Lendway (LDWY) 10-Q 8 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 07, 2019
Document and Entity Information
Entity Registrant Name	INSIGNIA SYSTEMS INC/MN
Entity Central Index Key	0000875355
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		12,045,229
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 4,282,000	$ 10,160,000
Held to maturity investments	5,014,000	0
Accounts receivable, net	6,248,000	8,763,000
Inventories	361,000	353,000
Income tax receivable	130,000	127,000
Prepaid expenses and other	212,000	306,000
Total Current Assets	16,247,000	19,709,000
Other Assets:
Property and equipment, net	3,126,000	3,268,000
Operating lease right-of-use assets	242,000	0
Other, net	676,000	976,000
Total Assets	20,291,000	23,953,000
Current Liabilities:
Accounts payable	2,801,000	3,334,000
Accrued liabilities:
Compensation	457,000	2,021,000
Other	374,000	701,000
Current portion of operating lease liabilities	203,000	0
Deferred revenue	436,000	302,000
Total Current Liabilities	4,271,000	6,358,000
Long-Term Liabilities:
Deferred tax liabilities	116,000	504,000
Accrued income taxes	628,000	613,000
Deferred rent	0	158,000
Operating lease liabilities	164,000	0
Total Long-Term Liabilities	908,000	1,275,000
Commitments and Contingencies
Shareholders' Equity:
Common stock, par value $.01: Authorized shares - 40,000,000 Issued and outstanding shares - 12,045,000 at June 30, 2019 and 11,840,000 at December 31, 2018	120,000	118,000
Additional paid-in capital	15,816,000	15,442,000
Retained earnings (Accumulated deficit)	(824,000)	760,000
Total Shareholders' Equity	15,112,000	16,320,000
Total Liabilities and Shareholders' Equity	$ 20,291,000	$ 23,953,000

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	12,045,000	11,840,000
Common stock, shares outstanding	12,045,000	11,840,000

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Services revenues	$ 5,435,000	$ 7,868,000	$ 10,074,000	$ 14,894,000
Products revenues	407,000	377,000	908,000	770,000
Total Net Sales	5,842,000	8,245,000	10,982,000	15,664,000
Cost of services	4,044,000	4,964,000	8,018,000	9,368,000
Cost of goods sold	333,000	276,000	725,000	545,000
Total Cost of Sales	4,377,000	5,240,000	8,743,000	9,913,000
Gross Profit	1,465,000	3,005,000	2,239,000	5,751,000
Operating Expenses:
Selling	693,000	719,000	1,431,000	1,622,000
Marketing	585,000	566,000	1,250,000	1,170,000
General and administrative	870,000	1,467,000	1,578,000	2,474,000
Total Operating Expenses	2,148,000	2,752,000	4,259,000	5,266,000
Operating Income (Loss)	(683,000)	253,000	(2,020,000)	485,000
Other income	30,000	7,000	67,000	12,000
Income (Loss) Before Taxes	(653,000)	260,000	(1,953,000)	497,000
Income tax expense (benefit)	(165,000)	76,000	(369,000)	149,000
Net Income (Loss)	$ (488,000)	$ 184,000	$ (1,584,000)	$ 348,000
Net income (loss) per share:
Basic	$ (0.04)	$ 0.02	$ (0.13)	$ 0.03
Diluted	$ (0.04)	$ 0.02	$ (0.13)	$ 0.03
Shares used in calculation of net income (loss) per share:
Basic	11,888,000	11,804,000	11,872,000	11,812,000
Diluted	11,888,000	12,076,000	11,872,000	12,040,000

