Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Rubicon Technology, Inc. | |
Entity Central Index Key | 1,410,172 | |
Trading Symbol | RBCN | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,732,682 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 18,021 | $ 17,672 |
Restricted cash | 173 | 163 |
Accounts receivable, net | 679 | 2,585 |
Inventories | 4,092 | 8,000 |
Other inventory supplies | 1,052 | 1,486 |
Prepaid expenses and other current assets | 448 | 1,082 |
Assets held for sale | 15,711 | 14,761 |
Total current assets | 40,176 | 45,749 |
Property and equipment, net | 1,307 | 7,110 |
Other assets | 154 | |
Total assets | 41,483 | 53,013 |
Liabilities and stockholders' equity | ||
Accounts payable | 711 | 948 |
Accrued payroll | 201 | 182 |
Accrued and other current liabilities | 488 | 602 |
Corporate income and franchise taxes | 505 | 568 |
Accrued real estate taxes | 214 | 241 |
Advance payments | 73 | 23 |
Total current liabilities | 2,192 | 2,564 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 5,000,000 undesignated shares authorized, no shares issued or outstanding | ||
Common stock, $0.001 par value, 8,200,000 shares authorized and 2,901,800 and 2,860,367 shares issued; 2,724,316 and 2,682,883 shares outstanding | 29 | 29 |
Additional paid-in capital | 375,515 | 374,903 |
Treasury stock, at cost, 177,484 shares | (12,148) | (12,148) |
Accumulated other comprehensive loss | (10) | (30) |
Accumulated deficit | (324,095) | (312,305) |
Total stockholders' equity | 39,291 | 50,449 |
Total liabilities and stockholders' equity | $ 41,483 | $ 53,013 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, undesignated shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 8,200,000 | 8,200,000 |
Common stock, shares issued | 2,901,800 | 2,860,367 |
Common stock, shares outstanding | 2,724,316 | 2,682,883 |
Treasury stock, shares | 177,484 | 177,484 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,345 | $ 7,086 | $ 3,667 | $ 14,908 |
Cost of goods sold | 1,537 | 18,732 | 8,276 | 36,024 |
Gross loss | (192) | (11,646) | (4,609) | (21,116) |
Operating expenses: | ||||
General and administrative | 812 | 1,709 | 3,921 | 6,171 |
Sales and marketing | 141 | 395 | 579 | 1,147 |
Research and development | 50 | 803 | 887 | 2,034 |
Loss (gain) on disposal of assets | (46) | 1,135 | 126 | |
Long-lived asset impairment charges | 10,216 | 675 | 10,481 | |
Loss from operations | (1,149) | (24,769) | (11,806) | (41,075) |
Other income (expense): | ||||
Interest income | 39 | 9 | 73 | 52 |
Interest expense | (28) | (98) | ||
Realized (loss) gain on foreign currency translation | 8 | (229) | 27 | 237 |
Total other income (expense) | 47 | (248) | 100 | 191 |
Loss before income taxes | (1,102) | (25,017) | (11,706) | (40,884) |
Income tax (expense) benefit | (7) | 216 | (85) | 541 |
Net loss | $ (1,109) | $ (24,801) | $ (11,791) | $ (40,343) |
Net loss per common share | ||||
Basic | $ (0.41) | $ (9.40) | $ (4.37) | $ (15.30) |
Diluted | $ (0.41) | $ (9.40) | $ (4.37) | $ (15.30) |
Weighted average common shares outstanding used in computing net loss per common share | 2,716,994 | 2,637,452 | 2,696,008 | 2,637,452 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (1,109) | $ (24,801) | $ (11,791) | $ (40,343) |
Other comprehensive income (loss): | ||||
Unrealized gain on investments, net of tax | 12 | 5 | ||
Unrealized gain (loss) on currency translation | (2) | 8 | 2 | |
Other comprehensive income (loss) | (2) | 20 | 7 | |
Comprehensive loss | $ (1,109) | $ (24,803) | $ (11,771) | $ (40,336) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (11,791) | $ (40,343) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 1,023 | 4,919 |
Net loss on disposal of assets | 1,135 | 126 |
Long-lived asset impairment charges | 675 | 10,481 |
Stock-based compensation | 786 | 1,081 |
Deferred taxes | (554) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,907 | (240) |
Inventories | 3,907 | 11,031 |
Other inventory supplies | 314 | 638 |
Prepaid expenses and other assets | 789 | 1,638 |
Accounts payable | (241) | (1,045) |
Accrued payroll | 16 | 1,265 |
Corporate income and franchise taxes | (63) | (42) |
Advanced payments | 50 | 457 |
Accrued and other current liabilities | (140) | (891) |
Net cash used in operating activities | (1,633) | (11,479) |
Cash flows from investing activities | ||
Purchases of property and equipment | (595) | |
Proceeds from disposal of assets | 2,144 | 190 |
Purchases of investments | (24) | (24) |
Proceeds from sale of investments | 37 | 8,924 |
Net cash provided by investing activities | 2,157 | 8,495 |
Cash flows from financing activities | ||
Net change in short-term borrowings | (1,500) | |
Taxes paid related to net share settlement of equity awards | (173) | (1) |
Restricted cash | (11) | (6) |
Net cash used in financing activities | (184) | (1,507) |
Net effect of currency translation | 9 | (355) |
Net increase (decrease) in cash and cash equivalents | 349 | (4,846) |
Cash and cash equivalents, beginning of period | 17,672 | 21,216 |
Cash and cash equivalents, end of period | $ 18,021 | $ 16,370 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Interim financial data The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements and should be read in conjunction with Rubicon Technology, Inc.’s (the “Company”) annual report filed on Form 10-K, for the fiscal year ended December 31, 2016. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the results of operations have been included. Consolidated operating results for the three and nine months periods ended September 30, 2017 are not necessarily indicative of results that may be expected for the year ending December 31, 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, Rubicon Sapphire Technology (Malaysia) SDN BHD, and Rubicon Technology Hong Kong Limited. All intercompany transactions and balances have been eliminated in consolidation. Foreign currency translation and transactions Rubicon Technology Worldwide LLC and Rubicon Technology Hong Kong Limited’s assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates and capital accounts at historical exchange rates. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. Translation adjustments resulting from fluctuations in exchange rates for Rubicon Technology Worldwide LLC and Rubicon Technology Hong Kong Limited are recorded as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity. The Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon Sapphire Technology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Non-monetary assets are translated at historical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for Rubicon Sapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the period. The Company records these gains and losses in other income (expense). Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other than the functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination of net income (loss) for the period. The Company records these gains and losses in other income (expense). Going Concern The Company evaluates whether it is probable that known conditions or events, considered in the aggregate, would raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. If such conditions or events are identified, the Company prepares mitigation plans to alleviate the doubt or a statement of the substantial doubt about the Company’s ability to continue as a going concern. The Company’s negative financial trends of recurring operating losses and negative cash flow from operating activities are considered conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. The Company has plans in place that are considered as probable to effectively mitigate the adverse conditions. Activities around the Company’s restructuring and mitigation plans are more fully disclosed below under assets held for sale and long-lived assets. Investments When the Company invests available cash, it primarily invests it in investment grade commercial paper, corporate notes, FDIC guaranteed certificates of deposit, common stock and government securities. Investments classified as available-for-sale securities are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive loss. Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the Consolidated Statement of Operations. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations, are classified as short-term. The Company reviews its available-for-sale securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement of Operations. Accounts receivable The majority of the Company’s accounts receivable is due from manufacturers serving the optical systems and specialty electronics devices industries. Credit is extended based on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time past due, the customer’s current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible, and payments subsequently received on such receivables are recorded as a reduction to bad debt expense. The following table shows the activity of the allowance for doubtful accounts: September 30, 2017 December 31, 2016 (in thousands) Beginning balance $ 31 $ 389 Net allowance adjustments (20 ) (235 ) Accounts charged off, less recoveries (4 ) (123 ) Ending balance $ 7 $ 31 Inventories Inventories are valued at the lower of cost or market. Raw materials cost is determined using the first-in, first-out method, and work-in-process and finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other information. The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventory has remained consistent for all periods presented. At times in 2016, the Company accepted sales orders for core and wafer products at prices lower than cost. Based on these sales prices, the Company recorded for the nine months ended September 30, 2016, a lower of cost or market adjustment which reduced inventory and increased cost of goods sold by $1.1 million. The Company did not record any additional lower of cost or market adjustments for the three and nine months ended September 30, 2017. The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipated sales. Based on this review, the Company determined at June 30, 2017 to lower its expected requirements for raw material inventory supply from five to three years and that it had excess material needed for future production. For the six months ended June 30, 2017, an excess and obsolete adjustment was recorded which reduced inventory and increased cost of goods sold by $2.4 million. The Company did not record any additional excess and obsolete adjustments for the three months ended September 30, 2017. September 30, 2017 December 31, 2016 (in thousands) Raw materials $ 476 $ 3,112 Work-in-process 2,993 4,251 Finished goods 623 637 $ 4,092 $ 8,000 Property and equipment Property and equipment consisted of the following: September 30, 2017 December 31, 2016 (in thousands) Machinery, equipment and tooling $ 6,352 $ 17,769 Leasehold improvements 4,624 4,624 Furniture and fixtures 8 699 Information systems 841 991 Construction in progress 247 263 Total cost 12,072 24,346 Accumulated depreciation and amortization (10,765 ) (17,236 ) Property and equipment, net $ 1,307 $ 7,110 Assets held for sale and long-lived assets When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Company performs an analysis to review the recoverability of the asset’s carrying value. The Company makes estimates of the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques, which assume the highest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible at the measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In the third quarter of 2016, the Company announced its decision to limit its focus to the optical and industrial sapphire markets and to exit the LED market. This resulted in the closing of the Company’s Malaysia facility. The Company evaluated its Malaysia asset portfolio based on assuming an orderly liquidation plan. Based on this review, the Company recorded for the year ended December 31, 2016 an asset impairment charge on its Malaysia machinery, equipment and facilities. In the fourth quarter of 2016, the Company also developed a plan to scale down the remaining operations and sell additional assets that would not be needed. In this regard, the Company identified excess U.S. machinery, equipment and facilities. Based on these reviews, the Company recorded for the year ended December 31, 2016 an asset impairment charge on its Malaysia and U.S. machinery, equipment and facilities of $26.6 million. In the nine months ended September 30, 2017, the Company held auctions and individual assets sales of certain equipment located in Batavia, Illinois, and Malaysia, resulting in the sale of a portion of the excess U.S. and some of the Malaysia equipment classified as (a) assets held for sale or (b) machinery and equipment which had a net book value of $3.1 million. Unsold equipment, including excess crystal growth furnaces, was classified as current assets held for sale at September 30, 2017. The Company is seeking to sell a manufacturing and office facility in Batavia, Illinois, a parcel of land the Company owns in Batavia, Illinois, and a facility in Penang, Malaysia. Although the Company cannot assure the timing of any sales, as it is the Company’s intention to complete these sales within the next twelve-month period, these properties were classified as current assets held for sale at September 30, 2017 and December 31, 2016. At September 30, 2017, the Company reviewed the current fair market value of its assets. With the scaling down of the Company’s U.S. operations, the Company identified at September 30, 2017, additional assets that will not be needed. For the nine months ended September 30, 2017, the Company reduced the net book value of certain machinery and equipment and recorded an asset impairment charge of $675,000. The Company will continue to assess its long-lived assets and adjust the carrying amount of these assets to reflect any changes in the asset usage, marketplace and other factors used in determining the current fair market value. The Company cannot guarantee that it will be able to successfully complete the sale of any assets. The table below summarizes the non-financial assets that were measured and recorded at fair value on a non-recurring basis as of September 30, 2017 and loss recorded during the nine months ended September 30, 2017 on those assets: Carrying value at September 30, 2017 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2 ) Significant unobservable inputs (Level 3 ) Loss for nine months ended September 30, 2017 (in thousands) Long-lived assets held and used $ 1,307 $ — $ 1,307 $ — $ 675 Long-lived assets held for sale 15,711 — 15,711 — — Total nonrecurring for value measurements $ 17,018 $ — $ 17,018 $ — $ 675 The table below summarizes the non-financial assets that were measured and recorded at fair value on a non-recurring basis as of December 31, 2016 and loss recorded during the twelve months ended December 31, 2016 on those assets: Carrying value at December 31, 2016 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3 ) Loss for twelve months ended December 31, 2016 (in thousands) Long-lived assets held and used $ 7,110 $ — $ 7,110 $ — $ 12,264 Long-lived assets held for sale 14,761 — 14,761 — 14,290 Total nonrecurring for value measurements $ 21,871 $ — $ 21,871 $ — $ 26,554 Revenue recognition Revenue recognized includes product sales and billings for costs and fees for government contracts. Product Sales The Company recognizes revenue from product sales when earned. Revenue is recognized when, and if, evidence of an arrangement is obtained and the other criteria to support revenue recognition are met, including: ● Persuasive evidence of an arrangement exists. ● Title has passed and the product has been delivered. ● The price is fixed or determinable. ● Collection of the resulting receivable is reasonably assured. Government Contracts The Company recognizes research and development revenue in the period during which the related costs are incurred over the contractually defined period. In July 2012, the Company signed a contract with the Air Force Research Laboratory to produce large-area sapphire windows on a cost plus fixed fee basis. The Company records research and development revenue on a gross basis as costs are incurred, plus a portion of the fixed fee. For the three and nine months ended September 30, 2017, $273,000 and $301,000 of revenue was recorded, respectively, and for the three and nine months ended September 30, 2016, $80,000 and $289,000 of revenue was recorded, respectively. The total value of the contract is $4.7 million, of which $4.6 million has been recorded through September 30, 2017. For the year ended December 31, 2016, the Company recorded estimated costs expected to be incurred in excess of this contract value of $217,000. No additional adjustments for the excess