Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 08, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | INSIGNIA SYSTEMS INC/MN | ||
Entity Central Index Key | 0000875355 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Interactive Data Current | Yes | ||
Entity Incorporation, State or Country Code | MN | ||
Entity File Number | 1-13471 | ||
Entity Public Float | $ 3,965,000 | ||
Entity Common Stock, Shares Outstanding | 1,754,030 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 7,128,000 | $ 7,510,000 |
Accounts receivable, net | 5,628,000 | 7,559,000 |
Inventories | 85,000 | 322,000 |
Income tax receivable | 241,000 | 126,000 |
Prepaid expenses and other | 711,000 | 375,000 |
Total Current Assets | 13,793,000 | 15,892,000 |
Other Assets: | ||
Property and equipment, net | 75,000 | 549,000 |
Operating lease right-of-use assets | 37,000 | 177,000 |
Other, net | 155,000 | 372,000 |
Total Assets | 14,060,000 | 16,990,000 |
Current Liabilities: | ||
Accounts payable | 3,148,000 | 3,036,000 |
Accrued liabilities: | ||
Compensation | 424,000 | 539,000 |
Other | 827,000 | 570,000 |
Current portion of long-term debt | 464,000 | 0 |
Current portion of operating lease liabilities | 56,000 | 212,000 |
Deferred revenue | 180,000 | 140,000 |
Total Current Liabilities | 5,099,000 | 4,497,000 |
Long-Term Liabilities: | ||
Accrued income taxes | 677,000 | 643,000 |
Long-term debt, net of current portion | 590,000 | 0 |
Operating lease liabilities | 0 | 56,000 |
Total Long-Term Liabilities | 1,267,000 | 699,000 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Common stock, par value $.01: Authorized shares - 5,714,000, Issued and outstanding shares - 1,748,000 in 2020 and 1,725,000 in 2019 | 122,000 | 121,000 |
Additional paid-in capital | 16,133,000 | 15,934,000 |
Accumulated deficit | (8,561,000) | (4,261,000) |
Total Shareholders' Equity | 7,694,000 | 11,794,000 |
Total Liabilities and Shareholders' Equity | $ 14,060,000 | $ 16,990,000 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 5,714,000 | 5,714,000 |
Common stock, shares issued | 1,748,000 | 1,725,000 |
Common stock, shares outstanding | 1,748,000 | 1,725,000 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total net sales | $ 17,669,000 | $ 21,954,000 |
Cost of goods sold | 14,467,000 | 17,193,000 |
Impairment loss | 159,000 | 0 |
Total cost of sales | 14,626,000 | 17,193,000 |
Gross profit | 3,043,000 | 4,761,000 |
Operating Expenses: | ||
Selling | 2,877,000 | 2,658,000 |
Marketing | 1,015,000 | 2,394,000 |
General and administrative | 3,947,000 | 3,324,000 |
Gain on sale of custom print business | (195,000) | 0 |
Impairment loss | 0 | 2,014,000 |
Total operating expenses | 7,644,000 | 10,390,000 |
Operating loss | (4,601,000) | (5,629,000) |
Other income | 110,000 | 142,000 |
Loss before taxes | (4,491,000) | (5,487,000) |
Income tax benefit | (191,000) | (466,000) |
Net loss | $ (4,300,000) | $ (5,021,000) |
Net loss per share: | ||
Basic | $ (2.48) | $ (2.94) |
Diluted | $ (2.48) | $ (2.94) |
Shares used in calculation of net loss per share: | ||
Basic | 1,734,000 | 1,706,000 |
Diluted | 1,734,000 | 1,706,000 |
Services | ||
Total net sales | $ 17,091,000 | $ 20,229,000 |
Cost of goods sold | 13,934,000 | 15,756,000 |
Impairment loss | 159,000 | 0 |
Products | ||
Total net sales | 578,000 | 1,725,000 |
Cost of goods sold | $ 533,000 | $ 1,437,000 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total |
Beginning balance, shares at Dec. 31, 2018 | 1,692,000 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 118,000 | $ 15,442,000 | $ 760,000 | $ 16,320,000 |
Issuance of common stock, net, shares | 15,000 | |||
Issuance of common stock, net, amount | $ 1,000 | 107,000 | 108,000 | |
Vesting of restricted stock units offset by repurchase of common stock upon vesting of restricted stock units and awards, shares | (3,000) | |||
Vesting of restricted stock units offset by repurchase of common stock upon vesting of restricted stock units and awards, amount | $ 2,000 | (37,000) | (35,000) | |
Value of stock-based compensation | 422,000 | 422,000 | ||
Restricted stock award issuance, shares | 21,000 | |||
Restricted stock award issuance, amount | 0 | |||
Net loss | (5,021,000) | (5,021,000) | ||
Ending balance, shares at Dec. 31, 2019 | 1,725,000 | |||
Ending balance, amount at Dec. 31, 2019 | $ 121,000 | 15,934,000 | (4,261,000) | 11,794,000 |
Issuance of common stock, net, shares | 5,000 | |||
Issuance of common stock, net, amount | 20,000 | 20,000 | ||
Vesting of restricted stock units offset by repurchase of common stock upon vesting of restricted stock units and awards, shares | 16,000 | |||
Vesting of restricted stock units offset by repurchase of common stock upon vesting of restricted stock units and awards, amount | $ 1,000 | (2,000) | (1,000) | |
Value of stock-based compensation | 172,000 | 172,000 | ||
Common stock issued for accrued liabilities | 9,000 | 9,000 | ||
Restricted stock award issuance, shares | 2,000 | |||
Restricted stock award issuance, amount | 0 | |||
Net loss | (4,300,000) | (4,300,000) | ||
Ending balance, shares at Dec. 31, 2020 | 1,748,000 | |||
Ending balance, amount at Dec. 31, 2020 | $ 122,000 | $ 16,133,000 | $ (8,561,000) | $ 7,694,000 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Activities: | ||
Net loss | $ (4,300,000) | $ (5,021,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 477,000 | 1,647,000 |
Impairment loss | 159,000 | 2,014,000 |
Gain on sale of custom print business | (195,000) | 0 |
Loss on sale of property and equipment | 35,000 | 0 |
Changes in allowance for doubtful accounts | 70,000 | 43,000 |
Deferred income tax benefit | 0 | (504,000) |
Stock-based compensation expense | 172,000 | 422,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,041,000 | 1,161,000 |
Inventories | 135,000 | 31,000 |
Income tax receivable | (115,000) | 1,000 |
Prepaid expenses and other | (327,000) | (69,000) |
Accounts payable | 115,000 | (224,000) |
Accrued liabilities | 79,000 | (1,680,000) |
Accrued income taxes | 34,000 | 30,000 |
Deferred revenue | 40,000 | (162,000) |
Net cash used in operating activities | (1,580,000) | (2,311,000) |
Investing Activities: | ||
Purchases of property and equipment | (61,000) | (398,000) |
Purchases of held to maturity investments | 0 | (4,981,000) |
Proceeds from sale of custom print business | 200,000 | 0 |
Proceeds from sale of held to maturity investments | 0 | 4,981,000 |
Net cash provided by (used in) investing activities | 139,000 | (398,000) |
Financing Activities: | ||
Cash dividends paid ($4.90 per share) | (14,000) | (14,000) |
Proceeds from issuance of common stock | 20,000 | 108,000 |
Repurchase of common stock upon vesting of restricted stock awards and vesting of restricted stock units | (1,000) | (35,000) |
Proceeds from PPP loan | 1,054,000 | 0 |
Net cash provided by financing activities | 1,059,000 | 59,000 |
Decrease in cash and cash equivalents | (382,000) | (2,650,000) |
Cash and cash equivalents at beginning of year | 7,510,000 | 10,160,000 |
Cash and cash equivalents at end of year | 7,128,000 | 7,510,000 |
Supplemental disclosures for cash flow information: | ||
Cash paid (refunded) during the year for income taxes | (112,000) | 8,000 |
Non-cash investing and financing activities: | ||
Purchase of property and equipment included in accounts payable | 11,000 | 0 |
Cash dividends declared included in accounts payable | 0 | 28,000 |
Receivable recorded from sale of custom print business | 100,000 | 0 |
Receivables recorded from sale of property and equipment | 195,000 | 0 |
Common stock issued for accrued liabilities | $ 9,000 | $ 0 |
STATEMENTS OF CASH FLOWS (Paren
STATEMENTS OF CASH FLOWS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Cash Flows [Abstract] | ||
