Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 13, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MICRON SOLUTIONS INC /DE/ | |
Entity Central Index Key | 0000819689 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 2,895,362 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Trading Symbol | MICR | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Security Exchange Name | NYSE | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 503 | $ 1,715 |
Trade accounts receivable, net of allowance for doubtful accounts of $39,169 at September 30, 2019 and $40,000 at December 31, 2018 | 2,379,496 | 2,325,804 |
Inventories | 2,639,385 | 3,685,059 |
Assets held for sale, net | 688,750 | |
Prepaid expenses and other current assets | 279,215 | 389,390 |
Total current assets | 5,298,599 | 7,090,718 |
Property, plant and equipment, net | 4,148,730 | 5,131,773 |
Intangible assets, net | 48,920 | 53,155 |
Other assets | 5,145 | 5,140 |
Total assets | 9,501,394 | 12,280,786 |
Current liabilities: | ||
Revolving line of credit | 1,162,145 | 2,025,592 |
Term notes payable, current portion, net | 389,420 | 389,420 |
Accounts payable | 611,767 | 1,200,298 |
Accrued expenses and other current liabilities | 785,449 | 459,108 |
Contract liabilities, current portion | 24,723 | 560,802 |
Total current liabilities | 2,973,504 | 4,635,220 |
Long-term liabilities: | ||
Term notes payable, non-current portion, net | 3,265,393 | 3,557,458 |
Subordinated promissory notes, non-current portion, net | 467,167 | |
Total long-term liabilities | 3,732,560 | 3,557,458 |
Total liabilities | 6,706,064 | 8,192,678 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Preferred stock, $0.001 par value; 2,000,000 shares authorized, none issued | ||
Common stock, $0.01 par value; 10,000,000 shares authorized; 3,926,491 issued, 2,895,362 outstanding at September 30, 2019 and 3,926,491 issued, 2,861,008 outstanding at December 31, 2018 | 39,265 | 39,265 |
Additional paid-in-capital | 11,715,002 | 11,604,817 |
Treasury stock at cost, 1,031,129 shares at September 30, 2019 and 1,065,483 shares at December 31, 2018 | (2,813,745) | (2,907,490) |
Accumulated deficit | (6,145,192) | (4,648,484) |
Total shareholders’ equity | 2,795,330 | 4,088,108 |
Total liabilities and shareholders’ equity | $ 9,501,394 | $ 12,280,786 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 39,169 | $ 40,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,926,491 | 3,926,491 |
Common stock, shares outstanding | 2,895,362 | 2,861,008 |
Treasury stock, shares | 1,031,129 | 1,065,483 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Codensed Consolidated Statements of Operations [Abstract] | ||||
Net sales | $ 4,331,280 | $ 5,001,660 | $ 13,909,101 | $ 15,441,134 |
Cost of sales | 3,813,882 | 4,266,636 | 12,227,430 | 13,096,930 |
Gross profit | 517,398 | 735,024 | 1,681,671 | 2,344,204 |
Selling and marketing | 170,065 | 189,031 | 486,449 | 583,607 |
General and administrative | 700,622 | 509,179 | 2,283,563 | 1,642,306 |
Research and development | 26,578 | 25,372 | 80,357 | 80,094 |
Total operating expenses | 897,265 | 723,582 | 2,850,369 | 2,306,007 |
Net income (loss) from operations | (379,867) | 11,442 | (1,168,698) | 38,197 |
Other income (expense): | ||||
Interest expense | (109,776) | (101,439) | (332,553) | (294,467) |
Other income (expense), net | (17,334) | 12,826 | 4,543 | 33,133 |
Total other expense, net | (127,110) | (88,613) | (328,010) | (261,334) |
Net income (loss) before income tax provision (benefit) | (506,977) | (77,171) | (1,496,708) | (223,137) |
Income tax provision (benefit) | 0 | 0 | 0 | 0 |
Net income (loss) | $ (506,977) | $ (77,171) | $ (1,496,708) | $ (223,137) |
Earnings (loss) per share - basic and diluted | $ (0.18) | $ (0.03) | $ (0.52) | $ (0.08) |
Weighted average common shares outstanding - basic and diluted | 2,889,408 | 2,853,111 | 2,878,049 | 2,847,660 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2017 | $ 39,265 | $ 11,532,207 | $ (2,966,798) | $ (3,536,186) | $ 5,068,488 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2017 | 3,926,491 | 1,087,217 | |||
Share-based compensation | 14,370 | 14,370 | |||
Issuance of common stock from treasury, shares | (5,661) | ||||
Issuance of common stock from treasury | 4,427 | $ 15,448 | 19,875 | ||
Net income (loss) | (179,647) | (179,647) | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2018 | $ 39,265 | 11,551,004 | $ (2,951,350) | (3,729,824) | 4,909,095 |
Shares, Outstanding, Ending Balance at Mar. 31, 2018 | 3,926,491 | 1,081,556 | |||
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2017 | $ 39,265 | 11,532,207 | $ (2,966,798) | (3,536,186) | 5,068,488 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2017 | 3,926,491 | 1,087,217 | |||
Net income (loss) | (223,137) | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2018 | $ 39,265 | 11,577,322 | $ (2,921,372) | (3,773,314) | 4,921,901 |
Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 3,926,491 | 1,070,570 | |||
Change in accounting principle - ASC 606 | (13,991) | (13,991) | |||
