Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 26, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | MECHANICAL TECHNOLOGY INC | ||
Entity Central Index Key | 0000064463 | ||
Current Fiscal Year End Date | --12-31 | ||
Amendment Flag | false | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 9,821,857 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Public Float | $ 3,756,086 | ||
Entity Emerging Growth | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Interactive Data | Yes | ||
Entity Incorporation State | NY | ||
Entity File Number | 001-40261 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 2,630 | $ 2,510 |
Accounts receivable - less allowances of $0 in 2020 and 2019 | 975 | 745 |
Inventories | 828 | 924 |
Prepaid expenses and other current assets | 346 | 56 |
Total Current Assets | 4,779 | 4,235 |
Other assets | 309 | 0 |
Deferred income taxes, net | 759 | 395 |
Equity investment | 750 | 0 |
Property, plant and equipment, net | 847 | 174 |
Operating lease right-of-use assets | 1,203 | 947 |
Total Assets | 8,647 | 5,751 |
Current Liabilities: | ||
Accounts payable | 300 | 210 |
Accrued liabilities | 1,019 | 761 |
Operating lease liability | 316 | 171 |
Income taxes payable | 2 | 0 |
Total Current Liabilities | 1,637 | 1,142 |
Other liabilities | 203 | 0 |
Operating lease liability | 891 | 776 |
Total Liabilities | 2,731 | 1,918 |
Commitments and Contingencies (Note 12) | ||
Stockholders' Equity: | ||
Common stock, par value $0.01 per share, authorized 75,000,000; 10,750,100 issued in 2020 and 10,586,170 issued in 2019 | 108 | 106 |
Additional paid-in capital | 137,365 | 137,230 |
Accumulated deficit | (117,793) | (119,739) |
Common stock in treasury, at cost, 1,015,493 shares in both 2020 and 2019 | (13,764) | (13,764) |
Total stockholders' equity | 5,916 | 3,833 |
Total Liabilities and Stockholders' Equity | $ 8,647 | $ 5,751 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful account receivable (in dollars) | $ 0 | $ 0 |
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 | 10,750,100 | 10,586,170 |
Common Stock, shares outstanding | 9,734,607 | 9,570,677 |
Treasury stock, shares | 1,015,493 | 1,015,493 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 9,599 | $ 6,571 |
Operating costs and expenses: | ||
Cost of product revenue | 2,669 | 2,205 |
Cost of cryptocurrency revenue | 405 | 0 |
Research and product development expenses | 1,491 | 1,381 |
Selling, general and administrative expenses | 3,584 | 2,726 |
Operating income | 1,450 | 259 |
Other income, net | 104 | 36 |
Income before income taxes | 1,554 | 295 |
Income tax benefit | 392 | 28 |
Net income | $ 1,946 | $ 323 |
Income per share (Basic) | $ 0.20 | $ 0.03 |
Income per share (Diluted) | $ 0.20 | $ 0.03 |
Weighted average shares outstanding (Basic) | 9,581,886 | 9,548,460 |
Weighted average shares outstanding (Diluted) | 9,634,503 | 9,602,548 |
Product Revenue [Member] | ||
Revenues | $ 9,004 | $ 6,571 |
Cryptocurrency Revenue [Member] | ||
Revenues | $ 595 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital [Member] | Retained Earnings / Accumulated Deficit [Member] | Treasury Stock | Total |
Beginning Balance (in shares) at Dec. 31, 2018 | 10,452,670 | 1,015,493 | |||
Beginning Balance at Dec. 31, 2018 | $ 105 | $ 139,067 | $ (118,462) | $ (13,764) | $ 6,946 |
Net income | 323 | 323 | |||
Stock based compensation | 31 | 31 | |||
Issuance of shares - option exercises, shares | 133,500 | ||||
Issuance of shares - option exercises, value | $ 1 | 73 | 74 | ||
Cash dividends | (1,941) | (1,600) | (3,541) | ||
Ending Balance (in shares) at Dec. 31, 2019 | 10,586,170 | 1,015,493 | |||
Ending Balance at Dec. 31, 2019 | $ 106 | 137,230 | (119,739) | $ (13,764) | 3,833 |
Net income | 1,946 | 1,946 | |||
Stock based compensation | 54 | 54 | |||
Issuance of shares - restricted stock, shares | 80,930 | ||||
Issuance of shares - restricted stock, value | $ 1 | (1) | |||
Issuance of shares - option exercises, shares | 83,000 | ||||
Issuance of shares - option exercises, value | $ 1 | 82 | 83 | ||
Ending Balance (in shares) at Dec. 31, 2020 | 10,750,100 | 1,015,493 | |||
Ending Balance at Dec. 31, 2020 | $ 108 | $ 137,365 | $ (117,793) | $ (13,764) | $ 5,916 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities | ||
Net income | $ 1,946 | $ 323 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 159 | 87 |
Provision for bad debts | 0 | 1 |
Deferred income taxes | (364) | 0 |
Stock based compensation | 54 | 31 |
Provision (recovery) for excess and obsolete inventories | (3) | 33 |
Loss on disposal of equipment | 3 | 3 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (230) | 125 |
Inventories | 99 | (94) |
Prepaid expenses and other current assets | (290) | 1 |
Other long-term assets | (309) | 0 |
Accounts payable | 90 | 9 |
Operating lease, net | 4 | 0 |
Income taxes and uncertain tax positions | 2 | 0 |
Other long-term liabilities | 203 | 0 |
Accrued liabilities | 258 | (230) |
Net cash provided by operating activities | 1,622 | 289 |
Investing Activities | ||
Purchases of equipment | (835) | (83) |
Purchase of stock in equity investment | (750) | 0 |
Net cash used in investing activities | (1,585) | (83) |
Financing Activities | ||
Cash dividends on common stock | 0 | (3,541) |
Proceeds from stock option exercises | 83 | 74 |
Net cash provided by (used in) financing activities | 83 | (3,467) |
Increase (decrease) in cash | 120 | (3,261) |
Cash - beginning of period | 2,510 | 5,771 |
Cash - end of period | $ 2,630 | $ 2,510 |
1. Nature of Operations
1. Nature of Operations | 12 Months Ended |
Dec. 31, 2020 | |
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 until redomestication in the State of Nevada on March 29, 2021, was incorporated in 1961 and is headquartered in Albany, New York. The Company's core business is conducted through MTI Instruments, Inc. (MTI Instruments), a wholly-owned subsidiary, which designs, manufactures and markets its products also at the Albany, New York location. The Company has also recently formed EcoChain, Inc. (EcoChain), a wholly-owned subsidiary, to conduct a new line of business associated with cryptocurrency mining operations, and also purchased Class A Preferred Shares of Soluna Technologies, Ltd. (Soluna), a Canadian company that develops vertically-integrated, utility-scale computing facilities focused on cryptocurrency mining and cutting-edge blockchain applications. MTI Instruments was incorporated in New York on March 8, 2000 and is a supplier of vibration measurement and balancing systems, precision linear displacement solutions, and wafer inspection tools. Our products consist of engine vibration analysis systems for both military and commercial aircraft and electronic gauging instruments for position, displacement and vibration application within the industrial manufacturing markets, as well as in the research, design and process development markets. These systems, tools and solutions are developed for markets and applications that require consistent operation of complex machinery and the precise measurements and control of products, processes, the development and implementation of automated manufacturing and assembly. EcoChain was incorporated in Delaware on January 8, 2020. EcoChain has established a new business line focused on cryptocurrency and the blockchain ecosystem. In connection with the creation of the new business line, EcoChain has established a cryptocurrency mining facility that integrates with the bitcoin blockchain network. On May 21, 2020, EcoChain closed its acquisition of the intellectual property of Giga Watt, Inc. (GigaWatt) and certain other property and rights of GigaWatt associated with GigaWatt's operation of a crypto-mining operation located in Washington State. EcoChain purchased these assets from Giga Watt's Chapter 11 Trustee in its bankruptcy case in the United States Bankruptcy Court Eastern District of Washington. Company management did not consider the assets EcoChain purchased from Giga Watt to constitute a "business" as substantially all the fair value of the gross assets acquired is concentrated in a group of similar identifiable assets. Therefore, management did not consider the acquisition of such assets to be a "business combination" as defined under ASC 805. The total purchase price of the assets acquired in the GigaWatt transaction was $200 thousand, of which $20 thousand was charged back as per the colocation agreement with Navier, Inc. and the remaining cost of $180 thousand was recorded as a leasehold improvement. The acquired assets formed the cornerstone of EcoChain's cryptocurrency mining operation in Washington. Liquidity 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 a consolidated accumulated deficit of approximately $117.8 million as of December 31, 2020. As of December 31, 2020, the Company had working capital of approximately $3.1 million, no debt, no outstanding commitments for capital expenditures, and approximately $2.6 million of cash available to fund our operations. Based on the Company's projected cash requirements for operations and capital expenditures, its current available cash of approximately $2.6 million and its projected 2021 cash flow pursuant to management's plans, management believes it will have adequate resources to fund operations and capital expenditures for the year ending December 31, 2021 and through the end of the first quarter of 2022. If cash generated from operations is insufficient to satisfy the Company's operational working capital and capital expenditure requirements, the Company may utilize the $300 thousand line of credit at MTI Instruments to fund these initiatives. The Company is considering other funding sources, including debt and equity. However, the Company has no other formal commitments for funding its future needs at this time and any additional financing we may require during the year ending December 31, 2021, may not be available to us on acceptable terms or at all. |
2. Accounting Policies
2. Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Accounting Policies | 2. Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, MTI Instruments and EcoChain. All intercompany balances and transactions are eliminated in consolidation. Use of Estimates The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. The Company periodically reviews inventory quantities on hand and records a provision for excess, slow moving and obsolete inventory based primarily on our estimated forecast of product demand, as well as based on historical usage. The Company also provides estimated inventory allowances for inventory whose carrying value is in excess of net realizable value. Demand and usage for products and materials can fluctuate significantly. A significant decrease in demand for our products could result in a short-term increase in the cost of inventory purchases and an increase of excess inventory quantities on hand. Although the Company makes every effort to assure the accuracy of our forecasts of future product demand, any significant unanticipated changes in demand could have a significant impact on the value of our inventory and our reported operating results. If changes in market conditions result in reductions in the estimated net realizable value of our inventory below our previous estimate, the Company would increase our reserve in the period in which we made such a determination and record a charge to cost of product revenue. Property, Plant, and Equipment Property, plant and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives as follows: Leasehold improvements Lesser of the life of the lease or the useful life of the improvement Computers and related software 3 to 5 years Machinery and equipment 3 to 10 years Office furniture, equipment and fixtures 2 to 10 years Significant additions or improvements extending assets' useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. The costs of fully depreciated assets remaining in use are included in the respective asset and accumulated depreciation accounts. When items are sold or retired, related gains or losses are included in net (loss) income. Income Taxes The Company is subject to income taxes in the U.S. (federal and state). As part of the process of preparing our consolidated financial statements, the Company calculates income taxes for each of the jurisdictions in which the Company operates. This involves estimating actual current taxes due together with assessing temporary differences resulting from differing treatment for tax and accounting purposes that are recorded as deferred tax assets and liabilities, loss carryforwards and tax credit carryforwards, for which income tax benefits are expected to be realized in future years. A valuation allowance has been established to reduce deferred tax assets, if it is more likely than not that all, or some portion, of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the period that includes the enactment date. Significant management judgment is required in determining the Company's provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the Company's net deferred tax assets. The Company considers all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items in determining the Company's valuation allowance. In addition, the Company's assessment requires the Company 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. The Company accounts for taxes in accordance with the asset and liability method of accounting for income taxes. Under this method, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The impact of the Company's reassessment of its tax positions for these standards did not have a material impact on its results of operations, financial condition, or liquidity. The Company is currently subject to audit in various jurisdictions, and these jurisdictions may assess additional income tax liabilities against us. Developments in an audit, litigation, or in applicable laws, regulations, administrative practices, principles, and interpretations could have a material effect on the Company's operating results or cash flows in the period or periods in which such developments occur, as well as for prior and in subsequent periods. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating the Company's provision and accruals for these taxes. There are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. The Company's effective tax rates could be affected by numerous factors, such as intercompany transactions, earnings being lower than anticipated in jurisdictions where the Company has lower statutory rates and higher than anticipated in jurisdictions where the Company has higher statutory rates, the applicability of special tax regimes, losses incurred in jurisdictions for which the Company is not able to realize the related tax benefit, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to its existing businesses and operations, acquisitions and investments and how they are financed, changes in the Company's stock price, changes in its deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations. Equity Investment - Soluna The equity investment in Soluna is carried at the cost of investment and is $750 thousand as of December 31, 2020. The Company owns approximately 1.86% of Soluna's stock, calculated on a fully-diluted basis, as of December 31, 2020. Equity Investments without Readily Determinable Fair Values Our equity investment in Soluna is accounted for under the measurement alternative. Equity securities measured and recorded using the measurement alternative are recorded at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Adjustments resulting from impairments and observable price changes are recorded in the income statement. There was no impairment of investment recognized in 2020. Equity Method Investments The Company's consolidated net income will include our proportionate share, if any, of the net income or loss of our equity method investee. When the Company records its proportionate share of net income, it increases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. Conversely, when the Company records its proportionate share of a net loss, it decreases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. When the Company's carrying value in an equity method investee company has been reduced to zero, no further losses are recorded in the Company's financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. The Company records its investment in MeOH Power, Inc. using the equity method of accounting. The fair value of the Company's interest in MeOH Power, Inc. has been determined to be $0 as of December 31, 2020 and December 31, 2019, based on MeOH Power, Inc.'s net position and expected cash flows. As of December 31, 2020, the Company retained its ownership of approximately 47.5% of MeOH Power, Inc.'s outstanding common stock, or 75,049,937 shares. The number of shares of MeOH Power, Inc.'s common stock authorized for issuance is 240,000,000 as of December 31, 2020. Fair Value Measurement The estimated fair value of certain financial instruments, including cash, accounts receivable and short-term debt approximates their carrying value due to their short maturities and varying interest rates. "Fair value" is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation methods, the Company is required to provide the following information according to the fair value accounting standards. These standards established a fair value hierarchy as specified that ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities are classified and disclosed in one of the following three categories: Level 1: Level 2: Level 3: Revenue Recognition Product Revenue Product revenue consists of revenue recognized from MTI Instruments' product lines. In general, the Company determines revenue recognition by: (1) identifying the contract, or contracts, with the customer; (2) identifying the performance obligations in the contract; (3) determining the contract price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, the performance obligations are satisfied by transferring the promised goods or services. Based on past experience, the Company reasonably estimates its returns and warranty reserves. Revenue is presented net of discounts and allowances, which are determined when the sale is negotiated. The nature of the Company's contracts do not give rise to variable consideration. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. If the product requires that the Company provide installation, all revenue related to the product is deferred and recognized upon the completion of the installation. If the product requires specific customer acceptance criteria, such as on-site customer acceptance and/or acceptance after install, then revenue is deferred until customer acceptance occurs or the acceptance provisions lapse, unless the Company can objectively and reliably demonstrate that the criteria specified in the acceptance provisions is satisfied. The Company may also record unearned revenues, which include payments for other offerings for which we have been paid in advance. The resulting revenue would be earned when we transfer control of the product or service. As of December 31, 2020 and December 31, 2019, the Company had no deferred or unearned revenue. MTI Instruments currently has distributor agreements in place for the international sale of general instrument and semiconductor products in certain global regions. Such agreements grant a distributor the right of first refusal to act as distributor for such products in the distributor's territory. In return, the distributor agrees to not market other products which are considered by MTI Instruments to be in direct competition with MTI Instruments' products. The distributor is allowed to purchase MTI Instruments' equipment at a price which is discounted off the published domestic/international list prices. Such list prices can be adjusted by MTI Instruments during the term of the distributor agreement. Generally, payment terms with the distributor are standard net 30 days; however, on occasion, extended payment terms have been granted. Title and risk of loss of the product passes to the distributor upon delivery to the independent carrier (standard "free-on-board" factory), and the distributor is responsible for any required training and/or service with the end-user. The sale (and subsequent payment) between MTI Instruments and the distributor is not contingent upon the successful resale of the product by the distributor. Distributor sales are covered by MTI Instruments' standard one-year warranty and there are no special return policies for distributors. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Shipping and handling charges billed to customers is a pass-through from the freight forwarder and is included in product revenue. Cost of Product Revenue Cost of product revenue includes material, labor, overhead and shipping and handling costs. Cryptocurrency Revenue Cryptocurrency revenue consists of revenue recognized from EcoChain's cryptocurrency mining facility. Revenue is recognized at the cryptocurrency's realized cash value based upon the rates at cryptocurrency exchanges where we are registered. Cryptocurrencies are earned when the miners solve complex computations and cryptocurrency is issued as a result. The mined cryptocurrency is immediately paid to the Coinbase wallet. Cryptocurrency is converted to U.S. dollars daily, as EcoChain is not in the business of accumulating cryptocurrency on its balance sheet for speculative gains. Cost of Cryptocurrency Revenue Cost of cryptocurrency revenue includes direct utility costs as well as overhead costs that relate to the operations of EcoChain's cryptocurrency mining facility. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at the invoiced amount billed to customers and do not bear interest. An allowance for doubtful accounts, if necessary, represents the Company's best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical write-off experience and current exposures identified. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers. The Company's allowance for doubtful accounts was $0 at both December 31, 2020 and December 31, 2019. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of the Company's invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from its customers. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer, if the Company expects the benefit of those costs to be longer than one year. As of December 31, 2020 and December 31, 2019, the Company has recorded no capitalized costs to obtain a contract. The Company applies the practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs include our internal sales force compensation programs as we have determined annual compensation is commensurate with annual sales activities. Warranty The Company accrues a warranty liability at the time product revenue is recorded based on historical experience. The liability is reviewed during the year and is adjusted, if appropriate, to reflect new product offerings or changes in experience. Actual warranty claims are tracked by product line. Warranty liability was $22 thousand and $16 thousand as of December 31, 2020 and 2019, respectively. Warranty expense was $11 thousand and $1 thousand for 2020 and 2019, respectively. Long-Lived Assets The Company accounts for impairment or disposal of long-lived assets in accordance with accounting standards that address the financial accounting and reporting for the impairment or disposal of long-lived assets, specify how impairment will be measured, and how impaired assets will be classified in the consolidated financial statements. On a quarterly basis, the Company analyzes the status of its long-lived assets at each subsidiary for potential impairment. As of December 31, 2020, the Company does not believe that any of its long-lived assets have suffered any type of impairment that would require an adjustment to that asset's recorded value. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid short-term investments with original maturities of less than three months. Net Income per Share The Company computes basic income per common share by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted income per share reflects the potential dilution, if any, computed by dividing income by the combination of dilutive common share equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Company's 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 and the amount of compensation cost, if any, for future service that the Company has not yet recognized are assumed to be used to repurchase shares in the current period. Share-Based Payments The Company grants options to purchase our common stock and award restricted stock to our employees and directors under our equity incentive plans. The benefits provided under these plans are share-based payments and the Company accounts for stock-based awards exchanged for employee service in accordance with the appropriate share-based payment accounting guidance. Stock-based compensation represents the cost related to stock-based awards granted to employees and directors. The Company measures stock-based compensation cost at grant date based on the estimated fair value of the award and recognizes the cost as expense on a straight-line basis in accordance with the vesting of the options (net of estimated forfeitures) over the option's requisite service period. The Company estimates the fair value of stock-based awards on the grant date using a Black- Scholes valuation model. The Company uses the fair value method of accounting with the modified prospective application, which provides for certain changes to the method for valuing share-based compensation. The valuation provisions apply to new awards and to awards that are outstanding on the effective date and subsequently modified. Under the modified prospective application, prior periods are not revised for comparative purposes. Stock-based compensation expense is recorded in the lines titled "Cost of product revenue," "Selling, general and administrative expenses" and "Research and product development expenses" in the Consolidated Statements of Operations based on the employees' respective functions. The Company records deferred tax assets for awards that potentially can result in deductions on the Company's income tax returns based on the amount of compensation cost that would be recognized upon issuance of the award and the Company's statutory tax rate. All income tax effects of awards, including excess tax benefits, recognized on stock-based compensation expense are reflected in the Consolidated Statements of Operations as a component of the provision for income taxes on a prospective basis. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company's stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company's expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate, and expected dividends. Theoretical valuation models and market-based methods are evolving and may result in lower or higher fair value estimates for share-based compensation. The timing, readiness, adoption, general acceptance, reliability, and testing of these methods is uncertain. Sophisticated mathematical models may require voluminous historical information, modeling expertise, financial analyses, correlation analyses, integrated software and databases, consulting fees, customization, and testing for adequacy of internal controls. For purposes of estimating the fair value of stock options granted using the Black-Scholes model, the Company uses the historical volatility of its stock for the expected volatility assumption input to the Black-Scholes model, consistent with the accounting guidance. The risk-free interest rate is based on the risk-free zero-coupon rate for a period consistent with the expected option term at the time of grant. The Company paid a special dividend during the year ended December 31, 2019 and did not pay any dividends during the year ended December 31, 2020. The Company is required to assume a dividend yield as an input to the Black-Scholes model. Since the 2019 dividend was a special dividend and the Company does not anticipate paying any cash dividends in the foreseeable future, the Company therefore used an expected dividend yield of zero in the option valuation model. The expected option term is calculated based on our historical forfeitures and cancellation rates. The fair value of restricted stock awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to three-year service period to the Company. The shares represented by restricted stock awards are outstanding at the grant date, and the recipients are entitled to voting rights with respect to such shares upon issuance. Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk principally consist of cash equivalents and trade accounts receivable. The Company's trade accounts receivable are primarily from sales to commercial customers, the U.S. government and state agencies. The Company does not require collateral and has not historically experienced significant credit losses related to receivables from individual customers or groups of customers in any particular industry or geographic area. The Company has cash deposits in excess of federally insured limits but does not believe them to be at risk. Research and Development Costs The Company expenses research and development costs as incurred. The Company incurred research and development costs of approximately $1.5 million and $1.4 million, which was entirely related to MTI Instruments, for the years ended December 31, 2020 and 2019, respectively. Advertising Costs The Company expenses advertising costs as incurred. The Company incurred advertising costs of approximately $39 thousand and $45 thousand, which was entirely related to MTI Instruments, for the years ended December 31, 2020 and 2019, respectively. Other Comprehensive Income The Company had no other comprehensive income items for the years ended December 31, 2020 and 2019. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liability on our consolidated balance sheets. The Company did not have any finance leases as of December 31, 2020 or December 31, 2019. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU assets also include any lease payments made and excludes lease incentives and initial direct costs incurred. The Company's lease terms may include options to extend or terminate its leases when it is reasonably certain that the Company will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, the Company accounts for lease components together with non-lease components (e.g. common-area maintenance). Accounting Updates Not Yet Effective Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the FASB) in the form of accounting standard updates (ASUs) to the FASB's Accounting Standards Codification (ASC). The Company considered the applicability and impact of all 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 June 2016, the FASB issued ASU 2016-13 (Financial Instruments - Credit Losses (Topic 326)) and its subsequent amendments to the initial guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02, respectively (collectively, Topic 326). Topic 326 changes how entities will measure credit losses for most financial assets and certain other instruments that are not accounted for at fair value through net income. This standard replaces the existing incurred credit loss model and establishes a single credit loss framework based on a current expected credit loss model for financial assets carried at amortized cost, including loans and held-to- maturity debt securities. The current expected loss model requires an entity to estimate credit losses expected over the life of the credit exposure upon initial recognition of that exposure when the financial asset is originated or acquired, which will generally result in earlier recognition of credit losses. This standard also requires expanded credit quality disclosures. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. This standard also simplifies the accounting model for purchased credit-impaired debt securities and loans. This standard will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any In December 2019, the FASB issued ASU 2019-12 (Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes). This standard removes exceptions to the general principles in Topic 740 for allocating tax expense between financial statement components, accounting basis differences stemming from an ownership change in foreign investments and interim period income tax accounting for year-to-date losses that exceed projected losses. The standard will be effective for the Company for annual reporting periods beginning after December 15, 2020 and interim periods within those fiscal years, and while early adoption is permitted, the Company does not expect to elect that option. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. At this time, the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01 (Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). This standard clarifies certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. This standard will reduce diversity in practice and increasing comparability of the accounting for these interactions. The standard will be effective for the Company for annual reporting periods beginning after December 15, 2020 and interim periods within those fiscal years, and while early adoption is permitted, the Company does not expect to elect that option. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. At this time, the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. Accounting Updates Recently Adopted by the Company On January 1, 2020, the Company adopted ASU No. 2018-18 (Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606). A collaborative arrangement is a contractual arrangement under which two or more parties actively participate in a joint operating activity and are exposed to significant risk and rewards that depend on the activity's commercial success. This standard clarifies when certain transactions between collaborative arrangement participants should be accounted for under ASC 606 and incorporates unit-of-account guidance consistent with ASC 606 to aid in this determination. The adoption of this standard did not have a material impact on its consolidated financial statements. There have been no other significant changes in the Company's reported financial position or results of operations and cash flows as a result of its adoption of new accounting pronouncements or changes to its significant accounting policies that were dis |