STATEMENTS OF SHAREHOLDERS' EQU

STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid In Capital [Member]	Retained Earnings (Accumulated Deficit) [Member]	Total
Balances at Dec. 31, 2017	$ 119,000	$ 15,361,000	$ (639,000)	$ 14,841,000
Balances, shares at Dec. 31, 2017	11,914,000
Issuance of common stock, net		49,000		49,000
Issuance of common stock, net, shares	49,000
Value of stock-based compensation		67,000		67,000
Net income (loss)			164,000	164,000
Balances at Mar. 31, 2018	$ 119,000	15,477,000	(475,000)	15,121,000
Balances, shares at Mar. 31, 2018	11,963,000
Balances at Dec. 31, 2017	$ 119,000	15,361,000	(639,000)	14,841,000
Balances, shares at Dec. 31, 2017	11,914,000
Net income (loss)				348,000
Balances at Jun. 30, 2018	$ 119,000	15,358,000	(291,000)	15,186,000
Balances, shares at Jun. 30, 2018	11,851,000
Balances at Mar. 31, 2018	$ 119,000	15,477,000	(475,000)	15,121,000
Balances, shares at Mar. 31, 2018	11,963,000
Value of stock-based compensation		82,000		82,000
Repurchase of common stock upon vesting of restricted stock awards and vesting of restricted stock units		(14,000)		(14,000)
Repurchase of common stock upon vesting of restricted stock awards and vesting of restricted stock units, shares	(9,000)
Repurchase of common stock, net		(187,000)		(187,000)
Repurchase of common stock, net, shares	(103,000)
Net income (loss)			184,000	184,000
Balances at Jun. 30, 2018	$ 119,000	15,358,000	(291,000)	15,186,000
Balances, shares at Jun. 30, 2018	11,851,000
Balances at Dec. 31, 2018	$ 118,000	15,442,000	760,000	16,320,000
Balances, shares at Dec. 31, 2018	11,840,000
Issuance of common stock, net	$ 1,000	107,000		108,000
Issuance of common stock, net, shares	107,000
Value of stock-based compensation		138,000		138,000
Net income (loss)			(1,096,000)	(1,096,000)
Balances at Mar. 31, 2019	$ 119,000	15,687,000	(336,000)	15,470,000
Balances, shares at Mar. 31, 2019	11,947,000
Balances at Dec. 31, 2018	$ 118,000	15,442,000	760,000	16,320,000
Balances, shares at Dec. 31, 2018	11,840,000
Net income (loss)				(1,584,000)
Balances at Jun. 30, 2019	$ 120,000	15,816,000	(824,000)	15,112,000
Balances, shares at Jun. 30, 2019	12,045,000
Balances at Mar. 31, 2019	$ 119,000	15,687,000	(336,000)	15,470,000
Balances, shares at Mar. 31, 2019	11,947,000
Value of stock-based compensation		139,000		139,000
Repurchase of common stock upon vesting of restricted stock awards and vesting of restricted stock units	$ 1,000	(10,000)		(9,000)
Repurchase of common stock upon vesting of restricted stock awards and vesting of restricted stock units, shares	98,000
Net income (loss)			(488,000)	(488,000)
Balances at Jun. 30, 2019	$ 120,000	$ 15,816,000	$ (824,000)	$ 15,112,000
Balances, shares at Jun. 30, 2019	12,045,000

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating Activities:
Net income (loss)	$ (1,584,000)	$ 348,000
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	742,000	570,000
Changes in allowance for doubtful accounts	(2,000)	(36,000)
Deferred income tax benefit	(388,000)	0
Stock-based compensation expense	277,000	149,000
Accrued interest on held to maturity investments	(33,000)	0
Changes in operating assets and liabilities:
Accounts receivable	2,517,000	2,296,000
Inventories	(8,000)	(63,000)
Income tax receivable	(3,000)	107,000
Prepaid expenses and other	92,000	109,000
Accounts payable	(459,000)	(131,000)
Accrued liabilities	(1,924,000)	17,000
Accrued income taxes	15,000	15,000
Deferred revenue	134,000	659,000
Net cash provided by (used in) operating activities	(624,000)	4,040,000
Investing Activities:
Purchases of property and equipment	(358,000)	(528,000)
Purchase of investments	(4,981,000)	0
Net cash used in investing activities	(5,339,000)	(528,000)
Financing Activities:
Proceeds from issuance of common stock	108,000	49,000
Repurchase of common stock upon vesting of restricted stock awards	(9,000)	(14,000)
Cash dividends paid ($0.70 per share)	(14,000)	(14,000)
Repurchase of common stock, net	0	(187,000)
Net cash provided by (used in) financing activities	85,000	(166,000)
Increase (decrease) in cash and cash equivalents	(5,878,000)	3,346,000
Cash and cash equivalents at beginning of period	10,160,000	4,695,000
Cash and cash equivalents at end of period	4,282,000	8,041,000
Supplemental disclosures for cash flow information:
Cash paid during the period for income taxes	6,000	0
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable	$ 0	$ 111,000

