Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 16, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | NANOPHASE TECHNOLOGIES Corp | |
Entity Central Index Key | 0000883107 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 000-22333 | |
Entity Incorporation, State Code | DE | |
Current Fiscal Year End Date | --12-31 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 38,215,792 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited Consolidated Condensed) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 1,134 | $ 1,194 |
Trade accounts receivable, less allowance for doubtful accounts of $9 on September 30, 2020 and on December 31, 2019, respectively | 2,451 | 970 |
Inventories, net | 3,584 | 2,554 |
Prepaid expenses and other current assets | 599 | 267 |
Total current assets | 7,768 | 4,985 |
Equipment and leasehold improvements, net | 2,650 | 2,255 |
Operating leases, right-of-use | 1,917 | 2,119 |
Other assets, net | 11 | 13 |
TOTAL ASSETS | 12,346 | 9,372 |
Current liabilities: | ||
Line of credit, bank | 500 | 500 |
Line of credit, related party | 1,541 | 224 |
Current portion of long-term debt, related party | 500 | 500 |
Current portion of finance lease obligations | 186 | 218 |
Current portion of operating lease obligations | 411 | 357 |
Accounts payable | 1,668 | 1,748 |
Current portion of deferred revenue | 309 | 482 |
Accrued expenses | 647 | 380 |
Total current liabilities | 5,762 | 4,409 |
Long-term portion of finance lease obligations | 148 | 288 |
Long-term portion of operating lease obligations | 1,766 | 2,035 |
Long-term convertible loan, related party | 1,030 | 830 |
PPP Loan SBA | 952 | |
Long-term portion of deferred revenue | 93 | |
Asset retirement obligations | 212 | 206 |
Total long-term liabilities | 4,108 | 3,452 |
Contingent liabilities | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value, 24,088 shares authorized and no shares issued and outstanding | ||
Common stock, $.01 par value, 55,000,000 shares authorized; 38,215,069 and 38,136,792 shares issued and outstanding on September 30, 2020 and December 31, 2019, respectively | 382 | 381 |
Additional paid-in capital | 102,055 | 101,886 |
Accumulated deficit | (99,961) | (100,756) |
Total stockholders' equity | 2,476 | 1,511 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 12,346 | $ 9,372 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited Consolidated Condensed) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9 | $ 9 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 24,088 | 24,088 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 55,000,000 | 55,000,000 |
Common stock, issued | 38,215,069 | 38,136,792 |
Common stock, outstanding | 38,215,069 | 38,136,792 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited Consolidated Condensed) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Total revenue | $ 3,888 | $ 3,069 | $ 12,262 | $ 10,118 |
Operating expense: | ||||
Cost of good revenue | 2,201 | 2,506 | 7,832 | 7,839 |
Gross profit | 1,687 | 563 | 4,430 | 2,279 |
Research and development expense | 405 | 488 | 1,134 | 1,450 |
Selling, general and administrative expense | 730 | 890 | 2,133 | 2,711 |
Income/(loss) from operations | 552 | (815) | 1,163 | (1,882) |
Interest expense | 122 | 47 | 368 | 140 |
Income/(loss) before provision for income taxes | 430 | (862) | 795 | (2,022) |
Provision for income taxes | ||||
Net income/(loss) | $ 430 | $ (862) | $ 795 | $ (2,022) |
Net income/(loss) per basic shares (in dollars per share) | $ 0.01 | $ (0.02) | $ 0.02 | $ (0.06) |
Weighted average number of basic common shares outstanding (in shares) | 38,141,741 | 38,136,792 | 38,138,453 | 36,077,257 |
Net income/(loss) per diluted share (in dollars per share) | $ 0.01 | $ (0.02) | $ 0.02 | $ (0.06) |
Weighted average number of diluted common shares outstanding (in shares) | 38,432,741 | 38,136,792 | 38,228,453 | 36,077,257 |
Product Revenue [Member] | ||||
Revenue: | ||||
Total revenue | $ 3,827 | $ 3,043 | $ 11,929 | $ 9,797 |
Other Revenue [Member] | ||||
Revenue: | ||||
Total revenue | $ 61 | $ 26 | $ 333 | $ 321 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited Consolidated Condensed) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Dec. 31, 2018 | $ 339 | $ 98,795 | $ (97,750) | $ 1,384 |
Balance at beginning (in shares) at Dec. 31, 2018 | 33,911,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Stock-based compensation | 57 | 57 | ||
Net loss | (513) | (513) | ||
Balance at ending at Mar. 31, 2019 | $ 339 | 98,852 | (98,263) | 928 |
Balance at ending (in shares) at Mar. 31, 2019 | 33,911,792 | |||
Balance at beginning at Dec. 31, 2018 | $ 339 | 98,795 | (97,750) | 1,384 |
Balance at beginning (in shares) at Dec. 31, 2018 | 33,911,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Net loss | (2,022) | |||
Balance at ending at Sep. 30, 2019 | $ 381 | 100,624 | (99,772) | 1,233 |
Balance at ending (in shares) at Sep. 30, 2019 | 38,136,792 | |||
Balance at beginning at Mar. 31, 2019 | $ 339 | 98,852 | (98,263) | 928 |
Balance at beginning (in shares) at Mar. 31, 2019 | 33,911,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Stock option exercises | 16 | 16 | ||
Stock option exercises (in shares) | 36,000 | |||
Stock-based compensation | 58 | 58 | ||
Issuance of common stock | $ 42 | 1,634 | 1,676 | |
Issuance of common stock (in shares) | 4,189,000 | |||
Net loss | (647) | (647) | ||
Balance at ending at Jun. 30, 2019 | $ 381 | 100,560 | (98,910) | 2,031 |
Balance at ending (in shares) at Jun. 30, 2019 | 38,136,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Stock-based compensation | 64 | 64 | ||
Net loss | (862) | (862) | ||
Balance at ending at Sep. 30, 2019 | $ 381 | 100,624 | (99,772) | 1,233 |
Balance at ending (in shares) at Sep. 30, 2019 | 38,136,792 | |||
Balance at beginning at Dec. 31, 2019 | $ 381 | 101,886 | (100,756) | 1,511 |
Balance at beginning (in shares) at Dec. 31, 2019 | 38,136,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Stock-based compensation | 52 | 52 | ||
Net loss | (167) | (167) | ||
Balance at ending at Mar. 31, 2020 | $ 381 | 101,938 | (100,923) | 1,396 |
Balance at ending (in shares) at Mar. 31, 2020 | 38,136,792 | |||
Balance at beginning at Dec. 31, 2019 | $ 381 | 101,886 | (100,756) | 1,511 |
Balance at beginning (in shares) at Dec. 31, 2019 | 38,136,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Net loss | 795 | |||
Balance at ending at Sep. 30, 2020 | $ 382 | 102,055 | (99,961) | 2,476 |
Balance at ending (in shares) at Sep. 30, 2020 | 38,215,069 | |||
Balance at beginning at Mar. 31, 2020 | $ 381 | 101,938 | (100,923) | 1,396 |