Dividends per share | $ 4.90 | $ 4.90 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Description of Business . Reverse Stock Split. Sale of Custom Print Business. Revenue Recognition Cash and Cash Equivalents Fair Value of Financial Measurements . The hierarchy is divided into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company records certain financial assets and liabilities at their carrying amounts that approximate fair value, based on their short-term nature. These financial assets and liabilities included cash and cash equivalents, accounts receivable and accounts payable. The carrying value of long-term debt approximates fair value, as the loan is repayable over the next 16 months at an interest rate prescribed by a government agency (see Note 11). Accounts Receivable . Changes in the Company’s allowance for doubtful accounts are as follows: December 31 2020 2019 Beginning balance $ 65,000 $ 22,000 Bad debt provision 70,000 47,000 Accounts written-off - (4,000 ) Ending balance $ 135,000 $ 65,000 Inventories December 31 2020 2019 Raw materials $ 32,000 $ 47,000 Work-in-process 2,000 16,000 Finished goods 51,000 259,000 $ 85,000 $ 322,000 Property and Equipment Production tooling, machinery and equipment 1 - 6 years Office furniture and fixtures 1 - 3 years Computer equipment and software 3 - 5 years During December 2020, in connection with the outsourcing of certain printing operations, the Company sold property and equipment with a net book value of $230,000, for $195,000, resulting in a loss on sale of $35,000. The proceeds were in the form of receivables due in four equal amounts due in June and December 2021 and June and December 2022. Impairment of Long-Lived Assets A hierarchy for inputs used in measuring fair value is in place that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The hierarchy is intended to maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available. At March 31, 2020, the impact of COVID-19 was determined to be a triggering event requiring an impairment review of long-lived assets. In 2011, the Company paid News America Marketing In-Store, L.L.C. (“News America”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America’s network of retailers as News America’s exclusive agent. The $4,000,000 was being amortized over the 10-year term of the arrangement. In 2019, the Company accelerated the amortization based on the anticipated recovery period over the remaining term of the contract due to the loss of a significant retailer that exited the Company’s retailer network in the first half of 2019 as a result of competitive pressures. As a result of the accelerated amortization, amortization expense for the year ended December 31, 2019 was $600,000. At March 31, 2020, the Company determined the asset was impaired based upon continued revenue declines driven by changes in market conditions due to COVID-19 within the stores that this agreement affords the Company access to. As a result, an impairment of $159,000 was recognized as of March 31, 2020. The Company also shortened the useful life of the underlying asset from March 31, 2021 to December 31, 2020 and recorded remaining amortization expense on a straight-line basis over the remainder of 2020. Amortization expense without the impairment was $158,000 for the year ended December 31, 2020. The net carrying amount of the selling arrangement was recorded within other assets on the Company’s balance sheet. A summary of the carrying amount of this selling arrangement is as follows as of December 31: 2020 2019 Gross cost $ 4,000,000 $ 4,000,000 Accumulated amortization (4,000,000 ) (3,683,000 ) Net carrying amount $ - $ 317,000 In 2019, the Company identified indicators of impairment due to the 2019 operating loss, cash flows used in operations and the excess of the book value of the Company compared to its market capitalization, which became a significant difference during the last two months of 2019. Due to these indicators of impairment, the Company completed an impairment analysis on its long-lived assets by first reviewing the expected undiscounted cash flows compared to the carrying value over the primary asset’s remaining useful life to determine if further impairment testing was required. The Company prepared an undiscounted cash flow analysis related to its selling agreement, described above, which is a separate asset group and as the undiscounted cash flows exceeded the carrying value, no further impairment testing was required. For the property and equipment asset group, the undiscounted cash flows were less than carrying value and therefore, a fair value assessment was required to determine the amount of the impairment. Due to the nature of the primary asset (internally developed software), the most readily available fair market value related to the asset is the market capitalization of the Company which is considered a level 1 measurement (quoted market price). After allocating the Company’s market capitalization to its working capital, there was no remaining value to allocate to long-lived assets which included the internally developed software recently placed in service. The Company utilized other level 3 inputs to determine the fair value of other tangible long-lived assets, including appraised values of production tooling, machinery and equipment. As a result, the Company recorded a long-lived asset impairment charge totaling $2,014,000 during the fourth quarter of 2019. As of December 31, 2019 Property and Equipment, net: Balance prior to impairment $ 2,563,000 Impairment charge (2,014,000 ) Ending balance $ 549,000 Income Taxes Stock-Based Compensation . The expected lives of the options and employee stock purchase plan rights are based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at grant date. Volatility is based on historical and expected future volatility of the Company’s stock. The Company has not historically issued any dividends beyond one-time dividends declared in 2011 and 2016 and does not expect to in the future. Forfeitures are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. Advertising Costs Net Income (Loss) Per Share Weighted average common shares outstanding for the years ended December 31, 2020 and 2019 were as follows: Year ended December 31 2020 2019 Denominator for basic net loss per share - weighted average shares 1,734,000 1,706,000 Effect of dilutive securities: Stock options, restricted stock units and restricted stock awards - - Denominator for diluted net loss per share - weighted average shares 1,734,000 1,706,000 Due to the net loss incurred during the years ended December 31, 2020 and 2019, all stock awards were anti-dilutive for the period. Use of Estimates |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Investments | During 2020 and as of December 31, 2019, the Company did not have any investments. Prior to December 31, 2019, the Company had invested its excess cash in debt securities, with an average maturity of approximately six months, and which were classified as held to maturity within current assets. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
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 revenues. 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. 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 the Company’s performance obligations included in its primary revenue streams and the timing or method of revenue recognition for each: In-Store Signage Solution Services. Each of the individual activities under the Company’s 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 the Company and the Company has an enforceable right to payment for services performed to date. As a result, the Company recognizes the transaction price for service performance obligations as revenue over time. Given the nature of the Company’s performance obligations is to provide a display service over the duration of a specified period or periods, the Company recognizes revenue on a straight-line basis over the display service period as it best reflects the timing of transfer of its sign solutions . Non-POPS Solutions Products . Disaggregation of Revenue In the following table, revenue is disaggregated by major revenue stream and timing of revenue recognition. Year ended December 31, 2020 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 10,702,000 $ - $ 10,702,000 Products and services transferred at a point in time 6,389,000 578,000 6,967,000 Total $ 17,091,000 $ 578,000 $ 17,669,000 Year ended December 31, 2019 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 15,172,000 $ - $ 15,172,000 Products and services transferred at a point in time 5,057,000 1,725,000 6,782,000 Total $ 20,229,000 $ 1,725,000 $ 21,954,000 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 Accounting Standards Codification 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, 2019 $ 140,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied (140,000 ) Cash received in advance and not recognized as revenue 180,000 Balance at December 31, 2020 $ 180,000 Transaction Price Allocated to Remaining Performance Obligations The Company applies the practical expedient in paragraph 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 its performance obligations. This practical expedient is being applied to arrangements for certain incomplete services and unshipped custom signage materials. At December 31, 2020, there were no contracts with an expected duration of greater than one year. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consists of the following at December 31: Year ended December 31 2020 2019 Property and Equipment: Production tooling, machinery and equipment $ 2,349,000 $ 3,685,000 Office furniture and fixtures 425,000 393,000 Computer equipment and software 1,447,000 1,426,000 Leasehold improvements - - Construction in-progress 17,000 - 4,238,000 5,504,000 Accumulated depreciation and amortization (4,163,000 ) (4,955,000 ) Net Property and Equipment $ 75,000 $ 549,000 Depreciation expense for the years ended December 31, 2020 and 2019 was $314,000 and $1,044,000, respectively. During December 2020, in connection with the outsourcing of most printing operations, the Company sold property and equipment with a net book value of $230,000, for $195,000, resulting in a loss on sale of $35,000. The proceeds were in the form of receivables due in four equal amounts due in June and December 2021 and June and December 2022. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | The Company leases space under a non-cancelable operating lease for its 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 the Company’s corporate headquarters includes both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g., fixed common-area or other maintenance costs) which are accounted for as a single lease component as the Company elected the practical expedient to group lease and non-lease components for all leases. The lease for the Company’s additional office space is non-cancelable with a lease term of less than one year and therefore, the Company elected the practical expedient to exclude this short-term lease from the Company’s right-of-use assets and lease liabilities. The Company’s incremental borrowing rate used in determining the present value of the lease payments was based on information available at the lease commencement date. The cost components of the Company’s operating leases were as follows for the years ended December 31, 2020 and 2019: Year ended December 31, 2020 Corporate Additional Operating Headquarters Office Space Leases Operating lease cost $ 150,000 $ - $ 150,000 Variable lease cost 104,000 - 104,000 Short-term lease cost - 40,000 40,000 Total $ 254,000 $ 40,000 $ 294,000 Year ended December 31, 2019 Corporate Additional Operating Headquarters Office Space Leases Operating lease cost $ 150,000 $ - $ 150,000 Variable lease cost 106,000 - 106,000 Short-term lease cost - 38,000 38,000 Total $ 256,000 $ 38,000 $ 294,000 Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased corporate headquarters which are paid based on actual costs incurred by the lessor. Maturities of the Company’s lease liabilities for its corporate headquarters operating lease were as follows as of December 31, 2020: 2021 $ 57,000 Less: Interest 1,000 Present value of lease liabilities $ 56,000 The remaining lease term as of December 31, 2020 and 2019, was 0.25 years and 1.25 years, respectively. The discount rate as of both December 31, 2020 and 2019 was 6%. The cash outflow for operating leases for the years ended December 31, 2020 and December 31, 2019 was $222,000 and $217,000, respectively. The Company plans to enter into a lease for a new operations center in suburban Minneapolis for a two-year term commencing in March 2021. The Company also plans to enter into a lease by April 2021 for new headquarters near downtown Minneapolis. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Retailer Agreements Aggregate commitment amounts under agreements with retailers are approximately as follows for the years ending December 31: 2021 $ 418,000 2022 708,000 2023 354,000 During 2020, the Company renegotiated several fixed or store-based retail payment contracts to sign placement-based payment contracts, in each case with the general effect of reducing guaranteed payment obligations. On an ongoing basis the Company negotiates renewals of various agreements with retailers, retailer contracts generally have terms of one to three years. Legal . In July 2019, the Company brought suit against News America in the U.S. District Court in Minnesota, alleging violations of federal and state antitrust and tort laws by News America. The complaint alleges that News America has monopolized the national market for third-party in-store advertising and promotion products and services through various wrongful acts designed to harm the Company, its last significant competitor. 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 our Company. In August 2019, News America filed an answer and counterclaim. In October 2019, News America moved for a judgment on the pleadings. Management believes that the counterclaim is without merit, and the Company filed a response brief on November 11, 2019. The Company also moved to dismiss the counterclaim against it. The court heard oral arguments from both parties on January 14, 2020, and subsequently denied both motions. On July 10, 2020 the parties cross-moved for summary judgment on the counterclaim. On December 7, 2020, the Court granted News America’s motion for summary judgment on the counterclaim in part, requiring Insignia to strike certain allegations from its Complaint and finding News America’s request for attorneys’ fees and costs premature. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Stock-Based Compensation The following table summarizes the stock-based compensation expense that was recognized in the Company’s statements of operations for the years ended December 31, 2020 and 2019: Year ended December 31 2020 2019 Cost of sales $ 5,000 $ 14,000 Selling 38,000 121,000 Marketing (1,000 ) 12,000 General and administrative 130,000 275,000 $ 172,000 $ 422,000 The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards with the following weighted average assumptions: 2020 2019 Stock Purchase Plan Options: Expected life (years) 1.0 1.0 Expected volatility 59 % 57 % Dividend yield 0 % 0 % Risk-free interest rate 1.6 % 2.6 % The Company uses the graded attribution method to recognize expense for unvested stock-based awards. The amount of stock-based compensation recognized during a period is based on the value of the awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company re-evaluates the forfeiture rate annually and adjusts it as necessary. Stock Options, Restricted Stock, Restricted Stock Units, and Other Stock-Based Compensation Awards Under the terms of the 2018 Plan, the number of shares of our common stock that may be the subject of awards and issued under the 2018 Plan was initially 128,571 plus any shares remaining available for future grants under the 2013 Plan on the effective date of the 2018 Plan. All equity awards made during 2019 were under the 2018 Plan. Under the terms of the 2018 Plan, the Company may grant awards in a variety of instruments including stock options, restricted stock and restricted stock units to employees, consultants and directors generally at an exercise price at or above 100% of fair market value at the close of business on the date of grant. Stock options expire 10 years after the date of grant and generally vest over three years. The Company issues new shares of common stock upon grant of restricted stock, when stock options are exercised, and when restricted stock units are vested and/or settled. The following table summarizes activity under the 2003, 2013 and 2018 Plans: Plan Shares Available for Grant Plan Options Outstanding Weighted Average Exercise Price Per Share Balance at January 1, 2019 117,860 53,225 $ 16.49 Restricted stock units and awards granted - 2018 Plan ( 10,106 ) — Cancelled or forfeited - 2018 Plan options 1,938 ( 1,938 ) 13.65 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 1,938 — 13.65 Cancelled or forfeited - 2013 Plan options 2,926 ( 2,926 ) 14.70 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 3,105 — 12.02 Cancelled or forfeited - 2003 Plan options — ( 5,945 ) 