as follows: For the Years Ended December 31, 2020 2019 Deferred tax assets: Reserves $ 23,735 $ 21,677 Deferred compensation 166,740 66,460 Stock compensation 183,742 191,855 Deferred revenue 132,814 126,428 Inventories 212,226 182,189 Credits and loss carryforward 4,314,653 3,794,279 Total deferred tax assets before valuation allowance 5,033,910 4,382,888 Less: valuation allowance - (178,593 ) Total deferred tax assets 5,033,910 4,204,295 Deferred tax liabilities: Property and equipment (229,042 ) (369,004 ) Intangible assets (602,277 ) (527,447 ) Other (327,288 ) (288,021 ) Total deferred tax liabilities (1,158,607 ) (1,184,472 ) Deferred tax assets 3,875,303 3,019,823 Valuation allowance (176,710 ) - Net deferred assets $ 3,698,593 $ 3,019,823 |
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 at December 31, 2018 $ 262,784 Gross increases for tax positions of the current year 54,452 Unrecognized tax benefits balance at December 31, 2019 317,236 Gross increases for tax positions of the current year 54,452 Unrecognized tax benefits balance at December 31, 2020 $ 371,688 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019: For the Year Ended December 31, 2020 2019 Basic and diluted net loss per share: Numerator: Net loss $ (6,544 ) $ (900,337 ) Denominator: Weighted average common shares outstanding - basic 16,512,203 15,148,613 Effect of dilutive securities - - Weighted average common shares outstanding - diluted 16,512,203 15,148,613 Net loss per common share: Basic $ (0.00 ) $ (0.06 ) Diluted $ (0.00 ) $ (0.06 ) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of (Loss) Income from Operations by Reporting Segments | Segment detail for the years ended December 31, 2020 and 2019 is as follows: For the Year Ended December 31, 2020 For the Year Ended December 31, 2029 OSS Bressner Total OSS Bressner Total Revenues $ 33,650,019 $ 18,245,369 $ 51,895,388 $ 40,055,408 $ 18,252,611 $ 58,308,019 Cost of revenues (21,081,787 ) (14,378,987 ) (35,460,774 ) (24,762,812 ) (14,142,944 ) (38,905,756 ) Gross profit 12,568,232 3,866,382 16,434,614 15,292,596 4,109,667 19,402,263 Gross profit % 37.3 % 21.2 % 31.7 % 38.2 % 22.5 % 33.3 % Total operating expenses (13,129,857 ) (3,729,038 ) (16,858,895 ) (16,391,427 ) (3,789,855 ) (20,181,282 ) (Loss) income from operations $ (561,625 ) $ 137,344 $ (424,281 ) $ (1,098,831 ) $ 319,812 $ (779,019 ) |
The Company and Basis of Pres_2
The Company and Basis of Presentation - Additional Information (Details) | Mar. 03, 2021USD ($) | Mar. 01, 2021USD ($)$ / sharesshares | Apr. 27, 2020USD ($)Installment | Apr. 24, 2020USD ($) | Apr. 07, 2020USD ($) | Apr. 30, 2017USD ($) | Jul. 31, 2019USD ($)shares | Mar. 31, 2019USD ($) | Feb. 28, 2018USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Apr. 28, 2020USD ($) | Apr. 09, 2020EUR (€) | Jun. 19, 2019USD ($) | Oct. 31, 2018 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Net proceeds from issuance of initial public offering | $ 16,100,000 | ||||||||||||||
Proceeds from notes payable | $ 350,000 | ||||||||||||||
Common stock, shares issued | shares | 1,554,546 | 16,684,424 | 16,121,747 | ||||||||||||
Proceeds from issuance of common stock | $ 2,488,148 | $ 2,700,714 | |||||||||||||
Loan amount | $ 5,664,188 | ||||||||||||||
Cash and cash equivalents | 6,316,921 | 5,185,321 | |||||||||||||
Working capital | 16,266,293 | ||||||||||||||
Operating loss | 424,281 | 779,019 | |||||||||||||
Cash used in operating activities | 250,173 | $ (2,374,868) | |||||||||||||
Non-interest bearing convertible note | $ 6,000,000 | ||||||||||||||
Original issue discount rate | 10.00% | ||||||||||||||
Tranche One | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Non-interest bearing convertible note | $ 3,000,000 | ||||||||||||||
Debt maturity term | 3 months | ||||||||||||||
Tranche Two | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Non-interest bearing convertible note | $ 3,000,000 | ||||||||||||||
Debt maturity term | 7 months | ||||||||||||||
Number of note repayable installments | Installment | 22 | ||||||||||||||
Direct Offering | Subsequent Event | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Estimated proceeds from Issuance of common stock after commissions and offering costs | $ 9,250,000 | $ 9,250,000 | |||||||||||||
Proceeds from issuance of stock, net of issuance costs, Shares | shares | 1,497,006 | ||||||||||||||
Sale of stock, price per share | $ / shares | $ 6.68 | ||||||||||||||
Follow-on Public Offering | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Aggregate of common stock preferred stock debt securities and warrants securities | $ 100,000,000 | ||||||||||||||
Members of Board of Directors and Others | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Proceeds from notes payable | $ 1,500,000 | ||||||||||||||
Management | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Estimated savings from cost reduction plan | $ 2,500,000 | ||||||||||||||
Senior Secured Convertible Promissory Notes | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Debt instrument, face amount | $ 3,000,000 | ||||||||||||||
Debt instrument, interest rate | 10.00% | ||||||||||||||
Paycheck Protection Program | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Loan amount | $ 1,500,000 | ||||||||||||||
Bressner Technology | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Percentage of shares acquired | 100.00% | ||||||||||||||
Bressner Technology GmbH | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Debt instrument, face amount | € | € 500,000 | ||||||||||||||
Cash and cash equivalents | $ 1,062,818 | ||||||||||||||
SkyScale, LLC | |||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |||||||||||||||
Member contribution to joint venture | $ 750,000 | ||||||||||||||
Interest received in joint venture | 50.00% |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)CustomerContract | Dec. 31, 2019USD ($)CustomerContract | Dec. 31, 2020EUR (€) | |
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 | 4,816,433 | |||
Allowance for doubtful accounts receivable | 32,120 | $ 14,000 | ||
Unbilled receivables | 106 | 25,432 | ||
Impairment of goodwill | 0 | 1,697,394 | ||
Impairment of intangible and long-lived assets | 0 | |||
Amount of warranties sold | $ 51,895,388 | 58,308,019 | ||
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. | |||
Term of customers product warranty | 1 year | |||
Deferred revenue to be recognize | $ 407,768 | |||
Unearned revenue recognition period | 2020 through 2024 | |||
Purchase price allocation period | 1 year | |||
Amortization of debt discount | $ 376,004 | 21,303 | ||
Advertising costs | 377,105 | 352,080 | ||
Benefit in income tax provision | 41,561 | |||
Additional interim tax benefit | $ (603,744) | 237,252 | ||
ASU 2016-02 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, ASU, adopted | true | true | ||
Change in accounting principle, ASU, adoption date | Dec. 15, 2021 | Dec. 15, 2021 | ||
ASU 2016-13 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, ASU, adopted | true | true | ||
