Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 14, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Entity Central Index Key | 883,107 | ||
Entity Registrant Name | NANOPHASE TECHNOLOGIES Corp | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Trading Symbol | NANX | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 10,265,000 | ||
Entity Common Stock, Par Value | $ 0.01 | ||
Entity Common Stock, Shares Outstanding | 31,229,996 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 1,779 | $ 1,275 |
Trade accounts receivable, less allowance for doubtful accounts of $5 and $6 on December 31, 2016 and 2015, respectively | 434 | 507 |
Inventories, net | 772 | 662 |
Prepaid expenses and other current assets | 442 | 247 |
Total current assets | 3,427 | 2,691 |
Equipment and leasehold improvements, net | 1,395 | 1,861 |
Other assets, net | 20 | 22 |
Total assets | 4,842 | 4,574 |
Current liabilities: | ||
Current portion of capital lease obligations | 107 | 94 |
Accounts payable | 669 | 508 |
Accrued expenses | 521 | 276 |
Total current liabilities | 1,297 | 878 |
Long-term portion of capital lease obligations | 110 | 144 |
Long-term deferred rent | 466 | 519 |
Asset retirement obligations | 178 | 172 |
Total long-term liabilities | 754 | 835 |
Contingent liabilities | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value, 24,088 shares authorized and no shares issued and outstanding | ||
Common stock, $.01 par value, 42,000,000 and 35,000,000 shares authorized; 31,229,996 and 28,585,496 shares issued and outstanding on December 31, 2016 and December 31, 2015, respectively | 312 | 286 |
Additional paid-in capital | 97,359 | 96,172 |
Accumulated deficit | (94,880) | (93,597) |
Total stockholders' equity | 2,791 | 2,861 |
Total liabilities and stockholders' equity | $ 4,842 | $ 4,574 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, less allowance for doubtful accounts | $ 5 | $ 6 |
Preferred stock, par value | $ .01 | $ 0.01 |
Preferred stock, shares authorized | 24,088 | 24,088 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ .01 | $ 0.01 |
Common stock, shares authorized | 42,000,000 | 35,000,000 |
Common stock, shares issued | 31,229,996 | 28,585,496 |
Common stock, shares outstanding | 31,229,996 | 28,585,496 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||
Product revenue | $ 10,720 | $ 10,272 |
Other revenue | 63 | 41 |
Total revenue | 10,783 | 10,313 |
Operating expense: | ||
Cost of revenue | 7,543 | 7,199 |
Gross profit | 3,240 | 3,114 |
Research and development expense | 1,554 | 1,273 |
Selling, general and administrative expense | 2,954 | 3,019 |
Loss from operations | (1,268) | (1,178) |
Interest expense | (15) | (14) |
Loss before provision for income taxes | (1,283) | (1,192) |
Net loss | $ (1,283) | $ (1,192) |
Net loss per share - basic and diluted | $ (0.04) | $ (0.04) |
Weighted average number of basic and diluted common shares outstanding | 30,911,869 | 28,574,902 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, beginning at Dec. 31, 2014 | $ 285 | $ 95,966 | $ (92,405) | $ 3,846 | |
Balance, beginning (shares) at Dec. 31, 2014 | 28,516,163 | ||||
Stock option exercises | $ 1 | 25 | $ 26 | ||
Stock option exercises (shares) | 69,333 | 69,000 | |||
Stock-based compensation | 181 | $ 181 | |||
Net loss | (1,192) | (1,192) | |||
Balance, ending at Dec. 31, 2015 | $ 286 | 96,172 | (93,597) | 2,861 | |
Balance, ending (shares) at Dec. 31, 2015 | 28,585,496 | ||||
Sale of common stock | $ 26 | 962 | 988 | ||
Sale of common stock (shares) | 2,600,000 | ||||
Stock option exercises | 18 | $ 18 | |||
Stock option exercises (shares) | 44,500 | 44,000 | |||
Stock-based compensation | 207 | $ 207 | |||
Net loss | (1,283) | (1,283) | |||
Balance, ending at Dec. 31, 2016 | $ 312 | $ 97,359 | $ (94,880) | $ 2,791 | |
Balance, ending (shares) at Dec. 31, 2016 | 31,229,996 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | ||
Net loss | $ (1,283) | $ (1,192) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 610 | 735 |
Impairment of fixed asset | 54 | |
Share-based compensation | 207 | 182 |
Changes in assets and liabilities related to operations: | ||
Trade accounts receivable | 73 | (119) |
Inventories | (110) | 288 |
Prepaid expenses and other assets | (194) | 120 |
Accounts payable | 161 | (14) |
Accrued expenses | 241 | (240) |
Net cash used in operating activities | (241) | (240) |
Investing activities: | ||
Acquisition of equipment and leasehold improvements | (128) | (280) |
Payment of accounts payable incurred for the purchase of equipment and leasehold improvements | (37) | (8) |
Net cash used in investing activities | (165) | (288) |
Financing activities: | ||
Principal payment on capital leases | (96) | (85) |
Proceeds from sale of common stock | 988 | |
Proceeds from exercise of stock options | 18 | 26 |
Net cash provided by (used in) financing activities | 910 | (59) |
Increase/(Decrease) in cash and cash equivalents | 504 | (587) |
Cash and cash equivalents at beginning of period | 1,275 | 1,862 |
Cash and cash equivalents at end of period | 1,779 | 1,275 |
Supplemental cash flow information: | ||
Interest paid | 15 | 14 |
Supplemental non-cash investing activities: | ||
Accounts payable incurred for the purchase of equipment and leasehold improvements | 37 | |
Capital lease obligations incurred in the purchase of equipment | $ 75 | $ 132 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | (1) Description of Business Nanophase Technologies Corporation (“Nanophase”, “Company”, “we”, “our”, or “us”) is an advanced materials and applications developer and commercial manufacturer with an integrated family of nanomaterial and related technologies. We produce engineered nano and larger, sub-micron, materials for use in a variety of diverse markets: personal care including sunscreens, architectural coatings, industrial coating applications, abrasion-resistant additives, plastics additives, medical diagnostics, energy, and a variety of surface finishing technologies (polishing) applications, including optics. We have recently expanded our offerings beyond active ingredients to include targeted full formulations of skin care products, marketed and sold by our wholly-owned subsidiary, Solésence ™ LLC. We target markets in which we believe practical solutions may be found using our products. We work closely with current and potential customers in these target markets to identify their material and performance requirements and market our materials to various end-use applications manufacturers. Recently developed technologies have made certain new products possible and opened potential new markets. We recently developed new material solutions in the light energy-management area (particularly solar control) that have been taken to potential customers, and for which we are experiencing early-stage, accelerating revenue growth. We also developed a new solution for surface treatments (coatings) which we used to launch new products in personal care, including those of our subsidiary, Solésence ™ LLC, in the fall of 2016. Although our primary strategic focus has been the North American market, we currently sell material to customers overseas and have been working to expand our reach within foreign markets. The Company was incorporated in Illinois on November 25, 1989, and became a Delaware corporation during November 1997. Our common stock trades on the OTCQB marketplace under the symbol NANX. While product sales comprise the majority of our revenue, we also recognize revenue from other sources from time to time. These activities are not expected to drive the long-term growth of the business. For this reason, we classify such revenue as “other revenue” in our Statements of Operations, as it does not represent revenue directly from our nanocrystalline materials. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Use of Estimates and Risks and Uncertainties The preparation of financial statements requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain assumptions are also necessary to assess the impact of risks and uncertainties on the financial statements, such as cash flow projections, availability of capital if needed to support the ongoing operations of the business, and our expected compliance with contractual commitments. These risks and uncertainties are further discussed in Note 12. Any changes in these assumptions or business plans could have a material impact on the financial statements. Cash and Cash Equivalents Cash and cash equivalents primarily consist of demand deposits, but also include certain lower risk investments with a stated maturity upon acquisition of 90 days or less (e.g., money market funds or a certificate of deposit with a maturity of 90 days or less at the time of purchase). Trade Accounts Receivable Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. We determine the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. Our typical credit terms are thirty days from shipment and invoicing. Inventories Inventories are stated at the lower of cost, maintained on a first in, first out basis, or market. We have recorded allowances to reduce inventory relating to excess quantities of certain materials. Write-downs of inventories establish a new cost basis, which is not increased for future increases in market value of inventories or changes in estimated excess quantities. Equipment and Leasehold Improvements Equipment is stated at cost and is being depreciated over its estimated useful life (3-20 years) using the straight-line method. Leasehold improvements are stated at cost and are being amortized using the straight-line method over the shorter of the useful life of the asset or the term of the lease (3-13 years). Depreciation expense for leased assets is included with depreciation expense for owned assets. From time to time we have self-constructed assets. These assets are stated at cost plus the capitalization of labor and are depreciated over an estimated useful life (7-10 years) using the straight-line method. Long Lived Assets We review long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. We conduct long-lived asset impairment analyses in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets Asset Retirement Obligations In connection with our leased facilities, we are required to remove certain leasehold improvements upon termination of our occupancy. We follow the provisions of the FASB issued ASC 410-20, Asset Retirement Obligations Activity in the asset retirement obligation account for the years ended December 31, is as follows: 2016 2015 Balance, beginning $ 172 $ 166 Accretion of liability due to passage of time 6 6 Amortization of asset due to passage of time — — Balance, ending $ 178 $ 172 Financial Instruments We follow ASC Topic 820, Fair Value Measurements and Disclosures Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, along with the promissory note with no related borrowings described in Note 3, and any borrowings on the working capital line of credit described in Note 3. The fair values of all financial instruments were not materially different from their carrying values. There were no financial assets or liabilities adjusted to fair value on December 31, 2016 and 2015. Product Revenue Product revenue consists of sales of product that are recognized when realized and earned. This occurs when persuasive evidence of an arrangement exists, title transfers via shipment of products or when delivery has occurred, the price is fixed or determinable and collectability is reasonably assured. Other Revenue Other revenue may include revenue from technology license fees and paid development projects. Technology license fees and paid development projects are recognized when earned pursuant to the agreed upon contractual arrangement, when performance obligations are satisfied, the amount is fixed or determinable, and collectability is reasonably assured. Shipping and handling costs are included in other revenue when products are shipped and invoiced to the customer. We include the related cost of shipping and handling in cost of goods sold. Research and Development Expenses Research and development expenses are recognized as expense when incurred. Income Taxes We account for income taxes using the liability method. As such, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are calculated using the enacted tax rates and laws that are expected to be in effect when the anticipated reversal of these differences is scheduled to occur. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured, as described above, is reflected as a liability for uncertain tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. We have not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. We file tax returns in all appropriate jurisdictions, which includes a federal tax return and Illinois state tax return. Open tax years for both jurisdictions are 2013 to 2015, which statutes expire in 2017 to 2019, respectively, under most cases and subject to appropriate laws and regulations. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in selling, general and administrative expenses in the statements of operations. As of December 31, 2016 and 2015, we had no liability for unrecognized tax benefits. Earnings Per Share Options to purchase approximately 859,000 shares of common stock that were outstanding as of December 31, 2016 were not included in the computation of earnings per share for the year ended December 31, 2016, as the impact of such shares would be both negligible and anti-dilutive. Options to purchase approximately 210,000 shares of common stock that were outstanding as of December 31, 2015 were not included in the computation of earnings per share for the year ended December 31, 2015, as the impact of such shares would be both negligible and anti-dilutive. New Accounting Pronouncements During May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers During February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) During August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern During March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting Compensation - Stock Compensation |
Note and Line of Credit
