Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 11, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | AUTOSCOPE TECHNOLOGIES CORP | |
Entity Central Index Key | 0000943034 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 5,398,887 | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 0-26056 | |
Entity Address, Address Line One | 1115 Hennepin Avenue | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55403 | |
Entity Tax Identification Number | 86-3685595 | |
City Area Code | (612) | |
Local Phone Number | 438-2363 | |
Entity Incorporation, State or Country Code | MN | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Common Stock [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | AATC | |
Security Exchange Name | NASDAQ | |
Rights [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Trading Symbol | AATC | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 1,933 | $ 8,229 | |
Accounts receivable, net of allowance for doubtful accounts of $6 and $18 respectively | 2,762 | 2,369 | |
Inventories | 1,475 | 1,429 | |
Investments in available-for-sale debt securities | 425 | 0 | |
Investments in equity securities | 247 | [1] | 0 |
Due from broker | 481 | 0 | |
Prepaid expenses and other current assets | 913 | 355 | |
Total current assets | 8,236 | 12,382 | |
Property and equipment: | |||
Furniture and fixtures | 136 | 136 | |
Leasehold improvements | 6 | 6 | |
Equipment | 972 | 994 | |
Real property | 2,059 | 2,059 | |
Property and equipment, Gross | 3,173 | 3,195 | |
Accumulated depreciation | 997 | 958 | |
Property and equipment, Net | 2,176 | 2,237 | |
Operating lease assets, net | 9 | 58 | |
Intangible assets, net | 2,996 | 2,866 | |
Deferred income taxes | 4,811 | 4,824 | |
Long-term investments in available-for-sale debt securities | 3,011 | 0 | |
TOTAL ASSETS | 21,239 | 22,367 | |
Current liabilities: | |||
Accounts payable | 479 | 236 | |
Deferred revenue | 112 | 107 | |
Warranty | 119 | 128 | |
Accrued compensation | 59 | 132 | |
Operating lease obligations | 10 | 59 | |
Current maturities of long-term debt | 57 | 56 | |
Other current liabilities | 133 | 181 | |
Total current liabilities | 969 | 899 | |
Long-term debt | 1,645 | 1,674 | |
TOTAL LIABILITIES | 2,614 | 2,573 | |
Shareholders' equity: | |||
Preferred stock, $0.01 par value; 5,000,000 shares authorized, none issued or outstanding | 0 | 0 | |
Common stock, $0.01 par value; 20,000,000 shares authorized, 5,398,887 and 5,378,857 issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 54 | 54 | |
Additional paid-in capital | 25,452 | 25,167 | |
Accumulated other comprehensive loss | (543) | (288) | |
Accumulated deficit | (6,338) | (5,139) | |
Total shareholders' equity | 18,625 | 19,794 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 21,239 | $ 22,367 | |
[1] The fair value of the Company's equity investments are determined based on readily available market data, and are classified as level 1 fair value measurements. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 6 | $ 18 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized | 20,000,000 | 20,000,000 |
Common stock shares issued | 5,398,887 | 5,378,857 |
Common stock shares outstanding | 5,398,887 | 5,378,857 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Total Revenue | $ 2,819 | $ 3,788 | $ 5,571 | $ 6,767 |
Cost of revenue: | ||||
Total Cost of revenue | 824 | 827 | 1,440 | 1,533 |
Gross profit | 1,995 | 2,961 | 4,131 | 5,234 |
Operating expenses: | ||||
Selling, general and administrative | 1,324 | 1,516 | 3,009 | 2,882 |
Research and development | 526 | 541 | 954 | 1,037 |
Total Operating expenses | 1,850 | 2,057 | 3,963 | 3,919 |
Income from operations | 145 | 904 | 168 | 1,315 |
Other income | 10 | 0 | 21 | 925 |
Investment income | (30) | 0 | (25) | 0 |
Interest expense | (18) | 0 | (36) | 0 |
Income from operations before income taxes | 107 | 904 | 128 | 2,240 |
Income tax expense | 33 | 152 | 36 | 357 |
Net income | $ 74 | $ 752 | $ 92 | $ 1,883 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.01 | $ 0.14 | $ 0.02 | $ 0.35 |
Diluted (in dollars per share) | $ 0.01 | $ 0.14 | $ 0.02 | $ 0.35 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 5,381 | 5,341 | 5,371 | 5,332 |
Diluted (in shares) | 5,387 | 5,350 | 5,373 | 5,343 |
Product sales [Member] | ||||
Revenue: | ||||
Total Revenue | $ 1,432 | $ 1,305 | $ 2,366 | $ 2,468 |
Cost of revenue: | ||||
Total Cost of revenue | 719 | 730 | 1,230 | 1,343 |
Royalties [Member] | ||||
Revenue: | ||||
Total Revenue | 1,387 | 2,483 | 3,205 | 4,299 |
Cost of revenue: | ||||
Total Cost of revenue | $ 105 | $ 97 | $ 210 | $ 190 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 74 | $ 752 | $ 92 | $ 1,883 |
Comprehensive income: | ||||
Foreign currency translation adjustment | (131) | 18 | (193) | (35) |
Comprehensive income (loss) | $ (57) | $ 770 | $ (101) | $ 1,848 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities: | ||
Net income | $ 92,000 | $ 1,883,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 95,000 | 80,000 |
Software amortization | 404,000 | 382,000 |
Amortization of deferred finance fees | 1,000 | 0 |
Stock-based compensation | 268,000 | 107,000 |
Deferred income tax expense | 30,000 | 348,000 |
Forgiveness income from PPP Loan (Note N) | 0 | (931,000) |
Loss on disposal of assets | 5,000 | 1,000 |
Realized loss on equity investments | 53,000 | 0 |
Unrealized loss on equity investments | 3,000 | 0 |
Investment loss | 6,000 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (393,000) | (1,237,000) |
Inventories | (46,000) | 47,000 |
Prepaid expenses and other current assets | (557,000) | 50,000 |
Accounts payable | 244,000 | (212,000) |
Accrued expenses and other current liabilities | (126,000) | 191,000 |
Net cash provided by (used) for operating activities | 79,000 | 709,000 |
Investing activities: | ||
Capitalized software development costs | (534,000) | (178,000) |
Purchases of property and equipment | (41,000) | (8,000) |
Purchase of equity securities | (795,000) | 0 |
Sale of equity securities | 10,000 | 0 |
Purchase of debt securities | (3,521,000) | 0 |
Net cash used for investing activities | (4,881,000) | (186,000) |
Financing activities: | ||
Stock for tax withholding | (15,000) | (35,000) |
Dividends paid | (1,291,000) | (644,000) |
Proceeds from exercised options | 32,000 | 8,000 |
Principal payments on long-term debt | (29,000) | 0 |
Net cash used for financing activities | (1,303,000) | (671,000) |
Effect of exchange rate changes on cash | (191,000) | (30,000) |
Change in cash and cash equivalents | (6,296,000) | (178,000) |
Cash and cash equivalents at beginning of period | 8,229,000 | 8,605,000 |
Cash and cash equivalents at end of period | 1,933,000 | 8,427,000 |
Non-Cash investing and financing activities: | ||
Sale of equity securities included in due from broker | $ 481,000 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Captal | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Balance at Dec. 31, 2020 | $ 19,370,000 | $ 54,000 | $ 24,968,000 | $ (150,000) | $ (5,502,000) |
Balance (in shares) at Dec. 31, 2020 | 5,352,626 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 107,000 | 107,000 | |||
Stock-based compensation (in shares) | 19,562 | ||||
Stock options exercised | 8,000 | 8,000 | |||
Stock options exercised (in shares) | 2,000 | ||||
Stock for tax withholding | (35,000) | (35,000) | |||
Stock for tax withholding (in shares) | (7,002) | ||||
Dividends declared | (644,000) | (644,000) | |||
Transfers of investments from held-to-maturity to available-for-sale classification | (62,000) | (62,000) | |||
Comprehensive income: | |||||
Foreign currency translation adjustment | (35,000) | (35,000) | |||
Net income | 1,883,000 | 1,883,000 | |||
Balance at Jun. 30, 2021 | 20,654,000 | $ 54,000 | 25,048,000 | (185,000) | (4,263,000) |
Balance (in shares) at Jun. 30, 2021 | 5,367,186 | ||||
Balance at Mar. 31, 2021 | 20,477,000 | $ 54,000 | 24,997,000 | (203,000) | (4,371,000) |
Balance (in shares) at Mar. 31, 2021 | 5,354,337 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 54,000 | 54,000 | |||
Stock-based compensation (in shares) | 12,527 | ||||
Stock options exercised | 8,000 | 8,000 | |||
Stock options exercised (in shares) | 2,000 | ||||
Stock for tax withholding | (11,000) | (11,000) | |||
Stock for tax withholding (in shares) | (1,678) | ||||
Dividends declared | (644,000) | (644,000) | |||
Comprehensive income: | |||||
Foreign currency translation adjustment | 18,000 | 18,000 | |||
Net income | 752,000 | 752,000 | |||
Balance at Jun. 30, 2021 | 20,654,000 | $ 54,000 | 25,048,000 | (185,000) | (4,263,000) |
Balance (in shares) at Jun. 30, 2021 | 5,367,186 | ||||
Balance at Dec. 31, 2021 | 19,794,000 | $ 54,000 | 25,167,000 | (288,000) | (5,139,000) |
Balance (in shares) at Dec. 31, 2021 | 5,378,857 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 268,000 | 268,000 | |||
Stock-based compensation (in shares) | 15,300 | ||||
Stock options exercised | $ 32,000 | 32,000 | |||
Stock options exercised (in shares) | 7,000 | 7,000 | |||
Stock for tax withholding | $ (15,000) | (15,000) | |||
Stock for tax withholding (in shares) | (2,270) | ||||
Dividends declared | (1,291,000) | (1,291,000) | |||
Transfers of investments from held-to-maturity to available-for-sale classification | 62,000 | ||||
Comprehensive income: | |||||
Foreign currency translation adjustment | (193,000) | (193,000) | |||
Net income | 92,000 | 92,000 | |||
Balance at Jun. 30, 2022 | 18,625,000 | $ 54,000 | 25,452,000 | (543,000) | (6,338,000) |
Balance (in shares) at Jun. 30, 2022 | 5,398,887 | ||||
Balance at Mar. 31, 2022 | 19,333,000 | $ 54,000 | 25,396,000 | (350,000) | (5,767,000) |
Balance (in shares) at Mar. 31, 2022 | 5,391,488 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 62,000 | 62,000 | |||
Stock-based compensation (in shares) | 8,304 | ||||
Stock for tax withholding | (6,000) | (6,000) | |||
Stock for tax withholding (in shares) | (905) | ||||
Dividends declared | (645,000) | (645,000) | |||
Transfers of investments from held-to-maturity to available-for-sale classification | (62,000) | (62,000) | |||
Comprehensive income: | |||||
Foreign currency translation adjustment | (131,000) | (131,000) | |||
Net income | 74,000 | 74,000 | |||
Balance at Jun. 30, 2022 | $ 18,625,000 | $ 54,000 | $ 25,452,000 | $ (543,000) | $ (6,338,000) |
