For the
fiscal year ended December 31, 2020
|
Commission
File Number 1-13471
|
INSIGNIA SYSTEMS, INC.
|
(Exact
name of registrant as specified in its charter)
|
Minnesota
|
41-1656308
|
(State
or other jurisdiction of incorporation or
organization)
|
(IRS
Employer Identification No.)
|
8799
Brooklyn Blvd., Minneapolis, MN 55445
|
(Address
of principal executive offices; zip code)
|
(763)
392-6200
|
(Registrant’s
telephone number, including area code)
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common
Stock, $0.01 par value
|
|
ISIG
|
|
The
Nasdaq Stock Market LLC
|
|
December 31, 2020
|
December 31, 2019
|
||
Year Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Total
Net Sales
|
$17,669,000
|
$17,482,000
|
$21,954,000
|
$21,528,000
|
Operating
Loss
|
(4,601,000)
|
(4,839,000)
|
(5,629,000)
|
(6,106,000)
|
Net
Loss
|
(4,300,000)
|
(4,615,000)
|
(5,021,000)
|
(5,577,000)
|
|
|
|
|
|
|
December 31, 2020
|
December 31, 2019
|
||
As of
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Shareholders'
equity
|
$7,694,000
|
$6,668,000
|
$11,794,000
|
$11,083,000
|
|
Page
|
|
1
|
||
6
|
||
|
|
|
|
|
|
10
|
||
17
|
||
50
|
||
|
|
|
|
|
|
52
|
||
|
55
|
|
As Restated
|
|
For the Years Ended December 31
|
2020
|
2019
|
Net
sales
|
100.0%
|
100.0%
|
Cost
of sales
|
83.7
|
79.9
|
Gross
profit
|
16.3
|
20.1
|
Operating
expenses:
|
|
|
Selling
|
16.5
|
12.3
|
Marketing
|
5.8
|
11.1
|
General
and administrative
|
22.8
|
15.7
|
Gain
on sale
|
(1.1)
|
-
|
Impairment
loss
|
-
|
9.4
|
Total
operating expenses
|
44.0
|
48.5
|
Operating
loss
|
(27.7)
|
(28.4)
|
Other
income
|
0.2
|
0.5
|
Loss
before taxes
|
(27.5)
|
(27.9)
|
Income
tax benefit
|
(1.1)
|
(2.0)
|
Net
loss
|
(26.4)%
|
(25.9)%
|
Report
of Independent Registered Public Accounting Firm
|
18
|
|
|
Balance
Sheets as of December 31, 2020 and 2019
|
20
|
|
|
Statements
of Operations for the years ended December 31, 2020 and
2019
|
21
|
|
|
Statements
of Shareholders’ Equity for the years ended December 31, 2020
and 2019
|
22
|
|
|
Statements
of Cash Flows for the years ended December 31, 2020 and
2019
|
23
|
|
|
Notes
to Financial Statements
|
24
|
Insignia Systems, Inc.
|
||
BALANCE SHEETS
|
||
|
As Restated
|
As Restated
|
As of December 31
|
2020
|
2019
|
ASSETS
|
|
|
Current Assets:
|
|
|
Cash
and cash equivalents
|
$7,128,000
|
$7,510,000
|
Accounts
receivable, net
|
5,857,000
|
7,559,000
|
Inventories
|
85,000
|
322,000
|
Income
tax receivable
|
241,000
|
126,000
|
Prepaid
expenses and other
|
711,000
|
375,000
|
Total
Current Assets
|
14,022,000
|
15,892,000
|
|
|
|
Other Assets:
|
|
|
Property
and equipment, net
|
75,000
|
549,000
|
Operating
lease right-of-use assets
|
37,000
|
177,000
|
Other,
net
|
155,000
|
372,000
|
|
|
|
Total Assets
|
$14,289,000
|
$16,990,000
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
Current Liabilities:
|
|
|
Accounts
payable
|
3,148,000
|
3,036,000
|
Accrued
liabilities:
|
|
|
Compensation
|
424,000
|
539,000
|
Sales
tax
|
1,011,000
|
594,000
|
Other
|
1,071,000
|
687,000
|
Current
portion of long-term debt
|
464,000
|
—
|
Current
portion of operating lease liabilities
|
56,000
|
212,000
|
Deferred
revenue
|
180,000
|
140,000
|
Total
Current Liabilities
|
6,354,000
|
5,208,000
|
|
|
|
Long-Term Liabilities:
|
|
|
Accrued
income taxes
|
677,000
|
643,000
|
Long-term
debt, net of current portion
|
590,000
|
—
|
Operating
lease liabilities
|
—
|
56,000
|
Total
Long-Term Liabilities
|
1,267,000
|
699,000
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
Common
stock, par value $.01:
|
|
|
Authorized
shares - 5,714,000
|
|
|
Issued
and outstanding shares - 1,748,000 in 2020 and 1,725,000 in
2019
|
122,000
|
121,000
|
Additional
paid-in capital
|
16,133,000
|
15,934,000
|
Accumulated
deficit
|
(9,587,000)
|
(4,972,000)
|
Total
Shareholders' Equity
|
6,668,000
|
11,083,000
|
|
|
|
Total Liabilities and Shareholders' Equity
|
$14,289,000
|
$16,990,000
|
|
|
|
See accompanying notes to financial statements.
|
|
|
Insignia Systems, Inc.
|
||
STATEMENTS OF OPERATIONS
|
||
|
|
|
|
As Restated
|
As Restated
|
Year Ended December 31
|
2020
|
2019
|
Services
revenues
|
$16,904,000
|
$19,803,000
|
Products
revenues
|
578,000
|
1,725,000
|
Total
Net Sales
|
17,482,000
|
21,528,000
|
|
|
|
Cost
of services
|
13,934,000
|
15,756,000
|
Cost
of goods sold
|
533,000
|
1,437,000
|
Impairment
loss - services
|
159,000
|
—
|
Total
Cost of Sales
|
14,626,000
|
17,193,000
|
Gross
Profit
|
2,856,000
|
4,335,000
|
|
|
|
Operating Expenses:
|
|
|
Selling
|
2,877,000
|
2,658,000
|
Marketing
|
1,015,000
|
2,394,000
|
General
and administrative
|
3,998,000
|
3,375,000
|
Gain
on sale of custom print business
|
(195,000)
|
—
|
Impairment
loss
|
—
|
2,014,000
|
Total
Operating Expenses
|
7,695,000
|
10,441,000
|
Operating
Loss
|
(4,839,000)
|
(6,106,000)
|
|
|
|
Other
income
|
33,000
|
105,000
|
Loss
Before Taxes
|
(4,806,000)
|
(6,001,000)
|
|
|
|
Income
tax benefit
|
(191,000)
|
(424,000)
|
Net
Loss
|
$(4,615,000)
|
$(5,577,000)
|
|
|
|
Net
loss per share:
|
|
|
Basic
|
$(2.66)
|
$(3.27)
|
Diluted
|
$(2.66)
|
$(3.27)
|
|
|
|
Shares
used in calculation of net
loss
per share:
|
|
|
Basic
|
1,734,000
|
1,706,000
|
Diluted
|
1,734,000
|
1,706,000
|
|
|
|
See accompanying notes to financial statements.
|
|
|
Insignia Systems, Inc.
|
|||||
STATEMENTS OF SHAREHOLDERS' EQUITY
|
|||||
|
|
|
|
|
|
|
Common Stock
|
Additional Paid-In
|
Retained Earnings
|
|
|
|
Shares
|
Amount
|
Capital
|
(Accumulated Deficit)
|
Total
|
Balance at January 1, 2019, as previously
reported
|
1,692,000
|
$118,000
|
$15,442,000
|
$760,000
|
$16,320,000
|
Cumulative
restatement adjustments
|
-
|
-
|
-
|
(155,000)
|
(155,000)
|
Issuance of
common stock, net
|
15,000
|
1,000
|
107,000
|
-
|
108,000
|
Vesting of
restricted stock units offset by repurchase of common stock upon
vesting of restricted stock units and awards
|
(3,000)
|
2,000
|
(37,000)
|
-
|
(35,000)
|
Value of
stock-based compensation
|
-
|
-
|
422,000
|
-
|
422,000
|
Restricted
stock award issuance
|
21,000
|
-
|
-
|
-
|
-
|
Net
loss
|
-
|
-
|
-
|
(5,577,000)
|
(5,577,000)
|
|
|
|
|
|
|
Balance at December 31, 2019, as restated
|
1,725,000
|
121,000
|
15,934,000
|
(4,972,000)
|
11,083,000
|
Issuance of
common stock, net
|
5,000
|
-
|
20,000
|
-
|
20,000
|
Vesting of
restricted stock units offset by repurchase of common stock upon
vesting of restricted stock units and awards
|
16,000
|
1,000
|
(2,000)
|
-
|
(1,000)
|
Value of
stock-based compensation
|
-
|
-
|
172,000
|
-
|
172,000
|
Common stock
issued for accrued liabilities
|
-
|
|
9,000
|
-
|
9,000
|
Restricted
stock award issuance
|
2,000
|
-
|
-
|
-
|
-
|
Net
loss
|
-
|
-
|
-
|
(4,615,000)
|
(4,615,000)
|
Balance at December 31, 2020, as restated
|
1,748,000
|
$122,000
|
$16,133,000
|
$(9,587,000)
|
$6,668,000
|
|
|
|
|
|
|
See accompanying notes to financial statements.
|
|
|
|
|
|
Insignia Systems, Inc.
|
||
STATEMENTS OF CASH FLOWS
|
||
|
|
|
|
As Restated
|
As Restated
|
Year Ended December 31
|
2020
|
2019
|
Operating activities:
|
|
|
Net
loss
|
$(4,615,000)
|
$(5,577,000)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Depreciation
and amortization
|
477,000
|
1,647,000
|
Impairment
loss
|
159,000
|
2,014,000
|
Gain
on sale of custom print business
|
(195,000)
|
—
|
Loss
on sale of property and equipment
|
35,000
|
—
|
Changes
in allowance for doubtful accounts
|
203,000
|
43,000
|
Deferred
income tax benefit
|
—
|
(462,000)
|
Stock-based
compensation expense
|
172,000
|
422,000
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
1,679,000
|
1,161,000
|
Inventories
|
135,000
|
31,000
|
Income
tax receivable
|
(115,000)
|
1,000
|
Prepaid
expenses and other
|
(327,000)
|
(69,000)
|
Accounts
payable
|
115,000
|
(224,000)
|
Accrued
liabilities
|
623,000
|
(1,166,000)
|
Accrued
income taxes
|
34,000
|
30,000
|
Deferred
revenue
|
40,000
|
(162,000)
|
Net
cash used in operating activities
|
(1,580,000)
|
(2,311,000)
|
|
|
|
Investing activities:
|
|
|
Purchases
of property and equipment
|
(61,000)
|
(398,000)
|
Purchases
of held to maturity investments
|
—
|
(4,981,000)
|
Proceeds
from sale of custom print business
|
200,000
|
—
|
Proceeds
from sale of held to maturity investments
|
—
|
4,981,000
|
Net
cash provided by (used in) investing activities
|
139,000
|
(398,000)
|
|
|
|
Financing activities:
|
|
|
Cash
dividends paid ($4.90 per share)
|
(14,000)
|
(14,000)
|
Proceeds
from issuance of common stock, net
|
20,000
|
108,000
|
Repurchase
of common stock upon vesting of restricted stock awards and vesting
of restricted stock units
|
(1,000)
|
(35,000)
|
Proceeds
from PPP Loan
|
1,054,000
|
—
|
Net
cash provided by financing activities
|
1,059,000
|
59,000
|
|
|
|
Decrease
in cash and cash equivalents
|
(382,000)
|
(2,650,000)
|
|
|
|
Cash
and cash equivalents at beginning of year
|
7,510,000
|
10,160,000
|
Cash
and cash equivalents at end of year
|
$7,128,000
|
$7,510,000
|
|
|
|
Supplemental disclosures for cash flow information:
|
|
|
Cash
paid (refunded) during the year for income taxes
|
$(112,000)
|
$8,000
|
|
|
|
Non-cash investing and financing activities:
|
|
|
Purchases
of property and equipment included in accounts payable
|
$11,000
|
$-
|
Cash
dividends declared included in accounts payable
|
$-
|
$28,000
|
Receivables
recorded from sale of custom print business
|
$100,000
|
$-
|
Receivables
recorded from sale of property and equipment
|
$195,000
|
$-
|
Common
stock issued for accrued liabilities
|
$9,000
|
$-
|
|
|
|
See accompanying notes to financial statements.