Note and Line of Credit | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Note and Line of Credit | (3) Note and Line of Credit During July 2014 we entered into a bank-issued letter of credit and related promissory note for up to $30 in borrowings to support our obligations under our facility lease agreement. We then sold our certificates of deposit. No borrowings have been incurred under this promissory note. Should any borrowings occur in the future, the interest rate would be the prime rate plus 1%, with the bank having the right to “set off” or apply unpaid balances against our checking account if we fail to meet our obligations under any borrowings under the note. It is our intention to renew this note annually, for as long as we need to pursuant to the terms of our facility lease agreement. Because there were no amounts outstanding on the note at any time during 2016 or 2015, we have recorded no related liability on our balance sheet. During March 2015, we entered into a Business Loan Agreement (the “Line of Credit Agreement”) with Libertyville Bank and Trust Company, a Wintrust Community Bank (“Libertyville”), our primary bank. This Line of Credit Agreement was subsequently amended on April 13, 2015. Under the Line of Credit Agreement, as amended, Libertyville will provide a maximum of $300, or 75% of our eligible accounts receivable, whichever is less, of revolving credit, collateralized by a senior priority lien on our accounts receivable, inventory, equipment, general intangibles and fixtures. Interest on any borrowings would be the prime rate at the time plus 1%. Availability to draw on the line requires us to have at least $1 million in cash, including any amounts borrowed, at Libertyville on the date of any advance. Advances may only occur at the beginning or end of a fiscal quarter and must be repaid in full within five days of the advance. The Line of Credit Agreement was to expire on March 4, 2016, but during March 2016 was extended until March 4, 2017. During February 2017, this agreement was further extended to March 2018. No borrowing on this line was outstanding on December 31, 2016. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | (4) Inventories Inventories consist of the following: As of December 31, 2016 2015 Raw materials $ 283 $ 184 Finished goods 510 530 793 714 Allowance for excess quantities (21 ) (52 ) $ 772 $ 662 |
Equipment and Leasehold Improve
Equipment and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Equipment and Leasehold Improvements | (5) Equipment and Leasehold Improvements Equipment and leasehold improvements consist of the following: As of December 31, 2016 2015 Machinery and equipment $ 14,587 $ 14,562 Office equipment 790 778 Office furniture 110 110 Leasehold improvements 4,814 4,789 Construction in progress 75 11 20,376 20,250 Less: Accumulated depreciation and amortization (18,981 ) (18,389 ) $ 1,395 $ 1,861 Depreciation expense was $605 and $726, for the years ended December 31, 2016 and 2015, respectively. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Lease Commitments | (6) Lease Commitments We lease our operating facilities under operating leases. During October 2016 we entered into a Third Lease Amendment related to our primary facility in Romeoville, Illinois, extending the term of the lease through December 31, 2024. The current monthly rent on this lease amounts to $25. We lease our Burr Ridge, Illinois, facility under an agreement extended during September 2010, which extended the term through September 2014 (we have since exercised our final tenant option to extend the term through September 2017). During March 2017, we entered into a new Building Lease for this facility that will begin September 2017 and extend through September 2021, with our having the option to further extend this lease by three additional one-year periods. The current monthly rent on this lease amounts to $15. During 2016 we also renewed our lease for our offsite warehouse in Romeoville, Illinois, through August 2019. The current monthly rent on this lease amounts to $5. The following is a schedule of future minimum lease payments including real estate taxes as required under the above operating leases, as well as the remaining lease payments under capital leases as referenced below: Year ending December 31: Operating Capital 2017 $ 698 58 2018 700 45 2019 691 34 2020 589 18 2021 554 15 Thereafter 1,289 — Total minimum payments required: $ 4,521 * $ 170 * * After paying $60 to retire a capital lease during January 2017, the remaining payments under capital leases include principal of $147 and interest of $23. Also, includes future payments of the Burr Ridge Building Lease executed March 2017 as described above. Rent expense, including real estate taxes, under these leases amounted to $597 and $588, for the years ended December 31, 2016 and 2015, respectively. On December 31, 2016 equipment under capital leases had a cost of $362 with accumulated depreciation of $62, compared to $316 and $29, respectively, on December 31, 2015. Principal and interest payments are due monthly under the capital lease obligations through October 2020. We entered into one new capital lease during 2016 for $75 and a 5-year duration (through August 2021), and recognized an impairment charge, reducing the value of two other pieces of capital equipment by $54 in aggregate. We entered into three new capital leases during 2015 for $132 and 3 to 5 year durations (through August 2020). |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | (7) Accrued Expenses Accrued expenses consist of the following: As of December 31, 2016 2015 Accrued payroll and related expenses $ 167 $ 108 Customer net volume rebate payable 201 — Other 153 168 $ 521 $ 276 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (8) Income Taxes Our net income tax provision, including both current and deferred, related to U.S. federal and state income taxes, is none. A reconciliation of income tax expense to the amount computed by applying the Federal income tax rate to loss before provision for income taxes as of December 31, 2016 and 2015 is as follows: 2016 2015 Income tax credit at statutory rates $ (436 ) $ (405 ) Nondeductible expenses 2 3 State income tax, net of federal benefits (66 ) (61 ) Other 144 (3 ) Increase in valuation allowance 356 466 $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred income taxes consist of the following: As of December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 31,935 $ 31,590 Inventory and other allowances 16 28 Charitable contribution carryforwards 5 6 Excess (tax) book depreciation 805 709 Excess (tax) book amortization 69 67 Share-based compensation 1,328 1,396 Other accrued costs 219 225 Total deferred tax assets 34,377 34,021 Less: Valuation allowance (34,377 ) (34,021 ) Deferred income taxes $ — $ — The valuation allowance increased approximately $0.4 million and $0.5 million for the years ended December 31, 2016 and 2015, respectively (with no expiring net operating loss carryforwards and credits for either period; a portion of the charitable contribution carryforward expired during 2016) due principally to the change in the net operating loss carryforward and uncertainty as to whether future taxable income will be generated prior to the expiration of the carryforward period. Under the Internal Revenue Code, certain ownership changes, including the prior issuance of preferred stock and our public offering of common stock, may subject us to annual limitations on the utilization of our net operating loss carryforward. As of December 31, 2016, the amounts subject to limitations has not yet been determined. We have net operating loss carryforwards for tax purposes of approximately $82 million on December 31, 2016, which expire between 2018 and 2036. During 2011, the state of Illinois suspended the use of net operating loss carryforwards for a four year period beginning 2011, extending the term of all net loss carryforwards by a corresponding four years. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Capital Stock | (9) Capital Stock As of December 31, 2016 and 2015, we had 24,088 authorized but unissued shares of preferred stock. In addition, as of December 31, 2016, 1,196,000 authorized but unissued shares of common stock have been reserved for future issuance upon exercise of stock options. During August 2016, our stockholders authorized an additional 7,000,000 shares of common stock, increasing our authorized shares of common stock from 35,000,000 to 42,000,000 authorized shares. Our stockholders also authorized an additional 1,200,000 shares of common stock that may be issued pursuant to our 2010 Equity Compensation Plan. |
Stock Options and Stock Grants
Stock Options and Stock Grants | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Stock Grants | (10) Stock Options and Stock Grants We have entered into stock option agreements with certain officers, employees and directors. The stock options generally expire ten years from the date of grant. Employee Stock Options We follow FASB ASC Topic 718 , Share-Based Payments As of December 31, 2016, there was approximately $183 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under our stock option plans. That cost is expected to be recognized over a remaining weighted-average period of 1.7 years. The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for options granted for all years presented: Years Ended December 31, 2016 2015 Weighted-average risk-free interest rates: 1.5 % 1.7 % Dividend yield: 0.00 % 0.00 % Weighted-average expected life of the option: 7 years 7 years Weighted-average expected stock price volatility: 95 % 95 % Weighted-average fair value of the options granted: $ 0.36 $ 0.36 We use the Black−Scholes option pricing model to determine the fair value of stock based compensation. The Black−Scholes model requires us to make several assumptions, including the estimated length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of our common stock price over the expected term and estimated forfeitures. Expected price volatility of the fiscal 2016 and 2015 grants is based on the daily market rate changes of our stock going back to January 1, 2008. The shares granted in fiscal 2016 and 2015 had a vesting period of three years and a contractual life of 10 years. Forfeitures were estimated at 4% and 4% for the years ended December 31, 2016 and 2015, based on our historical experience. The Black−Scholes model also requires a risk free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of the grant, and the dividend yield on our common stock, which is assumed to be zero since we do not pay dividends and have no current plans to do so in the future. Changes in these assumptions can materially affect the estimate of fair value of stock based compensation and consequently, the related expense recognized on the statement of operations. We recognize stock based compensation expense on a straight-line basis. The following table summarizes the option activity for our employees and directors during the year ended December 31, 2016: (rounded) Weighted Average Exercise Price per Weighted Average Remaining Contractual Term Aggregate Intrinsic Options Shares Share (years) Value Outstanding on January 1, 2016 2,574,000 $ 0.95 Granted 508,000 $ 0.48 Exercised (44,000 ) $ 0.40 Forfeited or expired (105,000 ) $ 3.08 Outstanding on December 31, 2016 2,933,000 $ 0.81 6.3 $ 616 Exercisable on December 31, 2016 2,053,000 $ 0.96 5.3 $ 378 Shares available for grant 1,196,000 The aggregate intrinsic value in the table above is based on our closing stock price of $0.72 on the last business day for the year ended December 31, 2016. During the years ended December 31, 2016 and 2015, the total intrinsic value of our stock options exercised was $19 and $10, respectively. Cash received for option exercises was $18 and $26 during the years ended December 31, 2016 and 2015, respectively. We had approximately 44,000 options exercised during the year ended December 31, 2016, compared to 69,000 in 2015. Based on our election of the “with and without” approach, no realized tax benefits from stock options were recognized for the years ended December 31, 2016 and 2015. Stock Appreciation Rights Prior to 2011, we granted our Outside Directors stock appreciation rights (SARs) under our Amended and Restated 2006 Stock Appreciation Rights Plan and subsequently under our 2010 Equity Plan. The change in fair value of the awards granted during prior years was included in non-cash compensation expense for the years ended December 31, 2016 and 2015. The SARs granted vested immediately and were payable upon the directors’ removal or resignation from the position of director. These awards were accounted for as liability awards, included in accrued expenses as of December 31, 2015, and adjusted to fair value each reporting period. The fair value of the liability on December 31, 2016 and 2015 was zero. During November 2016, all vested SARs were terminated. Those Outside Directors whose vested SARs were cancelled received immediately vested options in the same quantity, and at the same strike price, as their cancelled SARs. The options granted are included in the above chart. We have no remaining SARs outstanding. Restricted Stock As of both December 31, 2016 and 2015, we did not have any unvested non-director restricted stock or performance shares outstanding. |
401(k) Profit-Sharing Plan
401(k) Profit-Sharing Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
401(k) Profit-Sharing Plan | (11) 401(k) Profit-Sharing Plan We have a 401(k) profit-sharing plan covering substantially all employees who meet defined service requirements. We have made in the past, and may make in the future, maximum contributions of 100% of the first 3% and 50% of the next 2% of the participant’s salary. We made changes to our benefits program and, as part of those changes, discontinued these Company contributions effective January 2014, which resulted in no contributions made during 2016 or 2015. During 2017, we implemented a new Company contribution program, in which 10% of the employee’s contribution will be matched up to an 8% contribution (for a match of up to 0.8% of a participant’s salary). |
Significant Customers and Conti