Balance (in shares) at Jun. 30, 2022 | 5,398,887 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note A: Basis of Presentation On July 21, 2021, a holding company reorganization was completed (the "Reorganization") in which Image Sensing Systems, Inc. ("ISNS") became a wholly-owned subsidiary of the new parent company named "Autoscope Technologies Corporation" ("Autoscope"), which became the successor issuer to ISNS. As a result of the Reorganization, Autoscope replaced ISNS as the public company trading on the Nasdaq Stock Market under the ticker symbol "AATC," and outstanding shares of ISNS's common stock automatically converted into shares of common stock of Autoscope. As used in this Quarterly Report on Form 10-Q, the "Company", "we", "us" and "our" or its management or business at any time before the effective date of the Reorganization refer to those of ISNS as the predecessor company and its wholly-owned subsidiaries and thereafter to Autoscope and its wholly-owned subsidiaries, except as otherwise specified or to the extent the context otherwise indicates. The Reorganization is intended to be a tax-free transaction for U.S. federal income tax purposes for the Company's shareholders. Autoscope was incorporated on April 23, 2021 under the laws of the State of Minnesota, and ISNS was incorporated in Minnesota on December 20, 1984. The Company develops and markets video and radar processing products for use in applications such as intersection control, highway, bridge and tunnel traffic management and traffic data collection. We sell our products primarily to distributors and also receive royalties under a license agreement with a manufacturer/distributor for certain of our products. Our products are used primarily by governmental entities. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q, which require the Company to make estimates and assumptions that affect amounts reported. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. It is the opinion of management that the unaudited condensed consolidated financial statements include all adjustments consisting of normal recurring accruals considered necessary for a fair presentation. All significant intercompany balances and transactions have been eliminated. Operating results for the three and six June 30, 2022 Cash Dividend On February 2, 2022, the Board of Directors of the Company approved a cash dividend of $0.12 per share to shareholders of record on the close of business on February 21, 2022, which was paid to shareholders on February 28, 2022. On May 10, 2022, the Board of Directors of the Company approved a cash dividend of $0.12 per share to shareholders of record on the close of business May 23, 2022, which was paid to shareholders on May 30, 2022. On August 9, 2022, the Board of Directors of the Company approved a cash dividend of $0.12 per share to shareholders of record on the close of business August 25, 2022, which is payable to shareholders on August 31, 2022. Summary of Significant Accounting Policies The Company believes that of its significant accounting policies, the following are particularly important to the portrayal of the Company's results of operations and financial position and may require the application of a higher level of judgment by the Company's management and, as a result, are subject to an inherent degree of uncertainty. Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: ● Identification of a contract, or contracts, with a customer; ● Identification of performance obligations in the contract or contracts; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, we satisfy a performance obligation. Revenue disaggregated by revenue source for the three and six months ended June 30, 2022 and 2021 consists of the following (in thousands); revenue excludes sales and usage-based taxes when or if it has been determined that we are acting as a pass-through agent: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Product sales $ 1,432 $ 1,305 $ 2,366 $ 2,468 Royalties 1,387 2,483 3,205 4,299 Total revenue $ 2,819 $ 3,788 $ 5,571 $ 6,767 Product Sales: Product revenue is generated primarily from the direct sales of our RTMS radar systems worldwide and our Autoscope video systems in Europe and Asia. Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the amount we expect to receive in exchange for those goods or services. Certain product sales may contain multiple performance obligations for revenue recognition purposes. Multiple performance obligations may include hardware, software, installation services, training, support, and extended warranties. For performance obligations without observable stand-alone prices charged to customers Revenue for services such as maintenance, repair, and technical support is recognized either as the service is performed or ratably over the defined contractual period for service maintenance contracts. From time to time, our payment terms may vary by the type and location of our customer and the products or services offered. Revenue for extended warranties are deferred until the coverage period and then recognized ratably over the extended warranty term. We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. We record provisions against sales revenue for estimated returns and allowances in the period when the related revenue is recorded based on historical sales returns and changes in end user demand. Royalties: Econolite Control Products, Inc. (“Econolite”) is our licensee that sells our Autoscope video system products in the United States, Mexico, Canada and the Caribbean. The royalty of approximately 50% of the gross profit on licensed products is recognized when the products are shipped or delivered by Econolite to its customers. Practical Expedients and Exemptions: We generally expense sales commissions when incurred because the amortization periods would have been one year We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year Inventories Inventories are primarily electronic components and finished goods and are valued at the lower of cost or net realizable value determined under the first-in, first-out accounting method. Income Taxes We record a tax provision for the anticipated tax consequences of our reported results of operations. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those deferred tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. We believe it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with the tax effects of the deferred tax liabilities, will be sufficient to fully recover the remaining net realizable value of our deferred tax assets. If all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our financial condition and operating results. We recognize penalties and interest expense related to unrecognized tax benefits in income tax expense. Intangible Assets We capitalize certain software development costs related to software to be sold, leased, or otherwise marketed. Capitalized software development costs include purchased materials, services, internal labor and other costs associated with the development of new products and services. Software development costs are expensed as incurred until technological feasibility has been established, at which time future costs incurred are capitalized until the product is available for general release to the public. Based on our product development process, technological feasibility is generally established once product and detailed program designs have been completed, uncertainties related to high-risk development issues have been resolved through coding and testing, and we have established that the necessary skills, hardware, and software technology are available for production of the product. Once a software product is available for general release to the public, capitalized development costs associated with that product will begin to be amortized to cost of sales over the product's estimated economic selling life, using the greater of straight-line or a method that results in cost recognition in future periods that is consistent with the anticipated timing of product revenue recognition. Capitalized software development costs are subject to an ongoing assessment of recoverability, which is impacted by estimates and assumptions of future revenues and expenses for these software products, as well as other factors such as changes in product technologies. Any portion of unamortized capitalized software development costs that are determined to be in excess of net realizable value have been expensed in the period in which such a determination is made. Subsequent to reaching technological feasibility for certain software products, we capitalized approximately $221,000 and $55,000 in the quarters ended June 30, 2022 and 2021, respectively, and $534,000 and $178,000 during the six-month periods ended June 30, 2022 and 2021, respectively. Intangible assets with finite lives are amortized on a straight - line basis over the expected period to be benefited by future cash flows and reviewed for impairment. At both June 30, 2022 - lived intangible assets. Investments in Debt Securities We classify investments in debt securities on the acquisition date and at each balance sheet date. At March 31, 2022, all of our investments in debt securities were classified as held-to-maturity. Held-to-maturity securities are those securities in which the Company has the ability and intent to hold until maturity. Securities classified as held-to-maturity are carried at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security using the straight-line method. During the quarter ended June 30, 2022, we changed the classification of $3.4 million in fair value of our held-to-maturity debt securities to available-for-sale debt securities due to our sales of some of the held-to-maturity securities and that sale being inconsistent with our former intent to hold the securities to maturity. Thus, as of June 30, 2022, all investments in debt securities were classified as available-for-sale. The difference between the reclassified securities' amortized cost and fair value at the date of transfer of $62,000 was recognized as an unrealized loss recorded as a component of accumulated other comprehensive income. Investments in Equity Securities We carry all investments in equity securities at fair value and record the subsequent changes in values in the Consolidated Statement of Operations as a component of investment gains or losses. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2022 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note B: Recent Accounting Pronouncements Accounting pronouncements net yet adopted In June 2016, the FASB issued ASU No. 2016-13 In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including The Company is currently evaluating the potential impact of ASU 2016‑13 on our consolidated financial statements. The adoption of ASU 2016-13 could result in an increase in the allowance for bad debt on the Company's account receivables as a result of changing from an "incurred loss" model, which encompasses allowances for current known losses, to an "expected loss" model, which encompasses allowances for losses expected to be incurred on the Company's receivables. While we are currently evaluating the potential impact of adopting ASU 2016-13, we expect the impact of adoption to be immaterial. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note C: Fair Value Measurements The guidance for fair value measurements establishes the authoritative definition of fair value, sets out a framework for measuring fair value and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We use a three Level 1: observable inputs such as quoted prices in active markets; Level 2: inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Financial Instruments not Measured at Fair Value Certain of our financial instruments are not measured at fair value and are recorded at carrying amounts approximating fair value, based on their short-term nature or variable interest rate. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable and other current financial assets and liabilities. |
Investments in available-for-sa
Investments in available-for-sale debt securities | 6 Months Ended |
Jun. 30, 2022 | |
Investments in available-for-sale debt securities disclosure [Abstract] | |
Investments in available-for-sale debt securities | Note D: Investments in available-for-sale debt securities Investments in available-for-sale debt securities as of June 30, 2022 are summarized by type below (in thousands). Amortized Cost Unrealized Gains Unrealized Losses Fair Value (1) U.S. government $ 609 $ — $ (6 ) $ 603 Corporate and other taxable bonds 2271 1 (31 ) 2,241 Other 635 — (43 ) 592 $ 3,515 $ 1 $ (80 ) $ 3,436 The amortized cost and estimated fair value of available-for-sale debt securities at June 30, 2022 are summarized below by contractual maturity dates (in thousands). Due in one Due after one five Mortgage-backed securities Total Amortized cost $ 428 $ 2,677 $ 410 $ 3,515 Fair value (1) 425 2,607 404 3,436 The following table shows the gross unrealized holding losses and fair value of our available-for-sale securities with unrealized holding losses, summarized by type of securities and length of time that individual securities had been in a continuous loss position deemed to be temporary as of June 30, 2022 (in thousands). Less than 12 12 Total Fair value ( 1 Gross unrealized losses Fair value ( 1 Gross unrealized losses Fair value ( 1 Gross unrealized losses U.S. government $ 603 $ (6 ) $ — $ — $ 603 $ (6 ) Corporate and other taxable bonds 2,241 (30 ) — — 2,241 (30 ) Other 592 (43 ) — — 592 (43 ) $ 3,436 $ (79 ) $ — $ — $ 3,436 $ (79 ) We did not consider any of our available-for-sale securities to be impaired as of June 30, 2022. When evaluating for impairment we assess indicators that include but are not limited to, financial performance, changes in underlying credit ratings, market conditions and offers to purchase or sell. (1) The fair value of the Company's available-for-sale debt securities are determined based upon inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and are classified as level 2 fair value measurements. |
Investments in equity securitie
Investments in equity securities | 6 Months Ended |
Jun. 30, 2022 | |
Investments in equity securities | |
Investments in equity securities | Note E: Investments in equity securities Investments in equity securities as of June 30, 2022 are summarized based on the primary industry of the investee in the table below (in thousands). Cost Basis Net Unrealized Gains (Losses) Fair Value (2) Banks and finance $ 250 $ (3 ) $ 247 $ 250 $ (3 ) $ 247 (2) The fair value of the Company's equity investments are determined based on readily available market data, and are classified as level 1 fair value measurements. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
Inventories [Abstract] | |
Inventories | Note F: Inventories Inventories consisted of the following (in thousands): June 30, 2022 December 31, 2021 Finished goods $ 822 $ 1,205 Components 653 224 Total $ 1,475 $ 1,429 |
Operating Leases
Operating Leases | 6 Months Ended |
Jun. 30, 2022 | |
Operating Leases [Abstract] | |
Operating Leases | Note G: Operating Leases The Company is subject to various non-cancelable operating leases for office space and IT equipment expiring at various dates through March 2023. These leases do not have significant rent escalation, holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not contain contingent rent provisions. Most of these leases include an Because most of our leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of the lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. We used incremental borrowing rates as of January 1, 2019 The Three-Month Periods Ended June 30, Six Months Periods Ended June 30, 2022 2021 2022 2021 Operating lease costs $ 4 $ 53 $ 57 $ 108 Variable lease cost 3 51 54 93 Total $ 7 $ 104 $ 111 $ 201 Variable lease costs consist primarily of property taxes, insurance, and common area or other maintenance costs for our leased facilities and equipment, which are paid based on actual costs incurred by the lessor. Maturities for our lease liabilities for all operating leases were as follows (in thousands) as of June 30, 2022: Total 2022 $ 7 2023 3 2024 and thereafter — Total lease payments 10 Less: Interest — Present value of lease liabilities $ 10 The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 30, 2022: June 30, 2022 Remaining lease term and discount rate: Weighted average remaining lease term (years) 0.64 Weighted average discount rate 4.75 % Cash paid for amounts included in the measurement of operating lease liabilities was $57,000 and $107,000 for the six months ended June 30, 2022 and 2021, respectively, and these amounts are included in operating activities in the condensed consolidated statements of cash flows. During the six months ended June 30, 2022, ISNS and Spruce Tree Centre L.L.P. entered into a lease agreement, which increased operating lease assets and operating lease liabilities by $8,400. The Company is using this leased space to hold equipment that supports various traffic cameras in Saint Paul, Minnesota. The lease agreement, effective March 1, 2022, will expire on March 31, 2023. There were no operating lease assets obtained in exchange for new operating lease liabilities for the three months ended June 30, 2022. On July 28, 2021, ISNS and Spruce Tree Centre L.L.P. ("Spruce Tree") entered into an amendment (the "Amendment"), which amended the original Office Lease Agreement dated as of November 24, 1998 by and between ISNS and Spruce Tree (the "Original Lease"), as such Original Lease was subsequently amended (as so amended, the "Lease"). The Lease term was to expire on July 31, 2021. The Amendment, which was effective August 1, 2021, extended the Lease through March 31, 2022. In addition, the Amendment increased the monthly rent from $16,660 to $16,960 for the period from August 1, 2021 through March 31, 2022. On August 27, 2021 (the "Effective Date"), ISNS and TJ&Z Family Limited Partnership, a Minnesota limited partnership ("TJ&Z"), entered into a Purchase Agreement (the "Original Agreement") under which ISNS purchased certain real and personal property (the "Property") from TJ&Z for a total purchase price of $2,050,000, subject to adjustments if certain conditions were not satisfied (the "Purchase Price"). The foregoing description of the Purchase Agreement and the First Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 2, 2021 and the First Amendment filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 4, 2021 and incorporated herein by reference. The following is a schedule of minimum future rental income (in thousands) on the operating lease related to the billboard located on the Company's Minnesota headquarters as of June 30, 2022. Total 2022 $ 19 2023 38 2024 38 2025 38 2026 38 2027 and thereafter 38 Total minimum future rental income $ 209 The operating lease related to the billboard located on the Real Property is for an initial term of , through December 31, 2027. The lease automatically renews on an annual basis thereafter, cancellable by either party. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note H: Intangible Assets Intangible assets consisted of the following (dollars in thousands): June 30, 2022 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Value (in Years) Wrong Way development costs $ 228 $ (228 ) $ — — Vision development costs 3,107 (2,163 ) 944 8.0 Echo development costs 1,852 (638 ) 1,214 7.0 IntellitraffiQ development costs 468 (468 ) — — Intellisight development costs 841 (3 ) 838 8.0 Total $ 6,496 $ (3,500 ) $ 2,996 7.6 December 31, 2021 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Value (in Years) Wrong Way development costs $ 228 $ (228 ) $ — — Vision development costs 3,107 (1,953 ) 1,154 8.0 Echo development costs 1,852 (506 ) 1,346 7.0 IntellitraffiQ development costs 468 (409 ) 59 4.0 Intellisight development costs 307 — 307 — Total $ 5,962 $ (3,096 ) $ 2,866 6.6 |
Warranties
Warranties | 6 Months Ended |
Jun. 30, 2022 | |
Warranties [Abstract] | |