Change in accounting principle, ASU, adoption date | Dec. 15, 2022 | Dec. 15, 2022 | ||
ASU 2014-09 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, ASU, adopted | true | true | ||
Change in accounting principle, ASU, adoption date | Jan. 1, 2019 | Jan. 1, 2019 | ||
ASU 2018-07 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, ASU, adopted | true | true | ||
Change in accounting principle, ASU, adoption date | Dec. 31, 2020 | Dec. 31, 2020 | ||
ASU 2016-15 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, ASU, adopted | true | true | ||
Change in accounting principle, ASU, adoption date | Dec. 15, 2018 | Dec. 15, 2018 | ||
ASU 2017-11 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, ASU, adopted | true | true | ||
Change in accounting principle, ASU, adoption date | Apr. 1, 2020 | Apr. 1, 2020 | ||
ASU 2019-12 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, ASU, adopted | true | true | ||
Change in accounting principle, ASU, adoption date | Jul. 1, 2020 | Jul. 1, 2020 | ||
Additional interim tax benefit | $ 446,099 | |||
Change in accounting principle, ASU, early adopted | true | true | ||
Interest Expense | ||||
Significant Accounting Policies [Line Items] | ||||
Amortization of debt discount | $ 376,006 | 21,303 | ||
Product Warranty | ||||
Significant Accounting Policies [Line Items] | ||||
Amount of warranties sold | 373,847 | 377,768 | ||
Revenue recognized | 401,915 | 392,532 | ||
Deferred revenue | 407,768 | 394,571 | ||
Vendor Managed Inventory Program Agreement | ||||
Significant Accounting Policies [Line Items] | ||||
Amount of warranties sold | 6,692,752 | 10,075,756 | ||
Product sold but held in inventory | $ 1,482,186 | $ 459,893 | ||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 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 | |||
Contracts with customers payment terms | 60 days | |||
Term of customers product extended warranty | 5 years | |||
Percentage of uncertain income tax positions not recognized | 50.00% | |||
Sales Revenue, Net | Customer Concentration Risk | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, number of customers | Customer | 2 | 2 | ||
Concentration risk, percentage | 24.00% | 41.00% | ||
Cost of Goods, Total | Supplier Concentration Risk | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 18.30% | 11.00% | ||
Net Trade Accounts Receivable | Customer Concentration Risk | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 64.00% | 72.00% | ||
Bressner | ||||
Significant Accounting Policies [Line Items] | ||||
Maximum basic deposit coverage per owner | € | € 100,000 | |||
Aggregate amount of deposits coverage in excess of insurance limits | $ 818,256 | € 669,160 | ||
Bressner | Designated as Hedging Instrument | ||||
Significant Accounting Policies [Line Items] | ||||
Number of foreign exchange contracts | Contract | 0 | 0 |
Significant Accounting Polici_5
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, 2020 | Dec. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | $ 51,895,388 | $ 58,308,019 |
Customized Computers and Flash Arrays | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 32,309,533 | 37,518,074 |
In-flight Entertainment & Connectivity | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 1,340,485 | 2,537,334 |
Value-added Reseller with Minimal Customization | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 18,245,370 | 18,252,611 |
Domestic | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 22,914,575 | 21,940,869 |
Domestic | Customized Computers and Flash Arrays | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 21,698,400 | 19,436,784 |
Domestic | In-flight Entertainment & Connectivity | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 1,123,664 | 2,030,596 |
Domestic | Value-added Reseller with Minimal Customization | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 92,511 | 473,489 |
International | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 28,980,813 | 36,367,150 |
International | Customized Computers and Flash Arrays | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 10,611,133 | 18,081,290 |
International | In-flight Entertainment & Connectivity | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | 216,821 | 506,738 |
International | Value-added Reseller with Minimal Customization | ||
Disaggregation Of Revenue [Line Items] | ||
Operating segment revenues | $ 18,152,859 | $ 17,779,122 |
Long-Lived Intangible Assets -
Long-Lived Intangible Assets - Additional Information (Details) | Aug. 31, 2018USD ($)yr$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 30, 2019USD ($) |
Long Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 7,120,510 | $ 7,120,510 | ||
Impairment of goodwill | 0 | 1,697,394 | ||
Amortization expense | 683,935 | $ 984,065 | ||
Concept Development Inc | ||||
Long Lived Intangible Assets [Line Items] | ||||
Business acquisition date | Aug. 31, 2018 | |||
Percentage of shares acquired | 100.00% | |||
Cash paid to acquire businesses | $ 646,759 | |||
Common stock shares issued | shares | 1,266,364 | |||
Common stock shares issued, Value | $ 4,194,673 | |||
Share price | $ / shares | $ 3.63 | |||
Goodwill | $ 3,100,361 | $ 1,195,000 | ||
Identified intangible assets | $ 1,770,000 | $ 575,000 | ||
Impairment of goodwill | $ 1,697,394 | |||
Concept Development Inc | Discount Rate | ||||
Long Lived Intangible Assets [Line Items] | ||||
Business combination fair value assumption equity interest measurement input | 8.75 | |||
Concept Development Inc | Lack of Marketability | ||||
Long Lived Intangible Assets [Line Items] | ||||
Business combination fair value assumption equity interest measurement input | yr | 1 |
Long-Lived Intangible Assets _2
Long-Lived Intangible Assets - Schedule of Change in Identified Intangible Assets (Details) - Concept Development Inc - USD ($) | 1 Months Ended | |
Apr. 30, 2019 | Aug. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||
Identified intangible assets | $ 575,000 | $ 1,770,000 |
Identified intangible assets, change | (1,195,000) | |
Customer Lists and Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Identified intangible assets | 470,000 | 1,470,000 |
Identified intangible assets, change | (1,000,000) | |
Trade Name | ||
Finite Lived Intangible Assets [Line Items] | ||
Identified intangible assets | 90,000 | 100,000 |
Identified intangible assets, change | (10,000) | |
Non-Compete | ||
Finite Lived Intangible Assets [Line Items] | ||
Identified intangible assets | 15,000 | $ 200,000 |
Identified intangible assets, change | $ (185,000) |
Long-Lived Intangible Assets _3
Long-Lived Intangible Assets - Schedule of Definite Lived Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Gross | $ 3,538,793 | $ 3,538,793 |
Definite lived intangible assets, Accumulated Amortization | (2,876,536) | (2,192,601) |
Definite lived intangible assets, Net | 662,257 | 1,346,192 |
Customer Lists and Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Gross | 2,084,515 | 2,084,515 |