Significant Customers and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Significant Customers and Contingencies | (12) Significant Customers and Contingencies Revenue from three customers constituted approximately 69%, 5% and 4%, respectively, of our 2016 revenue. Amounts included in accounts receivable on December 31, 2016 relating to these three customers were approximately none, $39 and $180, respectively. Revenue from these three customers constituted approximately 63%, 4% and 7%, respectively, of our 2015 revenue. Amounts included in accounts receivable on December 31, 2015 relating to these three customers were approximately none, $35 and $240, respectively. The loss of one of these significant customers or the failure to attract new customers could have a material adverse effect on our business, results of operations and financial condition. We currently have exclusive supply agreements with BASF Corporation (“BASF”), our largest customer, that have contingencies outlined which could potentially result in the license of technology and/or the sale of production equipment from the Company to the customer intended to provide capacity sufficient to meet the customer’s production needs. This outcome may occur if we fail to meet certain performance requirements, certain other obligations and/or certain financial condition covenants. The financial condition covenants in one of our supply agreements with BASF “trigger” a technology transfer right (license and equipment sale at BASF’s option) in the event (a) that earnings for the twelve month period ending with our most recently published quarterly financial statements are less than zero and our cash, cash equivalents and certain investments are less than $1 million, or (b) of an acceleration of any debt maturity having a principal amount of more than $10 million. Our supply agreements with BASF also “trigger” a technology transfer right in the event of our insolvency, as further defined within the agreements. In the event of an equipment sale, upon incurring a triggering event, the equipment would be sold to the customer at either 115% of the equipment’s net book value or the greater of 30% of the original book value of such equipment, and any associated upgrades to it, or 115% of the equipment’s net book value, depending on the equipment and related products. We believe that we have sufficient cash and credit availability, (See Liquidity and Capital Resources in Management’s Discussion and Analysis in Part II, Item 7 of this Form 10-K for a further discussion, as well as the description of our Line of Credit Agreement described in Note 3 ) Should events arise that make it appropriate for us to seek additional financing, such additional financing may not be available on acceptable terms or even at all, and any such financing could be dilutive to our stockholders. Such a financing could be necessitated by such things as the loss of one or more significant customers or a significant decline in revenue from those customers, currently unknown capital requirements, new regulatory requirements, the need to meet cash requirements under our BASF agreement to avoid a triggering event, or other circumstances not currently anticipated by us. The failure to obtain sufficient capital may impair or curtail our business plans and under such circumstances may raise doubt regarding our ability to continue as a going concern. |
Business Segmentation and Geogr
Business Segmentation and Geographical Distribution | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segmentation and Geographical Distribution | (13) Business Segmentation and Geographical Distribution Revenue from international sources approximated $1,039 and $1,393 for the years ended December 31, 2016 and 2015, respectively. As part of our revenue from international sources, we recognized approximately $902 and $1,339 in product revenue from a number of German companies, in the aggregate, for the years ended December 31, 2016 and 2015, respectively. Our operations comprise a single business segment and all of our long-lived assets are located within the United States. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | (14) Subsequent Events As discussed in Note 3, the Line of Credit Agreement with our primary bank (Libertyville) was to expire on March 4, 2017, but during February 2017 this agreement was further extended to March 2018. As discussed in Note 6, during March 2017 we entered into a new Building Lease for our Burr Ridge facility. The previous lease expires September 2017, at which time this new lease will begin, and extend through September 2021. We have the option to further extend this lease by up to three additional one year periods. As discussed in Note 6, during January 2017 we paid $60 to retire a capital lease related to equipment that we sold to a third party for $100, its remaining book value. No gain or loss was recognized during 2017 associated with the transaction. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates and Risks and Uncertainties | Use of Estimates and Risks and Uncertainties The preparation of financial statements requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain assumptions are also necessary to assess the impact of risks and uncertainties on the financial statements, such as cash flow projections, availability of capital if needed to support the ongoing operations of the business, and our expected compliance with contractual commitments. These risks and uncertainties are further discussed in Note 12. Any changes in these assumptions or business plans could have a material impact on the financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents primarily consist of demand deposits, but also include certain lower risk investments with a stated maturity upon acquisition of 90 days or less (e.g., money market funds or a certificate of deposit with a maturity of 90 days or less at the time of purchase). |
Trade Accounts Receivable | Trade Accounts Receivable Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. We determine the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. Our typical credit terms are thirty days from shipment and invoicing. |
Inventories | Inventories Inventories are stated at the lower of cost, maintained on a first in, first out basis, or market. We have recorded allowances to reduce inventory relating to excess quantities of certain materials. Write-downs of inventories establish a new cost basis, which is not increased for future increases in market value of inventories or changes in estimated excess quantities. |
Equipment and Leasehold Improvements | Equipment and Leasehold Improvements Equipment is stated at cost and is being depreciated over its estimated useful life (3-20 years) using the straight-line method. Leasehold improvements are stated at cost and are being amortized using the straight-line method over the shorter of the useful life of the asset or the term of the lease (3-13 years). Depreciation expense for leased assets is included with depreciation expense for owned assets. From time to time we have self-constructed assets. These assets are stated at cost plus the capitalization of labor and are depreciated over an estimated useful life (7-10 years) using the straight-line method. |