|
|
|
|
As Restated
|
|
December 31
|
2020
|
2019
|
Beginning
balance
|
$65,000
|
$22,000
|
Bad
debt provision
|
203,000
|
47,000
|
Accounts
written-off
|
-
|
(4,000)
|
Ending
balance
|
$268,000
|
$65,000
|
December 31
|
2020
|
2019
|
Raw
materials
|
$32,000
|
$47,000
|
Work-in-process
|
2,000
|
16,000
|
Finished
goods
|
51,000
|
259,000
|
|
$85,000
|
$322,000
|
Production
tooling, machinery and equipment
|
1 - 6
years
|
Office
furniture and fixtures
|
1 - 3
years
|
Computer
equipment and software
|
3 - 5
years
|
|
2020
|
2019
|
Gross
cost
|
$4,000,000
|
$4,000,000
|
Accumulated
amortization
|
(4,000,000)
|
(3,683,000)
|
Net
carrying amount
|
$-
|
$317,000
|
As
of December 31, 2019
|
|
Property and Equipment, net:
|
|
Balance
prior to impairment
|
$2,563,000
|
Impairment
charge
|
(2,014,000)
|
Ending
balance
|
$549,000
|
Year ended December 31
|
2020
|
2019
|
Denominator
for basic net loss per share - weighted average shares
|
1,734,000
|
1,706,000
|
Effect
of dilutive securities:
|
|
|
Stock
options, restricted stock units and restricted stock
awards
|
-
|
-
|
Denominator
for diluted net loss per share - weighted average
shares
|
1,734,000
|
1,706,000
|
|
December 31, 2020
|
December 31, 2019
|
||
Year Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Net
Sales
|
$17,669,000
|
$17,482,000
|
$21,954,000
|
$21,528,000
|
Operating
Loss
|
(4,601,000)
|
(4,839,000)
|
(5,629,000)
|
(6,106,000)
|
Net
Loss
|
(4,300,000)
|
(4,615,000)
|
(5,021,000)
|
(5,577,000)
|
|
December 31, 2020
|
December 31, 2019
|
||
As of
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Shareholders'
equity
|
$7,694,000
|
$6,668,000
|
$11,794,000
|
$11,083,000
|
|
December 31,
|
December 31,
|
Year Ended
|
2020
|
2019
|
Reduction
of net sales
|
$187,000
|
$426,000
|
Increase
in general and administrative expense for penalities
|
51,000
|
51,000
|
Decrease
in other income for interest expense
|
77,000
|
37,000
|
Decrease
in income tax benefit
|
-
|
42,000
|
Total
increase in net loss due to restatement items
|
$315,000
|
$556,000
|
|
December 31, 2020
|
December 31, 2019
|
||
Year Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Services
revenues
|
$17,091,000
|
$16,904,000
|
$20,229,000
|
$19,803,000
|
Products
revenues
|
578,000
|
578,000
|
1,725,000
|
1,725,000
|
Total
Net Sales
|
17,669,000
|
17,482,000
|
21,954,000
|
21,528,000
|
|
|
|
|
|
Cost
of services
|
13,934,000
|
13,934,000
|
15,756,000
|
15,756,000
|
Cost
of goods sold
|
533,000
|
533,000
|
1,437,000
|
1,437,000
|
Impairment
loss
|
159,000
|
159,000
|
—
|
—
|
Total
Cost of Sales
|
14,626,000
|
14,626,000
|
17,193,000
|
17,193,000
|
Gross
Profit
|
3,043,000
|
2,856,000
|
4,761,000
|
4,335,000
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Selling
|
2,877,000
|
2,877,000
|
2,658,000
|
2,658,000
|
Marketing
|
1,015,000
|
1,015,000
|
2,394,000
|
2,394,000
|
General
and administrative
|
3,947,000
|
3,998,000
|
3,324,000
|
3,375,000
|
Gain
on sale of business
|
(195,000)
|
(195,000)
|
—
|
—
|
Impairment
loss
|
—
|
—
|
2,014,000
|
2,014,000
|
Total
Operating Expenses
|
7,644,000
|
7,695,000
|
10,390,000
|
10,441,000
|
Operating
Loss
|
(4,601,000)
|
(4,839,000)
|
(5,629,000)
|
(6,106,000)
|
|
|
|
|
|
Other
income
|
110,000
|
33,000
|
142,000
|
105,000
|
Loss
Before Taxes
|
(4,491,000)
|
(4,806,000)
|
(5,487,000)
|
(6,001,000)
|
|
|
|
|
|
Income
tax benefit
|
(191,000)
|
(191,000)
|
(466,000)
|
(424,000)
|
Net
Loss
|
$(4,300,000)
|
$(4,615,000)
|
$(5,021,000)
|
$(5,577,000)
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
Basic
|
$(2.48)
|
$(2.66)
|
$(2.94)
|
$(3.27)
|
Diluted
|
$(2.48)
|
$(2.66)
|
$(2.94)
|
$(3.27)
|
|
|
|
|
|
Shares used in calculation of net loss per share:
|
|
|
|
|
Basic
|
1,734,000
|
1,734,000
|
1,706,000
|
1,706,000
|
Diluted
|
1,734,000
|
1,734,000
|
1,706,000
|
1,706,000
|
|
December 31, 2020
|
December 31, 2019
|
||||
|
As previously reported
|
Error correction
|
Restated
|
As previously reported
|
Error correction
|
Restated
|
Accounts
receivable, net
|
$5,628,000
|
$229,000
|
$5,857,000
|
$7,559,000
|
$-
|
$7,559,000
|
Accrued
liabilities - sales tax
|
$-
|
$1,011,000
|
$1,011,000
|
$-
|
$594,000
|
$594,000
|
Accrued
liabilities - other
|
$827,000
|
$244,000
|
$1,071,000
|
$570,000
|
$117,000
|
$687,000
|
Accumulated
deficit
|
$8,561,000
|
$1,026,000
|
$9,587,000
|
$4,261,000
|
$711,000
|
$4,972,000
|
SHAREHOLDERS' EQUITY
|
||
|
|
|
|
Retained Earnings (Accumulated Deficit)
|
Total Shareholders' Equity
|
January
1, 2019
|
|
|
As
reported
|
$760,000
|
$16,320,000
|
Adjustment
due to error correction prior to 2019
|
(155,000)
|
(155,000)
|
As
restated
|
$605,000
|
$16,165,000
|
|
|
|
December
31, 2019
|
|
|
As
reported
|
$(4,261,000)
|
$11,794,000
|
Adjustment
due to cumulative error correction
|
(711,000)
|
(711,000)
|
As
restated
|
$(4,972,000)
|
$11,083,000
|
|
|
|
December
31, 2020
|
|
|
As
reported
|
$(8,561,000)
|
$7,694,000
|
Adjustment
due to cumulative error correction
|
(1,026,000)
|
(1,026,000)
|
As
restated
|
$(9,587,000)
|
$6,668,000
|
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
Three Months Ended
|
2020
|
2020
|
2020
|
2020
|
Reduction
of net sales
|
$36,000
|
$41,000
|
$56,000
|
$54,000
|
Increase
in general and administrative expense for penalities
|
11,000
|
12,000
|
15,000
|
13,000
|
Decrease
in other income for interest expense
|
15,000
|
18,000
|
21,000
|
23,000
|
Change
in income tax benefit
|
-
|
-
|
-
|
-
|
Total
increase in net loss due to restatement items
|
$62,000
|
$71,000
|
$92,000
|
$90,000
|
|
March 31, 2020
|
June 30, 2020
|
||
Three Months Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Services
revenues
|
$4,436,000
|
$4,400,000
|
$3,174,000
|
$3,133,000
|
Products
revenues
|
246,000
|
246,000
|
214,000
|
214,000
|
Total
Net Sales
|
4,682,000
|
4,646,000
|
3,388,000
|
3,347,000
|
|
|
|
|
|
Cost
of services
|
3,382,000
|
3,382,000
|
2,807,000
|
2,807,000
|
Cost
of goods sold
|
172,000
|
172,000
|
208,000
|
208,000
|
Impairment
loss
|
159,000
|
159,000
|
—
|
—
|
Total
Cost of Sales
|
3,713,000
|
3,713,000
|
3,015,000
|
3,015,000
|
Gross
Profit
|
969,000
|
933,000
|
373,000
|
332,000
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Selling
|
720,000
|
720,000
|
927,000
|
927,000
|
Marketing
|
365,000
|
365,000
|
243,000
|
243,000
|
General
and administrative
|
993,000
|
1,004,000
|
980,000
|
992,000
|
Gain
on sale of business
|
—
|
—
|
—
|
—
|
Total
Operating Expenses
|
2,078,000
|
2,089,000
|
2,150,000
|
2,162,000
|
Operating
Loss
|
(1,109,000)
|
(1,156,000)
|
(1,777,000)
|
(1,830,000)
|
|
|
|
|
|
Other
income (expense)
|
24,000
|
9,000
|
16,000
|
(2,000)
|
Loss
Before Taxes
|
(1,085,000)
|
(1,147,000)
|
(1,761,000)
|
(1,832,000)
|
|
|
|
|
|
Income
tax expense (benefit)
|
(222,000)
|
(222,000)
|
11,000
|
11,000
|
Net
Loss
|
$(863,000)
|
$(925,000)
|
$(1,772,000)
|
$(1,843,000)
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
Basic
|
$(0.50)
|
$(0.53)
|
$(1.03)
|
$(1.07)
|
Diluted
|
$(0.50)
|
$(0.53)
|
$(1.03)
|
$(1.07)
|
|
|
|
|
|
Shares used in calculation of net loss per share:
|
|
|
|
|
Basic
|
1,724,000
|
1,724,000
|
1,725,000
|
1,725,000
|
Diluted
|
1,724,000
|
1,724,000
|
1,725,000
|
1,725,000
|
|
September 30, 2020
|
December 31, 2020
|
||
Three Months Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Services
revenues
|
$4,373,000
|
$4,317,000
|
$5,108,000
|
$5,054,000
|
Products
revenues
|
118,000
|
118,000
|
—
|
—
|
Total
Net Sales
|
4,491,000
|
4,435,000
|
5,108,000
|
5,054,000
|
|
|
|
|
|
Cost
of services
|
3,764,000
|
3,764,000
|
3,981,000
|
3,981,000
|
Cost
of goods sold
|
112,000
|
112,000
|
41,000
|
41,000
|
Impairment
loss
|
—
|
—
|
—
|
—
|
Total
Cost of Sales
|
3,876,000
|
3,876,000
|
4,022,000
|
4,022,000
|
Gross
Profit
|
615,000
|
559,000
|
1,086,000
|
1,032,000
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Selling
|
585,000
|
585,000
|
645,000
|
645,000
|
Marketing
|
192,000
|
192,000
|
215,000
|
215,000
|
General
and administrative
|
825,000
|
840,000
|
1,149,000
|
1,162,000
|
Gain
on sale of business
|
(195,000)
|
(195,000)
|
—
|
—
|
Total
Operating Expenses
|
1,407,000
|
1,422,000
|
2,009,000
|
2,022,000
|
Operating
Loss
|
(792,000)
|
(863,000)
|
(923,000)
|
(990,000)
|
|
|
|
|
|
Other
income (expense)
|
6,000
|
(15,000)
|
64,000
|
41,000
|
Loss
Before Taxes
|
(786,000)
|
(878,000)
|
(859,000)
|
(949,000)
|
|
|
|
|
|
Income
tax expense
|
8,000
|
8,000
|
12,000
|
12,000
|
Net
Loss
|
$(794,000)
|
$(886,000)
|
$(871,000)
|
$(961,000)
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
Basic
|
$(0.46)
|
$(0.51)
|
$(0.49)
|
$(0.55)
|
Diluted
|
$(0.46)
|
$(0.51)
|
$(0.49)
|
$(0.55)
|
|
|
|
|
|
Shares used in calculation of net loss per share:
|
|
|
|
|
Basic
|
1,740,000
|
1,740,000
|
1,745,000
|
1,745,000
|
Diluted
|
1,740,000
|
1,740,000
|
1,745,000
|
1,745,000
|
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
Three Months Ended
|
2019
|
2019
|
2019
|
2019
|
Reduction
of net sales
|
$63,000
|
$115,000
|
$105,000
|
$143,000
|
Increase
in general and administrative expense for penalities
|
8,000
|
14,000
|
13,000
|
16,000
|
Decrease
in other income (expense) for interest expense
|
5,000
|
8,000
|
10,000
|
14,000
|
Reduction
(increase) in income tax benefit
|
44,000
|
34,000
|
(9,000)
|
(27,000)
|
Total
increase in net loss due to restatement items
|
$120,000
|
$171,000
|
$119,000
|
$146,000
|
|
March 31, 2019
|
June 30, 2019
|
||
Three Months Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Services
revenues
|
$4,639,000
|
$4,576,000
|
$5,435,000
|
$5,320,000
|
Products
revenues
|
501,000
|
501,000
|
407,000
|
407,000
|
Total
Net Sales
|
5,140,000
|
5,077,000
|
5,842,000
|
5,727,000
|
|
|
|
|
|
Cost
of services
|
3,974,000
|
3,974,000
|
4,044,000
|
4,044,000
|
Cost
of goods sold
|
392,000
|
392,000
|
333,000
|
333,000
|
Total
Cost of Sales
|
4,366,000
|
4,366,000
|
4,377,000
|
4,377,000
|
Gross
Profit
|
774,000
|
711,000
|
1,465,000
|
1,350,000
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Selling
|
738,000
|
738,000
|
693,000
|
693,000
|
Marketing
|
665,000
|
665,000
|
585,000
|
585,000
|
General
and administrative
|
708,000
|
716,000
|
870,000
|
884,000
|
Impairment
loss
|
—
|
—
|
—
|
—
|
Total
Operating Expenses
|
2,111,000
|
2,119,000
|
2,148,000
|
2,162,000
|
Operating
Loss
|
(1,337,000)
|
(1,408,000)
|
(683,000)
|
(812,000)
|
|
|
|
|
|
Other
income
|
37,000
|
32,000
|
30,000
|
22,000
|
Loss
Before Taxes
|
(1,300,000)
|
(1,376,000)
|
(653,000)
|
(790,000)
|
|
|
|
|
|
Income
tax benefit
|
(204,000)
|
(160,000)
|
(165,000)
|
(131,000)
|
Net
Loss
|
$(1,096,000)
|
$(1,216,000)
|
$(488,000)
|
$(659,000)
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
Basic
|
$(0.65)
|
$(0.72)
|
$(0.29)
|
$(0.39)
|
Diluted
|
$(0.65)
|
$(0.72)
|
$(0.29)
|
$(0.39)
|
|
|
|
|
|
Shares used in calculation of net loss per share:
|
|
|
|
|
Basic
|
1,694,000
|
1,694,000
|
1,698,000
|
1,698,000
|
Diluted
|
1,694,000
|
1,694,000
|
1,698,000
|
1,698,000
|
|
September 30, 2019
|
December 31, 2019
|
||
Three Months Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Services
revenues
|
$4,400,000
|
$4,295,000
|
$5,755,000
|
$5,612,000
|
Products
revenues
|
254,000
|
254,000
|
563,000
|
563,000
|
Total
Net Sales
|
4,654,000
|
4,549,000
|
6,318,000
|
6,175,000
|
|
|
|
|
|
Cost
of services
|
3,514,000
|
3,514,000
|
4,224,000
|
4,224,000
|
Cost
of goods sold
|
214,000
|
214,000
|
498,000
|
498,000
|
Total
Cost of Sales
|
3,728,000
|
3,728,000
|
4,722,000
|
4,722,000
|
Gross
Profit
|
926,000
|
821,000
|
1,596,000
|
1,453,000
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Selling
|
573,000
|
573,000
|
654,000
|
654,000
|
Marketing
|
559,000
|
559,000
|
585,000
|
585,000
|
General
and administrative
|
865,000
|
878,000
|
881,000
|
897,000
|
Impairment
loss
|
—
|
—
|
2,014,000
|
2,014,000
|
Total
Operating Expenses
|
1,997,000
|
2,010,000
|
4,134,000
|
4,150,000
|
Operating
Loss
|
(1,071,000)
|
(1,189,000)
|
(2,538,000)
|
(2,697,000)
|
|
|
|
|
|
Other
income
|
46,000
|
36,000
|
29,000
|
15,000
|
Loss
Before Taxes
|
(1,025,000)
|
(1,153,000)
|
(2,509,000)
|
(2,682,000)
|
|
|
|
|
|
Income
tax benefit
|
(47,000)
|
(56,000)
|
(50,000)
|
(77,000)
|
Net
Loss
|
$(978,000)
|
$(1,097,000)
|
$(2,459,000)
|
$(2,605,000)
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
Basic
|
$(0.57)
|
$(0.64)
|
$(1.43)
|
$(1.52)
|
Diluted
|
$(0.57)
|
$(0.64)
|
$(1.43)
|
$(1.52)
|
|
|
|
|
|
Shares used in calculation of net loss per share:
|
|
|
|
|
Basic
|
1,712,000
|
1,712,000
|
1,720,000
|
1,720,000
|
Diluted
|
1,712,000
|
1,712,000
|
1,720,000
|
1,720,000
|
|
September 30, 2019
|
December 31, 2019
|
||
Three Months Ended
|
As previously reported
|
Restated
|
As previously reported
|
Restated
|
Services
revenues
|
$4,400,000
|
$4,295,000
|
$5,755,000
|
$5,612,000
|
Products
revenues
|
254,000
|
254,000
|
563,000
|
563,000
|
Total
Net Sales
|
4,654,000
|
4,549,000
|
6,318,000
|
6,175,000
|
|
|
|
|
|
Cost
of services
|
3,514,000
|
3,514,000
|
4,224,000
|
4,224,000
|
Cost
of goods sold
|
214,000
|
214,000
|
498,000
|
498,000
|
Total
Cost of Sales
|
3,728,000
|
3,728,000
|
4,722,000
|
4,722,000
|
Gross
Profit
|
926,000
|
821,000
|
1,596,000
|
1,453,000
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
Selling
|
573,000
|
573,000
|
654,000
|
654,000
|
Marketing
|
559,000
|
559,000
|
585,000
|
585,000
|
General
and administrative
|
865,000
|
878,000
|
881,000
|
897,000
|
Impairment
loss
|
—
|
—
|
2,014,000
|
2,014,000
|
Total
Operating Expenses
|
1,997,000
|
2,010,000
|
4,134,000
|
4,150,000
|
Operating
Loss
|
(1,071,000)
|
(1,189,000)
|
(2,538,000)
|
(2,697,000)
|
|
|
|
|
|
Other
income
|
46,000
|
36,000
|
29,000
|
15,000
|
Loss
Before Taxes
|
(1,025,000)
|
(1,153,000)
|
(2,509,000)
|
(2,682,000)
|
|
|
|
|
|
Income
tax benefit
|
(47,000)
|
(56,000)
|
(50,000)
|
(77,000)
|
Net
Loss
|
$(978,000)
|
$(1,097,000)
|
$(2,459,000)
|
$(2,605,000)
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
Basic
|
$(0.57)
|
$(0.64)
|
$(1.43)
|
$(1.52)
|
Diluted
|
$(0.57)
|
$(0.64)
|
$(1.43)
|
$(1.52)
|
|
|
|
|
|
Shares used in calculation of net loss per share:
|
|
|
|
|
Basic
|
1,712,000
|
1,712,000
|
1,720,000
|
1,720,000
|
Diluted
|
1,712,000
|
1,712,000
|
1,720,000
|
1,720,000
|
|
March 31, 2019
|
June 30, 2019
|
||||
|
As previously reported
|
Error correction
|
Restated
|
As previously reported
|
Error correction
|
Restated
|
Accounts
receivable, net
|
$6,360,000
|
$-
|
$6,360,000
|
$6,248,000
