Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 03, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | INSIGNIA SYSTEMS INC/MN | |
Entity Central Index Key | 0000875355 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
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 Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | MN | |
Entity File Number | 1-13471 | |
Entity Common Stock, Shares Outstanding | 1,754,030 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 6,838,000 | $ 7,128,000 |
Accounts receivable, net | 4,726,000 | 5,628,000 |
Inventories | 102,000 | 85,000 |
Income tax receivable | 238,000 | 241,000 |
Prepaid expenses and other | 628,000 | 711,000 |
Total Current Assets | 12,532,000 | 13,793,000 |
Other Assets: | ||
Property and equipment, net | 74,000 | 75,000 |
Operating lease right-of-use assets | 33,000 | 37,000 |
Other, net | 130,000 | 155,000 |
Total Assets | 12,769,000 | 14,060,000 |
Current Liabilities: | ||
Accounts payable | 2,580,000 | 3,148,000 |
Accrued liabilities: | ||
Compensation | 374,000 | 424,000 |
Other | 1,280,000 | 827,000 |
Current portion of long-term debt | 0 | 464,000 |
Current portion of operating lease liabilities | 16,000 | 56,000 |
Deferred revenue | 700,000 | 180,000 |
Total Current Liabilities | 4,950,000 | 5,099,000 |
Long-Term Liabilities: | ||
Accrued income taxes | 685,000 | 677,000 |
Long-term debt | 0 | 590,000 |
Operating lease liabilities | 17,000 | 0 |
Total Long-Term Liabilities | 702,000 | 1,267,000 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Common stock, par value $.01: authorized shares - 5,714,000, issued and outstanding shares - 1,754,000 at March 31, 2021 and 1,748,000 December 31, 2020 | 18,000 | 17,000 |
Additional paid-in capital | 16,319,000 | 16,238,000 |
Accumulated deficit | (9,220,000) | (8,561,000) |
Total Shareholders' Equity | 7,117,000 | 7,694,000 |
Total Liabilities and Shareholders' Equity | $ 12,769,000 | $ 14,060,000 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ .01 | $ 0.01 |
Common stock, shares authorized | 5,714,000 | 5,714,000 |
Common stock, shares issued | 1,754,000 | 1,748,000 |
Common stock, shares outstanding | 1,754,000 | 1,748,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total Net Sales | $ 5,419,000 | $ 4,682,000 |
Cost of services | 4,457,000 | 3,382,000 |
Cost of goods sold | 0 | 172,000 |
Impairment loss - services | 0 | 159,000 |
Total Cost of Sales | 4,457,000 | 3,713,000 |
Gross Profit | 962,000 | 969,000 |
Operating Expenses: | ||
Selling | 516,000 | 720,000 |
Marketing | 235,000 | 365,000 |
General and administrative | 1,919,000 | 993,000 |
Total Operating Expenses | 2,670,000 | 2,078,000 |
Operating Loss | (1,708,000) | (1,109,000) |
Other income: | ||
Gain on forgiveness of debt and accrued interest | 1,062,000 | 0 |
Miscellaneous | 0 | 24,000 |
Loss Before Taxes | (646,000) | (1,085,000) |
Income tax expense (benefit) | 13,000 | (222,000) |
Net Loss | $ (659,000) | $ (863,000) |
Net loss per share: | ||
Basic | $ (0.38) | $ (0.50) |
Diluted | $ (0.38) | $ (0.50) |
Shares used in calculation of net loss per share: | ||
Basic | 1,751,000 | 1,724,000 |
Diluted | 1,751,000 | 1,724,000 |
Services | ||
Total Net Sales | $ 5,419,000 | $ 4,436,000 |
Products | ||
Total Net Sales | $ 0 | $ 246,000 |
CONDENSED STATEMENTS OF SHAREHO
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2019 | 1,725,000 | |||
Beginning balance at Dec. 31, 2019 | $ 16,000 | $ 16,039,000 | $ (4,261,000) | $ 11,794,000 |
Issuance of common stock, net, shares | 5,000 | |||
Issuance of common stock, net | 20,000 | 20,000 | ||
Value of stock-based compensation | 49,000 | 49,000 | ||
Net loss | (863,000) | (863,000) | ||
Ending balance, shares at Mar. 31, 2020 | 1,730,000 | |||
Ending balance at Mar. 31, 2020 | $ 16,000 | 16,108,000 | (5,124,000) | 11,000,000 |
Beginning balance, shares at Dec. 31, 2020 | 1,748,000 | |||
Beginning balance at Dec. 31, 2020 | $ 17,000 | 16,238,000 | (8,561,000) | 7,694,000 |
Issuance of common stock, net, shares | 6,000 | |||
Issuance of common stock, net | $ 1,000 | 25,000 | 26,000 | |
Value of stock-based compensation | 56,000 | 56,000 | ||
Net loss | (659,000) | (659,000) | ||
Ending balance, shares at Mar. 31, 2021 | 1,754,000 | |||
Ending balance at Mar. 31, 2021 | $ 18,000 | $ 16,319,000 | $ (9,220,000) | $ 7,117,000 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Activities: | ||
Net loss | $ (659,000) | $ (863,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 21,000 | 148,000 |
Impairment loss | 0 | 159,000 |
Gain on sale of property and equipment | (7,000) | 0 |
Changes in allowance for doubtful accounts | (3,000) | 9,000 |