Stockholders' Equity Attributable to Parent, Beginning Balance at Mar. 31, 2018 | $ 39,265 | 11,551,004 | $ (2,951,350) | (3,729,824) | 4,909,095 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2018 | 3,926,491 | 1,081,556 | |||
Share-based compensation | 8,817 | 8,817 | |||
Issuance of common stock from treasury, shares | (5,242) | ||||
Issuance of common stock from treasury | 5,571 | $ 14,304 | 19,875 | ||
Net income (loss) | 33,681 | 33,681 | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2018 | $ 39,265 | 11,565,392 | $ (2,937,046) | (3,696,143) | 4,971,468 |
Shares, Outstanding, Ending Balance at Jun. 30, 2018 | 3,926,491 | 1,076,314 | |||
Share-based compensation | 7,729 | 7,729 | |||
Issuance of common stock from treasury, shares | (5,744) | ||||
Issuance of common stock from treasury | 4,201 | $ 15,674 | 19,875 | ||
Net income (loss) | (77,171) | (77,171) | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2018 | $ 39,265 | 11,577,322 | $ (2,921,372) | (3,773,314) | 4,921,901 |
Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 3,926,491 | 1,070,570 | |||
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2018 | $ 39,265 | 11,604,817 | $ (2,907,490) | (4,648,484) | 4,088,108 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 3,926,491 | 1,065,483 | |||
Share-based compensation | 29,862 | 29,862 | |||
Issuance of common stock from treasury, shares | (11,200) | ||||
Issuance of common stock from treasury | (2,562) | $ 30,562 | 28,000 | ||
Net income (loss) | (518,773) | (518,773) | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2019 | $ 39,265 | 11,632,117 | $ (2,876,928) | (5,167,257) | 3,627,197 |
Shares, Outstanding, Ending Balance at Mar. 31, 2019 | 3,926,491 | 1,054,283 | |||
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2018 | $ 39,265 | 11,604,817 | $ (2,907,490) | (4,648,484) | 4,088,108 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 3,926,491 | 1,065,483 | |||
Net income (loss) | (1,496,708) | ||||
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2019 | $ 39,265 | 11,715,002 | $ (2,813,745) | (6,145,192) | 2,795,330 |
Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 3,926,491 | 1,031,129 | |||
Stockholders' Equity Attributable to Parent, Beginning Balance at Mar. 31, 2019 | $ 39,265 | 11,632,117 | $ (2,876,928) | (5,167,257) | 3,627,197 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2019 | 3,926,491 | 1,054,283 | |||
Share-based compensation | 30,000 | 30,000 | |||
Issuance of common stock from treasury, shares | (10,981) | ||||
Issuance of common stock from treasury | (1,965) | $ 29,965 | 28,000 | ||
Issuance of warrants | 32,236 | 32,236 | |||
Net income (loss) | (470,958) | (470,958) | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2019 | $ 39,265 | 11,692,388 | $ (2,846,963) | (5,638,215) | 3,246,475 |
Shares, Outstanding, Ending Balance at Jun. 30, 2019 | 3,926,491 | 1,043,302 | |||
Share-based compensation | 24,250 | 24,250 | |||
Issuance of common stock from treasury, shares | (12,173) | ||||
Issuance of common stock from treasury | (5,218) | $ 33,218 | 28,000 | ||
Issuance of warrants | 3,582 | 3,582 | |||
Net income (loss) | (506,977) | (506,977) | |||
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2019 | $ 39,265 | $ 11,715,002 | $ (2,813,745) | $ (6,145,192) | $ 2,795,330 |
Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 3,926,491 | 1,031,129 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (1,496,708) | $ (223,137) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Gain on sale of assets | (7,602) | |
Depreciation and amortization | 1,108,018 | 1,130,000 |
Non-cash interest expense | 60,026 | 50,443 |
Change in allowance for doubtful accounts | 831 | |
Share-based compensation expense | 168,112 | 90,541 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (54,523) | (334,469) |
Inventories | 1,087,278 | (483,847) |
Prepaid expenses and other current and non-current assets | 110,170 | (98,922) |
Other non-current assets | 1,000 | |
Accounts payable | (588,531) | (86,616) |
Accrued expenses and other current liabilities | 320,092 | 297,228 |
Contract liabilities | (536,079) | 186,761 |
Net cash provided by operating activities | 171,084 | 528,982 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (161,928) | (456,488) |
Proceeds from sale of property, plant and equipment | 32,602 | |
Proceeds from sale of assets held for sale | 663,334 | |
Cash paid for patents and trademarks | (2,661) | |
Net cash provided by (used in) investing activities | 534,008 | (459,149) |
Cash flows from financing activities: | ||
Payments on revolving line of credit, net | (863,447) | (334,830) |
Payments on term notes payable | (342,857) | (304,762) |
Payments of debt issuance costs | (34,389) | |
Proceeds from subordinated debt | 500,000 | |
(Payments on) subordinated debt | (350,000) | |
Net cash provided by (used in) financing activities | (706,304) | (1,023,981) |
Net change in cash and cash equivalents | (1,212) | (954,148) |
