Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 03, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | INSIGNIA SYSTEMS INC/MN | |
Entity Central Index Key | 0000875355 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 1,768,114 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 1-13471 | |
Entity Incorporation State Country Code | MN | |
Entity Tax Identification Number | 41-1656308 | |
Entity Address Address Line 1 | 212 Third Ave N | |
Entity Address Address Line 2 | Ste 356 | |
Entity Address City Or Town | Minneapolis | |
Entity Address State Or Province | MN | |
Entity Address Postal Zip Code | 55401 | |
City Area Code | 763 | |
Local Phone Number | 392-6200 | |
Security 12b Title | Common Stock, $0.01 par value | |
Trading Symbol | ISIG | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 3,649,000 | $ 7,128,000 |
Restricted cash | 85,000 | 0 |
Accounts receivable, net | 4,203,000 | 5,857,000 |
Inventories | 87,000 | 85,000 |
Income tax receivable | 242,000 | 241,000 |
Prepaid expenses and other | 837,000 | 711,000 |
Total Current Assets | 9,103,000 | 14,022,000 |
Other Assets: | ||
Property and equipment, net | 114,000 | 75,000 |
Operating lease right-of-use assets | 202,000 | 37,000 |
Other, net | 37,000 | 155,000 |
Total Assets | 9,456,000 | 14,289,000 |
Current Liabilities: | ||
Accounts payable | 1,506,000 | 3,148,000 |
Accrued liabilities: | ||
Compensation | 395,000 | 424,000 |
Sales tax | 1,275,000 | 1,011,000 |
Other | 842,000 | 1,071,000 |
Current portion of long-term debt | 0 | 464,000 |
Current portion of operating lease liabilities | 75,000 | 56,000 |
Deferred revenue | 211,000 | 180,000 |
Total Current Liabilities | 4,304,000 | 6,354,000 |
Long-Term Liabilities: | ||
Accrued income taxes | 703,000 | 677,000 |
Long-term debt, net of current portion | 0 | 590,000 |
Operating lease liabilities | 127,000 | 0 |
Total Long-Term Liabilities | 830,000 | 1,267,000 |
Commitments and Contingencies | 0 | 0 |
Shareholders' Equity: | ||
Common stock, par value $.01: Authorized shares - 5,714,000, Issued and outstanding shares - 1,768,000 at September 30, 2021 and 1,748,000 at December 31, 2020, respectively | 18,000 | 17,000 |
Additional paid-in capital | 16,443,000 | 16,238,000 |
Accumulated deficit | (12,139,000) | (9,587,000) |
Total Shareholders' Equity | 4,322,000 | 6,668,000 |
Total Liabilities and Shareholders' Equity | $ 9,456,000 | $ 14,289,000 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
CONDENSED BALANCE SHEETS | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 5,714,000 | 5,714,000 |
Common stock, shares issued | 1,768,000 | 1,748,000 |
Common stock, shares outstanding | 1,768,000 | 1,748,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) | ||||
Services revenues | $ 3,493,000 | $ 4,317,000 | $ 14,975,000 | $ 11,850,000 |
Products revenues | 0 | 118,000 | 0 | 578,000 |
Total Net Sales | 3,493,000 | 4,435,000 | 14,975,000 | 12,428,000 |
Cost of services | 2,948,000 | 3,764,000 | 12,293,000 | 9,953,000 |
Cost of goods sold | 0 | 112,000 | 0 | 492,000 |
Impairment loss - services | 0 | 0 | 0 | 159,000 |
Total Cost of Sales | 2,948,000 | 3,876,000 | 12,293,000 | 10,604,000 |
Gross Profit | 545,000 | 559,000 | 2,682,000 | 1,824,000 |
Operating Expenses: | ||||
Selling | 425,000 | 585,000 | 1,406,000 | 2,232,000 |
Marketing | 266,000 | 192,000 | 761,000 | 800,000 |
General and administrative | 779,000 | 840,000 | 4,052,000 | 2,836,000 |
Gain on sale of business | 0 | (195,000) | (195,000) | |
Total Operating Expenses | 1,470,000 | 1,422,000 | 6,219,000 | 5,673,000 |
Operating Loss | (925,000) | (863,000) | (3,537,000) | (3,849,000) |
Other income (expense): | ||||
Gain on forgiveness of debt and accrued interest | 0 | 0 | 1,062,000 | 0 |
Interest income (expense) | 14,000 | (21,000) | (46,000) | (55,000) |
Miscellaneous | (1,000) | 6,000 | 1,000 | 47,000 |
Loss Before Taxes | (912,000) | (878,000) | (2,520,000) | (3,857,000) |
Income tax expense (benefit) | 9,000 | 8,000 | 32,000 | (203,000) |
Net Loss | $ (921,000) | $ (886,000) | $ (2,552,000) | $ (3,654,000) |
Net loss per share: | ||||
Basic | $ (0.52) | $ (0.51) | $ (1.45) | $ (2.11) |
Diluted | $ (0.52) | $ (0.51) | $ (1.45) | $ (2.11) |
Shares used in calculation of net loss per share: | ||||