|
$-
|
$6,248,000
|
Accrued
liabilities - sales tax
|
$-
|
$232,000
|
$232,000
|
$-
|
$347,000
|
$347,000
|
Accrued
liabilities - other
|
$462,000
|
$41,000
|
$503,000
|
$374,000
|
$63,000
|
$437,000
|
Deferred
tax liabilities
|
$290,000
|
$2,000
|
$292,000
|
$116,000
|
$36,000
|
$152,000
|
Accumulated
deficit
|
$336,000
|
$275,000
|
$611,000
|
$824,000
|
$446,000
|
$1,270,000
|
|
September 30, 2019
|
March 31, 2020
|
||||
|
As previously reported
|
Error correction
|
Restated
|
As previously reported
|
Error correction
|
Restated
|
Accounts
receivable, net
|
$6,438,000
|
$-
|
$6,438,000
|
$6,199,000
|
$50,000
|
$6,249,000
|
Accrued
liabilities - sales tax
|
$-
|
$452,000
|
$452,000
|
$-
|
$681,000
|
$681,000
|
Accrued
liabilities - other
|
$413,000
|
$86,000
|
$499,000
|
$261,000
|
$142,000
|
$403,000
|
Deferred
tax liabilities
|
$61,000
|
$27,000
|
$88,000
|
$-
|
$-
|
$-
|
Accumulated
deficit
|
$1,802,000
|
$565,000
|
$2,367,000
|
$5,124,000
|
$773,000
|
$5,897,000
|
|
June 30, 2020
|
September 30, 2020
|
||||
|
As previously reported
|
Error correction
|
Restated
|
As previously reported
|
Error correction
|
Restated
|
Accounts
receivable, net
|
$5,319,000
|
$102,000
|
$5,421,000
|
$5,538,000
|
$174,000
|
$5,712,000
|
Accrued
liabilities - sales tax
|
$-
|
$773,000
|
$773,000
|
$-
|
$902,000
|
$902,000
|
Accrued
liabilities - other
|
$597,000
|
$172,000
|
$769,000
|
$664,000
|
$208,000
|
$872,000
|
Accumulated
deficit
|
$6,896,000
|
$844,000
|
$7,740,000
|
$7,690,000
|
$936,000
|
$8,626,000
|
SHAREHOLDERS' EQUITY
|
||
|
|
|
|
Accumulated Deficit
|
Total Shareholders' Equity
|
March
31, 2019
|
|
|
As
reported
|
$(336,000)
|
$15,470,000
|
Adjustment
due to cumulative error correction of net loss to first quarter
2019
|
(275,000)
|
(275,000)
|
As
restated
|
$(611,000)
|
$15,195,000
|
|
|
|
June
30, 2019
|
|
|
As
reported
|
$(824,000)
|
$15,112,000
|
Adjustment
due to cumulative error correction of net loss in second quarter
2019
|
(446,000)
|
(446,000)
|
As
restated
|
$(1,270,000)
|
$14,666,000
|
|
|
|
September
30, 2019
|
|
|
As
reported
|
$(1,802,000)
|
$14,209,000
|
Adjustment
due to cumulative error correction of net loss in third quarter
2019
|
(565,000)
|
(565,000)
|
As
restated
|
$(2,367,000)
|
$13,644,000
|
SHAREHOLDERS' EQUITY
|
||
|
|
|
|
Accumulated Deficit
|
Total Shareholders' Equity
|
March
31, 2020
|
|
|
As
reported
|
$(5,124,000)
|
$11,000,000
|
Adjustment
due to cumulative error correction of net loss to first quarter
2020
|
(773,000)
|
(773,000)
|
As
restated
|
$(5,897,000)
|
$10,227,000
|
|
|
|
June
30, 2020
|
|
|
As
reported
|
$(6,896,000)
|
$9,287,000
|
Adjustment
due to cumulative error correction of net loss in second quarter
2020
|
(843,000)
|
(843,000)
|
As
restated
|
$(7,739,000)
|
$8,444,000
|
|
|
|
September
30, 2020
|
|
|
As
reported
|
$(7,690,000)
|
$8,538,000
|
Adjustment
due to cumulative error correction of net loss in third quarter
2020
|
(936,000)
|
(936,000)
|
As
restated
|
$(8,626,000)
|
$7,602,000
|
|
As Restated
|
||
|
Year ended
December 31, 2020
|
||
|
Services
Revenues
|
Products
Revenue
|
Total
Revenue
|
Timing of revenue recognition:
|
|
|
|
Products
and services transferred over time
|
$10,670,000
|
$-
|
$10,670,000
|
Products
and services transferred at a point in time
|
6,234,000
|
578,000
|
6,812,000
|
Total
|
$16,904,000
|
$578,000
|
$17,482,000
|
|
|
|
|
|
As Restated
|
||
|
Year ended
December 31, 2019
|
||
|
Services
Revenues
|
Products
Revenue
|
Total
Revenue
|
Timing of revenue recognition:
|
|
|
|
Products
and services transferred over time
|
$15,029,000
|
$-
|
$15,029,000
|
Products
and services transferred at a point in time
|
4,774,000
|
1,725,000
|
6,499,000
|
Total
|
$19,803,000
|
$1,725,000
|
$21,528,000
|
Balance
at December 31, 2019
|
$140,000
|
Reclassification
of beginning deferred revenue to revenue, as a result of
performance obligations satisfied
|
(140,000)
|
Cash
received in advance and not recognized as revenue
|
180,000
|
Balance
at December 31, 2020
|
$180,000
|
Year ended December 31
|
2020
|
2019
|
Property and Equipment:
|
|
|
Production
tooling, machinery and equipment
|
$2,349,000
|
$3,685,000
|
Office
furniture and fixtures
|
425,000
|
393,000
|
Computer
equipment and software
|
1,447,000
|
1,426,000
|
Leasehold
improvements
|
-
|
-
|
Construction
in-progress
|
17,000
|
-
|
|
4,238,000
|
5,504,000
|
Accumulated
depreciation and amortization
|
(4,163,000)
|
(4,955,000)
|
Net
Property and Equipment
|
$75,000
|
$549,000
|
|
Year ended
December 31, 2020
|
||
|
Corporate
|
Additional
|
Operating
|
|
Headquarters
|
Office
Space
|
Leases
|
Operating
lease cost
|
$150,000
|
$-
|
$150,000
|
Variable
lease cost
|
104,000
|
-
|
104,000
|
Short-term
lease cost
|
-
|
40,000
|
40,000
|
Total
|
$254,000
|
$40,000
|
$294,000
|
|
Year ended
December 31, 2019
|
||
|
Corporate
|
Additional
|
Operating
|
|
Headquarters
|
Office
Space
|
Leases
|
Operating
lease cost
|
$150,000
|
$-
|
$150,000
|
Variable
lease cost
|
106,000
|
-
|
106,000
|
Short-term
lease cost
|
-
|
38,000
|
38,000
|
Total
|
$256,000
|
$38,000
|
$294,000
|
2021
|
$57,000
|
Less:
Interest
|
1,000
|
Present
value of lease liabilities
|
$56,000
|
2021
|
$418,000
|
2022
|
708,000
|
2023
|
354,000
|
Year ended December 31
|
2020
|
2019
|
Cost
of sales
|
$5,000
|
$14,000
|
Selling
|
38,000
|
121,000
|
Marketing
|
(1,000)
|
12,000
|
General
and administrative
|
130,000
|
275,000
|
|
$172,000
|
$422,000
|
|
2020
|
2019
|
Stock Purchase Plan Options:
|
|
|
Expected
life (years)
|
1.0
|
1.0
|
Expected
volatility
|
59%
|
57%
|
Dividend
yield
|
0%
|
0%
|
Risk-free
interest rate
|
1.6%
|
2.6%
|
|
Plan Shares Available for Grant
|
Plan Options Outstanding
|
Weighted Average Exercise Price Per Share
|
Balance
at January 1, 2019
|
117,860
|
53,225
|
$16.49
|
Restricted
stock units and awards granted - 2018 Plan
|
(10,106)
|
—
|
|
Cancelled
or forfeited - 2018 Plan options
|
1,938
|
(1,938)
|
13.65
|
Cancelled
or forfeited - 2018 Plan restricted stock and restricted stock
units
|
1,938
|
—
|
13.65
|
Cancelled
or forfeited - 2013 Plan options
|
2,926
|
(2,926)
|
14.70
|
Cancelled
or forfeited - 2013 Plan restricted stock and restricted stock
units
|
3,105
|
—
|
12.02
|
Cancelled
or forfeited - 2003 Plan options
|
—
|
(5,945)
|
17.21
|
Balance
at December 31, 2019
|
117,661
|
42,416
|
16.66
|
|
|
|
|
Restricted
stock units and awards granted - 2018 Plan
|
(31,782)
|
—
|
|
Cancelled
or forfeited - 2018 Plan options
|
1,070
|
(1,070)
|
13.65
|
Cancelled
or forfeited - 2018 Plan restricted stock and restricted stock
units
|
3,091
|
—
|
9.58
|
Cancelled
or forfeited - 2013 Plan options
|
2,241
|
(2,241)
|
15.54
|
Cancelled
or forfeited - 2013 Plan restricted stock and restricted stock
units
|
1,450
|
—
|
13.34
|
Cancelled
or forfeited - 2003 Plan options
|
—
|
(8,607)
|
24.23
|
|
|
|
|
Balance
at December 31, 2020
|
93,731
|
30,498
|
$14.69
|
|
Options Outstanding
|
Options Exercisable
|
|||
Ranges of Exercise Prices
|
Number Outstanding
|
Weighted Average Remaining Contractual Life
|
Weighted Average Exercise Price Per Share
|
Number Exercisable
|
Weighted Average Exercise Price Per Share
|
$8.26 - $13.65
|
18,799
|
6.12
years
|
$12.36
|
9,424
|
$11.07
|
$15.54 - $21.63
|
11,699
|
1.97
years
|
18.43
|
11,699
|
18.43
|
|
30,498
|
4.53
years
|
$14.69
|
21,123
|
$15.15
|
|
Number of Shares
|
Weighted average
grant date fair value
|
Unvested
shares at January 1, 2019
|
70,078
|
$12.47
|
Granted
|
10,106
|
7.42
|
Vested
|
(30,103)
|
11.15
|
Forfeited
or surrendered
|
(5,422)
|
12.88
|
Unvested
shares at December 31, 2019
|
44,659
|
$12.16
|
Granted
|
31,782
|
6.00
|
Vested
|
(22,315)
|
11.36
|
Forfeited
or surrendered
|
(4,162)
|
10.30
|
Unvested
shares at December 31, 2020
|
49,964
|
$8.76
|
|
As Restated
|
|
Year Ended December 31
|
2020
|
2019
|
Current
taxes - Federal
|
$(233,000)
|
$-
|
Current
taxes - State
|
42,000
|
38,000
|
Deferred
taxes - Federal
|
-
|
(402,000)
|
Deferred
taxes - State
|
-
|
(60,000)
|
|
|
|
Income
tax benefit
|
$(191,000)
|
$(424,000)
|
|
As Restated
|
|
Year Ended December 31
|
2020
|
2019
|
Federal
statutory rate
|
21.0%
|
21.0%
|
|
|
|
Stock-based
awards
|
(0.8)
|
(0.7)
|
State
taxes
|
3.6
|
3.2
|
Other
permanent differences
|
(0.3)
|
(0.6)
|
Impact
of uncertain tax positions
|
(0.7)
|
(0.5)
|
Valuation
allowance
|
(19.6)
|
(15.4)
|
Other
|
0.8
|
0.1
|
|
|
|
Effective
federal income tax rate
|
4.0%
|
7.1%
|
|
As Restated
|
|
As of December 31
|
2020
|
2019
|
Deferred tax assets
|
|
|
Accrued
expenses
|
$376,000
|
$260,000
|
Inventory
reserve
|
9,000
|
5,000
|
Stock-based
awards
|
65,000
|
88,000
|
Reserve
for bad debts
|
33,000
|
16,000
|
Net
operating loss and credit carryforwards
|
1,422,000
|
715,000
|
Other
|
47,000
|
26,000
|
Depreciation
|
52,000
|
-
|
Valuation
allowance
|
(1,946,000)
|
(1,003,000)
|
|
|
|
Total
deferred tax assets
|
$58,000
|
$107,000
|
|
|
|
Deferred tax liabilities
|
|
|
Depreciation
|
$-
|
$(18,000)
|
Prepaid
expenses
|
(58,000)
|
(89,000)
|
|
|
|
Total
deferred tax liabilities
|
(58,000)
|
(107,000)
|
|
|
|
Net
deferred income tax liabilities
|
$-
|
$-
|
Balance
at January 1, 2019
|
$613,000
|
Increases
due to interest and state tax
|
30,000
|
Balance
at December 31, 2019
|
643,000
|
Increases
due to interest and state tax
|
34,000
|
Balance
at December 31, 2020
|
$677,000
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Incorporated by Reference To
|
|
|
|
|
|
|
Restated
Articles of Incorporation (effective as of January 4,
2021)
|
|
Exhibit
3.1 to Current Report filed January 6, 2021
|
|
|
|
|
|
|
|
Composite
Bylaws, as amended through December 5, 2015
|
|
Exhibit
3.2 to Annual Report on Form 10-K for the year ended December 31,
2015
|
|
|
|
|
|
|
|
Description
of Securities
|
|
Exhibit
4.1 to Annual Report on Form 10-K for the year ended December 31,
2019
|
|
|
|
|
|
|
|
2003
Incentive Stock Option Plan, as amended
|
|
Exhibit
10.1 to Form 8-K filed December 2, 2016
|
|
|
|
|
|
|
|
Form of
Incentive Stock Option Agreement under 2003 Incentive Stock Option
Plan
|
|
Exhibit
10.1 to Form 8-K filed January 16, 2013
|
|
|
|
|
|
|
|
2013
Omnibus Stock and Incentive Plan, as amended
|
|
Exhibit
10.2 to Form 8-K filed December 2, 2016
|
|
|
|
|
|
|
|
Form of
Incentive Stock Option Agreement under 2013 Omnibus Stock and
Incentive Plan
|
|
Exhibit
10.1 to Form 8-K filed August 23, 2013
|
|
|
|
|
|
|
|
Form of
Restricted Stock Unit Agreement for Employees under 2013 Omnibus
Stock and Incentive Plan
|
|
Exhibit
10.1 to Form 8-K filed May 28, 2014
|
|
|
|
|
|
|
|
Form of
Restricted Stock Award Agreement for Employees under the 2013
Omnibus Stock and Incentive Plan
|
|
Exhibit
10.1 to Form 10-Q for the quarterly period ended September 30,
2017
|
|
|
|
|
|
|
|
2018
Equity Incentive Plan
|
|
Exhibit
99.1 to Registration Statement on Form S-8, Reg. No.
333-226670
|
|
|
|
|
|
|
|
Form of
Non-Qualified Stock Option Agreement under 2018 Equity Incentive
Plan
|
|
Exhibit
10.1 to Form 8-K filed August 14, 2018
|
|
|
|
|
|
|
|
Form of
Restricted Stock Unit Agreement under 2018 Equity Incentive
Plan
|
|
Exhibit
10.2 to Form 8-K filed August 14, 2018
|
|
|
|
|
|
|
|
Form of
Restricted Stock Unit Agreement for Non-Employee Directors under
the 2018 Equity Incentive Plan
|
|
Exhibit
10.1 to Form 10-Q for the quarterly period ended June 30,
2019
|
|
|
|
|
|
|
|
Employee
Stock Purchase Plan, as amended
|
|
Exhibit
99.2 to Registration Statement on Form S-8, filed August 8,
2018
|
|
|
|
|
|
|
|
Deferred
Compensation Plan for Directors
|
|
Exhibit
10.1 to Form 10-Q for the quarterly period ended March 31,
2018
|
|
|
|
|
|
|
|
Employment
Agreement with Kristine Glancy dated April 8, 2016
|
|
Exhibit
10.1 to Form 8-K filed April 13, 2016
|
|
|
|
|
|
|
|
Change
in Control Severance Agreement with Kristine Glancy dated April 8,
2016
|
|
Exhibit
10.2 to Form 8-K filed April 13, 2016
|
|
|
|
|
|
|
|
First
Amendment to Change in Control Agreement with Kristine A. Glancy
dated April 28, 2018
|
|
Exhibit
10.1 to Form 10-Q for the quarterly period ended March 31,
2019
|
|
|
|
|
|
|
|
Employment
Agreement with Jeffrey Jagerson dated July 17, 2017
|
|
Exhibit
10.1 to Form 8-K filed June 30, 2017
|
|
|
|
|
|
|
|
Change
in Control Agreement with Jeffrey Jagerson dated July 17,
2017
|
|
Exhibit
10.2 to Form 8-K filed June 30, 2017
|
|
|
|
|
|
|
|
Employment
Agreement with Adam May dated December 20, 2019
|
|
Exhibit
10.18 to Annual Report on Form 10-K for the year ended December 31,
2019
|
|
|
|
|
|
|
|
Change
in Control Agreement with Adam May dated December 20,
2019
|
|
Exhibit
10.19 to Annual Report on Form 10-K for the year ended December 31,
2019
|
|
|
|
|
|
|
|
Industrial/Warehouse
Lease Agreement between the Company and Opus Northwest L.L.C. dated
March 27, 2008**
|
|
Exhibit
10.22 to Annual Report on Form 10-K for the year ended December 31,
2007
|
|
|
|
|
|
|
|
First
Amendment to Industrial/Warehouse Lease Agreement with James
Campbell Company LLC (as successor in interest to Opus Northwest
L.L.C.) dated September 14, 2015
|
|
Exhibit
10.1 to Form 10-Q for the quarterly period ended September 30,
2015
|
|
|
|
|
|
|
|
Exclusive
Agreement for Sale and Implementation of Specified Signs with Price
approved June 6, 2011
|
|
Exhibit
10.2 to Form 10-Q for the quarterly period ended June 30,
2011
|
|
|
|
|
|
|
|
Settlement
Agreement and Release with News America Marketing In-Store, LLC,
dated February 9, 2011, including exhibits
|
|
Exhibit
10.1 to Form 10-Q/A for the quarterly period ended March 31,
2011
|
|
|
|
|
|
|
|
Promissory
Note with Alerus Financial, N.A., dated April 22, 2020
|
|
Exhibit
10.1 to Form 8-K filed April 28, 2020
|
|
|
|
|
|
|
+23.1
|
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
|
Powers
of Attorney
|
|
|
|
|
|
|
|
|
+31
|
|
Certification
of Principal Executive and Financial Officer pursuant to Section
302 of the Sarbanes Oxley Act of 2002
|
|
|
++32
|
|
Section
1350 Certifications
|
|
|
+101.1
|
|
The
following materials from Insignia Systems, Inc.’s Annual
Report on Form 10-K/A for the year ended December 31, 2020 are
filed herewith, formatted in XBRL (Extensible Business
Reporting
Language):
(i) Balance Sheets, (ii) Statements of Operations, (iii) Statements
of Shareholders’ Equity (iv) Statements of Cash Flows, and
(v) Notes to Financial Statements.
|
|
|
|
Insignia Systems, Inc. |
|
|
|
|
|
|
Dated: August 23,
2021
|
By:
|
/s/ Kristine A.
