Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 28, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | MECHANICAL TECHNOLOGY INC | |
Entity Central Index Key | 64,463 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,248,482 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 529 | $ 462 |
Accounts receivable - less allowances of $0 in 2016 and $56 in 2015 | 597 | 931 |
Inventories | 1,190 | 1,006 |
Prepaid expenses and other current assets | 61 | 72 |
Total Current Assets | 2,377 | 2,471 |
Property, plant and equipment, net | 145 | 115 |
Total Assets | 2,522 | 2,586 |
Current Liabilities: | ||
Accounts payable | 297 | 152 |
Accrued liabilities | 1,096 | 907 |
Total Current Liabilities | 1,393 | 1,059 |
Commitments and Contingencies (Note 8) | ||
Stockholders' Equity: | ||
Common stock, par value $0.01 per share, authorized 75,000,000; 6,263,975 issued in both 2016 and 2015 | 63 | 63 |
Additional paid-in capital | 135,929 | 135,839 |
Accumulated deficit | (121,099) | (120,621) |
Common stock in treasury, at cost, 1,015,493 shares in 2016 and 1,005,092 shares in 2015 | (13,764) | (13,754) |
Total stockholders' equity | 1,129 | 1,527 |
Total Liabilities and Stockholders' Equity | $ 2,522 | $ 2,586 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful account receivable (in dollars) | $ 0 | $ 56 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 75,000,000 | 75,000,000 |
Common Stock, shares issued | 6,263,975 | 6,263,975 |
Common Stock, treasury at cost | 1,015,493 | 1,005,092 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Product revenue | $ 1,808 | $ 1,951 | $ 3,033 | $ 3,587 |
Operating costs and expenses: | ||||
Cost of product revenue | 608 | 733 | 1,245 | 1,371 |
Unfunded research and product development expenses | 310 | 378 | 644 | 754 |
Selling, general and administrative expenses | 781 | 1,048 | 1,616 | 2,057 |
Operating income (loss) | 109 | (208) | (472) | (595) |
Other expense, net | (1) | (6) | ||
Income (loss) before income taxes | 108 | (208) | (478) | (595) |
Income tax expense | (10) | (10) | ||
Net income (loss) | $ 108 | $ (218) | $ (478) | $ (605) |
Income (loss) per share attributable to MTI (Basic) | $ 0.02 | $ (0.04) | $ (.09) | $ (.12) |
Income (loss) per share attributable to MTI (Diluted) | $ 0.02 | $ (0.04) | $ (.09) | $ (.12) |
Weighted average shares outstanding (Basic) | 5,248,482 | 5,258,883 | 5,250,892 | 5,258,883 |
Weighted average shares outstanding (Diluted) | 5,422,842 | 5,258,883 | 5,250,892 | 5,258,883 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital [Member] | Retained Earnings / Accumulated Deficit [Member] | Treasury Stock [Member] | Total |
Beginning Balance at Dec. 31, 2014 | $ 63 | $ 135,698 | $ (117,789) | $ (13,754) | $ 4,218 |
Beginning Balance (in shares) at Dec. 31, 2014 | 6,263,975 | 1,005,092 | |||
Net loss | (2,832) | (2,832) | |||
Stock based compensation | 141 | 141 | |||
Ending Balance at Dec. 31, 2015 | $ 63 | 135,839 | (120,621) | $ (13,754) | 1,527 |
Ending Balance (in shares) at Dec. 31, 2015 | 6,263,975 | 1,005,092 | |||
Net loss | (478) | (478) | |||
Stock based compensation | 90 | 90 | |||
Purchase of common stock for treasury | $ (10) | (10) | |||
Purchase of common stock for treasury (in shares) | 10,401 | ||||
Ending Balance at Jun. 30, 2016 | $ 63 | $ 135,929 | $ (121,099) | $ (13,764) | $ 1,129 |
Ending Balance (in shares) at Jun. 30, 2016 | 6,263,975 | 1,015,493 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Activities | ||
Net loss | $ (478) | $ (605) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 42 | 39 |
Loss on disposal of equipment | 6 | |
Provision for bad debts | (21) | 25 |
Stock based compensation | 90 | 67 |
Provision for excess and obsolete inventories | 152 | 11 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 355 | 17 |
Inventories | (336) | 47 |
Prepaid expenses and other current assets | 11 | 16 |
Accounts payable | 145 | 33 |
Accrued liabilities | 189 | (71) |
Net cash provided by (used in) operating activities | 155 | (421) |
Investing Activities | ||
Purchases of equipment | (78) | (51) |
Principle payments from notes receivable - related party | 20 | |
Net cash used in investing activities | (78) | (31) |
Financing Activities | ||
Purchases of common stock for treasury | (10) | |
Net cash used in financing activities | (10) | |
Increase (decrease) in cash | 67 | (452) |
Cash - beginning of period | 462 | 1,923 |