contract costs were recorded for the three and nine months ended September 30, 2017. The Company does not provide maintenance or other services and it does not have sales that involve multiple elements or deliverables. Segment information The Company evaluates operations as one reportable segment, as it only reports profit and loss information on an aggregate basis to its chief operating decision maker. Net income per common share Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares any outstanding stock options and warrants based on the treasury stock method. Diluted net loss per share is the same as basic net loss per share for the three and nine months ended September 30, 2017 and 2016 because the effects of potentially dilutive securities are anti-dilutive. As of September 30, 2017 and 2016, diluted shares outstanding were the same as basic shares outstanding as the exercise price of outstanding stock options exceeded the weighted-average trading share price. Other comprehensive loss Comprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive loss includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the nine months ended September 30, 2017 and for the twelve months ended December 31, 2016, other comprehensive loss includes the unrealized loss on investments and foreign currency translation adjustments. The following table summarizes the components of accumulated comprehensive loss: September 30, 2017 December 31, 2016 (in thousands) Unrealized loss on investments $ - $ (12 ) Unrealized loss on currency translation (10 ) (18 ) Ending balance $ (10 ) $ (30 ) New accounting pronouncements adopted In March 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”), Compensation—Stock Compensation Topic 718): Improvements to Employee Share-Based Payment Accounting Recent accounting pronouncements In January 2016, the FASB issued ASU No. 2016-01 (“ASU 2016-01”), Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) In April 2016, the FASB issued ASU No. 2016-10 (“ASU 2016-10”), Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. Revenue from Contracts with Customers (Topic 606), In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 805): Clarifying the Definition of a Business |
Significant Customers
Significant Customers | 9 Months Ended |
Sep. 30, 2017 | |
Significant Customers [Abstract] | |
SIGNIFICANT CUSTOMERS | 3. SIGNIFICANT CUSTOMERS For the three months ended September 30, 2017, the Company had four customers individually that accounted for approximately 17%, 12%, 11% and 11% of revenue. For the three months ended September 30, 2016, the Company had one customer individually that accounted for approximately 76% of revenue. For the nine months ended September 30, 2017, the Company had four customers individually that accounted for approximately 17%, 13%, 11% and 10% of revenue. For the nine months ended September 30, 2016, the Company had two customers individually that accounted for approximately 55% and 10% of revenue. No other customers individually accounted for more than 10% of revenue for these reported periods in 2017 and 2016. Customers individually representing more than 10% of trade receivables accounted for approximately 64% and 75% of accounts receivable as of September 30, 2017 and December 31, 2016, respectively. The Company grants credit to customers based on an evaluation of their financial condition. Losses from credit sales are provided for in the financial statements. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 4. STOCKHOLDERS’ EQUITY Common Stock On April 19, 2017, the Company received a staff determination letter from the Listing Qualifications Department of NASDAQ informing the Company that it has failed to regain compliance with the minimum bid price requirement set forth in Listing Rule 5550(a) (2), and that the Company’s common stock would be delisted from the NASDAQ Capital Market at the opening of business on April 28, 2017 unless the Company timely requested an appeal of this determination. On April 26, 2017, the Company submitted an appeal requesting a hearing before a NASDAQ listing qualifications panel. With completion of the reverse stock split (described below) our shares began trading above the required $1.00 per share closing bid price. On May 19, 2017, the Company received notification from NASDAQ that the bid price deficiency had been cured and the Company is considered in compliance with all applicable listing standards. At the Company’s annual meeting of stockholders held on May 3, 2017, the Company’s stockholders approved, (i) an amendment to the Company’s Eighth Amended and Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to effect a reverse stock split of the Company’s common stock in a range of 1-for-10 to 1-for-20, such ratio to be determined in the sole discretion of the Board; and (ii) an amendment to the Certificate of Incorporation to decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstanding immediately following the reverse stock split, rounded up to the nearest 100,000 shares. On May 3, 2017, following the annual meeting, the Board determined to effect the reverse stock split at a ratio of 1-for-10, and the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to (a) implement the reverse stock split and (b) to reduce the number of authorized shares of common stock from 40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. The amendment, reverse stock split and reduction in authorized shares were effective on May 5, 2017. As a result of the reverse stock split, every 10 shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock. Following the amendment to the Certificate of Incorporation, the Company has a total of 13,200,000 authorized shares, comprised of (i) 8,200,000 shares of common stock and (ii) 5,000,000 shares of preferred stock. Stockholders received cash in lieu of any fractional shares resulting from the reverse stock split in a proportionate amount equal to $0.78 per pre-split share based on the average closing price of the Common Stock for the 30 trading days immediately preceding the effective date of the reverse stock split. As of September 30, 2017, the Company had reserved 159,102 shares of common stock for issuance upon the exercise of outstanding common stock options and vesting of restricted stock units. Also 278,956 shares of the Company’s common stock were reserved for future grants of stock options and restricted stock units (or other similar equity instruments) under the Rubicon Technology, Inc. 2016 Stock Incentive Plan (the “2016 Plan”) as of September 30, 2017. |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK INCENTIVE PLANS | 5. STOCK INCENTIVE PLANS In August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the “2007 Plan”), and which allowed for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance awards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Plan entitle the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair market value of the common stock on the grant date. On June 24, 2016, the plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016 Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan. In June 2016, the Company’s stockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. The committee determines the type of award to be granted, the fair market value, the number of shares covered by the award, and the time when the award vests and may be exercised. Pursuant to the 2016 Plan, 222,980 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan that subsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Plan will automatically terminate on March 17, 2026, unless the Company terminates it sooner. The Company uses the Black-Scholes option pricing model to value stock options issued. The Company uses a three-year historical stock price average to determine its volatility assumptions. The assumed risk-free rates were based on U.S. Treasury rates in effect at the time of grant with a term consistent with the expected option lives. The expected term is based upon the vesting term of the Company’s options, a review of a peer group of companies, and expected exercise behavior. The forfeiture rate is based on past history of forfeited options. The expense is allocated using the straight-line method. For the three and nine months ended September 30, 2017, the Company recorded $20,000 and $258,000, respectively, of stock option compensation expense. For the three and nine months ended