Cash and cash equivalents, beginning of period | 1,715 | 956,988 |
Cash and cash equivalents, end of period | 503 | 2,840 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 272,526 | 244,819 |
Non-cash activities: | ||
Issuance of common stock warrants in connection with subordinated notes payable | 35,818 | |
Issuance of treasury stock for directors' fees | $ 84,000 | 45,426 |
Adjustment to accumulated deficit for change in accounting principle (ASC 606) | $ (13,991) |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation and Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | 1. Ba sis of Presentation and Accounting Policies The condensed consolidated financial statements (the "financial statements") include the accounts of Micron Solutions, Inc. (“Micron Solutions”) and its subsidiary, Micron Products, Inc. ("Micron" and together with Micron Solutions, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. The financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations. These financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 19, 2019 . The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The Company's balance sheet at December 31, 2018 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. The information presented reflects, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial results for the interim periods presented. The preparation of financial statements in conformity with GAAP requires 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 financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Liquidity and Management’s Plan The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. T he Company identified certain conditions and events which in the aggregate required management to perform an assessment of the Company’s ability to continue as a going concern. These conditions included the Company’s negative financial history and the current liquidity position, including $503 of cash as of September 30, 2019 and approximately $1,000,000 of borrowing capacity o n its revolving line of credit with Rockland Trust Company (the “Revolver”). Management has performed an analysis to evaluate the entity’s ability to continue as a going concern for one year after the financial statements issuance date. Management’s analysis includes forecasting future revenues, expenditures and cash flows, taking into consideration past performance and the requirements under the credit agreement. Revenue and cash flow forecasts are dependent on the Company’s ability to fill booked orders from customers, its ability to close new and expanded business , its implementation of production efficiencies, and improve ment of its overall financial performance. In addition, the Company has amended its bank debt agreement to eliminate its debt service coverage covenant for the three months ended September 30, 2019. Based on management’s analysis, the Company believes that cash flows from its operations, together with its existing working capital, booked orders, expense management, and availability on its Revolver will be sufficient to fund operations at current levels and repay debt obligations over the next twelve months from the finan cial statements issuance date. H owever, there can be no assurance that the Company will be able to do so. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases,” which requires a lessee to recognize lease liabilities for the lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and right-of-use assets, representing the lessee’s right to use, or to control the use of, specified assets for the lease term. The Company adopted the ASU on January 1, 2019 and, based on its current portfolio of leases (which consists solely of an office equipment lease), no lease assets or liabilities have been recognized in these financial statements, Management does not expect any recently issued, but not yet effective, accounting standards to have a material effect on its results of operations or financial conditions. Revenue Recognition During the nine months ended September 30, 2019, the Company recognized as revenue $5 46,889 of amounts recorded as Contract Liabilities at December 31, 2018. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventories [Abstract] | |
Inventories | 2. Inventories Inventories consist of the following: September 30, December 31, 2019 2018 Raw materials $ 928,730 $ 1,079,887 Work-in-process 407,775 1,105,272 Finished goods 1,302,880 1,499,900 Total $ 2,639,385 $ 3,685,059 Silver included in raw materials, work-in-process and finished goods inventory had an estimated cost of $394,056 and $461,272 as of September 30, 2019 and December 31, 2018 , respectively. |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment, net [Abstract] | |