Warranties | Note I: Warranties We generally provide a two three year Warranty liability and related activity consisted of the following (in thousands): Six-Month Periods Ended June 30, 2022 2021 Beginning balance $ 128 $ 141 Warranty provisions 15 24 Warranty claims (6 ) (24 ) Adjustments to preexisting warranties (13 ) 3 Currency (5 ) (2 ) Ending balance $ 119 $ 142 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note J: Stock-Based Compensation We compensate officers, directors, key employees and consultants with stock-based compensation under the Image Sensing Systems, Inc. 2014 2014 three one nine Compensation expense, net of estimated forfeitures, is recognized ratably over the vesting period. Stock-based compensation expense included in general and administrative expense for the three-month periods ended June 30, 2022 and 2021 was $62,000 and $ 54,000, Stock-based compensation expense included in general and administrative expense for the six-month periods ended June 30, 2022 and 2021 was $114,000 and $107,000, respectively. At June 30, 2022, 612,474 shares were available for grant under the 2014 Stock Options A summary of the stock option activity for the first six 2022 Number of Shares Weighted Weighted Aggregate Options outstanding at December 31, 2021 12,000 $ 4.90 1.13 $ 19,860 Granted 120,000 $ 6.87 — $ — Exercised (7,000 ) $ 4.55 — $ — Expired — $ — — $ — Forfeited (2,000 ) $ 7.10 — $ — Options outstanding at June 30, 2022 123,000 $ 6.81 9.40 $ 3,720 Options exercisable at June 30, 2022 63,000 $ 6.74 9.22 $ 3,720 Stock options to purchase 7,000 shares were exercised, no stock options expired, and options to purchase 2,000 shares were forfeited during the six-month period ended June 30, 2022, and options to purchase 2,000 were exercised and 1,000 shares were forfeited during the six-month period ended June 30, 2021. During each of the six-month periods ended June 30, 2022 and 2021, we recognized $154,000 and no stock-based compensation expense related to stock options, respectively. As of June 30, 2022, there was $123,000 of unrecognized compensation cost related to non-vested stock options. The fair value of stock options granted under stock-based compensation programs has been estimated as of the date of each grant using the multiple option form of the Black-Scholes valuation model, based on the grant price and assumptions regarding the expected life, stock price volatility, dividends, and risk-free interest rates. Each vesting period of an option is valued separately, with this value being recognized over the vesting period. The weighted average per share grant date fair value of options to purchase 120,000 shares granted for the quarter ended June 30, 2022 was $2.32. The weighted average assumptions used to determine the fair value of stock options granted during 2022 is as follows: 2022 Expected life (in years) 3.59 Risk-free interest rate 1.44 % Expected volatility 70.29 % Dividend yield 6.95 % The expected life represents the period that the stock option awards are expected to be outstanding and was determined based on historical and anticipated future exercise and expiration patterns. The risk-free interest rate used is based on the yield of constant maturity U.S. Treasury bonds on the grant date with a remaining term equal to the expected life of the grant. We estimate stock volatility based on a historical daily price observation. The dividend yield assumption is based on the annualized current dividend divided by the share price on the grant date. Restricted Stock Awards and Stock Awards Restricted stock awards are granted under the 2014 Plan at the discretion of the Compensation Committee of our Board of Directors. We issue restricted stock awards to executive officers and key consultants. These awards may contain certain performance conditions or time-based vesting criteria. The restricted stock awards granted to executive officers vest if the various performance or time-based metrics are met. Stock-based compensation is recognized for the number of awards expected to vest at the end of the period and is expensed beginning on the grant date through the end of the vesting period. At the time of vesting of the restricted stock awards, the recipients of common stock may request to receive a net of the number of shares required for employee withholding taxes, which can be withheld up to the relevant jurisdiction's maximum statutory rate. Compensation expense related to any stock awards issued to employees is determined on the grant date based on the publicly-quoted fair market value of our common stock and is charged to earnings on the grant date. We also issue stock awards as a portion of the annual retainer for each director on a quarterly basis. The stock awards are fully vested at the time of issuance. The following table summarizes restricted stock award activity for the first six 2022 Number of Weighted Awards outstanding December 31, 2021 18,597 $ 5.72 Granted 15,300 5.88 Vested (24,629 ) 5.75 Forfeited — — Awards outstanding at June 30, 2022 9,268 $ 5.90 As of June 30, 2022, the total stock-based compensation expense related to non-vested awards not yet recognized was $36,000, which is expected to be recognized over a weighted average period of 1.66 years. During the six-month periods ended June 30, 2022 and June 30, 2021, we recognized $114,000 and $107,000, respectively, of stock-based compensation expense related to restricted stock awards. |
Income per Common Share
Income per Common Share | 6 Months Ended |
Jun. 30, 2022 | |
Income per Common Share [Abstract] | |
Income per Common Share | Note K: Income per Common Share Net income per share is computed by dividing net income (loss) by the daily weighted average number of common shares outstanding during the applicable periods. Diluted net income (loss) per share includes the potentially dilutive effect of common shares subject to outstanding stock options and restricted stock awards using the treasury stock method. Under the treasury stock method, shares subject to certain outstanding stock options and restricted stock awards have been excluded from the calculation of the diluted weighted average shares outstanding because the exercise of those options or the vesting of those restricted stock awards would lead to a net reduction in common shares outstanding. As a result, stock options and restricted stock awards to acquire 120,000 and 2,000 weighted common shares have been excluded from the diluted weighted shares outstanding for the three-month periods ended June 30, 2022 and 2021, respectively, and 100,099 and 2,000 weighted common shares have been excluded from the diluted weighted shares outstanding for the six-month periods ended June 30, 2022 and 2021, respectively. A reconciliation of net income per share is as follows (in thousands, except per share data): Three-Month Periods Ended June 30, Six-Month Periods Ended June 30, 2022 2021 2022 2021 Numerator: Net income $ 74 $ 752 $ 92 $ 1,883 Denominator: Weighted average common shares outstanding 5,381 5,341 5,371 5,332 Dilutive potential common shares 6 9 2 11 Shares used in diluted net income per common share calculations 5,387 5,350 5,373 5,343 Basic net income per common share $ 0.01 $ 0.14 $ 0.02 $ 0.35 Diluted net income per common share $ 0.01 $ 0.14 $ 0.02 $ 0.35 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2022 | |
Segment Information [Abstract] | |
Segment Information | Note L: Segment Information The Company's Chief Executive Officer and management regularly review financial information for the Company's discrete operating segments. Based on similarities in the economic characteristics, nature of products and services, production processes, type or class of customer served, method of distribution and regulatory environments, the operating segments have been aggregated for financial statement purposes and categorized into two Autoscope video is our machine-vision product line, and revenue consists of royalties (all of which are received from Econolite), as well as a portion of international product sales. Video products are normally sold in the Intersection segment. RTMS is our radar product line, and revenue consists of international and North American product sales. Radar products are normally sold in the Highway segment. All segment revenues are derived from external customers. Operating expenses and total assets are not allocated to the segments for internal reporting purposes. Due to the changes in how we manage our business, we may reevaluate our segment definitions in the future. The following tables set forth selected unaudited financial information for each of our reportable segments (in thousands): Three Months Ended June 30, Intersection Highway Total 2022 2021 2022 2021 2022 2021 Revenue $ 1,456 $ 2,637 $ 1,363 $ 1,151 $ 2,819 $ 3,788 Gross profit 1,305 2,437 690 524 1,995 2,961 Amortization of intangible assets 105 97 99 98 204 195 Intangible assets 1,782 1,364 1,214 1,593 2,996 2,957 Six Months Ended June 30, Intersection Highway Total 2022 2021 2022 2021 2022 2021 Revenue $ 3,438 $ 4,529 $ 2,133 $ 2,238 $ 5,571 $ 6,767 Gross profit 3,074 4,161 1,057 1,073 4,131 5,234 Amortization of intangible assets 210 190 194 192 404 382 Intangible assets 1,782 1,364 1,214 1,593 2,996 2,957 |
Restructuring and Exit Activiti
Restructuring and Exit Activities | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Exit Activities [Abstract] | |
Restructuring and Exit Activities | Note M: Restructuring and Exit Activities In the third quarter of 2016, in order to streamline our operating and cost structure, we initiated the closure of our wholly-owned subsidiaries, Image Sensing Systems HK Limited (ISS HK) in Hong Kong and Image Sensing Systems (Shenzhen) Limited (ISS WOFE) in China. During 2020, we initiated the closure of Image Sensing Systems EMEA Limited (ISS UK) and Image Sensing Systems Holdings Limited (ISS Holdings). At September 30, 2021, Image Sensing Systems (Shenzhen) Limited was fully closed. We incurred $1,000 and $23,000 for these entities' closure costs In the second quarter of 2021, the Company began the process of forming a subsidiary in Chennai, India. Autoscope Technologies India Private Limited ("Autoscope India") was legally formed on October 14, 2021. Autoscope India's operations will solely focus on research and development. |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2022 | |
Long-term Debt | |