September 30, 2016, the Company recorded $147,000 and $460,000, respectively, of stock option compensation expense. As of September 30, 2017, the Company had $225,000 of total unrecognized compensation cost related to non-vested stock option awards granted under the Company’s stock-based plans that it expects to recognize over a weighted-average period of 1.40 years. The Company used a Monte Carlo simulation model valuation technique to determine the fair value of 59,098 RSUs granted in March 2017 to a key executive pursuant to an employment agreement because the awards vest based upon achievement of market price targets of the Company’s common stock. The RSUs vest in the amounts set forth below on the first date the 15-trading day average closing price of the Company’s common stock equals or exceeds the corresponding target price for the common stock before March 15, 2021. Number of restricted stock units Target price 15,000 $ 6.50 15,000 $ 8.00 15,000 $ 9.50 14,098 $ 11.00 During the nine months ended September 30, 2017, the first three tranches of the grant vested. When the negotiation of the terms of the employment agreement began, the closing price of the common stock was approximately $5.50 per share. On the date of grant, the closing price of the Company’s common stock was $6.30 per share. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each RSU. The Company used the following assumptions in determining the fair value of the RSUs: Daily expected stock price volatility 4.4237 % Daily expected mean return on equity (0.2226 %) Daily expected dividend yield 0.0 % Average daily risk free interest rate 0.0063 % The daily expected stock price volatility is based on a four-year historical volatility of the Company’s common stock. The daily-expected dividend yield is based on annual expected dividend payments. The average daily risk-free interest rate is based on the three-year treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years. These RSUs had a grant date fair value of $322,623. The following table summarizes the activity of the stock incentive and equity plans as of September 30, 2017 and changes during the nine months then ended: Shares available for grant Number of options outstanding Weighted- average option exercise price Number of restricted stock and board shares issued Number of restricted stock units outstanding At January 1, 2017 243,218 253,541 $ 37.30 76,483 12,584 Granted (70,098 ) — — 11,000 59,098 Exercised/issued — — — — (49,156 ) Cancelled/forfeited 105,836 (116,965 ) 53.91 — — At September 30, 2017 278,956 136,576 $ 19.23 87,483 22,526 The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock. Based on the fair market value of the common stock at September 30, 2017 and 2016, there was no intrinsic value for the options outstanding. A summary of the Company’s non-vested options during the nine months ended September 30, 2017 is presented below: Options Weighted- average exercise price Non-vested at January 1, 2017 148,983 $ 10.20 Granted — — Vested (42,757 ) 12.79 Forfeited (47,825 ) 9.83 Non-vested at September 30, 2017 58,401 $ 8.59 For the three and nine months ended September 30, 2017, the Company recorded $94,000 and $418,000, respectively, of restricted stock unit (“RSU”) expense. For the three and nine months ended September 30, 2016, the Company recorded $48,600 and $187,000, respectively, of restricted stock unit (“RSU”) expense. As of September 30, 2017, there was $61,000 of unrecognized compensation cost related to the non-vested RSUs. This cost is expected to be recognized over a weighted-average period of 0.39 years. A summary of the Company’s restricted stock units is as follows: RSUs outstanding Weighted average time of Aggregate intrinsic value Non-vested restricted stock units as of January 1, 2017 12,584 $ 16.00 Granted 59,098 6.30 Vested (49,156 ) 8.49 Cancelled — — Non-vested at September 30, 2017 22,526 $ 6.94 $ 186,065 For the three and nine months ended September 30, 2017, the Company recorded $49,000 and $110,000, respectively, of stock compensation expense related to restricted stock. For the three and nine months ended September 30, 2016, the Company recorded $153,000 and $434,000, respectively, of stock compensation expense related to restricted stock. An analysis of restricted stock issued is as follows: Non-vested restricted stock as of January 1, 2017 16,470 Granted 11,000 Vested (22,566 ) Non-vested restricted stock as of September 30, 2017 4,904 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company experiences routine litigation in the normal course of its business. The Company currently does not have any material pending litigation. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 7. INCOME TAXES The Company is subject to income taxes in the U.S. and Malaysia. On a quarterly basis, the Company assesses the recoverability of deferred tax assets and the need for a valuation allowance. Such evaluations involve the application of significant judgment and multiple factors, both positive and negative, are considered. For the period ended September 30, 2017, a valuation allowance has been included in the 2017 forecasted effective tax rate. The Company is in a cumulative loss position for the past three years, which is considered significant negative evidence that is difficult to overcome on a “more likely than not” standard through objectively verifiable data. Under the accounting standards objective verifiable evidence is given greater weight than subjective evidence such as the Company’s projections for future growth. Based on an evaluation in accordance with the accounting standards, a valuation allowance has been recorded against the net U.S. deferred tax assets in order to measure only the portion of the deferred tax assets that are more likely than not to be realized based on the weight of all available evidence. At September 30, 2017, the Company continues to be in a three-year cumulative loss position, therefore, until an appropriate level of profitability is attained, the Company expects to maintain a full valuation allowance on its U.S. and Malaysia net deferred tax assets. Any U.S. and Malaysia tax benefits or tax expense recorded on the Company’s Consolidated Statement of Operations will be offset with a corresponding valuation allowance until such time that the Company changes its determination related to the realization of deferred tax assets. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The tax provision for the three and nine months ended September 30, 2017 is based on an estimated combined statutory effective tax rate. The Company recorded for the three and nine months ended September 30, 2017 a tax expense of $7,000 and $85,000 respectively for an effective tax rate of 0.6%.and 0.7%, respectively. For the three and nine months ended September 30, 2017, the difference between the Company’s effective tax rate and the U.S. federal 35% statutory rate and state 6.2% (net of federal benefit) statutory rate was primarily related to U.S. and Malaysia valuation allowances, Malaysia foreign tax rate differential, and Malaysia withholding taxes. |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | 8. CREDIT FACILITY In January 2013, the Company entered into a three-year term agreement with a bank to provide the Company with a senior secured credit facility of up to $25.0 million. The agreement provided for the Company to borrow up to 80% of eligible accounts receivable and up to 35% of domestically held raw material and finished goods inventory. Advances against inventory were limited to 40% of the aggregate outstanding on the revolving line of credit and $10.0 million in aggregate. The Company had the option to borrow at an interest rate of LIBOR plus 2.75% or the Wall Street Journal prime rate plus 0.50%. If the Company maintained liquidity of $20.0 million or greater with the lending institution, then the borrowing interest rate options were LIBOR plus 2.25% or the Wall Street Journal prime rate. There was an unused revolving line facility fee of 0.375% per annum. In August 2015, the Company entered into an amended agreement with the bank to extend the senior secured facility through January 2018. Under the amended agreement, advances against inventory were limited to the lesser of 45% of the aggregate outstanding principal on the revolving line of credit and $10.0 million and the rate on facility fee on the unused portion of the revolving line was adjusted to 0.50% per annum. In September 2016, the Company voluntarily terminated the loan agreement. Pursuant to the pay-off letter for termination of the loan agreement, upon payment of the pay-off amount, all obligations under the loan agreement were paid and discharged in full, all unfunded commitments by the bank to make credit extensions to the Company under the loan agreement were terminated, all security interests granted to or held by the bank under the loan agreement were released, and all guaranties supporting the loan agreement were released. The Company did not incur any early termination penalties in connection with the termination. For the three and nine months ended September 30, 2017, the Company incurred no interest expense. For the three and nine months ended September 30, 2016, the Company recorded interest expense of $27,500 and $98,200, respectively, which includes $24,200 and $87,000, respectively, of interest expense charged on the unused portion of the facility. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Rubicon Technology Worldwide LLC, Rubicon Sapphire Technology (Malaysia) SDN BHD, and Rubicon Technology Hong Kong Limited. All intercompany transactions and balances have been eliminated in consolidation. |