Stock-based compensation expense | 56,000 | 49,000 |
Gain on forgiveness of debt and accrued interest | (1,062,000) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 905,000 | 1,351,000 |
Inventories | (17,000) | 9,000 |
Income tax receivable | 3,000 | (119,000) |
Prepaid expenses and other | 108,000 | 4,000 |
Accounts payable | (568,000) | (208,000) |
Accrued liabilities | 392,000 | (501,000) |
Income tax payable | 8,000 | 9,000 |
Deferred revenue | 520,000 | 210,000 |
Net cash provided by (used in) operating activities | (303,000) | 257,000 |
Investing Activities: | ||
Purchases of property and equipment | (29,000) | (32,000) |
Sale of property and equipment | 16,000 | 0 |
Net cash used in investing activities | (13,000) | (32,000) |
Financing Activities: | ||
Proceeds from issuance of common stock | 26,000 | 20,000 |
Net cash provided by financing activities | 26,000 | 20,000 |
Increase (decrease) in cash and cash equivalents | (290,000) | 245,000 |
Cash and cash equivalents at beginning of period | 7,128,000 | 7,510,000 |
Cash and cash equivalents at end of period | 6,838,000 | 7,755,000 |
Supplemental disclosures for cash flow information: | ||
Cash refunded (paid) during the period for income taxes | (1,000) | 112,000 |
Non-cash financing activities: | ||
Operating lease right-of-use asset obtained in exchange for lease obligation | 33,000 | 0 |
Forgiveness of debt and accrued interest | $ 1,062,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Description of Business . Reverse Stock Split. Sale of Custom Print Business. Basis of Presentation . Inventories . March 31, 2021 December 31, 2020 Raw materials $ - $ 32,000 Work-in-process 2,000 2,000 Finished goods 100,000 51,000 $ 102,000 $ 85,000 Property and Equipment . March 31, 2021 December 31, 2020 Property and Equipment: Production tooling, machinery and equipment $ 27,000 $ 2,349,000 Office furniture and fixtures 88,000 425,000 Computer equipment and software 704,000 1,447,000 Construction in-progress — 17,000 819,000 4,238,000 Accumulated depreciation and amortization ( 745,000 ) ( 4,163,000 ) Net Property and Equipment $ 74,000 $ 75,000 Depreciation expense was approximately $21,000 and $85,000 in the three months ended March 31, 2021 and 2020, respectively. Stock-Based Compensation During the three months ended March 31, 2021 and 2020, no equity awards were issued by the Company. The Company estimated the fair value of stock-based awards granted during the three months ended March 31, 2021, under the Company’s employee stock purchase plan using the following weighted average assumptions: expected life of 1.0 year, expected volatility of 142.2%, dividend yield of 0% and risk-free interest rate of 0.1%. The Company recorded total stock-based compensation expense of $56,000 and $49,000 for the three months ended March 31, 2021 and 2020, respectively. Net Loss per Share . Due to the net loss incurred during the three months ended March 31, 2021 and 2020 all outstanding stock options were anti-dilutive for the periods. Weighted average common shares outstanding for the three months ended March 31, 2021 and 2020 were as follows: Three months ended March 31 2021 2020 Denominator for basic net loss per share - weighted average shares 1,751,000 1,724,000 Effect of dilutive securities: Stock options, restricted stock and restricted stock units — — Denominator for diluted net loss per share - weighted average shares 1,751,000 1,724,000 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Under Accounting Standards Update (“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. Three months ended March 31, 2021 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 2,028,000 $ - $ 2,028,000 Products and services transferred at a point in time 3,391,000 - 3,391,000 Total $ 5,419,000 $ - $ 5,419,000 Three months ended March 31, 2020 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 3,344,000 $ - $ 3,344,000 Products and services transferred at a point in time 1,092,000 246,000 1,338,000 Total $ 4,436,000 $ 246,000 $ 4,682,000 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, 2020 $ 180,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied ( 132,000 ) Cash received in advance and not recognized as revenue 652,000 Balance at March 31, 2021 $ 700,000 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. Among our contracts with an expected duration of greater than one year, we estimate that revenue of $38,000, $116,000 and $60,000 related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2021 will be recognized during the remainder of fiscal 2021, 2022 and 2023, respectively. |
Selling Arrangement