Definite lived intangible assets, Accumulated Amortization | (1,578,178) | (1,109,681) |
Definite lived intangible assets, Net | $ 506,337 | $ 974,834 |
Customer Lists and Relationships | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 36 months | 36 months |
Definite lived intangible assets, Remaining Months | 10 months | 22 months |
Customer Lists and Relationships | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 60 months | 60 months |
Definite lived intangible assets, Remaining Months | 32 months | 44 months |
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 days | 0 days |
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 | 10 months | |
Definite lived intangible assets, Gross | $ 447,274 | 447,274 |
Definite lived intangible assets, Accumulated Amortization | (355,742) | (217,570) |
Definite lived intangible assets, Net | $ 91,532 | $ 229,704 |
Trade name, Trademarks & other | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 24 months | 24 months |
Definite lived intangible assets, Remaining Months | 8 months | |
Trade name, Trademarks & other | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 36 months | 36 months |
Definite lived intangible assets, Remaining Months | 22 months | |
Non-Compete | ||
Finite Lived Intangible Assets [Line Items] | ||
Definite lived intangible assets, Expected Life | 36 months | 36 months |
Definite lived intangible assets, Remaining Months | 10 months | 22 months |
Definite lived intangible assets, Gross | $ 246,797 | $ 246,797 |
Definite lived intangible assets, Accumulated Amortization | (182,409) | (105,143) |
Definite lived intangible assets, Net | $ 64,388 | $ 141,654 |
Long-Lived Intangible Assets _4
Long-Lived Intangible Assets - Schedule of Amortization Expense of Definite Lived Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2021 | $ 556,872 | |
2022 | 63,231 | |
2023 | 42,154 | |
Definite lived intangible assets, Net | $ 662,257 | $ 1,346,192 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts receivable gross | $ 7,491,503 | $ 11,681,157 |
Less: allowance for doubtful accounts | (33,120) | (14,000) |
Accounts receivable, total | 7,458,383 | 11,667,157 |
Accounts Receivable | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts receivable gross | 7,491,397 | 11,655,725 |
Unbilled Receivables | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Accounts receivable gross | $ 106 | $ 25,432 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable Net Current [Abstract] | ||
Provision for bad debt expense | $ 20,000 | $ 7,263 |
Inventories - Summary of Invent
Inventories - Summary of Inventories, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,210,327 | $ 2,478,882 |
Sub-assemblies | 255,699 | 1,857,004 |
Work-in-process | 407,328 | 493,276 |
Finished goods | 4,424,603 | 3,087,529 |
Inventory gross | 10,297,957 | 7,916,691 |
Less: reserves for obsolete and slow-moving inventories | (650,453) | (547,335) |
Inventory net | $ 9,647,504 | $ 7,369,356 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 6,939,894 | $ 6,076,589 |
Less: accumulated depreciation and amortization | (3,452,716) | (2,508,025) |
Property plant and equipment, net excluding construction in progress and software implementation | 3,487,178 | 3,568,564 |
Computers and Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 748,392 | 633,546 |
Furniture and Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 329,725 | 340,801 |
Manufacturing Equipment and Engineering Tools | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,710,784 | 2,501,020 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 943,194 | 892,097 |
Software Implementation | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,203,484 | $ 1,709,125 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 4,315 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Depreciation and amortization | $ 922,597 | $ 671,223 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities And Other Liabilities [Abstract] | ||
Accrued compensation and related liabilities | $ 932,988 | $ 1,621,177 |
Deferred revenue and customer deposits | 1,096,672 | 1,260,126 |
Warranty reserve | 425,636 | 424,011 |
Deferred rent | 312,909 | 373,354 |
Other accrued expenses | 713,239 | 928,764 |
Accrued expenses and other liabilities | $ 3,481,444 | $ 4,607,432 |
Debt - Additional Information (
Debt - Additional Information (Details) | Jul. 01, 2020 | May 11, 2020USD ($) | Apr. 24, 2020USD ($)$ / shares | Apr. 20, 2020USD ($)$ / shares | Apr. 09, 2020EUR (€) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Apr. 30, 2019USD ($)Individual$ / sharesshares | Apr. 30, 2019EUR (€)Individual | Sep. 30, 2017USD ($) | Sep. 30, 2017EUR (€) | Dec. 31, 2020USD ($)LineofCreditTermLoan$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2020EUR (€)LineofCreditTermLoan | Dec. 31, 2019EUR (€) | Sep. 30, 2019EUR (€) | Jun. 30, 2019EUR (€) | Apr. 30, 2019EUR (€)shares | Sep. 30, 2017EUR (€) |
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 5,664,188 | ||||||||||||||||||
Borrowings from notes payable | $ 350,000 | ||||||||||||||||||
Non-interest bearing convertible note | $ 6,000,000 | ||||||||||||||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Original issue discount rate | 10.00% | ||||||||||||||||||
Debt discount amortization | $ 376,004 | $ 21,303 | |||||||||||||||||
April 2019 Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 63,188 | 241,054 | |||||||||||||||||
Debt instrument, face amount | $ 350,000 | ||||||||||||||||||
Debt maturity term | 2 years | 2 years | |||||||||||||||||
Debt instrument, interest rate | 9.50% | 9.50% | |||||||||||||||||
Debt instrument, monthly / quarterly principal and interest payments | $ 16,100 | ||||||||||||||||||
Number of individuals | Individual | 3 | 3 | |||||||||||||||||
Warrants to purchase common stock percentage equal to original principal | 10.00% | 10.00% | |||||||||||||||||
Warrants exercise price | $ / shares | $ 2.15 | ||||||||||||||||||
Warrants to purchase common stock | shares | 16,276 | 16,276 | |||||||||||||||||
Estimated fair value of each warrants | $ / shares | $ 0.90 | ||||||||||||||||||
April 2019 Notes | Exercise Price | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 2.15 | ||||||||||||||||||
April 2019 Notes | Warrants | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value of the warrant issued | $ 14,037 | ||||||||||||||||||
April 2019 Notes | Warrants | Exercise Price | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 2.15 | ||||||||||||||||||
April 2019 Notes | Warrants | Contractual Term | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 5 years | 5 years | |||||||||||||||||
April 2019 Notes | Warrants | Volatility Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 0.4460 | 0.4460 | |||||||||||||||||
April 2019 Notes | Warrants | Dividend Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 0 | 0 | |||||||||||||||||
April 2019 Notes | Warrants | Risk-free Interest Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 0.02307 | 0.02307 | |||||||||||||||||
