Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 03, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-15751 | ||
Entity Registrant Name | EMAGIN CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 56-1764501 | ||
Entity Address, Address Line One | 700 South Drive | ||
Entity Address, Address Line Two | Suite 201 | ||
Entity Address, City or Town | Hopewell Junction | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 12533 | ||
City Area Code | 845 | ||
Local Phone Number | 838-7900 | ||
Title of 12(b) Security | Common Stock, $.001 Par Value Per Share | ||
Trading Symbol | EMAN | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 54 | ||
Entity Common Stock, Shares Outstanding | 51,300,677 | ||
Documents Incorporated by Reference | The information required by Part III of this Report, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement relating to the Annual Meeting of Stockholders to be held in 2020 , which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates. | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001046995 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,515 | $ 3,359 |
Accounts receivable, net | 3,966 | 3,186 |
Unbilled accounts receivable | 155 | 224 |
Inventories | 8,832 | 8,582 |
Prepaid expenses and other current assets | 1,130 | 875 |
Total current assets | 17,598 | 16,226 |
Equipment, furniture and leasehold improvements, net | 8,100 | 8,921 |
Operating lease right-of-use assets | 3,729 | |
Intangibles and other assets | 160 | 269 |
Total assets | 29,587 | 25,416 |
Current liabilities: | ||
Accounts payable | 1,302 | 2,024 |
Accrued compensation | 1,778 | 1,634 |
Revolving credit facility, net | 2,891 | |
Common stock warrant liability | 23 | 1,497 |
Other accrued expenses | 1,401 | 1,827 |
Deferred revenue | 277 | 38 |
Operating lease liability - current | 775 | |
Other current liabilities | 342 | 427 |
Total current liabilities | 8,789 | 7,447 |
Finance lease liability-long term | 24 | |
Operating lease liability-long term | 3,067 | |
Total liabilities | 11,880 | 7,447 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity: | ||
Preferred stock, $.001 par value: authorized 10,000,000 shares: Series B Convertible Preferred stock, (liquidation preference of $5,659) stated value $1,000 per share, $.001 par value: 10,000 shares designated and 5,659 issued and outstanding as of December 31, 2019 and 2018. | ||
Common stock, $.001 par value: authorized 200,000,000 shares, issued 50,250,378 shares, outstanding 50,088,312 shares as of December 31, 2019 and issued 45,323,339 shares, outstanding 45,161,273 shares as of December 31, 2018. | 50 | 45 |
Additional paid-in capital | 258,767 | 254,736 |
Accumulated deficit | (240,610) | (236,312) |
Treasury stock, 162,066 shares as of December 31, 2019 and 2018 | (500) | (500) |
Total shareholders' equity | 17,707 | 17,969 |
Total liabilities and shareholders' equity | $ 29,587 | $ 25,416 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 50,250,378 | 45,323,339 |
Common stock, shares outstanding | 50,088,312 | 45,161,273 |
Treasury stock, shares | 162,066 | 162,066 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, liquidation preference | $ 5,659 | $ 5,659 |
Preferred stock, stated value | $ 1,000 | $ 1,000 |
Preferred stock, shares designated | 10,000 | 10,000 |
Preferred stock, shares issued | 5,659 | 5,659 |
Preferred stock, shares outstanding | 5,659 | 5,659 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | ||
Total revenues, net | $ 26,726 | $ 26,235 |
Cost of revenues: | ||
Impairment of Consumer Night Vision Business inventory | 2,690 | |
Total cost of revenues | 19,998 | 22,241 |
Gross profit | 6,728 | 3,994 |
Operating expenses: | ||
Research and development | 5,048 | 6,694 |
Selling, general and administrative | 7,251 | 8,967 |
Total operating expenses | 12,299 | 15,661 |
Loss from operations | (5,571) | (11,667) |
Other income (expense): | ||
Change in fair value of common stock warrant liability | 1,474 | 2,194 |
Interest expense, net | (201) | (69) |
Total other income | 1,273 | 2,125 |
Loss before provision for income taxes | (4,298) | (9,542) |
Income taxes | ||
Net loss | $ (4,298) | $ (9,542) |
Loss per share, basic | $ (0.09) | $ (0.21) |
Loss per share, diluted | $ (0.09) | $ (0.21) |
Weighted average number of shares outstanding: | ||
Basic | 48,132,714 | 44,429,114 |
Diluted | 48,132,714 | 44,429,114 |
Product [Member] | ||
Revenues: | ||
Total revenues, net | $ 24,589 | $ 23,322 |
Cost of revenues: | ||
Cost of goods and services sold | 18,775 | 17,797 |
Contract [Member] | ||
Revenues: | ||
Total revenues, net | 2,137 | 2,913 |
Cost of revenues: | ||
Cost of goods and services sold | $ 1,223 | $ 1,754 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2017 | $ 35 | $ 244,726 | $ (226,770) | $ (500) | $ 17,491 | |
Balance, shares at Dec. 31, 2017 | 5,659 | 35,182,589 | ||||
Exercise of common stock options | 98 | $ 98 | ||||
Exercise of common stock options, shares | 99,937 | 99,937 | ||||
Exercise of common stock warrants | 46 | $ 46 | ||||
Exercise of common stock warrants, shares | 30,000 | 30,000 | ||||
Public offering of common shares, net of offering costs | $ 10 | 9,256 | $ 9,266 | |||
Public offering of common shares, net of offering costs, shares | 10,010,813 | |||||
Stock based compensation | 610 | 610 | ||||
Net loss | (9,542) | (9,542) | ||||
Balance at Dec. 31, 2018 | $ 45 | 254,736 | (236,312) | (500) | 17,969 | |
Balance, shares at Dec. 31, 2018 | 5,659 | 45,323,339 | ||||
Exercise of common stock options | 9 | $ 9 | ||||
Exercise of common stock options, shares | 12,500 | 12,500 | ||||
Public offering of common shares, net of offering costs | $ 5 | 3,471 | $ 3,476 | |||
Public offering of common shares, net of offering costs, shares | 4,914,539 | |||||
Stock based compensation | 551 | 551 | ||||
Net loss | (4,298) | (4,298) | ||||
Balance at Dec. 31, 2019 | $ 50 | $ 258,767 | $ (240,610) | $ (500) | $ 17,707 | |
Balance, shares at Dec. 31, 2019 | 5,659 | 50,250,378 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (4,298) | $ (9,542) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,046 | 1,989 |
Change in fair value of common stock warrant liability | (1,474) | (2,194) |
Impairment of Consumer Night Vision Business inventory | 1,270 | |
Impairment of Consumer Night Vision Business tooling | 76 | |
Stock-based compensation | 551 | 610 |
Amortization of operating lease right-of-use assets | 538 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (780) | 1,342 |
Unbilled accounts receivable | 69 | 183 |
Inventories | (250) | (2,632) |
Prepaid expenses and other current assets | (255) | 453 |
Deferred revenues | 239 | (727) |
Operating lease liabilities | (530) | |
Accounts payable, accrued expenses, and other current liabilities | (966) | 2,793 |
Net cash used in operating activities | (5,110) | (6,379) |
Cash flows from investing activities: | ||
Purchase of equipment | (1,110) | (2,296) |
Net cash used in investing activities | (1,110) | (2,296) |
Cash flows from financing activities: | ||
Borrowings (repayments) under revolving line of credit, net | 2,891 | (3,808) |
Proceeds from public offering, net | 3,476 | 12,172 |
Proceeds from warrant exercise, net | 46 | |
Proceeds from exercise of stock options | 9 | 98 |
Net cash provided by financing activities | 6,376 | 8,508 |
Net increase (decrease) in cash and cash equivalents | 156 | (167) |
Cash and cash equivalents, beginning of period | 3,359 | 3,526 |
Cash and cash equivalents, end of period | 3,515 | 3,359 |
Cash paid for interest | 177 | 106 |
Cash paid for income taxes |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2019 | |
Nature of Business [Abstract] | |
Nature of Business | Note 1 – Nature Of Business eMagin Corporation and its wholly owned subsidiary, Virtual Vision, Inc. (the “Company”), designs, manufactures and supplies OLED-on-silicon microdisplays and virtual imaging products which utilize OLED microdisplays. The Company’s products are sold mainly in North America, Asia, and Europe. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2 – Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of eMagin Corporation and its wholly owned subsidiary. All intercompany transactions have been eliminated in consolidation. The Company manages its operations on a consolidated, integrated basis in order to optimize its equipment and facilities and to effectively service its global customer base, and concludes that it operates in a single business segment. Use of Estimates In accordance with accounting principles generally accepted in the United States of America, management utilizes certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments related to, among others, allowance for doubtful accounts, warranty reserves, inventory reserves, stock-based compensation expense, deferred tax asset valuation allowances, litigation and other loss contingencies. Management bases its estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Revenue and Cost Recognition All of the Company’s revenues are earned from contracts with customers and are classified as either Product or Contract revenues. Contracts include written agreements and purchase orders, as well as arrangements that are implied by customary practices or law. Product revenue is generated primarily from contracts to produce, ship and deliver OLED microdisplays. eMagin’s performance obligations are satisfied, control of our products is transferred, and revenue is recognized at a single point in time when control transfers to our customer for product shipped. Our customary terms are FOB our factory and control is deemed to transfer upon shipment. The Company has elected to treat shipping and other transportation costs charged to customers as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. As customers are invoiced at the time control transfers and the right to consideration is unconditional at that time, the Company does not maintain contract asset balances for product revenue. Additionally, the Company does not maintain contract liability balances for product revenues, as performance obligations are satisfied prior to customer payment for product. The Company offers a one-year product warranty, for replacement of product only, and does not allow returns. The Company offers industry standard payment terms that typically require payment from our customers from 30 to 60 days after title transfers. The Company also recognizes revenues under the over time method from certain research and development (“R&D”) activities (contract revenues) under both firm fixed-price contracts and cost-type contracts. Progress and revenues from research and development activities relating to firm fixed-price contracts and cost-type contracts are generally recognized on an input method of accounting as costs are incurred. Under the input method, revenue is recognized based on efforts expended to date (e.g., the costs of resources consumed or labor hours worked, or machine hours used) relative to total efforts intended to be expended. Contract costs include all direct material, labor and subcontractor costs and an allocation of allowable indirect costs as defined by each contract, as periodically adjusted to reflect revised agreed upon rates. These rates are subject to audit by the other party. Any changes in estimate related to contract accounting are accounted for prospectively over the remaining life of the contract. Under the over time method, billings may not correlate directly to the revenue recognized. Based upon the terms of the specific contract, billings may be in excess of the revenue recognized, in which case the amounts are included in deferred revenues as a liability on the Consolidated Balance Sheets. Likewise, revenue recognized may exceed customer billings in which case the amounts are reported as unbilled receivables. Unbilled revenues are expected to be billed and collected within one year. The incidental costs related to obtaining product sales contracts are non-recoverable from customers; and accordingly, are expensed as incurred. The Company adopted the provisions of ASC No. 606, Revenue from Contracts with Customers, and related amendments (“ASC 606”) on January 1, 2018 using the modified retrospective adoption method with the cumulative effect of initially applying the guidance recognized at the date of initial application. During 2017, the Company analyzed its revenue recognition policies under ASC 606 and then current revenue recognition policies and determined that the performance obligations, transaction price, allocation of transaction price, recognition of contract costs and timing of revenue recognition would not be materially impacted by adopting ASC 606. Accordingly, there was no modified retrospective adoption adjustment necessary as of January 1, 2018 . Product Warranty The Company offers a one-year product replacement warranty. The standard policy is to repair or replace the defective products. The Company accrues for estimated returns of defective products at the time revenue is recognized based on historical activity as well as for specific known product issues. The determination of these accruals requires the Company to make estimates of the frequency and extent of warranty activity and estimate future costs to replace the products under warranty. If the actual warranty activity and/or repair and replacement costs differ significantly from these estimates, adjustments to cost of revenue may be required in future periods. The following table provides a summary of the activity related to the Company's warranty liability, included in other current liabilities, during the years ended December 31, 2019 and 2018 (in thousands): Twelve Months Ended December 31, 2019 2018 Beginning balance $ 423 $ 468 Warranty accruals and adjustments 58 132 Warranty claims (181) (177) Ending balance $ 300 $ 423 Research and Development Expenses Research and development costs are expensed as incurred. Cash and Cash Equivalents All highly liquid instruments with an original maturity of three months or less at the date of purchase are considered to be cash equivalents. Accounts Receivable The majority of the Company’s commercial accounts receivable are due from Original Equipment Manufacturers ("OEM’s”). Credit is extended based on an evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are payable in U.S. dollars, are due within 30 - 90 days and are stated at amounts due from customers net of an allowance for doubtful accounts. Any account outstanding longer than the contractual payment terms is considered past due. Unbilled Accounts Receivable Unbilled receivables principally represent revenues recorded under the over time method of accounting that have not been billed to customers in accordance with the contractual terms of the arrangement. We anticipate that the majority of the balance at December 31, 2019 will be collected during the 2020 fiscal year. As of December 31, 2019 and 2018 , unbilled accounts receivable was $0.2 million and $ 0.2 million, respectively. Allowance for Doubtful Accounts The allowance for doubtful accounts reflects an estimate of probable losses inherent in the accounts receivable balance. The allowance is determined based on a variety of factors, including the length of time receivables are past due, historical experience, the customer's current ability to pay its obligation, and the condition of the general economy and the industry as a whole. The Company will record a specific reserve for individual accounts when the Company becomes aware of a customer's inability to meet its financial obligations, deterioration in the customer's operating results or financial position, or deterioration in the customer’s credit history. If circumstances related to customers change, the Company would further adjust estimates of the recoverability of receivables. Account balances, when determined to be uncollectible, are charged against the allowance. Inventories Inventories are stated on a standard cost basis adjusted to approximate the lower of cost (as determined by the first-in, first-out method) or net realizable value. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. The Company regularly reviews inventory quantities on hand, future purchase commitments with the Company’s suppliers, and the estimated utility of the inventory. If the Company review indicates a reduction in utility below carrying value, the inventory is reduced to a new cost basis. Equipment, Furniture and Leasehold Improvements Equipment, furniture and leasehold improvements are stated at cost. Depreciation on equipment is calculated using the straight-line method of depreciation over the estimated useful life ranging from three to 10 years. Amortization of leasehold improvements is calculated by using the straight-line method over the shorter of their estimated useful lives or lease terms. Expenditures for maintenance and repairs are charged to expense as incurred. The Company performs impairment tests on its long-lived assets when circumstances indicate that their carrying amounts may not be recoverable. If required, recoverability is tested by comparing the estimated future undiscounted cash flows of the asset or asset group to its carrying value. Impairment losses, if any, are recognized based on the excess of the assets' carrying amounts over their estimated fair values. Intangible Assets - Patents Acquired patents are recorded at purchase price as of the date acquired and amortized over the expected useful life which is generally the remaining life of the patent. Total intangible amortization expense was approximately $32 and $54 thousand for the years ended December 31, 2019 and 2018 , respectively. Advertising Costs related to advertising and promotion of products are charged to sales and marketing expense as incurred. There was no advertising expense for the years ended December 31, 2019 and 2018 . Shipping and Handling Fees The Company includes costs related to shipping and handling in cost of goods sold. Income Taxes The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The effect on deferred tax assets and liabilities of changes in tax rates will be recognized as income or expense in the period that the change occurs. The Company recognizes the effect of income tax positions which are more-likely-than-not of being sustained. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. Changes in circumstances, assumptions and clarification of uncertain tax regimes may require changes to any valuation allowances associated with the Company’s deferred tax assets. Due to the Company’s operating loss carryforwards, all tax years remain open to examination by the major taxing jurisdictions to which the Company is subject. In the event that the Company is assessed interest or penalties at some point in the future, it will be classified in the financial statements as tax expense . For additional details regarding our accounting for income taxes, see Note 11 in the accompanying consolidated financial statements. Net Loss per Common Share Basic loss per share is computed using the weighted average number of common shares outstanding during the period, and excludes any dilutive effects of common stock equivalent shares such as stock options, warrants, and convertible preferred stock. Diluted loss per share is computed using the weighted average number of common shares outstanding and potentially dilutive common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive. In accordance with Accounting Standards Codification (“ASC”) 260, entities that have issued securities other than common stock that participate in dividends with the common stock (“participating securities”) are required to apply the two-class method to compute basic EPS. The two-class method is an earnings allocation method under which EPS is calculated for each class of common stock and participating security as if all such earnings had been distributed during the period. The Company’s Series B Convertible Preferred stock (“Preferred Stock – Series B”) is considered a participating security as the preferred stock participates in dividends with the common stock, which requires the use of the two-class method when computing basic and diluted earnings per share. The Preferred Stock – Series B is not required to absorb any net loss. Although the Company paid a one-time special dividend in 2012, the Company does not expect to pay dividends on its common or preferred stock in the near future. For the years ended December 31, 2019 and 2018 , the Company reported a net loss and as a result, basic and diluted loss per common share are the same. Therefore, in calculating net loss per share amounts, shares underlying the potentially dilutive common stock equivalents were excluded from the calculation of diluted net income per common share because their effect was anti-dilutive. The following is a table of the potentially dilutive common stock equivalents for the years ended December 31, 2019 and 2018 that were not included in diluted EPS as their effect would be anti-dilutive: Twelve Months Ended December 31, 2019 2018 Options 5,404,985 4,678,420 Warrants 19,295,773 9,055,773 Convertible preferred stock 7,545,333 7,545,333 Total potentially dilutive common stock equivalents 32,246,091 21,279,526 Comprehensive Income (loss) Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of shareholders’ equity but are excluded from the calculation of net income (loss). The Company's operations did not give rise to any material items includable in comprehensive income (loss), which were not already in net income (loss) for the years ended December 31, 2019 and 2018 . Accordingly, the Company's comprehensive income (loss) is the same as its net income (loss) for the periods presented. Fair Value of Financial Instruments Cash, cash equivalents, accounts receivable, short-term investments and accounts payable are stated at cost, which approximates fair value due to the short-term nature of these instruments. The Asset Based Lending Facility, (“ABL Facility”) is also stated at cost, which approximates fair value because the interest rate is based on a market based rate plus a margin. We have categorized our assets and liabilities that are valued at fair value on a recurring basis into three-level fair value hierarchy in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows: Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities. Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 – Unobservable inputs for the asset or liability. The common stock warrant liability discussed in Note 12 is currently the only financial assets or liability recorded at fair value on a recurring basis, and is considered a Level 3 liability. The fair value of the common stock warrant liability is included in current liabilities on the accompanying financial statements as of December 31, 2019 , as the warrants are currently exercisable The following table shows the reconciliation of the Level 3 warrant liability measured and recorded at fair value on a recurring basis, using significant unobservable inputs (in thousands): Estimated Fair Value Balance as of January 1, 2019 $ 1,497 Fair value of warrants issuance during period - Change in fair value of warrant liability, net (1,474) Balance as of December 31, 2019 $ 23 The fair value of the liability for common stock purchase warrants at December 31, 2019 was estimated using the Black Scholes option pricing model based on the market value of the underlying common stock at the measurement date, the five year contractual term of the warrants, risk-free interest rates of 1.56% , no expected dividends and expected volatility of the price of the underlying common stock ranging from 40.3 % to 46.4% . Stock-based Compensation The Company uses the fair value method of accounting for share-based compensation arrangements. The fair values of stock options are estimated at the date of grant using the Black-Scholes option valuation model. Stock-based compensation expense is reduced for estimated forfeitures and is amortized over the vesting period using the straight-line method. Derivative Financial Instruments The Company evaluates all financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features qualifying as embedded derivatives. For derivative financial instruments accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement of operations. The Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Concentration of Credit Risk The majority of eMagin’s products are sold throughout North America, Asia, and Europe. Sales to the Company’s recurring customers are made generally on open account while sales to occasional customers are typically made on a prepaid basis. eMagin performs periodic credit evaluations on its recurring customers and generally does not require collateral. An allowance for doubtful accounts is maintained for credit losses. Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and short-term investments. The Company’s cash and cash equivalents are deposited with financial institutions which, at times, may exceed federally insured limits. The Company invests surplus cash in a government money market fund that consists of U.S Government obligations and repurchase agreements collateralized by U.S. Government Obligations, which is not insured. To date, the Company has not experienced any loss associated with this risk. Concentrations The Company purchases principally all of its silicon wafers, which are a key ingredient in its OLED production process, from two suppliers located in Taiwan and Korea. For the year ended December 31, 2019 and 2018 , no single customer accounted for over 10% of net revenues. Liquidity and Going Concern The accompanying consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. For the year ended December 31, 2019 , the Company incurred a net loss of $4.3 million and used cash in operating activities of $5.1 million. At December 31, 2019 , the Company had cash and cash equivalents of $3.5 million, net working capital of $8.8 million, outstanding debt of $2.9 million, and outstanding borrowing availability under its ABL Facility of $1.2 million. Due to continuing losses, the Company’s financial position, and uncertainty regarding the Company’s ability to borrow under its ABL Facility, or continue to raise funds under its ATM facility, the Company may not be able to meet its financial obligations as they become due without additional financing or sources of capital. Management is prepared to reduce expenses and raise additional capital, but there can be no assurance that the Company will be successful in sufficiently reducing expenses or raising capital to meet its operating needs. The Company’s ABL Facility expires on December 31, 2020 and renews automatically for another year unless terminated pursuant to its terms. Although our relationship with the lender is positive, there is no assurance the lender will renew or extend this facility, or continue to make funds available during 2020 and beyond at present availability levels, or at all. Therefore, in accordance with applicable accounting guidance, and based on the Company’s current financial condition and availability of funds, there is substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date these financial statements were issued. The Company has taken actions to increase revenues and to reduce expenses and is considering financing alternatives, but there can be no assurance that the Company will be successful in sufficiently increasing revenues, reducing expenses or securing additional financing to meet its operating needs. The Company’s plans with regard to these matters include the following actions: 1) focus production and engineering resources on improving manufacturing yields and increasing production volumes, 2) a senior management Work Status Reduction , 3) reduce headcount and not replace departed employees, 4) reduce discretionary and other expenses, and 5) considering financing and/or strategic alternatives. In October 2019, senior management work status was reduced by approximately 20% under a work status r eduction program. Based on the Company’s current projections, operational and yield improvements, and the anticipated availability of the ABL Facility, the Company estimates it will have sufficient liquidity to fund operations through the end of the fourth quarter of 2020 . However. there can be no assurance the Company’s plans will be achieved, or that the Company will be able to continue to borrow under its ABL Facility, continue to raise funds under its ATM facility, secure additional financing, and/or pursue strategic alternatives on terms acceptable to the Company, or at all. Accounting Policy Updates The Company adopted Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) on January 1, 2019. The Company evaluates whether leases are classified as operating or financing based on certain assumptions that require judgment, such as the asset's fair value, the asset's estimated residual value, the interest rate implicit in the lease, and the asset's economic useful life. At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use (“ROU”) assets upon lease commencement using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company records lease liabilities within current or noncurrent liabilities based upon the length of time associated with the lease payments. The operating lease ROU assets includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any, and are recorded as noncurrent assets. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with an initial term of 12 months or less are not recorded on the accompanying consolidated balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Equipment under capital lease obligations are classified as revenue earning assets and the related depreciation is recorded on the assets. Debt related to capital lease obligations is included in the Company’s debt obligations. Recently Adopted Accounting Standards In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532 - Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule was effective on November 5, 2018. The Company adopted the guidance on January 1, 2019, and such adoption did not have a material impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently issued amendments that replaced existing lease accounting guidance. The accounting standard requires lessees to recognize a lease liability and corresponding right-of-use asset on their balance sheets. The Company adopted the guidance effective January 1, 2019. The Company elected the transition package of three practical expedients permitted under the transition guidance and elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption, without a restatement of prior periods. As a result of the adoption, the Company adjusted its beginning balance at January 1, 2019 by recording operating lease ROU assets and liabilities through a cumulative-effect adjustment. The adoption impacted the accompanying consolidated balance sheet, but did not have an impact on the consolidated statements of operations and comprehensive loss. The impact of the adoption of ASC 842 on the accompanying consolidated balance sheet as of January 1, 2019 was as follows (in thousands. December 31, 2018 Adjustments Due to the Adoption of ASC 842 January 1, 2019 Right of Use Assets (1) Operating lease - right of use asset $ — $ 4,267 $ 4,267 Operating lease liabilities Current $ — $ 964 $ 964 Noncurrent $ — $ 3,432 $ 3,432 (1) Operating lease right-of-use assets includes deferred rent of $129 thousand Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) and subsequently issued amendments. The guidance affects the Company's accounts receivable, and it requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Based on the composition of the Company's receivables, current market conditions and historical credit loss activity, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) a guidance that adds, amends, and removes certain disclosure requirements related to fair value measurements. Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amended or eliminated disclosures in this standard may be adopted early, while certain additional disclosure requirements in this standard can be adopted on its effective date. In addition, certain changes in the standard require retrospective adoption, while other changes must be adopted prospectively. The Company is currently evaluating the impact of this guidance on the Company’s disclosures; however, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) as part of its initiative to reduce complexity in accounting standards. This standard simplify the accounting for income taxes. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. This standard may be adopted early, while certain additional disclosure requirements in this standard can be adopted on its effective date. In addition, certain changes in the standard require retrospective adoption, while other changes must be adopted prospectively. The Company is currently evaluating the impact of this guidance on the Company’s disclosures; however, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. |
