Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 14, 2018 | Sep. 30, 2017 | |
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, 2017 | ||
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 | $ 10,312,000 | ||
Entity Common Stock, Shares Outstanding | 33,847,793 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,955 | $ 1,779 |
Trade accounts receivable, less allowance for doubtful accounts of $5 on December 31, 2017 and 2016 | 1,115 | 434 |
Inventories, net | 1,139 | 772 |
Prepaid expenses and other current assets | 415 | 442 |
Total current assets | 4,624 | 3,427 |
Equipment and leasehold improvements, net | 1,624 | 1,395 |
Other assets, net | 18 | 20 |
Total assets | 6,266 | 4,842 |
Current liabilities: | ||
Line of Credit | 300 | 0 |
Current portion of capital lease obligations | 143 | 107 |
Accounts payable | 1,038 | 669 |
Accrued expenses | 543 | 521 |
Total current liabilities | 2,024 | 1,297 |
Long-term portion of capital lease obligations | 416 | 110 |
Long-term deferred rent | 410 | 466 |
Asset retirement obligations | 184 | 178 |
Total long-term liabilities | 1,010 | 754 |
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 shares authorized; 33,847,793 and 31,229,996 shares issued and outstanding on December 31, 2017 and December 31, 2016, respectively | 338 | 312 |
Additional paid-in capital | 98,563 | 97,359 |
Accumulated deficit | (95,669) | (94,880) |
Total stockholders' equity | 3,232 | 2,791 |
Total liabilities and stockholders' equity | $ 6,266 | $ 4,842 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 5 | $ 5 |
Preferred stock, par value | $ 0.01 | $ .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 | $ 0.01 | $ .01 |
Common stock, shares authorized | 42,000,000 | 42,000,000 |
Common stock, shares issued | 33,847,793 | 31,229,996 |
Common stock, shares outstanding | 33,847,793 | 31,229,996 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | ||
Product revenue | $ 12,129 | $ 10,720 |
Other revenue | 342 | 63 |
Total revenue | 12,471 | 10,783 |
Operating expense: | ||
Cost of revenue | 8,621 | 7,543 |
Gross profit | 3,850 | 3,240 |
Research and development expense | 1,736 | 1,554 |
Selling, general and administrative expense | 2,886 | 2,954 |
Loss from operations | (772) | (1,268) |
Interest expense | (34) | (15) |
Other, net | 17 | |
Loss before provision for income taxes | (789) | (1,283) |
Net loss | $ (789) | $ (1,283) |
Net loss per share - basic and diluted | $ (0.03) | $ (0.04) |
Weighted average number of basic and diluted common shares outstanding | 31,335,956 | 30,911,869 |
STATEMENTS OF STOCKHOLDERS_ EQU
STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, beginning at Dec. 31, 2015 | $ 286 | $ 96,172 | $ (93,597) | $ 2,861 |
Balance, beginning (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 | |||
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 | |||
Sale of common stock | $ 25 | 975 | 1,000 | |
Sale of common stock (shares) | 2,500,000 | |||
Stock option exercises | $ 1 | 46 | 47 | |
Stock option exercises (shares) | 117,797 | |||
Stock-based compensation | 183 | 183 | ||
Net loss | (789) | (789) | ||
Balance, ending at Dec. 31, 2017 | $ 338 | $ 98,563 | $ (95,669) | $ 3,232 |
Balance, ending (shares) at Dec. 31, 2017 | 33,847,793 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | ||
Net loss | $ (789) | $ (1,283) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 344 | 610 |
Impairment (gain on disposal) of fixed asset | (12) | 54 |
Shared-based compensation | 183 | 207 |
Changes in assets and liabilities related to operations: | ||
Trade accounts receivable | (681) | 73 |
Inventories | (367) | (110) |
Prepaid expenses and other assets | 27 | (194) |
Accounts payable | 369 | 161 |
Accrued expenses | (34) | 241 |
Net cash used in operating activities | (960) | (241) |
Investing activities: | ||
Acquisition of equipment and leasehold improvements | (209) | (128) |
Proceeds from disposal of equipment | 137 | |
Payment of accounts payable incurred for the purchase of equipment and leasehold improvements | (37) | |
Net cash provided used in investing activities | (72) | (165) |
Financing activities: | ||
Principal payments on capital leases | (139) | (96) |
Proceeds from line of credit | 300 | |
Proceeds from sale of common stock | 1,000 | 988 |
Proceeds from exercise of stock options | 47 | 18 |
Net cash provided by financing activities | 1,208 | 910 |
Increase in cash and cash equivalents | 176 | 504 |
Cash and cash equivalents at beginning of period | 1,779 | 1,275 |
Cash and cash equivalents at end of period | 1,955 | 1,779 |
Supplemental cash flow information: | ||
Interest paid | 34 | 15 |
Supplemental non-cash investing and financing activities: | ||