Basic | 1,766,000 | 1,740,000 | 1,757,000 | 1,730,000 |
Diluted | 1,766,000 | 1,740,000 | 1,757,000 | 1,730,000 |
CONDENSED STATEMENTS OF SHAREHO
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 1,725,000 | |||
Balance, amount at Dec. 31, 2019 | $ 11,083,000 | $ 16,000 | $ 16,039,000 | $ (4,972,000) |
Value of stock-based compensation, Shares | 0 | |||
Value of stock-based compensation | 49,000 | $ 0 | 49,000 | 0 |
Issuance of common stock, net, shares | 5,000 | |||
Issuance of common stock, net, amount | 20,000 | $ 0 | 20,000 | 0 |
Net loss | (925,000) | $ 0 | 0 | (925,000) |
Balance, shares at Mar. 31, 2020 | 1,730,000 | |||
Balance, amount at Mar. 31, 2020 | 10,227,000 | $ 16,000 | 16,108,000 | (5,897,000) |
Balance, shares at Dec. 31, 2019 | 1,725,000 | |||
Balance, amount at Dec. 31, 2019 | 11,083,000 | $ 16,000 | 16,039,000 | (4,972,000) |
Net loss | (3,654,000) | |||
Balance, shares at Sep. 30, 2020 | 1,749,000 | |||
Balance, amount at Sep. 30, 2020 | 7,602,000 | $ 17,000 | 16,211,000 | (8,626,000) |
Balance, shares at Mar. 31, 2020 | 1,730,000 | |||
Balance, amount at Mar. 31, 2020 | 10,227,000 | $ 16,000 | 16,108,000 | (5,897,000) |
Value of stock-based compensation, Shares | 0 | |||
Value of stock-based compensation | 59,000 | 0 | 59,000 | 0 |
Net loss | (1,843,000) | $ 0 | 0 | (1,843,000) |
Repurchase of common stock upon vesting of restricted stock units, shares | 4,000 | |||
Repurchase of common stock upon vesting of restricted stock units, amount | 0 | $ 0 | 0 | 0 |
Balance, shares at Jun. 30, 2020 | 1,734,000 | |||
Balance, amount at Jun. 30, 2020 | 8,443,000 | $ 16,000 | 16,167,000 | (7,740,000) |
Value of stock-based compensation, Shares | 0 | |||
Value of stock-based compensation | 37,000 | 0 | 37,000 | 0 |
Issuance of common stock, net, amount | 9,000 | 0 | 9,000 | 0 |
Net loss | (886,000) | $ 0 | 0 | (886,000) |
Vesting of restricted stock units offset by repurchase of common stock upon vesting of retricted stock units and awards, shares | 13,000 | |||
Vesting of restricted stock units offset by repurchase of common stock upon vesting of retricted stock units and awards, amount | (1,000) | $ 1,000 | (2,000) | 0 |
Common stock issued for accrued liabilities, shares | 2,000 | |||
Balance, shares at Sep. 30, 2020 | 1,749,000 | |||
Balance, amount at Sep. 30, 2020 | 7,602,000 | $ 17,000 | 16,211,000 | (8,626,000) |
Balance, shares at Dec. 31, 2020 | 1,748,000 | |||
Balance, amount at Dec. 31, 2020 | 6,668,000 | $ 17,000 | 16,238,000 | (9,587,000) |
Value of stock-based compensation, Shares | $ 0 | |||
Value of stock-based compensation | 56,000 | 56,000 | 0 | |
Issuance of common stock, net, shares | 6,000 | |||
Issuance of common stock, net, amount | 26,000 | $ 1,000 | 25,000 | 0 |
Net loss | (737,000) | $ 0 | 0 | (737,000) |
Balance, shares at Mar. 31, 2021 | 1,754,000 | |||
Balance, amount at Mar. 31, 2021 | 6,013,000 | $ 18,000 | 16,319,000 | (10,324,000) |
Balance, shares at Dec. 31, 2020 | 1,748,000 | |||
Balance, amount at Dec. 31, 2020 | 6,668,000 | $ 17,000 | 16,238,000 | (9,587,000) |
Net loss | (2,552,000) | |||
Balance, shares at Sep. 30, 2021 | 1,768,000 | |||
Balance, amount at Sep. 30, 2021 | 4,322,000 | $ 18,000 | 16,443,000 | (12,139,000) |
Balance, shares at Mar. 31, 2021 | 1,754,000 | |||
Balance, amount at Mar. 31, 2021 | 6,013,000 | $ 18,000 | 16,319,000 | (10,324,000) |
Value of stock-based compensation, Shares | 0 | |||
Value of stock-based compensation | 86,000 | 0 | 86,000 | 0 |
Net loss | (894,000) | $ 0 | 0 | (894,000) |
Repurchase of common stock upon vesting of restricted stock units, shares | 11,000 | |||
Repurchase of common stock upon vesting of restricted stock units, amount | (9,000) | $ 0 | (9,000) | 0 |
Balance, shares at Jun. 30, 2021 | 1,765,000 | |||
Balance, amount at Jun. 30, 2021 | 5,196,000 | $ 18,000 | 16,396,000 | (11,218,000) |
Value of stock-based compensation, Shares | 0 | |||
Value of stock-based compensation | 56,000 | 0 | 56,000 | 0 |
Net loss | (921,000) | $ 0 | 0 | (921,000) |
Repurchase of common stock upon vesting of restricted stock units, shares | 3,000 | |||
Repurchase of common stock upon vesting of restricted stock units, amount | (9,000) | $ 0 | (9,000) | 0 |
Balance, shares at Sep. 30, 2021 | 1,768,000 | |||