Impairment of Consumer Night Vi
Impairment of Consumer Night Vision Business Assets | 12 Months Ended |
Dec. 31, 2019 | |
Impairment of Consumer Night Vision Business Assets [Abstract] | |
Impairment of Consumer Night Vision Business Assets | Note 3 - Impairment of Consumer Night Vision Business Assets During the quarter ended June 30, 2018 the Company made a decision to exit the business associated with its two consumer night vision products, BlazeSpark and BlazeTorch (the “Consumer Night Vision Business”). The Company’s decision was based on lower than anticipated sales and an assessment performed during the quarter of the anticipated level of additional engineering, marketing and financial resources necessary to modify the products for an expanded market. As a result, the Company concluded an impairment had occurred and wrote-down $2.7 million of related Consumer Night Vision Business inventory, which includes an accrual of $1.4 million of inventory purchased by a contract manufacturer in anticipation of future production, and $0.1 million of production tooling, which are reflected in cost of revenues in the accompanying Consolidated Statements of Operations. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 4 – Revenue Recognition All of the Company’s revenues are earned from contracts with customers and are classified as either Product or Contract revenues. Contracts include written agreements and purchase orders, as well as arrangements that are implied by customary practices or law. Disaggregation of Revenue The Company sells products directly to milita ry contractors and OEM’s and they use our displays in a diverse range of applications encompassing the military, and commercial, including medical and industrial, market sectors . Revenues are classified as either military, commercial, consumer or multiple based on management’s knowledge of the customer’s p roducts and markets served by displays or the R&D contract work. Revenues classified as Multiple are for sales to customers that incorporate the Company’s displays in products that could be used for either Military or Commercial applications. R&D activities are performed for both military customers and U.S. Government defense related agencies and consumer companies. Product and Contract revenues are disclosed on the Consolidated Statements of Operations. Additional disaggregated revenue information for the years ended December 31, 2019 and 2018 were as follows (in thousands): Twelve Months Ended December 31, 2019 2018 North and South America $ 14,566 $ 13,969 Europe, Middle East, and Africa 11,112 9,157 Asia Pacific 1,048 3,109 Total $ 26,726 $ 26,235 Twelve Months Ended December 31, 2019 2018 Military 65 % 75 % Commercial, including industrial and medical 12 % 10 % Consumer 4 % 6 % Multiple 19 % 9 % 100 % 100 % Accounts Receivable from Customers Accounts receivable, net of allowances, associated with revenue from customers were approximately $4.0 million and $3.2 million as of December 31, 2019 and 2018 , respectively. Contract Assets and Liabilities Unbilled Accounts Receivables (Contract Assets) - Pursuant to the over time revenue recognition model, revenue may be recognized prior to the customer being invoiced. An unbilled accounts receivable is recorded to reflect revenue that is recognized when the proportional performance method is applied and such revenue exceeds the amount invoiced to the customer. Unbilled receivables are disclosed on the Consolidated Balance Sheet as of December 31, 2019 and 2018 . Customer Advances and Deposits (Contract Liabilities) The Company recognizes a contract liability when it has billed and received consideration from the customer pursuant to the terms of a contract but has not yet recognized the related revenue. These billings in excess of revenue are classified as deferred revenue on the Consolidated Statements of Operations. Total contract assets and liabilities consisted of the following amounts (in thousands): December 31, December 31, 2019 2018 Unbilled Receivables (contract assets) $ 155 $ 224 Deferred Revenue (contract liabilities) $ (277) $ (38) During the years ended December 31, 2019 and 2018, the Company recognized $0.2 million and $0.7 million of revenue related to its contract liabilities that existed at December 31, 2018 and 2017 , respectively. Remaining Performance Obligations . The Company has elected the practical expedient, which allows disclosure of remaining performance obligations only for contracts with an original duration of greater than one year. Such remaining performance obligations primarily relate to engineering and design services. As of December 31, 2019 and 2018 , the aggregate amount of the transaction price allocated to remaining performance obligations was $1.4 million and $1.1 million. The Company expects to recognize revenue on all of its remaining performance obligations over the next 12 months. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable, Net [Abstract] | |
Accounts Receivable, Net | Note 5 – Accounts Receivable, net Accounts receivable consisted of the following (in thousands): December 31, December 31, 2019 2018 Accounts receivable $ 4,105 $ 3,325 Less allowance for doubtful accounts (139) (139) Accounts receivable, net $ 3,966 $ 3,186 |
Inventories, Net
Inventories, Net | 12 Months Ended |
Dec. 31, 2019 | |
Inventories, Net [Abstract] | |
Inventories, Net | Note 6 – Inventories, net The components of inventories were as follows (in thousands): December 31, December 31, 2019 2018 Raw materials $ 2,788 $ 3,701 Work in process 1,561 1,033 Finished goods 5,248 4,888 Total inventories 9,597 9,622 Less inventory reserve (765) (1,040) Total inventories, net $ 8,832 $ 8,582 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 7 – Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2019 2018 Vendor prepayments $ 657 $ 702 Other prepaid expenses 473 173 Total prepaid expenses and other current assets $ 1,130 $ 875 |
Equipment, Furniture and Leaseh
Equipment, Furniture and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2019 | |
Equipment, Furniture and Leasehold Improvements [Abstract] | |
Equipment, Furniture and Leasehold Improvements | Note 8 – Equipment, Furniture and Leasehold Improvements Equipment, furniture and leasehold improvements consist of the following (in thousands): December 31, 2019 2018 Computer hardware and software $ 893 $ 800 Lab and factory equipment 17,482 17,107 Furniture, fixtures and office equipment 59 48 Assets under capital leases 116 66 Construction in progress 2,668 2,114 Leasehold improvements 60 22 Total equipment, furniture and leasehold improvements 21,278 20,157 Less: accumulated depreciation (13,178) (11,236) Equipment, furniture and leasehold improvements, net $ 8,100 $ 8,921 Depreciation expense was $1.9 million for the years ended December 31, 2019 and 2018 , respectively. Depreciation expense was $11 thousand for assets under capital leases for the year ended December 31, 2019 . |
Debt _ Line of Credit
Debt / Line of Credit | 12 Months Ended |
Dec. 31, 2019 | |
Debt / Line of Credit [Abstract] | |
Debt / Line of Credit | Note 9 – Debt / Line of Credit (in thousands) 2019 2018 Revolving credit facility $ 2,891 $ — Less: unamortized debt issuance costs — — Revolving credit facility, net $ 2,891 $ — On December 21, 2016, the Company entered into an ABL Facility with a lender that provides for up to a maximum amount of $5 million based on a borrowing base equivalent of 85% of eligible accounts receivable plus the lesser of $2 million or 50% of eligible inventory. The interest on the ABL Facility is equal to the Prime Rate plus 3% but may not be less than 6.5% with a minimum monthly interest payment of $2 thousand. The Company is also obligated to pay the lender a monthly administrative fee of $1 thousand and an annual facility fee equal to 1% of the maximum amount borrowable under the facility. As of December 31, 2019 , the interest rate on outstanding borrowings was 7.75% . The ABL Facility renewed on December 31, 2019 and will automatically renew on December 31, 2020 for a one -year term unless written notice to terminate the agreement is provided by either party. In conjunction wit h entering into the financing, the Company incurred $0.2 million of debt issuance costs including lender and legal costs that were amortized over the original three -year term of the ABL Facility. The ABL Facility agreement contains certain lenders remedies that upon events of default, give the bank the ability to terminate the facility before the scheduled maturity date. Accordingly, the Company classifies borrowing under the ABL Facility as current liabilities on the accompanying balance sheets. The ABL Facility is secured by a lien on all receivables, property and the proceeds thereof, credit insurance policies and other insurance relating to the collateral, books, records and other general intangibles, inventory and equipment, proceeds of the collateral and accounts, instruments, chattel paper, and documents. Collections received on accounts receivable are directly used to pay down the outstanding borrowings on the credit facility. The ABL Facility contains customary representations and warranties, affirmative and negative covenants and events of default. The Company is required to maintain a minimum tangible net worth of $13 million and a minimum working capital balance of $4 million at all times. As of December 31, 2019 , the Company had unused borrowing availability of $1.2 million and were in compliance with all financial debt covenants. For the years ended December 31, 2019 and 2018 , interest expense includes interest paid, or accrued, and amortization or write-off of debt issuance costs of approximately $82 thousand on outstanding debt. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 10 – Leases The Company leases office and manufacturing facilities in Hopewell Junction, NY under a non-cancelable operating lease agreement. The lease for these facilities, as amended, expires in May 2024 and does not contain a renewal option. The lease agreement does not contain any residual value guarantees, or m aterial restrictive covenants. The Company also leases an office facility for its design group in Santa Clara, California. During the fourth quarter of 2019, the Company signed a two -year extension of this lease that expires in October 2021 . The lease agreement does not contain a ny residual value guarantees, m aterial restrictive covenants or a renewal option . The Company's operating leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. On May 2, 2019, the Company entered into a three -year finance lease commitment for phone equipment. Finance leases are included in e quipment, furniture and leasehold improvements, net, Other current liabilities , and Finance lease liability – long term in our consolidated Balance Sheet. Rent expense was approximately $ 1.0 million for each of the years ended December 31, 2019 and 2018. The components of lease expense were as follows (in thousands ): Twelve Months Ended December 31, 2019 Finance Lease Cost: Amortization of right-of-use assets $ 11 Interest on lease liabilities 3 Operating lease cost 986 Short-term lease cost 58 Total Lease Cost $ 1,058 Other Information Cash paid for amounts included in the measurement lease liabilities: Operating cash flows from operating leases $ 1,012 Financing cash flows from finance leases $ 13 Right-of-use assets obtained in exchange for new finance lease liabilities $ 50 Right-of-use assets obtained in exchange for new operating lease liabilities $ 110 December 31, 2019 Finance lease right-of-use assets $ 40 Operating lease right-of-use assets $ 3,729 Finance lease liability, current $ 16 Finance lease liability, non-current $ 24 Operating lease liabilities, current $ 775 Operating lease liabilities, non-current $ 3,067 Weighted average remaining lease terms - finance leases 2.33 years Weighted average remaining lease terms - operating leases 4.42 years Weighted average discount rate - finance leases 10.91% Weighted average discount rate - operating leases 8.48% Future annual minimum lease payments and finance lease commitments as of December 31, 2019 were as follows (in thousands) : Operating Leases Finance Leases 2020 $ 1,063 $ 20 2021 1,054 20 2022 1,014 6 2023 1,022 - 2024 426 - Thereafter - - Total undiscounted future minimum lease payments 4,579 46 Less imputed interest 737 6 Lease liability $ 3,842 $ 40 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 11 – Income Taxes New Tax Legislation On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“TCJA”). The legislation significantly changed U.S. tax law by, among other things, lowering the corporate income tax rate from 35% to 21% and changing the carryforward and utilization of net operating losses. We will monitor future interpretations of the TCJA as they develop, and accordingly our estimates may change. As a result of the reduction in federal corporate income tax rates provisioned by the TCJA the Company recorded a reduction to its deferred tax assets of $19.0 million at December 31, 2017 and a corresponding reduction to its valuation allowa nce. The Company’s net deferred tax asset at December 31, 2019 and 2018 reflect the current reduced federal income tax rates. In addition, the Company will file a claim for a federal tax refund of approximately $0.2 million for its AMT credit carryforward in tax years 2018 to 2021 pursuant to the appl icable provisions of the TCJA. Net loss before income taxes consists of the following (in thousands): For the Years Ended December 31, 2019 2018 Domestic, current $ (4,298) $ (9,542) Total $ (4,298) $ (9,542) The tax effects of significant items comprising the Company’s deferred taxes are as follows (numbers are in thousands): For the Years Ended December 31, 2019 2018 Deferred tax assets: Federal and state net operating loss carryforwards $ 30,428 $ 30,350 Research and development tax credit carryforwards 2,479 2,438 Stock based compensation 1,632 1,470 Other provision and expenses not currently deductible 1,327 1,345 Total deferred tax assets 35,866 35,603 Deferred tax liabilities: Depreciation and amortization (693) (726) Prepaid expenses (195) (151) Total deferred liabilities (888) (877) Less: valuation allowance (34,978) (34,726) Net deferred tax asset $ — $ — The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The effect on deferred tax assets and liabilities of changes in tax rates will be recognized as income or expense in the period that the change occurs. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. Changes in circumstances, assumptions and clarification of uncertain tax regimes may require changes to any valuation allowances associated with the Company’s deferred tax assets. As of December 31, 2019 , the Company’s deferred tax assets were generated primarily from the federal and state net operating loss, stock based compensation and research and development tax credits. In assessing the realizability of deferred tax assets, management determined that it is more likely than not that none of the deferre d tax assets will be realized. Therefore, the Company has provided a full valuation allowance against the deferred tax assets at December 31, 2019 and 2018 . As of December 31, 2019 and 2018 , the Company had net deferred tax assets before its valuation allowance of $35.0 million and $34.7 million , respectively. During the year ended December 31, 2019 , the Company did not utilize its prior years’ net operating loss carryforwards and the net operating loss of $5.3 million that originated in 1998 expired. As of December 31, 2019 , eMagin has federal and state net operating los s carryforwards of $142.7 million and federal research and development tax credit carryforwards of $2.5 million. Pursuant to provisions of the TCJA, the net operating losses originating in years subsequent to 2017 totaling $14.7 million can be carried forward indefinitely. The federal net operating losses and tax credit carryforwards will expire as follows (in thousands) : Net Research and Operating Development Losses Tax Credits 2019 -2020 $ 24,931 $ 653 2021 -2024 41,283 - 2025 -2037 61,755 1,826 No Expiration 14,705 - $ 142,674 $ 2,479 The utilization of net operating losses can be subject to a limitation due to the change of ownership provisions under Section 382 of the Internal Revenue Code and similar state provisions. Such limitation may result in the expiration of the net operating losses before their utilization. The Company has done an analysis regarding prior year ownership changes, and it has been determined that the Section 382 limitation on the utilization of net operating losses will currently not materially affect the Company's ability to utilize its net operating losses. The difference between the statutory federal income tax rate on the Company's pre-tax loss and the Company's effective income tax rate is summarized as follows: For the Years Ended December 31, 2019 2018 U.S. Federal income tax benefit at federal statutory rate 21 % 21 % Change in valuation allowance (6) (21) Permanent differences 7 (3) NOL Expiration - 1998 (26) - Other, net 4 3 Effective tax rate - % - % The Company did no t have unrecognized tax benefits at December 31, 2019 and 2018 . The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2019 and 2018 , the Company recognized no interest and penalties. The Company files income tax returns in the U.S. federal jurisdiction and in certain U.S. states. Generally, the Company’s tax filings are subject to tax examinations by major taxing jurisdictions during the three years period subsequent to the due date of such returns, or if later, when the return is filed. However, d ue to the Company's operating losses, the utilization of a net operating loss subjects the year that such loss originated to being open for examination by major taxing jurisdictions to which the Company is subject. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2019 | |
Warrants [Abstract] | |
Warrants | Note 12 – Warrants The Company accounts for common stock warrants pursuant to applicable accounting guidance contained in ASC 815, "Derivatives and Hedging - Contracts in Entity's Own Equity" and makes a determination as to their treatment as either equity instruments or a warrant liability based on an analysis of the underlying warrant agreements. Summary of warrants and warrants outstanding: Issued Outstanding Exercise Price Expire 2015 Warrant Issuance 383,500 383,500 2.05 Jun 2021 2016 Warrant Issuance 2,947,949 2,947,949 2.60 Feb 2023 2017 Warrant Issuance (1)(2) 100,000 100,000 2.25 Mar 2022 2017 Warrant Issuance (1) 1,650,000 1,650,000 2.45 Nov 2022 2018 Warrant Issuance (1) 4,004,324 3,974,324 1.55 Jul 2023 2019 Warrant Issuance 240,000 240,000 0.55 Apr 2024 2019 Warrant Issuance (3) 4,000,000 4,000,000 0.49 Oct 2024 2019 Warrant Issuance (4) 6,000,000 6,000,000 0.78 Oct 2024 (1) W arrants are subject to liability accounting . (2) Issued in conjunction with an unsecured line of credit as described in Note 9: Debt / Line of Credit . (3) Immediately exercisable pre-funded warrants at an exercise price of $0.01 per share. (4) Private Placement u nregistered warrants exercisable six months following issuance . Equity classified warrants The 2015, 2016, and 2019 warrants share similar terms, and the exercise price of the Warrant Shares are subject to adjustment in the event of any stock dividends and splits, reverse stock splits, stock dividends, recapitalizations, reorganizations or similar transactions. The Warrants will be exercisable on a “cashless” basis in certain circumstances, including in the event a registration statement is not in effect at time of exercise. The warrant agreements contain a clause specifying that in the event there is no effective registration in effect for the underlying warrant shares to be issued at time of exercise, in no circumstance will the Company be required to net cash settle the warrants. Based on the Company’s analysis of the terms and conditions of the warrants, the Company has concluded that they meet the conditions outlined in applicable accounting guidance to be classified as equity instruments. As a result, the Company has accounted for the exercise price paid by investors for purchase of the pre-funded warrants as additional paid in capital on the accompanying Balance Sheets as of December 31, 2019 . Liability classified warrants The 2017 and 2018 warrants have alternative settlement provisions that, at the option of the holder, provide for physical settlement or if, at the time of settlement there is no effective registration statement, a cashless exercise as defined in the warrant agreement. Based on analysis of the underlying warrant agreement and applicable accounting guidance, the Company concluded that these registered warrants require the issuance of registered securities upon exercise and do not sufficiently preclude an implied right to net cash settlement. Accordingly, these warran ts were classified in the accompanying Consolidated Balance Sheet as a current liability upon issuance and will be revalued at each subsequent balance sheet date. The fair value of the liability for common stock purchase warrants is estimated using the Black Scholes option pricing model based on the market value of the underlying common stock at the measurement date, the contractual term of the warrant, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock. Based on the Black Sholes method the fair value of the Company’s warrants are as follows (in thousands) : 2019 2018 2018 January and February Issuance Fair Value at December 31, $ 22 $ 1,342 2017 May issuance Fair Value at December 31, 1 155 $ 23 $ 1,497 Twelve Months Ended December 31, Change in Fair Value of common stock warrant liability (1) $ 1,474 $ 2,194 (1) The combined changes in fair value is reflected as income from change in the fair market value of common stock warrant liability. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note 13 – Shareholders’ Equity Preferred Stock - Series B Convertible Preferred Stock (“the Preferred Stock – Series B”) The Company has designated 10,000 shares of the Company’s preferred stock as Preferred Stock – Series B at a stated value of $1,000 per share. The Preferred Stock – Series B is convertible into common stock at a conversion price of $0.75 per share. The holders of the Preferred Stock – Series B are not entitled to receive dividends unless the Company’s Board of Directors declare a dividend for holders of the Company’s common stock and then the dividend shall be equal to the amount that such holder would have been entitled to receive if the holder converted its Preferred Stock – Series B into shares of the Company’s common stock. In the event of a liquidation, dissolution, or winding up of the Company, the Preferred Stock – Series B is entitled to receive liquidation preference before the Common Stock. The Company may at its option redeem the Preferred Stock – Series B by providing the required notice to the holders of the Preferred Stock – Series B and paying an amount equal to $1,000 multiplied by the number of shares for all of such holder’s shares of outstanding Preferred Stock – Series B to be redeemed. As of December 31, 2019 and 2018 , there were 5,659 shares of Preferred Stock – Series B i ssued and outstanding. Common Stock Common share activity due to o ption s and warrant s (dollar amounts in thousands): Twelve Months Ended December 31, 2019 2018 Options exercised 12,500 99,937 Proceeds $ 9 $ 98 Warrants exercised - 30,000 Proceeds $ - $ 46 Equity Issuances On January 25, 2018 the Company entered into an underwriting agreement to issue and sell 9,807,105 shares of Company Common Stock, together with warrants to purchase 3,922,842 shares of Common Stock with an initial exercise price of $1.55 per share (at a public offering price of $1.35 per fixed combination consisting of one share of Common Stock and associated warrant to purchase four tenths of one share of Common Stock). The offering closed on January 29, 2018 and the Company received net proceeds after underwriting discounts and expenses of $11.9 million. In a concurrent private placement, certain of our directors and officers purchased an aggregate of 203,708 shares of Common Stock, together with warrants to purchase up to 81,487 shares of Common Stock at the public offering price of $1.35 per fixed combination. The private placement closed on February 15, 2018 , and the Company received net proceeds of $0.3 million. On April 9, 2019, the Company closed a registered direct offering of 4.0 million shares of common stock at a purchase price per share of $0.50 , for gross proceeds of approximately $2.0 million before deducting placement agent fees and other offering expenses. The Company also issued unregistered warrants to the investor to purchase up to 3.0 million shares of common stock at an exercise price of $0.78 per share. The warrants are exercisable nine months following issuance and will expire five and one-half years from the issuance date. On April 11, 2019, the Company closed an additional $2.0 million registered direct offering consisting of immediately exercisable pre-funded warrants to purchase up to 4.0 million shares of our common stock at a purchase price of $0.49 per warrant and an exercise price of $0.01 per share. In a concurrent private placement, the Company also issued to the investor in the registered direct offering unregistered warrants to purchase up to 3.0 million shares of the Company’s common stock at an exercise price of $0.78 per share. The unregistered warrants are exercisable six months following issuance and will expire five and one-half years from the issuance date. On November 22, 2019, the Company entered into an ATM offering agreement with H.C. Wainwright & Co., LLC, (“Wainwright”) relating to shares of our common stock. In accordance with the terms of the sales agreement, we may offer and sell up to 5.0 million shares of our common stock having an aggregate of fering price of up to $1.7 million from time to time through Wainwright acting as our sales agent. Wainwright will be entitled to compensation at a fixed commission rate equal to 3.0% of the gross proceeds per share sold under the sales agreement. We intend to use any net proceeds from this offering to fund working capital requirements and for other general corporate purposes. |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock Compensation [Abstract] | |
Stock Compensation | Note 14 – Stock Compensation Employee stock purchase plan In 2005, the shareholders approved the 2005 Employee Stock Purchase Plan (“ESPP”). The ESPP provides the Company’s employees with the opportunity to purchase common stock through payroll deductions. Employees may purchase stock semi-annually at a price that is 85% of the fair market value at certain plan-defined dates. At December 31, 2016, the number of shares of common stock available for issuance was 300,000 . As of December 31, 2019 , the plan had not been implemented. Incentive compensation plans The 2017 Incentive Stock Plan (the “2017 Plan”) adopted and approved by the shareholders on May 25, 2017 provides for grants of common stock and opt ions to purchase shares of common stock to employees, officers, directors and consultants. The 2017 Plan has an aggregate of 2.0 million shares. Vesting terms of the options range from immediate vesting to a ratable vesting period of 5 years. The 2019 Employee and Consultant Stock Option and Incentive Plan (the “2019 Employee and Consultant Plan”) was adopted and approved by the shareholders on December 5, 2019 was designed to enhance the flexibili ty to grant equity awards to officers, employees and consultants and to ensure grant of equity awards to eligible recipients. The 2019 Plan has an aggregate of 5.0 million shares and permits an award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, dividend equivale nt rights and cash-based awards. A minimum vesting period of one year is required for all equity awards . Option activity for the year ended December 31, 2019 is summarized as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 4,678,420 $ 2.81 Options granted 1,438,695 0.65 Options exercised (12,500) 0.70 Options forfeited (9,200) 2.66 Options cancelled or expired (690,430) 1.54 Outstanding at December 31, 2019 5,404,985 $ 2.40 3.52 $ — Vested or expected to vest at December 31, 2019 (1) 5,401,528 $ 2.40 3.52 $ — Exercisable at December 31, 2019 5,232,179 $ 2.40 3.52 $ — (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to total unvested options. At December 31, 2019 , there were 5.0 and 2.0 million shares available for grant under the 2019 Employee and Consultant and Non - Employee Director Incentive Plans and 49,834 shar es available for grant under the 2017 Plan. T here are no shares available for grant under older plans. The aggregate intrinsic value in the table above represents the difference between the exercise price of the underlying options and the quoted price of the Company’s common stock on December 31, 2019 for the options that were in-the-money. As of December 31, 2019 there were no options that were in-the-money. The Company’s closing stock price was $0.34 as of December 31, 2019 . The Company issues new shares of common stock upon exercise of stock options. The intrinsic value of options exercised was $2.0 thousand for the year ended December 31, 2019 . Stock- based compensation The Company uses the fair value method of accounting for share-based compensation arrangements. The fair value of stock options is estimated at the date of grant using the Black-Scholes option valuation model. Stock-based compensation expense is reduced for estimated forfeitures and is amortized over the vesting period using the straight-line method. The following table summarizes the allocation of non-cash stock-based compensation to the Company’s expense categories for the years ended December 31, 2019 and 2018 (in thousands): Twelve Months Ended December 31, 2019 2018 Cost of revenues $ 25 $ 36 Research and development 85 95 Selling, general and administrative 441 479 Total stock compensation expense $ 551 $ 610 At December 31, 2019 , total unrecognized compensation costs related to stock options was approximately $0.4 million, net of estimated forfeitures. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures and is expected to be recognized over a weighted average period of approximately 0.7 years. The following key assumptions were used in the Black-Scholes option pricing model to determine the fair value of stock options granted: Twelve Months Ended December 31, 2019 2018 Dividend yield 0 % 0 % Risk free interest rates 1.77 -2.48 % 2.16 -2.75 % Expected volatility 41.7 to 49.2 % 46.4 to 50.0 % Expected term (in years) 3.5 to 4.0 3.5 to 4.8 The weighted average fair value per share for options granted in 2019 and 2018 was $0.65 and $1.70 , respectively. There were no dividends declared or paid in 2019 or 2018 . The Company does not expect to pay dividends in the near future; therefore, it used an expected dividend yield of 0% . The risk-free interest rate used in the Black-Scholes option pricing model is based on the implied yield at the time of grant available on U.S. Treasury securities with an equivalent term. Expected volatility is based on the weighted average historical volatility of the Company’s common stock for the equivalent term. The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on historical experience and vesting schedules of similar awards. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 15 – Commitments and Contingencies Equipment Purchase Commitments The Company has committed to equipment purchases of approximately $ 0.3 million at December 31, 2019 . Employee benefit plans The Company’s U.S. employees participate in a defined contribution plan. Under the provisions of the plan, an employee is fully vested with respect to Company contributions after five years of service. The Company matches employee contributions of 50 % up to a maximum of 3% of qualified compensation. The Company’s contributions were $0.1 million for the year ended December 31, 2019 and there were no Company contributions for the years ended December 31, 2018 . Change in Control agreements The Company entered into change in control agreements with certain of its executive officers, non-executive officers and managers. The agreements specify various employment-related matters, including annual compensation, performance incentive bonuses, and severance benefits in the event of termination with or without cause. Litigation From time to time, the Company is subject to various legal proceedings and claims that arise in the ordinary course of business. In March 2019, we received a demand letter seeking payment of $0.9 million of outstanding invoices relating to purchased inventory from Suga Electronics Limited, or Suga, a contract manufacturer located in China, which manufactured product sold by their consumer night vision business. We responded to the demand letter, and requested that Suga provide substant iation of purchased inventory. During September and October 2019, the Company held discussions with Suga to attempt to reach a settlement; however, in November 2019 the Company received a formal request for arbitration which Suga filed with the International Chamber of Commerce or ICC. The Company retained local counsel in Hong Kong to represent it before the ICC and in December 2019 filed an answer to Suga’s request for arbitration including a counterclaim seeking repayment of amounts previously paid to Suga. The parties are currently awaiting the appointment of an arbitrator by the ICC. As disclosed, during the quarter ended June 30, 2018, we made a decision to exit the consumer night vision business and accrued approximately $1.0 million related to invoices received for inventory purchased by Suga in anticipation of future production. While we believe that we have adequately accrued for the losses and are in discussions to resolve related claims by the contract manufacturers, there is the risk that additional losses or litigation related expenses may be incurred above the amounts accrued for as of December 31, 2019, if we fail to resolve these claims in a timely and/or favorable manner. |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information [Abstract] | |
Quarterly Financial Information | Note 16 – Quarterly Financial Information (Unaudited) Summarized quarterly financial information for 2019 and 2018 are as follows (in thousands except share data): Quarters Ended March 31, June 30, September 30, December 31, 2019 2019 2019 2019 Revenues $ 6,112 $ 5,361 $ 7,919 $ 7,334 Gross profit $ 1,336 $ 225 $ 2,491 $ 2,676 Net income (loss) before income tax $ (1,439) $ (2,337) $ (315) $ (207) Net loss $ (1,439) $ (2,337) $ (315) $ (207) Net loss per share - basic $ (0.03) $ (0.05) $ (0.01) $ (0.00) Net loss per share - diluted $ (0.03) $ (0.05) $ (0.01) $ (0.00) Weighted average number of shares outstanding - basic 45,161,273 48,817,940 49,173,773 49,316,852 Weighted average number of shares outstanding - diluted 45,161,273 48,817,940 49,173,773 49,316,852 Quarters Ended March 31, June 30, September 30, December 31, 2018 2018 2018 2018 Revenues $ 6,867 $ 7,066 $ 6,867 $ 5,435 Gross profit $ 1,980 $ 106 $ 2,379 $ (471) Net loss before income tax $ (2,081) $ (5,065) $ 63 $ (2,459) Net loss $ (2,081) $ (5,065) $ 63 $ (2,459) Net loss per share - basic $ (0.05) $ (0.11) $ 0.00 $ (0.05) Net loss per share - diluted $ (0.05) $ (0.11) $ 0.00 $ (0.05) Weighted average number of shares outstanding - basic 42,255,189 45,111,273 45,149,717 45,161,273 Weighted average number of shares outstanding - diluted 42,255,189 45,111,273 45,265,370 45,161,273 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 – Subsequent Events On February 13 , 2020, we have entered into a n amendment to the ATM o ffering a greement , dated November 22, 2019 , with Wainwright. The Amendment modifies the Agreement to amend the aggregate offering price up to $2.5 million of the shares that the Company may offer and sell through Wainwright from time to time . Wainwright will be entitled to reimbursement up to $15 thousand under the sales agreement. We intend to use the net proceeds from this offering to fund working capital requirements and for other general corporate purposes. |
Significant Accounting Polici_2
Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of eMagin Corporation and its wholly owned subsidiary. All intercompany transactions have been eliminated in consolidation. The Company manages its operations on a consolidated, integrated basis in order to optimize its equipment and facilities and to effectively service its global customer base, and concludes that it operates in a single business segment. |
Use of Estimates | Use of Estimates In accordance with accounting principles generally accepted in the United States of America, management utilizes certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments related to, among others, allowance for doubtful accounts, warranty reserves, inventory reserves, stock-based compensation expense, deferred tax asset valuation allowances, litigation and other loss contingencies. Management bases its estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. |
Revenue and Cost Recognition | Revenue and Cost Recognition All of the Company’s revenues are earned from contracts with customers and are classified as either Product or Contract revenues. Contracts include written agreements and purchase orders, as well as arrangements that are implied by customary practices or law. Product revenue is generated primarily from contracts to produce, ship and deliver OLED microdisplays. eMagin’s performance obligations are satisfied, control of our products is transferred, and revenue is recognized at a single point in time when control transfers to our customer for product shipped. Our customary terms are FOB our factory and control is deemed to transfer upon shipment. The Company has elected to treat shipping and other transportation costs charged to customers as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. As customers are invoiced at the time control transfers and the right to consideration is unconditional at that time, the Company does not maintain contract asset balances for product revenue. Additionally, the Company does not maintain contract liability balances for product revenues, as performance obligations are satisfied prior to customer payment for product. The Company offers a one-year product warranty, for replacement of product only, and does not allow returns. The Company offers industry standard payment terms that typically require payment from our customers from 30 to 60 days after title transfers. The Company also recognizes revenues under the over time method from certain research and development (“R&D”) activities (contract revenues) under both firm fixed-price contracts and cost-type contracts. Progress and revenues from research and development activities relating to firm fixed-price contracts and cost-type contracts are generally recognized on an input method of accounting as costs are incurred. Under the input method, revenue is recognized based on efforts expended to date (e.g., the costs of resources consumed or labor hours worked, or machine hours used) relative to total efforts intended to be expended. Contract costs include all direct material, labor and subcontractor costs and an allocation of allowable indirect costs as defined by each contract, as periodically adjusted to reflect revised agreed upon rates. These rates are subject to audit by the other party. Any changes in estimate related to contract accounting are accounted for prospectively over the remaining life of the contract. Under the over time method, billings may not correlate directly to the revenue recognized. Based upon the terms of the specific contract, billings may be in excess of the revenue recognized, in which case the amounts are included in deferred revenues as a liability on the Consolidated Balance Sheets. Likewise, revenue recognized may exceed customer billings in which case the amounts are reported as unbilled receivables. Unbilled revenues are expected to be billed and collected within one year. The incidental costs related to obtaining product sales contracts are non-recoverable from customers; and accordingly, are expensed as incurred. The Company adopted the provisions of ASC No. 606, Revenue from Contracts with Customers, and related amendments (“ASC 606”) on January 1, 2018 using the modified retrospective adoption method with the cumulative effect of initially applying the guidance recognized at the date of initial application. During 2017, the Company analyzed its revenue recognition policies under ASC 606 and then current revenue recognition policies and determined that the performance obligations, transaction price, allocation of transaction price, recognition of contract costs and timing of revenue recognition would not be materially impacted by adopting ASC 606. Accordingly, there was no modified retrospective adoption adjustment necessary as of January 1, 2018 . |
Product Warranty | Product Warranty The Company offers a one-year product replacement warranty. The standard policy is to repair or replace the defective products. The Company accrues for estimated returns of defective products at the time revenue is recognized based on historical activity as well as for specific known product issues. The determination of these accruals requires the Company to make estimates of the frequency and extent of warranty activity and estimate future costs to replace the products under warranty. If the actual warranty activity and/or repair and replacement costs differ significantly from these estimates, adjustments to cost of revenue may be required in future periods. The following table provides a summary of the activity related to the Company's warranty liability, included in other current liabilities, during the years ended December 31, 2019 and 2018 (in thousands): Twelve Months Ended December 31, 2019 2018 Beginning balance $ 423 $ 468 Warranty accruals and adjustments 58 132 Warranty claims (181) (177) Ending balance $ 300 $ 423 |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid instruments with an original maturity of three months or less at the date of purchase are considered to be cash equivalents. |
Accounts Receivable | Accounts Receivable The majority of the Company’s commercial accounts receivable are due from Original Equipment Manufacturers ("OEM’s”). Credit is extended based on an evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are payable in U.S. dollars, are due within 30 - 90 days and are stated at amounts due from customers net of an allowance for doubtful accounts. Any account outstanding longer than the contractual payment terms is considered past due. |
Unbilled Accounts Receivable | Unbilled Accounts Receivable Unbilled receivables principally represent revenues recorded under the over time method of accounting that have not been billed to customers in accordance with the contractual terms of the arrangement. We anticipate that the majority of the balance at December 31, 2019 will be collected during the 2020 fiscal year. As of December 31, 2019 and 2018 , unbilled accounts receivable was $0.2 million and $ 0.2 million, respectively. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts reflects an estimate of probable losses inherent in the accounts receivable balance. The allowance is determined based on a variety of factors, including the length of time receivables are past due, historical experience, the customer's current ability to pay its obligation, and the condition of the general economy and the industry as a whole. The Company will record a specific reserve for individual accounts when the Company becomes aware of a customer's inability to meet its financial obligations, deterioration in the customer's operating results or financial position, or deterioration in the customer’s credit history. If circumstances related to customers change, the Company would further adjust estimates of the recoverability of receivables. Account balances, when determined to be uncollectible, are charged against the allowance. |
Inventories | Inventories Inventories are stated on a standard cost basis adjusted to approximate the lower of cost (as determined by the first-in, first-out method) or net realizable value. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. The Company regularly reviews inventory quantities on hand, future purchase commitments with the Company’s suppliers, and the estimated utility of the inventory. If the Company review indicates a reduction in utility below carrying value, the inventory is reduced to a new cost basis. |