Cash - end of period | $ 529 | $ 1,471 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of Operations Description of Business Mechanical Technology, Incorporated (MTI or the Company), a New York corporation, was incorporated in 1961. The Companys core business is conducted through MTI Instruments, Inc. (MTI Instruments), a wholly-owned subsidiary. MTI Instruments was incorporated in New York on March 8, 2000 and is a supplier of precision linear displacement solutions, vibration measurement and system balancing systems, and wafer inspection tools, consisting of electronic gauging instruments for position, displacement and vibration application within the industrial manufacturing/production markets, as well as the research, design and process development market; tensile stage systems for materials testing at academic and industrial research settings; and engine vibration analysis systems for both military and commercial aircraft. These tools, systems and solutions are developed for markets and applications that require the precise measurements and control of products, processes, and the development and implementation of automated manufacturing, assembly, and consistent operation of complex machinery. Liquidity; Going Concern The Company has historically incurred significant losses primarily due to its past efforts to fund direct methanol fuel cell product development and commercialization programs, and had an accumulated deficit of approximately $121.1 million and working capital of approximately $984 thousand at June 30, 2016. As of June 30, 2016, we had no debt and $13 thousand in commitments for capital expenditures. Based on the Companys projected cash requirements for operations and capital expenditures, its current available cash of approximately $529 thousand and our projected 2016 cash flow pursuant to managements current plan, management believes it will have adequate resources to fund operations and capital expenditures for the remainder of the year. If cash generated from operations is insufficient to satisfy the Companys working capital and capital expenditure requirements, the Company may be required to sell additional equity or obtain credit facilities. The Company has no other formal commitments for funding future needs of the organization at this time and any additional financing during 2016, if required, may not be available to us on acceptable terms or at all. The Companys financial statements have been prepared assuming the Company will continue as a going concern, which assumes the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used. The Companys history of operating cash flow deficits, its current cash position and lack of access to capital may raise doubt about its ability to continue as a going concern and its continued existence could be dependent upon several factors, including its ability to raise revenue levels and control costs to generate positive cash flows, to sell additional shares of the Companys common stock to fund operations and to obtain credit facilities. Selling additional shares of the Companys common stock and obtaining credit facilities may be more difficult as a result of limited access to equity markets and the tightening of credit markets. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount of or classification of liabilities that might be necessary as a result of this uncertainty. The Company believes that the current lack of liquidity and going concern opinion resulted primarily from delays in entering into a new agreement with the U.S. Air Force (as discussed in our Annual Report on Form-K for the year ended December 31, 2015 in Item 7: Managements Discussion and Analysis of Financial Condition and Results of Operations) and in an expected product order from Asia that was not received, as well as the Companys cancellation of its existing lines of credit on March 24, 2016, as further discussed in Item 7: Managements Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in the Annual Report and this Form 10-Q. As previously reported, the Company entered into the long-anticipated contract with the U.S. Air Force on July 1, 2016. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2 Basis of Presentation In the opinion of management, the Companys condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the periods presented in accordance with United States of America Generally Accepted Accounting Principles (U.S. GAAP) and with the instructions to Form 10-Q in Article 10 of the Securities and Exchange Commissions (SEC) Regulation S-X. The results of operations for the interim periods presented are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015. The information presented in the accompanying condensed consolidated balance sheet as of December 31, 2015 has been derived from the Companys audited consolidated financial statements. All other information has been derived from the Companys unaudited condensed consolidated financial statements for the three and six months ended June 30, 2016 and June 30, 2015. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MTI Instruments. All intercompany balances and transactions are eliminated in consolidation. The Company records its investment in MeOH Power, Inc. using the equity method of accounting. The fair value of the Companys interest in MeOH Power, Inc. has been determined to be $0 as of June 30, 2016 and December 31, 2015, based on MeOH Power, Inc.s net position and expected cash flows. As of June 30, 2016, the Company retained its ownership of approximately 47.5% of MeOH Power, Inc.s outstanding common stock, or 75,049,937 shares, and 55.9% of the common stock and warrants issued, which includes 31,904,136 warrants outstanding. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Accounts Receivable | 3. Accounts Receivable Accounts receivables consist of the following at: (Dollars in thousands) June 30, 2016 December 31, 2015 U.S. and State Government $ 4 $ 15 Commercial 593 972 Allowance for doubtful accounts (56 ) Total $ 597 $ 931 For the six months ended June 30, 2016 and 2015, the largest commercial customer represented 14.0% and 6.7%, respectively, and the largest governmental agency customer represented 1.3% and 3.6%, respectively, of the Companys product revenue. As of June 30, 2016 and December 31, 2015, the largest commercial receivable represented 21.2% and 13.8%, respectively, and the largest governmental receivable represented 0.7% and 1.6%, respectively, of the Companys accounts receivable. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories consist of the following at: (Dollars in thousands) June 30, 2016 December 31, 2015 Finished goods $ 446 $ 412 Work in process 295 240 Raw materials 449 354 Total $ 1,190 $ 1,006 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 5. Property, Plant and Equipment Property, plant and equipment consist of the following at: (Dollars in thousands) June 30, 2016 December 31, 2015 Leasehold improvements $ 39 $ 39 Computers and related software 1,054 1,052 Machinery and equipment 867 853 Office furniture and fixtures 61 61 2,021 2,005 Less: Accumulated depreciation 1,876 1,890 $ 145 $ 115 Depreciation expense was $42 thousand and $80 thousand for the six months ended June 30, 2016 and the year ended December 31, 2015, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The Companys effective income tax rate was 0% during the three and six months ended June 30, 2016. The projected annual effective tax rate is less than the Federal statutory rate of 34%, primarily due to permanent differences, the change in the valuation allowance and changes to estimated taxable income for 2016. For the three and six months ended June 30, 2015, the Companys effective income tax rate was 4.8% and 1.7%, respectively. There was no income tax expense for the three and six months ended June 30, 2016. Income tax expense of $10 thousand for the three and six months ended June 30, 2015, respectively, related to an adjustment of the prior period estimated tax accrual. The Company provides for recognition of deferred tax assets if the realization of such assets is more likely than not to occur in accordance with accounting standards that address income taxes. Significant management judgment is required in determining the period in which the reversal of a valuation allowance should occur. The Company has considered all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items, in determining its valuation allowance. In addition, the Companys assessment requires us to schedule future taxable income in accordance with accounting standards that address income taxes to assess the appropriateness of a valuation allowance which further requires the exercise of significant management judgment. Although the Company expects to generate levels of pre-tax earnings in the future, the Company decided to re-establish a full valuation allowance at December 31, 2015 for its deferred tax assets. This decision was based upon actual results differing from those estimates used as a basis for the previous partial valuation of the deferred tax asset. The Company believes that the accounting estimate for the valuation of deferred tax assets is a critical accounting estimate, because judgment is required in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns. The Company based the estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans and other expectations about future outcomes. In the event that actual results differ from these estimates or the Company adjusts these estimates in future periods, the Company may need to adjust the recorded valuation allowance, which could materially impact our financial position and results of operations. The valuation allowance was $18.6 million at June 30, 2016 and $18.5 million at December 31, 2015. We will continue to evaluate the ability to realize our deferred tax assets and related valuation allowance on a quarterly basis. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders Equity Common Stock The Company has one class of common stock, par value $.01. Each share of the Companys common stock is entitled to one vote on all matters submitted to stockholders. As of June 30, 2016 and December 31, 2015, there were 5,248,482 and 5,258,883 shares of common stock, respectively, issued and outstanding. Treasury Stock On June 11, 2015, the Companys Board of Directors approved the repurchase of up to 525,000 shares of the Companys outstanding shares of common stock. The Company previously entered into a stock purchase plan with a registered broker-dealer in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act), pursuant to which the broker-dealer had authority to purchase shares on the Companys behalf pursuant to the Boards authorization. Following the termination of the Companys credit lines, discussed in Note 9 below, the Company terminated the stock repurchase plan with the broker-dealer effective March 24, 2016. During 2016, 10,401 shares of common stock were repurchased by the Company. As of June 30, 2016 and December 31, 2015, there were 1,015,493 and 1,005,092 shares, respectively, held in treasury. Reservation of Shares The Company had reserved common shares for future issuance as follows as of June 30, 2016: Stock options outstanding 1,177,065 Common stock available for future equity awards or issuance of options 24,936 Number of common shares reserved 1,202,001 Income (Loss) per Share The Company computes basic income (loss) per common share by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted income (loss) per share reflects the potential dilution, if any, computed by dividing income (loss) by the combination of dilutive common share equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Companys share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money stock options, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of a stock option, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the amount of windfall tax benefits that would be recorded in additional paid-in capital, if any, when the stock option is exercised are assumed to be used to repurchase shares in the current period. Not included in the computation of earnings per share, assuming dilution, for the six months ended June 30, 2016, were options to purchase 1,177,065 shares of the Companys common stock. These potentially dilutive items were excluded because the Company incurred a loss during the period and their inclusion would be anti-dilutive. Not included in the computation of earnings per share, assuming dilution, for the three months ended June 30, 2016, were options to purchase 768,501 shares, respectively of the Companys common stock. These potentially dilutive items were excluded even though the average market price of the common stock exceeded the exercise prices for a portion of the options because the calculation of incremental shares resulted in an anti-dilutive effect. Not included in the computation of earnings per share, assuming dilution, for the three and six months ended June 30, 2015, were options to purchase 942,689 shares of the Companys common stock. These potentially dilutive items were excluded because the Company incurred a loss during the periods and their inclusion would be anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Commitments: Leases The Company and its subsidiary lease certain manufacturing, laboratory and office facilities. The lease provides for the Company to pay its allocated share of insurance, taxes, maintenance and other costs of the leased property. Under the agreement, MTI Instruments has an option to terminate the lease as of December 1, 2016. If MTI Instruments terminates the lease prior to November 2019, MTI Instruments is required to reimburse the landlord for all unamortized costs that the landlord incurred for renovations to the leased space in conjunction with the lease renewal. Future minimum rental payments required under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of June 30, 2016 are: $113 thousand remaining in 2016, $227 thousand in 2017, $221 thousand in 2018 and $207 thousand in 2019. Warranties Product warranty liabilities are included in Accrued liabilities in the Condensed Consolidated Balance Sheets. Below is a reconciliation of changes in product warranty liabilities: (Dollars in thousands) Six Months Ended June 30, 2016 2015 Balance, January 1 $ 16 $ 17 Accruals for warranties issued 7 9 Settlements made (in cash or in kind) (3 ) (7 ) Balance, end of period $ 20 $ 19 Employment Agreement The Company has an employment agreement with one employee that provides certain payments upon termination of employment under certain circumstances, as defined in the agreement. As of June 30, 2016, the Companys potential minimum obligation to this employee was approximately $72 thousand. Contingencies: Legal We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. When applicable, we accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt During the first quarter of 2016, we entered into discussions with Bank of America, N.A. (the Bank) to strengthen the lines of credit and re-align their terms to be more consistent with our current business plan. During such discussions, the Bank informed the Company that based on its results for 2015 it was not in compliance with certain financial covenants of the lines. Since an agreement on new covenants could not be reached, the Company decided that the lines of credit could not be utilized and therefore terminated them on March 24, 2016. There were no amounts outstanding under the credit facilities at the time of cancellation. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | 10. Stock Based Compensation During 2016, the Company granted 261,000 options to purchase the Companys common stock from the Mechanical Technology Incorporated 2014 Equity Incentive Plan (the During 2016, the Company granted 2,000 options to purchase the Companys common stock from the Mechanical Technology Incorporated 2012 Equity Incentive Plan, which generally vest 25% on each of the first four anniversaries of the date of the award. The exercise price of these options is $0.78 per share and was based on the closing market price of the Companys common stock on the date of grant. Using a Black-Scholes Option Pricing Model, the weighted average fair value of these options is $0.74 per share and was estimated at the date of grant. During 2015, the Company granted 140,000 options to purchase the Companys common stock from the 2014 Plan, which generally vest 25% on each of the first four anniversaries of the date of the award. The exercise price of these options is $1.20 per share and was based on the closing market price of the Companys common stock on the date of grant. Using a Black-Scholes Option Pricing Model, the weighted average fair value of these options is $1.14 per share and was estimated at the date of grant. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions MeOH Power, Inc. As of June 30, 2016, the Company owned an aggregate of approximately 47.5% of MeOH Power, Inc.s outstanding common stock, or 75,049,937 shares, and 55.9% of the common stock and warrants issued, which includes 31,904,136 warrants outstanding. The number of shares of MeOH Power, Inc.s common stock authorized for issuance is 240,000,000 as of June 30, 2016. On December 18, 2013, MeOH Power, Inc. and the Company executed a Senior Demand Promissory Note (the Note) in the amount of $380 thousand to secure the intercompany amounts due to the Company from MeOH Power, Inc. upon the deconsolidation of MeOH Power, Inc. Interest accrues on the Note at the Prime Rate in effect on the first business day of the month, as published in the Wall Street Journal. At the Companys option, all or part of the principal and interest due on this Note may be converted to shares of common stock of MeOH Power, Inc. at a rate of $0.07 per share. Interest began accruing on January 1, 2014. The Company recorded a full allowance against the Note. As of June 30, 2016 and December 31, 2015, $270 thousand and $266 thousand, respectively, of principal and interest are available to convert into shares of common stock of MeOH Power, Inc. Any adjustments to the allowance are recorded as miscellaneous expense during the period incurred. |
Recent Accounting Standards or
Recent Accounting Standards or Updates Not Yet Effective | 6 Months Ended |
Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Standards or Updates Not Yet Effective | 12. Recent Accounting Standards or Updates Not Yet Effective The Company considered the applicability and impact of all accounting standard updates (ASUs). ASUs not mentioned below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (Revenue from Contracts with Customers ) In August 2014, the FASB issued ASU 2014-15 (Presentation of Financial Statements Going Concern ), In February 2015, the FASB issued ASU 2015-02 (Consolidation (Topic 810): Amendments to the Consolidation Analysis), which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This standard became effective for the Company beginning in the first quarter of 2016. The Companys adoption of this standard had no impact on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11 (Inventory (Topic 330): Simplifying the Measurement of Inventory), which applies to inventory that is measured using first-in, first-out (FIFO) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (LIFO). This standard will be effective for the Company for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this standard on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17 (Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes) as part of its ongoing simplification initiative, with the objective of reducing complexity in accounting standards. The amendments in this standard require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. This guidance does not change the offsetting requirements for deferred tax liabilities and assets, which results in the presentation of one amount on the balance sheet. Additionally, the amendments in this standard align the deferred income tax presentation with the requirements in International Accounting Standards (IAS) 1 (Presentation of Financial Statements.) This standard will be effective for the Company for annual and interim reporting periods beginning on or after December 15, 2016. The Company is currently evaluating the impact of this standard on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01 (Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities) the main objective of which is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This standard will be effective for the Company for annual and