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Description of Business . Basis of Presentation . Recently Adopted Accounting Pronouncements . “Leases Inventories . June 30, December 31, 2019 2018 Raw materials $ 64,000 $ 80,000 Work-in-process 35,000 12,000 Finished goods 262,000 261,000 $ 361,000 $ 353,000 Property and Equipment . June 30, December 31, 2019 2018 Property and Equipment: Production tooling, machinery and equipment $ 3,728,000 $ 3,694,000 Office furniture and fixtures 385,000 385,000 Computer equipment and software 4,187,000 2,743,000 Leasehold improvements 577,000 577,000 Construction in-progress — 1,179,000 8,877,000 8,578,000 Accumulated depreciation and amortization (5,751,000 ) (5,310,000 ) Net Property and Equipment $ 3,126,000 $ 3,268,000 Depreciation expense was approximately $259,000 and $440,000 in the three and six months ended June 30, 2019, respectively, and was $181,000 and $367,000 in the three and six months ended June 30, 2018, respectively. Stock-Based Compensation During the six months ended June 30, 2019 and 2018, no stock awards were granted by the Company, except for those awarded to non-employee members of the Board of Directors. During the six months ended June 30, 2018, the Company issued 178,000 restricted stock units under the 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”). The shares underlying the awards were assigned a value of $1.77 per share, which was the closing price of our common stock on the date of grant and are scheduled to vest over three years. The Company estimated the fair value of stock-based awards granted during the six months ended June 30, 2019 under the Company’s employee stock purchase plan using the following weighted average assumptions: expected life of 1.0 year, expected volatility of 57%, dividend yield of 0% and risk-free interest rate of 2.60%. During June 2019, non-employee members of the Board of Directors received restricted stock grants totaling 70,755 shares pursuant to the 2018 Equity Incentive Plan (the “2018 Plan”). The shares underlying the awards were assigned a value of $1.06 per share, which was the closing price of our common stock on the date of grants, for a total value of $75,000, and are scheduled to vest the day immediately preceding the date of the 2020 annual shareholder meeting. During July 2018, non-employee members of the Board of Directors received restricted stock grants totaling 46,152 shares pursuant to the 2018 Plan. The shares underlying the awards were assigned a value of $1.95 per share, which was the closing price of our common stock on the date of grants, for a total value of $90,000, which vested the day immediately preceding the date of our 2019 annual shareholder meeting. During June 2019, the Company issued 8,370 shares of common stock in settlement of $9,000 of total deferred fees due to a non-employee director’s departure from the board. Our non-employee directors are eligible to participate in our director deferred compensation plan, which allows a director to make voluntary deferrals of up to 100% of their annual cash retainers relating to board or committee chair service. Total stock-based compensation expense recorded for the three and six months ended June 30, 2019 was $139,000 and $277,000, respectively, and for the three and six months ended June 30, 2018 was $82,000 and $149,000, respectively. Net Income (Loss) per Share . Due to the net loss incurred during the three and six months ended June 30, 2019 all outstanding stock options were anti-dilutive for that period. Options to purchase approximately 245,000 shares of common stock with a weighted average exercise price of $2.71 were outstanding at June 30, 2018 and were not included in the computation of common stock equivalents for the three and six months ended June 30, 2018 because their exercise prices were higher than the average fair market value of the common shares during the reporting period. Weighted average common shares outstanding for the three and six months ended June 30, 2019 and 2018 were as follows: Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 Denominator for basic net income (loss) per share - weighted average shares 11,888,000 11,804,000 11,872,000 11,812,000 Effect of dilutive securities: Stock options and restricted stock units — 272,000 — 228,000 Denominator for diluted net income (loss) per share - weighted average shares 11,888,000 12,076,000 11,872,000 12,040,000