Long Lived Assets | Long Lived Assets We review long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. We conduct long-lived asset impairment analyses in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets |
Asset Retirement Obligations | Asset Retirement Obligations In connection with our leased facilities, we are required to remove certain leasehold improvements upon termination of our occupancy. We follow the provisions of the FASB issued ASC 410-20, Asset Retirement Obligations Activity in the asset retirement obligation account for the years ended December 31, is as follows: 2016 2015 Balance, beginning $ 172 $ 166 Accretion of liability due to passage of time 6 6 Amortization of asset due to passage of time — — Balance, ending $ 178 $ 172 |
Financial Instruments | Financial Instruments We follow ASC Topic 820, Fair Value Measurements and Disclosures Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, along with the promissory note with no related borrowings described in Note 3, and any borrowings on the working capital line of credit described in Note 3. The fair values of all financial instruments were not materially different from their carrying values. There were no financial assets or liabilities adjusted to fair value on December 31, 2016 and 2015. |
Product Revenue | Product Revenue Product revenue consists of sales of product that are recognized when realized and earned. This occurs when persuasive evidence of an arrangement exists, title transfers via shipment of products or when delivery has occurred, the price is fixed or determinable and collectability is reasonably assured. |
Other Revenue | Other Revenue Other revenue may include revenue from technology license fees and paid development projects. Technology license fees and paid development projects are recognized when earned pursuant to the agreed upon contractual arrangement, when performance obligations are satisfied, the amount is fixed or determinable, and collectability is reasonably assured. Shipping and handling costs are included in other revenue when products are shipped and invoiced to the customer. We include the related cost of shipping and handling in cost of goods sold. |
Research and Development Expenses | Research and Development Expenses Research and development expenses are recognized as expense when incurred. |
Income Taxes | Income Taxes We account for income taxes using the liability method. As such, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are calculated using the enacted tax rates and laws that are expected to be in effect when the anticipated reversal of these differences is scheduled to occur. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured, as described above, is reflected as a liability for uncertain tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. We have not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. We file tax returns in all appropriate jurisdictions, which includes a federal tax return and Illinois state tax return. Open tax years for both jurisdictions are 2013 to 2015, which statutes expire in 2017 to 2019, respectively, under most cases and subject to appropriate laws and regulations. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in selling, general and administrative expenses in the statements of operations. As of December 31, 2016 and 2015, we had no liability for unrecognized tax benefits. |
Earnings Per Share | Earnings Per Share Options to purchase approximately 859,000 shares of common stock that were outstanding as of December 31, 2016 were not included in the computation of earnings per share for the year ended December 31, 2016, as the impact of such shares would be both negligible and anti-dilutive. Options to purchase approximately 210,000 shares of common stock that were outstanding as of December 31, 2015 were not included in the computation of earnings per share for the year ended December 31, 2015, as the impact of such shares would be both negligible and anti-dilutive. |
New Accounting Pronouncements | New Accounting Pronouncements During May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers During February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) During August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern During March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting Compensation - Stock Compensation |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of activity in asset retirement obligations | Activity in the asset retirement obligation account for the years ended December 31, is as follows: 2016 2015 Balance, beginning $ 172 $ 166 Accretion of liability due to passage of time 6 6 Amortization of asset due to passage of time — — Balance, ending $ 178 $ 172 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consist of the following: As of December 31, 2016 2015 Raw materials $ 283 $ 184 Finished goods 510 530 793 714 Allowance for excess quantities (21 ) (52 ) $ 772 $ 662 |
Equipment and Leasehold Impro24
Equipment and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of equipment and leasehold improvements | Equipment and leasehold improvements consist of the following: As of December 31, 2016 2015 Machinery and equipment $ 14,587 $ 14,562 Office equipment 790 778 Office furniture 110 110 Leasehold improvements 4,814 4,789 Construction in progress 75 11 20,376 20,250 Less: Accumulated depreciation and amortization (18,981 ) (18,389 ) $ 1,395 $ 1,861 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of future minimum lease payments | The following is a schedule of future minimum lease payments including real estate taxes as required under the above operating leases, as well as the remaining lease payments under capital leases as referenced below: Year ending December 31: Operating Capital 2017 $ 698 58 2018 700 45 2019 691 34 2020 589 18 2021 554 15 Thereafter 1,289 — Total minimum payments required: $ 4,521 * $ 170 * * After paying $60 to retire a capital lease during January 2017, the remaining payments under capital leases include principal of $147 and interest of $23. Also, includes future payments of the Burr Ridge Building Lease executed March 2017 as described above. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consist of the following: As of December 31, 2016 2015 Accrued payroll and related expenses $ 167 $ 108 Customer net volume rebate payable 201 — Other 153 168 $ 521 $ 276 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of income tax expense by applying federal income tax rate to loss before provision for income taxes | A reconciliation of income tax expense to the amount computed by applying the Federal income tax rate to loss before provision for income taxes as of December 31, 2016 and 2015 is as follows: 2016 2015 Income tax credit at statutory rates $ (436 ) $ (405 ) Nondeductible expenses 2 3 State income tax, net of federal benefits (66 ) (61 ) Other 144 (3 ) Increase in valuation allowance 356 466 $ — $ — |