Selling Arrangement | 3 Months Ended |
Mar. 31, 2021 | |
Selling Arrangement | |
Selling Arrangement | In 2011, the Company paid to 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. During the three months ended March 31, 2020, the impact of COVID-19 was determined to be a triggering event requiring an impairment review of long-lived assets. As of 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 covered by the agreement. As a result, an impairment of $159,000 was recognized as of March 31, 2020. The Company also shortened the remaining 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 $61,000 in the three months ended March 31, 2020. The selling arrangement was fully amortized as of March 31, 2021 and December 31, 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | For the three months ended March 31, 2021, the Company recorded income tax expense of $13,000, or (2.0%) of loss before taxes. For the three months ended March 31, 2020, the Company recorded income tax benefit of $222,000, or 20.5% of loss before taxes. The income tax expense (benefit) for the three months ended March 31, 2021 and 2020 is comprised of federal and state taxes. The primary differences between the Company’s March 31, 2021 and 2020 effective tax rates and the statutory federal rate are nondeductible stock-based compensation, nondeductible meals and entertainment and increases in the Company’s valuation allowance against its deferred tax assets. For the three months ended March 31, 2020, the Company recognized a decrease in its valuation allowance against certain federal net operating losses (“NOLs”), which the Company was able to carry back to prior periods. 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, the Company considers tax regulations of the jurisdictions in which it operates, 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 March 31, 2021 and December 31, 2020, the Company had a valuation allowance of approximately $1,881,000 and $1,723,000, respectively, against its entire deferred tax asset because the Company does not believe it is more likely than not that it will realize its deferred tax asset. As of March 31, 2021, and December 31, 2020, the Company had unrecognized tax benefits totaling $685,000 and $677,000, 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 $685,000. 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 2021. 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, in 2020 the Company 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 2020 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. |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations | During the three months ended March 31, 2021, two customers accounted for 17% and 14%, respectively of the Company’s total net sales. During the three months ended March 31, 2020, one customer accounted for 16% of the Company’s total net sales. At March 31, 2021, two customers accounted for 19% and 10%, respectively of the Company’s total accounts receivable. At December 31, 2020, two customers represented 18% and 11%, respectively of the Company’s total accounts receivable. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Legal Proceedings | 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. Discovery is underway and trial has been scheduled for December 2021. At this stage of the proceedings, the Company is unable to determine the likelihood of an unfavorable outcome or estimate any potential resulting liability. |
Loan
Loan | 3 Months Ended |
Mar. 31, 2021 | |
Loans Payable [Abstract] | |
Loan | In April 2020, the Company entered into a promissory note (the “Note”) with Alerus Financial, N.A. The Note evidenced 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. The Company’s application for forgiveness of the entire principal amount and all accrued interest under the Note was approved by the SBA on January 29, 2021. Accordingly, for the quarter ended March 31, 2021 the debt of $1,054,000, plus accrued interest of $8,000, was eliminated with a gain on debt forgiveness and accrued interest included in other income. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | In April 2021, the Company signed a lease for its headquarters space in Minneapolis for a three-year term commencing in July 2021 with monthly payments of approximately $8,300, inclusive of common area maintenance costs. A right-of-use asset and lease liability of approximately $183,000 will be recorded during the second quarter of 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Description of Business | Insignia (the “Company”) is a leading provider of in-store and digital advertising solutions to consumer-packaged goods (“CPG”) manufacturers, retailers, shopper marketing agencies and brokerages. The Company operates in a single reportable segment. The Company’s leadership and employees have extensive industry knowledge with direct experience in both CPG manufacturers and retailers. The Company provides marketing solutions to CPG manufacturers spanning from some of the largest multinationals to new and emerging brands. |