Balance, amount at Sep. 30, 2021 | $ 4,322,000 | $ 18,000 | $ 16,443,000 | $ (12,139,000) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating Activities: | ||
Net loss | $ (2,552,000) | $ (3,654,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 46,000 | 386,000 |
Impairment loss | 0 | 159,000 |
Gain on sale of business | (7,000) | (195,000) |
Changes in allowance for doubtful accounts | 34,000 | 112,000 |
Stock-based compensation expense | 198,000 | 145,000 |
Gain on forgiveness of debt and accrued interest | (1,062,000) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,620,000 | 1,810,000 |
Inventories | (2,000) | 80,000 |
Income tax receivable | (1,000) | (121,000) |
Prepaid expenses and other | (27,000) | (148,000) |
Accounts payable | (1,655,000) | (768,000) |
Accrued liabilities | 28,000 | 346,000 |
Accrued income taxes | 26,000 | 25,000 |
Deferred revenue | 31,000 | 176,000 |
Net cash used in operating activities | (3,323,000) | (1,647,000) |
Investing Activities: | ||
Purchases of property and equipment | (81,000) | (56,000) |
Proceeds from sale of custom print business | 0 | 200,000 |
Proceeds from sale of property and equipment | 16,000 | 0 |
Net cash provided by (used in) investing activities | (65,000) | 144,000 |
Financing Activities: | ||
Cash dividends paid ($0.70 per share) | (14,000) | (14,000) |
Proceeds from issuance of common stock, net | 26,000 | 20,000 |
Repurchase of common stock upon vewsting of restricted stock awards | (18,000) | (1,000) |
Proceeds from PPP loan | 0 | 1,054,000 |
Net cash provided by (used in) financing activities | (6,000) | 1,059,000 |
Decrease in cash and cash equivalents | (3,394,000) | (444,000) |
Cash and cash equivalents and restricted cash at beginning of period | 7,128,000 | 7,510,000 |
Cash and cash equivalents and restricted cash at end of period | 3,734,000 | 7,066,000 |
Supplemental disclosures for cash flow information: | ||
Cash refunded during the period for income taxes | 6,000 | 107,000 |
Purchases of property and equipment included in accounts payable | 13,000 | 22,000 |
Common stock issued for accrued liabilities | 0 | 9,000 |
Receivables recorded from sale of cusom print business | 0 | 100,000 |
Operating lease right of use asset obtained in exchange for lease obligations | 219,000 | 0 |
Forgiveness of debt and accrued interest | $ 1,062,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
1. Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies. Description of Business . Reverse Stock Split. Sale of Custom Print Business. Basis of Presentation . Cash and Cash Equivalents and Restricted Cash. September 30, December 31, 2021 2020 Cash and cash equivalents $ 3,649,000 $ 7,128,000 Restricted cash 85,000 — Total cash, cash equivalents and restricted cash $ 3,734,000 $ 7,128,000 Restricted Cash. Inventories . September 30, December 31, 2021 2020 Work-in-process $ 2,000 $ 2,000 Finished goods 85,000 83,000 $ 87,000 $ 85,000 Property and Equipment . September 30, December 31, 2021 2020 Property and Equipment: Production tooling, machinery and equipment $ 26,000 $ 2,349,000 Office furniture and fixtures 95,000 425,000 Computer equipment and software 740,000 1,447,000 Leasehold improvements 19,000 — Construction in-progress 4,000 17,000 884,000 4,238,000 Accumulated depreciation and amortization (770,000 ) (4,163,000 ) Net Property and Equipment $ 114,000 $ 75,000 Depreciation expense was approximately $14,000 and $46,000 in the three and nine months ended September 30, 2021, respectively, and was $85,000 and $255,000 in the three and nine months ended September 30, 2020, respectively. Stock-Based Compensation During the nine months ended September 30, 2021 and 2020, no equity awards were issued by the Company, except those awarded to non-employee members of the Board of Directors. In June 2021, non-employee members of the Board of Directors received restricted stock grants totaling 5,514 shares pursuant to the 2018 Equity Incentive Plan (the “2018 Plan”). The shares underlying the awards were assigned a value of $8.16 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $45,000. The shares are scheduled to vest the day immediately preceding the date of the next annual shareholder meeting. The