Schedule of significant components of deferred income taxes | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred income taxes consist of the following: As of December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 31,935 $ 31,590 Inventory and other allowances 16 28 Charitable contribution carryforwards 5 6 Excess (tax) book depreciation 805 709 Excess (tax) book amortization 69 67 Share-based compensation 1,328 1,396 Other accrued costs 219 225 Total deferred tax assets 34,377 34,021 Less: Valuation allowance (34,377 ) (34,021 ) Deferred income taxes $ — $ — |
Stock Options and Stock Grants
Stock Options and Stock Grants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions used to calculate Black-Scholes Ooption Pricing Model for stock options granted | The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for options granted for all years presented: Years Ended December 31, 2016 2015 Weighted-average risk-free interest rates: 1.5 % 1.7 % Dividend yield: 0.00 % 0.00 % Weighted-average expected life of the option: 7 years 7 years Weighted-average expected stock price volatility: 95 % 95 % Weighted-average fair value of the options granted: $ 0.36 $ 0.36 |
Schedule of option activity | The following table summarizes the option activity for our employees and directors during the year ended December 31, 2016: (rounded) Weighted Average Exercise Price per Weighted Average Remaining Contractual Term Aggregate Intrinsic Options Shares Share (years) Value Outstanding on January 1, 2016 2,574,000 $ 0.95 Granted 508,000 $ 0.48 Exercised (44,000 ) $ 0.40 Forfeited or expired (105,000 ) $ 3.08 Outstanding on December 31, 2016 2,933,000 $ 0.81 6.3 $ 616 Exercisable on December 31, 2016 2,053,000 $ 0.96 5.3 $ 378 Shares available for grant 1,196,000 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Line Items] | ||
Cash and cash equivalents description | 90 days or less | |
Credit period after shipment and invoicing | 30 days | |
Threshold percentage | 50.00% | |
Stock Options [Member] | ||
Accounting Policies [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 859,000 | 210,000 |
Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Open tax years for jurisdictions | 2,013 | |
Income tax statutes expiration year | 2,017 | |
Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Open tax years for jurisdictions | 2,015 | |
Income tax statutes expiration year | 2,019 | |
Equipment [Member] | Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Equipment leasehold improvements and leased assets useful life | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Equipment leasehold improvements and leased assets useful life | 20 years | |
Leasehold Improvements [Member] | Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Equipment leasehold improvements and leased assets useful life | 3 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Equipment leasehold improvements and leased assets useful life | 13 years | |
Self-Constructed Assets [Member] | Minimum [Member] | ||
Accounting Policies [Line Items] | ||
Equipment leasehold improvements and leased assets useful life | 7 years | |
Self-Constructed Assets [Member] | Maximum [Member] | ||
Accounting Policies [Line Items] | ||
Equipment leasehold improvements and leased assets useful life | 10 years |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Balance, beginning | $ 172 | $ 166 |
Accretion of liability due to passage of time | 6 | 6 |
Balance, ending | $ 178 | $ 172 |
Note and Line of Credit (Detail
Note and Line of Credit (Detail Narratives) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2017 | Dec. 31, 2016 | Jul. 31, 2014 | |
Letter of Credit [Member] | |||
Letter of credit and related promissory note | $ 30 | ||
Basis spread variable interest rate | 1.00% | ||
Variable interest rate basis | Prime rate | ||
Line of Credit [Member] | |||
Basis spread variable interest rate | 1.00% | ||
Variable interest rate basis | Prime rate | ||
Line of credit facility, maximum borrowing capacity | $ 300 | ||
Borrowing capacity as percentage of accounts receivable | 75.00% | ||
Minimum amount of cash required on advances | $ 1,000 | ||
Line of credit facility, expiration date | Mar. 4, 2017 | ||
Line of Credit [Member] | Subsequent Event [Member] | |||
Line of credit facility, expiration date | Mar. 31, 2018 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 283 | $ 184 |
Finished goods | 510 | 530 |
Inventory gross, Total | 793 | 714 |
Allowance for excess inventory quantities | (21) | (52) |
Total | $ 772 | $ 662 |
Equipment and Leasehold Impro33
Equipment and Leasehold Improvements (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 605 | $ 726 |
Equipment and Leasehold Impro34
Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 20,376 | $ 20,250 |
Less: Accumulated depreciation and amortization | (18,981) | (18,389) |
Property, Plant and Equipment, Net, Total | 1,395 | 1,861 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 14,587 | 14,562 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 790 | 778 |
Office Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 110 | 110 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,815 | 4,789 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 75 | $ 11 |
Lease Commitments (Details Narr
Lease Commitments (Details Narrative) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($) | Jan. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Operating Leased Assets [Line Items] | ||||
Rent Expense | $ 597 | $ 588 | ||
Cost of equipment under capital lease | 362 | 316 | ||
Accumulated depreciation | $ 62 | $ 29 | ||
Number of capital leases | 1 | 3 | ||
Capital lease term | 5 years | |||
Payments to acquire capital lease | $ 75 | $ 132 | ||
Payment to retire capital lease | 96 | $ 85 | ||
Change in value of capital equipment | $ (54) | |||
Minimum [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Capital lease term | 3 years | |||
Maximum [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Capital lease term | 5 years | |||
Subsequent Event [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Capital leases, principal amount | $ 147 | |||
Capital leases, interest | 23 | |||
Payment to retire capital lease | $ 60 | |||
Romeoville Illinois [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Operating lease number of renewals | 1 | |||
Monthly rent on lease amounts | $ 25 | |||
Offsite Warehouse [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Monthly rent on lease amounts | $ 5 | |||
Burr Ridge Facility [Member] | Subsequent Event [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Operating lease number of renewals | 1 | |||
Monthly rent on lease amounts | $ 15 |
Lease Commitments (Details)
Lease Commitments (Details) $ in Thousands | Dec. 31, 2016USD ($) | |
Operating leases: | ||
2,017 | $ 698 | |
2,018 | 700 | |
2,019 | 691 | |
2,020 | 589 | |
2,021 | 554 | |
Thereafter | 1,289 | |
Total minimum payments required | 4,521 | [1] |
Capital leases: | ||
2,017 | 58 | |
2,018 | 45 | |
2,019 | 34 | |
2,020 | 18 | |
2,021 | 15 | |
Total minimum payments required | $ 170 | [1] |