Balance at beginning (in shares) at Mar. 31, 2020 | 38,136,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Stock-based compensation | 47 | 47 | ||
Net loss | 532 | 532 | ||
Balance at ending at Jun. 30, 2020 | $ 381 | 101,985 | (100,391) | 1,975 |
Balance at ending (in shares) at Jun. 30, 2020 | 38,136,792 | |||
Increase (Decrease) in Shareholders' Equity [Roll Forward] | ||||
Stock option exercises | $ 1 | 22 | 23 | |
Stock option exercises (in shares) | 78,277 | |||
Stock-based compensation | 48 | 48 | ||
Net loss | 430 | 430 | ||
Balance at ending at Sep. 30, 2020 | $ 382 | $ 102,055 | $ (99,961) | $ 2,476 |
Balance at ending (in shares) at Sep. 30, 2020 | 38,215,069 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited Consolidated Condensed) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities: | ||
Net income (loss) | $ 795 | $ (2,022) |
Adjustements to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 265 | 234 |
Loss on disposal of equipment and leasehold improvements | 16 | |
Share-based compensation | 147 | 179 |
Amortization of debt discount | 200 | |
Changes in assets and liabilities related to operations: | ||
Trade accounts receivable | (1,481) | (544) |
Inventories | (1,030) | 98 |
Prepaid expenses and other assets | (332) | (12) |
Accounts payable | (284) | (632) |
Accrued expenses | 267 | (19) |
Deferred revenue | (266) | 594 |
Other long-term assets and liabilities | (13) | (53) |
Net cash used in operating activities | (1,732) | (2,161) |
Investing activities: | ||
Acquisition of equipment and leasehold improvements | (448) | (523) |
Net cash used in investing activities | (448) | (523) |
Financing activities: | ||
Principal payments on finance leases | (172) | (162) |
Proceeds from line of credit, bank | 1,500 | 1,000 |
Payments to the line of credit, bank | (1,500) | (500) |
Proceeds from the line of credit, related party | 10,390 | 8,166 |
Payments to the line of credit, related party | (9,073) | (7,895) |
Proceeds from PPP / SBA Loan | 952 | |
Proceeds from issuance of common stock | 1,676 | |
Proceeds from stock option exercises | 23 | 16 |
Net cash provided by financing activities | 2,120 | 2,301 |
Increase (decrease) in cash and cash equivalents | (60) | (383) |
Cash and cash equivalents at beginning of period | 1,194 | 1,345 |
Cash and cash equivalents at end of period | 1,134 | 962 |
Supplemental cash flow information: | ||
Interest paid | 152 | 126 |
Supplemental non-cash investing and finacing activities: | ||
Accounts payable incurred for the purchase of equipment and leasehold improvements | $ 204 | $ 18 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | (1) Basis of Presentation The accompanying unaudited consolidated condensed interim financial statements of Nanophase Technologies Corporation (“Nanophase”, “Company”, “we”, “our”, or “us”) reflect all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of our financial position and operating results for the interim periods presented. All statements include the results from both Nanophase and our wholly owned subsidiary, Solésence, LLC (“Solésence®,” or our “Solésence® subsidiary”). Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission. |
Going Concern _ Liquidity
Going Concern / Liquidity | 9 Months Ended |
Sep. 30, 2020 | |
Going Concern Liquidity [Abstract] | |
Going Concern / Liquidity | (2) Going Concern / Liquidity We believe that cash from operations and cash on hand, in addition to unused borrowing capacity, may not be adequate to fund our operating plans through September 30, 2021. We are working to reduce these risks, but some of this is dependent on several things, some of which we have limited control. Our largest customer made up 63% of our 2019 revenue and has seen a significant reduction in orders placed to us in 2020. We have also seen a rapid increase in sales of our Solésence® products, adding working capital pressure in terms of additional inventory and accounts receivable. Both of these issues have limited our flexibility and required us to make cash management a top priority. After April 17, 2020, some of this pressure was mitigated due to our receipt of a $952 loan under the Paycheck Protection Program (the “PPP”), as discussed more fully below. We also have a $500 term loan, and revolving credit facility with a maximum credit limit of $2,750, both described more fully below, with principal due on March 31, 2021. In the event that we are unable to either extend the maturity, or potentially refinance this loan, we may have difficulty funding ongoing operations. Notwithstanding the fact that visibility into the ongoing impact of the various reactions and policies relating to, the Covid-19 pandemic is limited, it is currently management’s belief that we will continue to achieve strong growth in Solésence® sales through 2020. Given these issues, and other commercial realities, we are monitoring the additional working capital demands that this could create as we continue to execute on our Solésence® growth strategy. It is also management’s belief that the Covid-19 pandemic, related governmental reaction, and resulting economic slow-down has, and is expected to continue, to affect certain consumer behaviors and markets has had a negative impact on its Personal Care Ingredients customers during 2020, with a current lack of visibility as to how far this impact may extend in to 2021. Management believes the outlook after the fourth quarter is uncertain, but a continuation of the Covid-19 pandemic and related reactions and policies going forward would be expected to maintain a degree of negative impact on the Company and its businesses. While customer demand over the next several months is currently known, Management believes the negative impacts late in the fourth quarter and, if applicable, thereafter, are not currently quantifiable. The timing of cash flows is critical. If cash generated from operations is not materially consistent with our plans, we believe that we may need to seek additional funding to address working capital demands. The trading volume of our stock has been low enough that we expect it would be difficult to sell enough shares, assuming our shareholders would approve the authorization of additional shares, to generate additional capital via the OTC market. These uncertainties have caused us to be unable to assert that, for the next twelve months, we have enough current cash, guaranteed access to financing to fund operations, or access to cash in the equity markets to continue with our current growth strategy in terms of investment in capital equipment and in operating expenses related to Solésence®. On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (SARS-CoV-2) to