interim reporting periods beginning on or after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 (Leases (Topic 842)) the main objective of which requires lessees to put most leases on their balance sheet but recognize expenses on their income statement in a manner similar to current accounting requirements. This standard will be effective for the Company for annual and interim reporting periods beginning on or after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 (CompensationStock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting), In April 2016, the FASB issued ASU 2016-10 (Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing), |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the Companys condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the periods presented in accordance with United States of America Generally Accepted Accounting Principles (U.S. GAAP) and with the instructions to Form 10-Q in Article 10 of the Securities and Exchange Commissions (SEC) Regulation S-X. The results of operations for the interim periods presented are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Companys audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015. The information presented in the accompanying condensed consolidated balance sheet as of December 31, 2015 has been derived from the Companys audited consolidated financial statements. All other information has been derived from the Companys unaudited condensed consolidated financial statements for the three and six months ended June 30, 2016 and June 30, 2015. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MTI Instruments. All intercompany balances and transactions are eliminated in consolidation. The Company records its investment in MeOH Power, Inc. using the equity method of accounting. The fair value of the Companys interest in MeOH Power, Inc. has been determined to be $0 as of June 30, 2016 and December 31, 2015, based on MeOH Power, Inc.s net position and expected cash flows. As of June 30, 2016, the Company retained its ownership of approximately 47.5% of MeOH Power, Inc.s outstanding common stock, or 75,049,937 shares, and 55.9% of the common stock and warrants issued, which includes 31,904,136 warrants outstanding. |
Accounts Receivables (Tables)
Accounts Receivables (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Schedule of accounts receivables | Accounts receivables consist of the following at: (Dollars in thousands) June 30, 2016 December 31, 2015 U.S. and State Government $ 4 $ 15 Commercial 593 972 Allowance for doubtful accounts (56 ) Total $ 597 $ 931 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consist of the following at: (Dollars in thousands) June 30, 2016 December 31, 2015 Finished goods $ 446 $ 412 Work in process 295 240 Raw materials 449 354 Total $ 1,190 $ 1,006 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following at: (Dollars in thousands) June 30, 2016 December 31, 2015 Leasehold improvements $ 39 $ 39 Computers and related software 1,054 1,052 Machinery and equipment 867 853 Office furniture and fixtures 61 61 2,021 2,005 Less: Accumulated depreciation 1,876 1,890 $ 145 $ 115 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of reserved common shares | The Company had reserved common shares for future issuance as follows as of June 30, 2016: Stock options outstanding 1,177,065 Common stock available for future equity awards or issuance of options 24,936 Number of common shares reserved 1,202,001 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of reconciliation of changes in product warranty liabilities | Product warranty liabilities are included in Accrued liabilities in the Condensed Consolidated Balance Sheets. Below is a reconciliation of changes in product warranty liabilities: (Dollars in thousands) Six Months Ended June 30, 2016 2015 Balance, January 1 $ 16 $ 17 Accruals for warranties issued 7 9 Settlements made (in cash or in kind) (3 ) (7 ) Balance, end of period $ 20 $ 19 |
Nature of Operations (Details N
Nature of Operations (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Accumulated deficit | $ (121,099) | $ (120,621) | ||
Working capital | 984 | |||
Cash | 529 | $ 462 | $ 1,471 | $ 1,923 |
Debt | 0 | |||
Capital expenditure commitments | $ 13 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
MeOH Power, Inc [Member] | ||
Fair value of non-controlling interest | $ 0 | $ 0 |
Percentage of equity ownership (in percent) | 47.50% | |
Number of warrants outstanding | 31,904,136 | |
Common Stock | ||
Number of equity shares outstanding | 5,248,482 | 5,258,883 |
MTI [Member] | MeOH Power, Inc [Member] | Common Stock | ||
Percentage of equity ownership (in percent) | 47.50% | |
Number of equity shares outstanding | 75,049,937 | |
MTI [Member] | MeOH Power, Inc [Member] | Common stock & Warrant [Member] | ||
Percentage of equity ownership (in percent) | 55.90% | |
Number of warrants outstanding | 31,904,136 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total | $ 597 | $ 931 |