3. Accounts Receivable
3. Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | 3. Accounts Receivable Accounts receivables consist of the following at: (Dollars in thousands) December 31, 2020 December 31, 2019 U.S. and State Government $ 2 $ 57 Commercial 909 653 Allowance for doubtful accounts – – Other 64 35 Total $ 975 $ 745 |
4. Inventories
4. Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories consist of the following at: (Dollars in thousands) December 31, 2020 December 31, 2019 Finished goods $ 371 $ 302 Work in process 139 279 Raw materials 318 343 Total $ 828 $ 924 |
5. Property, Plant and Equipmen
5. Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
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) December 31, 2020 December 31, 2019 Leasehold improvements $ 262 $ 39 Computers and related software 1,603 1,026 Machinery and equipment 885 915 Office furniture and fixtures 38 40 2,788 2,020 Less: Accumulated depreciation 1,941 1,846 $ 847 $ 174 Depreciation expense was $159 thousand and $87 thousand for the years ended December 31, 2020 and 2019, respectively. Repairs and maintenance expense was $32 thousand and $18 thousand for the years ended December 31, 2020 and 2019, respectively. |
6. Income Taxes
6. Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes Income tax benefit for each of the years ended December 31 consists of the following: (Dollars in thousands) 2020 2019 Federal $ – $ 33 State (4 ) (5 ) Deferred 396 – Total $ 392 $ 28 The significant components of deferred income tax benefit from operations for each of the years ended December 31 consists of the following: (Dollars in thousands) 2020 2019 Deferred tax (expense) benefit $ 83 $ (101 ) Net operating loss carry forward (330 ) (74 ) Valuation allowance 643 175 $ 396 $ – The Company's effective income tax rate from operations differed from the Federal statutory rate for each of the years ended December 31 as follows: 2020 2019 Federal statutory tax rate 21 % 21 % Change in valuation allowance (43 ) (54 ) State taxes, net of federal benefit 0 1 Expiration of stock option 1 14 Federal tax benefits, R&D (3 ) 9 Other Deferred Adjustments (1 ) -- Tax rate (25 )% (9 )% Deferred Tax Assets: Deferred tax assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates. Temporary differences, net operating loss carryforwards and tax credit carryforwards that give rise to deferred tax assets and liabilities are summarized as follows as of December 31: (Dollars in thousands) 2020 2019 Deferred tax assets: Inventory valuation $ 49 $ 43 Vacation pay 20 22 Bonus Accrual – – Warranty and other sale obligations 5 3 Deferred revenue 10 10 Allowance for related party note receivable 69 65 Net operating loss 10,187 10,518 Property, plant and equipment (20 ) (10 ) Stock options 36 72 Research and development tax credit 120 32 10,476 10,755 Valuation allowance (9,717 ) (10,360 ) Net deferred tax assets $ 759 $ 395 Valuation Allowance: 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. As a result of its assessment in 2020, the Company released a portion of its valuation allowance against its deferred tax assets. The partial release of the valuation allowance caused an incremental tax benefit of $643 thousand to be recognized in 2020. The release of a portion of the valuation allowance was based upon the Company's recent cumulative income history and projected future taxable income causing the Company to evaluate what portion of the Company's deferred tax assets it believes are more likely than not to be realized. The Company has determined that it will generate sufficient levels of pre-tax earnings in the future to realize the net deferred tax assets recorded on the balance sheet as of December 31, 2020. The Company has projected such pre-tax earnings utilizing a combination of historical and projected results, taking into consideration existing levels of permanent differences, non-deductible expense and the reversal of significant temporary differences. The valuation allowance at December 31, 2020 and 2019 was $9.9 million and $10.4 million, respectively. Activity in the valuation allowance for deferred tax assets is as follows as of December 31: (Dollars in thousands) 2020 2019 Valuation allowance, beginning of year $ 10,360 $ 10,535 Allowance for related party note receivable (65 ) 3 Inventory (43 ) (7 ) Net operating (loss) income (406 ) (74 ) Property, plant and equipment 10 7 Stock options (72 ) (35 ) Research and development credit (32 ) (82 ) Warranty and other sales obligations (3 ) (2 ) Deferred revenue (10 ) 10 Accrued compensation (22 ) 5 Valuation allowance, end of year $ 9,717 $ 10,360 Net operating losses: At December 31, 2020, the Company has unused Federal net operating loss carryforwards of approximately $49 million. Of these, none will expire in 2021, with the remainder expiring through 2035. The Company's and/or its subsidiaries' ability to utilize their net operating loss carryforwards may be significantly limited by Section 382 of the IRC of 1986, as amended, if the Company or any of its subsidiaries undergoes an "ownership change" as a result of changes in the ownership of the Company's or its subsidiaries' outstanding stock pursuant to the exercise of the warrants or otherwise. Unrecognized tax benefits: The Company has $710 thousand unrecognized tax benefits at December 31, 2020 and 2019. These unrecognized tax benefits relate to former subsidiaries of the Company and a prior investment in a partnership. In future periods, if these unrecognized benefits become supportable, the Company may not recognize a change in its effective tax rate as long as it remains in a partial valuation allowance position. Additionally, the Company does not have uncertain tax positions that it expects will increase or decrease within twelve months of this reporting date. The Company recognizes interest and penalties related to uncertain tax positions as a component of tax expense. The Company did not recognize any interest or penalties in 2020 and 2019. The Company files income tax returns, including returns for its subsidiaries, with federal and state jurisdictions. The Company is no longer subject to IRS or state examinations for any periods prior to 2017, although carryforward attributes that were generated prior to 2017 may still be adjusted upon examination by the IRS if they either have been or will be used in a future period. |
7. Accrued Liabilities
7. Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 7. Accrued Liabilities Accrued liabilities consist of the following at: (Dollars in thousands) December 31, 2020 December 31, 2019 Salaries, wages and related expenses $ 344 $ 238 Liability to shareholders for previous acquisition 363 363 Legal and professional fees 146 65 Warranty and other sale obligations 22 16 Commissions 4 3 Other 140 76 Total $ 1,019 $ 761 |
8. Stockholders' Equity
8. Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders' Equity Common Stock The Company has one class of common stock, par value $.01. Each share of the Company's common stock is entitled to one vote on all matters submitted to stockholders. As of December 31, 2020 and 2019, there were 9,734,607 and 9,570,677 shares of common stock issued and outstanding, respectively. Dividends Dividends are recorded when declared by the Company's Board of Directors. During 2019, the Company declared and paid a special dividend of $3.5 million or $0.37 per common share. A portion of dividends are charged against paid in capital because the Company does not have sufficient retained earnings. There were no dividends declared or paid during 2020. Reservation of Shares The Company had reserved common shares for future issuance as follows as of December 31, 2020: Stock options outstanding 398,750 Common stock available for future equity awards or issuance of options 11,125 Number of common shares reserved 409,875 |
9. Retirement Plan
9. Retirement Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plan | 9. Retirement Plan The Company maintains a voluntary savings and retirement plan under IRC Section 401(k) covering substantially all employees. Employees must complete six months of service and have attained the age of twenty-one prior to becoming eligible for participation in the plan. The Company plan allows eligible employees to contribute a percentage of their compensation on a pre-tax basis and the Company matches employee contributions, on a discretionary basis, currently in an amount equal to 100% of the first 3% and 50% of the next 2% of the employee's salary, subject to annual tax deduction limitations. Effective January 1, 2017, Company matching contributions are vested immediately. Company matching contributions were $77 thousand and $81 thousand for 2020 and 2019, respectively. The Company may also make additional discretionary contributions in amounts as determined by management and the Board of Directors. There were no additional discretionary contributions by the Company for the years 2020 or 2019. |
10. Net Income per Share
10. Net Income per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income per Share | 10. Net income per Share The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for continuing operations for the years ended December 31: (Dollars in thousands, except shares) 2020 2019 Numerator: Net income $ 1,946 $ 323 Denominator: Basic EPS: Common shares outstanding, beginning of period 9,570,677 9,437,177 Weighted average common shares issued during the period 11,209 111,283 Denominator for basic earnings per common shares - Weighted average common shares 9,581,886 9,548,460 Diluted EPS: Common shares outstanding, beginning of period 9,570,677 9,437,177 Common stock equivalents - options 52,617 54,088 Weighted average common shares issued during the period 11,209 111,283 Denominator for diluted earnings per common shares - Weighted average common shares 9,634,503 9,602,548 Not included in the computation of earnings per share, assuming dilution, for the year ended December 31, 2020, were options to purchase 237,000 shares of the Company's 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 year ended December 31, 2019, were options to purchase 313,000 shares of the Company's 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. |
11. Stock Based Compensation
11. Stock Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | 11. Stock Based Compensation Stock-based incentive awards are provided to employees and directors under the terms of the Company's 2006 Equity Incentive Plan (2006 Plan), which was amended and restated effective June 30, 2011, September 16, 2009 and October 20, 2016, 2012 Equity Incentive Plan (the 2012 Plan), which was amended and restated as of October 20, 2016, and 2014 Equity Incentive Plan (the 2014 Plan) (collectively, the Plans). Awards under the Plans have generally included at-the-money options and restricted stock grants. The 2006 Plan was adopted by the Company's Board of Directors on March 16, 2006 and approved by stockholders on May 18, 2006. The 2006 Plan was amended and restated by the Board of Directors effective September 16, 2009, June 30, 2011 and October 20, 2016. The September 16, 2009 amendment increased the initial aggregate number of 250,000 shares of common stock that may be awarded or issued to 600,000, the June 30, 2011 amendment increased the aggregate number of shares of common stock that may be awarded or issued under the 2006 Plan to 1,200,000, and the October 2016 amendment allowed for the award agreement or another agreement entered into between the Company and the award grantee to vary the method of exercise of options issued under the 2006 Plan and the provisions governing expiration of options or other awards under the 2006 Plan following termination of the award recipient. The number of shares that may be awarded under the 2006 Plan and awards outstanding has been adjusted for stock splits and other similar events. Under the 2006 Plan, the Board of Directors is authorized to issue stock options, stock appreciation rights, restricted stock, and other stock-based incentives to officers, employees and others. In connection with seeking stockholder approval of the 2012 Plan, the Company agreed not to make further awards under the 2006 Plan. The 2012 Plan was adopted by the Company's Board of Directors on April 14, 2012 and approved by its stockholders on June 14, 2012. The 2012 Plan was amended and restated by the Board of Directors effective October 20, 2016. The October 2016 amendment allowed for the award agreement or another agreement entered into between the Company and the award grantee to vary the method of exercise of options issued under the 2012 Plan and an agreement entered into between the Company and the award grantee to vary the provisions governing expiration of options or other awards under the 2012 Plan following termination of the award recipient. The 2012 Plan provides an initial aggregate number of 600,000 shares of common stock that may be awarded or issued. The number of shares that may be awarded under the 2012 Plan and awards outstanding may be subject to adjustment on account of any recapitalization, reclassification, stock split, reverse stock split and other dilutive changes in our common stock. Under the 2012 Plan, the Board of Directors is authorized to issue stock options (incentive and nonqualified), stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to employees, officers, directors, consultants and advisors of the Company and its subsidiaries. Incentive stock options may only be granted to employees of the Company and its subsidiaries. The 2014 Plan was adopted by the Company's Board of Directors on March 12, 2014 and approved by its stockholders on June 11, 2014. The 2014 Plan provides an initial aggregate number of 500,000 shares of common stock that may be awarded or issued. The number of shares that may be awarded under the 2014 Plan and awards outstanding may be subject to adjustment on account of any stock dividend, spin-off, stock split, reverse stock split, split-up, recapitalization, reclassification, reorganization, combination or exchange of shares, merger, consolidation, liquidation, business combination, exchange of shares or the like. Under the 2014 Plan, the Board-appointed administrator of the 2014 Plan is authorized to issue stock options (incentive and nonqualified), stock appreciation rights, restricted stock, restricted stock units, phantom stock, performance awards and other stock-based awards to employees, officers and directors of, and other individuals providing bona fide services to or for, the Company or any affiliate of the Company. Incentive stock options may only be granted to employees of the Company and its subsidiaries. In connection with the sale of shares of common stock to Brookstone, the Company entered into an Option Exercise and Stock Transfer Restriction Agreement (collectively, the Option and Transfer Agreements) with its Chief Executive Officer, its Chief Financial Officer and each of its non-employee directors (collectively, the Insiders). The Option and Transfer Agreements amend the stock option grant agreements between the Company and each Insider with respect to an option granted under and modify the terms of any option to purchase common stock held by each such Insider (collectively, Options) granted under, the Plans. The Option and Transfer Agreements restrict the aggregate amount of shares of common stock for which the Insiders may exercise Options during calendar years 2016, 2017, 2018 and 2019, and provide for a modified procedure for exercising Options in order to ensure the limit on the aggregate amount of Options that may be exercised in any such year is not exceeded. Such amendments and