be a global pandemic (COVID-19), which continues to spread throughout the United States and around the world. On April 23, 2020, the Governor of the State of Illinois extended his order that all non-essential businesses cease all activities within the State of Illinois except for certain minimum basic operations through May 30, 2020, and such executive order has been temporarily lifted. Given the uncertain progress toward combatting the SARS-CoV-2 virus, we expect there to be further disruptions in the local, national, and global economies. During these disruptions, we are doing everything we can to allow as many of our employees as possible to shelter-in-place. Relative to any further executive orders in Illinois, management believes that Nanophase Technologies and its Solésence® subsidiary qualify as essential businesses as defined, due to our product offerings supporting healthcare, and critical manufacturing and chemical products within sectors that have been designated as critical infrastructure, the continued operation of which is vital for national public health, economic security, and safety. The Company believes that its customers and suppliers may have similar disruptions, which may lead to greater reductions in their normal operations as a result of responses to the coronavirus pandemic in Illinois and in other jurisdictions in the United States and worldwide. Currently, the Company is consequently aware of changes in its business as a result of the coronavirus pandemic, but uncertain of the impacts of those changes on its consolidated statements of position, operations or cash flows. As of the date of this filing, we are reasonably confident in customer demand through 2020 and in to the first quarter of 2021. Demand for the second quarter of 2021, and the subsequent quarter, is not yet clear to management. We believe the resulting cessations, reductions, and disruptions in its customers’ and suppliers’ operations could be temporary; however, the Company’s management also believes the duration and, hence, the potential impact of such cessations, reductions, and disruptions is currently unknowable. As a result, although we believe we have acceptable visibility through the first quarter of 2021, conditions are fluid and our estimates regarding the first quarter and beyond could prove inaccurate. Moreover, we are unable to clearly estimate the potential impact on our business for the balance of the year as of the date of this filing. These circumstances raise significant doubt as to the Company’s ability to operate as a going concern under U.S. GAAP. The accompanying financial statements have been prepared on a going concern basis in accordance with U.S. GAAP. As such, no adjustments have been made to the unaudited condensed consolidated financial statements for the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue operating as a going concern. On April 17, 2020, the Company received funding in the form of a loan under the “PPP,” under Division A, Title I of Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), in the amount of $952 which helped us to continue to pay our people, rent and utilities during the second quarter. Under the PPP, the Company may apply for forgiveness of the amount due on the loan in an amount equal to the sum of the following costs incurred during the 24-week period beginning on the date of the first disbursement of the Loan: (a) payroll costs, (b) any payment of interest on a covered obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation), (c) any payment on a covered rent obligation, and (d) any covered utility payment, calculated in accordance with the terms of the CARES Act. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part. The principal amount of the PPP note accrues interest at the rate of 1.00% per year. The Company will be required to pay any unforgiven principle and interest under the PPP note in eighteen equal monthly installments, with the first payment being due on a date yet to be determined. The Company is in the process of applying for loan forgiveness and does not expect resolution until the first quarter of 2021. |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
Description Of Business | |
Description of Business | (3) Description of Business Nanophase Technologies Corporation (“Nanophase,” “Company,” “we,” “our,” or “us”) is a scientifically-driven company which, along with its wholly-owned subsidiary, Solésence, LLC (our “Solésence ® ® We target markets, primarily related to skin health products and ingredients, and diagnostic life sciences ingredients where we believe our materials and products offer practical and competitive minerals-based solutions. We traditionally work closely with current customers in these target markets to identify their material and performance requirements and market our 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. 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 Consolidated Statements of Operations, as it does not represent revenue directly from the sale of our products. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | (4) Revenues Revenues are recognized at a point in time, typically when control of the promised goods is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Deferred revenue includes customer deposits and other receipts that are recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in the Company’s Consolidated Condensed Statement of Operations. Customer deposits, $309 as of September 30, 2020, have been classified as deferred revenue. At December 31, 2019, customer deposits amounted to $575. On July 31, 2019, we entered into a Joint Development Agreement (“JDA”), with an initial term of ten years, with Sumitomo Corporation of Americas (“SCOA”) to jointly develop certain coated materials for the use in the personal care market. In return for the Company’s exclusive efforts on SCOA’s behalf, SCOA has paid a commitment fee of $250 and will pay two subsequent payments, of $125 each, for the development of products. The two subsequent payments are contingent upon the achievement of certain performance obligations as defined in the agreement. We began recognizing revenue from the commitment fee in November 2019 and will continue to do so as we fulfill our contractual performance obligations. In the case of the SCOA JDA, the Company is recognizing revenue over time using an input method. If the Company elects to terminate the agreement within the terms allowed and prior to achieving the initial performance obligations, the original $250 must be refunded. As of September 30, 2020, the Company has recognized $250 in cumulative revenue from the SCOA JDA, of which $47 and $229 was recognized in the three and nine months ended September, 30 of 2020. The Company has recognized this revenue proportionally, based upon its estimate of the period over which the performance obligation is expected to be completed. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | (5) Earnings Per Share Options to purchase approximately 165,000 and 497,000 shares of common stock that were outstanding as of September 30, 2019 were not included in the computation of loss per share for the three and nine months ended September 30, 2019, respectively, as the impact of such shares would be anti-dilutive. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | (6) Financial Instruments We follow the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 7, and any borrowings on the working capital line of credit from Libertyville Bank and Trust and any borrowings under the Master Agreement from Beachcorp, LLC described below in Note 7. 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 September 30, 2020 or December 31, 2019. |
Notes and Line of Credit
Notes and Line of Credit | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes and Lines of Credit | (7) Notes 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. 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. This note was renewed through July 1, 2021. Because there were no amounts outstanding on the note at any time during 2020 or 2019, we have recorded no related liability on our balance sheet. On March 22, 2019, we executed a Business Loan Agreement, dated as of March 4, 2019 (the “Loan Agreement”), with Libertyville Bank and Trust Company, a Wintrust Community Bank (“Libertyville”), our primary bank, the maturity of which was extended until April 20, 2021 pursuant to an amended and restated Promissory Note executed on June 25, 2020, and dated as of April 4, 2020. Under the Loan Agreement, Libertyville will provided a maximum of (i) $500 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 receivable, inventory, equipment, general intangibles and fixtures. Interest was payable monthly on any advances at a floating interest rate of the prime rate at the time plus 1%. We are required to have $500 in cash, inclusive of the borrowed amount, at Libertyville on the date of any advance. Advances could only occur at the beginning or end of a fiscal quarter and were required to be repaid in full within five business days of the advance. We borrowed $500 on September 29, 2020 and repaid it on October 2, 2020. We borrowed $500 on June 29, 2020 and repaid it on July 1, 2020. We borrowed $500 on March 30, 2020 and repaid it on April 2, 2020. We borrowed $500 on December 31, 2019 and repaid it on January 2, 2020. On November 16, 2018, we entered into a Business Loan Agreement (the “Master Agreement”) with Beachcorp, LLC. Beachcorp, LLC is managed by Bradford T. Whitmore, who, together with his affiliates Grace Brothers, Ltd. and Grace Investments, Ltd., beneficially owned approximately 63% of the outstanding shares of our common stock as of September 30, 2020. The Master Agreement relates to two loan facilities, each evidenced by separate promissory notes, each dated November 16, 2018: a term loan to the Company of up to $500 to be disbursed in a single advance (the “Term Loan”) with a fixed annual interest rate of 8.25%, payable quarterly, accruing from the date of such advance and with principal due on December 31, 2020; and an asset-based revolving loan facility for the Company of up to $2,000 (the “Revolver Facility”), with floating interest accruing at the prime rate plus 3% (8.25% minimum) per year, with a borrowing base consisting of qualified accounts receivable of the Company, and with all principal and accrued interest initially to be due March 31, 2020. On March 23, 2020, the Company and Beachcorp, LLC executed the First Amendment to our Master Agreement that extends the maturities of both the Term Loan and the Revolver Facility to March 31, 2021. On September 8, 2020, the Company executed an updated Promissory Note to, and a Second Amendment to the Business Loan Agreement with Beachcorp, LLC, expanding the capacity of the Revolver Facility from $2,000 to $2,750. The Term Loan and Revolver Facility are secured by all the unencumbered assets of the Company and subordinated to Libertyville’s secured interest under the New Business Loan Agreement. The Master Agreement substantially restricts the Company’s ability to incur additional indebtedness during the terms of both the Term Loan and the Revolver Facility. On September 30, 2020, the balance on the term loan was $500 and the balance on the Revolver Facility was $1,541. There was $34 in related interest expense during the quarter ended September 30, 2020, of which $12 was accrued and $22 paid by the end of the quarter. There was $47 in related interest expense during the quarter ended September 30, 2019, of which $9 was accrued and $18 paid by the end of the quarter. As Beachcorp, LLC is an affiliate of Mr. Whitmore, this amounts to interest to be paid to a related party. On September 30, 2020, the Company had $734 in excess borrowing capacity over the $1,541 balance on the Revolver Facility. The balance of borrowing base, loan amount, and any excess payments required over the available borrowing base will change as frequently as daily, given the operational nature of the elements of the Revolver Facility. On November 20, 2019, we entered into a 2% Secured Convertible Promissory Note with Bradford T. Whitmore in the principal amount of $2,000 (the “Convertible Note”). The principal amount is payable in a single payment on May 15, 2024 (the “Maturity Date”). The principal amount of the Convertible Note accrues interest at the rate of 2.0% per year, which interest is payable semi-annually on the 15th day of May and November, commencing on May 15, 2020. The principal amount and, at the holder’s option, accrued interest under the Convertible Note is convertible at the holder’s option into additional shares of the Company’s common stock in whole or in part and from time to time up to the Maturity Date at a conversion price of $0.20 per share. The convertible note contains a beneficial conversion feature since the Company’s stock was trading at $0.32 per share on the date the Company entered into the agreement. The intrinsic value of the beneficial conversion feature was $1.2 million on November 20, 2019 and is recorded as a discount on the convertible note. The discount will be accreted to the convertible note over the life of the note using the straight-line method. The offset to these discounts will be interest