[1] | After paying $60 to retire a capital lease during January 2017, the remaining payments under capital leases include principal of $147 and interest of $23. |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 167 | $ 108 |
Customer net volume rebate payable | 201 | |
Other | 153 | 168 |
Total | $ 521 | $ 276 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | |
Income Tax Disclosure [Abstract] | |||
Increase in valuation allowance | $ 4 | $ 5 | |
Net operating loss carryforwards | $ 82,000 | ||
Capital loss carryforwards expiration period start | 2,018 | ||
Capital loss carryforwards expiration period end | 2,036 | ||
Period for suspension of net operating loss carryforwards | 4 years | ||
Extension of the term of net loss carryforwards | 4 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income tax credit at statutory rates | $ (436) | $ (405) |
Nondeductible expenses | 2 | 3 |
State income tax, net of federal benefits | (66) | (61) |
Other | 144 | (3) |
Increase in valuation allowance | $ 356 | $ 466 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 31,935 | $ 31,590 |
Inventory and other allowances | 16 | 28 |
Charitable contribution carryforwards | 5 | 6 |
Excess (tax) book depreciation | 805 | 709 |
Excess (tax) book amortization | 69 | 67 |
Share-based compensation | 1,328 | 1,396 |
Other accrued costs | 219 | 225 |
Total deferred tax assets | 34,377 | 34,021 |
Less: Valuation allowance | $ (34,377) | $ (34,021) |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - shares | 1 Months Ended | ||
Aug. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | |||
Preferred stock, shares authorized | 24,088 | 24,088 | |
Authorized, unissued shares of common stock | 1,196,000 | ||
Addtional shares authorized during period | 7,000,000 | ||
Addtional shares authorized 2010 Equity Compensation Plan during period | 1,200,000 | ||
Common stock, shares authorized | 42,000,000 | 35,000,000 |
Stock Options and Stock Grant42
Stock Options and Stock Grants (Detail Narratives) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 207 | $ 181 |
Total unrecognized compensation cost related to nonvested share-based compensation arrangements granted | $ 183 | |
Weighted-average period over which unrecognized compensation is expected to be recognized | 1 year 8 months 12 days | |
Forfeiture rate | 4.00% | 4.00% |
Common stock issued pursuant to option exercises | 44,000 | 69,000 |
Proceeds from exercise of stock options | $ 18 | $ 26 |
Total intrinsic value of stock options exercised | $ 19 | $ 10 |
Share price | $ .72 | |
Vesting period | 3 years | |
Contractual life | 10 years |
Stock Options and Stock Grant43
Stock Options and Stock Grants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Weighted-average risk-free interest rates | 1.50% | 1.70% |
Dividend yield | 0.00% | 0.00% |
Weighted-average expected life of the option | 7 years | 7 years |
Weighted-average expected stock price volatility | 95.00% | 95.00% |
Weighted-average fair value of the options granted | $ 0.36 | $ 0.36 |
Stock Options and Stock Grant44
Stock Options and Stock Grants (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options: | ||
Stock options outstanding, beginning | 2,574,000 | |
Shares, Granted | 508,000 | |
Stock option exercises, Shares | (44,000) | (69,000) |
Shares, Forfeited or expired | (105,000) | |
Stock options outstanding, ending | 2,933,000 | 2,574,000 |
Shares, Exercisable | 2,053,000 | |
Shares available for grant | 1,196,000 | |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price per Share, Beginning Balance | $ 0.95 | |
Weighted Average Exercise Price per Share, Granted | .48 | |
Weighted Average Exercise Price per Share, Exercised | .40 | |
Weighted Average Exercise Price per Share, Forfeited or expired | 3.08 | |
Weighted Average Exercise Price per Share, Ending Balance | .81 | $ 0.95 |
Weighted Average Exercise Price per Share, Exercisable | $ .96 | |
Weighted Average Remaining Contractual Term, Outstanding | 6 years 3 months 18 days | |
Weighted Average Remaining Contractual Term Years, Exercisable | 5 years 3 months 18 days | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value, Outstanding | $ 616 | |
Aggregate Intrinsic Value, Exercisable | $ 378 |
401(k) Profit-Sharing Plan (Det
401(k) Profit-Sharing Plan (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jan. 31, 2017 | Dec. 31, 2016 | |
Defined contribution plan employer matching contribution percent for three percent of employee contribution | 100.00% | |
Defined contribution plan employer matching contribution percent for first compensation | 3.00% | |
Defined contribution plan employer matching contribution percent for two percent of employee contribution | 50.00% | |
Defined contribution plan employer matching contribution percent for next compensation | 2.00% | |
Contributions under profit sharing plan | $ 0 | |
Subsequent Event [Member] | ||
Employer's matching contribution | 8.00% | |
Employee's contribution for matching | 10.00% | |
Participant's salary for employer matching | 0.80% |
Significant Customers and Con46
Significant Customers and Contingencies (Detail Narratives) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Number of major customers | 3 | |
Accounts receivable | $ 434 | $ 507 |
Net earnings | (1,283) | (1,192) |
Customers One [Member] | ||
Accounts receivable | $ 0 | $ 0 |
Customers One [Member] | Customer Concentration Risk [Member] | Sales [Member] | ||
Revenue from top customers | 69.00% | 63.00% |
Customers Two [Member] | ||
Accounts receivable | $ 39 | $ 35 |
Customers Two [Member] | Customer Concentration Risk [Member] | Sales [Member] | ||
Revenue from top customers | 5.00% | 4.00% |
Customers Three [Member] | ||
Accounts receivable | $ 180 | $ 240 |
Customers Three [Member] | Customer Concentration Risk [Member] | Sales [Member] | ||
Revenue from top customers | 4.00% | 7.00% |
BASF [Member] | ||
Supply Agreement | We currently have exclusive supply agreements with BASF Corporation (“BASF”), | |
Net earnings | $ 0 | |
Equipment sale - net book value equipment and upgrades | 115.00% | |
Equipment sale - original book value of equipment and upgrades | 30.00% | |
Equipment sale - net book value equipment | 115.00% | |
BASF [Member] | Minimum [Member] | ||
Accelerated debt maturity - principal amount debt | $ 10,000 | |
BASF [Member] | Maximum [Member] | ||
Cash, cash equivalents and investments | $ 1,000 |
Business Segmentation and Geo47
Business Segmentation and Geographical Distribution (Detail Narratives) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Number of operating segment | 1 | |
Non-Domestic Revenue [Member] | ||
Revenue from international sources | $ 1,039 | $ 1,393 |
Germany [Member] | ||
Revenue from international sources | $ 902 | $ 1,339 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Payment to retire capital lease | $ 96 | $ 85 | ||
Line of Credit [Member] | ||||
Line of credit facility, expiration date | Mar. 4, 2017 | |||
Subsequent Event [Member] | ||||
Payment to retire capital lease | $ 60 | |||
Proceeds from sale of equipment | $ 100 | |||
Subsequent Event [Member] | Line of Credit [Member] | ||||
Line of credit facility, expiration date | Mar. 31, 2018 |