Foreign currency translation and transactions | Foreign currency translation and transactions Rubicon Technology Worldwide LLC and Rubicon Technology Hong Kong Limited’s assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates and capital accounts at historical exchange rates. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. Translation adjustments resulting from fluctuations in exchange rates for Rubicon Technology Worldwide LLC and Rubicon Technology Hong Kong Limited are recorded as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity. The Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon Sapphire Technology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Non-monetary assets are translated at historical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for Rubicon Sapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the period. The Company records these gains and losses in other income (expense). Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other than the functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination of net income (loss) for the period. The Company records these gains and losses in other income (expense). |
Going Concern | Going Concern The Company evaluates whether it is probable that known conditions or events, considered in the aggregate, would raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. If such conditions or events are identified, the Company prepares mitigation plans to alleviate the doubt or a statement of the substantial doubt about the Company’s ability to continue as a going concern. The Company’s negative financial trends of recurring operating losses and negative cash flow from operating activities are considered conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. The Company has plans in place that are considered as probable to effectively mitigate the adverse conditions. Activities around the Company’s restructuring and mitigation plans are more fully disclosed below under assets held for sale and long-lived assets. |
Investments | Investments When the Company invests available cash, it primarily invests it in investment grade commercial paper, corporate notes, FDIC guaranteed certificates of deposit, common stock and government securities. Investments classified as available-for-sale securities are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive loss. Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the Consolidated Statement of Operations. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations, are classified as short-term. The Company reviews its available-for-sale securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement of Operations. |
Accounts receivable | Accounts receivable The majority of the Company’s accounts receivable is due from manufacturers serving the optical systems and specialty electronics devices industries. Credit is extended based on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time past due, the customer’s current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible, and payments subsequently received on such receivables are recorded as a reduction to bad debt expense. The following table shows the activity of the allowance for doubtful accounts: September 30, 2017 December 31, 2016 (in thousands) Beginning balance $ 31 $ 389 Net allowance adjustments (20 ) (235 ) Accounts charged off, less recoveries (4 ) (123 ) Ending balance $ 7 $ 31 |
Inventories | Inventories Inventories are valued at the lower of cost or market. Raw materials cost is determined using the first-in, first-out method, and work-in-process and finished goods costs are determined on a standard cost basis, which includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other information. The Company establishes inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer specifications. The Company evaluates the ability to realize the value of its inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ product specifications. The Company’s method of estimating excess and obsolete inventory has remained consistent for all periods presented. At times in 2016, the Company accepted sales orders for core and wafer products at prices lower than cost. Based on these sales prices, the Company recorded for the nine months ended September 30, 2016, a lower of cost or market adjustment which reduced inventory and increased cost of goods sold by $1.1 million. The Company did not record any additional lower of cost or market adjustments for the three and nine months ended September 30, 2017. The Company evaluates the amount of raw material needed for future production based on expected crystal growth production needed to meet anticipated sales. Based on this review, the Company determined at June 30, 2017 to lower its expected requirements for raw material inventory supply from five to three years and that it had excess material needed for future production. For the six months ended June 30, 2017, an excess and obsolete adjustment was recorded which reduced inventory and increased cost of goods sold by $2.4 million. The Company did not record any additional excess and obsolete adjustments for the three months ended September 30, 2017. September 30, 2017 December 31, 2016 (in thousands) Raw materials $ 476 $ 3,112 Work-in-process 2,993 4,251 Finished goods 623 637 $ 4,092 $ 8,000 |
Property and equipment | Property and equipment Property and equipment consisted of the following: September 30, 2017 December 31, 2016 (in thousands) Machinery, equipment and tooling $ 6,352 $ 17,769 Leasehold improvements 4,624 4,624 Furniture and fixtures 8 699 Information systems 841 991 Construction in progress 247 263 Total cost 12,072 24,346 Accumulated depreciation and amortization (10,765 ) (17,236 ) Property and equipment, net $ 1,307 $ 7,110 |
Assets held for sale and long-lived assets | Assets held for sale and long-lived assets When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Company performs an analysis to review the recoverability of the asset’s carrying value. The Company makes estimates of the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that the carrying value exceeds the estimated fair value. The estimated fair value of assets is determined using appraisal techniques, which assume the highest and best use of the asset by market participants, considering the use of the asset that is physically possible, legally permissible, and financially feasible at the measurement date. Any impairment losses are recorded as operating expenses, which reduce net income. In the third quarter of 2016, the Company announced its decision to limit its focus to the optical and industrial sapphire markets and to exit the LED market. This resulted in the closing of the Company’s Malaysia facility. The Company evaluated its Malaysia asset portfolio based on assuming an orderly liquidation plan. Based on this review, the Company recorded for the year ended December 31, 2016 an asset impairment charge on its Malaysia machinery, equipment and facilities. In the fourth quarter of 2016, the Company also developed a plan to scale down the remaining operations and sell additional assets that would not be needed. In this regard, the