Glancy
|
|
|
|
Kristine A.
Glancy
|
|
|
|
President and Chief
Executive Officer
|
|
Dated: August
23, 2021
|
/s/
Kristine A. Glancy
|
|
|
Kristine
A. Glancy
|
|
|
President
and Chief Executive Officer
|
|
|
(principal
executive officer and interim principal financial
officer)
|
|
|
|
|
Dated: August
23, 2021
|
/s/
Zackery A. Weber
|
|
|
Zackery
A. Weber
|
|
|
Senior
Director of Financial Planning and Analysis
|
|
|
(interim
principal accounting officer)
|
|
|
|
|
Dated: August
23, 2021
|
/s/
Kristine A. Glancy
|
|
|
Kristine
A. Glancy
|
|
|
President
and Chief Executive Officer
|
|
|
(principal
executive officer and interim principal financial
officer)
|
|
|
|
|
|
|
|
Dated: August
23, 2021
|
/s/
Zackery A. Weber
|
|
|
Zackery
A. Weber
|
|
|
Senior
Director of Financial Planning and Analysis
|
|
|
(interim
principal accounting officer)
|
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Mar. 08, 2021 |
Jun. 30, 2020 |
|
Cover [Abstract] | |||
Entity Registrant Name | INSIGNIA SYSTEMS INC/MN | ||
Entity Central Index Key | 0000875355 | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | true | ||
Amendment Description | Insignia Systems, Inc. (“we”, “us”, “our” and the “Company”) is filing this Amendment No. 1 on Form 10-K/A (the “Amendment”) to amend its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 11, 2021 (the “Original Report”). In filing this amendment, the Company is restating its previously issued audited financial statements for the years ended December 31, 2020 and 2019 to account for misstatements related to sales taxes. Those previously issued financial statements should no longer be relied upon. Except as described below, all other information in, and the exhibits to, the Original Report remain unchanged. Accordingly, this Amendment should be read in conjunction with the Original Report and with our filings with the SEC made after the Original Report. This Amendment speaks as of the date of the Original Report and the Company has not updated the Original Report to reflect events occurring subsequent to the date of the Original Report. | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation, State or Country Code | MN | ||
Entity File Number | 1-13471 | ||
Entity Public Float | $ 3,965,000 | ||
Entity Common Stock, Shares Outstanding | 1,754,030 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 5,714,000 | 5,714,000 |
Common stock, shares issued | 1,748,000 | 1,725,000 |
Common stock, shares outstanding | 1,748,000 | 1,725,000 |
STATEMENTS OF OPERATIONS - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Total net sales | $ 5,054,000 | $ 4,435,000 | $ 3,347,000 | $ 4,646,000 | $ 6,175,000 | $ 4,549,000 | $ 5,727,000 | $ 5,077,000 | $ 17,482,000 | $ 21,528,000 |
Cost of goods sold | 41,000 | 112,000 | 208,000 | 172,000 | 498,000 | 214,000 | 333,000 | 392,000 | 14,467,000 | 17,193,000 |
Impairment loss | 159,000 | 0 | ||||||||
Total cost of sales | 4,022,000 | 3,876,000 | 3,015,000 | 3,713,000 | 4,722,000 | 3,728,000 | 4,377,000 | 4,366,000 | 14,626,000 | 17,193,000 |
Gross profit | 1,032,000 | 559,000 | 332,000 | 933,000 | 1,453,000 | 821,000 | 1,350,000 | 711,000 | 2,856,000 | 4,335,000 |
Operating Expenses: | ||||||||||
Selling | 645,000 | 585,000 | 927,000 | 720,000 | 654,000 | 573,000 | 693,000 | 738,000 | 2,877,000 | 2,658,000 |
Marketing | 215,000 | 192,000 | 243,000 | 365,000 | 585,000 | 559,000 | 585,000 | 665,000 | 1,015,000 | 2,394,000 |
General and administrative | 1,162,000 | 840,000 | 992,000 | 1,004,000 | 897,000 | 878,000 | 884,000 | 716,000 | 3,998,000 | 3,375,000 |
Gain on sale of custom print business | 0 | (195,000) | 0 | 0 | 0 | 0 | 0 | 0 | (195,000) | 0 |
Impairment loss | 0 | 2,014,000 | ||||||||
Total operating expenses | 2,022,000 | 1,422,000 | 2,162,000 | 2,089,000 | 4,150,000 | 2,010,000 | 2,162,000 | 2,119,000 | 7,695,000 | 10,441,000 |
Operating loss | (990,000) | (863,000) | (1,830,000) | (1,156,000) | (2,697,000) | (1,189,000) | (812,000) | (1,408,000) | (4,839,000) | (6,106,000) |
Other income | 41,000 | (15,000) | (2,000) | 9,000 | 15,000 | 36,000 | 22,000 | 32,000 | 33,000 | 105,000 |
Loss before taxes | (949,000) | (878,000) | (1,832,000) | (1,147,000) | (2,682,000) | (1,153,000) | (790,000) | (1,376,000) | (4,806,000) | (6,001,000) |
Income tax benefit | 12,000 | 8,000 | 11,000 | (222,000) | (77,000) | (56,000) | (131,000) | (160,000) | (191,000) | (424,000) |
Net loss | $ (961,000) | $ (886,000) | $ (1,843,000) | $ (925,000) | $ (2,605,000) | $ (1,097,000) | $ (659,000) | $ (1,216,000) | $ (4,615,000) | $ (5,577,000) |
Net loss per share: | ||||||||||
Basic | $ (.55) | $ (.51) | $ (1.07) | $ (.53) | $ (1.52) | $ (.64) | $ (.39) | $ (.72) | $ (2.66) | $ (3.27) |
Diluted | $ (0.55) | $ (.51) | $ (1.07) | $ (.53) | $ (1.52) | $ (.64) | $ (.39) | $ (.72) | $ (2.66) | $ (3.27) |
Shares used in calculation of net loss per share: | ||||||||||
Basic | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Diluted | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Services | ||||||||||
Total net sales | $ 5,054,000 | $ 4,317,000 | $ 3,133,000 | $ 4,400,000 | $ 5,612,000 | $ 4,295,000 | $ 5,320,000 | $ 4,576,000 | $ 16,904,000 | $ 19,803,000 |
Cost of goods sold | 13,934,000 | 15,756,000 | ||||||||
Impairment loss | 159,000 | 0 | ||||||||
Products | ||||||||||
Total net sales | $ 0 | $ 118,000 | $ 214,000 | $ 246,000 | $ 563,000 | $ 254,000 | $ 407,000 | $ 501,000 | 578,000 | 1,725,000 |
Cost of goods sold | $ 533,000 | $ 1,437,000 |
STATEMENTS OF CASH FLOWS (Parenthetical) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Cash Flows [Abstract] | ||
Dividends per share | $ 4.90 | $ 4.90 |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Description of Business and Basis of Presentation. Insignia (the “Company”) is a leading provider of in-store and digital advertising solutions to consumer-packaged goods (“CPG”) manufacturers, retailers, shopper marketing agencies and brokerages. The Company operates in a single reportable segment. The Company’s leadership and employees have extensive industry knowledge with direct experience in both CPG manufacturers and retailers. The Company provides marketing solutions to CPG manufacturers spanning from some of the largest multinationals to new and emerging brands.
As described in Note 2, “Restatement of Previously Issued Financial Statements”, the financial statements for the years ended December 31, 2020 and 2019, have been restated to reflect the correction of misstatements to the financial statements. We have also restated all amounts impacted within the notes to the financial statements.
Reverse Stock Split. Effective December 31, 2020, the Company implemented a seven-for-one reverse stock split. All share and per share information, including for stock options and restricted stock units, in the financial statements gives retroactive effect to the reverse stock split for all periods presented.
Sale of Custom Print Business. In August 2020, the Company sold its custom print business to an existing strategic partner. This divestiture has allowed the Company to focus on its core business, selling product solutions to CPGs. The custom print business was not material to operations as a whole and did not represent a strategic shift and therefore is not presented as a discontinued operation. The sale price was $300,000 resulting in a gain on the sale of $195,000. The Company received $200,000 of cash and recorded a short-term receivable of $75,000 and a long-term receivable of $25,000. In addition to the initial sale price, the Company is eligible to receive up to $100,000 in additional payments to the extent net sales by the custom print business during the first year after closing exceed a threshold amount. Due to the contingent nature of the earn-out, no additional gain has been recognized as part of the recorded gain.
Revenue Recognition. The Company recognizes revenue from Insignia In-Store Signage Solutions ratably over the period of service, which is typically a two-to-four-week display cycle. The Company recognized revenue related to custom print solutions and sign card sales at the time the products are shipped to customers. Revenue from non-POPS solutions is recognized with a mix of over-time and point in time recognition dependent on type of service performed. Revenue that has been billed and not yet recognized is reflected as deferred revenue on the Company’s balance sheet.
Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. At December 31, 2020 and 2019, $7,135,000 and $7,333,000 was invested in an insured sweep account and money market account, respectively. The balances in cash accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Amounts held in checking accounts and in insured cash sweep accounts during the years ended December 31, 2020 and 2019 were fully insured under the Federal Deposit Insurance Corporation.
Fair Value of Financial Measurements. Fair value is defined as the exit price, or the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants as of the measurement date. Accounting Standards Codification (“ASC”) 820-10 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect management’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances.
The hierarchy is divided into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The Company records certain financial assets and liabilities at their carrying amounts that approximate fair value, based on their short-term nature. These financial assets and liabilities included cash and cash equivalents, accounts receivable and accounts payable. The carrying value of long-term debt approximates fair value, as the loan is repayable over the next 16 months at an interest rate prescribed by a government agency (see Note 12).
Accounts Receivable. The majority of the Company’s accounts receivable is due from companies in the consumer-packaged goods industry. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are due within 30-150 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. Accounts receivable outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.
Changes in the Company’s allowance for doubtful accounts are as follows:
Inventories. Inventories are primarily comprised of sign cards and hardware. Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method, and consists of the following:
Property and Equipment. Property and equipment is recorded at cost. Significant additions or improvements extending asset lives are capitalized, while repairs and maintenance are charged to expense when incurred. Internally developed software is capitalized upon completion of preliminary project stage and when it is probable the project will be completed. Expenditures are capitalized for all development activities, while expenditures related to planning, training, and maintenance are expensed. Depreciation is provided in amounts sufficient to relate the cost of assets to operations over their estimated useful lives. The straight-line method of depreciation is used for financial reporting purposes and accelerated methods are used for tax purposes. Estimated useful lives of the assets are as follows:
During December 2020, in connection with the outsourcing of certain printing operations, the Company sold property and equipment with a net book value of $230,000, for $195,000, resulting in a loss on sale of $35,000. The proceeds were in the form of receivables due in four equal amounts due in June and December 2021 and June and December 2022.
Impairment of Long-Lived Assets. The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. Impaired assets are then recorded at their estimated fair value.
A hierarchy for inputs used in measuring fair value is in place that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The hierarchy is intended to maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available.
At March 31, 2020, the impact of COVID-19 was determined to be a triggering event requiring an impairment review of long-lived assets. In 2011, the Company paid News America Marketing In-Store, L.L.C. (“News America”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America’s network of retailers as News America’s exclusive agent. The $4,000,000 was being amortized over the 10-year term of the arrangement. In 2019, the Company accelerated the amortization based on the anticipated recovery period over the remaining term of the contract due to the loss of a significant retailer that exited the Company’s retailer network in the first half of 2019 as a result of competitive pressures. As a result of the accelerated amortization, amortization expense for the year ended December 31, 2019 was $600,000. At March 31, 2020, the Company determined the asset was impaired based upon continued revenue declines driven by changes in market conditions due to COVID-19 within the stores that this agreement affords the Company access to. As a result, an impairment of $159,000 was recognized as of March 31, 2020. The Company also shortened the useful life of the underlying asset from March 31, 2021 to December 31, 2020 and recorded remaining amortization expense on a straight-line basis over the remainder of 2020. Amortization expense without the impairment was $158,000 for the year ended December 31, 2020. The net carrying amount of the selling arrangement was recorded within other assets on the Company’s balance sheet. A summary of the carrying amount of this selling arrangement is as follows as of December 31:
In 2019, the Company identified indicators of impairment due to the 2019 operating loss, cash flows used in operations and the excess of the book value of the Company compared to its market capitalization, which became a significant difference during the last two months of 2019. Due to these indicators of impairment, the Company completed an impairment analysis on its long-lived assets by first reviewing the expected undiscounted cash flows compared to the carrying value over the primary asset’s remaining useful life to determine if further impairment testing was required. The Company prepared an undiscounted cash flow analysis related to its selling agreement, described above, which is a separate asset group and as the undiscounted cash flows exceeded the carrying value, no further impairment testing was required. For the property and equipment asset group, the undiscounted cash flows were less than carrying value and therefore, a fair value assessment was required to determine the amount of the impairment. Due to the nature of the primary asset (internally developed software), the most readily available fair market value related to the asset is the market capitalization of the Company which is considered a level 1 measurement (quoted market price). After allocating the Company’s market capitalization to its working capital, there was no remaining value to allocate to long-lived assets which included the internally developed software recently placed in service. The Company utilized other level 3 inputs to determine the fair value of other tangible long-lived assets, including appraised values of production tooling, machinery and equipment. As a result, the Company recorded a long-lived asset impairment charge totaling $2,014,000 during the fourth quarter of 2019.
Income Taxes. Income taxes are accounted for under the liability method. Deferred income taxes are provided for temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred taxes are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of the enactment. It is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense (benefit).
Stock-Based Compensation. The Company measures and recognizes compensation expense for all stock-based awards at fair value. Restricted stock units and awards are valued at the closing market price of the Company’s stock on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and employee stock purchase plan rights. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as by assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.
The expected lives of the options and employee stock purchase plan rights are based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at grant date. Volatility is based on historical and expected future volatility of the Company’s stock. The Company has not historically issued any dividends beyond one-time dividends declared in 2011 and 2016 and does not expect to in the future. Forfeitures are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates.
Advertising Costs. Advertising costs are charged to operations as incurred. Advertising expenses were approximately $69,000 and $133,000 during the years ended December 31, 2020 and 2019, respectively.
Net Income (Loss) Per Share. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding and excludes any dilutive effects of stock options and restricted stock units and awards. Diluted net income (loss) per share gives effect to all diluted potential common shares outstanding during the year.
Weighted average common shares outstanding for the years ended December 31, 2020 and 2019 were as follows:
Due to the net loss incurred during the years ended December 31, 2020 and 2019, all stock awards were anti-dilutive for the period.
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
|
Restatement of Previously Issued Financial Statements |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prior Period Adjustment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements. The financial statements for the years ended December 31, 2020 and 2019 have been restated to reflect the correction of misstatements. The Company also restated all amounts impacted within the notes to the financial statements. A description of the adjustments and their impact on the previously issued financial statements are included below.
Description of Restatement Adjustments. Commencing in the second quarter of 2021, the Company conducted a review of its sales tax positions, and related accounting, with the assistance of outside consultants. As a result of the review, it was determined that certain non-POPs services/products sales were subject to sales tax and that the Company had not assessed sales tax on sales of those services/products to customers. Company management then undertook a process to obtain documentation from significant customers to determine if each was exempt from sales tax assessments during the applicable periods. Based on responses received from these customers, the Company determined that it did not properly accrue sales tax and accrued the estimated sales tax. The misstatements in the previously issued financial statements are considered material and are described below.
In light of the foregoing, the Company in accordance with ASC 250, Accounting Changes and Error Corrections is restating the previously issued financial statements for the years ended December 31, 2020 and 2019 to reflect the effects of misstatements, and to make certain corresponding disclosures. The balance sheets, statements of operations, shareholders’ equity and cash flows, and Notes 1, 4, 9 and 11, were updated to reflect the restatement.
A summary of the impact of the misstatements is as follows:
The restated interim financial information for the relevant unaudited interim financial statements for the quarterly periods ended September 30, 2020 and 2019, June 30, 2020 and 2019, and March 31, 2020 and 2019, is also included below.
The categories of restatement adjustments and their impact on previously reported financial statements are described below:
The following is a summary of the impact of the correction of the sales tax error for the periods previously reported during the years ended December 31, 2020 and 2019, and during the quarters in the years ended December 31, 2020 and 2019.