Investments

Investments	6 Months Ended
	Jun. 30, 2019
Investments [Abstract]
Investments	The Company currently invests its excess cash in debt securities, with an average maturity of approximately six months. At June 30, 2019, there were $5,014,000 of held to maturity investments, all with maturity dates of less than one year. These investments are accounted for in accordance with Accounting Standards Codification (“ASC”) 320-10, “Investments – Debt and Equity Securities.” At June 30, 2019, the Company’s investment balances consisted solely of held to maturity investments and are carried at cost which approximates fair value due to the negligible risk of changes in value due to interest rates.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2019
Revenue Recognition [Abstract]
Revenue Recognition	Under ASU 2014-09 Revenue from Contracts with Customers Performance Obligations Taxes collected from customers and remitted to governmental authorities are excluded from revenue on the net basis of accounting. The Company includes shipping and handling fees in revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. The majority of the Company’s accounts receivable is due from companies in the consumer-packaged goods (“CPG”) industry. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are due within 30-150 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account under Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The following is a description of our performance obligations included in our primary revenue streams and the timing or method of revenue recognition for each: In-Store Signage Solution Services Each of the individual activities under our services, including production activities, are inputs to an integrated sign display service. Customers receive and consume the benefits from the promotional displays over the duration of the contracted display cycle. Additionally, the display of the signs does not have an alternative use to us and we have an enforceable right to payment for services performed to date. As a result, we recognize the transaction price for our POPS solution performance obligations as revenue over time. Given the nature of our performance obligations is to provide a display service over the duration of a specified period or periods, we recognize revenue on a straight-line basis over the display service period as it best reflects the timing of transfer of our POPS service solution . Other Service Revenues Products . Disaggregation of Revenue In the following table, revenue is disaggregated by major revenue stream and timing of revenue recognition. Three months ended June 30, 2019 Six months ended June 30, 2019 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 4,144,000 $ - $ 4,144,000 $ 7,699,000 $ - $ 7,699,000 Products and services transferred at a point in time 1,291,000 407,000 1,698,000 2,375,000 908,000 3,283,000 Total $ 5,435,000 $ 407,000 $ 5,842,000 $ 10,074,000 $ 908,000 $ 10,982,000 Three months ended June 30, 2018 Six months ended June 30, 2018 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 7,868,000 $ - $ 7,868,000 $ 14,894,000 $ - $ 14,894,000 Products and services transferred at a point in time - 377,000 377,000 - 770,000 770,000 Total $ 7,868,000 $ 377,000 $ 8,245,000 $ 14,894,000 $ 770,000 $ 15,664,000 Contract Costs Sales commissions that are paid to internal or external sales representatives are eligible for capitalization as they are incremental costs that would not have been incurred without entering into a specific sales arrangement and are recoverable through the expected margin on the transaction. The Company is applying the practical expedient in ASC 340-40-25-4 that allows the incremental costs of obtaining a contract to be recorded as an expense when incurred when the amortization period of the asset that would have otherwise been recognized is one year or less. These costs are included in selling expenses. Deferred Revenue Significant changes in deferred revenue during the period are as follows: Balance at December 31, 2018 $ 302,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied (301,000 ) Cash received in advance and not recognized as revenue 435,000 Balance at June 30, 2019 $ 436,000 Transaction Price Allocated to Remaining Performance Obligations The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less, which reflect the majority of our performance obligations. This practical expedient is being applied to arrangements for certain incomplete services and unshipped custom signage materials. Of those contracts with an expected duration of greater than one year, we estimate that revenue of $775,000 and $2,000,000 related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2019 will be recognized during the remainder of 2019 and in 2020, respectively.

Selling Arrangement

Selling Arrangement	6 Months Ended
	Jun. 30, 2019
Selling Arrangement
Selling Arrangement	In 2011, the Company paid to News America Marketing In-Store, L.L.C. (“News America Marketing”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America Marketing’s network of retailers as its exclusive agent. The $4,000,000 is being amortized over the 10-year term of the arrangement. Amortization expense was $150,000 and $300,000 in the three and six months ended June 30, 2019. Amortization expense was $100,00 and $200,000 in the three and six months ended June 30, 3018. Amortization expense is expected to be $600,000 in 2019, $262,000 in 2020 and $55,000 in the year ending December 31, 2021. The acceleration of amortization in 2019 is based on the anticipated recovery period over the remaining term of the contract due to the loss of a significant retailer which exited our retailer network in the first half of 2019 as a result of competitive pressures. The net carrying amount of the selling arrangement is recorded within other assets on the Company’s balance sheet.