17.21 Balance at December 31, 2019 117,661 42,416 16.66 Restricted stock units and awards granted - 2018 Plan ( 31,782 ) — Cancelled or forfeited - 2018 Plan options 1,070 ( 1,070 ) 13.65 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 3,091 — 9.58 Cancelled or forfeited - 2013 Plan options 2,241 ( 2,241 ) 15.54 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 1,450 — 13.34 Cancelled or forfeited - 2003 Plan options — ( 8,607 ) 24.23 Balance at December 31, 2020 93,731 30,498 $ 14.69 The following table summarizes information about the stock options outstanding at December 31, 2020: Options Outstanding Options Exercisable Ranges of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Number Exercisable Weighted Average Exercise Price Per Share $8.26 - $13.65 18,799 6.12 years $ 12.36 9,424 $ 11.07 $15.54 - $21.63 11,699 1.97 years 18.43 11,699 18.43 30,498 4.53 years $ 14.69 21,123 $ 15.15 Options outstanding under the Plans expire at various dates during the period from May 2021 through August 2028. Options outstanding during 2020 and 2019 had no intrinsic value. Options exercisable at December 31, 2020 had a weighted average remaining life of 3.16 years and no intrinsic value. No options were granted in either 2020 or 2019. The number of options exercisable at December 31, 2019 was 27,285. During the year ended December 31, 2020, the Company issued 24,282 restricted stock units. The shares underlying the awards were assigned a weighted average value of $6.00 per share, which was the closing price of the Company’s common stock on the date of grants. These awards are scheduled to vest over one year. No restricted stock or restricted stock unit awards were granted in 2019 to employees. During December 2020, non-employee members of the Board of Directors received restricted stock grants totaling 7,500 shares. The shares underlying the awards were assigned a value of $6.00 per share, which was the closing price of the Company’s common stock on the date of grants, for a total value of $45,000, and are scheduled to vest the day immediately preceding the date of the next annual shareholder meeting. During June 2019, non-employee members of the Board of Directors received restricted stock grants totaling 10,106 shares pursuant to the 2018 Plan. The shares underlying the awards were assigned a value of $7.42 per share, which was the closing price of the Company’s common stock on the date of grants, for a total value of $75,000, and were vested on July 30, 2020, the day immediately preceding the 2020 annual shareholder meeting. Restricted stock and restricted stock unit transactions during the years ended December 31, 2020 and 2019 are summarized as follows: Number of Shares Weighted average grant date fair value Unvested shares at January 1, 2019 70,078 $ 12.47 Granted 10,106 7.42 Vested (30,103 ) 11.15 Forfeited or surrendered (5,422 ) 12.88 Unvested shares at December 31, 2019 44,659 $ 12.16 Granted 31,782 6.00 Vested (22,315 ) 11.36 Forfeited or surrendered (4,162 ) 10.30 Unvested shares at December 31, 2020 49,964 $ 8.76 As of December 31, 2020, there was approximately $20,000 of total unrecognized compensation costs related to outstanding stock options, which is expected to be recognized over a weighted average period of 1.61 years. As of December 31, 2020, there was approximately $242,000 of total unrecognized compensation costs related to restricted stock and restricted stock units, which is expected to be recognized over a weighted average period of 0.88 years. Employee Stock Purchase Plan. Share Repurchase Programs. Dividends. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income tax benefit consists of the following: Year Ended December 31 2020 2019 Current taxes - Federal $ (233,000 ) $ - Current taxes - State 42,000 38,000 Deferred taxes - Federal - (437,000 ) Deferred taxes - State - (67,000 ) Income tax benefit $ (191,000 ) $ (466,000 ) The actual tax benefit attributable to loss before taxes differs from the expected tax benefit computed by applying the U.S. federal corporate income tax rate of 21% as follows: Year Ended December 31 2020 2019 Federal statutory rate 21.0 % 21.0 % Stock-based awards (0.8 ) (0.8 ) State taxes 3.5 3.2 Other permanent differences - (0.1 ) Impact of uncertain tax positions (0.7 ) (0.6 ) Valuation allowance (19.5 ) (14.0 ) Other 0.8 (0.2 ) Effective federal income tax rate 4.3 % 8.5 % Components of resulting noncurrent deferred tax assets (liabilities) are as follows: As of December 31 2020 2019 Deferred tax assets Accrued expenses $ 153,000 $ 105,000 Inventory reserve 9,000 5,000 Stock-based awards 65,000 88,000 Reserve for bad debts 33,000 16,000 Net operating loss and credit carryforwards 1,422,000 715,000 Other 47,000 26,000 Depreciation 52,000 - Valuation allowance (1,723,000 ) (848,000 ) Total deferred tax assets $ 58,000 $ 107,000 Deferred tax liabilities Depreciation $ - $ (18,000 ) Prepaid expenses (58,000 ) (89,000 ) Total deferred tax liabilities (58,000 ) (107,000 ) Net deferred income tax liabilities $ - $ - As of December 31, 2020, the Company had a Federal net operating loss (NOL) to carry forward of approximately $5,400,000 and state NOLs of approximately $4,500,000 to carry forward. The Federal NOLs can be carried forward indefinitely. The expiration of state NOLs carried forward varies by taxing jurisdiction. Section 382 of the U.S. Internal Revenue Code of 1986 (“Section 382”), as amended, generally imposes an annual limitation on the amount of NOL carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. During 2020, we believe we may have experienced an ownership change as defined in Section 382 which would limit our ability to utilize our NOLs. The Company has not yet completed a formal Section 382 analysis. In addition, our ability to utilize the current NOL carryforwards might be further limited by future issuances of our common stock. In March 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The CARES Act, among other provisions, allows for companies to carry back federal NOLs generated in 2018, 2019 and 2020 for up to five years for refunds of federal taxes paid. This provision created an opportunity for the Company to utilize NOLs not previously expected to be utilized. Thus, the Company has reversed approximately $215,000 of its valuation allowance against the NOLs in its deferred tax assets which the Company carried back to claim a refund of federal taxes paid. As the Company expects to receive the tax refund from the ability to carry back the NOLs within the next 12 months, this discrete benefit has been recorded within income taxes receivable on the balance sheet. In addition to the $215,000 recognized, $17,000 was included as a discrete tax benefit for the year and included in income taxes receivable related to the NOL carry back due to differences in the federal tax rate utilized for the deferred tax asset compared to the rates in effect for the years in which the NOL is being carried back. The Company evaluates all significant available positive and negative evidence, including the existence of losses in prior years and its forecast of future taxable income, in assessing the need for a valuation allowance. The underlying assumptions the Company uses in forecasting future taxable income require significant judgment and take into consideration the Company’s recent performance. The change in the valuation allowance for the years ended December 31, 2020 and 2019 was $875,000 and $769,000, respectively. The Company has recorded a liability of $677,000 and $643,000 for uncertain tax positions taken in tax returns in previous years as of December 31, 2020 and 2019, respectively. This liability is reflected as accrued income taxes on the Company’s balance sheets. The Company files income tax returns in the United States and numerous state and local tax jurisdictions. Tax years 2017 and forward are open for examination and assessment by the Internal Revenue Service. With limited exceptions, tax years prior to 2017 are no longer open in major state and local tax jurisdictions. The Company does not anticipate that the total unrecognized tax benefits will change significantly prior to December 31, 2021. A reconciliation of the beginning and ending amount of the liability for uncertain tax positions is as follows: Balance at January 1, 2019 $ 613,000 Increases due to interest and state tax 30,000 Balance at December 31, 2019 643,000 Increases due to interest and state tax 34,000 Balance at December 31, 2020 $ 677,000 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | The Company sponsors a Retirement Profit Sharing and Savings Plan under Section 401(k) of the Internal Revenue Code. The plan allows employees to defer up to 50% of their wages, subject to Federal limitations, on a pre-tax basis through contributions to the plan. During the years ended December 31, 2020 and 2019, the Company’s expense for matching contributions was $62,000 and $72,000, respectively. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Major Customers Export Sales |