April 2019 Related Party Notes | Board of Directors | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 206,669 | 791,170 | |||||||||||||||||
Debt instrument, face amount | $ 1,150,000 | ||||||||||||||||||
Debt maturity term | 2 years | 2 years | |||||||||||||||||
Debt instrument, interest rate | 9.50% | 9.50% | |||||||||||||||||
Debt instrument, monthly / quarterly principal and interest payments | $ 52,900 | ||||||||||||||||||
Number of individuals | Individual | 3 | 3 | |||||||||||||||||
Warrants to purchase common stock percentage equal to original principal | 10.00% | 10.00% | |||||||||||||||||
Warrants exercise price | $ / shares | $ 2.15 | ||||||||||||||||||
Warrants to purchase common stock | shares | 53,490 | 53,490 | |||||||||||||||||
Estimated fair value of each warrants | $ / shares | $ 0.90 | ||||||||||||||||||
April 2019 Related Party Notes | Warrants | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value of the warrant issued | $ 46,121 | ||||||||||||||||||
April 2019 Related Party Notes | Warrants | Exercise Price | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 2.15 | ||||||||||||||||||
April 2019 Related Party Notes | Warrants | Contractual Term | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 5 years | 5 years | |||||||||||||||||
April 2019 Related Party Notes | Warrants | Volatility Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 0.4260 | 0.4260 | |||||||||||||||||
April 2019 Related Party Notes | Warrants | Dividend Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 0 | 0 | |||||||||||||||||
April 2019 Related Party Notes | Warrants | Risk-free Interest Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value assumptions | 0.023067 | 0.023067 | |||||||||||||||||
PPP Loan | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 1,499,360 | ||||||||||||||||||
Debt instrument, interest rate | 1.00% | 1.00% | |||||||||||||||||
Debt instrument, maturity date | Apr. 30, 2022 | ||||||||||||||||||
Borrowings from notes payable | $ 1,499,360 | ||||||||||||||||||
Loan forgiveness period | 56 days | 168 days | |||||||||||||||||
Percentage of payroll requirement | 60.00% | ||||||||||||||||||
PPP Loan | Minimum | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Payroll costs exclude compensation of individual employee | $ 100,000 | ||||||||||||||||||
Percentage of reduction in salaries and wages for employees | 25.00% | ||||||||||||||||||
PPP Loan | Maximum | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Percentage of forgiven amount for non-payroll costs | 25.00% | ||||||||||||||||||
Salaries and wages for employees | $ 100,000 | ||||||||||||||||||
PPP Loan | Two Year Promissory Note | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate | 1.00% | ||||||||||||||||||
Debt instrument, maturity date | Apr. 28, 2022 | ||||||||||||||||||
Senior Secured Convertible Promissory Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, face amount | $ 3,000,000 | ||||||||||||||||||
Debt instrument, interest rate | 10.00% | ||||||||||||||||||
Senior Secured Convertible Promissory Notes | Securities Purchase Agreement | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate | 0.00% | ||||||||||||||||||
Debt instrument, maturity date | Apr. 1, 2022 | ||||||||||||||||||
Non-interest bearing convertible note | $ 3,000,000 | $ 6,000,000 | $ 3,000,000 | ||||||||||||||||
Common stock, par value | $ / shares | $ 0.0001 | ||||||||||||||||||
Debt instrument, initial conversion price per share | $ / shares | $ 2.50 | $ 2.50 | |||||||||||||||||
Original issue discount rate | 10.00% | 10.00% | |||||||||||||||||
Debt instrument, aggregate purchase price | $ 2,700,000 | ||||||||||||||||||
Debt instrument, conversion price percentage, eligibility of conversion | 135.00% | ||||||||||||||||||
Monthly amortization payments percentage of initial principal | 0.04545% | ||||||||||||||||||
Debt instrument, redemption price percentage | 105.00% | 110.00% | |||||||||||||||||
Debt instrument, conversion description | Subject to the satisfaction of certain equity conditions set forth in the notes, installment amounts may be satisfied in shares of our common stock, with such installment conversion at a conversion price equal to the lower of (i) the conversion price then in effect and (ii) the greater of (x) the floor price of $1.00 (80% of the Nasdaq market price at date of purchase agreement) and (y) the lower of (I) 82.5% the volume weighted average price of our common stock on the trading day immediately before the applicable installment date and (II) 82.5% of the quotient of (A) the sum of the volume weighted average price of our common stock for each of the three (3) trading days with the lowest volume weighted average price of our common stock during the twenty (20) consecutive trading day period ending and including the trading day immediately prior to the applicable installment date, divided by (B) three (3). | ||||||||||||||||||
Percentage of market price | 80.00% | ||||||||||||||||||
Volume weighted average price of common stock period | 3 days | ||||||||||||||||||
Volume weighted average price period | 20 days | ||||||||||||||||||
Number of trading days, shares pre-delivered | 2 days | ||||||||||||||||||
Debt discount amortization | $ 168,395 | ||||||||||||||||||
Original issue discount rate | $ 316,274 | ||||||||||||||||||
Debt discount amortization | 177,530 | ||||||||||||||||||
Debt discount amortization | $ 30,079 | 21,303 | |||||||||||||||||
Senior Secured Convertible Promissory Notes | Minimum | Securities Purchase Agreement | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt conversion floor price | $ / shares | $ 1 | ||||||||||||||||||
Volume weighted average price percentage | 82.50% | ||||||||||||||||||
Senior Secured Convertible Promissory Notes | Maximum | Securities Purchase Agreement | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Volume weighted average price percentage | 82.50% | ||||||||||||||||||
Bressner Technology GmbH | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Number of term loans outstanding | TermLoan | 3 | 3 | |||||||||||||||||
Debt instrument, face amount | € | € 500,000 | ||||||||||||||||||
Bressner Technology GmbH | Term Loans | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 1,304,063 | € 1,066,446 | |||||||||||||||||
Bressner Technology GmbH | Note Payable Maturing on June 18, 2021 | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 611,406 | 571,095 | € 500,000 | € 508,679 | |||||||||||||||
Debt instrument, face amount | $ 586,189 | € 500,000 | |||||||||||||||||
Debt instrument, interest rate | 1.70% | 1.87% | 1.87% | 1.70% | |||||||||||||||
Debt instrument, maturity date | Jun. 25, 2020 | ||||||||||||||||||
Debt instrument, extended maturity date | Jun. 18, 2021 | ||||||||||||||||||
Bressner Technology GmbH | Note Payable Maturing on March 30, 2021 | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 81,251 | 368,835 | € 66,446 | 328,525 | |||||||||||||||
Debt instrument, face amount | $ 586,189 | € 500,000 | |||||||||||||||||
Debt instrument, interest rate | 2.25% | 2.25% | |||||||||||||||||