Leases

Leases	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Leases	The Company leases space under a non-cancelable operating lease for our corporate headquarters. This lease has escalating lease terms and also includes a tenant incentive that was recorded at the time the lease was originally entered into. The lease does not contain contingent rent provisions. The Company also has a lease for additional office space under an operating lease. The lease for our corporate headquarters includes both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g., common-area or other maintenance costs) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components for all leases. The lease for our additional office space is non-cancelable with a lease term of less than one year and therefore, we have elected the practical expedient to exclude this short-term lease from our right-of-use assets and lease liabilities. Our leases include options to renew. The exercise of lease renewal options is at our sole discretion. Therefore, the renewals to extend the lease terms are not included in our right of use assets and lease liabilities as they are not reasonably certain of exercise. We regularly evaluate the renewal options and when they are reasonably certain of exercise, we include the renewal period in our lease term. We used our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The cost components of our operating leases were as follows for the periods ended June 30, 2019: Three months ended June 30, 2019 Six months ended June 30, 2019 Corporate Additional Operating Corporate Additional Operating Headquarters Office Space Leases Headquarters Office Space Leases Operating lease cost $ 38,000 $ - $ 38,000 $ 75,000 $ - $ 75,000 Variable lease cost 26,000 - 26,000 54,000 - 54,000 Short-term lease cost - 9,000 9,000 - 19,000 19,000 Total $ 64,000 $ 9,000 $ 73,000 $ 129,000 $ 19,000 $ 148,000 Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased corporate headquarters which are paid based on actual costs incurred by the lessor. Maturities of our lease liabilities for our corporate headquarters operating lease were as follows as of June 30, 2019: Maturity of Lease Liabilities Operating Leases 2019 $ 108,000 2020 222,000 2021 57,000 Total lease payments $ 387,000 Less: Interest 20,000 Present value of lease liabilities $ 367,000 The remaining lease term as of June 30, 2019 was 1.75 years and the discount rate was 6%. The cash outflow for operating leases for the three and six months ended June 30, 2019 was $54,000 and $108,000, respectively. The following table presents future minimum lease payments for our operating leases at December 31, 2018 under ASC 840 and is being presented for comparative purposes: 2019 $ 217,000 2020 $ 222,000 2021 $ 57,000 Rent expense under these leases was approximately $75,000 and $135,000 for the three and six months ended June 30, 2018, respectively.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes	For the three and six months ended June 30, 2019, the Company recorded income tax benefit of $165,000 and $369,000, or 25.3% and.18.9% of loss before taxes, respectively. For the three and six months ended June 30, 2018, the Company recorded income tax expense of $76,000 and $149,000, or 29.2% and 30.0% of income before taxes, respectively. The income tax benefit or expense for the three and six months ended June 30, 2019 and 2018 is comprised of federal and state taxes. The primary differences between the Company’s June 30, 2019 and 2018 effective tax rates and the statutory federal rate are expenses related to stock-based compensation and nondeductible meals and entertainment as well as for the three and six months ended June 30, 2019 an increase in the Company’s valuation allowance against its deferred tax assets. The Company reassesses its effective rate each reporting period and adjusts the annual effective rate if deemed necessary, based on projected annual taxable income (loss). Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statements and tax basis of assets and liabilities given the provisions of enacted tax laws. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustment to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria. At June 30, 2019 and December 31, 2018, the Company had a valuation allowance of approximately $99,000 and $79,000, respectively, as a result of certain capital losses, credits and net operating losses carried forward which the Company does not believe are more likely than not to be realized. As of June 30, 2019, and December 31, 2018, the Company had unrecognized tax benefits totaling $628,000 and $613,000, respectively, including interest, which relates to state nexus issues. The amount of the unrecognized tax benefits, if recognized, that would affect the effective income tax rates of future periods is $628,000. Due to the current statute of limitations regarding the unrecognized tax benefits, the unrecognized tax benefits and associated interest are not expected to change significantly in 2019.

Concentrations

Concentrations	6 Months Ended
	Jun. 30, 2019
Risks and Uncertainties [Abstract]
Concentrations	During the six months ended June 30, 2019, two customers accounted for 15% and 12% respectively, of the Company’s total net sales. During the six months ended June 30, 2018, two customers accounted for 25% and 24%, respectively, of the Company’s total net sales. At June 30, 2019, two customers represented 18% and 16% respectively, of the Company’s total accounts receivable. At December 31, 2018, two customers represented 31% and 16% of the Company’s total accounts receivable. Although there are a number of customers that the Company sells to, the loss of an additional significant customer could adversely affect operating results. Additionally, the loss of an additional major retailer from the Company’s retail network could further adversely affect operating results.