Long-term Debt | Note N: Long-term Debt Paycheck Protection Program Loan Under the Paycheck Protection Program ("PPP"), the United States Small Business Administration ("SBA") approved the Company's application to receive a loan in the amount of $ 923,700 , 2020 The term of the PPP loan was 24 1.00 Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans made under the PPP after 24 On February 2, 2021, the Company was notified by the Lender that the Lender had received payment in full of the PPP Loan from the United States government, and the Company's PPP Loan had been forgiven. The Company recognized the amount of the PPP Loan principal and accrued interest forgiven totaling approximately $931,000 as other non-operating income in the first quarter of 2021. Real Property Bank Loan On December 10, 2021, ISNS entered into a Business Loan Agreement (the "Loan Agreement") with Coulee Bank (the "Bank") and issued a promissory note to the Bank (the "Note") in the original principal amount of $1,742,500 (the "Loan") to finance the purchase of the Company's Minnesota headquarters located at 1115 Hennepin Avenue, Minneapolis, Minnesota (Real Property). The Note has a term of five years and bears interest at the fixed annual rate of 3.95% unless ISNS defaults under the terms of the Note, in which case a higher interest rate will go into effect calculated as provided in the Note. The Note is payable in 59 consecutive monthly payments of principal and interest of $10,566, with the first payment due on January 10, 2022 and one final payment consisting of the balance of the entire remaining principal amount together with all accrued and unpaid interest, estimated at $1,438,256, due and payable on December 10, 2026. There is no prepayment penalty unless ISNS finances the Loan with another lender, in which case ISNS would be obligated to pay a prepayment penalty to the Bank equal to 1% of the unpaid principal. Upon the occurrence of an event of default under the Loan Agreement, all indebtedness of ISNS to the Bank immediately will become due and payable, all without notice of any kind to ISNS, except that in the case of an event of default of the type described in the "Insolvency" subsection of the Loan Agreement, such acceleration will be automatic and not optional. In addition, upon a default, the Bank will have all the rights and remedies provided in the or available at law, in equity, or otherwise. Under the Mortgage granted by ISNS to the Bank (the "Mortgage") dated as of December 10, 2021, ISNS mortgaged and conveyed to the Bank, with power of sale, all of ISNS's right, title, and interest in and to the Real Property, together with all existing or subsequently erected or affixed buildings and all improvements and fixtures; and all easements, rights of way, and appurtenances. The events of default under the Mortgage are similar to those under the Loan Agreement and the Note and are in addition to those under the Loan Agreement and the Note. As provided in the Assignment of Rents between ISNS and the Bank (the "Assignment") dated as of December 10, 2021, ISNS granted to the Bank a continuing security interest in, and conveyed to the Bank, all of ISNS's right, title, and interest in and to the rents from the Real Property. The Assignment provides that unless and until the Bank exercises its right to collect the rents as provided in the Assignment and so long as there is no default under the Assignment, ISNS may remain in possession and control of and operate and manage the Real Property and collect the rents. The events of default under the Assignment are similar to those under the Loan Agreement, the Note, and the Mortgage and are in addition to those under the Loan Agreement, the Note, and the Mortgage. Other than the lease for the billboards on the Real Property, which TJ&Z assigned to ISNS, there are currently no tenants in the Real Property and no leases or other similar agreements with prospective tenants contemplated. In connection with the Loan, the Company incurred and capitalized approximately $13,000 of debt issuance costs which will be amortized as additional interest expense over the life of the loan and are presented as a reduction to the long-term debt balance. Long-term Debt Maturities Maturities of long-term debt, excluding deferred debt issuance costs, for the next fiscal years are as follows (dollars in thousands): Long-term Debt Maturities 2022 $ 29 2023 60 2024 63 2025 66 2026 1,496 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note O: Commitments and Contingencies Litigation We are involved from time to time in various legal proceedings arising in the ordinary course of our business, including primarily commercial, product liability, employment and intellectual property claims. In accordance with GAAP, we record a liability in our Consolidated Financial Statements with respect to any of these matters when it is both probable t one |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | Note P: Risks and Uncertainties In December 2019, the outbreak of a novel strain of coronavirus, called COVID-19, originated in Wuhan, China, and has since spread worldwide, including to the U.S. To date, the COVID-19 pandemic has caused widespread disruptions to the U.S. and global economy and has contributed to significant volatility, negative pressure in financial markets, and disruptions in supply chains. The global impact of the outbreak is continually evolving and, as additional cases and variants of the virus are identified, many countries, including the U.S., have reacted by instituting quarantines, restrictions on travel, and mandatory closures of businesses. Certain states and cities, including where we or the third parties with whom we engage operate, have also reacted by instituting quarantines, restrictions on travel, “stay at home” rules, restrictions on types of business that may continue to operate, and restrictions on the types of construction projects that may be undertaken. Although the COVID-19 restrictions imposed have been eased in many cases, the extent to which the COVID-19 pandemic impacts our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted with any confidence, including the scope, severity and duration of the pandemic; the actions taken to contain the pandemic or mitigate its impact, including the adoption, effectiveness, and availability of COVID-19 vaccines; the effect of any relaxation of current restrictions in the community and regions in which we, our customers and end users do business; the direct and indirect economic effects of the pandemic and containment measures; and the emergence of any additional COVID-19 variants. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic has affected, and may continue to adversely affect, our business, financial condition and results of operations, and it has had, and probably will continue to have, the effect of exacerbating many of the risks described in this Quarterly Report on Form 10-Q including, but not limited to, the following: • We currently rely on third parties to, among other things, manufacture, supply and market our products and supply other goods and services to run our business. If any such third party is adversely impacted by restrictions resulting from the COVID-19 pandemic, including staffing shortages, production slowdowns, the closure of facilities, and disruptions in delivery systems, our supply chain may be disrupted, which could limit our ability to manufacture our products and conduct research and development. • We have established a hybrid work-from-home policy for all employees, other than those who are performing or supporting business-critical operations or other essential activities. Our increased reliance on personnel working from home has not negatively impacted productivity or disrupted, delayed or otherwise adversely impacted our business. • The trading prices for our common stock have been highly volatile as a result of the COVID-19 pandemic. As a result, we may face difficulties raising capital through any sales of our common stock, or such sales may be on unfavorable terms. In addition, a recession, depression or other sustained adverse market event resulting from the COVID-19 pandemic or other developments and events could materially and adversely affect our business and the value of our common stock. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Basis of Presentation [Abstract] | |
Revenue Recognition | Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: ● Identification of a contract, or contracts, with a customer; ● Identification of performance obligations in the contract or contracts; ● Determination of the transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, we satisfy a performance obligation. Revenue disaggregated by revenue source for the three and six months ended June 30, 2022 and 2021 consists of the following (in thousands); revenue excludes sales and usage-based taxes when or if it has been determined that we are acting as a pass-through agent: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Product sales $ 1,432 $ 1,305 $ 2,366 $ 2,468 Royalties 1,387 2,483 3,205 4,299 Total revenue $ 2,819 $ 3,788 $ 5,571 $ 6,767 Product Sales: Product revenue is generated primarily from the direct sales of our RTMS radar systems worldwide and our Autoscope video systems in Europe and Asia. Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the amount we expect to receive in exchange for those goods or services. Certain product sales may contain multiple performance obligations for revenue recognition purposes. Multiple performance obligations may include hardware, software, installation services, training, support, and extended warranties. For performance obligations without observable stand-alone prices charged to customers Revenue for services such as maintenance, repair, and technical support is recognized either as the service is performed or ratably over the defined contractual period for service maintenance contracts. From time to time, our payment terms may vary by the type and location of our customer and the products or services offered. Revenue for extended warranties are deferred until the coverage period and then recognized ratably over the extended warranty term. We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. We record provisions against sales revenue for estimated returns and allowances in the period when the related revenue is recorded based on historical sales returns and changes in end user demand. Royalties: Econolite Control Products, Inc. (“Econolite”) is our licensee that sells our Autoscope video system products in the United States, Mexico, Canada and the Caribbean. The royalty of approximately 50% of the gross profit on licensed products is recognized when the products are shipped or delivered by Econolite to its customers. Practical Expedients and Exemptions: We generally expense sales commissions when incurred because the amortization periods would have been one year We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year |