Annual Financial Statements
The following table sets forth the corrections in each of the individual line items affected in the statements of operations:
The following table sets forth the corrections in each of the individual line items affected in the balance sheets:
The following table sets forth the corrections to retained earnings (accumulated deficit) and total shareholders’ equity in the statements of shareholders’ equity.
Quarterly Financial Statements (Unaudited)
The following table sets forth the corrections in each of the individual line items affected in the statements of operations:
The following table sets forth the corrections in each of the individual line items affected in the balance sheets:
The following table sets forth the corrections to the retained earnings (accumulated deficits) and total shareholders’ equity in the statements of shareholders’ equity.
The Company did not present tables for adjustments within the statement of cash flows, since all of the foregoing adjustments were within the operating activities section of the cash flows. These adjustments did not affect total cash flows from operating activities, financing activities or investing activities for any period presented.
|
Investments |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Investments [Abstract] | |
Investments | During 2020 and as of December 31, 2019, the Company did not have any investments. Prior to December 31, 2019, the Company had invested its excess cash in debt securities, with an average maturity of approximately six months, and which were classified as held to maturity within current assets. |
Revenue Recognition |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Under ASU 2014-09 Revenue from Contracts with Customers (“Topic 606”), revenue is measured based on consideration specified in the contract with a customer, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, including noncash consideration, consideration paid or payable to a customer and significant financing components. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer, as further described below under “Performance Obligations.”
Taxes collected from customers and remitted to governmental authorities are excluded from revenue on the net basis of accounting.
The Company includes shipping and handling fees in revenues. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The following is a description of the Company’s performance obligations included in its primary revenue streams and the timing or method of revenue recognition for each:
In-Store Signage Solution Services. The Company provides a service of displaying promotional signs in close proximity to the CPG manufacturer’s product in participating stores, which the Company maintains in two-to-four-week cycle increments.
Each of the individual activities under the Company’s services, including production activities, are inputs to an integrated sign display service. Customers receive and consume the benefits from the promotional displays over the duration of the contracted display cycle. Additionally, the display of the signs does not have an alternative use to the Company and the Company has an enforceable right to payment for services performed to date. As a result, the Company recognizes the transaction price for service performance obligations as revenue over time. Given the nature of the Company’s performance obligations is to provide a display service over the duration of a specified period or periods, the Company recognizes revenue on a straight-line basis over the display service period as it best reflects the timing of transfer of its sign solutions.
Non-POPS Solutions. The Company also supplies CPG manufacturers with other retailer approved promotional services, such as signage, on-pack, merchandising and digital solutions. These services are more customized than POPS, consisting of variable durations and variable specifications. Due to the variable nature of these services, revenue recognition is a mix of over time and point in time recognition.
Products. Prior to the August 2020 sale of the Company’s custom print business, the Company also sold custom print solutions directly to its customers. Each such product was a distinct performance obligation. Revenue was recognized at a point in time upon shipment, when control of the goods transferred to the customer.
Disaggregation of Revenue
In the following table, revenue is disaggregated by major revenue stream and timing of revenue recognition.
Contract Costs
Sales commissions that are paid to internal or external sales representatives are eligible for capitalization as they are incremental costs that would not have been incurred without entering into a specific sales arrangement and are recoverable through the expected margin on the transaction. The Company is applying the practical expedient in Accounting Standards Codification 340-40-25-4 that allows the incremental costs of obtaining a contract to be recorded as an expense when incurred when the amortization period of the asset that would have otherwise been recognized is one year or less. These costs are included in selling expenses.
Deferred Revenue
Significant changes in deferred revenue during the period are as follows:
Transaction Price Allocated to Remaining Performance Obligations
The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less, which reflect the majority of its performance obligations. This practical expedient is being applied to arrangements for certain incomplete services and unshipped custom signage materials. At December 31, 2020, there were no contracts with an expected duration of greater than one year.
|
Property and Equipment |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and equipment consists of the following at December 31:
Depreciation expense for the years ended December 31, 2020 and 2019 was $314,000 and $1,044,000, respectively. During December 2020, in connection with the outsourcing of most printing operations, the Company sold property and equipment with a net book value of $230,000, for $195,000, resulting in a loss on sale of $35,000. The proceeds were in the form of receivables due in four equal amounts due in June and December 2021 and June and December 2022.
|
Leases |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | The Company leases space under a non-cancelable operating lease for its corporate headquarters. This lease has escalating lease terms and also includes a tenant incentive that was recorded at the time the lease was originally entered into. The lease does not contain contingent rent provisions. The Company also has a lease for additional office space under an operating lease. The lease for the Company’s corporate headquarters includes both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g., fixed common-area or other maintenance costs) which are accounted for as a single lease component as the Company elected the practical expedient to group lease and non-lease components for all leases. The lease for the Company’s additional office space is non-cancelable with a lease term of less than one year and therefore, the Company elected the practical expedient to exclude this short-term lease from the Company’s right-of-use assets and lease liabilities.
The Company’s incremental borrowing rate used in determining the present value of the lease payments was based on information available at the lease commencement date.
The cost components of the Company’s operating leases were as follows for the years ended December 31, 2020 and 2019:
Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for the Company’s leased corporate headquarters which are paid based on actual costs incurred by the lessor.
Maturities of the Company’s lease liabilities for its corporate headquarters operating lease were as follows as of December 31, 2020:
The remaining lease term as of December 31, 2020 and 2019, was 0.25 years and 1.25 years, respectively. The discount rate as of both December 31, 2020 and 2019 was 6%. The cash outflow for operating leases for the years ended December 31, 2020 and December 31, 2019 was $222,000 and $217,000, respectively.
The Company plans to enter into a lease for a new operations center in suburban Minneapolis for a two-year term commencing in March 2021. The Company also plans to enter into a lease by April 2021 for new headquarters near downtown Minneapolis.
|
Commitments and Contingencies |
12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||
Commitments and Contingencies | Retailer Agreements. The Company has contracts in the normal course of business with various retailers, some of which provide for fixed or store-based payments rather than sign placement-based payments resulting in minimum commitments each year in order to maintain the agreements. During the years ended December 31, 2020 and 2019, the Company incurred $2,765,000 and $3,356,000 of costs related to fixed and store-based payments, respectively. The amounts are recorded in cost of services in the Company’s statements of operations.
Aggregate commitment amounts under agreements with retailers are approximately as follows for the years ending December 31:
During 2020, the Company renegotiated several fixed or store-based retail payment contracts to sign placement-based payment contracts, in each case with the general effect of reducing guaranteed payment obligations. On an ongoing basis the Company negotiates renewals of various agreements with retailers, retailer contracts generally have terms of one to three years.
Legal. The Company is subject to various legal matters in the normal course of business.
In July 2019, the Company brought suit against News America in the U.S. District Court in Minnesota, alleging violations of federal and state antitrust and tort laws by News America. The complaint alleges that News America has monopolized the national market for third-party in-store advertising and promotion products and services through various wrongful acts designed to harm the Company, its last significant competitor. The suit seeks, among other relief, an injunction sufficient to prevent further antitrust injury and an award of treble damages to be determined at trial for the harm caused to our Company.
In August 2019, News America filed an answer and counterclaim. In October 2019, News America moved for a judgment on the pleadings. Management believes that the counterclaim is without merit, and the Company filed a response brief on November 11, 2019. The Company also moved to dismiss the counterclaim against it. The court heard oral arguments from both parties on January 14, 2020, and subsequently denied both motions. On July 10, 2020 the parties cross-moved for summary judgment on the counterclaim. On December 7, 2020, the Court granted News America’s motion for summary judgment on the counterclaim in part, requiring Insignia to strike certain allegations from its Complaint and finding News America’s request for attorneys’ fees and costs premature.
|
Shareholders' Equity |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Stock-Based Compensation. The Company’s stock-based compensation plans are administered by the Compensation Committee of the Board of Directors, which, subject to approval by the Board of Directors, selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the award.
The following table summarizes the stock-based compensation expense that was recognized in the Company’s statements of operations for the years ended December 31, 2020 and 2019:
The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards with the following weighted average assumptions:
The Company uses the graded attribution method to recognize expense for unvested stock-based awards. The amount of stock-based compensation recognized during a period is based on the value of the awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company re-evaluates the forfeiture rate annually and adjusts it as necessary.
Stock Options, Restricted Stock, Restricted Stock Units, and Other Stock-Based Compensation Awards. The Company maintains the 2003 Incentive Stock Option Plan (the “2003 Plan”), the 2013 Omnibus Stock and Incentive Plan (the “2013 Plan”) and the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan replaced the 2013 Plan upon its ratification by shareholders in July 2018. No further awards may be granted under the 2013 Plan or the 2003 Plan. Awards granted under the 2003 Plan and 2013 Plan will remain in effect until they are exercised or expire according to their terms.
Under the terms of the 2018 Plan, the number of shares of our common stock that may be the subject of awards and issued under the 2018 Plan was initially 128,571 plus any shares remaining available for future grants under the 2013 Plan on the effective date of the 2018 Plan. All equity awards made during 2019 were under the 2018 Plan.
Under the terms of the 2018 Plan, the Company may grant awards in a variety of instruments including stock options, restricted stock and restricted stock units to employees, consultants and directors generally at an exercise price at or above 100% of fair market value at the close of business on the date of grant. Stock options expire 10 years after the date of grant and generally vest over three years. The Company issues new shares of common stock upon grant of restricted stock, when stock options are exercised, and when restricted stock units are vested and/or settled.
The following table summarizes activity under the 2003, 2013 and 2018 Plans:
The following table summarizes information about the stock options outstanding at December 31, 2020:
Options outstanding under the Plans expire at various dates during the period from May 2021 through August 2028. Options outstanding during 2020 and 2019 had no intrinsic value. Options exercisable at December 31, 2020 had a weighted average remaining life of 3.16 years and no intrinsic value. No options were granted in either 2020 or 2019. The number of options exercisable at December 31, 2019 was 27,285.
During the year ended December 31, 2020, the Company issued 24,282 restricted stock units. The shares underlying the awards were assigned a weighted average value of $6.00 per share, which was the closing price of the Company’s common stock on the date of grants. These awards are scheduled to vest over one year. No restricted stock or restricted stock unit awards were granted in 2019 to employees.
During December 2020, non-employee members of the Board of Directors received restricted stock grants totaling 7,500 shares. The shares underlying the awards were assigned a value of $6.00 per share, which was the closing price of the Company’s common stock on the date of grants, for a total value of $45,000, and are scheduled to vest the day immediately preceding the date of the next annual shareholder meeting. During June 2019, non-employee members of the Board of Directors received restricted stock grants totaling 10,106 shares pursuant to the 2018 Plan. The shares underlying the awards were assigned a value of $7.42 per share, which was the closing price of the Company’s common stock on the date of grants, for a total value of $75,000, and were vested on July 30, 2020, the day immediately preceding the 2020 annual shareholder meeting.
Restricted stock and restricted stock unit transactions during the years ended December 31, 2020 and 2019 are summarized as follows:
As of December 31, 2020, there was approximately $20,000 of total unrecognized compensation costs related to outstanding stock options, which is expected to be recognized over a weighted average period of 1.61 years.
As of December 31, 2020, there was approximately $242,000 of total unrecognized compensation costs related to restricted stock and restricted stock units, which is expected to be recognized over a weighted average period of 0.88 years.
Employee Stock Purchase Plan. The Company has an Employee Stock Purchase Plan (the “ESPP”) that enables employees to contribute up to 10% of their base compensation toward the purchase of the Company’s common stock at 85% of its market value on the first or last day of the year. During the years ended December 31, 2020 and 2019, respectively, participants purchased 6,152 and 4,638 shares under the ESPP. At December 31, 2020, 28,977 shares were reserved for future employee purchases of common stock under the ESPP. For the years ended December 31, 2020 and 2019, the Company recognized $18,000 and $55,000, respectively, of stock-based compensation expense related to the ESPP.
Share Repurchase Programs. On April 5, 2018, the Board authorized the repurchase of up to $3,000,000 of the Company’s common stock on or before March 31, 2020, when the program expired. During the years ended December 31, 2020 and 2019, the Company did not repurchase any shares.
Dividends. The Company has not historically paid dividends, other than one-time dividends declared in 2011 and 2016. The Company intends to retain earnings from operations for use in advancing our business strategy; however, the Company may consider special dividends in the future depending on outcomes of actions such as legal proceedings.
|
Income Taxes |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income tax benefit consists of the following:
The actual tax benefit attributable to loss before taxes differs from the expected tax benefit computed by applying the U.S. federal corporate income tax rate of 21% as follows:
Components of resulting noncurrent deferred tax assets (liabilities) are as follows:
As of December 31, 2020, the Company had a Federal net operating loss (NOL) to carry forward of approximately $5,400,000 and state NOLs of approximately $4,500,000 to carry forward. The Federal NOLs can be carried forward indefinitely. The expiration of state NOLs carried forward varies by taxing jurisdiction.
Section 382 of the U.S. Internal Revenue Code of 1986 (“Section 382”), as amended, generally imposes an annual limitation on the amount of NOL carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. During 2020, we believe we may have experienced an ownership change as defined in Section 382 which would limit our ability to utilize our NOLs. The Company has not yet completed a formal Section 382 analysis. In addition, our ability to utilize the current NOL carryforwards might be further limited by future issuances of our common stock.
In March 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The CARES Act, among other provisions, allows for companies to carry back federal NOLs generated in 2018, 2019 and 2020 for up to five years for refunds of federal taxes paid. This provision created an opportunity for the Company to utilize NOLs not previously expected to be utilized. Thus, the Company has reversed approximately $215,000 of its valuation allowance against the NOLs in its deferred tax assets which the Company carried back to claim a refund of federal taxes paid. As the Company expects to receive the tax refund from the ability to carry back the NOLs within the next 12 months, this discrete benefit has been recorded within income taxes receivable on the balance sheet. In addition to the $215,000 recognized, $17,000 was included as a discrete tax benefit for the year and included in income taxes receivable related to the NOL carry back due to differences in the federal tax rate utilized for the deferred tax asset compared to the rates in effect for the years in which the NOL is being carried back.
The Company evaluates all significant available positive and negative evidence, including the existence of losses in prior years and its forecast of future taxable income, in assessing the need for a valuation allowance. The underlying assumptions the Company uses in forecasting future taxable income require significant judgment and take into consideration the Company’s recent performance. The change in the valuation allowance for the years ended December 31, 2020 and 2019 was $943,000 and $924,000, respectively.
The Company has recorded a liability of $677,000 and $643,000 for uncertain tax positions taken in tax returns in previous years as of December 31, 2020 and 2019, respectively. This liability is reflected as accrued income taxes on the Company’s balance sheets. The Company files income tax returns in the United States and numerous state and local tax jurisdictions. Tax years 2017 and forward are open for examination and assessment by the Internal Revenue Service. With limited exceptions, tax years prior to 2017 are no longer open in major state and local tax jurisdictions. The Company does not anticipate that the total unrecognized tax benefits will change significantly prior to December 31, 2021.
A reconciliation of the beginning and ending amount of the liability for uncertain tax positions is as follows:
|
Employee Benefit Plans |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | The Company sponsors a Retirement Profit Sharing and Savings Plan under Section 401(k) of the Internal Revenue Code. The plan allows employees to defer up to 50% of their wages, subject to Federal limitations, on a pre-tax basis through contributions to the plan. During the years ended December 31, 2020 and 2019, the Company’s expense for matching contributions was $62,000 and $72,000, respectively. |
Concentrations |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Major Customers. During the year ended December 31, 2020, one customer accounted for 14% of the Company’s total net sales. At December 31, 2020, two customers represented 17% and 10%, respectively of the Company’s total accounts receivable. During the year ended December 31, 2019, two customers accounted for 13% and 12%, respectively of the Company’s total net sales. At December 31, 2019, four customers represented 17%, 12%, 12% and 10%, respectively of the Company’s total accounts receivable.
Export Sales. Export sales accounted for less than 1% of total net sales during the years ended December 31, 2020 and 2019.
|
Loan |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Loans Payable [Abstract] | |
Loan | In April 2020, the Company entered into a promissory note (the “Note”) with Alerus Financial, N.A. The Note evidences a loan to the Company in the amount of $1,054,000 pursuant to the Paycheck Protection Program (the “PPP”) of the CARES Act administered by the U.S. Small Business Administration (the “SBA”).
In accordance with the requirements of the CARES Act, the Company used the proceeds from the loan exclusively for qualified expenses under the PPP, including payroll costs, rent and utility costs, as further detailed in the CARES Act and applicable guidance issued by the SBA. Interest was accrued on the outstanding balance of the Note at a rate of 1.00% per annum. The Note was scheduled to mature on April 22, 2022 and required 18 equal monthly payments of principal and interest.