Debt instrument, maturity date | Mar. 30, 2021 | Mar. 30, 2021 | |||||||||||||||||
Debt instrument, monthly / quarterly principal and interest payments | $ 24,960 | € 22,232 | |||||||||||||||||
Bressner Technology GmbH | Note Payable Maturing on March 24, 2020 | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | 338,663 | 301,650 | |||||||||||||||||
Debt instrument, face amount | $ 336,810 | € 300,000 | |||||||||||||||||
Debt instrument, interest rate | 1.65% | 1.65% | |||||||||||||||||
Debt instrument, maturity date | Mar. 24, 2020 | ||||||||||||||||||
Bressner Technology GmbH | Note Payable Maturing on January 31, 2020 | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 28,068 | 25,000 | |||||||||||||||||
Debt instrument, face amount | $ 436,272 | € 400,000 | |||||||||||||||||
Debt instrument, interest rate | 2.125% | 2.125% | |||||||||||||||||
Debt instrument, maturity date | Jan. 31, 2020 | Jan. 31, 2020 | |||||||||||||||||
Debt instrument, monthly / quarterly principal and interest payments | $ 28,068 | € 25,000 | |||||||||||||||||
Term Loans | Bressner Technology GmbH | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total balance outstanding | $ 611,406 | € 500,000 | |||||||||||||||||
Debt maturity term | 1 year | ||||||||||||||||||
Debt instrument, interest rate | 1.90% | ||||||||||||||||||
German Institutions | Revolving Credit Facility | Bressner Technology GmbH | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Number of lines of credit | LineofCredit | 2 | 2 | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,690,184 | € 2,200,000 | |||||||||||||||||
Total outstanding balance | € | € 0 | € 0 | |||||||||||||||||
German Institutions | Revolving Credit Facility | Bressner Technology GmbH | Line of Credit Facility One | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit current rate | 3.89% | ||||||||||||||||||
German Institutions | Revolving Credit Facility | Bressner Technology GmbH | Line of Credit Facility Two | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit current rate | 4.00% | ||||||||||||||||||
German Institutions | Revolving Credit Facility | Bressner Technology GmbH | One Million Euros Credit Line | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit facility, maturity date | Jan. 31, 2024 |
Debt - Summary of Outstanding D
Debt - Summary of Outstanding Debt Obligations (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2020EUR (€) | |
Debt Instrument [Line Items] | ||
Balance | $ 5,664,188 | |
Current Portion | 3,619,374 | |
Long-term Portion | $ 2,044,814 | |
PPP Loan | ||
Debt Instrument [Line Items] | ||
Current Interest Rate | 1.00% | 1.00% |
Maturity Date | Apr. 30, 2022 | |
Balance | $ 1,499,360 | |
Long-term Portion | $ 1,499,360 | |
Note Payable - Third Party | ||
Debt Instrument [Line Items] | ||
Current Interest Rate | 9.50% | 9.50% |
Maturity Date | Apr. 30, 2021 | |
Balance | $ 63,188 | |
Current Portion | $ 63,188 | |
Related Party Notes Payable | ||
Debt Instrument [Line Items] | ||
Current Interest Rate | 9.50% | 9.50% |
Maturity Date | Apr. 30, 2021 | |
Balance | $ 206,669 | |
Current Portion | $ 206,669 | |
Convertible Senior Secured Note | ||
Debt Instrument [Line Items] | ||
Current Interest Rate | 10.00% | 10.00% |
Maturity Date | Apr. 30, 2022 | |
Balance | $ 2,590,908 | |
Current Portion | 2,045,454 | |
Long-term Portion | 545,454 | |
Domestic | ||
Debt Instrument [Line Items] | ||
Balance | 4,360,125 | |
Current Portion | 2,315,311 | |
Long-term Portion | 2,044,814 | |
Foreign | ||
Debt Instrument [Line Items] | ||
Balance | 1,304,063 | € 1,066,446 |
Current Portion | $ 1,304,063 | |
Foreign | Note Payable Maturing on June 18, 2021 | ||
Debt Instrument [Line Items] | ||
Current Interest Rate | 1.87% | 1.87% |
Maturity Date | Jun. 30, 2021 | |
Balance | $ 611,406 | € 500,000 |
Current Portion | $ 611,406 | |
Foreign | Note Payable Maturing on March 31, 2021 | ||
Debt Instrument [Line Items] | ||
Current Interest Rate | 2.25% | 2.25% |
Maturity Date | Mar. 31, 2021 | |
Balance | $ 81,251 | € 66,446 |
Current Portion | $ 81,251 | |
Foreign | Note Payable Maturing on April 30, 2021 | ||
Debt Instrument [Line Items] | ||
Current Interest Rate | 1.90% | 1.90% |
Maturity Date | Apr. 30, 2021 | |
Balance | $ 611,406 | € 500,000 |
Current Portion | $ 611,406 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt Obligations (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Current portion, principal | $ 3,619,374 | |
Current portion, less discount | (133,511) | |
Current portion, less loan origination costs | (131,504) | |
Current portion, net liability | 3,354,359 | |
Long-term portion, principal | 2,044,814 | |
Long-term portion, less discount | (6,867) | |
Long-term portion, less loan origination costs | (7,240) | |
Long-term portion, net liability | 2,030,707 | |
Principal | 5,664,188 | |
Less discount | (140,378) | |
Less loan origination costs | (138,744) | |
Net liability | 5,385,066 | |
PPP Loan | ||
Debt Instrument [Line Items] | ||
Long-term portion, principal | 1,499,360 | |
Long-term portion, net liability | 1,499,360 | |
Principal | 1,499,360 | |
Net liability | 1,499,360 | |
Related Parties | ||
Debt Instrument [Line Items] | ||
Current portion, principal | 206,669 | |
Current portion, less discount | (6,726) | $ (23,060) |
Current portion, net liability | 199,943 | |
Long-term portion, less discount | 0 | $ (6,726) |
Principal | 206,669 | |
Less discount | (6,726) | |
Net liability | 199,943 | |
Third Parties | ||
Debt Instrument [Line Items] | ||
Current portion, principal | 63,188 | |
Current portion, less discount | (2,047) | |
Current portion, net liability | 61,141 | |
Principal | 63,188 | |
Less discount | (2,047) | |
Net liability | 61,141 | |
Convertible Note | ||
Debt Instrument [Line Items] | ||
Current portion, principal | 2,045,454 | |
Current portion, less discount | (124,738) | |
Current portion, less loan origination costs | (131,504) | |
Current portion, net liability | 1,789,212 | |
Long-term portion, principal | 545,454 | |
Long-term portion, less discount | (6,867) | |
Long-term portion, less loan origination costs | (7,240) | |
Long-term portion, net liability | 531,347 | |
Principal | 2,590,908 | |
Less discount | (131,605) | |
Less loan origination costs | (138,744) | |
Net liability | 2,320,559 | |
Foreign | ||
Debt Instrument [Line Items] | ||
Current portion, principal | 1,304,063 | |
Current portion, net liability | 1,304,063 | |
Principal | 1,304,063 | |
Net liability | $ 1,304,063 |
Debt - Schedule of Total Future
Debt - Schedule of Total Future Payments under Notes Payable and Related Party Notes Payable (Details) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
2021 | $ 3,619,374 |
2022 | 2,044,814 |
Total minimum payments | 5,664,188 |
Current portion of notes payable | (3,619,374) |
Long-term Portion | 2,044,814 |
2021 | (265,015) |
2022 | (14,107) |
Total minimum payments | (279,122) |
Current portion of notes payable | 265,015 |
Notes payable, net of current portion | (14,107) |