modifications also operate to, except with respect to the termination of Options in connection with an Insider's termination of employment or service in connection with misconduct as described in the Option and Transfer Agreements, (i) remove all references to an expiration of the exercisability of such Options within a special, delineated time period following the termination of service to or employment by the Company, and (ii) provide that all vested Options are exercisable by the Insider until default expiration under the applicable Plan (i.e., ten years from the date of grant). If an Option and Transfer Agreement is terminated, the limitations on Option exercises described above will terminate, but the exercisability of the Insider's vested Options until default expiration under the applicable Plan and stock option agreement (i.e., ten years from the date of grant) will survive indefinitely. On January 14, 2020, the Company awarded to members of the Company's Investment Committee and to the Company's CEO special one-time restricted stock awards totaling 68,930 shares of common stock (67,930 from the 2012 Plan and 1,000 from the 2014 Plan) valued at $0.99 per share based on the closing market price of the Company's common stock on the date of grant. The shares will be restricted until vested and vest in two annual installments, with half vesting on the first anniversary of the award date and the remainder vesting on the second anniversary of the award date. During 2020, the Company granted options to purchase 25,000 shares of the Company's 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 $0.70 per share and was based on the closing market price of the Company's common stock on the day prior to the date of grant. Using a Black-Scholes Option Pricing Model, the weighted average fair value of these options is $0.57 per share and was estimated at the date of grant. During 2020, the Company granted options to purchase 25,000 shares of the Company's common stock from the 2012 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 $0.75 per share and was based on the closing market price of the Company's common stock on the date of grant. Using a Black-Scholes Option Pricing Model, the weighted average fair value of these options is $0.61 per share and was estimated at the date of grant. On December 21, 2020, the Company awarded to its CFO and the President of MTI Instruments restricted stock awards totaling 15,000 shares of common stock from the 2014 Plan valued at $3.63 per share based on the closing market price of the Company's common stock on the date of grant. The shares will be restricted until vested and vest in three annual installments beginning on the first anniversary of the award date. During 2019, the Company granted options to purchase 15,000 shares of the Company's 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 $0.83 per share and was based on the closing market price of the Company's common stock on the day prior to the date of grant. Using a Black-Scholes Option Pricing Model, the weighted average fair value of these options is $0.66 per share and was estimated at the date of grant. Stock-based compensation expense for the years ended December 31, 2020 and 2019 was generated from stock option and restricted stock awards. Stock options are awards that allow holders to purchase shares of the Company's common stock at a fixed price. Under the 2014 and 2012 Plans, stock options issued to employees generally vest 25% over four years. Options issued to non-employee members of the MTI Board of Directors generally vest 25% over four years. Certain options granted may be fully or partially exercisable immediately, may vest on other than a four-year schedule or vest upon attainment of specific performance criteria. Restricted stock awards generally vest one to three years after the date of grant, although certain awards may vest immediately or vest upon attainment of specific performance criteria. Option exercise prices are generally equivalent to the closing market value price of the Company's common stock on the date of grant. Unexercised options generally terminate ten years after date of grant. The following table presents the weighted-average assumptions used for options granted under the 2014 Plan: 2020 2019 Option term (years) 6.25 6.26 Volatility 106.22% 99.99% Risk-free interest rate 0.31% 1.37% Dividend yield 0% 0% Weighted-average fair value per option granted $ 0.57 $ 0.66 The following table presents the weighted-average assumptions used for options granted under the 2012 Plan: 2020 Option term (years) 6.25 Volatility 106.46% Risk-free interest rate 0.28% Dividend yield 0% Weighted-average fair value per option granted $ 0.61 Share-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest, therefore, awards are reduced for estimated forfeitures. The revised accounting standard requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Total share-based compensation expense, related to the Company's share-based awards, recognized for the years ended December 31, was comprised as follows: 2020 2019 (Dollars in thousands) Cost of product revenue $ 1 $ 1 Research and product development 7 4 Selling, general and administrative 46 26 Share-based compensation expense $ 54 $ 31 Total unrecognized compensation costs related to non-vested stock options as of December 31, 2020 and December 31, 2019 is $78 thousand and $96 thousand, respectively, and is expected to be recognized over a weighted-average remaining vesting period of approximately 2.55 years and 3.02 years, respectively. Presented below is a summary of the Company's stock option activity for the Plans for the years ended December 31: 2020 2019 Shares under option, beginning 527,875 720,624 Granted 50,000 15,000 Exercised (83,000 ) (133,500 ) Forfeited (27,750 ) – Expired/canceled (68,375 ) (74,249 ) Shares under option, ending 398,750 527,875 Options exercisable 276,000 392,375 Remaining shares available for granting of options 11,125 68,930 The weighted average exercise price for the Company's stock option activity for the Plans is as follows for each of the years ended December 31: 2020 2019 Shares under option, beginning $ 0.89 $ 0.86 Granted $ 0.73 $ 0.83 Exercised $ 1.00 $ 0.56 Forfeited $ 0.90 – Expired/canceled $ 0.73 $ 1.15 Shares under option, ending $ 0.87 $ 0.89 Options exercisable, ending $ 0.89 $ 0.89 The following table summarizes information for options outstanding and exercisable for the Plans as of December 31, 2020: Outstanding Exercisable Weighted Average Weighted Weighted Average Weighted Exercise Remaining Average Remaining Average Price Range Number Contractual Life Exercise Price Number Contractual Life Exercise Price $0.29 - $1.08 349,750 6.18 $ 0.82 227,000 4.84 $ 0.82 $1.09 - $1.20 49,000 4.17 $ 1.20 49,000 4.17 $ 1.20 398,750 5.93 $ 0.87 276,000 4.72 $ 0.89 The aggregate intrinsic value (i.e. the difference between the closing stock price and the price to be paid by the option holder to exercise the option) is $1.5 million for the Company's outstanding options and $1.1 million for the exercisable options as of December 31, 2020. The amounts are based on the Company's closing stock price of $4.71 as of December 31, 2020. Non-vested restricted stock activity is as follows for the year ended December 31: 2020 Restricted 2020 Grant Date Fair Value Non-vested restricted stock balance, beginning January 1 - $0.00 Non-vested restricted stock granted 83,930 $1.46 Vested restricted stock - $0.00 Non-vested restricted stock forfeited/expired (3,000 ) $0.99 Non-vested restricted stock balance, ending December 31 80,930 $1.48 At December 31, 2020, there was $94 thousand of unrecognized compensation cost related to restricted stock awards. This cost is expected to be recognized over a remaining period of 2.15 years. |
12. Commitments and Contingenci
12. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Commitments: Leases The Company determines whether an arrangement is a lease at inception. The Company and its subsidiary have operating leases for certain manufacturing, laboratory, office facilities and certain equipment. The leases have remaining lease terms of less than one year to less than five years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of December 31, 2020 and December 31, 2019, the Company has no assets recorded under finance leases. Lease expense for these leases is recognized on a straight-line basis over the lease term. For the twelve months ended December 31, total lease costs are comprised of the following: (Dollars in thousands) 2020 2019 Operating lease cost $ 308 $ 222 Short-term lease cost 2 – Total net lease cost $ 310 $ 222 Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases. Supplemental cash flows information related to leases for the twelve months ended December 31 was as follows: (Dollars in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 304 $ 222 Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: Operating leases 504 966 Supplemental balance sheet information for the twelve months ended December 31 was as follows: (Dollars in thousands, except lease term and discount rate) 2020 2019 Operating leases: Operating lease ROU asset $ 1,203 $ 947 Current operating lease liabilities $ 316 $ 171 Non-current operating lease liabilities 891 776 Total operating lease liabilities $ 1,207 $ 947 Operating leases: ROU assets $ 1,452 $ 1,164 Asset lease expense (249 ) (217 ) ROU assets, net $ 1,203 $ 947 Weighted Average Remaining Lease Term (in years): Operating leases 3.62 4.92 Weighted Average Discount Rate: Operating leases 5.12% 5.85% Maturities of operating lease liabilities are as follows for the year ending December 31: (Dollars in thousands) 2020 2021 $ 371 2022 375 2023 337 2024 245 2025 – Total lease payments 1,328 Less: imputed interest 121 Total lease obligations 1,207 Less: current obligations 316 Long-term lease obligations $ 891 As of December 31, 2020, there were no additional operating lease commitments that had not yet commenced. Warranties Product warranty liabilities are included in "Accrued liabilities" in the Consolidated Balance Sheets. Below is a reconciliation of changes in product warranty liabilities: 2020 2019 Balance, January 1 $ 16 $ 24 Accruals for warranties issued 22 16 Accruals for pre-existing warranties (12 ) (15 ) Settlements made (in cash or in kind) (4 ) (9 ) Balance, end of period $ 22 $ 16 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. The Company has been named as a party in the December 19, 2019 United States Environmental Protection Agency (EPA) Demand Letter regarding the Malta Rocket Fuel Area Superfund Site (Site) located in Malta and Stillwater, New York in connection with an alleged release of hazardous materials into the environment. The EPA is seeking reimbursement of response costs from all named parties in the amount of approximately $358,000 plus interest in connection with the investigation and disposal activities associated with the various drum caches discovered at the Site, issuance of the Explanation of Significant Differences ("ESD") of the Site, and implementation of the work contemplated by the ESD. The Company considers the likelihood of a material adverse outcome to be remote and does not currently anticipate that any expense or liability it may incur as a result of these matters in the future will be material to the Company's financial condition. |
13. Related Party Transactions
13. Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions MeOH Power, Inc. 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 Company's 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 December 31, 2020 and December 31, 2019, $321 thousand and $312 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. Legal Services During the years ended December 31, 2020 and December 31, 2019, the Company incurred $95 thousand and $54 thousand, respectively, to Couch White, LLP for legal services associated with contract review. A partner at Couch White, LLP is an immediate family member of one of our Directors. Soluna Transactions On January 8, 2020, the Company formed EcoChain as a wholly-owned subsidiary to pursue a new business line focused on cryptocurrency and the blockchain ecosystem. In connection with this new business line, EcoChain established a facility to mine cryptocurrencies and integrate with the blockchain network. Pursuant to an Operating and Management Agreement dated January 13, 2020, by and between EcoChain and Soluna, a Canadian company that develops vertically-integrated, utility-scale computing facilities focused on cryptocurrency mining and cutting-edge blockchain applications, Soluna assisted the Company in developing, and is now operating, the cryptocurrency mining facility. The Operating and Management Agreement requires, among other things, that Soluna provide developmental and operational services, as directed by EcoChain, with respect to the cryptocurrency mining facility in exchange for EcoChain's payment to Soluna of a one-time management fee of $65 thousand and profit-based success payments in the event EcoChain achieves explicit profitability thresholds. Once aggregate earnings before interest, taxes, depreciation and amortization of the mine exceeds the total amount of funding provided by the Company to Soluna (whether pursuant to this agreement or otherwise) for the purposes of creating, developing, assembling and constructing the mine (the Threshold), Soluna is entitled to ongoing success payments of 20.0% of the earnings before interest, taxes, depreciation and amortization of the mine. As of December 31, 2020, no additional payments have been made or due, as the Threshold has not been achieved. Pursuant to the Operating and Management Agreement, during the developmental phase of the cryptocurrency mining facility, which ended on March 14, 2020, Soluna gathered and analyzed information with respect to EcoChain's cryptocurrency mining efforts and produced budgets, financial models, and technical and operational plans, including a detailed business plan, that it delivered to EcoChain in March 2020 (the "Deliverables"), all of which was designed to assist with the efficient implementation of a cryptocurrency mine. The agreement provided that, following EcoChain's acceptance of the Deliverables, which occurred on March 23, 2020, Soluna, on behalf of EcoChain, would commence operations of the cryptocurrency mine in a manner that will allow EcoChain to mine and sell cryptocurrency. In that regard, on May 21, 2020, EcoChain acquired the intellectual property of GigaWatt and certain other property and rights of GigaWatt associated with GigaWatt's operation of a crypto-mining operation located in Washington State. The acquired assets formed the cornerstone of EcoChain's cryptocurrency mining operation. EcoChain sells for U.S. dollars all cryptocurrency it mines and is not in the business of accumulating cryptocurrency on its balance sheet for speculative gains. On October 22, 2020, the Company loaned Soluna $112 thousand to acquire additional assets from the bankruptcy trustee for Giga Watt assets and Soluna further transferred title of the assets to EcoChain, which satisfied the note. On November 19, 2020 EcoChain and Soluna entered into an additional Operating and Management agreement related to a target located in the Southeast United States. In accordance with the terms of the agreement EcoChain paid to Soluna $150 thousand. On December 1, 2020, EcoChain and Soluna entered into an additional Operating and Management agreement for a target located in the West Region, $38 thousand was paid to Soluna in accordance with this agreement, this target subsequently did not meet the business requirements to continue pursuing the investment. Each Operating and Management agreement requires that Soluna shall provide project sourcing services including acquisition negotiations, establishing an operating model, investments/financing timeline and project development path. Simultaneously with entering into the Operating and Management Agreement with Soluna, the Company, pursuant to a purchase agreement it entered into with Soluna, made a strategic investment in Soluna by purchasing 158,730 Class A Preferred Shares of Soluna for an aggregate purchase price of $500 thousand on January 13, 2020. After acceptance of the Deliverables, as required by the terms of the purchase agreement, on March 23, 2020, the Company purchased an additional 79,365 Class A Preferred Shares of Soluna for an aggregate purchase price of $250 thousand. The Company also has the right, but not the obligation, to purchase additional equity securities of Soluna and its subsidiaries (including additional Class A Preferred Shares of Soluna) if Soluna secures certain levels or types of project financing with