expense. For the three and nine months ended September 30, 2020, the Company accreted $67 and $200, respectively. The balance on the convertible note was $1,030 and $830, net of discounts of $1,103 and $1,170 at September 30, 2020 and December 31, 2019, respectively. On September 30, 2020, the balance on the term loan was $500, the balance on the Revolver Facility was $1,541, the balance on the Convertible Note was $2,000. In the nine months ended September 30, 2020, there was $334 in interest expense relating to these credit facilities held by Beachcorp, LLC. The accrued interest expense balance on these related party credit facilities amounted to $27, and $10, at September 30, 2020 and December 31, 2019, respectively. The obligations under the Convertible Note are secured by a security interest in all of the Company’s personal property pursuant to a Commercial Security Agreement among Mr. Whitmore, the Company and Solésence, LLC, the Company’s sole subsidiary. Given that Beachcorp, LLC is an affiliate of Mr. Whitmore, this amounts to all of this interest being owed to a related party. On April 17, 2020, we entered into a Promissory Note, dated as of April 16, 2020, in favor of Libertyville in the principal amount of $952 for our loan under the PPP. The Company may apply for forgiveness of the amount due on the loan in an amount equal to the sum of the following costs incurred during the 24-week period beginning on the date of the first disbursement of the Loan: (a) payroll costs, (b) any payment of interest on a covered obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation), (c) any payment on a covered rent obligation, and (d) any covered utility payment, calculated in accordance with the terms of the CARES Act. No assurance can be provided that the Company will obtain forgiveness of the Loan in whole or in part. The principal amount of the PPP note accrues interest at the rate of 1.00% per year. The Company will be required to pay any unforgiven principle and interest under the PPP note in eighteen equal monthly installments, with the first payment being due on November 17, 2020 and continuing on the same day of each subsequent month until April 17, 2022. On September 30, 2020, the balance under the PPP note was $952. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | (8) Inventories Inventories consist of the following: September 30, December 31, Raw materials $ 2,187 $ 1,425 Finished goods 1,427 1,170 3,614 2,595 Allowance for excess inventory quantities (30 ) (41 ) $ 3,584 $ 2,554 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | (9) Leases The Company's operating lease portfolio is comprised of operating leases for office, warehouse space and equipment. Certain of the Company's leases include one or more options to renew or terminate the lease at the Company's discretion. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in our lease term. As of September 30, 2020, the operating lease right-of-use “ROU” asset had a balance of $1,917 which is included in the “Operating lease right-of-use assets” line item of these condensed consolidated financial statements and current and non-current lease liabilities related to the ROU asset of $411 and $1,766 respectively. As of December 31, 2019, the ROU asset had a balance of $2,119 which is included in the “Operating lease right-of-use assets” line item of these condensed consolidated financial statements and current and non-current lease liabilities related to the ROU asset of $357 and $2,035 respectively. These are included in the “Current portion of operating lease obligations” and “Long-term operating lease obligations, net of current portion” line items of these condensed consolidated financial statements. The discount rates used for leases accounted for under ASC 842 are based on an interest rate yield curve developed for the leases in the Company’s portfolio. The office leases contain variable lease payments which consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. Quantitative information regarding the Company’s leases is as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Components of lease cost Finance lease cost components: Amortization of finance lease assets $ 17 $ 18 $ 54 $ 52 Interest on finance lease liabilities 9 14 30 44 Total finance lease costs $ 26 $ 32 $ 84 $ 96 Operating lease cost components: Operating lease cost $ 140 $ 129 $ 425 $ 375 Variable lease cost 27 27 81 81 Short-term lease cost 10 16 12 68 Total operating lease costs $ 177 $ 172 $ 518 $ 524 Total lease cost $ 203 $ 204 $ 602 $ 620 Supplemental cash flow information related to leases is as follows for the nine months ended: September 30, 2020 September 30, 2019 Cash paid for amounts included in the measurement of liabilities: Operating cash outflow from operating leases $ 518 $ 509 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 205 Weighted-average remaining lease term-finance leases (in years) 1.9 2.2 Weighted-average remaining lease term-operating leases (in years) 3.4 3.3 Weighted-average discount rate-finance leases 9.3 % 9.1 % Weighted-average discount rate-operating leases 14.3 % 14.4 % The future maturities of the Company’s finance and operating leases as of September 30, 2020 is as follows: Finance Operating Total 2020 $ 63 $ 172 $ 235 2021 196 701 897 2022 109 720 829 2023 5 705 710 2024 — 595 595 2025 and thereafter — 1 1 Total payments $ 373 $ 2,894 $ 3,267 Less amounts representing interest (39 ) (717 ) (756 ) Total minimum payments required: $ 334 $ 2,177 $ 2,511 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | (10) Share-Based Compensation We follow FASB ASC Topic 718, Compensation – Stock Compensation As of September 30, 2020, there was approximately $290 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 1.8 years. Stock Options and Stock Grants During the nine months ended September 30, 2020, 78,277 stock options were exercised for $23. During the nine months ended September 30, 2019, 36,000 stock options were exercised for $16. During the nine months ended September 30, 2020, 535,000 stock options were granted, compared to 547,500 stock options granted during the same period in 2019. During the nine months ended September 30, 2020, 460,640 stock options expired compared to 130,500 for the same period in 2019. For the nine months ended September 30, 2020, 202,134 stock options were forfeited compared to 48,600 for the same period in 2019. We had 3,507,073 stock options outstanding at a weighted average exercise price of $0.58 on September 30, 2020, compared to 3,747,400 stock options outstanding at a weighted average exercise price of $0.64 on September 30, 2019. No stock options were granted in the three-month periods ending September 30, 2020 and 2019. The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for stock options granted during the nine months periods presented: For the nine months ended September 30, September 30, Weighted-average risk-free interest rates 0.5 % 2.3 % Dividend yield 0.00 % 0.00 % Weighted-average expected life of the option 7 years 7 years Weighted-average expected stock price volatility 94 % 94 % Weighted-average fair value of the options granted $ 0.36 $ 0.41 As of September 30, 2020, we did not have any unvested restricted stock or performance shares outstanding. |