Capital lease obligations incurred in the purchase of equipment | $ 481 | $ 75 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Description Of Business | |
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 materials technologies. We produce engineered nano and “non-nano” materials for use in a variety of diverse markets: personal care including sunscreens as active ingredients and in fully formulated cosmetics of our own design, architectural coatings, industrial coating applications, abrasion-resistant additives, plastics additives, medical diagnostics, energy (including solar control) and a variety of surface finishing technologies (polishing) applications, including optics. We have expanded our offerings beyond active ingredients to include targeted full formulations of skin care products, marketed and sold by our wholly-owned subsidiary, Solésence ® 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 advanced materials to various end-use applications manufacturers, and our Solésence ® ® 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, 2017 | |
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 Cash primarily consists of demand deposits. 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 net realizable value. 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 (3-7 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: 2017 2016 Balance, beginning $ 178 $ 172 Accretion of liability due to passage of time 6 6 Amortization of asset due to passage of time — — Balance, ending $ 184 $ 178 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, 2017 and 2016. 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. We recognized a one-time technology development fee of $250,000 in 2017 relating to our agreement with Eminess Technologies, Inc. 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. 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, 2017 and 2016, we had no liability for unrecognized tax benefits. Earnings Per Share Options to purchase approximately 646,000 shares of common stock that were outstanding as of December 31, 2017 were not included in the computation of earnings per share for the year ended December 31, 2017, as the impact of such shares would be both negligible and anti-dilutive. 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. 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) |
Note and Line of Credit
Note and Line of Credit | 12 Months Ended |
Dec. 31, 2017 | |
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 $30,000 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 do so pursuant to the terms of our facility lease agreement. Because there were no amounts outstanding on the note at any time during 2017 or 2016, 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 and was extended on each of March 4, 2016 and February 14, 2017. Under the Line of Credit Agreement, as amended, Libertyville will provide a maximum of $300,000 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. Borrowings on this line were $300,000 on December 31, 2017. These borrowings were repaid in January 2018. The Line of Credit Agreement expired on March 4, 2018. On March 26, 2018, we executed a new Business Loan Agreement (the “New Line of Credit Agreement”), dated as of March 4, 2018, with Libertyville, which replaces the Line of Credit Agreement with Libertyville that expired on March 4, 2018. Under the New Line of Credit Agreement, Libertyville will provide a maximum of (i) $500,000 or (ii) two times the sum of (a) 75% our eligible accounts receivables and (b) our cash deposited with Libertyville, whichever is less, of revolving credit to us, collateralized by a senior priority lien on our accounts receivables, inventory, equipment, general intangibles and fixtures. Interest is payable monthly on any advances at a floating interest rate of the prime rate at the time plus 1%. We must have $1 million in cash, inclusive of the borrowed amount, 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 business days of the advance. Amounts due under the New Line of Credit Agreement must be paid in full on March 4, 2019. While the New Line of Credit Agreement is in effect, we cannot, among other things, engage in any business activities substantially different than those in which we are presently engaged, and there are limitations imposed on our ability to, among other things, incur additional indebtedness for borrowed money, including capital leases, sell, transfer, mortgage, assign, pledge, lease or grant a security interest in or encumber any of our assets, sell with recourse any of our accounts other than to Libertyville, cease operations, merge, transfer, acquire or consolidate with any other entity, change our name, dissolve or transfer or sell collateral outside the ordinary course of business, pay any cash dividends, loan, invest in or advance money or assets to any other person or entity, purchase, create or acquire any interest in any other entity, or incur any obligation as a surety or guarantor other than in the ordinary course of business, in each case without Libertyville’s prior written consent. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | (4) Inventories Inventories consist of the following: As of December 31, 2017 2016 Raw materials $ 297 $ 283 Finished goods 863 510 1,160 793 Allowance for excess quantities (21 ) (21 ) $ 1,139 $ 772 |
Equipment and Leasehold Improve
Equipment and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 Machinery and equipment $ 14,936 $ 14,587 Office equipment 811 790 Office furniture 110 110 Leasehold improvements 4,839 4,814 Construction in progress 157 75 20,853 20,376 Less: Accumulated depreciation and amortization (19,229 ) (18,981 ) $ 1,624 $ 1,395 Depreciation expense was $336 and $605, for the years ended December 31, 2017 and 2016, respectively. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2017 | |
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 $37. During March 2017, we entered into a new Building Lease for our Burr Ridge, Illinois facility that began in September 2017 and extends 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 $14. During 2016 we also renewed our lease for offsite warehouse in Romeoville, Illinois, through August 2019. The current monthly rent on this lease amounts to $7. 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: Operating Capital Year ending December 31: Leases Leases 2018 $ 699 144 2019 689 141 2020 587 134 2021 554 91 2022 420 49 Thereafter 869 — Total minimum payments required: $ 3,819 $ 559 Rent expense, including real estate taxes, under these leases amounted to $621 and $597, for the years ended December 31, 2017 and 2016, respectively. Amortization expense related to assets under capital lease is included in depreciation expense. On December 31, 2017 equipment under capital leases had a cost of $757 with accumulated depreciation of $43, compared to $362 and $62, respectively, on December 31, 2016. Principal and interest payments are due monthly under the capital lease obligations through October 2022. The remaining payments under capital leases include principal of $559 and interest of $100. We entered into three new capital leases during 2017 for $481 and a 5-year duration (through 2022). 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. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | (7) Accrued Expenses Accrued expenses consist of the following: As of December 31, 2017 2016 Accrued payroll and related expenses $ 196 $ 167 Customer net volume rebate payable 214 201 Other 133 153 $ 543 $ 521 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 is as follows: 2017 2016 Income tax credit at statutory rates $ (268 ) $ (436 ) Nondeductible expenses 2 2 State income tax, net of federal benefits (45 ) (66 ) Effect of US tax rate change 9,284 0 Expiration of stock options 188 149 Other 0 (5 ) Change in valuation allowance (9,161 ) 356 $ — $ — 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, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 23,520 $ 31,935 Inventory and other allowances 12 16 Charitable contribution carryforwards 2 5 Excess (tax) book depreciation 577 805 Excess (tax) book amortization 53 69 Share-based compensation 885 1,328 Other accrued costs 167 219 Total deferred tax assets 25,216 34,377 Less: Valuation allowance (25,216 ) (34,377 ) Deferred income taxes $ — $ — The valuation allowance decreased approximately $9.2 million and increased $0.4 million for the years ended December 31, 2017 and 2016, respectively (with no expiring net operating loss carryforwards and credits for either period; a portion of the charitable contribution carryforward expired during 2017 and 2016) due principally to the change in the Federal tax rate, the change in State tax rate, 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, 2017, the amounts subject to limitations have not yet been determined. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant changes in U.S. tax law, including a reduction in the corporate tax rates, changes in net operating loss carryforwards and carrybacks and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the current rate of 34% to 21%. As a result of the enacted law, the Company was required to revalue deferred tax assets and liabilities at the enacted rate. This revaluation resulted in a reduction in the deferred tax asset and valuation allowance of $9.3 million. The other provisions of the Tax Cuts and Jobs Act did not have a material impact on the financial statements as of December 31, 2017 and for the year then ended. With the new legislation, the Securities and Exchange Commission issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information prepared or analyzed in reasonable detail to complete its accounting for the change in tax law. There is no impact on the current year income tax expense for the federal corporate tax rate change due to our current year taxable loss and the calculation related to the change is complete. We had net operating loss carryforwards for tax purposes of approximately $83 million on December 31, 2017, which expire between 2018 and |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Capital Stock | (9) Capital Stock As of December 31, 2017 and 2016, we had 24,088 authorized but unissued shares of preferred stock. In addition, as of December 31, 2017, 796,000 authorized but unissued shares of common stock have been reserved for future equity grants under our 2010 Equity Compensation Plan. 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, 2017 | |
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 ASC Topic 718, Share-Based Payments As of December 31, 2017, there was approximately $241 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under our stock option plans. That cost is expected to be recognized over a remaining weighted-average period of 1.9 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, 2017 2016 Weighted-average risk-free interest rates: 2.1 % 1.5 % Dividend yield: 0.00 % 0.00 % Weighted-average expected life of the option: 7 years 7 years Weighted-average expected stock price volatility: 94 % 95 % Weighted-average fair value of the options granted: $ 0.55 $ 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 2017 and 2016 grants is based on the daily market rate changes of our stock going back to January 1, 2011. The shares granted in fiscal 2017 and 2016 had a vesting period of three years and a contractual life of 10 years. Forfeitures were estimated at 4% for the years ended December 31, 2017 and 2016, 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, 2017: Weighted Weighted Average Average Remaining Exercise Price Contractual Aggregate (rounded) per Term Intrinsic Options Shares Share (years) Value Outstanding on January 1, 2017 2,933,000 $ 0.81 Granted 515,000 $ 0.68 Exercised (118,000 ) $ 0.40 Forfeited or expired (189,000 ) $ 2.08 Outstanding on December 31, 2017 3,141,000 $ 0.73 5.8 $ 183 Exercisable on December 31, 2017 2,296,000 $ 0.79 4.8 $ 147 Shares available for grant 796,000 The aggregate intrinsic value in the table above is based on our closing stock price of $0.52 on the last business day for the year ended December 31, 2017. During the years ended December 31, 2017 and 2016, the total intrinsic value of our stock options exercised was $26 and $19, respectively. Cash received for option exercises was $47 and $18 during the years ended December 31, 2017 and 2016, respectively. We had approximately 118,000 options exercised during the year ended December 31, 2017, compared to 44,000 in 2016. 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, 2017 and 2016. |
401(k) Profit-Sharing Plan
401(k) Profit-Sharing Plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [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. 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). Contributions made in 2017 aggregated $19. No contributions were made in 2016. |
Significant Customers and Conti
Significant Customers and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Significant Customers and Contingencies | (12) Significant Customers and Contingencies Revenue from three customers constituted approximately 61%, 11% and 4%, respectively, of our 2017 revenue. Amounts included in accounts receivable on December 31, 2017 relating to these three customers were approximately $6, $446 and $35, respectively. Revenue from these three customers constituted approximately 69%, 4% and 5%, respectively, of our 2016 revenue. Amounts included in accounts receivable on December 31, 2016 relating to these three customers were approximately $6, $432 and $35, 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 ) We expect to expend resources on research, development and product testing, and in expanding current capacity or capability for new business. In addition, we may incur significant costs in preparing, filing, prosecuting, maintaining and enforcing our patents and other proprietary rights. We may need additional financing if we were to lose an existing customer or suffer a significant decrease in revenue from one or more of our customers or because of currently unknown capital requirements, new regulatory requirements or the need to meet the cash requirements discussed above to avoid a triggering event under our BASF agreement. Given our expected growth in our Solésence ® |