Share Repurchases

Share Repurchases	6 Months Ended
	Jun. 30, 2019
Share Repurchases
Share Repurchases	On April 5, 2018, the Board of Directors authorized the repurchase of up to $3,000,000 of the Company’s common stock on or before March 31, 2020. The plan allows the repurchases to be made in open market or privately negotiated transactions. The plan does not obligate the Company to repurchase any particular number of shares, and may be suspended at any time at the Company’s discretion. During the six months ended June 30, 2019, there was no share repurchase activity under the plan. During the six months ended June 30, 2018 the Company repurchased and retired approximately 103,000 shares, at a total cost of $187,000.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	On July 11, 2019, the Company brought suit against News Corporation, News America Marketing FSI L.L.C., and News America Marketing In-Store Services L.L.C. (collectively, “News America”) in the U.S. District Court in Minnesota, alleging violations of federal and state antitrust and tortious interference laws by News America. The complaint alleges that News America has expanded and maintained its monopoly power through various wrongful acts designed to harm the Company, its last significant competitor, in the third-party in-store advertising and promotion products and services market. The suit seeks, among other relief, an injunction sufficient to prevent further antitrust injury and an award of treble damages to be determined at trial for the harm caused to the Company.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Description of Business	Description of Business .
Basis of Presentation	Basis of Presentation .
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements . “Leases
Inventories	Inventories . June 30, December 31, 2019 2018 Raw materials $ 64,000 $ 80,000 Work-in-process 35,000 12,000 Finished goods 262,000 261,000 $ 361,000 $ 353,000
Property and Equipment	Property and Equipment . June 30, December 31, 2019 2018 Property and Equipment: Production tooling, machinery and equipment $ 3,728,000 $ 3,694,000 Office furniture and fixtures 385,000 385,000 Computer equipment and software 4,187,000 2,743,000 Leasehold improvements 577,000 577,000 Construction in-progress — 1,179,000 8,877,000 8,578,000 Accumulated depreciation and amortization (5,751,000 ) (5,310,000 ) Net Property and Equipment $ 3,126,000 $ 3,268,000 Depreciation expense was approximately $259,000 and $440,000 in the three and six months ended June 30, 2019, respectively, and was $181,000 and $367,000 in the three and six months ended June 30, 2018, respectively.
Stock-Based Compensation	Stock-Based Compensation During the six months ended June 30, 2019 and 2018, no stock awards were granted by the Company, except for those awarded to non-employee members of the Board of Directors. During the six months ended June 30, 2018, the Company issued 178,000 restricted stock units under the 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”). The shares underlying the awards were assigned a value of $1.77 per share, which was the closing price of our common stock on the date of grant and are scheduled to vest over three years. The Company estimated the fair value of stock-based awards granted during the six months ended June 30, 2019 under the Company’s employee stock purchase plan using the following weighted average assumptions: expected life of 1.0 year, expected volatility of 57%, dividend yield of 0% and risk-free interest rate of 2.60%. During June 2019, non-employee members of the Board of Directors received restricted stock grants totaling 70,755 shares pursuant to the 2018 Equity Incentive Plan (the “2018 Plan”). The shares underlying the awards were assigned a value of $1.06 per share, which was the closing price of our common stock on the date of grants, for a total value of $75,000, and are scheduled to vest the day immediately preceding the date of the 2020 annual shareholder meeting. During July 2018, non-employee members of the Board of Directors received restricted stock grants totaling 46,152 shares pursuant to the 2018 Plan. The shares underlying the awards were assigned a value of $1.95 per share, which was the closing price of our common stock on the date of grants, for a total value of $90,000, which vested the day immediately preceding the date of our 2019 annual shareholder meeting. During June 2019, the Company issued 8,370 shares of common stock in settlement of $9,000 of total deferred fees due to a non-employee director’s departure from the board. Our non-employee directors are eligible to participate in our director deferred compensation plan, which allows a director to make voluntary deferrals of up to 100% of their annual cash retainers relating to board or committee chair service. Total stock-based compensation expense recorded for the three and six months ended June 30, 2019 was $139,000 and $277,000, respectively, and for the three and six months ended June 30, 2018 was $82,000 and $149,000, respectively.
Net Income (Loss) per Share	Net Income (Loss) per Share . Due to the net loss incurred during the three and six months ended June 30, 2019 all outstanding stock options were anti-dilutive for that period. Options to purchase approximately 245,000 shares of common stock with a weighted average exercise price of $2.71 were outstanding at June 30, 2018 and were not included in the computation of common stock equivalents for the three and six months ended June 30, 2018 because their exercise prices were higher than the average fair market value of the common shares during the reporting period. Weighted average common shares outstanding for the three and six months ended June 30, 2019 and 2018 were as follows: Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 Denominator for basic net income (loss) per share - weighted average shares 11,888,000 11,804,000 11,872,000 11,812,000 Effect of dilutive securities: Stock options and restricted stock units — 272,000 — 228,000 Denominator for diluted net income (loss) per share - weighted average shares 11,888,000 12,076,000 11,872,000 12,040,000