Significant Customers and Conti
Significant Customers and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Significant Customers and Contingencies | (11) Significant Customers and Contingencies Revenue from four customers constituted approximately 30%, 18%, 16% and 16%, respectively, of our total revenue for the three months ended September 30, 2020. For the nine months ended September 30, 2020, revenue from the same four customers was approximately 20%, 32%, 13% and 14%, respectively. Amounts included in accounts receivable on September 30, 2020 relating to these four customers were approximately $901, $328, $291 and $420, respectively. Revenue from these four customers constituted approximately 0%, 75%, 0% and 4%, respectively, for the three months ended September 30, 2019. For the nine months ended September 30, 2019, revenue from the same four customers was approximately 4%, 64%, 0%, and 9%, respectively. Amounts included in accounts receivable on September 30, 2019 relating to these four customers were approximately $0, $1,042, $0 and $122, respectively. The loss of one of these significant customers, a significant decrease in revenue from one or more of these 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 a minimum of $1 million in total of certain assets of which at least $500 must be in cash, cash equivalents and certain investments, with the balance being composed of certain inventory and receivables, is not maintained or (b) of an acceleration of any debt maturity having a principal amount of more than $10 million. There are certain minimum finished goods inventory requirements with the 2019 amendment to the supply agreement. This agreement also requires Nanophase to maintain certain finished goods inventory levels as “safety stock,” beginning in the first quarter of 2019, and increasing through the third quarter of 2019 to a negotiated level based on agreed demand metrics, in order to maintain the $500 non-cash component discussed above. After September 30, 2019, should our safety stock fall below the prescribed amount of material, the quarter-end cash requirement would revert to $1,000 in cash, cash equivalents, and certain investments. The safety stock requirement may be adjusted upon mutual agreement. 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 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, we may also have temporary working capital demands that we cannot fund with existing capital, while remaining in compliance with the covenants included in our BASF agreement described above. If necessary, we may seek funding through public or private financing and through contracts with governmental entities or other companies. Additional financing may not be available on acceptable terms or at all, and any such additional financing could be dilutive to our shareholders. If we are unable to obtain adequate funds, we may be required to delay, scale-back or eliminate some of our manufacturing and marketing operations or we may need to obtain funds through arrangements on less favorable terms. Such circumstances could raise doubt as to our ability to continue as a going concern. If we obtain funding on unfavorable terms, we may be required to relinquish rights to some of our intellectual property. |
Business Segmentation and Geogr
Business Segmentation and Geographical Distribution | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segmentation and Geographical Distribution | (12) Business Segmentation and Geographical Distribution Revenue from international sources approximated $1,242 and $2,747 for the three and nine months ended September 30, 2020, respectively, compared to $33 and $734 for the three and nine months ended September 30, 2019, respectively. All of this revenue was product revenue. Our operations comprise a single business segment and all our long-lived assets are located within the United States. We categorize our revenue stream into three main product categories, Personal Care Ingredients, Advanced Materials and Solésence®. The revenues for the three months and nine months ended September 30, 2020 and 2019, by category, are as follows: For the three months ended September 30, For the nine months ended September 30, Product Category 2020 2019 2020 2019 Personal Care Ingredients $ 753 $ 2,304 $ 4,190 $ 6,464 Advanced Materials 1,582 388 3,678 1,988 Solésence® 1,553 377 4,394 1,666 Total Sales $ 3,888 $ 3,069 $ 12,262 $ 10,118 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following: September 30, December 31, Raw materials $ 2,187 $ 1,425 Finished goods 1,427 1,170 3,614 2,595 Allowance for excess inventory quantities (30 ) (41 ) $ 3,584 $ 2,554 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Summary of quantitative information about leases | Quantitative information regarding the Company’s leases is as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Components of lease cost Finance lease cost components: Amortization of finance lease assets $ 17 $ 18 $ 54 $ 52 Interest on finance lease liabilities 9 14 30 44 Total finance lease costs $ 26 $ 32 $ 84 $ 96 Operating lease cost components: Operating lease cost $ 140 $ 129 $ 425 $ 375 Variable lease cost 27 27 81 81 Short-term lease cost 10 16 12 68 Total operating lease costs $ 177 $ 172 $ 518 $ 524 Total lease cost $ 203 $ 204 $ 602 $ 620 |
Summary of supplemental cash flow information related to leases | Supplemental cash flow information related to leases is as follows for the nine months ended: September 30, 2020 September 30, 2019 Cash paid for amounts included in the measurement of liabilities: Operating cash outflow from operating leases $ 518 $ 509 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 205 Weighted-average remaining lease term-finance leases (in years) 1.9 2.2 Weighted-average remaining lease term-operating leases (in years) 3.4 3.3 Weighted-average discount rate-finance leases 9.3 % 9.1 % Weighted-average discount rate-operating leases 14.3 % 14.4 % |