Property, Plant and Equipment, net | 3. Property, Plant and Equipment, net Property, plant and equipment, net consist of the following: Asset Lives September 30, December 31, (in years) 2019 2018 Machinery and equipment 3 to 15 $ 18,127,460 $ 17,978,781 Building and improvements 5 to 25 3,991,951 3,991,951 Vehicles 3 to 5 100,096 98,119 Furniture, fixtures, computers and software 3 to 5 1,464,902 1,440,071 Construction in progress 25,208 168,094 Total property, plant and equipment 23,709,617 23,677,016 Less: accumulated depreciation (19,560,887) (18,545,243) Property, plant and equipment, net $ 4,148,730 $ 5,131,773 Construction in progress is generally comprised of internal tooling in process. For the three months ended September 30, 2019 and 2018 , the Company recorded depreciation expense of $358,024 and $361,077 , respectively. For the nine months ended September 30, 2019 and 2018, the Company recorded depreciation expense of $1,103,783 and $1,126,773 , respectively. |
Assets Held For Sale
Assets Held For Sale | 9 Months Ended |
Sep. 30, 2019 | |
Assets Held For Sale [Abstract] | |
Assets Held For Sale | 4. Assets Held for Sale In January 2016, the Co mpany entered into a Purchase and Sale Agreement with a buyer (collectively the “Parties”) to sell two unoccupied buildings, with a total of approximately 52,000 square feet, and land, at its Fitchburg, Massachusetts campus. As a result, the Company classified the property as Assets Held for Sale with a carrying value of $688,750 , which approximated the fair value less the expected cost to sell. On August 6, 2019, the Company closed on the sale of the property and received proceeds of $663,334 which is net of selling costs incurred. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt [Abstract] | |
Debt | 5. Debt The following table sets forth the items which comprise debt for the Company: September 30, December 31, 2019 2018 Revolving line of credit $ 1,162,145 $ 2,025,592 Total term notes payable, net of issuance costs $ 3,654,813 $ 3,946,878 Less current portion, net 389,420 389,420 Term notes payable, non-current, net 3,265,393 3,557,458 Subordinated notes payable, non-current, net 467,167 — Total long term debt, net 3,732,560 3,557,458 Total short and long term debt, net $ 5,284,125 $ 5,972,470 Availability to borrow under the Revolver is based on conditions defined in the credit agreement and amounts to $1,013,270 , at September 30 , 2019. The interest rate at September 30 , 2019 was 5.36% . The interest ra te on the Term Notes at September 30 , 2019 was 5.61% . Subordinated promissory notes In June 2019, the Company initiated a private offering to raise up to $500,000 through the sale of subordinated promissory notes (the “Notes”). The subscription for $500,000 was completed on July 5, 2019. The Notes bear interest on the unpaid principal at a simple annual interest rate equal to 10% per annum from the date of issuance. Interest only is payable in cash on a quarterly basis. The Notes mature on June 28, 2022 . Each investor entered into a Subordination Agreement providing that the indebtedness pursuant to the Notes shall be subordinated to all indebtedness of the Company pursuant to its existing credit agreement with Rockland Trust Company . F or every $50,000 in principal invested in the notes, each investor received a warrant to purchase 10,000 shares of common stock (collectively, the “Warrants”, see Note 8). The Warrants are exercisable at an exercise price equal to $2.90 per share, namely, the average closing market price of the Company’s common stock on the fifteen days prior to the date of the Warrant, plus 12% . The Warrants contain standard provisions relating to anti-dilution adjustments for stock splits and recapitalizations. The Warrants also provide the investors with standard piggy-back registration rights in the event the Company files a registration statement (other than a registration statement on Form S-4 or S-8) to register the shares of common stock subject to standard limitations in the discretion of any underwriter. In order to account for the subordinated notes payable and warrants, the Company allocated the proceeds between the notes and warrants on a relative fair value basis. As a result, the Company allocated $464,182 to the notes and $35,818 to the warrants. The total discount on the notes is being recognized as non-cash interest expense over the term of the notes. As of September 30, 2019, non-cash interest expense in the amount of $2,985 was recorded as amortization of the discount. Related parties participated in the private offering as follows: Jason Chambers, Director $50,000 Rodd Friedman, Director $100,000 Andrei Soran, Director $50,000 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | 6. Income Taxes As of September 30, 2019, the Company continues to maintain a valuation allowance against all of its domestic and foreign deferred tax assets, except for its AMT Credit carryforward, which is treated as a refundable attribute under the new tax law. At September 30, 2019 , the Company has federal and state net operating loss carryforwards totaling $11,300,000 and $12,195,000 , respectively, which begin to expire in 2031. The Company also has federal and state tax credit carryovers of $306,000 and $278,000 respectively. The federal and state tax credits begin to expire in 2027 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Legal matters In the ordinary course of its business, the Company is involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s financial position or results of operations. Off-balance sheet arrangements Lease expense under all operating leases for the three months ended September 30, 2019 and 2018 was $ 4,713 and $6,056 respectively, and for the nine months ended September 30, 2019 and 2018, was $15,900 and $17,977 respectively. The underlying lease is not being capitalized under ASC 842, Leases , as management has determined it is not material. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 8. Shareholders’ Equity Stock options and share-based incentive plans The following table sets forth the stock option transactions for the year ended September 30, 2019 : Weighted Weighted average Average remaining Aggregate Number of Exercise contractual Intrinsic options Price term (in years) Value Outstanding at December 31, 2018 393,500 $ 4.89 7.22 $ 960 Granted 45,000 2.50 Forfeited (48,337) 4.06 Expired (55,664) 5.68 Outstanding at September 30, 2019 334,499 $ 4.56 6.94 $ — Exercisable at September 30, 2019 149,823 $ 6.02 4.33 $ — Exercisable at December 31, 2018 182,164 $ 6.09 4.81 $ 960 For the three months ended September 30, 2019 and 2018, share based compensation expense related to stock options amounted to $11,318 and $7,729 , respectively. For the nine months ended September 30, 2019 and 2018, those amounts were $56,662 and $30,910 respectively. Share based compensation is included in general and administrative expenses. For the three months ended September 30, 2019, 37,500 op tions were granted, none were exercised and none were forfeited. For the three months ended September 30, 2018, no options were granted, none were exercised and none were forfeited. For the nine months ended September 30, 2018, 90,000 options were granted with a fair value of $0.50 per share, no options were exercised and 2,000 options were forfeited. Unrecognized stock based compensation expense related to stock options as of September 30, 2019 was $108,571 which is expected to be recognized over a period of 2.7 years. In March 2019, the Company issued 15,000 restricted stock units with a fair value of $3.20 per share which vest on the one year anniversary of the grant. In September 2019, the Company issued 6,667 restricted stock units with a fair value of $2.25 per share and which vest one year from the date of grant. For the three months ended September 30, 2019 and 2018, share based compensation expense related to restricted stock units amounted to $12,932 and $0 , respectively. For the nine months ended September 30, 2019 and 2018, share based compensation expense related to restricted stock units amounted to $27,450 and $0 , respectively. Unrecognized stock based compensation related to restricted stock units as of September 30, 2019 was $35,551 , which is expected to be recognized over a period of 0.65 years. 2019 Equity Incentive Plan On March 25, 2019, the Company’s Board of Directors adopted the 2019 Equity Incentive Plan (the “ 2019 Plan ”) which was approved by the stockholders at the May 23, 2019 Annual Meeting. The 2019 Plan authorizes the issuance of an aggregate of 500,000 shares. All non-issued shares of the 2010 Equity Incentive Plan expired upon the adoption of the 2019 Plan. The 2019 Plan provides the Company flexibility to award a mix of stock options, equity incentive grants, performance awards and other types of stock-based compensation. Warrants On June 28, 2019, 90,000 warrants were issued with an exercise price of $2.90 in conjunction with the Company’s subordinated notes payable offering. On July 5, 2019, 10,000 warrants were issued with an exercise price of $2.90 . The warrants are exercisable upon issuance for three years. 90,000 warrants expire in June 2022 and 10,000 warrants expire in July 2022. Common Stock For the three months ended September 30, 2019, the Company issued 12,173 shares of the Company’s common stock, with a fair value of $28,000 for director fees in lieu of cash payments. For the three months ended September 30, 2018, the Company issued 5,744 shares of the Company’s common stock, with a fair value of $19,875 for director fees in lieu of cash payments. For the nine months ended September 30, 2019, the Company issued 34,354 shares of the Company’s common stock, with a fair value of $84,000 for director fees in lieu of cash payments. For the nine months ended September 30, 2018, the Company issued 16,647 shares of the Company’s common stock, with a fair value of $ 5 9,625 for director fees in lieu of cash payments. |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation and Accounting Policies [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements (the "financial statements") include the accounts of Micron Solutions, Inc. (“Micron Solutions”) and its subsidiary, Micron Products, Inc. ("Micron" and together with Micron Solutions, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. The financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been omitted pursuant to such rules and regulations. These financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 19, 2019 . The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The Company's balance sheet at December 31, 2018 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. The information presented reflects, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial results for the interim periods presented. The preparation of financial statements in conformity with GAAP requires 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 financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Liquidity And Management's Plan | Liquidity and Management’s Plan The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. T he Company identified certain conditions and events which in the aggregate required management to perform an assessment of the Company’s ability to continue as a going concern. These conditions included the Company’s negative financial history and the current liquidity position, including $503 of cash as of September 30, 2019 and approximately $1,000,000 of borrowing capacity o n its revolving line of credit with Rockland Trust Company (the “Revolver”). Management has performed an analysis to evaluate the entity’s ability to continue as a going concern for one year after the financial statements issuance date. Management’s analysis includes forecasting future revenues, expenditures and cash flows, taking into consideration past performance and the requirements under the credit agreement. Revenue and cash flow forecasts are dependent on the Company’s ability to fill booked orders from customers, its ability to close new and expanded business , its implementation of production efficiencies, and improve ment of its overall financial performance. In addition, the Company has amended its bank debt agreement to eliminate its debt service coverage covenant for the three months ended September 30, 2019. Based on management’s analysis, the Company believes that cash flows from its operations, together with its existing working capital, booked orders, expense management, and availability on its Revolver will be sufficient to fund operations at current levels and repay debt obligations over the next twelve months from the finan cial statements issuance date. H owever, there can be no assurance that the Company will be able to do so. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases,” which requires a lessee to recognize lease liabilities for the lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and right-of-use assets, representing the lessee’s right to use, or to control the use of, specified assets for the lease term. The Company adopted the ASU on January 1, 2019 and, based on its current portfolio of leases (which consists solely of an office equipment lease), no lease assets or liabilities have been recognized in these financial statements, Management does not expect any recently issued, but not yet effective, accounting standards to have a material effect on its results of operations or financial conditions. |
Revenue Recognition | Revenue Recognition During the nine months ended September 30, 2019, the Company recognized as revenue $5 46,889 of amounts recorded as Contract Liabilities at December 31, 2018. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventories [Abstract] | |
Schedule Of Inventories | September 30, December 31, 2019 2018 Raw materials $ 928,730 $ 1,079,887 Work-in-process 407,775 1,105,272 Finished goods 1,302,880 1,499,900 Total $ 2,639,385 $ 3,685,059 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment, net [Abstract] | |
Property, Plant and Equipment, net | Asset Lives September 30, December 31, (in years) 2019 2018 Machinery and equipment 3 to 15 $ 18,127,460 $ 17,978,781 Building and improvements 5 to 25 3,991,951 3,991,951 Vehicles 3 to 5 100,096 98,119 Furniture, fixtures, computers and software 3 to 5 1,464,902 1,440,071 Construction in progress 25,208 168,094 Total property, plant and equipment 23,709,617 23,677,016 Less: accumulated depreciation (19,560,887) (18,545,243) Property, plant and equipment, net $ 4,148,730 $ 5,131,773 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt [Abstract] | |
Summary of Debt | September 30, December 31, 2019 2018 Revolving line of credit $ 1,162,145 $ 2,025,592 Total term notes payable, net of issuance costs $ 3,654,813 $ 3,946,878 Less current portion, net 389,420 389,420 Term notes payable, non-current, net 3,265,393 3,557,458 Subordinated notes payable, non-current, net 467,167 — Total long term debt, net 3,732,560 3,557,458 Total short and long term debt, net $ 5,284,125 $ 5,972,470 |
Schedule Of Related Parties Private Offering | Jason Chambers, Director $50,000 Rodd Friedman, Director $100,000 Andrei Soran, Director $50,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Shareholders' Equity [Abstract] | |