respect to its own wind power generation facilities. The Company has additionally entered into a Side Letter Agreement, dated January 13, 2020, with Soluna Technologies Investment I, LLC, a Delaware limited liability company that owns, on a fully diluted basis, 61.5% of Soluna and is controlled by a Brookstone Partners-affiliated director of the Company. The Side Letter Agreement provides for the transfer to the Company of additional Class A Preferred Shares of Soluna in the event Soluna issues additional equity below agreed-upon valuation thresholds. Several of Soluna's equityholders are affiliated with Brookstone Partners, the investment firm that holds an equity interest in the Company through Brookstone Partners Acquisition XXIV, LLC. The Company's two Brookstone-affiliated directors also serve as directors and, in one case, as an officer, of Soluna and also have ownership interest in Soluna. In light of these relationships, the various transactions by and between the Company and EcoChain, on the one hand, and Soluna, on the other hand, were negotiated on behalf of the Company and EcoChain via an independent investment committee of the Company's Board of Directors and separate legal representation. The transactions were subsequently unanimously approved by both the independent investment committee and the full Board of Directors of the Company. Three of our directors have various affiliations with Soluna. Chief Executive Officer and Director Michael Toporek (i) owns 90% of the equity of Soluna Technologies Investment I, LLC, which owns 61.5% of Soluna and (ii) owns 100% of the equity of MJT Park Investors, Inc., which owns 3.2% of Soluna, in each case on a fully-diluted basis. Mr. Toporek does not own directly, or indirectly, equity interest in Tera Joule, LLC, which owns 8.5% of Soluna; however, as a result of his 100% ownership of Brookstone IAC, Inc., which is the manager of Tera Joule, LLC, he has dispositive power over the equity interests that Tera Joule owns in Soluna. Director Matthew E. Lipman serves as a director and as acting Secretary and Treasurer of Soluna. Mr. Lipman does not own directly, or indirectly, equity interest in Tera Joule, LLC, which owns 8.5% of Soluna; however, as a result of his position as a director and officer of Brookstone IAC, Inc., which is the manager of Tera Joule, LLC, he has dispositive power over the equity interests that Tera Joule owns in Soluna. As a result, the approximate dollar value of the amount of Mr. Toporek's and Mr. Lipman's interest in the Company's transactions with Soluna through December 31, 2020, are $631 thousand and $0, respectively. The Company's investment in Soluna is carried at the cost of investment and is $750 thousand as of December 31, 2020. The Company owns approximately 1.86% of Soluna's stock, calculated on a fully-diluted basis, as of December 31, 2020. William P. Phelan, a director of the Company, serves as a director of Soluna. |
14. Geographic and Segment Info
14. Geographic and Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Geographic and Segment Information | 14. Geographic and Segment Information The Company sells its products on a worldwide basis with its principal markets listed in the table below where information on product revenue is summarized by geographic area for the Company as a whole for each of the years ended December 31: (Dollars in thousands) 2020 2019 Product revenue: United States $ 6,670 $ 4,248 Association of South East Asian Nations (ASEAN) 1,510 1,714 Europe, the Middle East and Africa (EMEA) 713 463 North America 111 129 South America – 17 Total product revenue $ 9,004 $ 6,571 Revenues are attributed to regions based on the location of customers. In 2020 and 2019, approximately 25.9% and 35.3%, respectively, of our product revenues was from customers outside of the United States. Long-lived assets of $847 thousand and $174 thousand at December 31, 2020 and 2019, respectively, consist of property, plant and equipment all located within the United States. At MTI Instruments, the largest commercial customer in 2020 was a U.S. supplier that builds and executes custom solutions for industry and government markets, which accounted for 9.1% of total product revenue. At MTI Instruments, the largest commercial customer in 2019 was a U.S. manufacturer of support solutions to the aerospace and energy markets, which accounted for 11.0% of total product revenue. The U.S. Air Force continues to be the largest government customer, accounting for 42.9% and 20.8% of total product revenue in 2020 and 2019, respectively. The Company operates in two business segments, Test and Measurement Instrumentation and Cryptocurrency. The Test and Measurement Instrumentation segment designs, manufactures, markets and services computer-based balancing systems for aircraft engines, high performance test and measurement instruments and systems, and wafer characterization tools for the semiconductor and solar industries. The Cryptocurrency segment is focused on cryptocurrency and the blockchain ecosystem. The Company's principal operations in both segments are located in North America. The accounting policies of the Test and Measurement Instrumentation and Cryptocurrency segments are similar to those described in the summary of significant accounting policies herein and in the Company's Annual Report. The Company evaluates performance based on profit or loss from operations before income taxes, accounting changes, items management does not deem relevant to segment performance, and interest income and expense. Inter-segment sales and expenses are not significant. Summarized financial information concerning the Company's reportable segments is shown in the following table. The "Other" column includes corporate related items and items such as income taxes or unusual items, which are not allocated to reportable segments. In addition, segments' non-cash items include any depreciation and amortization in reported profit or loss. (Dollars in thousands) Test and Cryptocurrency Other Condensed Year ended December 31, 2020 Product revenue $ 9,004 $ – $ – $ 9,004 Cryptocurrency revenue – 595 – 595 Research and product development expenses 1,491 – – 1,491 Selling, general and administrative expenses 1,752 445 1,387 3,584 Segment profit / (loss) from operations before 2,498 (209 ) (735 ) 1,554 Segment profit / (loss) 2,498 (209 ) (343 ) 1,946 Total assets 2,676 1,373 4,598 8,647 Capital expenditures 30 805 – 835 Depreciation and amortization 79 80 – 159 The following table presents the details of "Other" segment loss: (Dollars in thousands) Year Ended 2020 Corporate and other (expenses) income: Salaries and benefits $ (608 ) Income tax (expense) benefit 392 Other income (expense), net (127 ) Total expense $ (343 ) |
15. Line of Credit
15. Line of Credit | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | 15. Line of Credit On May 7, 2020, in connection with receipt of the $3.3 million United States Air Force delivery order, MTI Instruments obtained a $300 thousand secured line of credit from Pioneer Bank that will, among other things, assist with MTI Instruments' timely fulfillment of the delivery order. The line of credit may be drawn in the discretion of MTI Instruments and bears interest at a rate of Prime +1% per annum. Accrued interest is due monthly, and principal is payable over a period of 30 days following lender's demand. The line of credit is secured by the assets of MTI Instruments and is guaranteed by the Company. As of December 31, 2020, there were no amounts outstanding under the line of credit. |
16. Subsequent Events
16. Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events In accordance with U.S. GAAP, the Company has evaluated subsequent events for disclosure between the consolidated balance sheet date of December 31, 2020 and March 30, 2021, the date the financial statements were available to be issued. On January 14, 2021, EcoChain established a subsidiary, EcoChain Wind LLC, a Nevada limited liability company, for the purpose of acquiring real property in the Southeastern United States for purposes of building cryptocurrency mining operations at a green data center (the "Facility"). EcoChain signed an agreement, dated January 21, 2021, relating to the acquisition of this property, and closed the acquisition on March 4, 2021. On February 22, 2021, EcoChain executed and entered into an Industrial Power Contract with a power providing cooperative pursuant to which EcoChain will be provided with electric power and energy for use in the Facility. This agreement, and the electric power and energy to be provided to EcoChain, pursuant thereto, will commence upon the completion of the Facility, which is expected to occur on or around the third or fourth quarter of 2021, and will continue for an initial term of five years, with automatic renewals unless EcoChain elects to sooner terminate. EcoChain has agreed to pay the provider for the electric power and energy provided in accordance with the applicable monthly rates, charges and provisions agreed to from time to time between the power provider and the Tennessee Valley Authority ("TVA"), which is subject to modification or adjustment, from time to time, as agreed to between the power provider and the TVA. On February 22, 2021, we filed a definitive proxy statement on Schedule 14A providing notice of a Special Meeting of Shareholders of the Company that was held on March 25, 2021 (the "Special Meeting"). The Special Meeting was held: (i) to approve the Redomestication; (ii) to approve an amendment (the "Amendment") to the Company's restated certificate of incorporation, as amended ("Certificate of Incorporation") to effect, in the discretion of the Board, a reverse stock split of the Company's common stock at any time prior to the 2022 annual meeting of shareholders at a reverse split ratio in the range of between 1-for-2 and 1-for-10, which specific ratio will be determined by our Board (the "Reverse Stock Split"). The Amendment will not be implemented and the Reverse Stock Split will not occur unless the Board determines that the Reverse Stock Split is necessary to satisfy the initial or continued listing standards or requirements of Nasdaq or another national securities exchange and it is in the best interests of the Company and its shareholders to implement the Reverse Stock Split; and to approve the adoption of the Company's 2021 Plan. At the Special Meeting on March 25, 2021, the Company's shareholders approved each of these matters. On February 23, 2021, the Board, pursuant to its powers under the Company's Certificate of Incorporation and amended and restated by-laws ("Bylaws"), appointed William Hazelip as a member of the Board to fill an existing vacancy in the Board, effective February 23, 2021. Mr. Hazelip will serve with directors serving on the class of directors whose terms expire in 2023, and until the 2023 annual meeting of the Company's shareholders, at which time, if nominated, he will stand for election for a three-year term until the third annual meeting of the Company's shareholders following his election, or his earlier resignation, retirement, or other termination of service. On February 24, 2021, the Board, pursuant to its powers under the Company's Certificate of Incorporation and Bylaws, appointed Alykhan Madhavji as a member of the Board to fill an existing vacancy in the Board, effective February 24, 2021. Mr. Madhavji will serve with directors serving on the class of directors whose terms expire in 2022, and until the 2022 annual meeting of the Company's shareholders, at which time, if nominated, he will stand for election for a three-year term until the third annual meeting of the Company's shareholders following his election, or his earlier resignation, retirement, or other termination of service. |
2. Accounting Policies (Policie
2. Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, MTI Instruments and EcoChain. All intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Inventories | Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. The Company periodically reviews inventory quantities on hand and records a provision for excess, slow moving and obsolete inventory based primarily on our estimated forecast of product demand, as well as based on historical usage. The Company also provides estimated inventory allowances for inventory whose carrying value is in excess of net realizable value. Demand and usage for products and materials can fluctuate significantly. A significant decrease in demand for our products could result in a short-term increase in the cost of inventory purchases and an increase of excess inventory quantities on hand. Although the Company makes every effort to assure the accuracy of our forecasts of future product demand, any significant unanticipated changes in demand could have a significant impact on the value of our inventory and our reported operating results. If changes in market conditions result in reductions in the estimated net realizable value of our inventory below our previous estimate, the Company would increase our reserve in the period in which we made such a determination and record a charge to cost of product revenue. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives as follows: Leasehold improvements Lesser of the life of the lease or the useful life of the improvement Computers and related software 3 to 5 years Machinery and equipment 3 to 10 years Office furniture, equipment and fixtures 2 to 10 years Significant additions or improvements extending assets' useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. The costs of fully depreciated assets remaining in use are included in the respective asset and accumulated depreciation accounts. When items are sold or retired, related gains or losses are included in net (loss) income. |
Income Taxes | Income Taxes The Company is subject to income taxes in the U.S. (federal and state). As part of the process of preparing our consolidated financial statements, the Company calculates income taxes for each of the jurisdictions in which the Company operates. This involves estimating actual current taxes due together with assessing temporary differences resulting from differing treatment for tax and accounting purposes that are recorded as deferred tax assets and liabilities, loss carryforwards and tax credit carryforwards, for which income tax benefits are expected to be realized in future years. A valuation allowance has been established to reduce deferred tax assets, if it is more likely than not that all, or some portion, of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the period that includes the enactment date. Significant management judgment is required in determining the Company's provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the Company's net deferred tax assets. The Company considers all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items in determining the Company's valuation allowance. In addition, the Company's assessment requires the Company 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. The Company accounts for taxes in accordance with the asset and liability method of accounting for income taxes. Under this method, the Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The impact of the Company's reassessment of its tax positions for these standards did not have a material impact on its results of operations, financial condition, or liquidity. The Company is currently subject to audit in various jurisdictions, and these jurisdictions may assess additional income tax liabilities against us. Developments in an audit, litigation, or in applicable laws, regulations, administrative practices, principles, and interpretations could have a material effect on the Company's operating results or cash flows in the period or periods in which such developments occur, as well as for prior and in subsequent periods. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating the Company's provision and accruals for these taxes. There are many transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. The Company's effective tax rates could be affected by numerous factors, such as intercompany transactions, earnings being lower than anticipated in jurisdictions where the Company has lower statutory rates and higher than anticipated in jurisdictions where the Company has higher statutory rates, the applicability of special tax regimes, losses incurred in jurisdictions for which the Company is not able to realize the related tax benefit, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to its existing businesses and operations, acquisitions and investments and how they are financed, changes in the Company's stock price, changes in its deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations. |