Schedule of future maturities of finance and operating leases | The future maturities of the Company’s finance and operating leases as of September 30, 2020 is as follows: Finance Operating Total 2020 $ 63 $ 172 $ 235 2021 196 701 897 2022 109 720 829 2023 5 705 710 2024 — 595 595 2025 and thereafter — 1 1 Total payments $ 373 $ 2,894 $ 3,267 Less amounts representing interest (39 ) (717 ) (756 ) Total minimum payments required: $ 334 $ 2,177 $ 2,511 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [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 stock options granted during the nine months periods presented: For the nine months ended September 30, September 30, Weighted-average risk-free interest rates 0.5 % 2.3 % Dividend yield 0.00 % 0.00 % Weighted-average expected life of the option 7 years 7 years Weighted-average expected stock price volatility 94 % 94 % Weighted-average fair value of the options granted $ 0.36 $ 0.41 |
Business Segmentation and Geo_2
Business Segmentation and Geographical Distribution (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of revenue by category | The revenues for the three months and nine months ended September 30, 2020 and 2019, by category, are as follows: For the three months ended September 30, For the nine months ended September 30, Product Category 2020 2019 2020 2019 Personal Care Ingredients $ 753 $ 2,304 $ 4,190 $ 6,464 Advanced Materials 1,582 388 3,678 1,988 Solésence® 1,553 377 4,394 1,666 Total Sales $ 3,888 $ 3,069 $ 12,262 $ 10,118 |
Going Concern _ Liquidity (Deta
Going Concern / Liquidity (Details Narrative) - USD ($) $ in Thousands | Apr. 17, 2020 | Dec. 31, 2019 | Sep. 30, 2020 |
Revolving Credit Facility [Member] | |||
Maximum credit limit | $ 2,750 | ||
Term Loan [Member] | |||
Loan face value | $ 500 | ||
Maturity date | Mar. 31, 2021 | ||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Concentration risk (percent) | 63.00% | ||
Paycheck Protection Program [Member] | |||
Loan face value | $ 952 | $ 952 | |
Accrues interest | 1.00% | ||
Payment terms | PPP note in eighteen equal monthly installments, with the first payment being due on a date yet to be determined. The Company is in the process of applying for loan forgiveness and does not expect resolution until the first quarter of 2021. |
Revenues (Details Narrative)
Revenues (Details Narrative) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 14 Months Ended | |||
Jul. 31, 2019USD ($)Number | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Customer deposits | $ 309 | $ 309 | $ 309 | $ 575 | |||
Revenue | 3,888 | $ 3,069 | 12,262 | $ 10,118 | |||
Joint Development Agreement [Member] | Sumitomo Corporation of Americas [Member] | |||||||
Initial term agreement | 10 years | ||||||
Commitment fee per agreement | $ 250 | ||||||
Contingent fees per agreement | $ 125 | ||||||
Number of contingent fee payments | Number | 2 | ||||||
Refundable commitment fee per agreement | $ 250 | ||||||
Revenue | $ 47 | $ 229 | $ 250 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Common stock outstanding not included in computation of diluted earnings (loss) per share | 165,000 | 497,000 |
Notes and Line of Credit (Detai
Notes and Line of Credit (Details Narrative) $ / shares in Units, $ in Thousands | Sep. 29, 2020USD ($) | Jun. 29, 2020USD ($) | Apr. 17, 2020USD ($) | Mar. 30, 2020USD ($) | Mar. 23, 2020 | Nov. 20, 2019USD ($)$ / shares | Mar. 22, 2019USD ($)Number | Nov. 16, 2018USD ($) | Jul. 31, 2014USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Sep. 08, 2020USD ($) |
Interest expense paid | $ 122 | $ 47 | $ 368 | $ 140 | |||||||||||
Paycheck Protection Program [Member] | |||||||||||||||
Term loan | $ 952 | 952 | 952 | ||||||||||||
Interest rate | 1.00% | ||||||||||||||
Payment terms | PPP note in eighteen equal monthly installments, with the first payment being due on a date yet to be determined. The Company is in the process of applying for loan forgiveness and does not expect resolution until the first quarter of 2021. | ||||||||||||||
2% Secured Convertible Promissory Note Due on May 15, 2024 [Member] | Bradford T. Whitmore [Member] | |||||||||||||||
Interest rate | 2.00% | ||||||||||||||
Maturity date | May 15, 2024 | ||||||||||||||
Principal amount | $ 2,000 | ||||||||||||||
Debt conversion price (in dollars per share) | $ / shares | $ 0.20 | ||||||||||||||
Share price (in dollars per share) | $ / shares | $ 0.32 | ||||||||||||||
Discount on the convertible note | $ 1,200 | 1,103 | 1,103 | $ 1,170 | |||||||||||
Balance as of convertible note | 1,030 | 1,030 | 830 | ||||||||||||
Accreted amount | 67 | 200 | |||||||||||||
Asset-Based Revolving Loan Facility [Member] | |||||||||||||||
Maximum borrowing capacity | $ 2,750 | ||||||||||||||
Amount outstanding | 1,541 | 1,541 | |||||||||||||
Excess borrowing capacity | 734 | 734 | |||||||||||||
Business Loan Agreement [Member] | Beachcorp, LLC [Member] | |||||||||||||||
Maximum borrowing capacity | $ 500 | $ 2,750 | |||||||||||||
Term loan | $ 2,000 | 500 | 500 | ||||||||||||
Interest rate | 8.25% | ||||||||||||||
Maturity date | Dec. 31, 2020 | ||||||||||||||
Ownership percentage | 63.00% | ||||||||||||||
Total interest expense | 34 | 47 | 334 | ||||||||||||
Interest expense paid | 22 | 18 | |||||||||||||
Accrued interest expense on related party | 12 | $ 9 | |||||||||||||
Business Loan Agreement [Member] | Beachcorp, LLC [Member] | Bradford T. Whitmore [Member] | |||||||||||||||
Maximum borrowing capacity | 734 | 734 | |||||||||||||
Business Loan Agreement [Member] | Beachcorp, LLC [Member] | Asset-Based Revolving Loan Facility [Member] | |||||||||||||||
Basis spread variable interest rate | 3.00% | ||||||||||||||
Variable interest rate basis | Prime rate | ||||||||||||||
Maximum borrowing capacity | $ 2,000 | ||||||||||||||
Facility, expiration date | Mar. 31, 2020 | ||||||||||||||
First Amendment Too Our Master Agreement [Member] | Beachcorp, LLC [Member] | Term Loan and The Revolver Facility [Member] | Extended Maturity [Member] | |||||||||||||||
Maturity date | Mar. 31, 2021 | ||||||||||||||
Term loan collateral | Secured by all the unencumbered assets of the Company | ||||||||||||||
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 | ||||||||||||||
Facility, expiration date | Jul. 1, 2021 | ||||||||||||||
Line of Credit [Member] | Business Loan Agreement [Member] | Libertyville [Member] | |||||||||||||||
Basis spread variable interest rate | 1.00% | ||||||||||||||
Variable interest rate basis | Prime rate | ||||||||||||||
Maximum borrowing capacity | $ 500 | $ 500 | $ 500 | $ 500 | $ 500 | 500 | $ 500 | ||||||||
Repayments of lines of credit date | Oct. 2, 2020 | Jul. 1, 2020 | Apr. 2, 2020 | Jan. 2, 2020 | |||||||||||