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 including the value of Common Stock and Additional Paid-In Capital as of December 31, 2020. |
Sale of our Custom Print Business | In August 2020, the Company sold its custom print business to an existing strategic partner. This divestiture 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. On the date of the sale, the Company received $200,000 of cash and recorded a short-term receivable of $75,000 and a long-term receivable of $25,000. |
Basis of Presentation | The accompanying unaudited financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. They do not include all information and footnotes required by U.S. GAAP for complete financial statements. However, except as described herein, there has been no material change in the information disclosed in the notes to financial statements included in the Company’s financial statements as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. |
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 consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 Raw materials $ - $ 32,000 Work-in-process 2,000 2,000 Finished goods 100,000 51,000 $ 102,000 $ 85,000 |
Property and Equipment | Property and equipment consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 Property and Equipment: Production tooling, machinery and equipment $ 27,000 $ 2,349,000 Office furniture and fixtures 88,000 425,000 Computer equipment and software 704,000 1,447,000 Construction in-progress — 17,000 819,000 4,238,000 Accumulated depreciation and amortization ( 745,000 ) ( 4,163,000 ) Net Property and Equipment $ 74,000 $ 75,000 Depreciation expense was approximately $21,000 and $85,000 in the three months ended March 31, 2021 and 2020, respectively. |
Stock-Based Compensation | The Company measures and recognizes compensation expense for all stock-based payments at fair value. Restricted stock units and awards are valued at the closing market price of the Company’s stock as of 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 the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as 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. During the three months ended March 31, 2021 and 2020, no equity awards were issued by the Company. The Company estimated the fair value of stock-based awards granted during the three months ended March 31, 2021, under the Company’s employee stock purchase plan using the following weighted average assumptions: expected life of 1.0 year, expected volatility of 142.2%, dividend yield of 0% and risk-free interest rate of 0.1%. The Company recorded total stock-based compensation expense of $56,000 and $49,000 for the three months ended March 31, 2021 and 2020, respectively. |
Net Loss per Share | Basic net loss per share is computed by dividing net loss by the weighted average shares outstanding and excludes any potential dilutive effects of stock options and restricted stock units and awards. Diluted net loss per share gives effect to all dilutive potential common shares outstanding during the period. Due to the net loss incurred during the three months ended March 31, 2021 and 2020 all outstanding stock options were anti-dilutive for the periods. Weighted average common shares outstanding for the three months ended March 31, 2021 and 2020 were as follows: Three months ended March 31 2021 2020 Denominator for basic net loss per share - weighted average shares 1,751,000 1,724,000 Effect of dilutive securities: Stock options, restricted stock and restricted stock units — — Denominator for diluted net loss per share - weighted average shares 1,751,000 1,724,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Inventories | March 31, 2021 December 31, 2020 Raw materials $ - $ 32,000 Work-in-process 2,000 2,000 Finished goods 100,000 51,000 $ 102,000 $ 85,000 |
Schedule of Property and Equipment | March 31, 2021 December 31, 2020 Property and Equipment: Production tooling, machinery and equipment $ 27,000 $ 2,349,000 Office furniture and fixtures 88,000 425,000 Computer equipment and software 704,000 1,447,000 Construction in-progress — 17,000 819,000 4,238,000 Accumulated depreciation and amortization ( 745,000 ) ( 4,163,000 ) Net Property and Equipment $ 74,000 $ 75,000 |