Equity Method Investments | Equity Investment - Soluna The equity investment in Soluna is carried at the cost of investment and is $750 thousand as of December 31, 2020. The Company owns approximately 1.86% of Soluna's stock, calculated on a fully-diluted basis, as of December 31, 2020. Equity Investments without Readily Determinable Fair Values Our equity investment in Soluna is accounted for under the measurement alternative. Equity securities measured and recorded using the measurement alternative are recorded at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Adjustments resulting from impairments and observable price changes are recorded in the income statement. There was no impairment of investment recognized in 2020. Equity Method Investments The Company's consolidated net income will include our proportionate share, if any, of the net income or loss of our equity method investee. When the Company records its proportionate share of net income, it increases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. Conversely, when the Company records its proportionate share of a net loss, it decreases equity income (loss), net in our consolidated statements of operations and our carrying value in that investment. When the Company's carrying value in an equity method investee company has been reduced to zero, no further losses are recorded in the Company's financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. The Company records its investment in MeOH Power, Inc. using the equity method of accounting. The fair value of the Company's interest in MeOH Power, Inc. has been determined to be $0 as of December 31, 2020 and December 31, 2019, based on MeOH Power, Inc.'s net position and expected cash flows. As of December 31, 2020, the Company retained its ownership of approximately 47.5% of MeOH Power, Inc.'s outstanding common stock, or 75,049,937 shares. The number of shares of MeOH Power, Inc.'s common stock authorized for issuance is 240,000,000 as of December 31, 2020. |
Fair Value Measurement | Fair Value Measurement The estimated fair value of certain financial instruments, including cash, accounts receivable and short-term debt approximates their carrying value due to their short maturities and varying interest rates. "Fair value" is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation methods, the Company is required to provide the following information according to the fair value accounting standards. These standards established a fair value hierarchy as specified that ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities are classified and disclosed in one of the following three categories: Level 1: Level 2: Level 3: |
Revenue Recognition | Revenue Recognition Product Revenue Product revenue consists of revenue recognized from MTI Instruments' product lines. In general, the Company determines revenue recognition by: (1) identifying the contract, or contracts, with the customer; (2) identifying the performance obligations in the contract; (3) determining the contract price; (4) allocating the transaction price to performance obligations in the contract; and (5) recognizing revenue when, or as, the performance obligations are satisfied by transferring the promised goods or services. Based on past experience, the Company reasonably estimates its returns and warranty reserves. Revenue is presented net of discounts and allowances, which are determined when the sale is negotiated. The nature of the Company's contracts do not give rise to variable consideration. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. If the product requires that the Company provide installation, all revenue related to the product is deferred and recognized upon the completion of the installation. If the product requires specific customer acceptance criteria, such as on-site customer acceptance and/or acceptance after install, then revenue is deferred until customer acceptance occurs or the acceptance provisions lapse, unless the Company can objectively and reliably demonstrate that the criteria specified in the acceptance provisions is satisfied. The Company may also record unearned revenues, which include payments for other offerings for which we have been paid in advance. The resulting revenue would be earned when we transfer control of the product or service. As of December 31, 2020 and December 31, 2019, the Company had no deferred or unearned revenue. MTI Instruments currently has distributor agreements in place for the international sale of general instrument and semiconductor products in certain global regions. Such agreements grant a distributor the right of first refusal to act as distributor for such products in the distributor's territory. In return, the distributor agrees to not market other products which are considered by MTI Instruments to be in direct competition with MTI Instruments' products. The distributor is allowed to purchase MTI Instruments' equipment at a price which is discounted off the published domestic/international list prices. Such list prices can be adjusted by MTI Instruments during the term of the distributor agreement. Generally, payment terms with the distributor are standard net 30 days; however, on occasion, extended payment terms have been granted. Title and risk of loss of the product passes to the distributor upon delivery to the independent carrier (standard "free-on-board" factory), and the distributor is responsible for any required training and/or service with the end-user. The sale (and subsequent payment) between MTI Instruments and the distributor is not contingent upon the successful resale of the product by the distributor. Distributor sales are covered by MTI Instruments' standard one-year warranty and there are no special return policies for distributors. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Shipping and handling charges billed to customers is a pass-through from the freight forwarder and is included in product revenue. Cost of Product Revenue Cost of product revenue includes material, labor, overhead and shipping and handling costs. Cryptocurrency Revenue Cryptocurrency revenue consists of revenue recognized from EcoChain's cryptocurrency mining facility. Revenue is recognized at the cryptocurrency's realized cash value based upon the rates at cryptocurrency exchanges where we are registered. Cryptocurrencies are earned when the miners solve complex computations and cryptocurrency is issued as a result. The mined cryptocurrency is immediately paid to the Coinbase wallet. Cryptocurrency is converted to U.S. dollars daily, as EcoChain is not in the business of accumulating cryptocurrency on its balance sheet for speculative gains. Cost of Cryptocurrency Revenue Cost of cryptocurrency revenue includes direct utility costs as well as overhead costs that relate to the operations of EcoChain's cryptocurrency mining facility. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at the invoiced amount billed to customers and do not bear interest. An allowance for doubtful accounts, if necessary, represents the Company's best estimate of the amount of probable credit losses in its existing accounts receivable. The Company determines the allowance based on historical write-off experience and current exposures identified. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers. The Company's allowance for doubtful accounts was $0 at both December 31, 2020 and December 31, 2019. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of the Company's invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from its customers. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer, if the Company expects the benefit of those costs to be longer than one year. As of December 31, 2020 and December 31, 2019, the Company has recorded no capitalized costs to obtain a contract. The Company applies the practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs include our internal sales force compensation programs as we have determined annual compensation is commensurate with annual sales activities. |
Warranty | Warranty The Company accrues a warranty liability at the time product revenue is recorded based on historical experience. The liability is reviewed during the year and is adjusted, if appropriate, to reflect new product offerings or changes in experience. Actual warranty claims are tracked by product line. Warranty liability was $22 thousand and $16 thousand as of December 31, 2020 and 2019, respectively. Warranty expense was $11 thousand and $1 thousand for 2020 and 2019, respectively. |
Long-Lived Assets | Long-Lived Assets The Company accounts for impairment or disposal of long-lived assets in accordance with accounting standards that address the financial accounting and reporting for the impairment or disposal of long-lived assets, specify how impairment will be measured, and how impaired assets will be classified in the consolidated financial statements. On a quarterly basis, the Company analyzes the status of its long-lived assets at each subsidiary for potential impairment. As of December 31, 2020, the Company does not believe that any of its long-lived assets have suffered any type of impairment that would require an adjustment to that asset's recorded value. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid short-term investments with original maturities of less than three months. |
Net Income per Share | Net Income per Share The Company computes basic income per common share by dividing net income by the weighted average number of common shares outstanding during the reporting period. Diluted income per share reflects the potential dilution, if any, computed by dividing income by the combination of dilutive common share equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Company's 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 and the amount of compensation cost, if any, for future service that the Company has not yet recognized are assumed to be used to repurchase shares in the current period. |
Share-Based Payments | Share-Based Payments The Company grants options to purchase our common stock and award restricted stock to our employees and directors under our equity incentive plans. The benefits provided under these plans are share-based payments and the Company accounts for stock-based awards exchanged for employee service in accordance with the appropriate share-based payment accounting guidance. Stock-based compensation represents the cost related to stock-based awards granted to employees and directors. The Company measures stock-based compensation cost at grant date based on the estimated fair value of the award and recognizes the cost as expense on a straight-line basis in accordance with the vesting of the options (net of estimated forfeitures) over the option's requisite service period. The Company estimates the fair value of stock-based awards on the grant date using a Black- Scholes valuation model. The Company uses the fair value method of accounting with the modified prospective application, which provides for certain changes to the method for valuing share-based compensation. The valuation provisions apply to new awards and to awards that are outstanding on the effective date and subsequently modified. Under the modified prospective application, prior periods are not revised for comparative purposes. Stock-based compensation expense is recorded in the lines titled "Cost of product revenue," "Selling, general and administrative expenses" and "Research and product development expenses" in the Consolidated Statements of Operations based on the employees' respective functions. The Company records deferred tax assets for awards that potentially can result in deductions on the Company's income tax returns based on the amount of compensation cost that would be recognized upon issuance of the award and the Company's statutory tax rate. All income tax effects of awards, including excess tax benefits, recognized on stock-based compensation expense are reflected in the Consolidated Statements of Operations as a component of the provision for income taxes on a prospective basis. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company's stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the Company's expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate, and expected dividends. Theoretical valuation models and market-based methods are evolving and may result in lower or higher fair value estimates for share-based compensation. The timing, readiness, adoption, general acceptance, reliability, and testing of these methods is uncertain. Sophisticated mathematical models may require voluminous historical information, modeling expertise, financial analyses, correlation analyses, integrated software and databases, consulting fees, customization, and testing for adequacy of internal controls. For purposes of estimating the fair value of stock options granted using the Black-Scholes model, the Company uses the historical volatility of its stock for the expected volatility assumption input to the Black-Scholes model, consistent with the accounting guidance. The risk-free interest rate is based on the risk-free zero-coupon rate for a period consistent with the expected option term at the time of grant. The Company paid a special dividend during the year ended December 31, 2019 and did not pay any dividends during the year ended December 31, 2020. The Company is required to assume a dividend yield as an input to the Black-Scholes model. Since the 2019 dividend was a special dividend and the Company does not anticipate paying any cash dividends in the foreseeable future, the Company therefore used an expected dividend yield of zero in the option valuation model. The expected option term is calculated based on our historical forfeitures and cancellation rates. The fair value of restricted stock awards is based on the market close price per share on the grant date. The Company expenses the compensation cost of these awards as the restriction period lapses, which is typically a one- to three-year service period to the Company. The shares represented by restricted stock awards are outstanding at the grant date, and the recipients are entitled to voting rights with respect to such shares upon issuance. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk principally consist of cash equivalents and trade accounts receivable. The Company's trade accounts receivable are primarily from sales to commercial customers, the U.S. government and state agencies. The Company does not require collateral and has not historically experienced significant credit losses related to receivables from individual customers or groups of customers in any particular industry or geographic area. The Company has cash deposits in excess of federally insured limits but does not believe them to be at risk. |
Research and Development Costs | Research and Development Costs The Company expenses research and development costs as incurred. The Company incurred research and development costs of approximately $1.5 million and $1.4 million, which was entirely related to MTI Instruments, for the years ended December 31, 2020 and 2019, respectively. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. The Company incurred advertising costs of approximately $39 thousand and $45 thousand, which was entirely related to MTI Instruments, for the years ended December 31, 2020 and 2019, respectively. |
Other Comprehensive Income | Other Comprehensive Income The Company had no other comprehensive income items for the years ended December 31, 2020 and 2019. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liability on our consolidated balance sheets. The Company did not have any finance leases as of December 31, 2020 or December 31, 2019. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU assets also include any lease payments made and excludes lease incentives and initial direct costs incurred. The Company's lease terms may include options to extend or terminate its leases when it is reasonably certain that the Company will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, the Company accounts for lease components together with non-lease components (e.g. common-area maintenance). |