Business Segmentation and Geogr
Business Segmentation and Geographical Distribution | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Business Segmentation and Geographical Distribution | (13) Business Segmentation and Geographical Distribution Revenue from international sources approximated $1,835 and $1,039 for the years ended December 31, 2017 and 2016, respectively. As part of our revenue from international sources, we recognized approximately $1,713 and $902 in product revenue from a number of German companies, in the aggregate, for the years ended December 31, 2017 and 2016, 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, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | (14) Subsequent Events As discussed in Note 3, the Line of Credit Agreement with our primary bank (Libertyville) expired in March 2018, but during March 2018 we executed the New Line of Credit Agreement with Libertyville. Under the New Line of Credit Agreement, Libertyville will provide a maximum of (i) $500,000 or (ii) two times the sum of (a) 75% of our eligible accounts receivables and (b) our cash deposited with Libertyville, whichever is less, of revolving credit to us, collateralized by a senior priority lien on our accounts receivables, inventory, equipment, general intangibles and fixtures. Interest is payable monthly on any advances at a floating interest rate of the prime rate at the time plus 1%. We must have $1 million in cash, inclusive of the borrowed amount, 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 business days of the advance. Amounts due under the New Line of Credit Agreement must be paid in full on March 4, 2019. While the New Line of Credit Agreement is in effect, we cannot, among other things, engage in any business activities substantially different than those in which we are presently engaged, and there are limitations imposed on our ability to, among other things, incur additional indebtedness for borrowed money, including capital leases, sell, transfer, mortgage, assign, pledge, lease or grant a security interest in or encumber any of our assets, sell with recourse any of our accounts other than to Libertyville, cease operations, merge, transfer, acquire or consolidate with any other entity, change our name, dissolve or transfer or sell collateral outside the ordinary course of business, pay any cash dividends, loan, invest in or advance money or assets to any other person or entity, purchase, create or acquire any interest in any other entity, or incur any obligation as a surety or guarantor other than in the ordinary course of business, in each case without Libertyville's prior written consent. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 | Cash Cash primarily consists of demand deposits. |
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 net realizable value. 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 (3-7 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: 2017 2016 Balance, beginning $ 178 $ 172 Accretion of liability due to passage of time 6 6 Amortization of asset due to passage of time — — Balance, ending $ 184 $ 178 |
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, 2017 and 2016. |
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. We recognized a one-time technology development fee of $250,000 in 2017 relating to our agreement with Eminess Technologies, Inc. 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. 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, 2017 and 2016, we had no liability for unrecognized tax benefits. |
Earnings Per Share | Earnings Per Share Options to purchase approximately 646,000 shares of common stock that were outstanding as of December 31, 2017 were not included in the computation of earnings per share for the year ended December 31, 2017, as the impact of such shares would be both negligible and anti-dilutive. 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. |
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) |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: 2017 2016 Balance, beginning $ 178 $ 172 Accretion of liability due to passage of time 6 6 Amortization of asset due to passage of time — — Balance, ending $ 184 $ 178 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following: As of December 31, 2017 2016 Raw materials $ 297 $ 283 Finished goods 863 510 1,160 793 Allowance for excess quantities (21 ) (21 ) $ 1,139 $ 772 |