Stock Option Transactions | Weighted Weighted average Average remaining Aggregate Number of Exercise contractual Intrinsic options Price term (in years) Value Outstanding at December 31, 2018 393,500 $ 4.89 7.22 $ 960 Granted 45,000 2.50 Forfeited (48,337) 4.06 Expired (55,664) 5.68 Outstanding at September 30, 2019 334,499 $ 4.56 6.94 $ — Exercisable at September 30, 2019 149,823 $ 6.02 4.33 $ — Exercisable at December 31, 2018 182,164 $ 6.09 4.81 $ 960 |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policies (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Basis of Presentation and Accounting Policies [Abstract] | ||
Cash and cash equivalents | $ 503 | $ 1,715 |
Current borrowing capacity | 1,000,000 | |
Proceeds from subordinated debt | 500,000 | |
Revenue from contracts with customers | $ 546,889 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories [Abstract] | ||
Silver inventory | $ 394,056 | $ 461,272 |
Inventories (Schedule Of Invent
Inventories (Schedule Of Inventories) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories [Abstract] | ||
Raw materials | $ 928,730 | $ 1,079,887 |
Work-in-process | 407,775 | 1,105,272 |
Finished goods | 1,302,880 | 1,499,900 |
Total | $ 2,639,385 | $ 3,685,059 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment, net [Abstract] | ||||
Depreciation expense | $ 358,024 | $ 361,077 | $ 1,103,783 | $ 1,126,773 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net (Property, Plant and Equipment, net) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment | ||
Total property, plant and equipment | $ 23,709,617 | $ 23,677,016 |
Less: accumulated depreciation | (19,560,887) | (18,545,243) |
Property, plant and equipment, net | 4,148,730 | 5,131,773 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 18,127,460 | 17,978,781 |
Building and Improvements [Member] | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 3,991,951 | 3,991,951 |
Vehicles [Member] | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 100,096 | 98,119 |
Furniture, Fixtures, Computers and Software [Member] | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 1,464,902 | 1,440,071 |
Construction in Progress [Member] | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | $ 25,208 | $ 168,094 |
Maximum [Member] | Machinery and Equipment [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 15 years | |
Maximum [Member] | Building and Improvements [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 25 years | |
Maximum [Member] | Vehicles [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 5 years | |
Maximum [Member] | Furniture, Fixtures, Computers and Software [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 5 years | |
Minimum [Member] | Machinery and Equipment [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 3 years | |
Minimum [Member] | Building and Improvements [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 5 years | |
Minimum [Member] | Vehicles [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 3 years | |
Minimum [Member] | Furniture, Fixtures, Computers and Software [Member] | ||
Property, Plant and Equipment | ||
Asset Lives (in years) | 3 years |
Assets Held For Sale (Narrative
Assets Held For Sale (Narrative) (Details) | Aug. 06, 2019USD ($) | Jan. 31, 2016ft²item | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Assets Held For Sale [Abstract] | ||||
Number of unoccupied buildings with letter of intent to sale | item | 2 | |||
Area of building | ft² | 52,000 | |||
Assets held for sale, net | $ 688,750 | |||
Proceeds from sale of property | $ 663,334 | $ 663,334 |
Debt (Bank Debt Narrative) (Det
Debt (Bank Debt Narrative) (Details) | Sep. 30, 2019USD ($) |
Debt Instrument [Line Items] | |
Revolver, interest rate at end of period | 5.36% |
Amount available under line of credit facility | $ 1,013,270 |
Term Notes Payable [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 5.61% |
Debt (Other Debt Narrative) (De
Debt (Other Debt Narrative) (Details) - USD ($) | Jul. 05, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 28, 2019 |
Debt Instruments [Line Items] | ||||
Private offering | $ 500,000 | |||
Proceeds from subordinated debt | 500,000 | |||
Payment on subordinated debt | $ 350,000 | |||
Warrants to purchase outstanding | 10,000 | 90,000 | ||
Warrants exercise price | $ 2.90 | $ 2.90 | ||
Non-cash interest expense | 0 | |||
Subordinated promissory notes, exercise price of warrants | $ 2.90 | $ 2.90 | ||
Warrants [Member] | ||||
Debt Instruments [Line Items] | ||||
Percent of beneficial owner of company's common stock | 12.00% | |||
Invested amount in private offering | $ 35,818 | |||
Term Notes Payable [Member] | ||||
Debt Instruments [Line Items] | ||||
Debt instrument, maturity date | Jun. 28, 2022 | |||
Per amount invested in notes | $ 50,000 | |||
Invested amount in private offering | $ 464,182 | |||
Subordinated Debt [Member] | ||||
Debt Instruments [Line Items] | ||||
Debt instrument, interest rate | 10.00% |
Debt (Summary of Debt) (Details
Debt (Summary of Debt) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Revolving line of credit | $ 1,162,145 | $ 2,025,592 |