awards granted to directors in December 2020 vested in full on the day immediately preceding the date of the 2021 annual shareholder meeting, June 9, 2021. In July 2020, the Company issued 11,053 shares of common stock in settlement of $9,000 of total deferred fees as a result of a non-employee director’s departure from the Board of Directors. The Company’s non-employee directors are eligible to participate in a director deferred compensation plan, which allows a director to make voluntary deferrals of up to 100% of their annual cash retainers relating to Board and committee service. The Company estimated the fair value of stock-based awards granted during the nine months ended September 30, 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%. Total stock-based compensation expense recorded for the three and nine months ended September 30, 2021 was $56,000 and $198,000, respectively, and for the three and nine months ended September 30, 2020 was $37,000 and $145,000, respectively. Net Loss per Share . Due to the net loss incurred during the three and nine months ended September 30, 2021 and 2020 all outstanding stock options were anti-dilutive for the periods. Weighted average common shares outstanding for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended September 30 September 30 2021 2020 2021 2020 Denominator for basic net loss per share - weighted average shares 1,766,000 1,740,000 1,757,000 1,730,000 Effect of dilutive securities: Stock options and restricted stock units — — — — Denominator for diluted net loss per share - weighted average shares 1,766,000 1,740,000 1,757,000 1,730,000 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition | |
2. Revenue Recognition | 2. Revenue Recognition. Revenue from Contracts with Customers 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 been passed 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 September 30, 2021 Nine months ended September 30, 2021 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 1,482,000 $ - $ 1,482,000 $ 5,366,000 $ - $ 5,366,000 Products and services transferred at a point in time 2,011,000 - 2,011,000 9,609,000 - 9,609,000 Total $ 3,493,000 $ - $ 3,493,000 $ 14,975,000 $ - $ 14,975,000 Three months ended September 30, 2020 Nine months ended September 30, 2020 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 2,024,000 $ - $ 2,024,000 $ 7,366,000 $ - $ 7,366,000 Products and services transferred at a point in time 2,293,000 118,000 2,411,000 4,484,000 578,000 5,062,000 Total $ 4,317,000 $ 118,000 $ 4,435,000 $ 11,850,000 $ 578,000 $ 12,428,000 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 (148,000 ) Cash received in advance and not recognized as revenue 179,000 Balance at September 30, 2021 $ 211,000 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 anticipate that revenue of $29,000, $116,000 and $60,000 related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2021 will be recognized during the remainder of fiscal 2021, 2022 and 2023, respectively. |
Selling Arrangement
Selling Arrangement | 9 Months Ended |
Sep. 30, 2021 | |
Selling Arrangement | |
3. Selling Arrangement. | 3. Selling Arrangement. |
Lease
Lease | 9 Months Ended |
Sep. 30, 2021 | |
Lease | |
4. Lease | 4. Leases. The Company’s leases include options to renew. The exercise of lease renewal options is at the Company’s sole discretion. Therefore, the renewals to extend the lease terms are not included in the Company’s right of use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. The Company used its incremental borrowing rate in determining the present value of the lease payments based on the information available at the lease commencement date. The cost components of the Company’s operating leases were as follows for the periods ended September 30, 2021: Three months ended September 30, 2021 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ — $ 11,000 $ — $ 4,000 $ 11,000 Variable lease cost — 7,000 — 4,000 7,000 Short-term lease cost — — 7,000 — 7,000 Total $ — $ 18,000 $ 7,000 $ 8,000 $ 25,000 Nine months ended September 30, 2021 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ 38,000 $ 11,000 $ — $ 9,000 $ 58,000 Variable lease cost 24,000 7,000 — 9,000 40,000 Short-term lease cost — — 