In accordance with provisions of the CARES Act, the Company applied for forgiveness of the amount due under the Note, including accrued interest. The application for forgiveness of the principal amount of $1,054,000 and accrued interest was approved by the SBA on January 29, 2021. Accordingly, for the quarter ending March 31, 2021 the debt of $1,054,000, plus accrued interest which was $7,000 at December 31, 2020, will be eliminated with a gain on debt extinguishment included in other income.
|
Subsequent Events |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | The Company evaluated all subsequent event activity and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the Notes to Financial Statements, with the exception of the forgiveness of the Paycheck Protection Program loan disclosed in Note 12.
|
Summary of Significant Accounting Policies (Policies) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Insignia (the “Company”) is a leading provider of in-store and digital advertising solutions to consumer-packaged goods (“CPG”) manufacturers, retailers, shopper marketing agencies and brokerages. The Company operates in a single reportable segment. The Company’s leadership and employees have extensive industry knowledge with direct experience in both CPG manufacturers and retailers. The Company provides marketing solutions to CPG manufacturers spanning from some of the largest multinationals to new and emerging brands.
As described in Note 2, “Restatement of Previously Issued Financial Statements”, the financial statements for the years ended December 31, 2020 and 2019, have been restated to reflect the correction of misstatements to the financial statements. We have also restated all amounts impacted within the notes to the financial statements.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse Stock Split | Effective December 31, 2020, the Company implemented a seven-for-one reverse stock split. All share and per share information, including for stock options and restricted stock units, in the financial statements gives retroactive effect to the reverse stock split for all periods presented.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of our Custom Print Business | In August 2020, the Company sold its custom print business to an existing strategic partner. This divestiture has allowed the Company to focus on its core business, selling product solutions to CPGs. The custom print business was not material to operations as a whole and did not represent a strategic shift and therefore is not presented as a discontinued operation. The sale price was $300,000 resulting in a gain on the sale of $195,000. The Company received $200,000 of cash and recorded a short-term receivable of $75,000 and a long-term receivable of $25,000. In addition to the initial sale price, the Company is eligible to receive up to $100,000 in additional payments to the extent net sales by the custom print business during the first year after closing exceed a threshold amount. Due to the contingent nature of the earn-out, no additional gain has been recognized as part of the recorded gain.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | The Company recognizes revenue from Insignia In-Store Signage Solutions ratably over the period of service, which is typically a two-to-four-week display cycle. The Company recognized revenue related to custom print solutions and sign card sales at the time the products are shipped to customers. Revenue from non-POPS solutions is recognized with a mix of over-time and point in time recognition dependent on type of service performed. Revenue that has been billed and not yet recognized is reflected as deferred revenue on the Company’s balance sheet.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | The Company considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. At December 31, 2020 and 2019, $7,135,000 and $7,333,000 was invested in an insured sweep account and money market account, respectively. The balances in cash accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Amounts held in checking accounts and in insured cash sweep accounts during the years ended December 31, 2020 and 2019 were fully insured under the Federal Deposit Insurance Corporation.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Measurements | Fair value is defined as the exit price, or the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants as of the measurement date. Accounting Standards Codification (“ASC”) 820-10 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect management’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances.
The hierarchy is divided into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The Company records certain financial assets and liabilities at their carrying amounts that approximate fair value, based on their short-term nature. These financial assets and liabilities included cash and cash equivalents, accounts receivable and accounts payable. The carrying value of long-term debt approximates fair value, as the loan is repayable over the next 16 months at an interest rate prescribed by a government agency (see Note 12).
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | The majority of the Company’s accounts receivable is due from companies in the consumer-packaged goods industry. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are due within 30-150 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. Accounts receivable outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes-off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.
Changes in the Company’s allowance for doubtful accounts are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories are primarily comprised of sign cards and hardware. Inventory is valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method, and consists of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and equipment is recorded at cost. Significant additions or improvements extending asset lives are capitalized, while repairs and maintenance are charged to expense when incurred. Internally developed software is capitalized upon completion of preliminary project stage and when it is probable the project will be completed. Expenditures are capitalized for all development activities, while expenditures related to planning, training, and maintenance are expensed. Depreciation is provided in amounts sufficient to relate the cost of assets to operations over their estimated useful lives. The straight-line method of depreciation is used for financial reporting purposes and accelerated methods are used for tax purposes. Estimated useful lives of the assets are as follows:
During December 2020, in connection with the outsourcing of certain printing operations, the Company sold property and equipment with a net book value of $230,000, for $195,000, resulting in a loss on sale of $35,000. The proceeds were in the form of receivables due in four equal amounts due in June and December 2021 and June and December 2022.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long-Lived Assets | The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. Impaired assets are then recorded at their estimated fair value.
A hierarchy for inputs used in measuring fair value is in place that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The hierarchy is intended to maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available.
At March 31, 2020, the impact of COVID-19 was determined to be a triggering event requiring an impairment review of long-lived assets. In 2011, the Company paid News America Marketing In-Store, L.L.C. (“News America”) $4,000,000 in exchange for a 10-year arrangement to sell signs with price into News America’s network of retailers as News America’s exclusive agent. The $4,000,000 was being amortized over the 10-year term of the arrangement. In 2019, the Company accelerated the amortization based on the anticipated recovery period over the remaining term of the contract due to the loss of a significant retailer that exited the Company’s retailer network in the first half of 2019 as a result of competitive pressures. As a result of the accelerated amortization, amortization expense for the year ended December 31, 2019 was $600,000. At March 31, 2020, the Company determined the asset was impaired based upon continued revenue declines driven by changes in market conditions due to COVID-19 within the stores that this agreement affords the Company access to. As a result, an impairment of $159,000 was recognized as of March 31, 2020. The Company also shortened the useful life of the underlying asset from March 31, 2021 to December 31, 2020 and recorded remaining amortization expense on a straight-line basis over the remainder of 2020. Amortization expense without the impairment was $158,000 for the year ended December 31, 2020. The net carrying amount of the selling arrangement was recorded within other assets on the Company’s balance sheet. A summary of the carrying amount of this selling arrangement is as follows as of December 31:
In 2019, the Company identified indicators of impairment due to the 2019 operating loss, cash flows used in operations and the excess of the book value of the Company compared to its market capitalization, which became a significant difference during the last two months of 2019. Due to these indicators of impairment, the Company completed an impairment analysis on its long-lived assets by first reviewing the expected undiscounted cash flows compared to the carrying value over the primary asset’s remaining useful life to determine if further impairment testing was required. The Company prepared an undiscounted cash flow analysis related to its selling agreement, described above, which is a separate asset group and as the undiscounted cash flows exceeded the carrying value, no further impairment testing was required. For the property and equipment asset group, the undiscounted cash flows were less than carrying value and therefore, a fair value assessment was required to determine the amount of the impairment. Due to the nature of the primary asset (internally developed software), the most readily available fair market value related to the asset is the market capitalization of the Company which is considered a level 1 measurement (quoted market price). After allocating the Company’s market capitalization to its working capital, there was no remaining value to allocate to long-lived assets which included the internally developed software recently placed in service. The Company utilized other level 3 inputs to determine the fair value of other tangible long-lived assets, including appraised values of production tooling, machinery and equipment. As a result, the Company recorded a long-lived asset impairment charge totaling $2,014,000 during the fourth quarter of 2019.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income taxes are accounted for under the liability method. Deferred income taxes are provided for temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred taxes are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of the enactment. It is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense (benefit).
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | The Company measures and recognizes compensation expense for all stock-based awards at fair value. Restricted stock units and awards are valued at the closing market price of the Company’s stock on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and employee stock purchase plan rights. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as by assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.
The expected lives of the options and employee stock purchase plan rights are based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at grant date. Volatility is based on historical and expected future volatility of the Company’s stock. The Company has not historically issued any dividends beyond one-time dividends declared in 2011 and 2016 and does not expect to in the future. Forfeitures are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Costs | Advertising costs are charged to operations as incurred. Advertising expenses were approximately $69,000 and $133,000 during the years ended December 31, 2020 and 2019, respectively.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) per Share | Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding and excludes any dilutive effects of stock options and restricted stock units and awards. Diluted net income (loss) per share gives effect to all diluted potential common shares outstanding during the year.
Weighted average common shares outstanding for the years ended December 31, 2020 and 2019 were as follows:
Due to the net loss incurred during the years ended December 31, 2020 and 2019, all stock awards were anti-dilutive for the period.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
|
Summary of Significant Accounting Policies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Allowance for doubtful accounts |
|
|||||||||||||||||||||||||||||||||||||||||||||
Inventories |
|
|||||||||||||||||||||||||||||||||||||||||||||
Estimated useful lives |
|
|||||||||||||||||||||||||||||||||||||||||||||
Selling arrangement |
|
|||||||||||||||||||||||||||||||||||||||||||||
Asset impairment |
|
|||||||||||||||||||||||||||||||||||||||||||||
Weighted average common shares outstanding |
|
Restatement of Previously Issued Financial Statements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prior Period Adjustment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of misstatements | A summary of the impact of the misstatements is as follows:
The following table sets forth the corrections in each of the individual line items affected in the statements of operations:
The following table sets forth the corrections in each of the individual line items affected in the balance sheets:
The following table sets forth the corrections to retained earnings (accumulated deficit) and total shareholders’ equity in the statements of shareholders’ equity.
The following table sets forth the corrections in each of the individual line items affected in the statements of operations:
The following table sets forth the corrections in each of the individual line items affected in the balance sheets:
The following table sets forth the corrections to the retained earnings (accumulated deficits) and total shareholders’ equity in the statements of shareholders’ equity.
|
Revenue Recognition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred revenue |
|
Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment |
|
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of operating leases |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of our lease liabilities |
|
Commitments and Contingencies (Tables) |
12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||
Aggregate commitment amounts |
|
Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average assumptions |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option activity |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options outstanding |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock and restricted stock unit activity |
|
Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of effective federal income tax rate |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax assets (liabilities) |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Uncertain tax positions |
|
Summary of Significant Accounting Policies (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts, beginning | $ 65,000 | $ 22,000 |
Bad debt provision | 203,000 | 47,000 |
Accounts written-off | 0 | (4,000) |