Loan
Loan | 12 Months Ended |
Dec. 31, 2020 | |
Loans Payable [Abstract] | |
Loan | In April 2020, the Company entered into a promissory note (the “Note”) with Alerus Financial, N.A. The Note evidences a loan to the Company in the amount of $1,054,000 pursuant to the Paycheck Protection Program (the “PPP”) of the CARES Act administered by the U.S. Small Business Administration (the “SBA”). In accordance with the requirements of the CARES Act, the Company used the proceeds from the loan exclusively for qualified expenses under the PPP, including payroll costs, rent and utility costs, as further detailed in the CARES Act and applicable guidance issued by the SBA. Interest was accrued on the outstanding balance of the Note at a rate of 1.00% per annum. The Note was scheduled to mature on April 22, 2022 and required 18 equal monthly payments of principal and interest. In accordance with provisions of the CARES Act, the Company applied for forgiveness of the amount due under the Note, including accrued interest. The application for forgiveness of the principal amount of $1,054,000 and accrued interest was approved by the SBA on January 29, 2021. Accordingly, for the quarter ending March 31, 2021 the debt of $1,054,000, plus accrued interest which was $7,000 at December 31, 2020, will be eliminated with a gain on debt extinguishment included in other income. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | The Company evaluated all subsequent event activity and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the Notes to Financial Statements, with the exception of the forgiveness of the Paycheck Protection Program loan disclosed in Note 11. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | |
Reverse Stock Split | Effective December 31, 2020, the Company implemented a seven-for-one reverse stock split. All share and per share information, including for stock options and restricted stock units, in the financial statements gives retroactive effect to the reverse stock split for all periods presented. |
Sale of our Custom Print Business | In August 2020, the Company sold its custom print business to an existing strategic partner. This divestiture has allowed the Company to focus on its core business, selling product solutions to CPGs. The custom print business was not material to operations as a whole and did not represent a strategic shift and therefore is not presented as a discontinued operation. The sale price was $300,000 resulting in a gain on the sale of $195,000. The Company received $200,000 of cash and recorded a short-term receivable of $75,000 and a long-term receivable of $25,000. In addition to the initial sale price, the Company is eligible to receive up to $100,000 in additional payments to the extent net sales by the custom print business during the first year after closing exceed a threshold amount. Due to the contingent nature of the earn-out, no additional gain has been recognized as part of the recorded gain. |
Revenue Recognition | The Company recognizes revenue from Insignia In-Store Signage Solutions ratably over the period of service, which is typically a two-to-four-week display cycle. The Company recognized revenue related to custom print solutions and sign card sales at the time the products are shipped to customers. Revenue from non-POPS solutions is recognized with a mix of over-time and point in time recognition dependent on type of service performed. Revenue that has been billed and not yet recognized is reflected as deferred revenue on the Company’s balance sheet. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. At December 31, 2020 and 2019, $7,135,000 and $7,333,000 was invested in an insured sweep account and money market account, respectively. The balances in cash accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Amounts held in checking accounts and in insured cash sweep accounts during the years ended December 31, 2020 and 2019 were fully insured under the Federal Deposit Insurance Corporation. |
Fair Value of Financial Measurements | Fair value is defined as the exit price, or the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants as of the measurement date. Accounting Standards Codification (“ASC”) 820-10 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect management’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is divided into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company records certain financial assets and liabilities at their carrying amounts that approximate fair value, based on their short-term nature. These financial assets and liabilities included cash and cash equivalents, accounts receivable and accounts payable. The carrying value of long-term debt approximates fair value, as the loan is repayable over the next 16 months at an interest rate prescribed by a government agency (see Note 11). |
Accounts Receivable | The majority of the Company’s accounts receivable is due from companies in the consumer-packaged goods 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. Accounts receivable outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. Changes in the Company’s allowance for doubtful accounts are as follows: December 31 2020 2019 Beginning balance $ 65,000 $ 22,000 Bad debt provision 70,000 47,000 Accounts written-off - (4,000 ) Ending balance $ 135,000 $ 65,000 |
Inventories | Inventories are primarily comprised of sign cards and hardware. Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method, and consists of the following: December 31 2020 2019 Raw materials $ 32,000 $ 47,000 Work-in-process 2,000 16,000 Finished goods 51,000 259,000 $ 85,000 $ 322,000 |
Property and Equipment | Property and equipment is recorded at cost. Significant additions or improvements extending asset lives are capitalized, while repairs and maintenance are charged to expense when incurred. Internally developed software is capitalized upon completion of preliminary project stage and when it is probable the project will be completed. Expenditures are capitalized for all development activities, while expenditures related to planning, training, and maintenance are expensed. Depreciation is provided in amounts sufficient to relate the cost of assets to operations over their estimated useful lives. The straight-line method of depreciation is used for financial reporting purposes and accelerated methods are used for tax purposes. Estimated useful lives of the assets are as follows: Production tooling, machinery and equipment 1 - 6 years Office furniture and fixtures 1 - 3 years Computer equipment and software 3 - 5 years During December 2020, in connection with the outsourcing of certain printing operations, the Company sold property and equipment with a net book value of $230,000, for $195,000, resulting in a loss on sale of $35,000. The proceeds were in the form of receivables due in four equal amounts due in June and December 2021 and June and December 2022. |