PPP Loan | |
Debt Instrument [Line Items] | |
2022 | 1,499,360 |
Total minimum payments | 1,499,360 |
Long-term Portion | 1,499,360 |
Related Parties | |
Debt Instrument [Line Items] | |
2021 | 206,669 |
Total minimum payments | 206,669 |
Current portion of notes payable | (206,669) |
Third Parties | |
Debt Instrument [Line Items] | |
2021 | 63,188 |
Total minimum payments | 63,188 |
Current portion of notes payable | (63,188) |
Convertible Senior Secured Note | |
Debt Instrument [Line Items] | |
2021 | 2,045,454 |
2022 | 545,454 |
Total minimum payments | 2,590,908 |
Current portion of notes payable | (2,045,454) |
Long-term Portion | 545,454 |
Foreign | |
Debt Instrument [Line Items] | |
2021 | 1,304,063 |
Total minimum payments | 1,304,063 |
Current portion of notes payable | $ (1,304,063) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Jun. 24, 2020$ / sharesshares | Oct. 10, 2017shares | Dec. 31, 2015shares | Dec. 31, 2011shares | Nov. 30, 2008shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Apr. 30, 2019$ / shares | Dec. 18, 2017shares |
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 | $ / shares | $ 0.0001 | $ 0.0001 | |||||||
Common stock voting rights | one vote for each share | ||||||||
Preferred stock, shares outstanding | 0 | ||||||||
Unvested common stock options, net of estimated forfeitures | $ | $ 325,414 | ||||||||
Unearned stock-based compensation expected to be recognized | 2 years 2 months 4 days | ||||||||
April 2019 Notes | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants exercise price | $ / shares | $ 2.15 | ||||||||
April 2019 Notes | Exercise Price | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants exercise price | $ / shares | $ 2.15 | ||||||||
Restricted Stock Units | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares, granted | 554,251 | 167,500 | |||||||
Weighted average exercise price | $ / shares | $ 2.63 | $ 2.43 | |||||||
Unvested common stock options, net of estimated forfeitures | $ | $ 918,475 | ||||||||
Unearned stock-based compensation expected to be recognized | 2 years 2 months 19 days | ||||||||
Number of shares issued during the period | 123,440 | ||||||||
Number of shares retained for income tax purposes | 27,811 | ||||||||
Incentive Stock Options | |||||||||
Class Of Stock [Line Items] | |||||||||
Share price | $ / shares | $ 5.50 | ||||||||
Multiplier for calculating share vested on determined date | 1,177.52 | ||||||||
Cashless Exercise of Stock Options | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of common stock issued | 240,381 | 273,600 | |||||||
2017 Equity Incentive Plan | Restricted Stock Units | |||||||||
Class Of Stock [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Maximum | |||||||||
Class Of Stock [Line Items] | |||||||||
Ownership interest percentage | 10.00% | ||||||||
Options expiration period date of grant | 10 years | ||||||||
Minimum | |||||||||
Class Of Stock [Line Items] | |||||||||
Fair market value of common stock on date of grant | 110.00% | ||||||||
Options expiration period date of grant | 5 years | ||||||||
Mr. Raun | Restricted Stock Units | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares, granted | 412,125 | ||||||||
Vesting period | 3 years | ||||||||
Vesting percentage | 33.33% | ||||||||
Mr. Raun | Incentive Stock Options | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares granted | 412,125 | ||||||||
Weighted average exercise price | $ / shares | $ 2.14 | ||||||||
Common Stock | 2017 Equity Incentive Plan | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares available for grant | 26,235 | ||||||||
Common Stock | Maximum | 2017 Equity Incentive Plan | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares issued | 1,500,000 | ||||||||
2000 Plan | Common Stock | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares granted | 3,000,000 | ||||||||
2011 Plan | Common Stock | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares available for grant | 240,000 | ||||||||
2011 Plan | Common Stock | Maximum | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares granted | 1,500,000 | ||||||||
2011 Plan | Common Stock | Board of Directors | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares available for grant | 0 | ||||||||
Stock options, termination date | Oct. 10, 2017 | ||||||||
2015 Plan | Common Stock | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares available for grant | 790,000 | ||||||||
2015 Plan | Common Stock | Maximum | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares granted | 1,500,000 | ||||||||
2015 Plan | Common Stock | Board of Directors | |||||||||
Class Of Stock [Line Items] | |||||||||
Shares available for grant | 0 | ||||||||
Stock options, termination date | Oct. 10, 2017 | ||||||||
Stock Options | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of common stock issued | 314,236 | 350,587 | |||||||
Proceeds from stock options exercised | $ | $ 86,892 | $ 47,334 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity (Details) - Stock Options - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Outstanding beginning balance | 1,686,444 | 2,018,747 | |
Number of Shares, Granted | 432,125 | 106,000 | |
Number of Shares, Forfeited / Canceled | (38,197) | (62,000) | |
Number of Shares, Exercised | (760,105) | (376,303) | |
Number of Shares, Outstanding ending balance | 1,320,267 | 1,686,444 | 2,018,747 |
Number of Shares, Exercisable ending balance | 842,871 | ||
Number of Shares, Vested and expected to vest ending balance | 1,305,945 | ||
Weighted Average Exercise Price, Outstanding beginning balance | $ 1.13 | $ 1.13 | |
Weighted Average Exercise Price, Granted | 2.17 | 2.14 | |
Weighted Average Exercise Price, Forfeited / Canceled | 2.32 | 2.04 | |
Weighted Average Exercise Price, Exercised | 0.88 | 0.46 | |
Weighted Average Exercise Price, Outstanding ending balance | 1.81 | $ 1.13 | $ 1.13 |
Weighted Average Exercise Price, Exercisable ending balance | 1.56 | ||
Weighted Average Exercise Price, Vested and expected to vest ending balance | $ 1.81 | ||
Weighted Average Remaining Contractual Life (in years), Outstanding balance | 6 years 5 months 4 days | 4 years 10 months 2 days | 4 years 29 days |
Weighted Average Remaining Contractual Life (in years), Exercisable balance | 4 years 9 months 21 days | ||
Weighted Average Remaining Contractual Life (in years), Vested and expected to vest balance | 6 years 4 months 24 days | ||
Aggregate Intrinsic Value, Outstanding balance | $ 2,889,274 | $ 2,013,516 | $ 2,013,516 |
Aggregate Intrinsic Value, Exercisable balance | 2,060,542 | ||
Aggregate Intrinsic Value, Vested and expected to vest balance | $ 2,864,412 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Common Stock Options Outstanding (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares Outstanding | shares | 1,320,267 |
Number of Shares Exercisable | shares | 842,871 |
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 | $ 0.80 |
Number of Shares Outstanding | shares | 309,895 |