Equipment and Leasehold Impro24
Equipment and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 Machinery and equipment $ 14,936 $ 14,587 Office equipment 811 790 Office furniture 110 110 Leasehold improvements 4,839 4,814 Construction in progress 157 75 20,853 20,376 Less: Accumulated depreciation and amortization (19,229 ) (18,981 ) $ 1,624 $ 1,395 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: Operating Capital Year ending December 31: Leases Leases 2018 $ 699 144 2019 689 141 2020 587 134 2021 554 91 2022 420 49 Thereafter 869 — Total minimum payments required: $ 3,819 $ 559 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consist of the following: As of December 31, 2017 2016 Accrued payroll and related expenses $ 196 $ 167 Customer net volume rebate payable 214 201 Other 133 153 $ 543 $ 521 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 is as follows: 2017 2016 Income tax credit at statutory rates $ (268 ) $ (436 ) Nondeductible expenses 2 2 State income tax, net of federal benefits (45 ) (66 ) Effect of US tax rate change 9,284 0 Expiration of stock options 188 149 Other 0 (5 ) Change in valuation allowance (9,161 ) 356 $ — $ — |
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, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 23,520 $ 31,935 Inventory and other allowances 12 16 Charitable contribution carryforwards 2 5 Excess (tax) book depreciation 577 805 Excess (tax) book amortization 53 69 Share-based compensation 885 1,328 Other accrued costs 167 219 Total deferred tax assets 25,216 34,377 Less: Valuation allowance (25,216 ) (34,377 ) Deferred income taxes $ — $ — |
Stock Options and Stock Grants
Stock Options and Stock Grants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions used to calculate Black-Scholes option Pricing Model for 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, 2017 2016 Weighted-average risk-free interest rates: 2.1 % 1.5 % Dividend yield: 0.00 % 0.00 % Weighted-average expected life of the option: 7 years 7 years Weighted-average expected stock price volatility: 94 % 95 % Weighted-average fair value of the options granted: $ 0.55 $ 0.36 |
Schedule of option activity | The following table summarizes the option activity for our employees and directors during the year ended December 31, 2017: Weighted Weighted Average Average Remaining Exercise Price Contractual Aggregate (rounded) per Term Intrinsic Options Shares Share (years) Value Outstanding on January 1, 2017 2,933,000 $ 0.81 Granted 515,000 $ 0.68 Exercised (118,000 ) $ 0.40 Forfeited or expired (189,000 ) $ 2.08 Outstanding on December 31, 2017 3,141,000 $ 0.73 5.8 $ 183 Exercisable on December 31, 2017 2,296,000 $ 0.79 4.8 $ 147 Shares available for grant 796,000 |
Description of Business (Detail
Description of Business (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2017 | |
Sale of equipment | $ 137 | |
Payment received for development of dispersion capabilities | $ 250 | |
Eminess Technologies [Member} | ||
Sale of equipment | $ 36 | |
Payment received for development of dispersion capabilities | $ 250 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Balance, beginning | $ 178 | $ 172 |
Accretion of liability due to passage of time | 6 | 6 |
Balance, ending | $ 184 | $ 178 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Line Items] | ||
Threshold percentage | 50.00% | |
Technology development fee | $ 250 | |
Stock Options [Member] | ||
Accounting Policies [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 646,000 | 859,000 |
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 | 7 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 |
Note and Line of Credit (Detail
Note and Line of Credit (Detail Narratives) - USD ($) $ in Thousands | Mar. 26, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2014 |
Line of Credit | $ 300 | $ 0 | ||
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% | |||
Facility, expiration date | Mar. 4, 2018 | |||
Line of Credit | $ 300 | |||
Line of Credit [Member] | Greater than [Member] | ||||
Minimum amount of cash on hand before advance is given | $ 1,000 | |||
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 | |||
Subsequent Event [Member] | Line of Credit [Member] | ||||
Basis spread variable interest rate | 1.00% | |||
Variable interest rate basis | Prime rate | |||
Line of credit facility, maximum borrowing capacity | $ 500 | |||
Borrowing capacity as percentage of accounts receivable | 75.00% | |||
Borrowing capacity as multiple of accounts receivable | 2 | |||