Allowance for doubtful accounts, ending | $ 268,000 | $ 65,000 |
Summary of Significant Accounting Policies (Details 1) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounting Policies [Abstract] | ||
Raw materials | $ 32,000 | $ 47,000 |
Work-in-process | 2,000 | 16,000 |
Finished goods | 51,000 | 259,000 |
Inventories | $ 85,000 | $ 322,000 |
Summary of Significant Accounting Policies (Details 2) |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Production Tooling, Machinery and Equipment | Minimum | |
Estimated useful lives | 1 year |
Production Tooling, Machinery and Equipment | Maximum | |
Estimated useful lives | 6 years |
Furniture And Fixtures | Minimum | |
Estimated useful lives | 1 year |
Furniture And Fixtures | Maximum | |
Estimated useful lives | 3 years |
Computer Equipment and Software | Minimum | |
Estimated useful lives | 3 years |
Computer Equipment and Software | Maximum | |
Estimated useful lives | 5 years |
Summary of Significant Accounting Policies (Details 3) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounting Policies [Abstract] | ||
Gross cost | $ 4,000,000 | $ 4,000,000 |
Accumulated amortization | (4,000,000) | (3,683,000) |
Net carrying amount | $ 0 | $ 317,000 |
Summary of Significant Accounting Policies (Details 4) |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Accounting Policies [Abstract] | |
Beginning balance prior to impairment | $ 2,563,000 |
Impairment charge | (2,014,000) |
Ending balance | $ 549,000 |
Summary of Significant Accounting Policies (Details 5) - shares |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | ||||||||||
Denominator for basic net loss per share - weighted average shares | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Effect of dilutive securities: stock options, restricted stock and restricted stock units | 0 | 0 | ||||||||
Denominator for diluted net loss per share - weighted average shares | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Summary of Significant Accounting Policies (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | ||||||||||
Gain on sale of custom print business | $ 0 | $ 195,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 195,000 | $ 0 |
Insured cash sweep account | $ 7,135,000 | 7,333,000 | 7,135,000 | 7,333,000 | ||||||
Long-lived asset impairment charge | 0 | 2,014,000 | ||||||||
Advertising expense | $ 69,000 | $ 133,000 | ||||||||
Impairment loss | $ 2,014,000 | $ 0 | $ 0 | $ 0 |
Restatement of Previously Issued Financial Statements (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Total net sales | $ 5,054,000 | $ 4,435,000 | $ 3,347,000 | $ 4,646,000 | $ 6,175,000 | $ 4,549,000 | $ 5,727,000 | $ 5,077,000 | $ 17,482,000 | $ 21,528,000 | |
Operating loss | (990,000) | (863,000) | (1,830,000) | (1,156,000) | (2,697,000) | (1,189,000) | (812,000) | (1,408,000) | (4,839,000) | (6,106,000) | |
Net loss | (961,000) | (886,000) | (1,843,000) | (925,000) | (2,605,000) | (1,097,000) | (659,000) | (1,216,000) | (4,615,000) | (5,577,000) | |
Total Shareholders' Equity | 6,668,000 | 11,083,000 | 6,668,000 | 11,083,000 | $ 16,320,000 | ||||||
As Previously Reported | |||||||||||
Total net sales | 5,108,000 | 4,491,000 | 3,388,000 | 4,682,000 | 6,318,000 | 4,654,000 | 5,842,000 | 5,140,000 | 17,669,000 | 21,954,000 | |
Operating loss | (923,000) | (792,000) | (1,777,000) | (1,109,000) | (2,538,000) | (1,071,000) | (683,000) | (1,337,000) | (4,601,000) | (5,629,000) | |
Net loss | (871,000) | $ (794,000) | $ (1,772,000) | $ (863,000) | (2,459,000) | $ (978,000) | $ (488,000) | $ (1,096,000) | (4,300,000) | (5,021,000) | |
Total Shareholders' Equity | $ 7,694,000 | $ 11,794,000 | $ 7,694,000 | $ 11,794,000 |
Restatement of Previously Issued Financial Statements (Details 1) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Prior Period Adjustment [Abstract] | ||||||||||
Reduction of net sales | $ 54,000 | $ 56,000 | $ 41,000 | $ 36,000 | $ 143,000 | $ 105,000 | $ 115,000 | $ 63,000 | $ 187,000 | $ 426,000 |
Increase in general and administrative expense for penalties | 13,000 | 15,000 | 12,000 | 11,000 | 16,000 | 13,000 | 14,000 | 8,000 | 51,000 | 51,000 |
Decrease in other income for interest expense | 23,000 | 21,000 | 18,000 | 15,000 | 14,000 | 10,000 | 8,000 | 5,000 | 77,000 | 37,000 |
Decrease in income tax benefit | 0 | 0 | 0 | 0 | (27,000) | (9,000) | 34,000 | 44,000 | 0 | 42,000 |
Total increase in net loss due to restatement items | $ 90,000 | $ 92,000 | $ 71,000 | $ 62,000 | $ 146,000 | $ 119,000 | $ 171,000 | $ 120,000 | $ 315,000 | $ 556,000 |
Restatement of Previously Issued Financial Statements (Details 2) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Total net sales | $ 5,054,000 | $ 4,435,000 | $ 3,347,000 | $ 4,646,000 | $ 6,175,000 | $ 4,549,000 | $ 5,727,000 | $ 5,077,000 | $ 17,482,000 | $ 21,528,000 |
Cost of goods sold | 41,000 | 112,000 | 208,000 | 172,000 | 498,000 | 214,000 | 333,000 | 392,000 | 14,467,000 | 17,193,000 |
Impairment loss | 159,000 | 0 | ||||||||
Total cost of sales | 4,022,000 | 3,876,000 | 3,015,000 | 3,713,000 | 4,722,000 | 3,728,000 | 4,377,000 | 4,366,000 | 14,626,000 | 17,193,000 |
Gross profit | 1,032,000 | 559,000 | 332,000 | 933,000 | 1,453,000 | 821,000 | 1,350,000 | 711,000 | 2,856,000 | 4,335,000 |
Operating Expenses: | ||||||||||
Selling | 645,000 | 585,000 | 927,000 | 720,000 | 654,000 | 573,000 | 693,000 | 738,000 | 2,877,000 | 2,658,000 |
Marketing | 215,000 | 192,000 | 243,000 | 365,000 | 585,000 | 559,000 | 585,000 | 665,000 | 1,015,000 | 2,394,000 |
General and administrative | 1,162,000 | 840,000 | 992,000 | 1,004,000 | 897,000 | 878,000 | 884,000 | 716,000 | 3,998,000 | 3,375,000 |
Gain on sale of custom print business | 0 | (195,000) | 0 | 0 | 0 | 0 | 0 | 0 | (195,000) | 0 |
Impairment loss | 0 | 2,014,000 | ||||||||
Total operating expenses | 2,022,000 | 1,422,000 | 2,162,000 | 2,089,000 | 4,150,000 | 2,010,000 | 2,162,000 | 2,119,000 | 7,695,000 | 10,441,000 |
Operating loss | (990,000) | (863,000) | (1,830,000) | (1,156,000) | (2,697,000) | (1,189,000) | (812,000) | (1,408,000) | (4,839,000) | (6,106,000) |
Other income | 41,000 | (15,000) | (2,000) | 9,000 | 15,000 | 36,000 | 22,000 | 32,000 | 33,000 | 105,000 |
Loss before taxes | (949,000) | (878,000) | (1,832,000) | (1,147,000) | (2,682,000) | (1,153,000) | (790,000) | (1,376,000) | (4,806,000) | (6,001,000) |
Income tax benefit | 12,000 | 8,000 | 11,000 | (222,000) | (77,000) | (56,000) | (131,000) | (160,000) | (191,000) | (424,000) |
Net loss | $ (961,000) | $ (886,000) | $ (1,843,000) | $ (925,000) | $ (2,605,000) | $ (1,097,000) | $ (659,000) | $ (1,216,000) | $ (4,615,000) | $ (5,577,000) |
Net loss per share: | ||||||||||
Basic | $ (.55) | $ (.51) | $ (1.07) | $ (.53) | $ (1.52) | $ (.64) | $ (.39) | $ (.72) | $ (2.66) | $ (3.27) |
Diluted | $ (0.55) | $ (.51) | $ (1.07) | $ (.53) | $ (1.52) | $ (.64) | $ (.39) | $ (.72) | $ (2.66) | $ (3.27) |
Shares used in calculation of net loss per share: | ||||||||||
Basic | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Diluted | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Services | ||||||||||
Total net sales | $ 5,054,000 | $ 4,317,000 | $ 3,133,000 | $ 4,400,000 | $ 5,612,000 | $ 4,295,000 | $ 5,320,000 | $ 4,576,000 | $ 16,904,000 | $ 19,803,000 |
Cost of goods sold | 13,934,000 | 15,756,000 | ||||||||
Impairment loss | 159,000 | 0 | ||||||||
Products | ||||||||||
Total net sales | 0 | 118,000 | 214,000 | 246,000 | 563,000 | 254,000 | 407,000 | 501,000 | 578,000 | 1,725,000 |
Cost of goods sold | 533,000 | 1,437,000 | ||||||||
As Previously Reported | ||||||||||
Total net sales | 5,108,000 | 4,491,000 | 3,388,000 | 4,682,000 | 6,318,000 | 4,654,000 | 5,842,000 | 5,140,000 | 17,669,000 | 21,954,000 |
Cost of goods sold | 41,000 | 112,000 | 208,000 | 172,000 | 498,000 | 214,000 | 333,000 | 392,000 | 14,467,000 | 17,193,000 |
Impairment loss | 159,000 | 0 | ||||||||
Total cost of sales | 4,022,000 | 3,876,000 | 3,015,000 | 3,713,000 | 4,722,000 | 3,728,000 | 4,377,000 | 4,366,000 | 14,626,000 | 17,193,000 |
Gross profit | 1,086,000 | 615,000 | 373,000 | 969,000 | 1,596,000 | 926,000 | 1,465,000 | 774,000 | 3,043,000 | 4,761,000 |
Operating Expenses: | ||||||||||
Selling | 645,000 | 585,000 | 927,000 | 720,000 | 654,000 | 573,000 | 693,000 | 738,000 | 2,877,000 | 2,658,000 |
Marketing | 215,000 | 192,000 | 243,000 | 365,000 | 585,000 | 559,000 | 585,000 | 665,000 | 1,015,000 | 2,394,000 |
General and administrative | 1,149,000 | 825,000 | 980,000 | 993,000 | 881,000 | 865,000 | 870,000 | 708,000 | 3,947,000 | 3,324,000 |
Gain on sale of custom print business | 0 | (195,000) | 0 | 0 | 0 | 0 | 0 | 0 | (195,000) | 0 |
Impairment loss | 0 | 2,014,000 | ||||||||
Total operating expenses | 2,009,000 | 1,407,000 | 2,150,000 | 2,078,000 | 4,134,000 | 1,997,000 | 2,148,000 | 2,111,000 | 7,644,000 | 10,390,000 |
Operating loss | (923,000) | (792,000) | (1,777,000) | (1,109,000) | (2,538,000) | (1,071,000) | (683,000) | (1,337,000) | (4,601,000) | (5,629,000) |
Other income | 64,000 | 6,000 | 16,000 | 24,000 | 29,000 | 46,000 | 30,000 | 37,000 | 110,000 | 142,000 |
Loss before taxes | (859,000) | (786,000) | (1,761,000) | (1,085,000) | (2,509,000) | (1,025,000) | (653,000) | (1,300,000) | (4,491,000) | (5,487,000) |
Income tax benefit | 12,000 | 8,000 | 11,000 | (222,000) | (50,000) | (47,000) | (165,000) | (204,000) | (191,000) | (466,000) |
Net loss | $ (871,000) | $ (794,000) | $ (1,772,000) | $ (863,000) | $ (2,459,000) | $ (978,000) | $ (488,000) | $ (1,096,000) | $ (4,300,000) | $ (5,021,000) |
Net loss per share: | ||||||||||
Basic | $ (.49) | $ (.46) | $ (1.03) | $ (0.50) | $ (1.43) | $ (.57) | $ (.29) | $ (.65) | $ (2.48) | $ (2.94) |
Diluted | $ (.49) | $ (.46) | $ (1.03) | $ (0.50) | $ (1.43) | $ (.57) | $ (.29) | $ (.65) | $ (2.48) | $ (2.94) |
Shares used in calculation of net loss per share: | ||||||||||
Basic | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Diluted | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
As Previously Reported | Services | ||||||||||
Total net sales | $ 5,108,000 | $ 4,373,000 | $ 3,174,000 | $ 4,436,000 | $ 5,755,000 | $ 4,400,000 | $ 5,435,000 | $ 4,639,000 | $ 17,091,000 | $ 20,229,000 |
Cost of goods sold | 13,934,000 | 15,756,000 | ||||||||
Impairment loss | 159,000 | 0 | ||||||||
As Previously Reported | Products | ||||||||||
Total net sales | $ 0 | $ 118,000 | $ 214,000 | $ 246,000 | $ 563,000 | $ 254,000 | $ 407,000 | $ 501,000 | 578,000 | 1,725,000 |
Cost of goods sold | $ 533,000 | $ 1,437,000 |
Restatement of Previously Issued Financial Statements (Details 3) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
---|---|---|---|---|---|---|---|---|
Accounts receivable, net | $ 5,857,000 | $ 5,712,000 | $ 5,421,000 | $ 6,249,000 | $ 7,559,000 | $ 6,438,000 | $ 6,248,000 | $ 6,360,000 |
Sales tax | 1,011,000 | 902,000 | 773,000 | 681,000 | 594,000 | 452,000 | 347,000 | 232,000 |
Other | 1,071,000 | 872,000 | 769,000 | 403,000 | 687,000 | 499,000 | 437,000 | 503,000 |
Deferred tax liabilities | 0 | 0 | 0 | 0 | 0 | 88,000 | 152,000 | 292,000 |
Accumulated deficit | (9,587,000) | 8,626,000 | 7,740,000 | 5,897,000 | (4,972,000) | 2,367,000 | 1,270,000 | 611,000 |
As Previously Reported | ||||||||
Accounts receivable, net | 5,628,000 | 5,538,000 | 5,319,000 | 6,199,000 | 7,559,000 | 6,438,000 | 6,248,000 | 6,360,000 |
Sales tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Other | 827,000 | 664,000 | 597,000 | 261,000 | 570,000 | 413,000 | 374,000 | 462,000 |
Deferred tax liabilities | 0 | 0 | 0 | 0 | 0 | 61,000 | 116,000 | 290,000 |
Accumulated deficit | 8,561,000 | 7,690,000 | 6,896,000 | 5,124,000 | 4,261,000 | 1,802,000 | 824,000 | 336,000 |
Error Correction | ||||||||
Accounts receivable, net | 229,000 | 174,000 | 102,000 | 50,000 | 0 | 0 | 0 | 0 |
Sales tax | 1,011,000 | 902,000 | 773,000 | 681,000 | 594,000 | 452,000 | 347,000 | 232,000 |
Other | 244,000 | 208,000 | 172,000 | 142,000 | 117,000 | 86,000 | 63,000 | 41,000 |
Deferred tax liabilities | 0 | 0 | 0 | 0 | 0 | 27,000 | 36,000 | 2,000 |
Accumulated deficit | $ 1,026,000 | $ 936,000 | $ 844,000 | $ 773,000 | $ 711,000 | $ 565,000 | $ 446,000 | $ 275,000 |
Restatement of Previously Issued Financial Statements (Details 4) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|---|---|---|---|---|
Accumulated deficit | $ (9,587,000) | $ (8,626,000) | $ (7,739,000) | $ (5,897,000) | $ (4,972,000) | $ (2,367,000) | $ (1,270,000) | $ (611,000) | $ 605,000 |
Total Shareholders' Equity | 6,668,000 | 7,602,000 | 8,444,000 | 10,227,000 | 11,083,000 | 13,644,000 | 14,666,000 | 15,195,000 | 16,165,000 |
As Previously Reported | |||||||||
Accumulated deficit | (8,561,000) | (7,690,000) | (6,896,000) | (5,124,000) | (4,261,000) | (1,802,000) | (824,000) | (336,000) | 760,000 |
Total Shareholders' Equity | 7,694,000 | 8,538,000 | 9,287,000 | 11,000,000 | 11,794,000 | 14,209,000 | 15,112,000 | 15,470,000 | 16,320,000 |
Error Correction | |||||||||
Accumulated deficit | (1,026,000) | (936,000) | (843,000) | (773,000) | (711,000) | (565,000) | (446,000) | (275,000) | (155,000) |
Total Shareholders' Equity | $ (1,026,000) | $ (936,000) | $ (843,000) | $ (773,000) | $ (711,000) | $ (565,000) | $ (446,000) | $ (275,000) | $ (155,000) |
Restatement of Previously Issued Financial Statements (Details 5) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Prior Period Adjustment [Abstract] | ||||||||||
Reduction of net sales | $ 54,000 | $ 56,000 | $ 41,000 | $ 36,000 | $ 143,000 | $ 105,000 | $ 115,000 | $ 63,000 | $ 187,000 | $ 426,000 |
Increase in general and administrative expense for penalties | 13,000 | 15,000 | 12,000 | 11,000 | 16,000 | 13,000 | 14,000 | 8,000 | 51,000 | 51,000 |
Decrease in other income for interest expense | 23,000 | 21,000 | 18,000 | 15,000 | 14,000 | 10,000 | 8,000 | 5,000 | 77,000 | 37,000 |
Decrease in income tax benefit | 0 | 0 | 0 | 0 | (27,000) | (9,000) | 34,000 | 44,000 | 0 | 42,000 |
Total increase in net loss due to restatement items | $ 90,000 | $ 92,000 | $ 71,000 | $ 62,000 | $ 146,000 | $ 119,000 | $ 171,000 | $ 120,000 | $ 315,000 | $ 556,000 |
Restatement of Previously Issued Financial Statements (Details 6) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Total Net Sales | $ 5,054,000 | $ 4,435,000 | $ 3,347,000 | $ 4,646,000 | $ 6,175,000 | $ 4,549,000 | $ 5,727,000 | $ 5,077,000 | $ 17,482,000 | $ 21,528,000 |
Cost of services | 3,981,000 | 3,764,000 | 2,807,000 | 3,382,000 | 4,224,000 | 3,514,000 | 4,044,000 | 3,974,000 | ||
Cost of goods sold | 41,000 | 112,000 | 208,000 | 172,000 | 498,000 | 214,000 | 333,000 | 392,000 | 14,467,000 | 17,193,000 |
Impairment loss - services | 0 | 0 | 0 | 159,000 | 0 | 0 | 0 | 0 | 159,000 | 2,014,000 |
Total Cost of Sales | 4,022,000 | 3,876,000 | 3,015,000 | 3,713,000 | 4,722,000 | 3,728,000 | 4,377,000 | 4,366,000 | 14,626,000 | 17,193,000 |
Gross Profit | 1,032,000 | 559,000 | 332,000 | 933,000 | 1,453,000 | 821,000 | 1,350,000 | 711,000 | 2,856,000 | 4,335,000 |
Operating Expenses: | ||||||||||
Selling | 645,000 | 585,000 | 927,000 | 720,000 | 654,000 | 573,000 | 693,000 | 738,000 | 2,877,000 | 2,658,000 |
Marketing | 215,000 | 192,000 | 243,000 | 365,000 | 585,000 | 559,000 | 585,000 | 665,000 | 1,015,000 | 2,394,000 |
General and administrative | 1,162,000 | 840,000 | 992,000 | 1,004,000 | 897,000 | 878,000 | 884,000 | 716,000 | 3,998,000 | 3,375,000 |
Impairment loss | 2,014,000 | 0 | 0 | 0 | ||||||
Gain on sale of business | 0 | (195,000) | 0 | 0 | 0 | 0 | 0 | 0 | (195,000) | 0 |
Total Operating Expenses | 2,022,000 | 1,422,000 | 2,162,000 | 2,089,000 | 4,150,000 | 2,010,000 | 2,162,000 | 2,119,000 | 7,695,000 | 10,441,000 |
Operating Loss | (990,000) | (863,000) | (1,830,000) | (1,156,000) | (2,697,000) | (1,189,000) | (812,000) | (1,408,000) | (4,839,000) | (6,106,000) |