28,000 — 28,000 Total $ 62,000 $ 18,000 $ 28,000 $ 18,000 $ 126,000 Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs which are paid based on actual costs incurred by the lessor. Maturities of the Company’s lease liabilities for is corporate headquarters and its warehouse operating leases are as follows as of September 30, 2021: Maturity of Lease Liabilities Operating Leases 2021 $ 21,000 2022 83,000 2023 72,000 2024 40,000 Total lease payments $ 216,000 Less: Interest 14,000 Present value of lease liabilities $ 202,000 The remaining lease terms as of September 30, 2021 for the Company’s corporate headquarters and its warehouse leases were 2.8 years and 1.5 years, respectively. The discount rate for both leases is 4.75%. The cash outflow for operating leases for the three and nine months ended September 30, 2021 was $15,000 and $76,000, respectively. The cash outflow for operating leases for the three and nine months ended September 30, 2020 was $86,000 and $178,000, respectively. Operating lease liabilities and right-of-use assets were increased for new non-cash leases by $219,000 for the nine months ended September 30, 2021. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes | |
5. Income Taxes | 5. Income Taxes. 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 we operate, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustment to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria. At September 30, 2021 and December 31, 2020, the Company had a valuation allowance of approximately $2,811,000 and $1,946,000, respectively, against its entire net deferred tax asset because the Company does not believe it is more likely than not that it will realize its net deferred tax asset. As of September 30, 2021, and December 31, 2020, the Company had unrecognized tax benefits totaling $703,000 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 $703,000. The Company believes that it is reasonably possible that a decrease of up to $650,000 in unrecognized tax benefits related to state exposures may be necessary within the coming year, which would reduce accrued income taxes and increase income tax benefit. 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 | 9 Months Ended |
Sep. 30, 2021 | |
Concentrations | |
6. Concentrations | 6. Concentrations. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2021 | |
Legal Proceedings | |
7. Legal Proceedings | 7. Legal Proceedings. 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. Following the close of discovery, on August 27, 2021, News America moved for summary judgment on Insignia’s claims. On September 17, 2021, Insignia filed its response opposing summary judgment. On October 1, 2021, News America filed its reply brief. The court is scheduled to hear argument on the motion on January 26, 2022. 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 | 9 Months Ended |
Sep. 30, 2021 | |
Loan | |
8. Loan | 8. Loan. 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 nine months ended September 30, 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Description of Business | Description of Business . |
Reverse Stock Split | Reverse Stock Split. |
Sale of our Custom Print Business | Sale of Custom Print Business. |
Basis of Presentation | Basis of Presentation . |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash. September 30, December 31, 2021 2020 Cash and cash equivalents $ 3,649,000 $ 7,128,000 Restricted cash 85,000 — Total cash, cash equivalents and restricted cash $ 3,734,000 $ 7,128,000 |
Restricted Cash | Restricted Cash. |
Inventories | Inventories . September 30, December 31, 2021 2020 Work-in-process $ 2,000 $ 2,000 Finished goods 85,000 83,000 $ 87,000 $ 85,000 |
Property and Equipment | Property and Equipment . September 30, December 31, 2021 2020 Property and Equipment: Production tooling, machinery and equipment $ 26,000 $ 2,349,000 Office furniture and fixtures 95,000 425,000 Computer equipment and software 740,000 1,447,000 Leasehold improvements 19,000 — Construction in-progress 4,000 17,000 884,000 4,238,000 Accumulated depreciation and amortization (770,000 ) (4,163,000 ) Net Property and Equipment $ 114,000 $ 75,000 Depreciation expense was approximately $14,000 and $46,000 in the three and nine months ended September 30, 2021, respectively, and was $85,000 and $255,000 in the three and nine months ended September 30, 2020, respectively. |