Minimum amount of cash on hand before advance is given | $ 1,000 | |||
Facility, expiration date | Mar. 4, 2019 | |||
Repayment Terms | 5 days |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 297 | $ 283 |
Finished goods | 863 | 510 |
Inventory gross, Total | 1,160 | 793 |
Allowance for excess inventory quantities | (21) | (21) |
Total | $ 1,139 | $ 772 |
Equipment and Leasehold Impro34
Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 20,853 | $ 20,376 |
Less: Accumulated depreciation and amortization | (19,229) | (18,981) |
Property, Plant and Equipment, Net, Total | 1,624 | 1,395 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 14,936 | 14,587 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 811 | 790 |
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 | 4,839 | 4,815 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 157 | $ 75 |
Equipment and Leasehold Impro35
Equipment and Leasehold Improvements (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 336 | $ 605 |
Lease Commitments (Details)
Lease Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating leases: | |
2,018 | $ 699 |
2,019 | 689 |
2,020 | 587 |
2,021 | 554 |
2,022 | 420 |
Thereafter | 869 |
Total minimum payments required under operating leases | 3,819 |
Capital leases: | |
2,018 | 144 |
2,019 | 141 |
2,020 | 134 |
2,021 | 91 |
2,022 | 49 |
Total minimum payments required under capital leases | $ 559 |
Lease Commitments (Details Narr
Lease Commitments (Details Narrative) $ in Thousands | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Operating Leased Assets [Line Items] | |||
Rent Expense | $ 621 | $ 597 | |
Cost of equipment under capital lease | $ 757 | 757 | 362 |
Accumulated depreciation | 43 | $ 43 | $ 62 |
Number of capital leases | 3 | 1 | |
Capital lease term | 5 years | 5 years | |
Payments to acquire capital lease | $ 481 | $ 75 | |
Change in value of capital equipment | $ 54 | ||
Total minimum payments required under capital leases | 559 | 559 | |
Total future interest under capital leases | $ 100 | $ 100 | |
Minimum [Member] | |||
Operating Leased Assets [Line Items] | |||
Capital lease term | 3 years | ||
Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Capital lease term | 5 years | ||
Romeoville Illinois [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease number of renewals | 1 | ||
Monthly rent on lease amounts | $ 37 | ||
Burr Ridge Facility [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease number of renewals | 1 | ||
Monthly rent on lease amounts | $ 14 | ||
Offsite Warehouse [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease number of renewals | 3 | ||
Monthly rent on lease amounts | $ 7 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 196 | $ 167 |
Customer net volume rebate payable | 214 | 201 |
Other | 133 | 153 |
Total | $ 543 | $ 521 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax credit at statutory rates | $ (268) | $ (436) |
Nondeductible expenses | 2 | 2 |
State income tax, net of federal benefits | (45) | (66) |
Effect of US tax rate change | 9,284 | 0 |
Expiration of stock options | 188 | 149 |
Other | 0 | (5) |
Change in valuation allowance | $ (9,161) | $ 356 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 23,520 | $ 31,935 |
Inventory and other allowances | 12 | 16 |
Charitable contribution carryforwards | 2 | 5 |
Excess (tax) book depreciation | 577 | 805 |
Excess (tax) book amortization | 53 | 69 |
Share-based compensation | 885 | 1,328 |
Other accrued costs | 167 | 219 |
Total deferred tax assets | 25,216 | 34,377 |
Less: Valuation allowance | $ (25,216) | $ (34,377) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (decrease) in valuation allowance | $ (9,200) | $ 400 | |
Net operating loss carryforwards | $ 83,000 | ||
Capital loss carryforwards expiration period start | 2,018 | ||
Capital loss carryforwards expiration period end | 2,037 | ||
U.S. corporate tax rate | 34.00% | ||
Subsequent Event [Member] | |||
U.S. corporate tax rate | 21.00% | ||
Change In Enacted Rate [Member] | |||
Increase (decrease) in valuation allowance | $ (9,300) |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - shares | 1 Months Ended | |||
Aug. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2016 | |
Preferred stock, shares authorized | 24,088 | 24,088 | ||
Addtional shares authorized during period | 7,000,000 | |||
Common stock, shares authorized | 42,000,000 | 42,000,000 | 35,000,000 | |
2010 Equity Compensation Plan [Member] | ||||
Authorized, unissued shares of common stock | 796,000 | |||
Addtional shares authorized under plan | 1,200,000 |
Stock Options and Stock Grant43
Stock Options and Stock Grants (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted-average risk-free interest rates | 2.10% | 1.50% |