Impairment of Long-Lived Assets | The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. Impaired assets are then recorded at their estimated fair value. A hierarchy for inputs used in measuring fair value is in place that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The hierarchy is intended to maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available. At March 31, 2020, the impact of COVID-19 was determined to be a triggering event requiring an impairment review of long-lived assets. In 2011, the Company paid News America Marketing In-Store, L.L.C. (“News America”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America’s network of retailers as News America’s exclusive agent. The $4,000,000 was being amortized over the 10-year term of the arrangement. In 2019, the Company accelerated the amortization based on the anticipated recovery period over the remaining term of the contract due to the loss of a significant retailer that exited the Company’s retailer network in the first half of 2019 as a result of competitive pressures. As a result of the accelerated amortization, amortization expense for the year ended December 31, 2019 was $600,000. At March 31, 2020, the Company determined the asset was impaired based upon continued revenue declines driven by changes in market conditions due to COVID-19 within the stores that this agreement affords the Company access to. As a result, an impairment of $159,000 was recognized as of March 31, 2020. The Company also shortened the useful life of the underlying asset from March 31, 2021 to December 31, 2020 and recorded remaining amortization expense on a straight-line basis over the remainder of 2020. Amortization expense without the impairment was $158,000 for the year ended December 31, 2020. The net carrying amount of the selling arrangement was recorded within other assets on the Company’s balance sheet. A summary of the carrying amount of this selling arrangement is as follows as of December 31: 2020 2019 Gross cost $ 4,000,000 $ 4,000,000 Accumulated amortization (4,000,000 ) (3,683,000 ) Net carrying amount $ - $ 317,000 In 2019, the Company identified indicators of impairment due to the 2019 operating loss, cash flows used in operations and the excess of the book value of the Company compared to its market capitalization, which became a significant difference during the last two months of 2019. Due to these indicators of impairment, the Company completed an impairment analysis on its long-lived assets by first reviewing the expected undiscounted cash flows compared to the carrying value over the primary asset’s remaining useful life to determine if further impairment testing was required. The Company prepared an undiscounted cash flow analysis related to its selling agreement, described above, which is a separate asset group and as the undiscounted cash flows exceeded the carrying value, no further impairment testing was required. For the property and equipment asset group, the undiscounted cash flows were less than carrying value and therefore, a fair value assessment was required to determine the amount of the impairment. Due to the nature of the primary asset (internally developed software), the most readily available fair market value related to the asset is the market capitalization of the Company which is considered a level 1 measurement (quoted market price). After allocating the Company’s market capitalization to its working capital, there was no remaining value to allocate to long-lived assets which included the internally developed software recently placed in service. The Company utilized other level 3 inputs to determine the fair value of other tangible long-lived assets, including appraised values of production tooling, machinery and equipment. As a result, the Company recorded a long-lived asset impairment charge totaling $2,014,000 during the fourth quarter of 2019. As of December 31, 2019 Property and Equipment, net: Balance prior to impairment $ 2,563,000 Impairment charge (2,014,000 ) Ending balance $ 549,000 |
Income Taxes | Income taxes are accounted for under the liability method. Deferred income taxes are provided for temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred taxes are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of the enactment. It is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense (benefit). |
Stock-Based Compensation | The Company measures and recognizes compensation expense for all stock-based awards at fair value. Restricted stock units and awards are valued at the closing market price of the Company’s stock on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and employee stock purchase plan rights. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as by assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The expected lives of the options and employee stock purchase plan rights are based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at grant date. Volatility is based on historical and expected future volatility of the Company’s stock. The Company has not historically issued any dividends beyond one-time dividends declared in 2011 and 2016 and does not expect to in the future. Forfeitures are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. |
Advertising Costs | Advertising costs are charged to operations as incurred. Advertising expenses were approximately $69,000 and $133,000 during the years ended December 31, 2020 and 2019, respectively. |
Net Income (Loss) per Share | Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding and excludes any dilutive effects of stock options and restricted stock units and awards. Diluted net income (loss) per share gives effect to all diluted potential common shares outstanding during the year. Weighted average common shares outstanding for the years ended December 31, 2020 and 2019 were as follows: Year ended December 31 2020 2019 Denominator for basic net loss per share - weighted average shares 1,734,000 1,706,000 Effect of dilutive securities: Stock options, restricted stock units and restricted stock awards - - Denominator for diluted net loss per share - weighted average shares 1,734,000 1,706,000 Due to the net loss incurred during the years ended December 31, 2020 and 2019, all stock awards were anti-dilutive for the period. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Allowance for doubtful accounts | December 31 2020 2019 Beginning balance $ 65,000 $ 22,000 Bad debt provision 70,000 47,000 Accounts written-off - (4,000 ) Ending balance $ 135,000 $ 65,000 |
Inventories | December 31 2020 2019 Raw materials $ 32,000 $ 47,000 Work-in-process 2,000 16,000 Finished goods 51,000 259,000 $ 85,000 $ 322,000 |
Estimated useful lives | Production tooling, machinery and equipment 1 - 6 years Office furniture and fixtures 1 - 3 years Computer equipment and software 3 - 5 years |
Selling arrangement | 2020 2019 Gross cost $ 4,000,000 $ 4,000,000 Accumulated amortization (4,000,000 ) (3,683,000 ) Net carrying amount $ - $ 317,000 |
Asset impairment | As of December 31, 2019 Property and Equipment, net: Balance prior to impairment $ 2,563,000 Impairment charge (2,014,000 ) Ending balance $ 549,000 |
Weighted average common shares outstanding | Year ended December 31 2020 2019 Denominator for basic net loss per share - weighted average shares 1,734,000 1,706,000 Effect of dilutive securities: Stock options, restricted stock units and restricted stock awards - - Denominator for diluted net loss per share - weighted average shares 1,734,000 1,706,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition [Abstract] | |
Disaggregation of revenue | Year ended December 31, 2020 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 10,702,000 $ - $ 10,702,000 Products and services transferred at a point in time 6,389,000 578,000 6,967,000 Total $ 17,091,000 $ 578,000 $ 17,669,000 Year ended December 31, 2019 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 15,172,000 $ - $ 15,172,000 Products and services transferred at a point in time 5,057,000 1,725,000 6,782,000 Total $ 20,229,000 $ 1,725,000 $ 21,954,000 |
Deferred revenue | Balance at December 31, 2019 $ 140,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied (140,000 ) Cash received in advance and not recognized as revenue 180,000 Balance at December 31, 2020 $ 180,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Year ended December 31 2020 2019 Property and Equipment: Production tooling, machinery and equipment $ 2,349,000 $ 3,685,000 Office furniture and fixtures 425,000 393,000 Computer equipment and software 1,447,000 1,426,000 Leasehold improvements - - Construction in-progress 17,000 - 4,238,000 5,504,000 Accumulated depreciation and amortization (4,163,000 ) (4,955,000 ) Net Property and Equipment $ 75,000 $ 549,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Components of operating leases | Year ended December 31, 2020 Corporate Additional Operating Headquarters Office Space Leases Operating lease cost $ 150,000 $ - $ 150,000 Variable lease cost 104,000 - 104,000 Short-term lease cost - 40,000 40,000 Total $ 254,000 $ 40,000 $ 294,000 Year ended December 31, 2019 Corporate Additional Operating Headquarters Office Space Leases Operating lease cost $ 150,000 $ - $ 150,000 Variable lease cost 106,000 - 106,000 Short-term lease cost - 38,000 38,000 Total $ 256,000 $ 38,000 $ 294,000 |