U.S. and State Government [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total | 4 | 15 |
Commercial [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total | 593 | 972 |
Allowance for doubtful accounts [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total | $ (56) |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Sales Revenue, Segment [Member] | Commercial [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 14.00% | 6.70% | |
Sales Revenue, Segment [Member] | United States and State Government [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 1.30% | 3.60% | |
Accounts Receivable [Member] | Commercial [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 21.20% | 13.80% | |
Accounts Receivable [Member] | United States and State Government [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 0.70% | 1.60% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 446 | $ 412 |
Work in process | 295 | 240 |
Raw materials | 449 | 354 |
Total | $ 1,190 | $ 1,006 |
Property, Plant and Equipment30
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | $ 2,021 | $ 2,005 |
Less: Accumulated depreciation | 1,876 | 1,890 |
Property, plant and equipment, Net | 145 | 115 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 39 | 39 |
Computers and related software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 1,054 | 1,052 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | 867 | 853 |
Office furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Gross | $ 61 | $ 61 |
Property, Plant and Equipment31
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 42 | $ 39 | $ 80 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (as a percent) | 0.00% | 4.80% | 0.00% | 1.70% | |
Federal statutory rate (as a percent) | 34.00% | ||||
Income tax expense | $ 0 | $ 10 | $ 0 | $ 10 | |
Valuation allowance | $ 18,600 | $ 18,600 | $ 18,500 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Jun. 30, 2016shares |
Equity [Abstract] | |
Stock options outstanding | 1,177,065 |
Common stock available for future equity awards or issuance of options | 24,936 |
Number of common shares reserved | 1,202,001 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - $ / shares | Jun. 11, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Common stock shares issued | 6,263,975 | 6,263,975 | ||
Common stock repurchased | 525,000 | 10,401 | ||
Shares held in treasury | 1,015,493 | 1,005,092 | ||
Common Stock | ||||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Common stock shares issued | 5,248,482 | 5,258,883 | ||
Common stock shares outstanding | 5,248,482 | 5,258,883 | ||
Equity Option [Member] | ||||
Potentially dilutive items excluded from computation of earnings per share (in shares) | 768,501 | 942,689 |
Commitments and Contingencies35
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Balance, January 1 | $ 16 | $ 17 |
Accruals for warranties issued | 7 | 9 |
Settlements made (in cash or in kind) | (3) | (7) |
Balance, end of period | $ 20 | $ 19 |
Commitments and Contingencies36
Commitments and Contingencies (Details Narrative) $ in Thousands | Jun. 30, 2016USD ($) |
Future minimum rental payments required under non-cancelable operating leases | |
Remaining in 2016 | $ 113 |
2,017 | 227 |
2,018 | 221 |
2,019 | 207 |
Potential minimum obligation under employment agreement | $ 72 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - Employee Stock Option [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Equity Incentive Plan 2014 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of awards granted (in shares) | 261,000 | 140,000 |
Awards vesting percentage | 25.00% | 25.00% |
Exercise price of awards (in dollars per share) | $ 0.78 | $ 1.20 |
Weighted average fair value of awards (in dollars per share) | $ 0.74 | $ 1.14 |
Equity Incentive Plan 2012 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of awards granted (in shares) | 2,000 | |
Awards vesting percentage | 25.00% | |
Exercise price of awards (in dollars per share) | $ 0.78 | |
Weighted average fair value of awards (in dollars per share) | $ 0.74 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | Dec. 18, 2013 | |
Related Party Transaction [Line Items] | |||
Common Stock, shares authorized | 75,000,000 | 75,000,000 | |
MeOH Power, Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of outstanding common stock owned | 47.50% | ||
Number of outstanding common stock owned | 75,049,937 | ||
Percentage of issued common stock and warrants owned | 55.90% | ||
Warrants outstanding | 31,904,136 | ||
Common Stock, shares authorized | 240,000,000 | ||
Senior Demand Promissory Note [Member] | MeOH Power, Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Notes face amount | $ 380 | ||
Description of notes interest rate | Interest accrues on the Note at the Prime Rate in effect on the first business day of the month, as published in the Wall Street Journal. | ||
Notes convertible conversion price (in dollars per share) | $ 0.07 | ||
Notes beneficial conversion feature | $ 270 | $ 266 |