Other income: | ||||||||||
Other income (expense) | 41,000 | (15,000) | (2,000) | 9,000 | 15,000 | 36,000 | 22,000 | 32,000 | 33,000 | 105,000 |
Loss Before Taxes | (949,000) | (878,000) | (1,832,000) | (1,147,000) | (2,682,000) | (1,153,000) | (790,000) | (1,376,000) | (4,806,000) | (6,001,000) |
Income tax expense (benefit) | 12,000 | 8,000 | 11,000 | (222,000) | (77,000) | (56,000) | (131,000) | (160,000) | (191,000) | (424,000) |
Net Loss | $ (961,000) | $ (886,000) | $ (1,843,000) | $ (925,000) | $ (2,605,000) | $ (1,097,000) | $ (659,000) | $ (1,216,000) | $ (4,615,000) | $ (5,577,000) |
Net loss per share: | ||||||||||
Basic | $ (.55) | $ (.51) | $ (1.07) | $ (.53) | $ (1.52) | $ (.64) | $ (.39) | $ (.72) | $ (2.66) | $ (3.27) |
Diluted | $ (0.55) | $ (.51) | $ (1.07) | $ (.53) | $ (1.52) | $ (.64) | $ (.39) | $ (.72) | $ (2.66) | $ (3.27) |
Shares used in calculation of net loss per share: | ||||||||||
Basic | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Diluted | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Services | ||||||||||
Total Net Sales | $ 5,054,000 | $ 4,317,000 | $ 3,133,000 | $ 4,400,000 | $ 5,612,000 | $ 4,295,000 | $ 5,320,000 | $ 4,576,000 | $ 16,904,000 | $ 19,803,000 |
Cost of goods sold | 13,934,000 | 15,756,000 | ||||||||
Products | ||||||||||
Total Net Sales | 0 | 118,000 | 214,000 | 246,000 | 563,000 | 254,000 | 407,000 | 501,000 | 578,000 | 1,725,000 |
Cost of goods sold | 533,000 | 1,437,000 | ||||||||
As Previously Reported | ||||||||||
Total Net Sales | 5,108,000 | 4,491,000 | 3,388,000 | 4,682,000 | 6,318,000 | 4,654,000 | 5,842,000 | 5,140,000 | 17,669,000 | 21,954,000 |
Cost of services | 3,981,000 | 3,764,000 | 2,807,000 | 3,382,000 | 4,224,000 | 3,514,000 | 4,044,000 | 3,974,000 | ||
Cost of goods sold | 41,000 | 112,000 | 208,000 | 172,000 | 498,000 | 214,000 | 333,000 | 392,000 | 14,467,000 | 17,193,000 |
Impairment loss - services | 0 | 0 | 0 | 159,000 | 0 | 0 | 0 | 0 | ||
Total Cost of Sales | 4,022,000 | 3,876,000 | 3,015,000 | 3,713,000 | 4,722,000 | 3,728,000 | 4,377,000 | 4,366,000 | 14,626,000 | 17,193,000 |
Gross Profit | 1,086,000 | 615,000 | 373,000 | 969,000 | 1,596,000 | 926,000 | 1,465,000 | 774,000 | 3,043,000 | 4,761,000 |
Operating Expenses: | ||||||||||
Selling | 645,000 | 585,000 | 927,000 | 720,000 | 654,000 | 573,000 | 693,000 | 738,000 | 2,877,000 | 2,658,000 |
Marketing | 215,000 | 192,000 | 243,000 | 365,000 | 585,000 | 559,000 | 585,000 | 665,000 | 1,015,000 | 2,394,000 |
General and administrative | 1,149,000 | 825,000 | 980,000 | 993,000 | 881,000 | 865,000 | 870,000 | 708,000 | 3,947,000 | 3,324,000 |
Impairment loss | 2,014,000 | 0 | 0 | 0 | ||||||
Gain on sale of business | 0 | (195,000) | 0 | 0 | 0 | 0 | 0 | 0 | (195,000) | 0 |
Total Operating Expenses | 2,009,000 | 1,407,000 | 2,150,000 | 2,078,000 | 4,134,000 | 1,997,000 | 2,148,000 | 2,111,000 | 7,644,000 | 10,390,000 |
Operating Loss | (923,000) | (792,000) | (1,777,000) | (1,109,000) | (2,538,000) | (1,071,000) | (683,000) | (1,337,000) | (4,601,000) | (5,629,000) |
Other income: | ||||||||||
Other income (expense) | 64,000 | 6,000 | 16,000 | 24,000 | 29,000 | 46,000 | 30,000 | 37,000 | 110,000 | 142,000 |
Loss Before Taxes | (859,000) | (786,000) | (1,761,000) | (1,085,000) | (2,509,000) | (1,025,000) | (653,000) | (1,300,000) | (4,491,000) | (5,487,000) |
Income tax expense (benefit) | 12,000 | 8,000 | 11,000 | (222,000) | (50,000) | (47,000) | (165,000) | (204,000) | (191,000) | (466,000) |
Net Loss | $ (871,000) | $ (794,000) | $ (1,772,000) | $ (863,000) | $ (2,459,000) | $ (978,000) | $ (488,000) | $ (1,096,000) | $ (4,300,000) | $ (5,021,000) |
Net loss per share: | ||||||||||
Basic | $ (.49) | $ (.46) | $ (1.03) | $ (0.50) | $ (1.43) | $ (.57) | $ (.29) | $ (.65) | $ (2.48) | $ (2.94) |
Diluted | $ (.49) | $ (.46) | $ (1.03) | $ (0.50) | $ (1.43) | $ (.57) | $ (.29) | $ (.65) | $ (2.48) | $ (2.94) |
Shares used in calculation of net loss per share: | ||||||||||
Basic | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
Diluted | 1,745,000 | 1,740,000 | 1,725,000 | 1,724,000 | 1,720,000 | 1,712,000 | 1,698,000 | 1,694,000 | 1,734,000 | 1,706,000 |
As Previously Reported | Services | ||||||||||
Total Net Sales | $ 5,108,000 | $ 4,373,000 | $ 3,174,000 | $ 4,436,000 | $ 5,755,000 | $ 4,400,000 | $ 5,435,000 | $ 4,639,000 | $ 17,091,000 | $ 20,229,000 |
Cost of goods sold | 13,934,000 | 15,756,000 | ||||||||
As Previously Reported | Products | ||||||||||
Total Net Sales | $ 0 | $ 118,000 | $ 214,000 | $ 246,000 | $ 563,000 | $ 254,000 | $ 407,000 | $ 501,000 | 578,000 | 1,725,000 |
Cost of goods sold | $ 533,000 | $ 1,437,000 |
Revenue Recognition (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Total net sales | $ 5,054,000 | $ 4,435,000 | $ 3,347,000 | $ 4,646,000 | $ 6,175,000 | $ 4,549,000 | $ 5,727,000 | $ 5,077,000 | $ 17,482,000 | $ 21,528,000 |
Products and Services Transferred Over Time | ||||||||||
Total net sales | 10,670,000 | 15,029,000 | ||||||||
Products and Services Transferred at a Point in Time | ||||||||||
Total net sales | 6,812,000 | 6,499,000 | ||||||||
Services | ||||||||||
Total net sales | 5,054,000 | 4,317,000 | 3,133,000 | 4,400,000 | 5,612,000 | 4,295,000 | 5,320,000 | 4,576,000 | 16,904,000 | 19,803,000 |
Services | Products and Services Transferred Over Time | ||||||||||
Total net sales | 10,670,000 | 15,029,000 | ||||||||
Services | Products and Services Transferred at a Point in Time | ||||||||||
Total net sales | 6,234,000 | 4,774,000 | ||||||||
Products | ||||||||||
Total net sales | $ 0 | $ 118,000 | $ 214,000 | $ 246,000 | $ 563,000 | $ 254,000 | $ 407,000 | $ 501,000 | 578,000 | 1,725,000 |
Products | Products and Services Transferred Over Time | ||||||||||
Total net sales | 0 | 0 | ||||||||
Products | Products and Services Transferred at a Point in Time | ||||||||||
Total net sales | $ 578,000 | $ 1,725,000 |
Revenue Recognition (Details 1) |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Revenue Recognition [Abstract] | |
Deferred revenue, beginning | $ 140,000 |
Reclassification of beginning deferred revenue to revenue, as a result of performance obligations satisfied | (140,000) |
Cash received in advance and not recognized as revenue | 180,000 |
Deferred revenue, ending | $ 180,000 |
Property and Equipment (Details) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Property and equipment, gross | $ 4,238,000 | $ 5,504,000 |
Accumulated depreciation and amortization | (4,163,000) | (4,955,000) |
Property and equipment, net | 75,000 | 549,000 |
Machinery And Equipment | ||
Property and equipment, gross | 2,349,000 | 3,685,000 |
Furniture And Fixtures | ||
Property and equipment, gross | 425,000 | 393,000 |
Computer Equipment and Software | ||
Property and equipment, gross | 1,447,000 | 1,426,000 |
Leasehold Improvements | ||
Property and equipment, gross | 0 | 0 |
Construction in Progress | ||
Property and equipment, gross | $ 17,000 | $ 0 |
Property and Equipment (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 314,000 | $ 1,044,000 |
Loss on sale of property and equipment | $ (35,000) | $ 0 |
Leases (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Operating lease cost | $ 150,000 | $ 150,000 |
Variable lease cost | 104,000 | 106,000 |
Short-term lease cost | 40,000 | 38,000 |
Total | 294,000 | 294,000 |
Corporate Headquarters | ||
Operating lease cost | 150,000 | 150,000 |
Variable lease cost | 104,000 | 106,000 |
Short-term lease cost | 0 | 0 |
Total | 254,000 | 256,000 |
Additional Office Space | ||
Operating lease cost | 0 | 0 |
Variable lease cost | 0 | 0 |
Short-term lease cost | 40,000 | 38,000 |
Total | $ 40,000 | $ 38,000 |
Leases (Details 1) |
Dec. 31, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
2021 | $ 57,000 |
Less: interest | 1,000 |
Present value of lease liabilities | $ 56,000 |
Leases (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | ||
Remaining lease term | 3 months | 1 year 3 months |
Discount rate | 6.00% | 6.00% |
Cash outflow for operating leases | $ 222,000 | $ 217,000 |
Commitments and Contingencies (Details) |
Dec. 31, 2020
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 418,000 |
2022 | 708,000 |
2023 | $ 354,000 |
Commitments and Contingencies (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Fixed and store-based payments | $ 2,765,000 | $ 3,356,000 |
Shareholders' Equity (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Stock-based compensation expense | $ 172,000 | $ 422,000 |
Cost of Sales | ||
Stock-based compensation expense | 5,000 | 14,000 |
Selling Expenses | ||
Stock-based compensation expense | 38,000 | 121,000 |
Marketing Expenses | ||
Stock-based compensation expense | (1,000) | 12,000 |
General and Administrative Expense | ||
Stock-based compensation expense | $ 130,000 | $ 275,000 |
Shareholders' Equity (Details 1) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Stockholders' Equity Note [Abstract] | ||
Expected life | 1 year | 1 year |
Expected volatility | 59.00% | 57.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.60% | 2.60% |
Shareholders' Equity (Details 4) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Stockholders' Equity Note [Abstract] | ||
Restricted stock and restricted stock units outstanding, beginning | 44,659 | 70,078 |
Granted | 31,782 | 10,106 |
Vested | (22,315) | (30,103) |
Forfeited or surrendered | (4,162) | (5,422) |
Restricted stock and restricted stock units outstanding, ending | 49,964 | 44,659 |
Weighted average grant date fair value outstanding, beginning | $ 12.16 | $ 12.47 |
Granted | 6.00 | 7.42 |
Vested | 11.36 | 11.15 |
Forfeited or surrendered | 10.30 | 12.88 |
Weighted average grant date fair value outstanding, ending | $ 8.76 | $ 12.16 |
Shareholders' Equity (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Aggregate intrinsic value of options outstanding | $ 0 | $ 0 |
Weighted average remaining life of options exercisable | 3 years 1 month 28 days | |
Aggregate intrinsic value of options exercisable | $ 0 | |
Options exercisable | 0 | 27,285 |
Unrecognized compensation costs related to stock options | $ 20,000 | |
Unrecognized compensation costs related to restricted stock units | 242,000 | |
Stock-based compensation expense | $ 172,000 | $ 422,000 |
Stock Options | ||
Unrecognized compensation costs period of recognition | 1 year 7 months 10 days | |
Restricted Stock and Restricted Stock Units | ||
Unrecognized compensation costs period of recognition | 10 months 17 days | |
Employee Stock Purchase Plan | ||
Employees purchased shares | 6,152 | 4,638 |
Shares are reserved for future employee purchases | 28,977 | |
Stock-based compensation expense | $ 18,000 | $ 55,000 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||||||||||
Current taxes - Federal | $ (233,000) | $ 0 | ||||||||
Current taxes - State | 42,000 | 38,000 | ||||||||
Deferred taxes - Federal | 0 | (402,000) | ||||||||
Deferred taxes - State | 0 | (60,000) | ||||||||
Income tax benefit | $ 12,000 | $ 8,000 | $ 11,000 | $ (222,000) | $ (77,000) | $ (56,000) | $ (131,000) | $ (160,000) | $ (191,000) | $ (424,000) |
Income Taxes (Details 1) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
Stock based awards | (0.80%) | (0.80%) |
State taxes | 3.60% | 3.20% |
Other permanent differences | (0.30%) | (0.60%) |
Impact of uncertain tax positions | (0.70%) | (0.50%) |
Valuation allowance | (19.60%) | (15.40%) |
Other | 0.80% | 0.10% |
Effective federal income tax rate | 4.00% | 7.10% |
Income Taxes (Details 2) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred Tax Assets: | ||
Accrued expenses | $ 376,000 | $ 260,000 |
Inventory reserve | 9,000 | 5,000 |
Stock-based awards | 65,000 | 88,000 |
Reserve for bad debts | 33,000 | 16,000 |
Net operating loss and credit carryforwards | 1,422,000 | 715,000 |
Other | 47,000 | 26,000 |
Depreciation | 52,000 | 0 |
Valuation allowance | (1,946,000) | (1,003,000) |
Total deferred tax assets | 58,000 | 107,000 |
Deferred Tax Liabilities: | ||
Depreciation | 0 | (18,000) |
Prepaid expenses | (58,000) | (89,000) |
Total deferred tax liabilities | (58,000) | (107,000) |
Net deferred income tax liabilities | $ 0 | $ 0 |
Income Taxes (Details 3) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Liability for uncertain tax positions, beginning | $ 643,000 | $ 613,000 |
Increases due to interest and state tax | 34,000 | 30,000 |
Liability for uncertain tax positions, ending | $ 677,000 | $ 643,000 |
Income Taxes (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Change in the valuation allowance | $ 943,000 | $ 924,000 | |
Liability for uncertain tax positions | 677,000 | $ 643,000 | $ 613,000 |
Federal | |||
Net operating loss to carry forward | 5,400,000 | ||
State | |||
Net operating loss to carry forward | $ 4,500,000 |
Employee Benefit Plans (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Retirement Benefits [Abstract] | ||
Employee contribution percentage | 50.00% | 50.00% |
Matching employer contribution | $ 62,000 | $ 72,000 |
Concentrations (Details Narrative) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Sales Revenue, Net | Customer One | ||
Customer's percentage of net sales | 14.00% | 13.00% |
Sales Revenue, Net | Customer Two | ||
Customer's percentage of net sales | 12.00% | |
Accounts Receivable | Customer One | ||
Customer's percentage of net sales | 17.00% | 17.00% |
Accounts Receivable | Customer Two | ||
Customer's percentage of net sales | 10.00% | 12.00% |
Accounts Receivable | Customer Three | ||
Customer's percentage of net sales | 12.00% | |
Accounts Receivable | Customer Four | ||
Customer's percentage of net sales | 10.00% |
R;[DX']R;OLW]%JV3?5CEVPB3U)@1X"LHM"]QX,_$_\7?_]2>%VS80I
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M B>-[0J"]VV(]
M'^3W?5#HP@!EWP*S*!.DGZ"B24Y&7N(L# >#6.:Y-$DIJ76FT4CNH>O8Y.2X
M*B%:B:W1QO"6+0#KD1_J)LDP?V-L"H?QYX= $&X41USLIN^9G!O;FL:5W"<6
MU#%26X3K#<=\K=.59]@:@F ;G7\6V!7V$M P15 M#I,]/ [M^277C:98'LD.3-_Y:@<3% \N6
M@:,3K^Z4R1$)*,=KN8-EO()&VZ_CDK[J&(Q!LV[>'7C9KY-;;#" ])1PPBA/.29 9\@=AEMY$HR)#$3
M11R0N'I"*%3(?1$?NCA8'#4RQ)LQB2,;@0,Y1;^BX./%);G(O40$PQ3%*5$6
M*>!3X0E7:H!V+54_CD=A:,JF7W04R@9JCN-!#A$NB(N]D&QO,'U-!BVU/M:)
M,@B^6#B?S<&LYB2O97]0("@U%J-0Q 7'B-XBIH)L(E3=)%W^@@ %8S 8 >&PO=V]R:W-H965T
MRZ#)*U'MF035
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M5?NS%_'8IXVI$#_VOMV0=(
7?%+(+@&FRO@BP:Y<3GCE_/+Y_SV5#R+5U[X.Z-\@* ;
M=^ HH\JP)?]E>%RTOA:Z!A2C7HV@5(ZT5\:O57&MF,$"5[X.9S^72&1XJC4H
M/:WQP5OJ._IL>>4BK"0WM[AE(HC6VJ9T>W+I FLO0W5_VQHR:VF#!>!:7ED*F'IE(9%&_G(57
$F?/
M-//@N%P9&:=*&T(M#?\4?F$_L45N^"E/@)E.7^[II/-2,MHW$5\:0!*/ZT6J
MSQ]<>=?O&B)4AR%LZF%&KADB7"*[.L (]%V>X':)OQNJ"VJ2#VAKH(<:.XTX
MZ-]03\1E5OO90ORB[HH_%(WR1WA].3!#7]GZD3MJ5ZFTGRI"3D8%;N/YI;
*QY$+J0?D_ ]<
M7CO^MY]K)(28G,XK:%]221C&W._$!NW"[N /[G\_VQBL>)9WQ*[!!4[]3D>/
MB54L]G 0W/'!';YC,G2!&YN?1DTXQHP@67+".>V#<1.6C^@)3)%#3V"NOIB[
M3$+:AXO\.+44TSHS)=/&RLPY4( G<9@2Q&&ZXR[!-:+50^UX1!%##"502L5>
M>I*GUDFB!/^CB33G+D/T$C8E-H"D:\X!0NB0D-MS)-382F,'F*)>M)T'.)_0
MP@Y-?'T[Y0B-,5.:(#O U'& "=9+Z<1UWN8 4PQ-4@R^,]S=S++H'N'#+,_@
M. Y*LCPC(NZQGV>$X1#F1P%YH20CGY=Q,>/S\#POQ$E&.B/V.3KNW'D!.26W
ME\343$JN=>YD1001%4YL-8F-#D+'@Y'K@U?YX/"X+_CP%&69E1-TMW>YOR1&
M!Y8*% 2YM#"?N+\[\GZZ^Z.+.&,I&TN.^SLL_Y11 #SN'G%\N1TV\*1MF("BECO_\L?%#C^%L>H A;1C2@#LJ"BC?
MX*4>8LA.?PYUT6^OIPH80 I!@!.#5,H8Y1D,&*F/[OM=E2<70Z-T85
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MW_"BI#R,V%TT9%YRN-ZFGUCZ#G4"G$A-"LO1%;L:!^RL+)FPI
,)GI]92=Z*_'^T"Q^SL51 =ZYT-"<@!A[)=WR%C=UO$
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MD\<U0%O_U#\F)(;4[]ELX?W&E
M0:1;BOR"JBW[B&'+5CHG#Y$?8&_H>'UU^_&N(:*XRD,*VFCWUB&/)I8\-U
M]E[3]<7WHX9Z%O:SA.*VZ:Z$( GZ\M*]TO0H*^#<]> 5!+ P04 " "S@!=3(JT.
M\"4: #,30 &0 'AL+W=O
:>O5U=7_!7>
M1\XF 3P=RU!*!EY;TC!*;B29Y??H0'KO,HW,/4 B9K<2#59[44$G!IQ8B0^2
MM>3'H4PDR?1I0VKK;.]2$]59Q?W>E=F8[B#563LO'E.F,L/?R8Y;V