Maturities of our lease liabilities | 2021 $ 57,000 Less: Interest 1,000 Present value of lease liabilities $ 56,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregate commitment amounts | 2021 $ 418,000 2022 708,000 2023 354,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stock-based compensation expense | Year ended December 31 2020 2019 Cost of sales $ 5,000 $ 14,000 Selling 38,000 121,000 Marketing (1,000 ) 12,000 General and administrative 130,000 275,000 $ 172,000 $ 422,000 |
Weighted average assumptions | 2020 2019 Stock Purchase Plan Options: Expected life (years) 1.0 1.0 Expected volatility 59 % 57 % Dividend yield 0 % 0 % Risk-free interest rate 1.6 % 2.6 % |
Stock option activity | Plan Shares Available for Grant Plan Options Outstanding Weighted Average Exercise Price Per Share Balance at January 1, 2019 117,860 53,225 $ 16.49 Restricted stock units and awards granted - 2018 Plan ( 10,106 ) — Cancelled or forfeited - 2018 Plan options 1,938 ( 1,938 ) 13.65 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 1,938 — 13.65 Cancelled or forfeited - 2013 Plan options 2,926 ( 2,926 ) 14.70 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 3,105 — 12.02 Cancelled or forfeited - 2003 Plan options — ( 5,945 ) 17.21 Balance at December 31, 2019 117,661 42,416 16.66 Restricted stock units and awards granted - 2018 Plan ( 31,782 ) — Cancelled or forfeited - 2018 Plan options 1,070 ( 1,070 ) 13.65 Cancelled or forfeited - 2018 Plan restricted stock and restricted stock units 3,091 — 9.58 Cancelled or forfeited - 2013 Plan options 2,241 ( 2,241 ) 15.54 Cancelled or forfeited - 2013 Plan restricted stock and restricted stock units 1,450 — 13.34 Cancelled or forfeited - 2003 Plan options — ( 8,607 ) 24.23 Balance at December 31, 2020 93,731 30,498 $ 14.69 |
Stock options outstanding | Options Outstanding Options Exercisable Ranges of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Per Share Number Exercisable Weighted Average Exercise Price Per Share $8.26 - $13.65 18,799 6.12 years $ 12.36 9,424 $ 11.07 $15.54 - $21.63 11,699 1.97 years 18.43 11,699 18.43 30,498 4.53 years $ 14.69 21,123 $ 15.15 |
Restricted stock and restricted stock unit activity | Number of Shares Weighted average grant date fair value Unvested shares at January 1, 2019 70,078 $ 12.47 Granted 10,106 7.42 Vested (30,103 ) 11.15 Forfeited or surrendered (5,422 ) 12.88 Unvested shares at December 31, 2019 44,659 $ 12.16 Granted 31,782 6.00 Vested (22,315 ) 11.36 Forfeited or surrendered (4,162 ) 10.30 Unvested shares at December 31, 2020 49,964 $ 8.76 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income tax benefit | Year Ended December 31 2020 2019 Current taxes - Federal $ (233,000 ) $ - Current taxes - State 42,000 38,000 Deferred taxes - Federal - (437,000 ) Deferred taxes - State - (67,000 ) Income tax benefit $ (191,000 ) $ (466,000 ) |
Reconciliation of effective federal income tax rate | Year Ended December 31 2020 2019 Federal statutory rate 21.0 % 21.0 % Stock-based awards (0.8 ) (0.8 ) State taxes 3.5 3.2 Other permanent differences - (0.1 ) Impact of uncertain tax positions (0.7 ) (0.6 ) Valuation allowance (19.5 ) (14.0 ) Other 0.8 (0.2 ) Effective federal income tax rate 4.3 % 8.5 % |
Deferred tax assets (liabilities) | As of December 31 2020 2019 Deferred tax assets Accrued expenses $ 153,000 $ 105,000 Inventory reserve 9,000 5,000 Stock-based awards 65,000 88,000 Reserve for bad debts 33,000 16,000 Net operating loss and credit carryforwards 1,422,000 715,000 Other 47,000 26,000 Depreciation 52,000 - Valuation allowance (1,723,000 ) (848,000 ) Total deferred tax assets $ 58,000 $ 107,000 Deferred tax liabilities Depreciation $ - $ (18,000 ) Prepaid expenses (58,000 ) (89,000 ) Total deferred tax liabilities (58,000 ) (107,000 ) Net deferred income tax liabilities $ - $ - |
Uncertain tax positions | Balance at January 1, 2019 $ 613,000 Increases due to interest and state tax 30,000 Balance at December 31, 2019 643,000 Increases due to interest and state tax 34,000 Balance at December 31, 2020 $ 677,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts, beginning | $ 65,000 | $ 22,000 |
Bad debt provision | 70,000 | 47,000 |
Accounts written-off | 0 | (4,000) |
Allowance for doubtful accounts, ending | $ 135,000 | $ 65,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Raw materials | $ 32,000 | $ 47,000 |
Work-in-process | 2,000 | 16,000 |
Finished goods | 51,000 | 259,000 |
Inventories | $ 85,000 | $ 322,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) | 12 Months Ended |
Dec. 31, 2020 | |
Production Tooling, Machinery and Equipment | Minimum | |
Estimated useful lives | 1 year |
Production Tooling, Machinery and Equipment | Maximum | |
Estimated useful lives | 6 years |
Furniture And Fixtures | Minimum | |
Estimated useful lives | 1 year |
Furniture And Fixtures | Maximum | |
Estimated useful lives | 3 years |
Computer Equipment and Software | Minimum | |
Estimated useful lives | 3 years |
Computer Equipment and Software | Maximum | |
Estimated useful lives | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Gross cost | $ 4,000,000 | $ 4,000,000 |
Accumulated amortization | (4,000,000) | (3,683,000) |
Net carrying amount | $ 0 | $ 317,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | |
Beginning balance prior to impairment | $ 2,563,000 |
Impairment charge | (2,014,000) |
Ending balance | $ 549,000 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details 5) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Denominator for basic net loss per share - weighted average shares | 1,734,000 | 1,706,000 |
Effect of dilutive securities: stock options, restricted stock and restricted stock units | 0 | 0 |
Denominator for diluted net loss per share - weighted average shares | 1,734,000 | 1,706,000 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Gain on sale of custom print business | $ 195,000 | $ 0 |
Insured cash sweep account | 7,135,000 | 7,333,000 |
Long-lived asset impairment charge | 0 | 2,014,000 |
Advertising expense | $ 69,000 | $ 133,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total net sales | $ 17,669,000 | $ 21,954,000 |
Products and Services Transferred Over Time | ||
Total net sales | 10,702,000 | 15,172,000 |
Products and Services Transferred at a Point in Time | ||
Total net sales | 6,967,000 | 6,782,000 |
Services | ||
Total net sales | 17,091,000 | 20,229,000 |
Services | Products and Services Transferred Over Time | ||
Total net sales | 10,702,000 | 15,172,000 |
Services | Products and Services Transferred at a Point in Time | ||
Total net sales | 6,389,000 | 5,057,000 |
Products | ||
Total net sales | 578,000 | 1,725,000 |
Products | Products and Services Transferred Over Time | ||
Total net sales | 0 | 0 |
Products | Products and Services Transferred at a Point in Time | ||
Total net sales | $ 578,000 | $ 1,725,000 |
Revenue Recognition (Details 1)
Revenue Recognition (Details 1) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Revenue Recognition [Abstract] | |
Deferred revenue, beginning | $ 140,000 |
Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied | (140,000) |
Cash received in advance and not recognized as revenue | 180,000 |
Deferred revenue, ending | $ 180,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property and equipment, gross | $ 4,238,000 | $ 5,504,000 |
Accumulated depreciation and amortization | (4,163,000) | (4,955,000) |
Property and equipment, net | 75,000 | 549,000 |
Machinery And Equipment | ||
Property and equipment, gross | 2,349,000 | 3,685,000 |
Furniture And Fixtures | ||
Property and equipment, gross | 425,000 | 393,000 |
Computer Equipment and Software | ||
Property and equipment, gross | 1,447,000 | 1,426,000 |
Leasehold Improvements | ||
Property and equipment, gross | 0 | 0 |
Construction in Progress | ||
Property and equipment, gross | $ 17,000 | $ 0 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 314,000 | $ 1,044,000 |
Loss on sale of property and equipment | $ (35,000) | $ 0 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating lease cost | $ 150,000 | $ 150,000 |
Variable lease cost | 104,000 | 106,000 |