Inventories | Inventories Inventories are primarily electronic components and finished goods and are valued at the lower of cost or net realizable value determined under the first-in, first-out accounting method. |
Income Taxes | Income Taxes We record a tax provision for the anticipated tax consequences of our reported results of operations. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those deferred tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. We believe it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with the tax effects of the deferred tax liabilities, will be sufficient to fully recover the remaining net realizable value of our deferred tax assets. If all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with management’s expectations could have a material impact on our financial condition and operating results. We recognize penalties and interest expense related to unrecognized tax benefits in income tax expense. |
Intangible Assets | Intangible Assets We capitalize certain software development costs related to software to be sold, leased, or otherwise marketed. Capitalized software development costs include purchased materials, services, internal labor and other costs associated with the development of new products and services. Software development costs are expensed as incurred until technological feasibility has been established, at which time future costs incurred are capitalized until the product is available for general release to the public. Based on our product development process, technological feasibility is generally established once product and detailed program designs have been completed, uncertainties related to high-risk development issues have been resolved through coding and testing, and we have established that the necessary skills, hardware, and software technology are available for production of the product. Once a software product is available for general release to the public, capitalized development costs associated with that product will begin to be amortized to cost of sales over the product's estimated economic selling life, using the greater of straight-line or a method that results in cost recognition in future periods that is consistent with the anticipated timing of product revenue recognition. Capitalized software development costs are subject to an ongoing assessment of recoverability, which is impacted by estimates and assumptions of future revenues and expenses for these software products, as well as other factors such as changes in product technologies. Any portion of unamortized capitalized software development costs that are determined to be in excess of net realizable value have been expensed in the period in which such a determination is made. Subsequent to reaching technological feasibility for certain software products, we capitalized approximately $221,000 and $55,000 in the quarters ended June 30, 2022 and 2021, respectively, and $534,000 and $178,000 during the six-month periods ended June 30, 2022 and 2021, respectively. Intangible assets with finite lives are amortized on a straight - line basis over the expected period to be benefited by future cash flows and reviewed for impairment. At both June 30, 2022 - lived intangible assets. |
Investments in Debt Securities | Investments in Debt Securities We classify investments in debt securities on the acquisition date and at each balance sheet date. At March 31, 2022, all of our investments in debt securities were classified as held-to-maturity. Held-to-maturity securities are those securities in which the Company has the ability and intent to hold until maturity. Securities classified as held-to-maturity are carried at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security using the straight-line method. During the quarter ended June 30, 2022, we changed the classification of $3.4 million in fair value of our held-to-maturity debt securities to available-for-sale debt securities due to our sales of some of the held-to-maturity securities and that sale being inconsistent with our former intent to hold the securities to maturity. Thus, as of June 30, 2022, all investments in debt securities were classified as available-for-sale. The difference between the reclassified securities' amortized cost and fair value at the date of transfer of $62,000 was recognized as an unrealized loss recorded as a component of accumulated other comprehensive income. |
Investments in Equity Securities | Investments in Equity Securities We carry all investments in equity securities at fair value and record the subsequent changes in values in the Consolidated Statement of Operations as a component of investment gains or losses. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Basis of Presentation [Abstract] | |
Schedule of revenue disaggregated by revenue source | Revenue disaggregated by revenue source for the three and six months ended June 30, 2022 and 2021 consists of the following (in thousands); revenue excludes sales and usage-based taxes when or if it has been determined that we are acting as a pass-through agent: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Product sales $ 1,432 $ 1,305 $ 2,366 $ 2,468 Royalties 1,387 2,483 3,205 4,299 Total revenue $ 2,819 $ 3,788 $ 5,571 $ 6,767 |
Investments in available-for-_2
Investments in available-for-sale debt securities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments in available-for-sale debt securities disclosure [Abstract] | |
Schedule of investments Investments in available-for-sale debt securities by type | Investments in available-for-sale debt securities as of June 30, 2022 are summarized by type below (in thousands). Amortized Cost Unrealized Gains Unrealized Losses Fair Value (1) U.S. government $ 609 $ — $ (6 ) $ 603 Corporate and other taxable bonds 2271 1 (31 ) 2,241 Other 635 — (43 ) 592 $ 3,515 $ 1 $ (80 ) $ 3,436 |
Schedule of amortized cost and estimated fair value of held-to-maturity debt securities by contractual maturity dates | The amortized cost and estimated fair value of available-for-sale debt securities at June 30, 2022 are summarized below by contractual maturity dates (in thousands). Due in one Due after one five Mortgage-backed securities Total Amortized cost $ 428 $ 2,677 $ 410 $ 3,515 Fair value (1) 425 2,607 404 3,436 |
Schedule of unrealized loss on available-for-sale debt securities | The following table shows the gross unrealized holding losses and fair value of our available-for-sale securities with unrealized holding losses, summarized by type of securities and length of time that individual securities had been in a continuous loss position deemed to be temporary as of June 30, 2022 (in thousands). Less than 12 12 Total Fair value ( 1 Gross unrealized losses Fair value ( 1 Gross unrealized losses Fair value ( 1 Gross unrealized losses U.S. government $ 603 $ (6 ) $ — $ — $ 603 $ (6 ) Corporate and other taxable bonds 2,241 (30 ) — — 2,241 (30 ) Other 592 (43 ) — — 592 (43 ) $ 3,436 $ (79 ) $ — $ — $ 3,436 $ (79 ) We did not consider any of our available-for-sale securities to be impaired as of June 30, 2022. When evaluating for impairment we assess indicators that include but are not limited to, financial performance, changes in underlying credit ratings, market conditions and offers to purchase or sell. (1) The fair value of the Company's available-for-sale debt securities are determined based upon inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and are classified as level 2 fair value measurements. |
Investments in equity securit_2
Investments in equity securities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments in equity securities | |
Schedule of investments in equity securities by based on the primary industry of the investee | Investments in equity securities as of June 30, 2022 are summarized based on the primary industry of the investee in the table below (in thousands). Cost Basis Net Unrealized Gains (Losses) Fair Value (2) Banks and finance $ 250 $ (3 ) $ 247 $ 250 $ (3 ) $ 247 (2) The fair value of the Company's equity investments are determined based on readily available market data, and are classified as level 1 fair value measurements. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventories [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): June 30, 2022 December 31, 2021 Finished goods $ 822 $ 1,205 Components 653 224 Total $ 1,475 $ 1,429 |
Operating Leases (Tables)
Operating Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Operating Leases [Abstract] | |
Schedule of components of our costs for operating leases | The Three-Month Periods Ended June 30, Six Months Periods Ended June 30, 2022 2021 2022 2021 Operating lease costs $ 4 $ 53 $ 57 $ 108 Variable lease cost 3 51 54 93 Total $ 7 $ 104 $ 111 $ 201 |
Schedule of the future maturities of lease liabilities | Maturities for our lease liabilities for all operating leases were as follows (in thousands) as of June 30, 2022: Total 2022 $ 7 2023 3 2024 and thereafter — Total lease payments 10 Less: Interest — Present value of lease liabilities $ 10 |
Remaining lease term and discount rate | The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 30, 2022: June 30, 2022 Remaining lease term and discount rate: Weighted average remaining lease term (years) 0.64 Weighted average discount rate 4.75 % |
Schedule of minimum rental commitments under non-cancelable operating leases | The following is a schedule of minimum future rental income (in thousands) on the operating lease related to the billboard located on the Company's Minnesota headquarters as of June 30, 2022. Total 2022 $ 19 2023 38 2024 38 2025 38 2026 38 2027 and thereafter 38 Total minimum future rental income $ 209 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following (dollars in thousands): June 30, 2022 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Value (in Years) Wrong Way development costs $ 228 $ (228 ) $ — — Vision development costs 3,107 (2,163 ) 944 8.0 Echo development costs 1,852 (638 ) 1,214 7.0 IntellitraffiQ development costs 468 (468 ) — — Intellisight development costs 841 (3 ) 838 8.0 Total $ 6,496 $ (3,500 ) $ 2,996 7.6 December 31, 2021 Weighted Gross Net Average Carrying Accumulated Carrying Useful Life Amount Amortization Value (in Years) Wrong Way development costs $ 228 $ (228 ) $ — — Vision development costs 3,107 (1,953 ) 1,154 8.0 Echo development costs 1,852 (506 ) 1,346 7.0 IntellitraffiQ development costs 468 (409 ) 59 4.0 Intellisight development costs 307 — 307 — Total $ 5,962 $ (3,096 ) $ 2,866 6.6 |