Equipment, Furniture and Leasehold Improvements | Equipment, Furniture and Leasehold Improvements Equipment, furniture and leasehold improvements are stated at cost. Depreciation on equipment is calculated using the straight-line method of depreciation over the estimated useful life ranging from three to 10 years. Amortization of leasehold improvements is calculated by using the straight-line method over the shorter of their estimated useful lives or lease terms. Expenditures for maintenance and repairs are charged to expense as incurred. The Company performs impairment tests on its long-lived assets when circumstances indicate that their carrying amounts may not be recoverable. If required, recoverability is tested by comparing the estimated future undiscounted cash flows of the asset or asset group to its carrying value. Impairment losses, if any, are recognized based on the excess of the assets' carrying amounts over their estimated fair values. |
Intangible Assets - Patents | Intangible Assets - Patents Acquired patents are recorded at purchase price as of the date acquired and amortized over the expected useful life which is generally the remaining life of the patent. Total intangible amortization expense was approximately $32 and $54 thousand for the years ended December 31, 2019 and 2018 , respectively. |
Advertising | Advertising Costs related to advertising and promotion of products are charged to sales and marketing expense as incurred. There was no advertising expense for the years ended December 31, 2019 and 2018 . |
Shipping and Handling Fees | Shipping and Handling Fees The Company includes costs related to shipping and handling in cost of goods sold. |
Income Taxes | Income Taxes The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The effect on deferred tax assets and liabilities of changes in tax rates will be recognized as income or expense in the period that the change occurs. The Company recognizes the effect of income tax positions which are more-likely-than-not of being sustained. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. Changes in circumstances, assumptions and clarification of uncertain tax regimes may require changes to any valuation allowances associated with the Company’s deferred tax assets. Due to the Company’s operating loss carryforwards, all tax years remain open to examination by the major taxing jurisdictions to which the Company is subject. In the event that the Company is assessed interest or penalties at some point in the future, it will be classified in the financial statements as tax expense . For additional details regarding our accounting for income taxes, see Note 11 in the accompanying consolidated financial statements. |
Net Loss per Common Share | Net Loss per Common Share Basic loss per share is computed using the weighted average number of common shares outstanding during the period, and excludes any dilutive effects of common stock equivalent shares such as stock options, warrants, and convertible preferred stock. Diluted loss per share is computed using the weighted average number of common shares outstanding and potentially dilutive common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive. In accordance with Accounting Standards Codification (“ASC”) 260, entities that have issued securities other than common stock that participate in dividends with the common stock (“participating securities”) are required to apply the two-class method to compute basic EPS. The two-class method is an earnings allocation method under which EPS is calculated for each class of common stock and participating security as if all such earnings had been distributed during the period. The Company’s Series B Convertible Preferred stock (“Preferred Stock – Series B”) is considered a participating security as the preferred stock participates in dividends with the common stock, which requires the use of the two-class method when computing basic and diluted earnings per share. The Preferred Stock – Series B is not required to absorb any net loss. Although the Company paid a one-time special dividend in 2012, the Company does not expect to pay dividends on its common or preferred stock in the near future. For the years ended December 31, 2019 and 2018 , the Company reported a net loss and as a result, basic and diluted loss per common share are the same. Therefore, in calculating net loss per share amounts, shares underlying the potentially dilutive common stock equivalents were excluded from the calculation of diluted net income per common share because their effect was anti-dilutive. The following is a table of the potentially dilutive common stock equivalents for the years ended December 31, 2019 and 2018 that were not included in diluted EPS as their effect would be anti-dilutive: Twelve Months Ended December 31, 2019 2018 Options 5,404,985 4,678,420 Warrants 19,295,773 9,055,773 Convertible preferred stock 7,545,333 7,545,333 Total potentially dilutive common stock equivalents 32,246,091 21,279,526 |
Comprehensive Income (Loss) | Comprehensive Income (loss) Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of shareholders’ equity but are excluded from the calculation of net income (loss). The Company's operations did not give rise to any material items includable in comprehensive income (loss), which were not already in net income (loss) for the years ended December 31, 2019 and 2018 . Accordingly, the Company's comprehensive income (loss) is the same as its net income (loss) for the periods presented. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Cash, cash equivalents, accounts receivable, short-term investments and accounts payable are stated at cost, which approximates fair value due to the short-term nature of these instruments. The Asset Based Lending Facility, (“ABL Facility”) is also stated at cost, which approximates fair value because the interest rate is based on a market based rate plus a margin. We have categorized our assets and liabilities that are valued at fair value on a recurring basis into three-level fair value hierarchy in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows: Level 1 – Unadjusted quoted prices in active markets of identical assets or liabilities. Level 2 – Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 – Unobservable inputs for the asset or liability. The common stock warrant liability discussed in Note 12 is currently the only financial assets or liability recorded at fair value on a recurring basis, and is considered a Level 3 liability. The fair value of the common stock warrant liability is included in current liabilities on the accompanying financial statements as of December 31, 2019 , as the warrants are currently exercisable The following table shows the reconciliation of the Level 3 warrant liability measured and recorded at fair value on a recurring basis, using significant unobservable inputs (in thousands): Estimated Fair Value Balance as of January 1, 2019 $ 1,497 Fair value of warrants issuance during period - Change in fair value of warrant liability, net (1,474) Balance as of December 31, 2019 $ 23 The fair value of the liability for common stock purchase warrants at December 31, 2019 was estimated using the Black Scholes option pricing model based on the market value of the underlying common stock at the measurement date, the five year contractual term of the warrants, risk-free interest rates of 1.56% , no expected dividends and expected volatility of the price of the underlying common stock ranging from 40.3 % to 46.4% . |
Stock-Based Compensation | Stock-based Compensation The Company uses the fair value method of accounting for share-based compensation arrangements. The fair values of stock options are estimated at the date of grant using the Black-Scholes option valuation model. Stock-based compensation expense is reduced for estimated forfeitures and is amortized over the vesting period using the straight-line method. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates all financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features qualifying as embedded derivatives. For derivative financial instruments accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement of operations. The Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. |
Concentration of Credit Risk and Concentrations | Concentration of Credit Risk The majority of eMagin’s products are sold throughout North America, Asia, and Europe. Sales to the Company’s recurring customers are made generally on open account while sales to occasional customers are typically made on a prepaid basis. eMagin performs periodic credit evaluations on its recurring customers and generally does not require collateral. An allowance for doubtful accounts is maintained for credit losses. Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and short-term investments. The Company’s cash and cash equivalents are deposited with financial institutions which, at times, may exceed federally insured limits. The Company invests surplus cash in a government money market fund that consists of U.S Government obligations and repurchase agreements collateralized by U.S. Government Obligations, which is not insured. To date, the Company has not experienced any loss associated with this risk. Concentrations The Company purchases principally all of its silicon wafers, which are a key ingredient in its OLED production process, from two suppliers located in Taiwan and Korea. For the year ended December 31, 2019 and 2018 , no single customer accounted for over 10% of net revenues. |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. For the year ended December 31, 2019 , the Company incurred a net loss of $4.3 million and used cash in operating activities of $5.1 million. At December 31, 2019 , the Company had cash and cash equivalents of $3.5 million, net working capital of $8.8 million, outstanding debt of $2.9 million, and outstanding borrowing availability under its ABL Facility of $1.2 million. Due to continuing losses, the Company’s financial position, and uncertainty regarding the Company’s ability to borrow under its ABL Facility, or continue to raise funds under its ATM facility, the Company may not be able to meet its financial obligations as they become due without additional financing or sources of capital. Management is prepared to reduce expenses and raise additional capital, but there can be no assurance that the Company will be successful in sufficiently reducing expenses or raising capital to meet its operating needs. The Company’s ABL Facility expires on December 31, 2020 and renews automatically for another year unless terminated pursuant to its terms. Although our relationship with the lender is positive, there is no assurance the lender will renew or extend this facility, or continue to make funds available during 2020 and beyond at present availability levels, or at all. Therefore, in accordance with applicable accounting guidance, and based on the Company’s current financial condition and availability of funds, there is substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date these financial statements were issued. The Company has taken actions to increase revenues and to reduce expenses and is considering financing alternatives, but there can be no assurance that the Company will be successful in sufficiently increasing revenues, reducing expenses or securing additional financing to meet its operating needs. The Company’s plans with regard to these matters include the following actions: 1) focus production and engineering resources on improving manufacturing yields and increasing production volumes, 2) a senior management Work Status Reduction , 3) reduce headcount and not replace departed employees, 4) reduce discretionary and other expenses, and 5) considering financing and/or strategic alternatives. In October 2019, senior management work status was reduced by approximately 20% under a work status r eduction program. Based on the Company’s current projections, operational and yield improvements, and the anticipated availability of the ABL Facility, the Company estimates it will have sufficient liquidity to fund operations through the end of the fourth quarter of 2020 . However. there can be no assurance the Company’s plans will be achieved, or that the Company will be able to continue to borrow under its ABL Facility, continue to raise funds under its ATM facility, secure additional financing, and/or pursue strategic alternatives on terms acceptable to the Company, or at all. |
Accounting Policy Updates, Recently Adopted Accounting Standards and Recently Issued Accounting Standards | Accounting Policy Updates The Company adopted Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) on January 1, 2019. The Company evaluates whether leases are classified as operating or financing based on certain assumptions that require judgment, such as the asset's fair value, the asset's estimated residual value, the interest rate implicit in the lease, and the asset's economic useful life. At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use (“ROU”) assets upon lease commencement using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The Company records lease liabilities within current or noncurrent liabilities based upon the length of time associated with the lease payments. The operating lease ROU assets includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any, and are recorded as noncurrent assets. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with an initial term of 12 months or less are not recorded on the accompanying consolidated balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Equipment under capital lease obligations are classified as revenue earning assets and the related depreciation is recorded on the assets. Debt related to capital lease obligations is included in the Company’s debt obligations. Recently Adopted Accounting Standards In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532 - Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule was effective on November 5, 2018. The Company adopted the guidance on January 1, 2019, and such adoption did not have a material impact on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently issued amendments that replaced existing lease accounting guidance. The accounting standard requires lessees to recognize a lease liability and corresponding right-of-use asset on their balance sheets. The Company adopted the guidance effective January 1, 2019. The Company elected the transition package of three practical expedients permitted under the transition guidance and elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption, without a restatement of prior periods. As a result of the adoption, the Company adjusted its beginning balance at January 1, 2019 by recording operating lease ROU assets and liabilities through a cumulative-effect adjustment. The adoption impacted the accompanying consolidated balance sheet, but did not have an impact on the consolidated statements of operations and comprehensive loss. The impact of the adoption of ASC 842 on the accompanying consolidated balance sheet as of January 1, 2019 was as follows (in thousands. December 31, 2018 Adjustments Due to the Adoption of ASC 842 January 1, 2019 Right of Use Assets (1) Operating lease - right of use asset $ — $ 4,267 $ 4,267 Operating lease liabilities Current $ — $ 964 $ 964 Noncurrent $ — $ 3,432 $ 3,432 (1) Operating lease right-of-use assets includes deferred rent of $129 thousand Recently Issued Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) and subsequently issued amendments. The guidance affects the Company's accounts receivable, and it requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Based on the composition of the Company's receivables, current market conditions and historical credit loss activity, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) a guidance that adds, amends, and removes certain disclosure requirements related to fair value measurements. Among other changes, this standard requires certain additional disclosure surrounding Level 3 assets, including changes in unrealized gains or losses in other comprehensive income and certain inputs in those measurements. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amended or eliminated disclosures in this standard may be adopted early, while certain additional disclosure requirements in this standard can be adopted on its effective date. In addition, certain changes in the standard require retrospective adoption, while other changes must be adopted prospectively. The Company is currently evaluating the impact of this guidance on the Company’s disclosures; however, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) as part of its initiative to reduce complexity in accounting standards. This standard simplify the accounting for income taxes. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. This standard may be adopted early, while certain additional disclosure requirements in this standard can be adopted on its effective date. In addition, certain changes in the standard require retrospective adoption, while other changes must be adopted prospectively. The Company is currently evaluating the impact of this guidance on the Company’s disclosures; however, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Abstract] | |