Subordinated notes payable, non-current, net of discount | 467,167 | |
Total long term debt, net | 3,732,560 | 3,557,458 |
Total short and long term debt, net | 5,284,125 | 5,972,470 |
Term Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Total term notes payable, net of issuance costs | 3,654,813 | 3,946,878 |
Less current portion, net | 389,420 | 389,420 |
Term notes payable, non-current, net | $ 3,265,393 | $ 3,557,458 |
Debt (Schedule Of Related Parti
Debt (Schedule Of Related Parties Private Offering) (Details) - Private Placement [Member] | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Jason Chambers, Director [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Private offering | $ 50,000 |
Rodd Friedman, Director [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Private offering | 100,000 |
Andrei Soran. Director [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Private offering | $ 50,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax provision (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Federal Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforwards | 306,000 | 306,000 | ||
State Jurisdiction [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforwards | 278,000 | 278,000 | ||
Federal Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 11,300,000 | 11,300,000 | ||
State Jurisdiction [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 12,195,000 | $ 12,195,000 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Commitments and Contingencies [Abstract] | ||||
Operating lease expense | $ 4,713 | $ 6,056 | $ 15,900 | $ 17,977 |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) | Jul. 05, 2019 | Jul. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 28, 2019 | Mar. 25, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of options, granted in period | 45,000 | ||||||||||
Number of options, forfeited in period | 48,337 | ||||||||||
Number of options, Expired | 55,664 | ||||||||||
Warrants unexercised | 10,000 | 90,000 | |||||||||
Warrants exercise price | $ 2.90 | $ 2.90 | |||||||||
Warrants exercisable period | 3 years | ||||||||||
Common stock granted, shares | 12,173 | 5,744 | 34,354 | 16,647 | |||||||
Common stock granted, values | $ 28,000 | $ 19,875 | $ 84,000 | ||||||||
Director fees in lieu of cash payments | 59,625 | ||||||||||
2019 Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares authorized for issuance | 500,000 | ||||||||||
Forecast [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of warrants set to expire | 10,000 | 90,000 | |||||||||
Stock Option [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based compensation expense | $ 11,318 | $ 7,729 | 56,662 | $ 30,910 | |||||||
Number of options, granted in period | 37,500 | 90,000 | |||||||||
Number of options, exercised in period | 0 | 0 | 0 | ||||||||
Weighted average grant date fair value, options granted | $ 0.50 | ||||||||||
Number of options, forfeited in period | 2,000 | ||||||||||
Unrecognized stock based compensation expense | $ 108,571 | $ 108,571 | $ 108,571 | ||||||||
Unrecognized stock based compensation expense, recognition period | 2 years 8 months 12 days | ||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based compensation expense | 12,932 | $ 0 | $ 27,450 | $ 0 | |||||||
Unrecognized stock based compensation expense | $ 35,551 | $ 35,551 | $ 35,551 | ||||||||
Unrecognized stock based compensation expense, recognition period | 7 months 24 days | ||||||||||
Other than options, granted in period | 6,667 | 15,000 | |||||||||
Other than options, weighted average grant date fair value | $ 2.25 | $ 3.20 | $ 2.25 | $ 2.25 | |||||||
Vesting period | 1 year | 1 year |
Shareholders' Equity (Stock Opt
Shareholders' Equity (Stock Option Transactions) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Shareholders' Equity [Abstract] | ||
Number of options, outstanding, beginning balance | shares | 393,500 | |
Number of options, Granted | shares | 45,000 | |
Number of options, Forfeited | shares | (48,337) | |
Number of options, Expired | shares | (55,664) | |
Number of options, outstanding, ending balance | shares | 334,499 | 393,500 |
Number of options, exercisable | shares | 149,823 | 182,164 |
Weighted Average Exercise Price, Outstanding, beginning of period | $ / shares | $ 4.89 | |
Weighted Average Exercise Price, Granted | $ / shares | 2.50 | |
Weighted Average Exercise Price, Forfeited | $ / shares | 4.06 | |
Weighted Average Exercise Price, Expired | $ / shares | 5.68 | |
Weighted Average Exercise Price, Outstanding, ending of period | $ / shares | 4.56 | $ 4.89 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 6.02 | $ 6.09 |
Weighted average remaining contractual term (in years), Outstanding | 6 years 11 months 9 days | 7 years 2 months 19 days |
Weighted average remaining contractual term (in years), Exercisable | 4 years 3 months 29 days | 4 years 9 months 22 days |
Aggregate Intrinsic Value, Outstanding | $ | $ 960 | |
Aggregate Intrinsic Value, Exercisable | $ | $ 960 |