Accounting Updates Not Yet Effective | Accounting Updates Not Yet Effective Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the FASB) in the form of accounting standard updates (ASUs) to the FASB's Accounting Standards Codification (ASC). The Company considered the applicability and impact of all 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 June 2016, the FASB issued ASU 2016-13 (Financial Instruments - Credit Losses (Topic 326)) and its subsequent amendments to the initial guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02, respectively (collectively, Topic 326). Topic 326 changes how entities will measure credit losses for most financial assets and certain other instruments that are not accounted for at fair value through net income. This standard replaces the existing incurred credit loss model and establishes a single credit loss framework based on a current expected credit loss model for financial assets carried at amortized cost, including loans and held-to- maturity debt securities. The current expected loss model requires an entity to estimate credit losses expected over the life of the credit exposure upon initial recognition of that exposure when the financial asset is originated or acquired, which will generally result in earlier recognition of credit losses. This standard also requires expanded credit quality disclosures. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. This standard also simplifies the accounting model for purchased credit-impaired debt securities and loans. This standard will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any In December 2019, the FASB issued ASU 2019-12 (Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes). This standard removes exceptions to the general principles in Topic 740 for allocating tax expense between financial statement components, accounting basis differences stemming from an ownership change in foreign investments and interim period income tax accounting for year-to-date losses that exceed projected losses. The standard will be effective for the Company for annual reporting periods beginning after December 15, 2020 and interim periods within those fiscal years, and while early adoption is permitted, the Company does not expect to elect that option. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. At this time, the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01 (Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). This standard clarifies certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. This standard will reduce diversity in practice and increasing comparability of the accounting for these interactions. The standard will be effective for the Company for annual reporting periods beginning after December 15, 2020 and interim periods within those fiscal years, and while early adoption is permitted, the Company does not expect to elect that option. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. At this time, the Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. |
Accounting Updates Recently Adopted by the Company | Accounting Updates Recently Adopted by the Company On January 1, 2020, the Company adopted ASU No. 2018-18 (Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606). A collaborative arrangement is a contractual arrangement under which two or more parties actively participate in a joint operating activity and are exposed to significant risk and rewards that depend on the activity's commercial success. This standard clarifies when certain transactions between collaborative arrangement participants should be accounted for under ASC 606 and incorporates unit-of-account guidance consistent with ASC 606 to aid in this determination. The adoption of this standard did not have a material impact on its consolidated financial statements. There have been no other significant changes in the Company's reported financial position or results of operations and cash flows as a result of its adoption of new accounting pronouncements or changes to its significant accounting policies that were disclosed in its consolidated financial statements for the fiscal year ended December 31, 2020. |
2. Accounting Policies (Tables)
2. Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Useful Lives | Property, plant and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives as follows: Leasehold improvements Lesser of the life of the lease or the useful life of the improvement Computers and related software 3 to 5 years Machinery and equipment 3 to 10 years Office furniture, equipment and fixtures 2 to 10 years |
3. Accounts Receivables (Tables
3. Accounts Receivables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of accounts receivables | (Dollars in thousands) December 31, 2020 December 31, 2019 U.S. and State Government $ 2 $ 57 Commercial 909 653 Allowance for doubtful accounts – – Other 64 35 Total $ 975 $ 745 |
4. Inventories (Tables)
4. Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | (Dollars in thousands) December 31, 2020 December 31, 2019 Finished goods $ 371 $ 302 Work in process 139 279 Raw materials 318 343 Total $ 828 $ 924 |
5. Property, Plant and Equipm_2
5. Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | (Dollars in thousands) December 31, 2020 December 31, 2019 Leasehold improvements $ 262 $ 39 Computers and related software 1,603 1,026 Machinery and equipment 885 915 Office furniture and fixtures 38 40 2,788 2,020 Less: Accumulated depreciation 1,941 1,846 $ 847 $ 174 |
6. Income Taxes (Tables)
6. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | Income tax benefit for each of the years ended December 31 consists of the following: (Dollars in thousands) 2020 2019 Federal $ – $ 33 State (4 ) (5 ) Deferred 396 – Total $ 392 $ 28 |
Schedule of deferred income tax expense | The significant components of deferred income tax benefit from operations for each of the years ended December 31 consists of the following: (Dollars in thousands) 2020 2019 Deferred tax (expense) benefit $ 83 $ (101 ) Net operating loss carry forward (330 ) (74 ) Valuation allowance 643 175 $ 396 $ – |
Schedule of effective income tax rate | The Company's effective income tax rate from operations differed from the Federal statutory rate for each of the years ended December 31 as follows: 2020 2019 Federal statutory tax rate 21 % 21 % Change in valuation allowance (43 ) (54 ) State taxes, net of federal benefit 0 1 Expiration of stock option 1 14 Federal tax benefits, R&D (3 ) Other Deferred Adjustments (1 ) -- Tax rate (25 )% (9 )% |
Schedule of deferred tax assets | (Dollars in thousands) 2020 2019 Deferred tax assets: Inventory valuation $ 49 $ 43 Vacation pay 20 22 Bonus Accrual – – Warranty and other sale obligations 5 3 Deferred revenue 10 10 Allowance for related party note receivable 69 65 Net operating loss 10,187 10,518 Property, plant and equipment (20 ) (10 ) Stock options 36 72 Research and development tax credit 120 32 10,476 10,755 Valuation allowance (9,717 ) (10,360 ) Net deferred tax assets $ 759 $ 395 |
Schedule of deferred tax asset valuation allowance | Activity in the valuation allowance for deferred tax assets is as follows as of December 31: (Dollars in thousands) 2020 2019 Valuation allowance, beginning of year $ 10,360 $ 10,535 Allowance for related party note receivable (65 ) 3 Inventory (43 ) (7 ) Net operating (loss) income (406 ) (74 ) Property, plant and equipment 10 7 Stock options (72 ) (35 ) Research and development credit (32 ) (82 ) Warranty and other sales obligations (3 ) (2 ) Deferred revenue (10 ) 10 Accrued compensation (22 ) 5 Valuation allowance, end of year $ 9,717 $ 10,360 |
7. Accrued Liabilities (Tables)
7. Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | (Dollars in thousands) December 31, 2020 December 31, 2019 Salaries, wages and related expenses $ 344 $ 238 Liability to shareholders for previous acquisition 363 363 Legal and professional fees 146 65 Warranty and other sale obligations 22 16 Commissions 4 3 Other 140 76 Total $ 1,019 $ 761 |
8. Stockholders' Equity (Tables
8. Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of reserved common shares for future issuance | The Company had reserved common shares for future issuance as follows as of December 31, 2020: Stock options outstanding 398,750 Common stock available for future equity awards or issuance of options 11,125 Number of common shares reserved 409,875 |
10. Net income per share (Table
10. Net income per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of earnings per share | (Dollars in thousands, except shares) 2020 2019 Numerator: Net income $ 1,946 $ 323 Denominator: Basic EPS: Common shares outstanding, beginning of period 9,570,677 9,437,177 Weighted average common shares issued during the period 11,209 111,283 Denominator for basic earnings per common shares - Weighted average common shares 9,581,886 9,548,460 Diluted EPS: Common shares outstanding, beginning of period 9,570,677 9,437,177 Common stock equivalents - options 52,617 54,088 Weighted average common shares issued during the period 11,209 111,283 Denominator for diluted earnings per common shares - Weighted average common shares 9,634,503 9,602,548 |
11. Stock Based Compensation (T
11. Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Weighted average assumptions table | 2020 Option term (years) 6.25 Volatility 106.46% Risk-free interest rate 0.28% Dividend yield 0% Weighted-average fair value per option granted $ 0.61 |
Allocation of share based compensation table | 2020 2019 (Dollars in thousands) Cost of product revenue $ 1 $ 1 Research and product development 7 4 Selling, general and administrative 46 26 Share-based compensation expense $ 54 $ 31 |
Stock option activity table | Presented below is a summary of the Company's stock option activity for the Plans for the years ended December 31: 2020 2019 Shares under option, beginning 527,875 720,624 Granted 50,000 15,000 Exercised (83,000 ) (133,500 ) Forfeited (27,750 ) – Expired/canceled (68,375 ) (74,249 ) Shares under option, ending 398,750 527,875 Options exercisable 276,000 392,375 Remaining shares available for granting of options 11,125 68,930 The weighted average exercise price for the Company's stock option activity for the Plans is as follows for each of the years ended December 31: 2020 2019 Shares under option, beginning $ 0.89 $ 0.86 Granted $ 0.73 $ 0.83 Exercised $ 1.00 $ 0.56 Forfeited $ 0.90 – Expired/canceled $ 0.73 $ 1.15 Shares under option, ending $ 0.87 $ 0.89 Options exercisable, ending $ 0.89 $ 0.89 |
Weighted average exercise price table | Outstanding Exercisable Weighted Average Weighted Weighted Average Weighted Exercise Remaining Average Remaining Average Price Range Number Contractual Life Exercise Price Number Contractual Life Exercise Price $0.29 - $1.08 349,750 6.18 $ 0.82 227,000 4.84 $ 0.82 $1.09 - $1.20 49,000 4.17 $ 1.20 49,000 4.17 $ 1.20 398,750 5.93 $ 0.87 276,000 4.72 $ 0.89 |
Restricted stock activity table | 2020 Restricted 2020 Grant Date Fair Value Non-vested restricted stock balance, beginning January 1 - $0.00 Non-vested restricted stock granted 83,930 $1.46 Vested restricted stock - $0.00 Non-vested restricted stock forfeited/expired (3,000 ) $0.99 Non-vested restricted stock balance, ending December 31 80,930 $1.48 |
12. Commitments and Contingen_2
12. Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease cost | (Dollars in thousands) 2020 2019 Operating lease cost $ 308 $ 222 Short-term lease cost 2 – Total net lease cost $ 310 $ 222 |
Supplemental cash flow information | (Dollars in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 304 $ 222 Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: Operating leases 504 966 |
Supplemental balance sheet information | (Dollars in thousands, except lease term and discount rate) 2020 2019 Operating leases: Operating lease ROU asset $ 1,203 $ 947 Current operating lease liabilities $ 316 $ 171 Non-current operating lease liabilities 891 776 Total operating lease liabilities $ 1,207 $ 947 Operating leases: ROU assets $ 1,452 $ 1,164 Asset lease expense (249 ) (217 ) ROU assets, net $ 1,203 $ 947 Weighted Average Remaining Lease Term (in years): Operating leases 3.62 4.92 Weighted Average Discount Rate: Operating leases 5.12% 5.85% |
Schedule of maturities of operating lease liabilities | (Dollars in thousands) 2020 2021 $ 371 2022 375 2023 337 2024 245 2025 – Total lease payments 1,328 Less: imputed interest 121 Total lease obligations 1,207 Less: current obligations 316 Long-term lease obligations $ 891 |
Schedule of warranty liabilities | 2020 2019 Balance, January 1 $ 16 $ 24 Accruals for warranties issued 22 16 Accruals for pre-existing warranties (12 ) (15 ) Settlements made (in cash or in kind) (4 ) (9 ) Balance, end of period $ 22 $ 16 |
14. Geographic and Segment In_2
14. Geographic and Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Revenue by geographic area | (Dollars in thousands) 2020 2019 Product revenue: United States $ 6,670 $ 4,248 Association of South East Asian Nations (ASEAN) 1,510 1,714 Europe, the Middle East and Africa (EMEA) 713 463 North America 111 129 South America – 17 Total product revenue $ 9,004 $ 6,571 |
Revenue by segment | (Dollars in thousands) Test and Cryptocurrency Other Condensed Year ended December 31, 2020 Product revenue $ 9,004 $ – $ – $ 9,004 Cryptocurrency revenue – 595 – 595 Research and product development expenses 1,491 – – 1,491 Selling, general and administrative expenses 1,752 445 1,387 3,584 Segment profit / (loss) from operations before 2,498 (209 ) (735 ) 1,554 Segment profit / (loss) 2,498 (209 ) (343 ) 1,946 Total assets 2,676 1,373 4,598 8,647 Capital expenditures 30 805 – 835 Depreciation and amortization 79 80 – 159 |
Other segment income and expense table | (Dollars in thousands) Year Ended 2020 Corporate and other (expenses) income: Salaries and benefits $ (608 ) Income tax (expense) benefit 392 Other income (expense), net (127 ) Total expense $ (343 ) |
1. Nature of Operations (Detail
1. Nature of Operations (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ (117,793) | $ (119,739) | |
Working capital | 3,100 | ||
Cash | $ 2,630 | $ 2,510 | $ 5,771 |
2. Accounting Policies (Details
2. Accounting Policies (Details - Useful lives) | 12 Months Ended |
Dec. 31, 2020 | |
Leasehold improvements [Member] | |
Useful live | Lesser of the life of the lease or the useful life of the improvement |
Computer and related software [Member] | |
Useful live | 3 to 5 years |
Machinery and equipment [Member] | |
Useful live | 3 to 10 years |
Office furniture and fixtures [Member] | |
Useful live | 2 to 10 years |
2. Accounting Policies (Detai_2
2. Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Warranty liability | $ 22 | $ 16 |
Warranty expense | 11 | 1 |
Research and development expense | 1,491 | 1,381 |
Advertising expense | 39 | 45 |
Equity investment | 750 | 0 |
Allowance for doubtful accounts | 0 | 0 |
Soluna [Member] | ||
Equity investment | $ 750 | |
Equity ownership percentage | 1.86% | |
Impairment of investment | $ 0 | |
MeOH Power [Member] | ||
Equity investment | $ 0 | $ 0 |
Equity ownership percentage | 47.50% | |
Investment shares owned | 75,049,937 |
3. Accounts Receivable (Details
3. Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Accounts receivable, net | 975 | 745 |
U.S. and State Government [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | 2 | 653 |
Commercial [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | $ 909 | $ 57 |
4. Inventories (Details)
4. Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 371 | $ 302 |
Work in process | 139 | 279 |
Raw materials | 318 | 343 |
Total | $ 828 | $ 924 |
5. Property, Plant and Equipm_3
5. Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,788 | $ 2,020 |
Less: Accumulated depreciation | 1,941 | 1,846 |
Property, plant and equipment, net | 847 | 174 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 262 | 39 |
Computers and related software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,603 | 1,026 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 885 | 915 |
Office furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 38 | $ 40 |
5. Property, Plant and Equipm_4
5. Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 159 | $ 87 |
Repairs and maintenance expense | $ 32 | $ 18 |
6. Income Taxes (Details - Inco
6. Income Taxes (Details - Income tax expense) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ 0 | $ 33 |
State | (4) | (5) |
Deferred | 396 | 0 |
Income tax benefit (expense) | $ 392 | $ 28 |
6. Income Taxes (Details - Defe
6. Income Taxes (Details - Deferred income tax expense) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Deferred tax (expense) benefit | $ 83 | $ (101) |
Net operating loss carry forward | (330) | (74) |
Valuation allowance | 643 | 175 |
Deferred tax benefit (expense) | $ 396 | $ 0 |
6. Income Taxes (Details - Effe
6. Income Taxes (Details - Effective income tax rate) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory tax rate | 21.00% | 21.00% |
Change in valuation allowance | (43.00%) | (54.00%) |
State taxes, net of federal benefit | 0.00% | 1.00% |
Expiration of stock option | 1.00% | 14.00% |
Federal tax benefits, R&D | (3.00%) | 9.00% |
Other Deferred Adjustments | (1.00%) | 0.00% |
Tax rate | (25.00%) | (9.00%) |
6. Income Taxes (Details - De_2
