Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-13810 | |
Entity Registrant Name | Socket Mobile, Inc. | |
Entity Central Index Key | 0000944075 | |
Entity Tax Identification Number | 94-3155066 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 39700 Eureka Drive | |
Entity Address, City or Town | Newark | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94560 | |
Local Phone Number | 510-933-3000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 5,999,653 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 4,980,060 | $ 4,136,593 | $ 14,668,757 | $ 12,309,979 |
Cost of revenues | 2,343,758 | 1,959,956 | 7,002,971 | 5,937,026 |
Gross profit | 2,636,302 | 2,176,637 | 7,665,786 | 6,372,953 |
Operating expenses: | ||||
Research and development | 1,015,051 | 884,497 | 2,906,271 | 2,748,310 |
Sales and marketing | 785,295 | 738,804 | 2,312,305 | 2,210,499 |
General and administrative | 706,485 | 584,256 | 2,052,882 | 1,874,069 |
Total operating expenses | 2,506,831 | 2,207,557 | 7,271,458 | 6,832,878 |
Operating income (loss) | 129,471 | (30,920) | 394,328 | (459,925) |
Interest expense, net | (25,562) | (31,919) | (83,371) | (99,819) |
Net income (loss) before income taxes | 103,909 | (62,839) | 310,957 | (559,744) |
Income tax benefit (expense) | (9,611) | 17,582 | (85,030) | 151,216 |
Net income (loss) | $ 94,298 | $ (45,257) | $ 225,927 | $ (408,528) |
Net income (loss) per share: | ||||
Basic | $ 0.02 | $ (0.01) | $ 0.04 | $ (0.07) |
Diluted | $ 0.01 | $ (0.01) | $ 0.04 | $ (0.07) |
Weighted average shares outstanding: | ||||
Basic | 5,999,487 | 5,883,109 | 5,979,715 | 6,166,017 |
Diluted | 6,317,270 | 5,883,109 | 6,236,673 | 6,166,017 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 881,115 | $ 1,084,991 |
Accounts receivable, net | 3,062,209 | 2,367,177 |
Inventories, net | 2,528,238 | 2,272,328 |
Prepaid expenses and other current assets | 404,989 | 307,832 |
Deferred cost on shipments to distributors | 257,241 | 165,024 |
Total current assets | 7,133,792 | 6,197,352 |
Property and equipment: | ||
Machinery and office equipment | 2,200,567 | 2,188,835 |
Computer equipment | 1,243,799 | 992,531 |
Property and equipment, gross | 3,444,366 | 3,181,366 |
Accumulated depreciation | (2,627,141) | (2,492,154) |
Property and equipment, net | 817,225 | 689,212 |
Goodwill | 4,427,000 | 4,427,000 |
Other long-term assets | 213,504 | 236,565 |
Deferred tax assets | 5,668,870 | 5,780,938 |
Operating lease right-of-use asset | 1,021,164 | 1,265,648 |
Total assets | 19,281,555 | 18,596,715 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,789,991 | 1,533,456 |
Accrued payroll and related expenses | 634,458 | 512,307 |
Deferred revenue on shipments to distributors | 621,988 | 396,974 |
Short term portion of deferred service revenue | 34,933 | 33,644 |
Bank lines of credit | 1,428,961 | 1,316,778 |
Term loan – current portion | 458,333 | 500,000 |
Operating lease – current portion | 408,162 | 376,160 |
Finance lease – current portion | 12,332 | 15,697 |
Total current liabilities | 5,389,158 | 4,685,016 |
Long-term portion of deferred service revenue | 44,809 | 31,291 |
Long-term portion of term loan | 333,333 | |
Long-term portion of operating lease | 824,704 | 1,134,350 |
Long-term portion of finance lease | 8,290 | |
Total liabilities | 6,258,671 | 6,192,280 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value: Authorized – 20,000,000 shares, Issued and outstanding – 5,999,653 shares at September 30, 2019 and 5,883,109 shares at December 31, 2018 | 6,000 | 5,883 |
Additional paid-in capital | 60,916,306 | 60,523,901 |
Accumulated deficit | (47,899,422) | (48,125,349) |
Total stockholders’ equity | 13,022,884 | 12,404,435 |
Total liabilities and stockholders’ equity | $ 19,281,555 | $ 18,596,715 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 5,999,653 | 5,883,109 |
Common stock, shares outstanding | 5,999,653 | 5,883,109 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net income (loss) | $ 225,927 | $ (408,528) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation | 392,008 | 361,674 |
Depreciation and amortization | 333,451 | 314,770 |
Changes in deferred taxes | 112,068 | (151,215) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (695,032) | 155,653 |
Inventories | (255,910) | 305,053 |
Prepaid expenses and other assets | (98,477) | 72,093 |
Accounts payable and accrued expenses | 256,535 | 91,850 |
Accrued payroll and related expenses | 122,151 | (102,234) |
Net deferred income on shipments to distributors | 132,797 | (4,777) |
Deferred service revenue | 14,807 | (1,920) |
Net change in operating lease | (33,160) | (19,976) |
Net cash provided by operating activities | 507,165 | 612,443 |
Investing activities | ||
Purchases of equipment | (437,083) | (388,802) |
Net cash used in investing activities | (437,083) | (388,802) |
Financing activities | ||
Payments on financing leases | (11,655) | (21,289) |
Proceeds from borrowings under bank line of credit agreement | 13,038,000 | 9,416,353 |
Repayments of borrowings under bank line of credit agreement | (12,925,817) | (7,889,663) |
Proceeds from bank term loan | 4,000,000 | |
Repayments of bank term loan | (375,000) | (3,041,667) |
Common stock repurchases and related expenses | (5,021,830) | |
Stock options exercised | 514 | 279,177 |
Net cash used in financing activities | (273,958) | (2,278,919) |
Net decrease in cash and cash equivalents | (203,876) | (2,055,278) |
Cash and cash equivalents at beginning of period | 1,084,991 | 3,379,508 |
Cash and cash equivalents at end of period | 881,115 | 1,324,230 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 81,060 | 86,754 |
Cash paid for income taxes |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2017 | $ 7,011 | $ 64,777,620 | $ (47,554,208) | $ 17,230,423 |
Beginning Balance (in shares) at Dec. 31, 2017 | 7,011,128 | |||