Warranties (Tables)
Warranties (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Warranties [Abstract] | |
Warranty liability and related activity | Warranty liability and related activity consisted of the following (in thousands): Six-Month Periods Ended June 30, 2022 2021 Beginning balance $ 128 $ 141 Warranty provisions 15 24 Warranty claims (6 ) (24 ) Adjustments to preexisting warranties (13 ) 3 Currency (5 ) (2 ) Ending balance $ 119 $ 142 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation [Abstract] | |
Schedule of stock option activity | A summary of the stock option activity for the first six 2022 Number of Shares Weighted Weighted Aggregate Options outstanding at December 31, 2021 12,000 $ 4.90 1.13 $ 19,860 Granted 120,000 $ 6.87 — $ — Exercised (7,000 ) $ 4.55 — $ — Expired — $ — — $ — Forfeited (2,000 ) $ 7.10 — $ — Options outstanding at June 30, 2022 123,000 $ 6.81 9.40 $ 3,720 Options exercisable at June 30, 2022 63,000 $ 6.74 9.22 $ 3,720 |
Schedule of weighted average assumptions used to determine the fair value of stock options granted during period | 2022 Expected life (in years) 3.59 Risk-free interest rate 1.44 % Expected volatility 70.29 % Dividend yield 6.95 % |
Table summarizes restricted stock award activity | The following table summarizes restricted stock award activity for the first six 2022 Number of Weighted Awards outstanding December 31, 2021 18,597 $ 5.72 Granted 15,300 5.88 Vested (24,629 ) 5.75 Forfeited — — Awards outstanding at June 30, 2022 9,268 $ 5.90 |
Income per Common Share (Tables
Income per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income per Common Share [Abstract] | |
Schedule of reconciliation of net income per share | A reconciliation of net income per share is as follows (in thousands, except per share data): Three-Month Periods Ended June 30, Six-Month Periods Ended June 30, 2022 2021 2022 2021 Numerator: Net income $ 74 $ 752 $ 92 $ 1,883 Denominator: Weighted average common shares outstanding 5,381 5,341 5,371 5,332 Dilutive potential common shares 6 9 2 11 Shares used in diluted net income per common share calculations 5,387 5,350 5,373 5,343 Basic net income per common share $ 0.01 $ 0.14 $ 0.02 $ 0.35 Diluted net income per common share $ 0.01 $ 0.14 $ 0.02 $ 0.35 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Information [Abstract] | |
Schedule of financial information by reportable segment | The following tables set forth selected unaudited financial information for each of our reportable segments (in thousands): Three Months Ended June 30, Intersection Highway Total 2022 2021 2022 2021 2022 2021 Revenue $ 1,456 $ 2,637 $ 1,363 $ 1,151 $ 2,819 $ 3,788 Gross profit 1,305 2,437 690 524 1,995 2,961 Amortization of intangible assets 105 97 99 98 204 195 Intangible assets 1,782 1,364 1,214 1,593 2,996 2,957 Six Months Ended June 30, Intersection Highway Total 2022 2021 2022 2021 2022 2021 Revenue $ 3,438 $ 4,529 $ 2,133 $ 2,238 $ 5,571 $ 6,767 Gross profit 3,074 4,161 1,057 1,073 4,131 5,234 Amortization of intangible assets 210 190 194 192 404 382 Intangible assets 1,782 1,364 1,214 1,593 2,996 2,957 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Long-term Debt | |
Schedule of maturities of long-term debt | Maturities of long-term debt, excluding deferred debt issuance costs, for the next fiscal years are as follows (dollars in thousands): Long-term Debt Maturities 2022 $ 29 2023 60 2024 63 2025 66 2026 1,496 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Total Revenue | $ 2,819 | $ 3,788 | $ 5,571 | $ 6,767 |
Product sales [Member] | ||||
Total Revenue | 1,432 | 1,305 | 2,366 | 2,468 |
Royalties [Member] | ||||
Total Revenue | $ 1,387 | $ 2,483 | $ 3,205 | $ 4,299 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Aug. 09, 2022 | May 10, 2022 | Feb. 02, 2022 | ||
Disclosure of Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Amount of cash dividend payable to shareholders (in dollars per share) | $ 0.12 | $ 0.12 | ||||||
Royalty percentage of gross profit on licensed products | 50% | |||||||
Amortization period for expense sales commissions incurred, maximum | 1 year | |||||||
Period for the value of unsatisfied performance obligations which are not disclosed | 1 year | |||||||
Software development costs capitalized | $ 221,000 | $ 55,000 | $ 534,000 | $ 178,000 | ||||
Impairment of intangible assets | 0 | 0 | ||||||
Indefinite‑lived intangible assets | 0 | $ 0 | 0 | 0 | ||||
Fair value of available-for-sale debt securities | [1] | 3,436,000 | 3,436,000 | |||||
Transfers of investments from held-to-maturity to available-for-sale classification | $ (62,000) | $ 62,000 | $ (62,000) | |||||
Subsequent Event [Member] | ||||||||
Disclosure of Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Amount of cash dividend payable to shareholders (in dollars per share) | $ 0.12 | |||||||
[1] The fair value of the Company's available-for-sale debt securities are determined based upon inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and are classified as level 2 fair value measurements. |
Investments in available-for-_3
Investments in available-for-sale debt securities (Details) $ in Thousands | Jun. 30, 2022 USD ($) | |
Investments in available-for-sale debt securities | ||
Amortized cost | $ 3,515 | |
Unrealized Gains | 1 | |
Unrealized Losses | (80) | |
Fair Value | 3,436 | [1] |
U.S. government | ||
Investments in available-for-sale debt securities | ||
Amortized cost | 609 | |
Unrealized Gains | 0 | |
Unrealized Losses | (6) | |
Fair Value | 603 | [1] |
Corporate and other taxable bonds | ||
Investments in available-for-sale debt securities | ||
Amortized cost | 2,271 | |
Unrealized Gains | 1 | |
Unrealized Losses | (31) | |
Fair Value | 2,241 | [1] |
Other | ||
Investments in available-for-sale debt securities | ||
Amortized cost | 635 | |
Unrealized Gains | 0 | |
Unrealized Losses | (43) | |
Fair Value | $ 592 | [1] |
[1] The fair value of the Company's available-for-sale debt securities are determined based upon inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and are classified as level 2 fair value measurements. |
Investments in available-for-_4
Investments in available-for-sale debt securities (Details 1) $ in Thousands | Jun. 30, 2022 USD ($) | |
Debt Securities, Available-for-Sale, Amortized Cost | ||
Amortized cost, Due in one year or less | $ 428 | |
Amortized cost, Due after one year through five years | 2,677 | |
Amortized cost, Mortgage-backed securities | 410 | |
Amortized cost | 3,515 | |
Debt Securities, Available-for-Sale, Maturity, Fair Value | ||
Fair value, Due in one year or less | 425 | [1] |
Fair value, Due after one year through five years | 2,607 | [1] |
Fair value, Mortgage-backed securities | 404 | [1] |
Fair Value | $ 3,436 | [1] |
[1] The fair value of the Company's available-for-sale debt securities are determined based upon inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and are classified as level 2 fair value measurements. |
Investments in available-for-_5
Investments in available-for-sale debt securities (Details 2) $ in Thousands | Jun. 30, 2022 USD ($) | |
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, Fair Value | ||
Fair value, Less than 12 months | $ 3,436 | [1] |
Fair value, 12 months or more | 0 | [1] |
Fair value | 3,436 | [1] |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Gross unrealized losses, Less than 12 months | (79) | |
Gross unrealized losses, 12 months or more | 0 | |
Gross unrealized losses | (79) | |
U.S. government | ||
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, Fair Value | ||
Fair value, Less than 12 months | 603 | [1] |
Fair value, 12 months or more | 0 | [1] |
Fair value | 603 | [1] |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Gross unrealized losses, Less than 12 months | (6) | |
Gross unrealized losses, 12 months or more | 0 | |
Gross unrealized losses | (6) | |
Corporate and other taxable bonds | ||
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, Fair Value | ||
Fair value, Less than 12 months | 2,241 | [1] |
Fair value, 12 months or more | 0 | [1] |
Fair value | 2,241 | [1] |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Gross unrealized losses, Less than 12 months | (30) | |
Gross unrealized losses, 12 months or more | 0 | |
Gross unrealized losses | (30) | |
Other | ||
Debt Securities, Available-for-Sale, Continuous Unrealized Loss Position, Fair Value | ||
Fair value, Less than 12 months | 592 | [1] |
Fair value, 12 months or more | 0 | [1] |
Fair value | 592 | [1] |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Gross unrealized losses, Less than 12 months | (43) | |
Gross unrealized losses, 12 months or more | 0 | |
Gross unrealized losses | $ (43) | |
[1] The fair value of the Company's available-for-sale debt securities are determined based upon inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and are classified as level 2 fair value measurements. |
Investments in equity securit_3
Investments in equity securities (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2021 | |||
Investments in equity securities | ||||
Cost Basis | $ 250 | |||
Net Unrealized Gains | 3 | |||
Fair Value | 247 | [1] | $ 0 | |
Banks and finance | ||||
Investments in equity securities | ||||
Cost Basis | 250 | |||
Net Unrealized Gains | 3 | |||
Fair Value | [1] | $ 247 | ||
[1] The fair value of the Company's equity investments are determined based on readily available market data, and are classified as level 1 fair value measurements. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventories [Abstract] | ||
Finished goods | $ 822 | $ 1,205 |
Components | 653 | 224 |
Total | $ 1,475 | $ 1,429 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 8 Months Ended | |||
Jul. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | |
Operating Leases [Abstract] | ||||||
Operating lease cost | $ 16,660 | $ 4,000 | $ 53,000 | $ 57,000 | $ 108,000 | $ 16,960 |