Borrowing capacity as percentage of accounts receivable | 75.00% | ||||||||||||||
Borrowing capacity as multiple of accounts receivable | Number | 2 | ||||||||||||||
Minimum amount of cash on hand before advance is given | $ 500 | ||||||||||||||
Facility, expiration date | Apr. 20, 2021 | ||||||||||||||
Credit Facility [Member] | |||||||||||||||
Accrued interest expense on related party | $ 27 | $ 10 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,187 | $ 1,425 |
Finished goods | 1,427 | 1,170 |
Total inventory, gross | 3,614 | 2,595 |
Allowance for excess inventory quantities | (30) | (41) |
Total inventory | $ 3,584 | $ 2,554 |
Lease (Details)
Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Finance lease cost components: | ||||
Amortization of finance lease assets | $ 17 | $ 18 | $ 54 | $ 52 |
Interest on finance lease liabilities | 9 | 14 | 30 | 44 |
Total finance lease costs | 26 | 32 | 84 | 96 |
Operating lease cost components: | ||||
Operating lease cost | 140 | 129 | 425 | 375 |
Variable lease cost | 27 | 27 | 81 | 81 |
Short-term lease cost | 10 | 16 | 12 | 68 |
Total operating lease costs | 177 | 172 | 518 | 524 |
Total lease cost | $ 203 | $ 204 | $ 602 | $ 620 |
Lease (Details 1)
Lease (Details 1) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of liabilities: | ||
Operating cash outflow from operating leases | $ 518 | $ 509 |
Right-of-use assets obtained in exchange for lease obligations: Operating leases | $ 205 | |
Weighted-average remaining lease term-finance leases (in years) | 1 year 10 months 25 days | 2 years 2 months 12 days |
Weighted-average remaining lease term-operating leases (in years) | 3 years 4 months 24 days | 3 years 3 months 19 days |
Weighted-average discount rate-finance leases | 9.30% | 9.10% |
Weighted-average discount rate-operating leases | 14.30% | 14.40% |
Lease (Details 2)
Lease (Details 2) $ in Thousands | Sep. 30, 2020USD ($) |
Operating Leases: | |
2020 | $ 172 |
2021 | 701 |
2022 | 720 |
2023 | 705 |
2024 | 595 |
2025 and thereafter | 1 |
Total payments | 2,894 |
Less amounts representing interest | (717) |
Total minimum payments required: | 2,177 |
Finance Leases: | |
2020 | 63 |
2021 | 196 |
2022 | 109 |
2023 | 5 |
Total payments | 373 |
Less amounts representing interest | (39) |
Total minimum payments required: | 334 |
Total: | |
2020 | 235 |
2021 | 897 |
2022 | 829 |
2023 | 710 |
2024 | 595 |
2025 and thereafter | 1 |
Total payments | 3,267 |
Less amounts representing interest | (756) |
Total minimum payments required: | $ 2,511 |
Lease (Details Narrative)
Lease (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 1,917 | $ 2,119 |
Current portion of operating lease obligations | 411 | 357 |
Long-term portion of operating lease obligations | $ 1,766 | $ 2,035 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - Stock Options [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Weighted-average risk-free interest rates | 0.50% | 2.30% |
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% | 94.00% |
Weighted-average fair value of the options granted | $ 0.36 | $ 0.41 |
Share-Based Compensation (Det_2
Share-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Total unrecognized compensation cost related to nonvested share-based compensation arrangements granted | $ 290 | $ 290 | |||
Weighted-average period over which unrecognized compensation is expected to be recognized | 1 year 9 months 18 days | ||||
Vlaue of stock options exercised | 23 | $ 16 | |||
Stock Options [Member] | |||||
Share-based compensation expense | $ 48 | $ 64 | $ 147 | $ 179 | |
Stock options granted | 535,000 | 547,500 | |||
Number of stock options excercised | 78,277 | 36,000 | |||
Vlaue of stock options exercised | $ 23 | $ 16 | |||
Stock options expired | 460,640 | 130,500 | |||
Stock options forfeited | 202,134 | 48,600 | |||
Stock options outstanding, end of period | 3,507,073 | 3,747,400 | 3,507,073 | 3,747,400 | |
Weighted average exercise price | $ 0.58 | $ 0.64 | $ 0.58 | $ 0.64 |
Significant Customers and Con_2
Significant Customers and Contingencies (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Number | Sep. 30, 2019USD ($)Number | Dec. 31, 2019USD ($) | |
Number of major customers | Number | 4 | 4 | |||
Accounts receivable | $ 2,451 | $ 2,451 | $ 970 | ||
Deferred revenue | 309 | 309 | $ 482 | ||
Customer One [Member] | |||||
Accounts receivable | 901 | $ 0 | 901 | $ 0 | |
Customer Two [Member] | |||||
Accounts receivable | 328 | 1,042 | 328 | 1,042 | |
Customer Three [Member] | |||||
Accounts receivable | 291 | 0 | 291 | 0 | |
Customer Four [Member] | |||||
Accounts receivable | $ 420 | $ 122 | $ 420 | $ 122 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||||
Revenue from customers | 63.00% | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member] | |||||
Revenue from customers | 30.00% | 0.00% | 20.00% | 4.00% | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member] | |||||
Revenue from customers | 18.00% | 75.00% | 32.00% | 64.00% | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member] | |||||
Revenue from customers | 16.00% | 0.00% | 13.00% | 0.00% | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Four [Member] | |||||
Revenue from customers | 16.00% | 4.00% | 14.00% | 9.00% | |
BASF [Member] | |||||
Cash requirements levels for safety stock | $ 1,000 | $ 1,000 | |||
Equipment sale - net book value equipment | 115.00% | 115.00% | |||
BASF [Member] | Greater than [Member] | |||||
Total assets requirement under supply agreeement | $ 1,000 | $ 1,000 | |||
Cash, cash equivalents and certain investments required under supply agreeement | 500 | 500 | |||
Debt principal acceleration trigger amount | 10,000 | 10,000 | |||
Finished goods inventory levels as safety stock | $ 500 | $ 500 | |||
Equipment sale - original book value of equipment and upgrades | 30.00% | 30.00% | |||
BASF [Member] | Less than [Member] | |||||
Earnings trigger under supply agreeement | $ 0 |
Business Segmentation and Geo_3
Business Segmentation and Geographical Distribution (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Sales | $ 3,888 | $ 3,069 | $ 12,262 | $ 10,118 |
Personal Care Ingredients [Member] | ||||
Sales | 753 | 2,304 | 4,190 | 6,464 |
Advanced Materials [Member] | ||||
Sales | 1,582 | 388 | 3,678 | 1,988 |
Solesence [Member] | ||||
Sales | $ 1,553 | $ 377 | $ 4,394 | $ 1,666 |
Business Segmentation and Geo_4
Business Segmentation and Geographical Distribution (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Number | Sep. 30, 2019USD ($) | |
Number of business segments | Number | 1 | |||
International Sources [Member] | ||||
Revenue from international sources | $ | $ 1,242 | $ 33 | $ 2,747 | $ 734 |