Weighted Average Remaining Contractual Life (in years) | 2 years 1 month 24 days |
Weighted Average Exercise Price | $ 0.63 |
Number of Shares Exercisable | shares | 309,895 |
Weighted Average Remaining Contractual Life (in years) | 2 years 1 month 24 days |
Weighted Average Exercise Price | $ 0.63 |
2015 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Exercise Price Range, Lower Limit | 1.78 |
Exercise Price Range, Upper Limit | $ 1.95 |
Number of Shares Outstanding | shares | 424,610 |
Weighted Average Remaining Contractual Life (in years) | 6 years |
Weighted Average Exercise Price | $ 1.74 |
Number of Shares Exercisable | shares | 423,881 |
Weighted Average Remaining Contractual Life (in years) | 6 years |
Weighted Average Exercise Price | $ 1.74 |
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 | 585,762 |
Weighted Average Remaining Contractual Life (in years) | 9 years 3 days |
Weighted Average Exercise Price | $ 2.49 |
Number of Shares Exercisable | shares | 109,095 |
Weighted Average Remaining Contractual Life (in years) | 7 years 8 months 23 days |
Weighted Average Exercise Price | $ 3.48 |
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, 2020 | Dec. 31, 2019 | |
Class Of Stock [Line Items] | ||
Expected term (in years) | 5 years 14 days | |
Expected volatility, minimum | 43.50% | 43.70% |
Expected volatility, maximum | 47.80% | 44.40% |
Risk-free interest rate | 0.33% | |
Risk-free interest rate, minimum | 2.30% | |
Risk-free interest rate, maximum | 2.49% | |
Weighted average grant date fair value per share | $ 0.83 | $ 1.09 |
Grant date fair value of options vested | $ 554,575 | $ 706,417 |
Intrinsic value of options exercised | $ 2,370,491 | $ 559,237 |
Minimum | ||
Class Of Stock [Line Items] | ||
Expected term (in years) | 4 years 7 months 6 days | |
Maximum | ||
Class Of Stock [Line Items] | ||
Expected term (in years) | 5 years 10 months 24 days |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Outstanding beginning balance | 216,670 | 173,335 |
Number of Shares, Granted | 554,251 | 167,500 |
Number of shares, Vested | (151,251) | (116,665) |
Number of Shares, Canceled | (43,748) | (7,500) |
Number of Shares, Outstanding ending balance | 575,922 | 216,670 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ 3.02 | $ 4.13 |
Weighted Average Grant Date Fair Value, Granted | 2.63 | 2.43 |
Weighted Average Grant Date Fair Value, Vested | 3.16 | (3.86) |
Weighted Average Grant Date Fair Value, Canceled | 2.43 | (2.34) |
Weighted Average Grant Date Fair Value / Exercise Price, Outstanding ending balance | $ 2.65 | $ 3.02 |
Stockholders' Equity - Summar_4
Stockholders' Equity - Summary of Stock-Based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 724,378 | $ 649,469 |
General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 556,935 | 469,714 |
Production | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 65,631 | 70,243 |
Marketing and Selling | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 65,580 | 59,486 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 36,232 | $ 50,026 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Warrant Activity (Details) - Warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Class Of Stock [Line Items] | ||
Number of Shares, Beginning Warrants outstanding | 630,947 | 578,996 |
Number of Shares, Warrants granted | 69,766 | |
Number of Shares, Warrants exercised | (125,001) | (17,815) |
Number of Shares, Ending Warrants outstanding | 505,946 | 630,947 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | $ 4.16 | $ 4.32 |
Weighted Average Exercise Price, Warrant granted | 2.15 | |
Weighted Average Exercise Price, Warrant exercised | 0.76 | 1.40 |
Weighted Average Grant Date Fair Value / Exercise Price, Outstanding ending balance | $ 5 | $ 4.16 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | ||
Defined contribution plan name | 401(k) | |
Employee pre-tax earnings | 20.00% | |
Maximum pretax contribution per employee | 100.00% | 100.00% |
Defined contribution plan, employer matching contribution, percent | 5.00% | 5.00% |
Contributions made by company | $ 124,993 | $ 376,878 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) | |
Operating Leased Assets [Line Items] | ||
Operating lease, rent expense | $ | $ 673,089 | $ 692,158 |
Offices, Manufacturing and Warehouse Facility | Bressner Technology | ||
Operating Leased Assets [Line Items] | ||
Operating lease, area | 8,073 | |
Offices, Manufacturing and Warehouse Facility | Escondido, California | ||
Operating Leased Assets [Line Items] | ||
Operating lease, area | 29,342 | |
Operating lease modified date | 2019-02 | |
Operating lease, expiration date | Aug. 31, 2024 | |
Offices, Manufacturing and Warehouse Facility | Salt Lake City, Utah | ||
Operating Leased Assets [Line Items] | ||
Operating lease, area | 3,208 | |
Offices, Manufacturing and Warehouse Facility | Irvine, California | ||
Operating Leased Assets [Line Items] | ||
Operating lease, area | 12,880 | |
Operating lease, expiration date | Jun. 30, 2021 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Rental Commitments Under Operating Leases (Details) | Dec. 31, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2021 | $ 526,339 |
2022 | 302,362 |
2023 | 311,433 |
2024 | 211,734 |
Total minimum lease payments | $ 1,351,868 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Aug. 01, 2016 | Apr. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Marketing and selling | $ 4,120,778 | $ 5,138,762 | ||
Interest expense on all the related party | $ 50,298 | 67,197 | ||
Former Chief Executive Officer of Magma | ||||
Related Party Transaction [Line Items] | ||||
Management service, description | The agreement calls for payments of $180,000 per year for the first two years paid in monthly installments. In year three, the amount is reduced to $37,500 for the year paid in monthly installments. Additionally, the Company granted 30,000 options in conjunction with execution of this agreement. | |||
Payments of management services for first two years | $ 180,000 | |||
Annual management services fees reduced to amount in year three | $ 37,500 | |||
Options granted | 30,000 | |||
Payments of management services | $ 0 | 21,875 | ||
Members of Board of Directors | Credit Facility | ||||
Related Party Transaction [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 4,000,000 | |||
Debt instrument, face amount | 1,150,000 | |||
Other Shareholders | Credit Facility | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument, face amount | $ 350,000 | |||
Members of Board of Directors and Other Shareholders | Credit Facility | ||||
Related Party Transaction [Line Items] | ||||
Debt maturity term | 2 years | |||
Debt instrument, interest rate | 9.50% | |||
Debt instrument, monthly / quarterly principal and interest payments | $ 69,000 | |||
Warrants to purchase common stock percentage equal to original principal | 10.00% | |||
Warrants exercise price | $ 2.15 | |||
Warrants to purchase common stock | 69,766 | |||
Loan origination fee, percentage | 1.00% | |||