Exercise of stock options | $ 118 | 275,145 | 275,263 | |
Exercise of stock options (in shares) | 117,852 | |||
Cost of tender offer | $ (1,250) | (5,018,616) | (5,019,866) | |
Cost of tender offer (in shares) | (1,250,000) | |||
Stock-based compensation | 112,133 | 112,133 | ||
Net income (loss) | (225,029) | (225,029) | ||
Ending Balance at Mar. 31, 2018 | $ 5,879 | 60,146,282 | (47,779,237) | 12,372,924 |
Beginning Balance at Dec. 31, 2017 | $ 7,011 | 64,777,620 | (47,554,208) | 17,230,423 |
Beginning Balance (in shares) at Dec. 31, 2017 | 7,011,128 | |||
Net income (loss) | (408,528) | |||
Ending Balance at Sep. 30, 2018 | $ 5,883 | 60,397,769 | (47,962,736) | 12,440,916 |
Ending Balance (in shares) at Sep. 30, 2018 | 5,883,109 | |||
Beginning Balance at Mar. 31, 2018 | $ 5,879 | 60,146,282 | (47,779,237) | 12,372,924 |
Exercise of stock options | $ 4 | 4,032 | 4,036 | |
Exercise of stock options (in shares) | 4,129 | |||
Cost of tender offer | (2,086) | (2,086) | ||
Stock-based compensation | 118,843 | 118,843 | ||
Net income (loss) | (138,242) | (138,242) | ||
Ending Balance at Jun. 30, 2018 | $ 5,883 | 60,267,071 | (47,917,479) | 12,355,475 |
Ending Balance (in shares) at Jun. 30, 2018 | 5,883,109 | |||
Stock-based compensation | 130,698 | 130,698 | ||
Net income (loss) | (45,257) | (45,257) | ||
Ending Balance at Sep. 30, 2018 | $ 5,883 | 60,397,769 | (47,962,736) | 12,440,916 |
Ending Balance (in shares) at Sep. 30, 2018 | 5,883,109 | |||
Beginning Balance at Dec. 31, 2018 | $ 5,883 | $ 60,523,901 | (48,125,349) | 12,404,435 |
Beginning Balance (in shares) at Dec. 31, 2018 | 5,883,109 | |||
Restricted stock grants | 116 | (116) | ||
Restricted stock grants (in shares) | $ 116,050 | |||
Stock-based compensation | $ 121,965 | 121,965 | ||
Net income (loss) | 11,839 | 11,839 | ||
Ending Balance at Mar. 31, 2019 | $ 5,999 | 60,645,750 | (48,113,510) | 12,538,239 |
Ending Balance (in shares) at Mar. 31, 2019 | 5,999,159 | |||
Beginning Balance at Dec. 31, 2018 | $ 5,883 | 60,523,901 | (48,125,349) | 12,404,435 |
Beginning Balance (in shares) at Dec. 31, 2018 | 5,883,109 | |||
Stock-based compensation | 392,008 | |||
Net income (loss) | 225,927 | |||
Ending Balance at Sep. 30, 2019 | $ 6,000 | 60,916,306 | (47,899,422) | 13,022,884 |
Ending Balance (in shares) at Sep. 30, 2019 | 5,999,643 | |||
Beginning Balance at Mar. 31, 2019 | $ 5,999 | 60,645,750 | (48,113,510) | 12,538,239 |
Beginning Balance (in shares) at Mar. 31, 2019 | 5,999,159 | |||
Stock-based compensation | 137,035 | 137,035 | ||
Net income (loss) | 119,790 | 119,790 | ||
Ending Balance at Jun. 30, 2019 | $ 5,999 | 60,782,785 | (47,993,720) | 12,795,064 |
Ending Balance (in shares) at Jun. 30, 2019 | 5,999,159 | |||
Exercise of stock options | $ 1 | 513 | 514 | |
Exercise of stock options (in shares) | 494 | |||
Stock-based compensation | 133,008 | 133,008 | ||
Net income (loss) | 94,298 | 94,298 | ||
Ending Balance at Sep. 30, 2019 | $ 6,000 | $ 60,916,306 | $ (47,899,422) | $ 13,022,884 |
Ending Balance (in shares) at Sep. 30, 2019 | 5,999,643 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation | NOTE 1 — Basis of Presentation The accompanying unaudited condensed financial statements of Socket Mobile, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future period. These financial statements should be read in conjunction with the audited financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Note 2 - Summary of Significant Accounting Policies | NOTE 2 — Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements. Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. At September 30, 2019 and December 31, 2018, all of the Company’s cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The aggregate cash balance on deposit in these accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance on deposit in these accounts may, at times, exceed the federally insured limits. The Company has never experienced any losses in such accounts. The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, debt and foreign exchange contracts approximate fair value due to the relatively short period of time to maturity. Revenue Recognition and Deferred Revenue On January 1, 2017, the Company adopted ASC 606 “Revenue from Contracts with Customers” and implemented a new revenue recognition policy. Instead of deferring 100% of revenue and cost of revenue until products are sold by distributors, the new policy recognizes revenue on sales to distributors when shipping of product is completed and title transfers to the distributor, less a reserve for estimated product returns (sales and cost of sales). The reserves are based on estimates of future returns calculated from actual return history, primarily from stock rotations, plus knowledge of pending returns outside of the norm. At September 30, 2019, the deferred revenue and deferred cost on shipments to distributors were approximately $621,988 and $257,241 respectively, compared to approximately $396,974 and $165,024, respectively, at December 31, 2018. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company adopted ASU 2016-02 effective January 1, 2019, which had no impact on the Company’s Statements of Operations. The most significant impact was the recognition of right-of-use assets and liabilities for the operating lease. Adoption of the standard required the Company to restate the reported results in its earliest comparable period, January 1, 2018, including the recognition of additional operating lease right-of-use assets and liabilities. As a result, there was an increase in assets and corresponding liabilities of approximately $1.57 million on January 1, 2018. At September 30, 2019, the balances of right-of-use assets and liabilities for the operating lease are approximately $1.02 million and $1.23 million, respectively, compared to approximately $1.27 million and $1.51 million, respectively, at December 31, 2018. Recently Issued Financial Accounting Standards In July 2019, the FASB issued ASU 2019-07, “Codification Updates to SEC Sections — Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update)” (“ASU 2019-07”). ASU 2019-07 aligns the guidance in various SEC sections of the Codification with the requirements of certain SEC final rules. ASU 2019-07 is effective immediately. The adoption of ASU 2019-07 did not have a material impact on the Company’s financial statements. From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption. |