6. Income Taxes (Details - Deferred tax assets) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current deferred tax assets: | |||
Inventory valuation | $ 49 | $ 43 | |
Vacation pay | 20 | 22 | |
Bonus Accrual | 0 | 0 | |
Warranty and other sale obligations | 5 | 3 | |
Deferred revenue | 10 | 10 | |
Allowance for related party note receivable | 69 | 65 | |
Net operating loss | 10,187 | 10,518 | |
Property, plant and equipment | (20) | (10) | |
Stock options | 36 | 72 | |
Research and development tax credit | 120 | 32 | |
Deferred tax assets, gross | 10,476 | 10,755 | |
Valuation allowance | (9,717) | (10,360) | $ (10,535) |
Net deferred tax assets | $ 759 | $ 395 |
6. Income Taxes (Details - Valu
6. Income Taxes (Details - Valuation allowance) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance, beginning of year | $ 10,360 | $ 10,535 |
Allowance for related party note receivable | (65) | 3 |
Inventory | (43) | (7) |
Net operating (loss) income | (406) | (74) |
Property, plant and equipment | 10 | 7 |
Stock options | (72) | (35) |
Research and development credit | (32) | (82) |
Warranty and other sales obligations | (3) | (2) |
Deferred revenue | (10) | 10 |
Accrued compensation | (22) | 5 |
Valuation allowance, end of year | $ 9,717 | $ 10,360 |
6. Income Taxes (Details Narrat
6. Income Taxes (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Incremental tax benefit | $ 643 |
Net operating loss carryforward | $ 49,000 |
Net operating loss carryforward expiration date | Dec. 31, 2035 |
Unrecognized tax benefits | $ 710 |
7. Accrued Liabilities (Details
7. Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Salaries, wages and related expenses | $ 344 | $ 238 |
Liability to shareholders for previous acquisition | 363 | 363 |
Legal and professional fees | 146 | 65 |
Warranty and other sale obligations | 22 | 16 |
Commissions | 4 | 3 |
Other | 140 | 76 |
Accrued liabilities | $ 1,019 | $ 761 |
8. Stockholders' Equity (Detail
8. Stockholders' Equity (Details) | Dec. 31, 2020shares |
Equity [Abstract] | |
Stock options outstanding | 398,750 |
Common stock available for future equity awards or issuance of options | 11,125 |
Number of common shares reserved | 409,875 |
8. Stockholders' Equity (Deta_2
8. Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | |||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock shares issued | 9,734,607 | 9,570,677 | |
Common stock shares outstanding | 9,734,607 | 9,570,677 | 9,437,177 |
Dividends declared and paid | $ 0 | $ 3,500 |
9. Retirement Plan (Details Nar
9. Retirement Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Company matching contributions to pension plan | $ 77 | $ 81 |
10. Income (Loss) per Share (De
10. Income (Loss) per Share (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||
Net income | $ 1,946 | $ 323 |
Basic EPS: | ||
Common shares outstanding, beginning of period | 9,570,677 | 9,437,177 |
Weighted average common shares issued during the period | 11,209 | 111,283 |
Denominator for basic earnings per common shares - Weighted average common shares | 9,581,886 | 9,548,460 |
Diluted EPS: | ||
Common shares outstanding, beginning of period | 9,570,677 | 9,437,177 |
Common stock equivalents - options | 52,617 | 54,088 |
Weighted average common shares issued during the period | 11,209 | 111,283 |
Denominator for diluted earnings per common shares - Weighted average common shares | 9,634,503 | 9,602,548 |
10. Income (Loss) per Share (_2
10. Income (Loss) per Share (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Potentially dilutive securities | 237,000 | 313,000 |
11. Stock Based Compensation (D
11. Stock Based Compensation (Details - Assumptions) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
2014 Plan [Member] | ||
Option term (years) | 6 years 3 months | 6 years 3 months 4 days |
Volatility | 106.22% | 99.99% |
Risk-free interest rate | 0.31% | 1.37% |
Dividend yield | 0.00% | 0.00% |
Weighted-average fair value per option granted | $ 0.57 | $ 0.66 |
2012 Plan [Member] | ||
Option term (years) | 6 years 3 months | |
Volatility | 106.46% | |
Risk-free interest rate | 0.28% | |
Dividend yield | 0.00% | |
Weighted-average fair value per option granted | $ 0.61 |
11. Stock Based Compensation _2
11. Stock Based Compensation (Details - Share Based Compensation) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 54 | $ 31 |
Cost of Product Revenue [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 1 | 1 |
Research and Product Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 7 | 4 |
Selling, general and administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 46 | $ 26 |
11. Stock Based Compensation _3
11. Stock Based Compensation (Details - Option activity) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Shares under option, ending | 398,750 | |
Remaining shares available for granting of options | 11,125 | |
Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Shares under option, beginning | 527,875 | 720,624 |
Granted | 50,000 | 15,000 |
Exercised | (83,000) | (133,500) |
Forfeited | (27,750) | 0 |
Expired/canceled | (68,375) | (74,249) |
Shares under option, ending | 398,750 | 527,875 |
Options exercisable | 276,000 | 392,375 |
Remaining shares available for granting of options | 11,125 | 68,930 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted average exercise price under option, beginning | $ 0.89 | $ 0.86 |
Granted | 0.73 | 0.83 |
Exercised | 1 | 0.56 |
Forfeited | 0.90 | |
Expired/canceled | 0.73 | 1.15 |
Weighted average exercise price under option, ending | 0.87 | 0.89 |
Weighted average exercise price under option exercisable, ending | $ 0.89 | $ 0.89 |
11. Stock Based Compensation _4
11. Stock Based Compensation (Details - Options by Exercise price) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding Options, Number | shares | 398,750 |
Outstanding Options, Weighted Average Remaining Contractual Life | 5 years 11 months 4 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 0.87 |
Options Exercisable, Number | shares | 276,000 |
Options Exercisable, Weighted Average Remaining Contractual Life | 4 years 8 months 19 days |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.89 |
$0.29-$1.08 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding Options, Number | shares | 349,750 |
Outstanding Options, Weighted Average Remaining Contractual Life | 6 years 2 months 5 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 0.82 |
Options Exercisable, Number | shares | 227,000 |
Options Exercisable, Weighted Average Remaining Contractual Life | 4 years 10 months 3 days |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.82 |
$1.09-$1.20 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding Options, Number | shares | 49,000 |
Outstanding Options, Weighted Average Remaining Contractual Life | 4 years 2 months 1 day |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 1.20 |
Options Exercisable, Number | shares | 49,000 |
Options Exercisable, Weighted Average Remaining Contractual Life | 4 years 2 months 1 day |
Options Exercisable, Weighted Average Exercise Price | $ / shares | $ 1.20 |
11. Stock Based Compensation _5
11. Stock Based Compensation (Details - Nonvested Restricted Stock) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Non-vested restricted stock, balance beginning | shares | 0 |
Non-vested restricted stock granted | shares | 83,930 |
Vested restricted stock | shares | 0 |
Non-vested restricted stock forfeited/expired | shares | (3,000) |
Non-vested restricted stock, balance ending | shares | 80,930 |
Weighted Average Exercise Price, Non-vested restricted stock, balance beginning | $ / shares | $ 0 |
Non-vested restricted stock granted | $ / shares | 1.46 |
Vested restricted stock | $ / shares | |
Non-vested restricted stock forfeited | $ / shares | 0.99 |
Weighted Average Exercise Price, Non-vested restricted stock, balance ending | $ / shares | $ 1.48 |
11. Stock Based Compensation _6
11. Stock Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jan. 14, 2020 | Dec. 31, 2020 | Dec. 21, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock price | $ 4.71 | |||
Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option shares granted | 50,000 | 15,000 | ||
Weighted average exercise price shares granted (in dollars per share) | $ 0.73 | $ 0.83 | ||
Total unrecognized compensation costs - options | $ 78 | $ 96 | ||
Weighted-average remaining vesting period | 2 years 6 months 18 days | 3 years 7 days | ||
Aggregate intrinsic value of outstanding options | $ 1,500 | |||
Aggregate intrinsic value of options exercisable | $ 1,100 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average remaining vesting period | 2 years 1 month 24 days | |||
Restricted stock grants during period | 83,930 | |||
Price per share on date of grant | $ 1.46 | |||
Investment Committee and CEO [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 68,930 | |||
Price per share on date of grant | $ 0.99 | |||
2012 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 600,000 | |||
Number of option shares granted | 25,000 | |||
Weighted average exercise price shares granted (in dollars per share) | $ 0.75 | |||
Weighted average fair value shares granted (in dollars per share) | $ 0.61 | |||
2012 Plan [Member] | Investment Committee and CEO [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 67,930 | |||
2014 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 500,000 | |||
Number of option shares granted | 25,000 | 15,000 | ||
Weighted average exercise price shares granted (in dollars per share) | $ 0.70 | $ 0.83 | ||
Weighted average fair value shares granted (in dollars per share) | $ 0.57 | $ 0.66 | ||
2014 Plan [Member] | Investment Committee and CEO [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 1,000 | |||
2014 Plan [Member] | CFO and President of MTI Instruments [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants during period | 15,000 | |||
Price per share on date of grant | $ 3.63 |
12. Commitments and Contingen_3
12. Commitments and Contingencies (Details - Lease cost) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 308 | $ 222 |
Short-term lease cost | 2 | 0 |
Total net lease cost | $ 310 | $ 222 |
12. Commitments and Contingen_4
12. Commitments and Contingencies (Details - Supplemental Cash Flow Info) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 304 | $ 222 |
Non-Cash Activity Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 504 | $ 966 |
12. Commitments and Contingen_5
12. Commitments and Contingencies (Details - Supplemental Balance Sheet Info) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease ROU asset | $ 1,203 | $ 947 |
Current operating lease liabilities | 316 | 171 |
Non-current operating lease liabilities | 891 | 776 |
Total operating lease liabilities | 1,207 | 947 |
ROU assets | 1,452 | 1,164 |
Asset lease expense | (249) | (217) |
ROU assets, net | $ 1,203 | $ 947 |
Weighted Average Remaining Lease Term (in years): Operating leases | 3 years 7 months 13 days | 4 years 11 months 1 day |
Weighted Average Discount Rate: Operating leases | 5.12% | 5.85% |
12. Commitments and Contingen_6
12. Commitments and Contingencies (Details - Lease Maturities) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Future minimum rental payments required under non-cancelable operating leases | ||
2021 | $ 371 | |
2022 | 375 | |
2023 | 337 | |
2024 | 245 | |
2025 | 0 | |
Total lease payments | 1,328 | |
Less: imputed interest | 121 | |
Total lease obligations | 1,207 | $ 947 |
Less: current obligations | 316 | 171 |
Long-term lease obligations | $ 891 | $ 776 |
12. Commitments and Contingen_7
12. Commitments and Contingencies (Details - Warrant liability) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Product warranty, beginning balance | $ 16 | $ 24 |
Accruals for warranties issued | 22 | 16 |
Accruals for pre-existing warranties | (12) | (15) |
Settlements made (in cash or in kind) | (4) | (9) |
Product warranty, ending balance | $ 22 | $ 16 |
12. Commitments and Contingen_8
12. Commitments and Contingencies (Details Narrative) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation accrual | $ 358 |
13. Related Party Transactions
13. Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | Jan. 13, 2020 | Mar. 23, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Professional fees | $ 95 | $ 54 | ||
Soluna [Member] | ||||
Management fee | 65 | |||
Cost of investment | $ 750 | |||
Investment percentage | 1.86% | |||
Soluna [Member] | Class A Preferred Shares [Member] | ||||
Payment for investment | $ 500 | $ 250 | ||
Investment shares purchased | 158,730 | 79,365 | ||
Soluna [Member] | Class A Preferred Shares [Member] | Toporek [Member] | ||||
Value of investment | $ 631 | |||
Soluna [Member] | Class A Preferred Shares [Member] | Lipman [Member] | ||||
Value of investment | $ 0 |
14. Geographic and Segment In_3
14. Geographic and Segment Information (Details - Geographic) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total product revenue | $ 9,599 | $ 6,571 |
North America [Member] | ||
Total product revenue | 129 | |
South America [Member] | ||
Total product revenue | 0 | |
Product Revenue [Member] | ||
Total product revenue | 9,004 | 6,571 |
Product Revenue [Member] | United States [Member] | ||
Total product revenue | 4,248 | |
Product Revenue [Member] | ASEAN [Member] | ||
Total product revenue | 1,510 | 1,714 |
Product Revenue [Member] | E M E A [Member] | ||
Total product revenue | 713 | 463 |
Product Revenue [Member] | North America [Member] | ||
Total product revenue | 111 | |
Product Revenue [Member] | South America [Member] | ||
Total product revenue | $ 17 | |
United States [Member] | Product Revenue [Member] | ||
Total product revenue | $ 6,670 |
14. Geographic and Segment In_4
14. Geographic and Segment Information (Details - Segment) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 9,599 | $ 6,571 |
Research and development expenses | 1,491 | 1,381 |
Selling, general and administrative expenses | 3,584 | 2,726 |
Segment profit/(loss) from operations before income taxes | 1,554 | 295 |
Net income | 1,946 | 323 |
Total assets | 8,647 | 5,751 |
Product Revenue [Member] | ||
Revenues | 9,004 | 6,571 |
Cryptocurrency Revenue [Member] | ||
Revenues | 595 | $ 0 |
Reportable Subsegments [Member] | ||
Research and development expenses | 1,491 | |
Segment profit/(loss) from operations before income taxes | 1,554 | |
Total assets | 8,647 | |
Capital expenditures | 835 | |
Depreciation and amortization | 159 | |
Reportable Subsegments [Member] | Product Revenue [Member] | ||
Revenues | 9,004 | |
Reportable Subsegments [Member] | Cryptocurrency Revenue [Member] | ||
Revenues | 595 | |
Test and Measurement Instrumentation [Member] | ||
Research and development expenses | 1,491 | |
Selling, general and administrative expenses | 1,752 | |
Segment profit/(loss) from operations before income taxes | 2,498 | |
Net income | 2,498 | |
Total assets | 2,676 | |
Capital expenditures | 30 | |
Depreciation and amortization | 79 | |
Test and Measurement Instrumentation [Member] | Product Revenue [Member] | ||
Revenues | 9,004 | |
Test and Measurement Instrumentation [Member] | Cryptocurrency Revenue [Member] | ||
Revenues | 0 | |
Crytocurrency [Member] | ||
Research and development expenses | 0 | |
Selling, general and administrative expenses | 445 | |
Segment profit/(loss) from operations before income taxes | (209) | |
Net income | (209) | |
Total assets | 1,376 | |
Capital expenditures | 805 | |
Depreciation and amortization | 80 | |
Crytocurrency [Member] | Product Revenue [Member] | ||
Revenues | 0 | |
Crytocurrency [Member] | Cryptocurrency Revenue [Member] | ||
Revenues | 595 | |
Other [Member] | ||
Research and development expenses | 0 | |
Selling, general and administrative expenses | 1,387 | |
Segment profit/(loss) from operations before income taxes | (735) | |
Net income | (343) | |
Total assets | 4,598 | |
Capital expenditures | 0 | |
Depreciation and amortization | 0 | |
Other [Member] | Product Revenue [Member] | ||
Revenues | 0 | |
Other [Member] | Cryptocurrency Revenue [Member] | ||
Revenues | $ 0 |
14. Geographic and Segment In_5
14. Geographic and Segment Information (Details - Other Expenses) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income tax (expense) benefit | $ (392) | $ (28) |
Other income (expense), net | 104 | 36 |
Net income | 1,946 | $ 323 |
Other [Member] | ||
Salaries and benefits | (608) | |
Income tax (expense) benefit | 392 | |
Other income (expense), net | (127) | |
Net income | $ (343) |
15. Line of Credit (Details Nar
15. Line of Credit (Details Narrative) - Pioneer Bank [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Line of credit maximum amount | $ 300 |
Line of credit interest rate | Prime +1% per annum |
Line of credit outstanding | $ 0 |