Monthly commitment fee, percentage | 0.25% | |||
Members of Board of Directors and Other Shareholders | Credit Facility | Warrants | ||||
Related Party Transaction [Line Items] | ||||
Fair value of the warrant issued | $ 60,158 | |||
Board of Directors | ||||
Related Party Transaction [Line Items] | ||||
Marketing and selling | 33,000 | 40,006 | ||
Board of directors fees including stock-based Compensation | 271,200 | 160,726 | ||
Related Law Firm | General and Administrative | ||||
Related Party Transaction [Line Items] | ||||
Legal Fees | $ 9,000 | $ 37,800 |
Income Taxes - Schedule of Pre-
Income Taxes - Schedule of Pre-tax Income (Loss) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Domestic operations | $ (760,603) | $ (947,350) |
Foreign operations | 150,315 | 284,265 |
Pre-tax income (loss) | $ (610,288) | $ (663,085) |
Income Taxes - Schedule of (Ben
Income Taxes - Schedule of (Benefit) Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||
Federal | $ (26,951) | |
State | 16,058 | $ 19,676 |
International | 149,958 | 439,662 |
Current income tax (benefit) expense | 139,065 | 459,338 |
Deferred: | ||
Federal | (563,107) | (164,662) |
State | (180,059) | (57,424) |
International | 357 | |
Deferred income tax (benefit) expense | (742,809) | (222,086) |
Total (benefit) provision for income taxes | $ (603,744) | $ 237,252 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of (Benefit) Provision for Income Taxes Computed at Federal Statutory Rates (Benefit) Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision at federal statutory rates (21% applied to earnings before income taxes) | $ (128,161) | $ (200,212) |
State income taxes, net of federal benefit | 7,685 | 38,764 |
Other permanent items | (164,300) | 320,208 |
Research and development credits | (364,843) | (510,568) |
Stock based compensation | (178,552) | (48,499) |
Amortization and impairment | 132,934 | 550,454 |
Uncertain tax positions | 48,492 | 54,452 |
Other | 43,001 | 32,653 |
Total (benefit) provision for income taxes | $ (603,744) | $ 237,252 |
Income Taxes - Schedule of Re_2
Income Taxes - Schedule of Reconciliation of (Benefit) Provision for Income Taxes Computed at Federal Statutory Rates (Benefit) Provision for Income Taxes (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Corporate tax rate | 21.00% | 21.00% |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Taxes (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Reserves | $ 23,735 | $ 21,677 |
Deferred compensation | 166,740 | 66,460 |
Stock compensation | 183,742 | 191,855 |
Deferred revenue | 132,814 | 126,428 |
Inventories | 212,226 | 182,189 |
Credits and loss carryforward | 4,314,653 | 3,794,279 |
Total deferred tax assets before valuation allowance | 5,033,910 | 4,382,888 |
Less: valuation allowance | (178,593) | |
Total deferred tax assets | 5,033,910 | 4,204,295 |
Deferred tax liabilities: | ||
Property and equipment | (229,042) | (369,004) |
Intangible assets | (602,277) | (527,447) |
Other | (327,288) | (288,021) |
Total deferred tax liabilities | (1,158,607) | (1,184,472) |
Deferred tax assets | 3,875,303 | 3,019,823 |
Valuation allowance | (176,710) | |
Net deferred assets | $ 3,698,593 | $ 3,019,823 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||
Unrecognized tax benefits | $ 371,688 | $ 317,236 | $ 262,784 | |
Net deferred tax assets | 3,698,593 | 3,019,823 | ||
Deferred tax assets tax credit carryforwards | 3,185,600 | |||
Deferred tax assets operating loss carryforwards | 1,474,896 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 4,916,876 | 3,934,533 | $ 1,111,176 | |
Percentage of taxable income for offsetting operating loss carryforwards | 80.00% | |||
Tax credit carryforwards | $ 1,706,344 | 1,430,122 | ||
Tax credit carry forward expiration year | 2026 | |||
Federal | Other Accrued Expenses and Other Liabilities | ||||
Operating Loss Carryforwards [Line Items] | ||||
Unrecognized tax benefits | $ 371,688 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 2,366,620 | |||
Tax credit carryforwards | $ 1,479,256 | $ 1,290,046 |
Income Taxes - Schedule of Re_3
Income Taxes - Schedule of Reconciliation Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits balance at beginning of period | $ 317,236 | $ 262,784 |
Gross increases for tax positions of the current year | 54,452 | 54,452 |
Unrecognized tax benefits balance at end of period | $ 371,688 | $ 317,236 |
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, 2020 | Dec. 31, 2019 | |
Numerator: | ||
Net loss | $ (6,544) | $ (900,337) |
Denominator: | ||
Weighted average common shares outstanding - basic | 16,512,203 | 15,148,613 |
Weighted average common shares outstanding - diluted | 16,512,203 | 15,148,613 |
Net loss per common share: | ||
Basic | $ 0 | $ (0.06) |
Diluted | $ 0 | $ (0.06) |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)Segment | Dec. 31, 2019 | |
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Number of Reportable Segments | Segment | 2 | |
Germany | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Exception of Long-Lived Assets | $ | $ 238,211 | |
Revenue | Customer Concentration Risk | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Concentration risk, percentage | 24.00% | 41.00% |
Revenue | Customer Concentration Risk | Non-U.S. | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Concentration risk, percentage | 56.00% | 62.00% |
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, 2020 | Dec. 31, 2019 | |
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Revenue | $ 51,895,388 | $ 58,308,019 |
Cost of revenues | (35,460,774) | (38,905,756) |
Gross profit | $ 16,434,614 | $ 19,402,263 |
Gross profit % | 31.70% | 33.30% |
Total operating expenses | $ (16,858,895) | $ (20,181,282) |
Income (loss) from operations | (424,281) | (779,019) |
OSS Segment | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Revenue | 33,650,019 | 40,055,408 |
Cost of revenues | (21,081,787) | (24,762,812) |
Gross profit | $ 12,568,232 | $ 15,292,596 |
Gross profit % | 37.30% | 38.20% |
Total operating expenses | $ (13,129,857) | $ (16,391,427) |
Income (loss) from operations | (561,625) | (1,098,831) |
Bressner Segment | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Revenue | 18,245,369 | 18,252,611 |
Cost of revenues | (14,378,987) | (14,142,944) |
Gross profit | $ 3,866,382 | $ 4,109,667 |
Gross profit % | 21.20% | 22.50% |
Total operating expenses | $ (3,729,038) | $ (3,789,855) |
Income (loss) from operations | $ 137,344 | $ 319,812 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | Mar. 03, 2021 | Mar. 01, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Direct Offering | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Proceeds from issuance of stock, net of issuance costs, Shares | 1,497,006 | |||
Common stock, par value | $ 0.0001 | |||
Sale of stock, price per share | $ 6.68 | |||
Estimated proceeds from Issuance of common stock after commissions and offering costs | $ 9,250,000 | $ 9,250,000 | ||
Percentage of placement agents fee | 7.00% |