Dividend yield | 0.00% | 0.00% |
Weighted-average expected life of the option | 7 years | 7 years |
Weighted-average expected stock price volatility | 94.00% | 95.00% |
Weighted-average fair value of the options granted | $ 0.55 | $ 0.36 |
Stock Options and Stock Grant44
Stock Options and Stock Grants (Details 1) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options: | ||
Stock options outstanding, beginning | 2,933,000 | |
Granted | 515,000 | |
Exercises | (118,000) | (44,000) |
Forfeited or expired | (189,000) | |
Stock options outstanding, ending | 3,141,000 | 2,933,000 |
Exercisable | 2,296,000 | |
Shares available for grant | 796,000 | |
Weighted Average Exercise Price | ||
Beginning Balance | $ 0.81 | |
Granted | 0.68 | |
Exercised | 0.40 | |
Forfeited or expired | 2.08 | |
Ending Balance | 0.73 | $ 0.81 |
Exercisable | $ 0.79 | |
Weighted Average Remaining Contractual Term, Outstanding | 5 years 9 months 18 days | |
Weighted Average Remaining Contractual Term Years, Exercisable | 4 years 9 months 18 days | |
Aggregate Intrinsic Value | ||
Intrinsic Value, Outstanding | $ 183 | |
Intrinsic Value, Exercisable | $ 147 |
Stock Options and Stock Grant45
Stock Options and Stock Grants (Detail Narratives) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 183 | $ 207 |
Total unrecognized compensation cost related to nonvested share-based compensation arrangements granted | $ 241 | |
Weighted-average period over which unrecognized compensation is expected to be recognized | 1 year 10 months 25 days | |
Proceeds from exercise of stock options | $ 47 | $ 18 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period of stock options | 3 years | |
Contractual life | 5 years 9 months 18 days | |
Forfeiture rates | 4.00% | |
Dividend yield | 0.00% | 0.00% |
Share price | $ .52 | |
Total intrinsic value | $ 26 | $ 19 |
Proceeds from exercise of stock options | $ 47 | $ 18 |
Stock Option Exercises | 118,000 | 44,000 |
401(k) Profit-Sharing Plan (Det
401(k) Profit-Sharing Plan (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | ||
Contributions under profit sharing plan | $ 19 | $ 0 |
Employer's matching contribution | 8.00% | |
Employee's contribution for matching | 10.00% | |
Participant's salary for employer matching | 0.80% |
Significant Customers and Con47
Significant Customers and Contingencies (Detail Narratives) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Number of major customers | 3 | 3 |
Accounts receivable | $ 1,115 | $ 434 |
Customers One [Member] | ||
Accounts receivable | $ 6 | $ 6 |
Customers One [Member] | Customer Concentration Risk [Member] | Sales [Member] | ||
Revenue from customers | 61.00% | 69.00% |
Customers Two [Member] | ||
Accounts receivable | $ 446 | $ 432 |
Customers Two [Member] | Customer Concentration Risk [Member] | Sales [Member] | ||
Revenue from customers | 11.00% | 4.00% |
Customers Three [Member] | ||
Accounts receivable | $ 35 | $ 35 |
Customers Three [Member] | Customer Concentration Risk [Member] | Sales [Member] | ||
Revenue from customers | 4.00% | 5.00% |
BASF [Member] | ||
Supply Agreement | 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. | |
Equipment sale - original book value of equipment and upgrades | 30.00% | |
Equipment sale - net book value equipment | 115.00% | |
BASF [Member] | Greater than [Member] | ||
Accelerated debt maturity - principal amount debt | $ 10,000 | |
BASF [Member] | Less than [Member] | ||
Earnings trigger under supply agreeement | 0 | |
Cash, cash equivalents and investments trigger under supply agreeement | $ 1,000 |
Business Segmentation and Geo48
Business Segmentation and Geographical Distribution (Detail Narratives) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Number of business segments | 1 | |
International Sources [Member] | ||
Revenue from international sources | $ 1,835 | $ 1,039 |
GERMANY | ||
Revenue from international sources | $ 1,713 | $ 902 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Line of Credit [Member] - USD ($) $ in Thousands | Mar. 26, 2018 | Dec. 31, 2017 |
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% | |
Facility, expiration date | Mar. 4, 2018 | |
Subsequent Event [Member] | ||
Basis spread variable interest rate | 1.00% | |
Variable interest rate basis | Prime rate | |
Line of credit facility, maximum borrowing capacity | $ 500 | |
Borrowing capacity as percentage of accounts receivable | 75.00% | |
Borrowing capacity as multiple of accounts receivable | 2 | |
Minimum amount of cash on hand before advance is given | $ 1,000 | |
Repayment Terms (business days) | 5 days | |
Facility, expiration date | Mar. 4, 2019 |