Note 3 - Inventories
Note 3 - Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 — Inventories Inventories consist principally of raw materials and sub-assemblies, which are stated at the lower of cost (first-in, first-out) or market. Inventories at September 30, 2019 and December 31, 2018 were as follows: September 30, December 31, 2019 2018 Raw materials and sub-assemblies $ 3,140,461 $ 2,785,154 Finished goods 255,938 335,335 Inventory reserves (868,161 ) (848,161 ) Inventories, net $ 2,528,238 $ 2,272,328 |
Note 4 - Bank Financing Arrange
Note 4 - Bank Financing Arrangements | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Bank Financing Arrangements | NOTE 4 — Bank Financing Arrangements On January 31, 2018, the Company entered into an Amended and Restated Business Financing Agreement (the “Third Financing Agreement”) with Western Alliance Bank (the “Bank), that provides for a $2.5 million revolving line of credit and a $4.0 million term loan that the Company may use to repurchase shares of common stock. Pursuant to the revolving line of credit, the Company is permitted to borrow up to the lesser of $2.5 million or 80% of eligible accounts receivables. Amounts outstanding under the line of credit bear interest at the “U.S. Prime Rate” published by the Wall Street Journal plus 0.75%. Interest is payable monthly on the line of credit, and the principal is due upon the maturity date of January 31, 2020. Amounts outstanding under the term loan bear interest at the “U.S. Prime Rate” published by the Wall Street Journal plus 1.75%. The loans are secured by all of our present and future assets, including intellectual property and general intangibles. The Financing Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, grant liens, make investments, incur indebtedness, merge or consolidate, dispose of assets, make acquisitions, pay dividends or make distributions, repurchase stock, enter into transactions with affiliates and enter into restrictive agreements, in each case subject to customary exceptions for a credit facility of this size and type. The Financing Agreement also contains customary events of default including, among others, payment defaults, breaches of covenants, bankruptcy and insolvency events, cross defaults with certain material indebtedness, judgment defaults, and breaches of representations and warranties. Upon an event of default, the Bank may declare all or a portion of the Company’s outstanding obligations payable to be immediately due and payable and exercise other rights and remedies provided for under the Financing Agreement. During the existence of an event of default, interest on the obligations could be increased. On March 1, 2018, the Company received proceeds of $4.0 million under the provisions of the term loan for a common stock repurchase. On March 9, 2018, the Company completed a tender offer to purchase and retire 1,250,000 shares of common stock from multiple investors at a purchase price of $3.90 per share, for an aggregate cost of approximately $4.9 million, excluding fees and expenses relating to the tender offer. On April 12, 2018, the Company advised the Bank that its operating results for the quarter ended March 31, 2018 were not expected to be in compliance with two financial covenants, the first a Fixed Charge Coverage Ratio and the second a Total Funded Debt to EBITDA ratio. The Company reported the non-compliance in its Form 10-Q for the quarter ended March 31, 2018. The Bank verbally agreed to forbear the events of default subject to further modification of the Financing Agreement. The Company subsequently paid down the term loan from $4.0 million at March 31, 2018 to $1.0 million at June 30, 2018. The paydowns were made from its cash and revolving lines of credit. On June 4, 2018, the Company entered into the Fourth Amended and Restated Business Financing Agreement with the Bank. The Bank recognized the repayment of the outstanding term loan balance to $1.0 million by June 30, 2018. The remaining balance is repayable in 24 equal monthly installments. The Bank permanently waived the defaults resulting from March 31, 2018 results when paydown of the term loan balance to $1.0 million by June 30, 2018 was achieved. On July 30, 2018, the Company entered into the Fifth Amended and Restated Business Financing Agreement with the Bank. The Company was required to maintain daily cash plus available credit at or above 90% of the outstanding principal balance of the term loan until the Asset Coverage Ratio is at 1.25 to 1.0. The minimum Asset Coverage Ratio increased to 1.25 to 1.0 from December 31, 2018 onwards. On June 14, 2019, the Company entered into the Sixth Amended and Restated Business Financing Agreement with the Bank. The Bank waived the default which occurred for the month ended April 30, 2019 when the Company’s Asset Coverage Ratio was 1.13 to 1.00, instead of the required 1.25 to 1.00. The Bank also increased the Eligible Receivable threshold for Ingram Micro from 50% to 60% of domestic receivables, and from 35% to 50% of all receivables (including both domestic and foreign receivables). The Asset Coverage Ratio was 1.88 to 1.00 on September 30, 2019. During the three months and nine months ended September 