Summary of Activity Related to Warranty Liability Included in Other Current Liabilities | Twelve Months Ended December 31, 2019 2018 Beginning balance $ 423 $ 468 Warranty accruals and adjustments 58 132 Warranty claims (181) (177) Ending balance $ 300 $ 423 |
Schedule of Potentially Dilutive Common Stock Equivalents | Twelve Months Ended December 31, 2019 2018 Options 5,404,985 4,678,420 Warrants 19,295,773 9,055,773 Convertible preferred stock 7,545,333 7,545,333 Total potentially dilutive common stock equivalents 32,246,091 21,279,526 |
Reconciliation of the Level 3 Warrant Liability Measured and Recorded at Fair Value on a Recurring Basis | Estimated Fair Value Balance as of January 1, 2019 $ 1,497 Fair value of warrants issuance during period - Change in fair value of warrant liability, net (1,474) Balance as of December 31, 2019 $ 23 |
Impact of Adoption of ASC 842 on Balance Sheet | December 31, 2018 Adjustments Due to the Adoption of ASC 842 January 1, 2019 Right of Use Assets (1) Operating lease - right of use asset $ — $ 4,267 $ 4,267 Operating lease liabilities Current $ — $ 964 $ 964 Noncurrent $ — $ 3,432 $ 3,432 (1) Operating lease right-of-use assets includes deferred rent of $129 thousand |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | Twelve Months Ended December 31, 2019 2018 North and South America $ 14,566 $ 13,969 Europe, Middle East, and Africa 11,112 9,157 Asia Pacific 1,048 3,109 Total $ 26,726 $ 26,235 Twelve Months Ended December 31, 2019 2018 Military 65 % 75 % Commercial, including industrial and medical 12 % 10 % Consumer 4 % 6 % Multiple 19 % 9 % 100 % 100 % |
Schedule of Contract Assets and Liabilities | December 31, December 31, 2019 2018 Unbilled Receivables (contract assets) $ 155 $ 224 Deferred Revenue (contract liabilities) $ (277) $ (38) |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable, Net [Abstract] | |
Schedule of Accounts Receivable | December 31, December 31, 2019 2018 Accounts receivable $ 4,105 $ 3,325 Less allowance for doubtful accounts (139) (139) Accounts receivable, net $ 3,966 $ 3,186 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories, Net [Abstract] | |
Schedule of Components of Inventories | December 31, December 31, 2019 2018 Raw materials $ 2,788 $ 3,701 Work in process 1,561 1,033 Finished goods 5,248 4,888 Total inventories 9,597 9,622 Less inventory reserve (765) (1,040) Total inventories, net $ 8,832 $ 8,582 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | December 31, 2019 2018 Vendor prepayments $ 657 $ 702 Other prepaid expenses 473 173 Total prepaid expenses and other current assets $ 1,130 $ 875 |
Equipment, Furniture and Leas_2
Equipment, Furniture and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equipment, Furniture and Leasehold Improvements [Abstract] | |
Schedule of Equipment, Furniture and Leasehold Improvements | December 31, 2019 2018 Computer hardware and software $ 893 $ 800 Lab and factory equipment 17,482 17,107 Furniture, fixtures and office equipment 59 48 Assets under capital leases 116 66 Construction in progress 2,668 2,114 Leasehold improvements 60 22 Total equipment, furniture and leasehold improvements 21,278 20,157 Less: accumulated depreciation (13,178) (11,236) Equipment, furniture and leasehold improvements, net $ 8,100 $ 8,921 |
Debt _ Line of Credit (Tables)
Debt / Line of Credit (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt / Line of Credit [Abstract] | |
Schedule of Line of Credit | (in thousands) 2019 2018 Revolving credit facility $ 2,891 $ — Less: unamortized debt issuance costs — — Revolving credit facility, net $ 2,891 $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | Twelve Months Ended December 31, 2019 Finance Lease Cost: Amortization of right-of-use assets $ 11 Interest on lease liabilities 3 Operating lease cost 986 Short-term lease cost 58 Total Lease Cost $ 1,058 |
Schedule of Other Information | Other Information Cash paid for amounts included in the measurement lease liabilities: Operating cash flows from operating leases $ 1,012 Financing cash flows from finance leases $ 13 Right-of-use assets obtained in exchange for new finance lease liabilities $ 50 Right-of-use assets obtained in exchange for new operating lease liabilities $ 110 December 31, 2019 Finance lease right-of-use assets $ 40 Operating lease right-of-use assets $ 3,729 Finance lease liability, current $ 16 Finance lease liability, non-current $ 24 Operating lease liabilities, current $ 775 Operating lease liabilities, non-current $ 3,067 Weighted average remaining lease terms - finance leases 2.33 years Weighted average remaining lease terms - operating leases 4.42 years Weighted average discount rate - finance leases 10.91% Weighted average discount rate - operating leases 8.48% |
Future Annual Minimum Lease Payments and Finance Lease Commitments | Operating Leases Finance Leases 2020 $ 1,063 $ 20 2021 1,054 20 2022 1,014 6 2023 1,022 - 2024 426 - Thereafter - - Total undiscounted future minimum lease payments 4,579 46 Less imputed interest 737 6 Lease liability $ 3,842 $ 40 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes [Abstract] | |
Schedule of Net Loss Before Income Taxes | For the Years Ended December 31, 2019 2018 Domestic, current $ (4,298) $ (9,542) Total $ (4,298) $ (9,542) |
Schedule of Deferred Taxes | For the Years Ended December 31, 2019 2018 Deferred tax assets: Federal and state net operating loss carryforwards $ 30,428 $ 30,350 Research and development tax credit carryforwards 2,479 2,438 Stock based compensation 1,632 1,470 Other provision and expenses not currently deductible 1,327 1,345 Total deferred tax assets 35,866 35,603 Deferred tax liabilities: Depreciation and amortization (693) (726) Prepaid expenses (195) (151) Total deferred liabilities (888) (877) Less: valuation allowance (34,978) (34,726) Net deferred tax asset $ — $ — |
Schedule of Federal Net Operating Losses and Tax Credit Carryforwards | Net Research and Operating Development Losses Tax Credits 2019 -2020 $ 24,931 $ 653 2021 -2024 41,283 - 2025 -2037 61,755 1,826 No Expiration 14,705 - $ 142,674 $ 2,479 |
Schedule of Reconciliation of Effective Tax Rate | For the Years Ended December 31, 2019 2018 U.S. Federal income tax benefit at federal statutory rate 21 % 21 % Change in valuation allowance (6) (21) Permanent differences 7 (3) NOL Expiration - 1998 (26) - Other, net 4 3 Effective tax rate - % - % |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Warrants [Abstract] | |
Summary of Warrants Issued and Warrants Outstanding | Issued Outstanding Exercise Price Expire 2015 Warrant Issuance 383,500 383,500 2.05 Jun 2021 2016 Warrant Issuance 2,947,949 2,947,949 2.60 Feb 2023 2017 Warrant Issuance (1)(2) 100,000 100,000 2.25 Mar 2022 2017 Warrant Issuance (1) 1,650,000 1,650,000 2.45 Nov 2022 2018 Warrant Issuance (1) 4,004,324 3,974,324 1.55 Jul 2023 2019 Warrant Issuance 240,000 240,000 0.55 Apr 2024 2019 Warrant Issuance (3) 4,000,000 4,000,000 0.49 Oct 2024 2019 Warrant Issuance (4) 6,000,000 6,000,000 0.78 Oct 2024 (1) W arrants are subject to liability accounting . (2) Issued in conjunction with an unsecured line of credit as described in Note 9: Debt / Line of Credit . (3) Immediately exercisable pre-funded warrants at an exercise price of $0.01 per share. (4) Private Placement u nregistered warrants exercisable six months following issuance . |
Fair Value of Warrants | 2019 2018 2018 January and February Issuance Fair Value at December 31, $ 22 $ 1,342 2017 May issuance Fair Value at December 31, 1 155 $ 23 $ 1,497 Twelve Months Ended December 31, Change in Fair Value of common stock warrant liability (1) $ 1,474 $ 2,194 (1) The combined changes in fair value is reflected as income from change in the fair market value of common stock warrant liability. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders' Equity [Abstract] | |
Common Share Activity | Twelve Months Ended December 31, 2019 2018 Options exercised 12,500 99,937 Proceeds $ 9 $ 98 Warrants exercised - 30,000 Proceeds $ - $ 46 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stock Compensation [Abstract] | |
Schedule of Option Activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 4,678,420 $ 2.81 Options granted 1,438,695 0.65 Options exercised (12,500) 0.70 Options forfeited (9,200) 2.66 Options cancelled or expired (690,430) 1.54 Outstanding at December 31, 2019 5,404,985 $ 2.40 3.52 $ — Vested or expected to vest at December 31, 2019 (1) 5,401,528 $ 2.40 3.52 $ — Exercisable at December 31, 2019 5,232,179 $ 2.40 3.52 $ — (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to total unvested options. |
Schedule of Allocation of Non-Cash Stock-Based Compensation | Twelve Months Ended December 31, 2019 2018 Cost of revenues $ 25 $ 36 Research and development 85 95 Selling, general and administrative 441 479 Total stock compensation expense $ 551 $ 610 |
Schedule of Key Assumptions of Fair Value of Stock Options Granted | Twelve Months Ended December 31, 2019 2018 Dividend yield 0 % 0 % Risk free interest rates 1.77 -2.48 % 2.16 -2.75 % Expected volatility 41.7 to 49.2 % 46.4 to 50.0 % Expected term (in years) 3.5 to 4.0 3.5 to 4.8 |
Quarterly Financial Informati_2
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information [Abstract] | |
Schedule of Quarterly Financial Information | Quarters Ended March 31, June 30, September 30, December 31, 2019 2019 2019 2019 Revenues $ 6,112 $ 5,361 $ 7,919 $ 7,334 Gross profit $ 1,336 $ 225 $ 2,491 $ 2,676 Net income (loss) before income tax $ (1,439) $ (2,337) $ (315) $ (207) Net loss $ (1,439) $ (2,337) $ (315) $ (207) Net loss per share - basic $ (0.03) $ (0.05) $ (0.01) $ (0.00) Net loss per share - diluted $ (0.03) $ (0.05) $ (0.01) $ (0.00) Weighted average number of shares outstanding - basic 45,161,273 48,817,940 49,173,773 49,316,852 Weighted average number of shares outstanding - diluted 45,161,273 48,817,940 49,173,773 49,316,852 Quarters Ended March 31, June 30, September 30, December 31, 2018 2018 2018 2018 Revenues $ 6,867 $ 7,066 $ 6,867 $ 5,435 Gross profit $ 1,980 $ 106 $ 2,379 $ (471) Net loss before income tax $ (2,081) $ (5,065) $ 63 $ (2,459) Net loss $ (2,081) $ (5,065) $ 63 $ (2,459) Net loss per share - basic $ (0.05) $ (0.11) $ 0.00 $ (0.05) Net loss per share - diluted $ (0.05) $ (0.11) $ 0.00 $ (0.05) Weighted average number of shares outstanding - basic 42,255,189 45,111,273 45,149,717 45,161,273 Weighted average number of shares outstanding - diluted 42,255,189 45,111,273 45,265,370 45,161,273 |
Significant Accounting Polici_4
Significant Accounting Policies (Narrative) (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2019 | Dec. 31, 2019USD ($)item | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Line Items] | ||||||||||||
Total intangible amortization expense | $ 32,000 | $ 54,000 | ||||||||||
Standard product warranty period | 1 year | |||||||||||
Unbilled accounts receivable | $ 155,000 | $ 224,000 | $ 155,000 | 224,000 | ||||||||
Advertising expense | 0 | 0 | ||||||||||
Net loss | 207,000 | $ 315,000 | $ 2,337,000 | $ 1,439,000 | 2,459,000 | $ (63,000) | $ 5,065,000 | $ 2,081,000 | 4,298,000 | 9,542,000 | ||
Net cash used in operating activities | 5,110,000 | 6,379,000 | ||||||||||
Cash and cash equivalents | 3,515,000 | 3,359,000 | 3,515,000 | 3,359,000 | $ 3,526,000 | |||||||
Net working capital | $ 8,800,000 | $ 8,800,000 | ||||||||||
Work status reduction program, percentage decrease in senior management compensation | 20.00% | |||||||||||
Warrants [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Expected term | 5 years | 5 years | ||||||||||
Warrants [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Measurement input | item | 0 | 0 | ||||||||||
Minimum [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Accounts receivable, balance due | 30 days | |||||||||||
Minimum [Member] | Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Measurement input | item | 0.0156 | 0.0156 | ||||||||||
Minimum [Member] | Warrants [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Measurement input | item | 0.403 | 0.403 | ||||||||||
Maximum [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Accounts receivable, balance due | 90 days | |||||||||||
Maximum [Member] | Warrants [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Measurement input | item | 0.464 | 0.464 | ||||||||||
Equipment [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Estimated useful life | 3 years | |||||||||||
Equipment [Member] | Maximum [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Estimated useful life | 10 years | |||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Outstanding debt | $ 2,891,000 | $ 2,891,000 | ||||||||||
Remaining borrowing capacity | $ 1,200,000 | $ 1,200,000 |
Significant Accounting Polici_5
Significant Accounting Policies (Summary of Activity Related to Warranty Liability Included in Other Current Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | ||
Beginning balance | $ 423 | $ 468 |
Warranty accruals and adjustments | 58 | 132 |
Warranty claims | (181) | (177) |
Ending balance | $ 300 | $ 423 |
Significant Accounting Polici_6
Significant Accounting Policies (Schedule of Potentially Dilutive Common Stock Equivalents) (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common stock equivalents | 32,246,091 | 21,279,526 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common stock equivalents | 5,404,985 | 4,678,420 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common stock equivalents | 19,295,773 | 9,055,773 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common stock equivalents | 7,545,333 | 7,545,333 |
Significant Accounting Polici_7
Significant Accounting Policies (Reconciliation of the Level 3 Warrant Liability Measured and Recorded at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | ||