Stock-Based Compensation | Stock-Based Compensation During the nine months ended September 30, 2021 and 2020, no equity awards were issued by the Company, except those awarded to non-employee members of the Board of Directors. In June 2021, non-employee members of the Board of Directors received restricted stock grants totaling 5,514 shares pursuant to the 2018 Equity Incentive Plan (the “2018 Plan”). The shares underlying the awards were assigned a value of $8.16 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $45,000. The shares are scheduled to vest the day immediately preceding the date of the next annual shareholder meeting. The awards granted to directors in December 2020 vested in full on the day immediately preceding the date of the 2021 annual shareholder meeting, June 9, 2021. In July 2020, the Company issued 11,053 shares of common stock in settlement of $9,000 of total deferred fees as a result of a non-employee director’s departure from the Board of Directors. The Company’s non-employee directors are eligible to participate in a director deferred compensation plan, which allows a director to make voluntary deferrals of up to 100% of their annual cash retainers relating to Board and committee service. The Company estimated the fair value of stock-based awards granted during the nine months ended September 30, 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%. Total stock-based compensation expense recorded for the three and nine months ended September 30, 2021 was $56,000 and $198,000, respectively, and for the three and nine months ended September 30, 2020 was $37,000 and $145,000, respectively. |
Net Income (Loss) per Share | Net Loss per Share . Due to the net loss incurred during the three and nine months ended September 30, 2021 and 2020 all outstanding stock options were anti-dilutive for the periods. Weighted average common shares outstanding for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended September 30 September 30 2021 2020 2021 2020 Denominator for basic net loss per share - weighted average shares 1,766,000 1,740,000 1,757,000 1,730,000 Effect of dilutive securities: Stock options and restricted stock units — — — — Denominator for diluted net loss per share - weighted average shares 1,766,000 1,740,000 1,757,000 1,730,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of cash and cash equivalents | |
Inventories | |
Schedule of property and Equipment | |
Weighted average common shares outstanding | Three Months Ended Nine Months Ended September 30 September 30 2021 2020 2021 2020 Denominator for basic net loss per share - weighted average shares 1,766,000 1,740,000 1,757,000 1,730,000 Effect of dilutive securities: Stock options and restricted stock units — — — — Denominator for diluted net loss per share - weighted average shares 1,766,000 1,740,000 1,757,000 1,730,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition | |
Deferred revenue | Balance at December 31, 2020 $ 180,000 Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied (148,000 ) Cash received in advance and not recognized as revenue 179,000 Balance at September 30, 2021 $ 211,000 |
Disaggregation of revenue | Three months ended September 30, 2021 Nine months ended September 30, 2021 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 1,482,000 $ - $ 1,482,000 $ 5,366,000 $ - $ 5,366,000 Products and services transferred at a point in time 2,011,000 - 2,011,000 9,609,000 - 9,609,000 Total $ 3,493,000 $ - $ 3,493,000 $ 14,975,000 $ - $ 14,975,000 Three months ended September 30, 2020 Nine months ended September 30, 2020 Services Revenues Products Revenue Total Revenue Services Revenues Products Revenue Total Revenue Timing of revenue recognition: Products and services transferred over time $ 2,024,000 $ - $ 2,024,000 $ 7,366,000 $ - $ 7,366,000 Products and services transferred at a point in time 2,293,000 118,000 2,411,000 4,484,000 578,000 5,062,000 Total $ 4,317,000 $ 118,000 $ 4,435,000 $ 11,850,000 $ 578,000 $ 12,428,000 |
Lease (Tables)
Lease (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Lease | |