30, 2019, total repayments of the term loan was $125,000 and $375,000. During the nine months ended September 30, 2019, total amount borrowed under the domestic and international lines was $13,038,000 and the total repayments was $12,925,817. At September 30, 2019, the total borrowing capacity was approximately $237,000. Amounts outstanding under the term loan and bank credit facilities at September 30, 2019 are as follows: September 30, 2019 Long-term portion of term loan — Current-portion of term loan 458,333 Term loan $ 458,333 September 30, 2019 Lines of credit -domestic line 929,520 Lines of credit -EXIM line 499,441 Total lines of credit $ 1,428,961 Interest expense on the term loan for three and nine months ended September 30, 2019 was $9,031 and $38,225, respectively. Interest expense on the amounts drawn under the Company’s bank credit lines during the three and nine months ended September 30, 2019 was $16,633 and $45,310. Accrued interest payable related to the amounts outstanding under the term loan and bank credit facilities at September 30, 2019 was $15,877. |
Note 5 - Segment Information an
Note 5 - Segment Information and Concentrations | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information and Concentrations | NOTE 5 — Segment Information and Concentrations Segment Information The Company operates in the mobile barcode scanning and RFID/NFC data capture market. Mobile scanning typically consists of using mobile devices such as smartphones or tablets, with mobile scanning peripherals for data collection, and third-party vertical applications software. The Company distributes its products in the United States and foreign countries primarily through distributors and resellers. The Company markets its products primarily through application developers whose applications are designed to work with Company’s products. Revenues by geographic area for three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Revenues: Americas $ 3,283,745 $ 3,256,758 $ 10,937,316 $ 9,573,354 Europe 817,420 533,414 1,915,343 1,816,803 Asia Pacific 878,895 346,421 1,816,098 919,822 Total revenues $ 4,980,060 $ 4,136,593 $ 14,668,757 $ 12,309,979 Export revenues are attributable to countries based on the location of the Company’s customers. The Company does not hold long-lived assets in foreign locations. Major Customers Customers who accounted for at least 10% of the Company’s total revenues for the three and nine-month periods ended September 30, 2019 and 2018 were: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Ingram Micro Inc. 34 % 30 % 39 % 32 % BlueStar, Inc. 16 % 25 % 18 % 23 % Nippon Primex, Inc. 12 % * * * Ingram Micro Pan Europe GmbH 10 % * * * ScanSource, Inc. * 11 % * 10 % _____________ * Customer accounted for less than 10% of total revenues for the period Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk include cash, cash equivalents and accounts receivable. The Company invests its cash in demand deposit accounts in banks. To date, the Company has not experienced losses on the investments. The Company’s trade accounts receivables are primarily with distributors. The Company performs ongoing credit evaluations of its customers’ financial condition but generally requires no collateral. Reserves are maintained for potential credit losses, and such losses have been within management’s expectations. Customers who accounted for at least 10% of the Company’s accounts receivable balances at September 30, 2019 and December 31, 2018 were as follows: September 30, December 31, 2019 2018 Ingram Micro Inc. 37 % 41 % Ingram Micro Pan Europe GmbH 17 % * BlueStar, Inc. 14 % 19 % _____________ * Customer accounted for less than 10% of total accounts receivable balances for the period Concentration of Suppliers Several of the Company’s component parts are produced by a sole or limited number of suppliers. Shortages could occur in these essential materials due to increased demand, or to an interruption of supply. Suppliers may choose to restrict credit terms or require advance payments causing delays in the procurement of essential materials. If the Company were unable to procure certain of such materials, it could have a material adverse effect upon its results. At September 30, 2019, 36% of the Company’s accounts payable balances were concentrated in the top three suppliers. For the three months ended September 30, 2019, top three suppliers accounted for 53% of the inventory purchases. |
Note 6 - Stock-Based Compensati
Note 6 - Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 6 — Stock-Based Compensation The Company recognizes the compensation cost in the financial statements for all stock-based awards to employees, including grants of stock options and restricted stock units, based on the fair value of the awards as of the date that the awards are issued. Compensation cost for stock-based awards is recognized on a straight-line basis over the vesting period. The fair values of stock options are generally determined using a binomial lattice valuation model which incorporates assumptions about expected volatility, risk-free interest rate, dividend yield, and expected life. On February 15, 2019, 165,600 shares were granted to executive officers, selected employees and consultants as stock option refresher grants. On February 15, 2019, the Company also granted 116,050 restricted stock units (“RSUs”) to employees. Each RSU represents the right to receive one share of the Company’s common stock upon vesting. The fair value of these RSUs was calculated based upon the Company’s closing stock price on the date of grant. These RSUs are with service-based vesting provisions and vest over four years: 15% on February 15, 2020, 20% on February 15, 2021, 25% on February 15, 2022, and 40% on February 15, 2023. The shares are issued in the name of each employee but