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Schedule Of Inventories	June 30, December 31, 2019 2018 Raw materials $ 64,000 $ 80,000 Work-in-process 35,000 12,000 Finished goods 262,000 261,000 $ 361,000 $ 353,000
Schedule of Property and Equipment	June 30, December 31, 2019 2018 Property and Equipment: Production tooling, machinery and equipment $ 3,728,000 $ 3,694,000 Office furniture and fixtures 385,000 385,000 Computer equipment and software 4,187,000 2,743,000 Leasehold improvements 577,000 577,000 Construction in-progress — 1,179,000 8,877,000 8,578,000 Accumulated depreciation and amortization (5,751,000 ) (5,310,000 ) Net Property and Equipment $ 3,126,000 $ 3,268,000
Schedule Of Weighted Average Common Shares Outstanding	Three Months Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 Denominator for basic net income (loss) per share - weighted average shares 11,888,000 11,804,000 11,872,000 11,812,000 Effect of dilutive securities: Stock options and restricted stock units — 272,000 — 228,000 Denominator for diluted net income (loss) per share - weighted average shares 11,888,000 12,076,000 11,872,000 12,040,000

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2019
Revenue Recognition [Abstract]
Disaggregation of Revenue	Three months ended June 30, 2019 Six months ended June 30, 2019 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 4,144,000 $ - $ 4,144,000 $ 7,699,000 $ - $ 7,699,000 Products and services transferred at a point in time 1,291,000 407,000 1,698,000 2,375,000 908,000 3,283,000 Total $ 5,435,000 $ 407,000 $ 5,842,000 $ 10,074,000 $ 908,000 $ 10,982,000 Three months ended June 30, 2018 Six months ended June 30, 2018 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 7,868,000 $ - $ 7,868,000 $ 14,894,000 $ - $ 14,894,000 Products and services transferred at a point in time - 377,000 377,000 - 770,000 770,000 Total $ 7,868,000 $ 377,000 $ 8,245,000 $ 14,894,000 $ 770,000 $ 15,664,000
Schedule of Changes in Deferred Revenue	Balance at December 31, 2018 $ 302,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied (301,000 ) Cash received in advance and not recognized as revenue 435,000 Balance at June 30, 2019 $ 436,000

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Components of our operating leases	Three months ended June 30, 2019 Six months ended June 30, 2019 Corporate Additional Operating Corporate Additional Operating Headquarters Office Space Leases Headquarters Office Space Leases Operating lease cost $ 38,000 $ - $ 38,000 $ 75,000 $ - $ 75,000 Variable lease cost 26,000 - 26,000 54,000 - 54,000 Short-term lease cost - 9,000 9,000 - 19,000 19,000 Total $ 64,000 $ 9,000 $ 73,000 $ 129,000 $ 19,000 $ 148,000
Maturities of our lease liabilities	Maturity of Lease Liabilities Operating Leases 2019 $ 108,000 2020 222,000 2021 57,000 Total lease payments $ 387,000 Less: Interest 20,000 Present value of lease liabilities $ 367,000 2019 $ 217,000 2020 $ 222,000 2021 $ 57,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Inventories
Raw materials	$ 64,000	$ 80,000
Work-in-process	35,000	12,000
Finished goods	262,000	261,000
Inventories	$ 361,000	$ 353,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details 1) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Gross property and equipment	$ 8,877,000	$ 8,578,000
Accumulated depreciation and amortization	(5,751,000)	(5,310,000)
Net property and equipment	3,126,000	3,268,000
Production tooling, machinery and equipment [Member]
Gross property and equipment	3,728,000	3,694,000
Office furniture and fixtures [Member]
Gross property and equipment	385,000	385,000
Computer equipment and software [Member]
Gross property and equipment	4,187,000	2,743,000
Leasehold improvements [Member]
Gross property and equipment	577,000	577,000
Construction in-progress [Member]
Gross property and equipment	$ 0	$ 1,179,000