Variable lease cost | 3,000 | 51,000 | 54,000 | 93,000 | ||
Total | $ 7,000 | $ 104,000 | $ 111,000 | $ 201,000 |
Operating Leases (Details 1)
Operating Leases (Details 1) $ in Thousands | Jun. 30, 2022 USD ($) |
Operating Leases [Abstract] | |
2022 | $ 7 |
2023 | 3 |
2024 and thereafter | 0 |
Total lease payments | 10 |
Less: Interest | 0 |
Present value of lease liabilities | $ 10 |
Operating Leases (Details 2)
Operating Leases (Details 2) | Jun. 30, 2022 |
Remaining lease term and discount rate: | |
Weighted average remaining lease term (years) | 7 months 20 days |
Weighted average discount rate | 4.75% |
Operating Leases (Details 3)
Operating Leases (Details 3) $ in Thousands | Jun. 30, 2022 USD ($) |
Operating Leases [Abstract] | |
2022 | $ 19 |
2023 | 38 |
2024 | 38 |
2025 | 38 |
2026 | 38 |
2027 and thereafter | 38 |
Total minimum future rental income | $ 209 |
Operating Leases (Narrative) (D
Operating Leases (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 8 Months Ended | |||||
Dec. 10, 2021 | Aug. 27, 2021 | Jul. 31, 2021 | Nov. 26, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | |
Operating Leases | |||||||||
Operating lease assets | $ 0 | $ 0 | |||||||
Cash paid operating lease costs | 57,000 | $ 107,000 | |||||||
Increase in operating lease assets and liabilities | 8,400 | ||||||||
Rent expense for office facilities | $ 16,660 | $ 4,000 | $ 53,000 | $ 57,000 | 108,000 | $ 16,960 | |||
Inspection Period Under Lease Agreement | 60 days | ||||||||
Operating lease, initial term | 7 years | 7 years | |||||||
Increase in earnest money after amendment | $ 50,000 | ||||||||
Earnest money already paid | $ 100,000 | $ 50,000 | |||||||
Amount of loan | 1,742,500 | ||||||||
Loan proceeds | 1,742,500 | ||||||||
Payment to finance the purchase of the Property and closing costs | $ 230,119 | $ 41,000 | $ 8,000 | ||||||
Series of Individually Immaterial Asset Acquisitions [Member] | |||||||||
Operating Leases | |||||||||
Purchase Price | $ 2,050,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,496 | $ 5,962 |
Accumulated Amortization | (3,500) | (3,096) |
Net Carrying Value | $ 2,996 | $ 2,866 |
Weighted Average Useful Life | 7 years 7 months 6 days | 6 years 7 months 6 days |
Wrong Way Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 228 | $ 228 |
Accumulated Amortization | (228) | (228) |
Net Carrying Value | 0 | 0 |
Vision Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,107 | 3,107 |
Accumulated Amortization | (2,163) | (1,953) |
Net Carrying Value | $ 944 | $ 1,154 |
Weighted Average Useful Life | 8 years | 8 years |
Echo development costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,852 | $ 1,852 |
Accumulated Amortization | (638) | (506) |
Net Carrying Value | $ 1,214 | $ 1,346 |
Weighted Average Useful Life | 7 years | 7 years |
IntellitraffiQ Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 468 | $ 468 |
Accumulated Amortization | (468) | (409) |
Net Carrying Value | 0 | $ 59 |
Weighted Average Useful Life | 4 years | |
Intellisight development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 841 | $ 307 |
Accumulated Amortization | (3) | 0 |
Net Carrying Value | $ 838 | $ 307 |
Weighted Average Useful Life | 8 years |
Warranties (Details)
Warranties (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Beginning balance | $ 128 | $ 141 |
Warranty provisions | 15 | 24 |
Warranty claims | (6) | (24) |
Adjustments to preexisting warranties | (13) | 3 |
Currency | (5) | (2) |
Ending balance | $ 119 | $ 142 |
Minimum [Member] | ||
Product Warranty Liability [Line Items] | ||
Product Warranty Period | 2 years | |
Maximum [Member] | ||
Product Warranty Liability [Line Items] | ||
Product Warranty Period | 3 years |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Number of Shares | ||
Outstanding - beginning of period | 12,000 | |
Granted | 120,000 | |
Exercised | (7,000) | |
Expired | 0 | |
Forfeited | (2,000) | |
Outstanding - end of period | 123,000 | 12,000 |
Exercisable - end of period | 63,000 | |
Weighted Average Exercise Price per Share | ||
Outstanding - beginning of period | $ 4.9 | |
Granted | 6.87 | |
Exercised | 4.55 | |
Expired | 0 | |
Forfeited | 7.1 | |
Outstanding - end of period | 6.81 | $ 4.9 |
Exercisable - end of period | $ 6.74 | |
Weighted Average Remaining Contractual Term | ||
Options outstanding | 9 years 4 months 24 days | 1 year 1 month 17 days |
Options exercisable | 9 years 2 months 19 days | |
Aggregate Intrinsic Value | ||
Outstanding - beginning of period | $ 19,860 | |
Granted | $ 0 | |
Granted | $ 2.32 | |
Exercised | $ 0 | |
Expired | 0 | |
Forfeited | 0 | |
Outstanding - end of period | 3,720 | $ 19,860 |
Options exercisable | $ 3,720 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) - Employee Stock Option [Member] | 6 Months Ended |
Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life (in years) | 3 years 7 months 2 days |
Risk-free interest rate | 1.44% |
Expected volatility | 70.29% |
Dividend yield | 6.95% |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details 2) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Number of Shares | |
Awards outstanding at beginning of year | shares | 18,597 |
Granted | shares | 15,300 |
Vested | shares | (24,629) |
Forfeited | shares | 0 |
Awards outstanding at end of year | shares | 9,268 |
Weighted Average grant date fair value | |
Outstanding at beginning of year | $ / shares | $ 5.72 |
Granted | $ / shares | 5.88 |
Vested | $ / shares | 5.75 |
Forfeited | $ / shares | 0 |
Outstanding at end of year | $ / shares | $ 5.9 |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 62,000 | $ 54,000 | $ 114,000 | $ 107,000 |
Shares available for grant | 612,474 | 612,474 | ||
Stock option exercised | 7,000 | |||
Options expired | 0 | |||
Options forfeited | 2,000 | |||
Stock options granted | 120,000 | |||
Stock options granted, weighted average per share grant date fair value | $ 2.32 | |||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option awards, vesting term | 3 years | |||
Stock option awards, contractual term | 9 years | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option awards, vesting term | 5 years | |||
Stock option awards, contractual term | 10 years | |||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 154,000 | $ 0 | ||
Unrecognized compensation cost related to non-vested stock awards | $ 123,000 | $ 123,000 | ||
Stock option exercised | 7,000 | |||
Options expired | 0 | |||
Options forfeited | 2,000 | 1,000 | ||
Restricted Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 107,000 | |||
Unrecognized compensation cost related to non-vested stock awards | $ 36,000 | $ 36,000 | ||
Period for recognition of unrecognized compensation cost related to non-vested stock awards | 1 year 7 months 28 days | |||
Vesting rights description of stock awards granted | The restricted stock awards granted to executive officers vest if the various performance or time-based metrics are met. |
Income per Common Share (Detail
Income per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net income | $ 74 | $ 752 | $ 92 | $ 1,883 |
Denominator: | ||||
Weighted average common shares outstanding | 5,381 | 5,341 | 5,371 | 5,332 |
Dilutive potential common shares | 6 | 9 | 2 | 11 |
Shares used in diluted net income per common share calculations | 5,387 | 5,350 | 5,373 | 5,343 |
Basic net income per common share | $ 0.01 | $ 0.14 | $ 0.02 | $ 0.35 |
Diluted net income per common share | $ 0.01 | $ 0.14 | $ 0.02 | $ 0.35 |
Shares excluded from diluted weighted shares outstanding | 120,000 | 2,000 | 100,099 | 2,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of Reportable Segments | 2 | |||
Revenue | $ 2,819 | $ 3,788 | $ 5,571 | $ 6,767 |
Gross profit | 1,995 | 2,961 | 4,131 | 5,234 |
Amortization of intangible assets | 204 | 195 | 404 | 382 |
Intangible assets | 2,996 | 2,957 | 2,996 | 2,957 |
Intersection [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,456 | 2,637 | 3,438 | 4,529 |
Gross profit | 1,305 | 2,437 | 3,074 | 4,161 |
Amortization of intangible assets | 105 | 97 | 210 | 190 |
Intangible assets | 1,782 | 1,364 | 1,782 | 1,364 |
Highway [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,363 | 1,151 | 2,133 | 2,238 |
Gross profit | 690 | 524 | 1,057 | 1,073 |
Amortization of intangible assets | 99 | 98 | 194 | 192 |
Intangible assets | $ 1,214 | $ 1,593 | $ 1,214 | $ 1,593 |
Restructuring and Exit Activi_2
Restructuring and Exit Activities (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
ISS UK and ISS Holdings [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Entity closures cost | $ 1,000 | $ 23,000 |
Long-term Debt (Details)
Long-term Debt (Details) - Promissory Note $ in Thousands | Jun. 30, 2022 USD ($) |
Long-term Debt Maturities | |
2022 | $ 29 |
2023 | 60 |
2024 | 63 |
2025 | 66 |
2026 | $ 1,496 |
Long-term Debt (Details Narrati
Long-term Debt (Details Narrative) | 6 Months Ended | |||
Jun. 30, 2022 USD ($) wk | Jun. 30, 2021 USD ($) | Dec. 10, 2021 USD ($) | Apr. 22, 2020 USD ($) | |
LONG-TERM DEBT | ||||
Amount of the loan and accrued interest forgiven | $ 0 | $ 931,000 | ||
Amount of loan | $ 1,742,500 | |||
Paycheck Protection Program [Member] | ||||
LONG-TERM DEBT | ||||
Debt instrument, term | 24 months | |||
Debt instrument, annual interest rate | 1% | |||
Debt Instrument, payment terms | No payments of principal or interest were due during the nine months beginning on the date of the Note (the "Deferred Period"). | |||
Debt Instrument, threshold number of weeks to apply for and be granted forgiveness of debt | wk | 24 | |||
Amount of the loan and accrued interest forgiven | $ 931,000 | |||
Amount of loan | $ 923,700 | $ 923,700 | ||
Promissory Note | ||||
LONG-TERM DEBT | ||||
Original Principal amount | $ 1,742,500 | |||
Debt instrument, term | 5 years | |||
Debt instrument, annual interest rate | 3.95% | |||
Debt Instrument, frequency of periodic payment | 59 consecutive monthly payments | |||
Debt Instrument, periodic payment of principal and interest | $ 10,566 | |||
Debt Instrument, date of first required payment | Jan. 10, 2022 | |||
Debt Instrument, final periodic payment of principal and interest | $ 1,438,256 | |||
Debt Instrument, Maturity Date | Dec. 10, 2026 | |||
Debt Instrument, prepayment penalty | $ 0 | |||
Debt Instrument, prepayment penalty, interest rate | 1% | |||
Debt issuance costs incurred and capitalized | $ 13,000 |