held in an escrow account by the Company’s transfer agent, American Stock Transfer & Trust. As they vest, the shares will be issued to the individual either electronically or as certificates as instructed by the individual. Each individual has voting rights while shares are unvested. The share totals are included in primary earnings per share. The expense of these RSUs is recognized on a straight-line basis over the vesting period. On August 30, 2019 the Company completed a one-time tender offer to exchange 331,314 shares granted under its 2004 Equity Incentive Plan in year 2010 to the current employees, executive officers, and directors of the Company. All surrendered options were cancelled effective as of the expiration of the Exchange Offer on August 30, 2019. The Company granted new options to purchase an aggregate of 331,314 shares of the Company’s common stock pursuant to the terms of the Exchange Offer and the Company’s 2004 Equity Incentive Plan. The new options were priced at the closing market price of $2.32 on August 30, 2019 with a monthly vesting over 4 years and a new 10-year expiration date of August 30, 2029. The Company’s stockholders approved the implementation of this stock option exchange program at its 2019 annual meeting of stockholders on May 22, 2019. Total stock-based compensation expense for the three months and nine months ended September 30, 2019, was $133,008 and $392,008, respectively. |
Note 7 - Net Income (Loss) Per
Note 7 - Net Income (Loss) Per Share Applicable to Common Stockholders | 9 Months Ended |
Sep. 30, 2019 | |
Income Statement [Abstract] | |
Net Income (Loss) Per Share Applicable to Common Stockholders | NOTE 7 — Net Income (Loss) Per Share Applicable to Common Stockholders The following table sets forth the computation of basic and diluted net income (loss) per share: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Numerator: Net income (loss) $ 94,298 $ (45,257 ) $ 225,927 $ (408,528 ) Denominator: Weighted average shares outstanding used in computing net income (loss) per share: Basic 5,999,487 5,883,109 5,979,715 6,166,017 Effect of dilutive stock options 317,783 — 256,958 — Diluted 6,317,270 5,883,109 6,236,673 6,166,017 Net income (loss) per share applicable to common stockholders: Basic $ 0.02 $ (0.01 ) $ 0.04 $ (0.07 ) Diluted $ 0.01 $ (0.01 ) $ 0.04 $ (0.07 ) In the three and nine months ended September 30, 2019, 2,128,547 and 2,189,372, respectively, stock options were excluded in the calculation of diluted net loss per share because their effect would be anti-dilutive. In the three and nine months ended September 30, 2018, 2,358,059 stock options were excluded in the calculation of diluted net loss per share because their effect would be anti-dilutive. |
Note 8 - Income Taxes
Note 8 - Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 — Income Taxes The Tax Cuts and Jobs Act of 2017, effective on January 1, 2018, eliminates alternative minimum taxes and lowers the U.S. federal corporate income tax from 34% to 21%. In the three and nine months ended September 30, 2019, the Company recorded deferred tax expenses of $37,449 and $85,030, respectively. In the same periods a year ago, the Company recorded income tax benefits of $17,582 and $151,216, respectively, with the expectation of a return to profitable operating results and full utilization of the Company’s Net Operating Loss carryforwards. In Q3 2019, the Company also recorded a tax refund of $27,838 resulted of AMT paid in the prior years. |
Note 9 - Commitments and Contin
Note 9 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 — Commitments and Contingencies Operating Lease Obligations The Company leases office space under a non-cancelable operating lease that provides the Company approximately 37,100 square feet in Newark, California. The lease agreement expires on June 30, 2022. Monthly base rent increases four percent per year annually on July 1 st Cash payments included in the measurement of our operating lease liabilities were $117,268 and $342,785 for the three and nine-month periods ended September 30, 2019, respectively, compared to $112,758 and $329,601, respectively, for the same periods a year ago. Future minimum lease payments under the operating lease at September 30, 2019 are as shown below: Annual minimum payments: Amount 2019 (October 1, 2019 to December 31, 2019) $ 117,268 2020 478,455 2021 497,594 2022 (through June 30, 2022) 253,675 Total minimum payments $ 1,346,992 Financing Lease Obligations The new standard, ASU 2016-02 classifies lessee leases into two types, operating and finance. The Company leases certain of its equipment under finance leases. These leases are collateralized by their underlying assets. At September 30, 2019 and December 31, 2018, equipment with a cost of $100,584 was subject to such financing arrangements. The accumulated depreciation of the assets associated with the financing leases as of September 30, 2019 and December 31, 2018, amounted to $88,565 and $76,546 respectively. Future minimum payments under financing lease and equipment financing arrangements as of September 30, 2019 are as follows: Annual minimum payments: Amount 2019 (October 1, 2019 to December 31, 2019) $ 4,227 2020 8,455 Total minimum payments 12,682 Less amount representing interest (350 ) Present value of net minimum payments 12,332 Short term portion of financing leases (12,332 ) Long term portion of financing leases $ — Purchase Commitments As of September 30, 2019, the Company has non-cancelable purchase commitments for inventory to be used in the ordinary course of business of approximately $3,758,000. Legal Matters The Company is subject to disputes, claims, requests for indemnification and lawsuits arising in the ordinary course of business. Under the indemnification provisions of the Company’s customer agreements, the Company routinely agrees to indemnify and defend its customers against infringement of any patent, trademark, copyright, trade secrets, or other intellectual property rights arising from customers’ legal use of the Company’s products or services. The exposure to the Company under these indemnification provisions is generally limited to the total amount paid for the indemnified products. However, certain indemnification provisions potentially expose the Company to losses in excess of the aggregate amount received from the customer. To date, there have been no claims against the Company by its customers pertaining to such indemnification provisions, and no amounts have been recorded. The Company is currently not a party to any material legal proceedings. |