Schedule of Weighted Average Common Shares Outstanding | Three months ended March 31 2021 2020 Denominator for basic net loss per share - weighted average shares 1,751,000 1,724,000 Effect of dilutive securities: Stock options, restricted stock and restricted stock units — — Denominator for diluted net loss per share - weighted average shares 1,751,000 1,724,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Disaggregation of Revenue | Three months ended March 31, 2021 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 2,028,000 $ - $ 2,028,000 Products and services transferred at a point in time 3,391,000 - 3,391,000 Total $ 5,419,000 $ - $ 5,419,000 Three months ended March 31, 2020 Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 3,344,000 $ - $ 3,344,000 Products and services transferred at a point in time 1,092,000 246,000 1,338,000 Total $ 4,436,000 $ 246,000 $ 4,682,000 |
Schedule of Changes in Deferred Revenue | Balance at December 31, 2020 $ 180,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied ( 132,000 ) Cash received in advance and not recognized as revenue 652,000 Balance at March 31, 2021 $ 700,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventories | ||
Raw materials | $ 0 | $ 32,000 |
Work-in-process | 2,000 | 2,000 |
Finished goods | 100,000 | 51,000 |
Inventories | $ 102,000 | $ 85,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Gross property and equipment | $ 819,000 | $ 4,238,000 |
Accumulated depreciation and amortization | (745,000) | (4,163,000) |
Net property and equipment | 74,000 | 75,000 |
Production Tooling, Machinery and Equipment | ||
Gross property and equipment | 27,000 | 2,349,000 |
Office Furniture and Fixtures | ||
Gross property and equipment | 88,000 | 425,000 |
Computer Equipment and Software | ||
Gross property and equipment | 704,000 | 1,447,000 |
Construction in-Progress | ||
Gross property and equipment | $ 0 | $ 17,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | ||
Denominator for basic net loss per share - weighted average shares | 1,751,000 | 1,724,000 |
Effect of dilutive securities: stock options and restricted stock units and awards | 0 | 0 |
Denominator for diluted net loss per share - weighted average shares | 1,751,000 | 1,724,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | ||
Depreciation expense | $ 21,000 | $ 85,000 |
Equity awards issued | 0 | 0 |
Stock-based awards granted, estimated life | 1 year | |
Stock-based awards granted, expected volatility | 142.20% | |
Stock-based awards granted, dividend yield | 0.00% | |
Stock-based awards granted, risk-free interest rate | 0.10% | |
Stock-based compensation expense | $ 56,000 | $ 49,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total Net Sales | $ 5,419,000 | $ 4,682,000 |
Products and Services Transferred Over Time | ||
Total Net Sales | 2,028,000 | 3,344,000 |
Products and Services Transferred at a Point in Time | ||
Total Net Sales | 3,391,000 | 1,338,000 |
Services | ||
Total Net Sales | 5,419,000 | 4,436,000 |
Services | Products and Services Transferred Over Time | ||
Total Net Sales | 2,028,000 | 3,344,000 |
Services | Products and Services Transferred at a Point in Time | ||
Total Net Sales | 3,391,000 | 1,092,000 |
Products | ||
Total Net Sales | 0 | 246,000 |
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 | $ 0 | $ 246,000 |
Revenue Recognition (Details 1)
Revenue Recognition (Details 1) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Revenue Recognition [Abstract] | |
Deferred revenue, beginning | $ 180,000 |
Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied | (132,000) |
Cash received in advance and not recognized as revenue | 652,000 |
Deferred revenue, ending | $ 700,000 |
Selling Arrangement (Details Na
Selling Arrangement (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Selling Arrangement | ||
Impairment loss | $ 0 | $ 159,000 |
Amortization expense | $ 61,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit (expense) | $ (13,000) | $ 222,000 | |
Income tax rate, percentage | (2.00%) | 20.50% | |
Deferred tax asset valuation allowance | $ 1,881,000 | $ 1,723,000 | |
Unrecognized tax benefits | $ 685,000 | $ 677,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Total Net Sales | Customer One | |||
Customer's concentration risk percentage | 17.00% | 16.00% | |
Total Net Sales | Customer Two | |||
Customer's concentration risk percentage | 14.00% | ||
Accounts Receivable | Customer One | |||
Customer's concentration risk percentage | 19.00% | 18.00% | |
Accounts Receivable | Customer Two | |||
Customer's concentration risk percentage | 10.00% | 11.00% |