Cost components of operating leases | Three months ended September 30, 2021 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ — $ 11,000 $ — $ 4,000 $ 11,000 Variable lease cost — 7,000 — 4,000 7,000 Short-term lease cost — — 7,000 — 7,000 Total $ — $ 18,000 $ 7,000 $ 8,000 $ 25,000 Nine months ended September 30, 2021 Prior Corporate Corporate Additional Operating Headquarters Headquarters Office Space Warehouse Leases Operating lease cost $ 38,000 $ 11,000 $ — $ 9,000 $ 58,000 Variable lease cost 24,000 7,000 — 9,000 40,000 Short-term lease cost — — 28,000 — 28,000 Total $ 62,000 $ 18,000 $ 28,000 $ 18,000 $ 126,000 |
Maturity of Lease Liabilities | Maturity of Lease Liabilities Operating Leases 2021 $ 21,000 2022 83,000 2023 72,000 2024 40,000 Total lease payments $ 216,000 Less: Interest 14,000 Present value of lease liabilities $ 202,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies | ||
Cash and cash equivalents | $ 3,649,000 | $ 7,128,000 |
Restricted cash | 85,000 | 0 |
Total cash, cash equivalents and retricted cash | $ 3,734,000 | $ 7,128,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Inventories | ||
Work-in-process | $ 2,000 | $ 2,000 |
Finished goods | 85,000 | 83,000 |
Inventories | $ 87,000 | $ 85,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Gross property and equipment | $ 884,000 | $ 4,238,000 |
Accumulated depreciation and amortization | (770,000) | (4,163,000) |
Net property and equipment | 114,000 | 75,000 |
Production Tooling, Machinery and Equipment | ||
Gross property and equipment | 26,000 | 2,349,000 |
Office Furniture and Fixtures | ||
Gross property and equipment | 95,000 | 425,000 |
Computer Equipment and Software | ||
Gross property and equipment | 740,000 | 1,447,000 |
Leasehold improvements | ||
Gross property and equipment | 19,000 | |
Construction in-Progress | ||
Gross property and equipment | $ 4,000 | $ 17,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summary of Significant Accounting Policies | ||||
Denominator for basic net loss per share - weighted average shares | 1,766,000 | 1,740,000 | 1,757,000 | 1,730,000 |
Effect of dilutive securities: | ||||
Denominator for diluted net loss per share - weighted average shares | 1,766,000 | 1,740,000 | 1,757,000 | 1,730,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Aug. 31, 2020 | Jul. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |||||||
Sale of custom print business | $ 300,000 | ||||||
Deferred fees | $ 9,000 | ||||||
Common stock shares issued in settlement of deferred fee | 11,053 | ||||||
Gain on sale of print business | 195,000 | $ (7,000) | $ (195,000) | ||||
Cash received | 200,000 | ||||||
Short-term receivable | 75,000 | ||||||
Long-term receivable | $ 25,000 | ||||||
Depreciation expense | $ 14,000 | $ 85,000 | $ 46,000 | 255,000 | |||
Restricted stock granted | 5,514 | ||||||
Restricted stock price per share | $ 8.16 | ||||||
Fair value of restricted shares | $ 45,000 | ||||||
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 | $ 37,000 | $ 198,000 | $ 145,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total Net Sales | $ 3,493,000 | $ 4,435,000 | $ 14,975,000 | $ 12,428,000 |
Products and Services Transferred Over Time | ||||
Total Net Sales | 1,482,000 | 2,024,000 | 5,366,000 | 7,366,000 |
Products and Services Transferred at a Point in Time | ||||
Total Net Sales | 2,011,000 | 2,411,000 | 9,609,000 | 5,062,000 |
Services | ||||
Total Net Sales | 3,493,000 | 4,317,000 | 14,975,000 | 11,850,000 |
Services | Products and Services Transferred Over Time | ||||
Total Net Sales | 1,482,000 | 2,024,000 | 5,366,000 | 7,366,000 |
Services | Products and Services Transferred at a Point in Time | ||||
Total Net Sales | 2,011,000 | 2,293,000 | 9,609,000 | 4,484,000 |
Products | ||||
Total Net Sales | 0 | 118,000 | 0 | 578,000 |
Products | Products and Services Transferred Over Time | ||||
Total Net Sales | 0 | 0 | 0 | 0 |
Products | Products and Services Transferred at a Point in Time | ||||
Total Net Sales | $ 0 | $ 118,000 | $ 0 | $ 578,000 |
Revenue Recognition (Details 1)
Revenue Recognition (Details 1) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Revenue Recognition | |
Deferred revenue, beginning | $ 180,000 |
Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied | (148,000) |
Cash received in advance and not recognized as revenue | 179,000 |
Deferred revenue, ending | $ 211,000 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | $ 3,493,000 | $ 4,435,000 | $ 14,975,000 | $ 12,428,000 |
2021 | ||||
Revenue | 29,000 | |||
2022 | ||||
Revenue | 116,000 | |||
2023 | ||||
Revenue | $ 60,000 |
Selling Arrangement (Details Na
Selling Arrangement (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2011 | |
Impairment loss | $ 159,000 | $ 0 | $ 159,000 | ||
Amortization expense | $ 34,000 | $ 131,000 | |||
Selling Arrangement | |||||
Sale agreement to News America | $ 4,000,000 | ||||
Agreement term period | 10 years | ||||
Sale agreement description | the Company paid to News America Marketing In-Store, L.L.C. (“News America”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America’s network of retailers as News America’s exclusive agent |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2019 | |
Operating lease cost | $ 11,000 | $ 38,000 | $ 58,000 | $ 113,000 |
Variable lease cost | 7,000 | 28,000 | 40,000 | 87,000 |
Short-term lease cost | 7,000 | 18,000 | 28,000 | 37,000 |
Total | 25,000 | 84,000 | 126,000 | 237,000 |
Warehouse | ||||
Operating lease cost | 4,000 | 9,000 | ||
Variable lease cost | 4,000 | 9,000 | ||
Short-term lease cost | 0 | 0 | ||
Total | 8,000 | 18,000 | ||
Prior Corporate Headquarters | ||||
Operating lease cost | 0 | 38,000 | ||
Variable lease cost | 0 | 24,000 | ||
Short-term lease cost | 0 | 0 | ||
Total | 0 | 62,000 | ||
Corporate Headquarters | ||||
Operating lease cost | 11,000 | 38,000 | 11,000 | 113,000 |
Variable lease cost | 7,000 | 28,000 | 7,000 | 87,000 |
Short-term lease cost | 0 | 0 | 0 | 0 |
Total | 18,000 | 66,000 | 18,000 | 200,000 |
Additional Office Space | ||||
Operating lease cost | 0 | 0 | 0 | 0 |
Variable lease cost | 0 | 0 | 0 | 0 |
Short-term lease cost | 7,000 | 18,000 | 28,000 | 37,000 |
Total | $ 7,000 | $ 18,000 | $ 28,000 | $ 37,000 |
Leases (Details 1)
Leases (Details 1) | Sep. 30, 2021USD ($) |
Lease | |
2021 | $ 21,000 |
2022 | 83,000 |
2023 | 72,000 |
2024 | 40,000 |
Total lease payments | 216,000 |
Less: interest | 14,000 |
Present value of lease liabilities | $ 202,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restricted cash | $ 85,000 | $ 85,000 | ||
Increase in Operating lease liabilities and right-of-use | 219,000 | |||
Cash outflow for operating leases | $ 15,000 | $ 86,000 | $ 76,000 | $ 178,000 |
Warehouse | ||||
Remaining lease term | 1 year 6 months | |||
Discount rate | 4.75% | 4.75% | ||
Corporate Headquarters | ||||
Remaining lease term | 2 years 9 months 18 days | |||
Discount rate | 4.75% | 4.75% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Taxes | |||||
Income tax benefit (expense) | $ 9,000 | $ 8,000 | $ 32,000 | $ (203,000) | |
Income tax rate, percentage | 1.00% | 0.90% | 1.30% | (5.30%) | |
Valuation allowance against NOLs deferred tax assets | $ 2,811,000 | $ 1,946,000 | |||
Refunds of federal taxes paid period | 5 years | ||||
Deferred tax asset valuation allowance | $ 215,000 | ||||
Unrecognized tax benefits | $ 703,000 | 703,000 | 677,000 | ||
Discrete tax benefit | 215,000 | $ 17,000 | |||
Tax recognized amount | 650,000 | ||||
Unrecognized tax benefits recognized effective income tax rates of future periods | $ 703,000 | $ 703,000 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Customer One | Total Net Sales | |||
Customer's concentration risk percentage | 16.00% | 13.00% | |
Customer One | Accounts Receivable | |||
Customer's concentration risk percentage | 16.00% | 17.00% | |
Customer Two | Total Net Sales | |||
Customer's concentration risk percentage | 10.00% | 11.00% | |
Customer Two | Accounts Receivable | |||
Customer's concentration risk percentage | 13.00% | 10.00% |
Loan (Details Narrative)
Loan (Details Narrative) | 1 Months Ended | 9 Months Ended |
Apr. 30, 2020USD ($)integer | Sep. 30, 2021USD ($) | |
Loan (Details Narrative) | ||
Debt face amount | $ 1,054,000 | |
Rate of interest per annum | 1.00% | |
Laon maturity date | Apr. 22, 2022 | |
Number of monthly payments of principal and interest | integer | 18 | |
Accrued interest | $ 8,000 | |
Paycheck protection program loan amount | $ 1,054,000 |