Note 10 - Subsequent Events
Note 10 - Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 — Subsequent Events The Company has evaluated events from September 30, 2019 through the date the financial statements were issued. Except as disclosed below, there were no subsequent events that need disclosure. On October 23, 2019, The Board of Directors unanimously approved the appointment of Ivan Lazarev to serve as an independent director until the next annual meeting. Mr. Lazarev was granted a stock option of 5,542 shares vesting monthly over 19 months commencing October 23, 2019. The Board also appointed independent director Bill Parnell, the chairmanship of the Compensation Committee. Mr. Parnell was granted a supplemental stock option of 1,000 shares vesting over 19 months commencing October 23, 2019 to reflect his board committee leadership role. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements. |
Cash Equivalents and Fair Value of Financial Instruments | Cash Equivalents and Fair Value of Financial Instruments The Company considers all highly liquid investments purchased with a maturity date of 90 days or less at date of purchase to be cash equivalents. At September 30, 2019 and December 31, 2018, all of the Company's cash and cash equivalents consisted of amounts held in demand deposit accounts in banks. The aggregate cash balance on deposit in these accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company's cash balance on deposit in these accounts may, at times, exceed the federally insured limits. The Company has never experienced any losses in such accounts. The carrying value of the Company's cash and cash equivalents, accounts receivable, accounts payable, debt and foreign exchange contracts approximate fair value due to the relatively short period of time to maturity. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue On January 1, 2017, the Company adopted ASC 606 "Revenue from Contracts with Customers" and implemented a new revenue recognition policy. Instead of deferring 100% of revenue and cost of revenue until products are sold by distributors, the new policy recognizes revenue on sales to distributors when shipping of product is completed and title transfers to the distributor, less a reserve for estimated product returns (sales and cost of sales). The reserves are based on estimates of future returns calculated from actual return history, primarily from stock rotations, plus knowledge of pending returns outside of the norm. At September 30, 2019, the deferred revenue and deferred cost on shipments to distributors were approximately $621,988 and $257,241 respectively, compared to approximately $396,974 and $165,024, respectively, at December 31, 2018. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize a liability representing future lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases, a lessee is required to recognize at inception a right-of-use asset and a lease liability equal to the net present value of the lease payments, with lease expense recognized over the lease term on a straight-line basis. For leases with a term of twelve months or less, ASU 2016-02 allows a reporting entity to make an accounting policy election to not recognize a right-of-use asset and a lease liability, and to recognize lease expense on a straight-line basis. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company adopted ASU 2016-02 effective January 1, 2019, which had no impact on the Company's Statements of Operations. The most significant impact was the recognition of right-of-use assets and liabilities for the operating lease. Adoption of the standard required the Company to restate the reported results in its earliest comparable period, January 1, 2018, including the recognition of additional operating lease right-of-use assets and liabilities. As a result, there was an increase in assets and corresponding liabilities of approximately $1.57 million on January 1, 2018. At September 30, 2019, the balances of right-of-use assets and liabilities for the operating lease are approximately $1.02 million and $1.23 million, respectively, compared to approximately $1.27 million and $1.51 million, respectively, at December 31, 2018. |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards In July 2019, the FASB issued ASU 2019-07, "Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update)" ("ASU 2019-07"). ASU 2019-07 aligns the guidance in various SEC sections of the Codification with the requirements of certain SEC final rules. ASU 2019-07 is effective immediately. The adoption of ASU 2019-07 did not have a material impact on the Company's financial statements. From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company's financial position, results of operations or cash flows upon adoption. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory components | Inventories consist principally of raw materials and sub-assemblies, which are stated at the lower of cost (first-in, first-out) or market. Inventories at September 30, 2019 and December 31, 2018 were as follows: September 30, December 31, 2019 2018 Raw materials and sub-assemblies $ 3,140,461 $ 2,785,154 Finished goods 255,938 335,335 Inventory reserves (868,161 ) (848,161 ) Inventories, net $ 2,528,238 $ 2,272,328 |