Short-term lease cost | 40,000 | 38,000 |
Total | 294,000 | 294,000 |
Corporate Headquarters | ||
Operating lease cost | 150,000 | 150,000 |
Variable lease cost | 104,000 | 106,000 |
Short-term lease cost | 0 | 0 |
Total | 254,000 | 256,000 |
Additional Office Space | ||
Operating lease cost | 0 | 0 |
Variable lease cost | 0 | 0 |
Short-term lease cost | 40,000 | 38,000 |
Total | $ 40,000 | $ 38,000 |
Leases (Details 1)
Leases (Details 1) | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 57,000 |
Less: interest | 1,000 |
Present value of lease liabilities | $ 56,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Remaining lease term | 3 months | 1 year 3 months |
Discount rate | 6.00% | 6.00% |
Cash outflow for operating leases | $ 222,000 | $ 217,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 418,000 |
2022 | 708,000 |
2023 | $ 354,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Fixed and store-based payments | $ 2,765,000 | $ 3,356,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-based compensation expense | $ 172,000 | $ 422,000 |
Cost of Sales | ||
Stock-based compensation expense | 5,000 | 14,000 |
Selling Expenses | ||
Stock-based compensation expense | 38,000 | 121,000 |
Marketing Expenses | ||
Stock-based compensation expense | (1,000) | 12,000 |
General and Administrative Expense | ||
Stock-based compensation expense | $ 130,000 | $ 275,000 |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | ||
Expected life | 1 year | 1 year |
Expected volatility | 59.00% | 57.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.60% | 2.60% |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Plan shares available for grant, beginning | 117,661 | 117,860 |
Granted | (31,782) | (10,106) |
Plan shares available for grant, ending | 93,731 | 117,661 |
Plan options outstanding, beginning | 42,416 | 53,225 |
Granted | 0 | 0 |
Plan options outstanding, ending | 30,498 | 42,416 |
Weighted average exercise price per share, beginning | $ 16.66 | $ 16.49 |
Granted | 0 | 0 |
Weighted average exercise price per share, ending | $ 14.69 | $ 16.66 |
Stock Option Plan 2018 | Stock Options | ||
Cancelled or forfeited | 1,070 | 1,938 |
Cancelled or forfeited | (1,070) | (1,938) |
Cancelled or forfeited | $ 13.65 | $ 13.65 |
Stock Option Plan 2018 | Restricted Stock and Restricted Stock Units | ||
Cancelled or forfeited | 3,091 | 1,938 |
Cancelled or forfeited | 0 | 0 |
Cancelled or forfeited | $ 9.58 | $ 13.65 |
Stock Option Plan 2013 | Stock Options | ||
Cancelled or forfeited | 2,241 | 2,926 |
Cancelled or forfeited | (2,241) | (2,926) |
Cancelled or forfeited | $ 15.54 | $ 14.70 |
Stock Option Plan 2013 | Restricted Stock and Restricted Stock Units | ||
Cancelled or forfeited | 1,450 | 3,105 |
Cancelled or forfeited | 0 | 0 |
Cancelled or forfeited | $ 13.34 | $ 12.02 |
Stock Option Plan 2003 | Stock Options | ||
Cancelled or forfeited | 0 | 0 |
Cancelled or forfeited | (8,607) | (5,945) |
Cancelled or forfeited | $ 24.23 | $ 17.21 |
Shareholders' Equity (Details 3
Shareholders' Equity (Details 3) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Options outstanding | shares | 30,498 |
Weighted average remaining contractual life outstanding | 4 years 6 months 11 days |
Weighted average exercise price per share outstanding | $ 14.69 |
Options exercisable | shares | 21,123 |
Weighted average exercise price per share exercisable | $ 15.15 |
Exercise Price Range One | |
Ranges of exercise prices lower | 8.26 |
Ranges of exercise prices upper | $ 13.65 |
Options outstanding | shares | 18,799 |
Weighted average remaining contractual life outstanding | 6 years 1 month 13 days |
Weighted average exercise price per share outstanding | $ 12.36 |
Options exercisable | shares | 9,424 |
Weighted average exercise price per share exercisable | $ 11.07 |
Exercise Price Range Two | |
Ranges of exercise prices lower | 15.54 |
Ranges of exercise prices upper | $ 21.63 |
Options outstanding | shares | 11,699 |
Weighted average remaining contractual life outstanding | 1 year 11 months 19 days |
Weighted average exercise price per share outstanding | $ 18.43 |
Options exercisable | shares | 11,699 |
Weighted average exercise price per share exercisable | $ 18.43 |
Shareholders' Equity (Details 4
Shareholders' Equity (Details 4) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | ||
Restricted stock and restricted stock units outstanding, beginning | 44,659 | 70,078 |
Granted | 31,782 | 10,106 |
Vested | (22,315) | (30,103) |
Forfeited or surrendered | (4,162) | (5,422) |
Restricted stock and restricted stock units outstanding, ending | 49,964 | 44,659 |
Weighted average grant date fair value outstanding, beginning | $ 12.16 | $ 12.47 |
Granted | 6 | 7.42 |
Vested | 11.36 | 11.15 |
Forfeited or surrendered | 10.30 | 12.88 |
Weighted average grant date fair value outstanding, ending | $ 8.76 | $ 12.16 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Aggregate intrinsic value of options outstanding | $ 0 | $ 0 |
Weighted average remaining life of options exercisable | 3 years 1 month 28 days | |
Aggregate intrinsic value of options exercisable | $ 0 | |
Options exercisable | 0 | 27,285 |
Unrecognized compensation costs related to stock options | $ 20,000 | |
Unrecognized compensation costs related to restricted stock units | 242,000 | |
Stock-based compensation expense | $ 172,000 | $ 422,000 |
Stock Options | ||
Unrecognized compensation costs period of recognition | 1 year 7 months 10 days | |
Restricted Stock and Restricted Stock Units | ||
Unrecognized compensation costs period of recognition | 10 months 17 days | |
Employee Stock Purchase Plan | ||
Employees purchased shares | 6,152 | 4,638 |
Shares are reserved for future employee purchases | 28,977 | |
Stock-based compensation expense | $ 18,000 | $ 55,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current taxes - Federal | $ (233,000) | $ 0 |
Current taxes - State | 42,000 | 38,000 |
Deferred taxes - Federal | 0 | (437,000) |
Deferred taxes - State | 0 | (67,000) |
Income tax benefit | $ (191,000) | $ (466,000) |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
Stock based awards | (0.80%) | (0.80%) |
State taxes | 3.50% | 3.20% |
Other permanent differences | (0.00%) | (0.10%) |
Impact of uncertain tax positions | (0.70%) | (0.60%) |
Valuation allowance | (19.50%) | (14.00%) |
Other | 0.80% | (0.20%) |
Effective federal income tax rate | 4.30% | 8.50% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets: | ||
Accrued expenses | $ 153,000 | $ 105,000 |
Inventory reserve | 9,000 | 5,000 |
Stock-based awards | 65,000 | 88,000 |
Reserve for bad debts | 33,000 | 16,000 |
Net operating loss and credit carryforwards | 1,422,000 | 715,000 |
Other | 47,000 | 26,000 |
Depreciation | 52,000 | 0 |
Valuation allowance | (1,723,000) | (848,000) |
Total deferred tax assets | 58,000 | 107,000 |
Deferred Tax Liabilities: | ||
Depreciation | 0 | (18,000) |
Prepaid expenses | (58,000) | (89,000) |
Total deferred tax liabilities | (58,000) | (107,000) |
Net deferred income tax liabilities | $ 0 | $ 0 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Liability for uncertain tax positions, beginning | $ 643,000 | $ 613,000 |
Increases due to interest and state tax | 34,000 | 30,000 |
Liability for uncertain tax positions, ending | $ 677,000 | $ 643,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in the valuation allowance | $ 875,000 | $ 769,000 | |
Liability for uncertain tax positions | 677,000 | $ 643,000 | $ 613,000 |
Federal | |||
Net operating loss to carry forward | 5,400,000 | ||
State | |||
Net operating loss to carry forward | $ 4,500,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Employee contribution percentage | 50.00% | 50.00% |
Matching employer contribution | $ 62,000 | $ 72,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Sales Revenue, Net | Customer One | ||
Customer's percentage of net sales | 14.00% | 13.00% |
Sales Revenue, Net | Customer Two | ||
Customer's percentage of net sales | 12.00% | |
Accounts Receivable | Customer One | ||
Customer's percentage of net sales | 18.00% | 17.00% |
Accounts Receivable | Customer Two | ||
Customer's percentage of net sales | 11.00% | 12.00% |
Accounts Receivable | Customer Three | ||
Customer's percentage of net sales | 12.00% | |
Accounts Receivable | Customer Four | ||
Customer's percentage of net sales | 10.00% |