Company identified excess U.S. machinery, equipment and facilities. Based on these reviews, the Company recorded for the year ended December 31, 2016 an asset impairment charge on its Malaysia and U.S. machinery, equipment and facilities of $26.6 million. In the nine months ended September 30, 2017, the Company held auctions and individual assets sales of certain equipment located in Batavia, Illinois, and Malaysia, resulting in the sale of a portion of the excess U.S. and some of the Malaysia equipment classified as (a) assets held for sale or (b) machinery and equipment which had a net book value of $3.1 million. Unsold equipment, including excess crystal growth furnaces, was classified as current assets held for sale at September 30, 2017. The Company is seeking to sell a manufacturing and office facility in Batavia, Illinois, a parcel of land the Company owns in Batavia, Illinois, and a facility in Penang, Malaysia. Although the Company cannot assure the timing of any sales, as it is the Company’s intention to complete these sales within the next twelve-month period, these properties were classified as current assets held for sale at September 30, 2017 and December 31, 2016. At September 30, 2017, the Company reviewed the current fair market value of its assets. With the scaling down of the Company’s U.S. operations, the Company identified at September 30, 2017, additional assets that will not be needed. For the nine months ended September 30, 2017, the Company reduced the net book value of certain machinery and equipment and recorded an asset impairment charge of $675,000. The Company will continue to assess its long-lived assets and adjust the carrying amount of these assets to reflect any changes in the asset usage, marketplace and other factors used in determining the current fair market value. The Company cannot guarantee that it will be able to successfully complete the sale of any assets. The table below summarizes the non-financial assets that were measured and recorded at fair value on a non-recurring basis as of September 30, 2017 and loss recorded during the nine months ended September 30, 2017 on those assets: Carrying value at September 30, 2017 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2 ) Significant unobservable inputs (Level 3 ) Loss for nine months ended September 30, 2017 (in thousands) Long-lived assets held and used $ 1,307 $ — $ 1,307 $ — $ 675 Long-lived assets held for sale 15,711 — 15,711 — — Total nonrecurring for value measurements $ 17,018 $ — $ 17,018 $ — $ 675 The table below summarizes the non-financial assets that were measured and recorded at fair value on a non-recurring basis as of December 31, 2016 and loss recorded during the twelve months ended December 31, 2016 on those assets: Carrying value at December 31, 2016 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3 ) Loss for twelve months ended December 31, 2016 (in thousands) Long-lived assets held and used $ 7,110 $ — $ 7,110 $ — $ 12,264 Long-lived assets held for sale 14,761 — 14,761 — 14,290 Total nonrecurring for value measurements $ 21,871 $ — $ 21,871 $ — $ 26,554 |
Revenue recognition | Revenue recognition Revenue recognized includes product sales and billings for costs and fees for government contracts. Product Sales The Company recognizes revenue from product sales when earned. Revenue is recognized when, and if, evidence of an arrangement is obtained and the other criteria to support revenue recognition are met, including: ● Persuasive evidence of an arrangement exists. ● Title has passed and the product has been delivered. ● The price is fixed or determinable. ● Collection of the resulting receivable is reasonably assured. Government Contracts The Company recognizes research and development revenue in the period during which the related costs are incurred over the contractually defined period. In July 2012, the Company signed a contract with the Air Force Research Laboratory to produce large-area sapphire windows on a cost plus fixed fee basis. The Company records research and development revenue on a gross basis as costs are incurred, plus a portion of the fixed fee. For the three and nine months ended September 30, 2017, $273,000 and $301,000 of revenue was recorded, respectively, and for the three and nine months ended September 30, 2016, $80,000 and $289,000 of revenue was recorded, respectively. The total value of the contract is $4.7 million, of which $4.6 million has been recorded through September 30, 2017. For the year ended December 31, 2016, the Company recorded estimated costs expected to be incurred in excess of this contract value of $217,000. No additional adjustments for the excess contract costs were recorded for the three and nine months ended September 30, 2017. The Company does not provide maintenance or other services and it does not have sales that involve multiple elements or deliverables. |
Segment information | Segment information The Company evaluates operations as one reportable segment, as it only reports profit and loss information on an aggregate basis to its chief operating decision maker. |
Net income per common share | Net income per common share Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares any outstanding stock options and warrants based on the treasury stock method. Diluted net loss per share is the same as basic net loss per share for the three and nine months ended September 30, 2017 and 2016 because the effects of potentially dilutive securities are anti-dilutive. As of September 30, 2017 and 2016, diluted shares outstanding were the same as basic shares outstanding as the exercise price of outstanding stock options exceeded the weighted-average trading share price. |
Other comprehensive loss | Other comprehensive loss Comprehensive loss is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive loss includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the nine months ended September 30, 2017 and for the twelve months ended December 31, 2016, other comprehensive loss includes the unrealized loss on investments and foreign currency translation adjustments. The following table summarizes the components of accumulated comprehensive loss: September 30, 2017 December 31, 2016 (in thousands) Unrealized loss on investments $ - $ (12 ) Unrealized loss on currency translation (10 ) (18 ) Ending balance $ (10 ) $ (30 ) |
New accounting pronouncements adopted | New accounting pronouncements adopted In March 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”), Compensation—Stock Compensation Topic 718): Improvements to Employee Share-Based Payment Accounting |
Recent accounting pronouncements | Recent accounting pronouncements In January 2016, the FASB issued ASU No. 2016-01 (“ASU 2016-01”), Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) In April 2016, the FASB issued ASU No. 2016-10 (“ASU 2016-10”), Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. Revenue from Contracts with Customers (Topic 606), In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), Statement of Cash Flows (Topic230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-01 (“ASU 2017-01”), Business Combinations (Topic 805): Clarifying the Definition of a Business |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of allowance for doubtful accounts | September 30, 2017 December 31, 2016 (in thousands) Beginning balance $ 31 $ 389 Net allowance adjustments (20 ) (235 ) Accounts charged off, less recoveries (4 ) (123 ) Ending balance $ 7 $ 31 |
Schedule of inventories | September 30, 2017 December 31, 2016 (in thousands) Raw materials $ 476 $ 3,112 Work-in-process 2,993 4,251 Finished goods 623 637 $ 4,092 $ 8,000 |
Schedule of property and equipment | September 30, 2017 December 31, 2016 (in thousands) Machinery, equipment and tooling $ 6,352 $ 17,769 Leasehold improvements 4,624 4,624 Furniture and fixtures 8 699 Information systems 841 991 Construction in progress 247 263 Total cost 12,072 24,346 Accumulated depreciation and amortization (10,765 ) (17,236 ) Property and equipment, net $ 1,307 $ 7,110 |