Bank Financing Arrangements (Ta
Bank Financing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Term loan and bank credit line balances | Amounts outstanding under the term loan and bank credit facilities at September 30, 2019 are as follows: September 30, 2019 Long-term portion of term loan — Current-portion of term loan 458,333 Term loan $ 458,333 September 30, 2019 Lines of credit -domestic line 929,520 Lines of credit -EXIM line 499,441 Total lines of credit $ 1,428,961 |
Segment Information and Concent
Segment Information and Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Revenue by geographic areas | Revenues by geographic area for three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Revenues: Americas $ 3,283,745 $ 3,256,758 $ 10,937,316 $ 9,573,354 Europe 817,420 533,414 1,915,343 1,816,803 Asia Pacific 878,895 346,421 1,816,098 919,822 Total revenues $ 4,980,060 $ 4,136,593 $ 14,668,757 $ 12,309,979 |
Major customers accounted for at least 10% of total revenues | Customers who accounted for at least 10% of the Company’s total revenues for the three and nine-month periods ended September 30, 2019 and 2018 were: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Ingram Micro Inc. 34 % 30 % 39 % 32 % BlueStar, Inc. 16 % 25 % 18 % 23 % Nippon Primex, Inc. 12 % * * * Ingram Micro Pan Europe GmbH 10 % * * * ScanSource, Inc. * 11 % * 10 % _____________ * Customer accounted for less than 10% of total revenues for the period |
Major customers accounted for at least 10% of net accounts receivable balances | Customers who accounted for at least 10% of the Company’s accounts receivable balances at September 30, 2019 and December 31, 2018 were as follows: September 30, December 31, 2019 2018 Ingram Micro Inc. 37 % 41 % Ingram Micro Pan Europe GmbH 17 % * BlueStar, Inc. 14 % 19 % _____________ * Customer accounted for less than 10% of total accounts receivable balances for the period |
Net Income (Loss) Per Share App
Net Income (Loss) Per Share Applicable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Net income (loss) per share: | |
Net Income (Loss) Per Shares Applicable To Common Stockholders | The following table sets forth the computation of basic and diluted net income (loss) per share: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Numerator: Net income (loss) $ 94,298 $ (45,257 ) $ 225,927 $ (408,528 ) Denominator: Weighted average shares outstanding used in computing net income (loss) per share: Basic 5,999,487 5,883,109 5,979,715 6,166,017 Effect of dilutive stock options 317,783 — 256,958 — Diluted 6,317,270 5,883,109 6,236,673 6,166,017 Net income (loss) per share applicable to common stockholders: Basic $ 0.02 $ (0.01 ) $ 0.04 $ (0.07 ) Diluted $ 0.01 $ (0.01 ) $ 0.04 $ (0.07 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum payments for operating leases | Future minimum lease payments under the operating lease at September 30, 2019 are as shown below: Annual minimum payments: Amount 2019 (October 1, 2019 to December 31, 2019) $ 117,268 2020 478,455 2021 497,594 2022 (through June 30, 2022) 253,675 Total minimum payments $ 1,346,992 |
Future minimum payments under financing lease and equipment financing arrangements | Future minimum payments under financing lease and equipment financing arrangements as of September 30, 2019 are as follows: Annual minimum payments: Amount 2019 (October 1, 2019 to December 31, 2019) $ 4,227 2020 8,455 Total minimum payments 12,682 Less amount representing interest (350 ) Present value of net minimum payments 12,332 Short term portion of financing leases (12,332 ) Long term portion of financing leases $ — |
Inventory Components (Details)
Inventory Components (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and sub-assemblies | $ 3,140,461 | $ 2,785,154 |
Finished goods | 255,938 | 335,335 |
Inventory reserves | (868,161) | (848,161) |
Inventories, net | $ 2,528,238 | $ 2,272,328 |
Bank Financing Arrangements (De
Bank Financing Arrangements (Details Narrative) - USD ($) | Jan. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2019 |
Domestic Line of Credit | |||
Aggregate maximum advance amount | $ 2,000,000 | ||
Borrowing capacity description | 80% of qualified receivables | ||
Debt reference rate | U.S. Prime Rate | ||
Basis point added to reference rate of debt | 0.75% | ||
Line of credit expiration date | Jan. 31, 2020 | ||
Foreign Line of Credit | |||
Aggregate maximum advance amount | $ 500,000 | ||
Borrowing capacity description | 80% of qualified receivables | ||
Debt reference rate | U.S. Prime Rate | ||
Basis point added to reference rate of debt | 0.75% | ||
Line of credit expiration date | Jan. 31, 2020 | ||
Term Loan for Stock Repurchase | |||
Aggregate maximum advance amount | $ 4,000,000 | ||
Borrowing capacity description | Payable over 48 months | ||
Debt reference rate | U.S. Prime Rate | ||
Basis point added to reference rate of debt | 1.75% | ||
Amount outstanding | $ 458,333 | $ 458,333 | |
Amount repaid | 125,000 | 375,000 | |
Interest expense | 9,031 | 38,225 | |
Line of Credit Facilities | |||
Amount outstanding | 1,428,961 | 1,428,961 | |
Amount borrowed | 13,038,000 | ||
Amount repaid | 12,925,817 | ||
Interest expense | 16,633 | 45,310 | |
Accrued interest payable | 15,877 | 15,877 | |
Remaining borrowing capacity | $ 237,000 | $ 237,000 |
Amounts Outstanding under Bank
Amounts Outstanding under Bank Term Loan (Detail) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Long-term portion of term loan | $ 333,333 | |
Current-portion of term loan | 458,333 | $ 500,000 |
Term loan balance | $ 458,333 |
Amounts Outstanding under Ban_2