Summary of Significant Accoun_6

Summary of Significant Accounting Policies (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accounting Policies [Abstract]
Denominator for basic net income (loss) per share - weighted average shares	11,888,000	11,804,000	11,872,000	11,812,000
Effect of dilutive securities: Stock options and restricted stock units and awards	$ 0	$ 272,000	$ 0	$ 228,000
Denominator for diluted net income (loss) per share - weighted average shares	11,888,000	12,076,000	11,872,000	12,040,000

Summary of Significant Accoun_7

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accounting Policies [Abstract]
Depreciation expense	$ 259,000	$ 181,000	$ 440,000	$ 367,000
Restricted stock units (in shares)			178,000
Weighted average exercise price (in dollars per share)			$ 1.77
Vesting period			3 years
Stock-based awards granted, estimated life			1 year
Stock-based awards granted, expected volatility			57.00%
Stock-based awards granted, dividend yield			0.00%
Stock-based awards granted, risk-free interest rate			2.60%
Stock-based compensation expense	$ 139,000	$ 82,000	$ 277,000	$ 149,000
Shares excluded from the computation of earnings per share	245,000		245,000

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Services revenues	$ 5,435,000	$ 7,868,000	$ 10,074,000	$ 14,894,000
Products revenues	407,000	377,000	908,000	770,000
Total Net Sales	5,842,000	8,245,000	10,982,000	15,664,000
Products and services transferred over time
Services revenues	4,144,000	7,868,000	7,699,000	14,894,000
Products revenues	0	0	0	0
Total Net Sales	4,144,000	7,868,000	7,699,000	14,894,000
Products and services transferred at a point in time
Services revenues	1,291,000	0	2,375,000	0
Products revenues	407,000	377,000	908,000	770,000
Total Net Sales	$ 1,698,000	$ 377,000	$ 3,283,000	$ 770,000

Revenue Recognition (Details 1)

Revenue Recognition (Details 1)	6 Months Ended
	Jun. 30, 2019USD ($)
Revenue Recognition [Abstract]
Deferred revenue, beginning	$ 302,000
Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied	(301,000)
Cash received in advance and not recognized as revenue	435,000
Deferred revenue, ending	$ 436,000

Revenue Recognition (Details Na

Revenue Recognition (Details Narrative)	Jun. 30, 2019USD ($)
2019
Performance obligation revenue to be recognized	$ 775,000
2020
Performance obligation revenue to be recognized	$ 2,000,000

Selling Arrangement (Details Na

Selling Arrangement (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Selling Arrangement
Payments for arrangements to sell signs			$ 4,000,000
Term of arrangement			10 years
Amortization expense	$ 150,000	$ 100,000	$ 300,000	$ 200,000
2019	600,000		600,000
2020	262,000		262,000
2021	$ 55,000		$ 55,000

Leases (Details)

Leases (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Corporate Headquarters
Operating lease cost	$ 38,000	$ 75,000
Variable lease cost	26,000	54,000
Short-term lease cost	0	0
Total	64,000	129,000
Additional Office Space
Operating lease cost	0	0
Variable lease cost	0	0
Short-term lease cost	9,000	19,000
Total	9,000	19,000
Operating Leases
Operating lease cost	38,000	75,000
Variable lease cost	26,000	54,000
Short-term lease cost	9,000	19,000
Total	$ 73,000	$ 148,000

Leases (Details 1)

Leases (Details 1) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Leases [Abstract]
2019	$ 108,000	$ 217,000
2020	222,000	222,000
2021	57,000	$ 57,000
Total lease payments	387,000
Less: Interest	20,000
Present value of lease liabilities	$ 367,000

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (165,000)	$ 76,000	$ (369,000)	$ 149,000
Income tax rate, percentage	25.30%	29.20%	18.90%	30.00%
Deferred tax asset valuation allowance	$ 99,000		$ 99,000		$ 79,000
Unrecognized tax benefits	$ 628,000		$ 628,000		$ 613,000

Concentrations (Details Narrati

Concentrations (Details Narrative)	6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Sales Revenue Net [Member] | Customer One [Member]
Customer's concentration risk percentage	15.00%	25.00%
Sales Revenue Net [Member] | Customer Two [Member]
Customer's concentration risk percentage	12.00%	24.00%
Accounts Receivable [Member] | Customer One [Member]
Customer's concentration risk percentage	18.00%		31.00%
Accounts Receivable [Member] | Customer Two [Member]
Customer's concentration risk percentage	16.00%		16.00%