Summarizes non-financial assets that were measured and recorded at fair value on non-recurring | Carrying value at September 30, 2017 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2 ) Significant unobservable inputs (Level 3 ) Loss for nine months ended September 30, 2017 (in thousands) Long-lived assets held and used $ 1,307 $ — $ 1,307 $ — $ 675 Long-lived assets held for sale 15,711 — 15,711 — — Total nonrecurring for value measurements $ 17,018 $ — $ 17,018 $ — $ 675 Carrying value at December 31, 2016 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3 ) Loss for twelve months ended December 31, 2016 (in thousands) Long-lived assets held and used $ 7,110 $ — $ 7,110 $ — $ 12,264 Long-lived assets held for sale 14,761 — 14,761 — 14,290 Total nonrecurring for value measurements $ 21,871 $ — $ 21,871 $ — $ 26,554 |
Summary of accumulated comprehensive loss | September 30, 2017 December 31, 2016 (in thousands) Unrealized loss on investments $ - $ (12 ) Unrealized loss on currency translation (10 ) (18 ) Ending balance $ (10 ) $ (30 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted stock units | Number of restricted stock units Target price 15,000 $ 6.50 15,000 $ 8.00 15,000 $ 9.50 14,098 $ 11.00 |
Schedule of fair value of restricted stock units | Daily expected stock price volatility 4.4237 % Daily expected mean return on equity (0.2226 %) Daily expected dividend yield 0.0 % Average daily risk free interest rate 0.0063 % |
Schedule of activity of stock incentive and equity plans | Shares available for grant Number of options outstanding Weighted- average option exercise price Number of restricted stock and board shares issued Number of restricted stock units outstanding At January 1, 2017 243,218 253,541 $ 37.30 76,483 12,584 Granted (70,098 ) — — 11,000 59,098 Exercised/issued — — — — (49,156 ) Cancelled/forfeited 105,836 (116,965 ) 53.91 — — At September 30, 2017 278,956 136,576 $ 19.23 87,483 22,526 |
Schedule of non-vested options | Options Weighted- average exercise price Non-vested at January 1, 2017 148,983 $ 10.20 Granted — — Vested (42,757 ) 12.79 Forfeited (47,825 ) 9.83 Non-vested at September 30, 2017 58,401 $ 8.59 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of restricted stock units | Non-vested restricted stock as of January 1, 2017 16,470 Granted 11,000 Vested (22,566 ) Non-vested restricted stock as of September 30, 2017 4,904 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of restricted stock units | RSUs outstanding Weighted average time of Aggregate intrinsic value Non-vested restricted stock units as of January 1, 2017 12,584 $ 16.00 Granted 59,098 6.30 Vested (49,156 ) 8.49 Cancelled — — Non-vested at September 30, 2017 22,526 $ 6.94 $ 186,065 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Beginning balance | $ 31 | $ 389 |
Net allowance adjustments | (20) | (235) |
Accounts charged off, less recoveries | (4) | (123) |
Ending balance | $ 7 | $ 31 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Raw materials | $ 476 | $ 3,112 |
Work-in-process | 2,993 | 4,251 |
Finished goods | 623 | 637 |
Inventories | $ 4,092 | $ 8,000 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Summary Of Significant Accounting Policies [Line Items] | ||
Total cost | $ 12,072 | $ 24,346 |
Accumulated depreciation and amortization | (10,765) | (17,236) |
Property and equipment, net | 1,307 | 7,110 |
Machinery, equipment and tooling [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Total cost | 6,352 | 17,769 |
Leasehold improvements [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Total cost | 4,624 | 4,624 |
Furniture and fixtures [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Total cost | 8 | 699 |
Information systems [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Total cost | 841 | 991 |
Construction in progress [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Total cost | $ 247 | $ 263 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Long-lived assets held and used | $ 1,307 | $ 7,110 |
Long-lived assets held for sale | 15,711 | 14,761 |
Total nonrecurring for value measurements | 17,018 | 21,871 |
Long-lived assets held and used, Loss | 675 | 12,264 |
Long-lived assets held for sale, Loss | 14,290 | |
Total nonrecurring for value measurements, Loss | 675 | 26,554 |
Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Long-lived assets held and used | ||
Long-lived assets held for sale | ||
Total nonrecurring for value measurements | ||
Significant other observable inputs (Level 2) [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Long-lived assets held and used | 1,307 | 7,110 |
Long-lived assets held for sale | 15,711 | 14,761 |
Total nonrecurring for value measurements | 17,018 | 21,871 |
Significant unobservable inputs (Level 3) [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Long-lived assets held and used | ||
Long-lived assets held for sale | ||
Total nonrecurring for value measurements |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Unrealized loss on investments | $ (12) | |
Unrealized loss on currency translation | (10) | (18) |
Ending balance | $ (10) | $ (30) |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2017USD ($)Segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Increased cost of goods sold | $ 2,400,000 | $ 1,100,000 | ||||
Asset impairment charge | $ 3,100,000 | $ 26,600,000 | ||||
Revenue recognized | $ 273,000 | $ 80,000 | 301,000 | $ 289,000 | ||
Total value of the contract | 4,700,000 | 4,700,000 | ||||
Value of contract recorded | 4,600,000 | |||||
Estimated contract value | $ 217,000 | |||||
Deferred tax assets | $ 10,300,000 | $ 10,300,000 | ||||
Number of reportable segment | Segment | 1 | |||||
Inventory raw material supply, description | The Company determined at June 30, 2017 to lower its expected requirements for raw material inventory supply from five to three years and that it had excess material needed for future production. | |||||
Machinery and equipment [Member] | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Asset impairment charge | $ 675,000 |
Significant Customers (Details)
Significant Customers (Details) - customers | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||||
Number of customers | 4 | 1 | 4 | 2 | |
Customer [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 10.00% | |||
Revenue [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 17.00% | 76.00% | 17.00% | 55.00% | |
Revenue [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | 13.00% | 10.00% | ||
Revenue [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11.00% | 11.00% | |||
Revenue [Member] | Customer Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11.00% | 10.00% | |||
Accounts Receivable [Member] | Customer [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 64.00% | 75.00% | |||
Trade Receivables [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 10.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | May 05, 2017 | May 03, 2017 | Sep. 30, 2017 | Apr. 19, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||||
Reverse stock split, price per share | $ 1 | ||||
Reverse stock split, description | As a result of the reverse stock split, every 10 shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock. | The Company’s stockholders approved, (i) an amendment to the Company’s Eighth Amended and Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to effect a reverse stock split of the Company’s common stock in a range of 1-for-10 to 1-for-20, such ratio to be determined in the sole discretion of the Board; and (ii) an amendment to the Certificate of Incorporation to decrease the Company’s authorized number of shares of common stock to three times the number of shares of the Company’s common stock outstanding immediately following the reverse stock split, rounded up to the nearest 100,000 shares. On May 3, 2017, following the annual meeting, the Board determined to effect the reverse stock split at a ratio of 1-for-10, and the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to (a) implement the reverse stock split and (b) to reduce the number of authorized shares of common stock from 40,000,000 to 8,200,000, consequently reducing the number of total authorized shares from 45,000,000 to 13,200,000. The amendment, reverse stock split and reduction in authorized shares were effective on May 5, 2017. | |||
Total number of authorized shares | 13,200,000 | ||||
Common stock, shares authorized | 8,200,000 | 8,200,000 | |||
Reverse stock split per share, description | Stockholders received cash in lieu of any fractional shares resulting from the reverse stock split in a proportionate amount equal to $0.78 per pre-split share based on the average closing price of the Common Stock for the 30 trading days immediately preceding the effective date of the reverse stock split. | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||