Amounts Outstanding under Bank Lines of Credit (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Lines of credit - domestic line | $ 929,520 | |
Lines of credit - EXIM line | 499,441 | |
Total lines of credit | $ 1,428,961 | $ 1,316,778 |
Revenues By Geographic Areas (D
Revenues By Geographic Areas (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: (in thousands) | $ 4,980,060 | $ 4,136,593 | $ 14,668,757 | $ 12,309,979 |
Asia Pacific | ||||
Revenues: (in thousands) | 878,895 | 346,421 | 1,816,098 | 919,822 |
Americas | ||||
Revenues: (in thousands) | 3,283,745 | 3,256,758 | 10,937,316 | 9,573,354 |
Europe | ||||
Revenues: (in thousands) | $ 817,420 | $ 533,414 | $ 1,915,343 | $ 1,816,803 |
Major Customers Accounted for a
Major Customers Accounted for at Least 10% of Total Revenues (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Ingram Micro Inc. | ||||
Percent of total revenues | 34.00% | 30.00% | 39.00% | 32.00% |
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
BlueStar, Inc. | ||||
Percent of total revenues | 16.00% | 25.00% | 18.00% | 23.00% |
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
Nippon Primex, Inc. | ||||
Percent of total revenues | 12.00% | |||
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
Ingram Micro Pan Europe GmbH | ||||
Percent of total revenues | 10.00% | |||
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
ScanSource, Inc. | ||||
Percent of total revenues | 11.00% | 10.00% | ||
Threshold percentage for disclosure | 10.00% | 10.00% | 10.00% | 10.00% |
Major Customers as a Percentage
Major Customers as a Percentage of Net Accounts Receivable Balances (Details) | Sep. 30, 2019 | Dec. 31, 2018 |
Ingram Micro Inc. | ||
Percent of net accounts receivable balances | 37.00% | 41.00% |
Threshold percentage for disclosure | 10.00% | 10.00% |
Ingram Micro Pan Europe GmbH | ||
Percent of net accounts receivable balances | 17.00% | |
Threshold percentage for disclosure | 10.00% | 10.00% |
BlueStar, Inc. | ||
Percent of net accounts receivable balances | 14.00% | 19.00% |
Threshold percentage for disclosure | 10.00% | 10.00% |
Concentration of Suppliers (Det
Concentration of Suppliers (Details Narrative) | 3 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Accounts payable balances with three suppliers | 36.00% |
Percentage of inventory purchases from top three suppliers | 53.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | Feb. 15, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 |
Stock-based compensation expenses | $ 133,008 | $ 137,035 | $ 121,965 | $ 130,698 | $ 118,843 | $ 112,133 | $ 392,008 | |
Stock options granted | 165,600 | |||||||
Restricted stock granted | 116,050 |
Net Income (Loss) per Share A_2
Net Income (Loss) per Share Applicable to Common Stockholders (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income (loss) | $ 94,298 | $ 119,790 | $ 11,839 | $ (45,257) | $ (138,242) | $ (225,029) | $ 225,927 | $ (408,528) |
Denominator: Weighted average common shares outstanding used in computing net income (loss) per share: | ||||||||
Basic | 5,999,487 | 5,883,109 | 5,979,715 | 6,166,017 | ||||
Effect of dilutive stock options | 317,783 | 256,958 | ||||||
Diluted | 6,317,270 | 5,883,109 | 6,236,673 | 6,166,017 | ||||
Net income (loss) per share applicable to common stockholders: | ||||||||
Basic | $ 0.02 | $ (0.01) | $ 0.04 | $ (0.07) | ||||
Diluted | $ 0.01 | $ (0.01) | $ 0.04 | $ (0.07) |
Stock Options Excluded from Cal
Stock Options Excluded from Calculation of Diluted Net Loss Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net income (loss) per share: | ||||
Stock Options Excluded from Calculation of Diluted Net Income (Loss) Per Share | 2,128,547 | 2,358,059 | 2,189,372 | 2,358,059 |
Taxes (Details)
Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit (expense) | $ (9,611) | $ 17,582 | $ (85,030) | $ 151,216 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Operating lease expense | $ 103,208 | $ 103,208 | $ 309,625 | $ 309,625 | |
Operating lease cash payments | 117,268 | $ 112,758 | 342,785 | $ 329,601 | |
Non-cancelable purchase commitments for inventory | 3,758,000 | 3,758,000 | |||
Original cost of equipment under finance leases | 100,584 | 100,584 | $ 100,584 | ||
Finance lease accumulated depreciation | $ 88,565 | $ 88,565 | $ 76,546 |
Future Minimum Payments for Ope
Future Minimum Payments for Operating Lease (Detail) | Sep. 30, 2019USD ($) |
Annual minimum payments: | |
2019 (October 1, 2019 to December 31, 2019) | $ 117,268 |
2020 | 478,455 |
2021 | 497,594 |
2022 (through June 30, 2022) | 253,675 |
Total minimum payments | $ 1,346,992 |
Future Minimum Payments Under C
Future Minimum Payments Under Capital Lease And Equipment Financing Arrangements (Details) | Sep. 30, 2019USD ($) |
Annual minimum payments: | |
2019 (October 1, 2019 to December 31, 2019) | $ 4,227 |
2020 | 8,455 |
Total minimum payments | 12,682 |
Less amount representing interest | (350) |
Present value of net minimum payments | 12,332 |
Short term portion of capital leases | (12,332) |
Long term portion of capital leases | $ 0 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent events | The Company has evaluated events from September 30, 2019 through the date the financial statements were issued. Except as disclosed below, there were no subsequent events that need disclosure. On October 23, 2019, The Board of Directors unanimously approved the appointment of Ivan Lazarev to serve as an independent director until the next annual meeting. Mr. Lazarev was granted a stock option of 5,542 shares vesting monthly over 19 months commencing October 23, 2019. The Board also appointed independent director Bill Parnell, the chairmanship of the Compensation Committee. Mr. Parnell was granted a supplemental stock option of 1,000 shares vesting over 19 months commencing October 23, 2019 to reflect his board committee leadership role. |