Minimum [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 13,200,000 | ||||
Minimum [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 8,200,000 | ||||
Maximum [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 45,000,000 | ||||
Maximum [Member] | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 40,000,000 | ||||
Restricted stock units [Member] | |||||
Class of Stock [Line Items] | |||||
Exercise of outstanding common stock options and vesting of restricted stock units | 159,102 | ||||
Common stock reserved for future grants of stock options and restricted stock units | 278,956 |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of restricted stock units | shares | 15,000 |
Target price | $ / shares | $ 6.50 |
Restricted Stock Units One [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of restricted stock units | shares | 15,000 |
Target price | $ / shares | $ 8 |
Restricted Stock Units Two [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of restricted stock units | shares | 15,000 |
Target price | $ / shares | $ 9.50 |
Restricted Stock Units Three [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of restricted stock units | shares | 14,098 |
Target price | $ / shares | $ 11 |
Stock Incentive Plans (Details
Stock Incentive Plans (Details 1) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Daily expected stock price volatility | 4.4237% |
Daily expected mean return on equity | (0.2226%) |
Daily expected dividend yield | 0.00% |
Average daily risk free interest rate | 0.0063% |
Stock Incentive Plans (Detail28
Stock Incentive Plans (Details 2) - Restricted Stock Units [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for grant, Beginning balance | 243,218 |
Shares available for grant, Granted | (70,098) |
Shares available for grant, Exercised/issued | |
Shares available for grant, Cancelled/forfeited | 105,836 |
Shares available for grant, Ending balance | 278,956 |
Number of options outstanding, Beginning balance | 253,541 |
Number of options outstanding, Granted | |
Number of options outstanding, Exercised/issued | |
Number of options outstanding, Cancelled/forfeited | (116,965) |
Number of options outstanding, Ending balance | 136,576 |
Weighted-average option exercise price, Beginning balance | $ / shares | $ 37.30 |
Weighted-average option exercise price, Granted | $ / shares | |
Weighted-average option exercise price, Exercised/issued | $ / shares | |
Weighted-average option exercise price, Cancelled/forfeited | $ / shares | 53.91 |
Weighted-average option exercise price, Ending balance | $ / shares | $ 19.23 |
Number of restricted stock and board shares issued, Beginning balance | 76,483 |
Number of restricted stock and board shares issued, Granted | 11,000 |
Number of restricted stock and board shares issued, Exercised/issued | |
Number of restricted stock and board shares issued, Cancelled/forfeited | |
Number of restricted stock and board shares issued, Ending balance | 87,483 |
Number of restricted stock units outstanding, Beginning balance | 12,584 |
Number of restricted stock units outstanding, Granted | 59,098 |
Number of restricted stock units outstanding, Exercised/issued | (49,156) |
Number of restricted stock units outstanding, Cancelled/forfeited | |
Number of restricted stock units outstanding, Ending balance | 22,526 |
Stock Incentive Plans (Detail29
Stock Incentive Plans (Details 3) - Non-vested Options [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Options | |
Non-vested, Beginning balance | shares | 148,983 |
Granted | shares | |
Vested | shares | (42,757) |
Forfeited | shares | (47,825) |
Non-vested, Ending balance | shares | 58,401 |
Weighted-average exercise price | |
Non-vested, Beginning balance | $ / shares | $ 10.20 |
Granted | $ / shares | |
Vested | $ / shares | 12.79 |
Forfeited | $ / shares | 9.83 |
Non-vested, Ending balance | $ / shares | $ 8.59 |
Stock Incentive Plans (Detail30
Stock Incentive Plans (Details 4) - Restricted Stock Units [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested restricted stock , Beginning balance | shares | 12,584 |
RSUs outstanding, Granted | shares | 59,098 |
RSUs outstanding, Vested | shares | (49,156) |
RSUs outstanding, Cancelled | shares | |
Non-vested restricted stock , Ending balance | shares | 22,526 |
Weighted average price at time of grant, Beginning balance | $ / shares | $ 16 |
Weighted average price at time of grant, Granted | $ / shares | 6.30 |
Weighted average price at time of grant, Vested | $ / shares | 8.49 |
Weighted average price at time of grant, Cancelled | $ / shares | |
Weighted average price at time of grant, Ending balance | $ / shares | $ 6.94 |
Aggregate intrinsic value, Non-vested, Ending balance | $ | $ 186,065 |
Stock Incentive Plans (Detail31
Stock Incentive Plans (Details 5) - Restricted stock [Member] | 9 Months Ended |
Sep. 30, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested restricted stock , Beginning balance | 16,470 |
Granted | 11,000 |
Vested | (22,566) |
Non-vested restricted stock , Ending balance | 4,904 |
Stock Incentive Plans (Detail32
Stock Incentive Plans (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2007 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation expense | $ 20,000 | $ 147,000 | $ 258,000 | $ 460,000 | |
Unrecognized compensation cost | $ 225,000 | $ 225,000 | |||
Stock-based plan expect to recognize weighted-average period | 1 year 4 months 24 days | ||||
2007 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares awarded or sold | 440,769 | ||||
Plan expiration date | Jun. 24, 2016 | ||||
2016 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Plan expiration date | Mar. 17, 2026 | ||||
Common stock reserved for future issuance of awards | 222,980 | 222,980 | |||
Restricted stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation expense | $ 49,000 | 153,000 | $ 110,000 | 434,000 | |
Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock compensation expense | 94,000 | $ 48,600 | 418,000 | $ 187,000 | |
Unrecognized compensation cost | $ 61,000 | $ 61,000 | |||
Stock-based plan expect to recognize weighted-average period | 4 months 20 days | ||||
Closing price of common stock | $ 5.50 | $ 5.50 | |||
Number of restricted stock units granted | 15,000 | ||||
Restricted Stock Units [Member] | Key Executive [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Closing price of common stock | $ 6.30 | $ 6.30 | |||
Number of restricted stock units granted | 59,098 | ||||
Grant date fair value of restricted stock units | $ 322,623 | ||||
Fair value of restricted stock units, description | The daily expected stock price volatility is based on a four-year historical volatility of the Company’s common stock. The daily-expected dividend yield is based on annual expected dividend payments. The average daily risk-free interest rate is based on the three-year treasury yield as of the grant date. Each of the tranches is calculated to have its own fair value and requisite service period. The fair value of each tranche is amortized over the requisite or derived service period, which is up to four years. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 7 | $ (216) | $ 85 | $ (541) |
Effective income tax rate | 0.60% | 0.70% | ||
U.S. federal statutory rate | 35.00% | 35.00% | ||
State tax net of federal benefit | 6.20% | 6.20% |
Credit Facility (Details)
Credit Facility (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Aug. 31, 2015 | Jan. 31, 2013 | Sep. 30, 2016 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||||
Term agreement of senior secured credit facility | 3 years | |||
Amount of senior secured credit facility | $ 25,000,000 | |||
Percentage of eligible account receivable | 80.00% | |||
Percentage of domestically held raw material and finished goods inventory | 35.00% | |||
Percentage of advances against inventory | 45.00% | 40.00% | ||
Amount of aggregate outstanding principal on the revolving line of credit | $ 10,000,000 | $ 10,000,000 | ||
Option to borrow at an interest rate of LIBOR plus | 2.75% | |||
Option to borrow at an interest rate of Wall Street Journal prime rate plus | 0.50% | |||
Liquidity rate | $ 20,000,000 | |||
Borrowing interest rate options | 2.25% | |||
Percentage of unused revolving line facility fee | 0.50% | 0.375% | ||
Interest expense | $ 27,500 | $ 98,200 | ||
Interest expense charged on the unused portion of the facility | $ 24,200 | $ 87,000 |