Balance as of January 1, 2019 | $ 1,497 | |
Fair value of warrants issuance during period | ||
Change in fair value of warrant liability, net | (1,474) | $ (2,194) |
Balance as of December 31, 2019 | $ 23 | $ 1,497 |
Significant Accounting Polici_8
Significant Accounting Policies (Impact of Adoption of ASC 842 on Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease - right of use asset | $ 3,729 | $ 4,267 | |
Operating lease liabilities, current | 775 | 964 | |
Operating lease liabilities, non-current | 3,067 | 3,432 | |
Deferred rent | $ 277 | 129 | $ 38 |
Adjustments Due to the Adoption of ASC 842 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease - right of use asset | 4,267 | ||
Operating lease liabilities, current | 964 | ||
Operating lease liabilities, non-current | $ 3,432 |
Impairment of Consumer Night _2
Impairment of Consumer Night Vision Business Assets (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2018USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | |
Asset Impairment Charges [Line Items] | |||
Number of products, exiting buisness associated with | item | 2 | ||
Impairment of Consumer Night Vision Business inventory | $ 2,700 | $ 1,270 | |
Other accrued expenses | 1,827 | $ 1,401 | |
Impairment of Consumer Night Vision Business tooling | 100 | $ 76 | |
Contract Manufacturer [Member] | |||
Asset Impairment Charges [Line Items] | |||
Other accrued expenses | $ 1,400 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue Recognition [Abstract] | ||
Accounts receivable, net | $ 3,966 | $ 3,186 |
Revenue recognized related to contract liabilities | $ 200 | $ 700 |
Revenue Recognition (Remaining
Revenue Recognition (Remaining Performance Obligations Narrative) (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-31 - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation | $ 1.4 | $ 1.1 |
Remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue Recognition (Schedule o
Revenue Recognition (Schedule of Disaggregated Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||||||||
Revenues from contract with customer | $ 7,334 | $ 7,919 | $ 5,361 | $ 6,112 | $ 5,435 | $ 6,867 | $ 7,066 | $ 6,867 | $ 26,726 | $ 26,235 |
North and South America [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Revenues from contract with customer | 14,566 | 13,969 | ||||||||
Europe, Middle East, and Africa [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Revenues from contract with customer | 11,112 | 9,157 | ||||||||
Asia Pacific [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Revenues from contract with customer | $ 1,048 | $ 3,109 | ||||||||
Customer Concentration Risk [Member] | Revenues [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Concentration risk percentage | 100.00% | 100.00% | ||||||||
Customer Concentration Risk [Member] | Revenues [Member] | Military [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Concentration risk percentage | 65.00% | 75.00% | ||||||||
Customer Concentration Risk [Member] | Revenues [Member] | Commercial, including Industrial and Medical [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Concentration risk percentage | 12.00% | 10.00% | ||||||||
Customer Concentration Risk [Member] | Revenues [Member] | Consumer [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Concentration risk percentage | 4.00% | 6.00% | ||||||||
Customer Concentration Risk [Member] | Revenues [Member] | Multiple [Member] | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
Concentration risk percentage | 19.00% | 9.00% |
Revenue Recognition (Schedule_2
Revenue Recognition (Schedule of Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Revenue Recognition [Abstract] | |||
Unbilled Receivables (contract assets) | $ 155 | $ 224 | |
Deferred Revenue (contract liabilities) | $ (277) | $ (129) | $ (38) |
Accounts Receivable, Net (Sched
Accounts Receivable, Net (Schedule of Accounts Receivable) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, Net [Abstract] | ||
Accounts receivable | $ 4,105 | $ 3,325 |
Less allowance for doubtful accounts | (139) | (139) |
Accounts receivable, net | $ 3,966 | $ 3,186 |
Inventories, Net (Schedule of C
Inventories, Net (Schedule of Components of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventories, Net [Abstract] | ||
Raw materials | $ 2,788 | $ 3,701 |
Work in process | 1,561 | 1,033 |
Finished goods | 5,248 | 4,888 |
Total inventories | 9,597 | 9,622 |
Less inventory reserve | (765) | (1,040) |
Total inventories, net | $ 8,832 | $ 8,582 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Vendor prepayments | $ 657 | $ 702 |
Other prepaid expenses | 473 | 173 |
Total prepaid expenses and other current assets | $ 1,130 | $ 875 |
Equipment, Furniture and Leas_3
Equipment, Furniture and Leasehold Improvements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total equipment, furniture and leasehold improvements | $ 21,278 | $ 20,157 |
Less: accumulated depreciation | (13,178) | (11,236) |
Equipment, furniture and leasehold improvements, net | 8,100 | 8,921 |
Depreciation expense | 1,900 | 1,900 |
Computer Hardware and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment, furniture and leasehold improvements | 893 | 800 |
Lab and Factory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment, furniture and leasehold improvements | 17,482 | 17,107 |
Furniture, Fixtures and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment, furniture and leasehold improvements | 59 | 48 |
Assets Under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment, furniture and leasehold improvements | 116 | 66 |
Depreciation expense | 11 | |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment, furniture and leasehold improvements | 2,668 | 2,114 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment, furniture and leasehold improvements | $ 60 | $ 22 |
Debt _ Line of Credit (Narrativ
Debt / Line of Credit (Narrative) (Details) - USD ($) | Dec. 21, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | |||
Interest paid, capitalized or accrued | $ 82,000 | $ 82,000 | |
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Borrowing capacity description | provides for up to a maximum amount of $5 million based on a borrowing base equivalent of 85% of eligible accounts receivable plus the lesser of $2 million or 50% of eligible inventory. | ||
Maximum borrowing capacity | $ 5,000,000 | ||
Borrowing base equivalent of eligible accounts receivable, percentage | 85.00% | ||
Monthly interest payment | $ 2,000 | ||
Monthly administrative fee | $ 1,000 | ||
Annual facility fee on maximum amount borrowable | 1.00% | ||
Effective interest rate of funds borrowed | 7.75% | ||
Renewal date | Dec. 31, 2019 | ||
Automatic renewal date | Dec. 31, 2020 | ||
Line of credit facility term | 3 years | ||
Automatic renewal term | 1 year | ||
Debt issuance costs | $ 200,000 | ||
Minimum tangible net worth required for compliance | 13,000,000 | ||
Minimum working capital required for compliance | $ 4,000,000 | ||
Remaining borrowing capacity | $ 1,200,000 | ||
Minimum [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Minimum interest rate | 6.50% | ||
Maximum [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Borrowing base equivalent of eligible inventory | $ 2,000,000 | ||
Borrowing base equivalent of eligible inventory, percentage | 50.00% | ||
Prime Rate [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.00% |
Debt _ Line of Credit (Schedule
Debt / Line of Credit (Schedule of Line of Credit) (Details) - Revolving Credit Facility [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Revolving credit facility | $ 2,891 | |
Less unamortized debt issuance costs | ||
Revolving credit facility, net | $ 2,891 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | May 02, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Finance lease, term of contract | 3 years | |||
Rent expense | $ 1 | $ 1 | ||
Hopewell Junction, NY [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease expiration date | May 31, 2024 | |||
Santa Clara, California [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease extension term | 2 years | |||
Lease extension expiration date | Oct. 31, 2021 |
Leases (Components of Lease Exp
Leases (Components of Lease Expense) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Finance Lease Cost: | |
Amortization of right-of-use assets | $ 11 |
Interest on lease liabilities | 3 |
Operating lease cost | 986 |
Short-term lease cost | 58 |
Total Lease Cost | $ 1,058 |
Leases (Schedule of Other Infor
Leases (Schedule of Other Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 1,012 | ||
Financing cash flows from finance leases | 13 | ||
Right-of-use assets obtained in exchange for new finance lease liabilities | 50 | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 110 | ||
Finance lease right-of-use assets | 40 | ||
Operating lease right-of-use assets | 3,729 | $ 4,267 | |
Finance lease liability, current | 16 | ||
Finance lease liability, non-current | 24 | ||
Operating lease liabilities, current | 775 | 964 | |
Operating lease liabilities, non-current | $ 3,067 | $ 3,432 | |
Weighted average remaining lease terms - finance leases | 2 years 3 months 29 days | ||
Weighted average remaining lease terms - operating leases | 4 years 5 months 1 day | ||
Weighted average discount rate - finance leases | 10.91% | ||
Weighted average discount rate - operating leases | 8.48% |
Leases (Future Annual Minimum L
Leases (Future Annual Minimum Lease Payments and Finance Lease Commitments) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 1,063 |
2021 | 1,054 |
2022 | 1,014 |
2023 | 1,022 |
2024 | 426 |
Thereafter | |
Total undiscounted future minimum lease payments | 4,579 |
Less imputed interest | 737 |
Lease liability | 3,842 |
Finance Leases | |
2020 | 20 |
2021 | 20 |
2022 | 6 |
2023 | |
2024 | |
Thereafter | |
Total undiscounted future minimum lease payments | 46 |
Less imputed interest | 6 |
Lease liability | $ 40 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | |||
U.S. Federal income tax benefit at federal statutory rate | 21.00% | 21.00% | 35.00% |
Reduction to deferred tax assest valuation allowance | $ 19,000,000 | ||
Expected refund for AMT credit carryforward | $ 200,000 | ||
Valuation allowance | 34,978,000 | 34,726,000 | |
Net operating loss carryforwards | 142,674,000 | ||
Research and development tax credit carryforwards | 2,479,000 | 2,438,000 | |
Unrecognized tax benefits | 0 | 0 | |
Unrecognized tax benefits, interest and penalties | 0 | $ 0 | |
Minimum [Member] | |||
Income Tax Disclosure [Line Items] | |||
U.S. Federal income tax benefit at federal statutory rate | 21.00% | ||
Expired [Member] | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carryforwards | 5,300,000 | ||
Indefinite [Member] | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carryforwards | $ 14,700,000 |
Income Taxes (Schedule of Net L
Income Taxes (Schedule of Net Loss Before Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes [Abstract] | ||||||||||
Domestic, current | $ (4,298) | $ (9,542) | ||||||||
Loss before provision for income taxes | $ (207) | $ (315) | $ (2,337) | $ (1,439) | $ (2,459) | $ 63 | $ (5,065) | $ (2,081) | $ (4,298) | $ (9,542) |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Taxes [Abstract] | ||
Federal and state net operating loss carryforwards | $ 30,428 | $ 30,350 |
Research and development tax credit carryforwards | 2,479 | 2,438 |
Stock based compensation | 1,632 | 1,470 |
Other provision and expenses not currently deductible | 1,327 | 1,345 |
Total deferred tax assets | 35,866 | 35,603 |
Depreciation and amortization | (693) | (726) |
Prepaid expenses | (195) | (151) |
Total deferred liabilities | (888) | (877) |
Less valuation allowance | (34,978) | (34,726) |
Net deferred tax asset |
Income Taxes (Schedule of Feder
Income Taxes (Schedule of Federal Net Operating Losses and Tax Credit Carryforwards) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | ||
Net Operating Losses | $ 142,674 | |
Research and Development Tax Credits | 2,479 | $ 2,438 |
2019-2020 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating Losses | 24,931 | |
Research and Development Tax Credits | 653 | |
2021-2024 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating Losses | 41,283 | |
2025-2037 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating Losses | 61,755 | |
Research and Development Tax Credits | 1,826 | |
No Expiration [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating Losses | $ 14,705 | |
Minimum [Member] | 2019-2020 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward, expiration | Jan. 1, 2019 | |
Minimum [Member] | 2021-2024 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward, expiration | Jan. 1, 2021 | |
Minimum [Member] | 2025-2037 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward, expiration | Jan. 1, 2025 | |
Maximum [Member] | 2019-2020 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward, expiration | Dec. 31, 2020 | |
Maximum [Member] | 2021-2024 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward, expiration | Dec. 31, 2024 | |
Maximum [Member] | 2025-2037 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward, expiration | Dec. 31, 2037 |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of Effective Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
U.S. Federal income tax benefit at federal statutory rate | 21.00% | 21.00% | 35.00% |
Change in valuation allowance | (6.00%) | (21.00%) | |
Permanent differences | 7.00% | (3.00%) | |
NOL Expiration - 1998 | (26.00%) | ||
Other, net | 4.00% | 3.00% | |
Effective tax rate |
Warrants (Summary of Warrants I
Warrants (Summary of Warrants Issued and Warrants Outstanding) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Jan. 25, 2018 | |
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ 1.55 | |
2015 Warrant Issuance [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 383,500 | |
Outstanding | 383,500 | |
Exercise Price | $ 2.05 | |
Expire | 2021-06 | |
2016 Warrant Issuance [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 2,947,949 | |
Outstanding | 2,947,949 | |
Exercise Price | $ 2.60 | |
Expire | 2023-02 | |
2017 Warrant Issuance 1 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 100,000 | |
Outstanding | 100,000 | |
Exercise Price | $ 2.25 | |
Expire | 2022-03 | |
2017 Warrant Issuance 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 1,650,000 | |
Outstanding | 1,650,000 | |
Exercise Price | $ 2.45 | |
Expire | 2022-11 | |
2018 Warrant Issuance [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 4,004,324 | |
Outstanding | 3,974,324 | |
Exercise Price | $ 1.55 | |
Expire | 2023-07 | |
2019 Warrant Issuance 1 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 240,000 | |
Outstanding | 240,000 | |
Exercise Price | $ 0.55 | |
Expire | 2024-04 | |
2019 Warrant Issuance 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 4,000,000 | |
Outstanding | 4,000,000 | |
Exercise Price | $ 0.49 | |
Expire | 2024-10 | |
2019 Warrant Issuance 2 [Member] | Immediately Exercisable Pre-Funded [Member] | ||
Class of Warrant or Right [Line Items] | ||
Exercise Price | $ 0.01 | |
2019 Warrant Issuance 3 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issued | 6,000,000 | |
Outstanding | 6,000,000 | |
Exercise Price | $ 0.78 | |
Expire | 2024-10 |
Warrants (Fair Value of Warrant
Warrants (Fair Value of Warrants) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Warrant or Right [Line Items] | ||
Fair Value at December 31, | $ 23 | $ 1,497 |
Change in Fair Value of common stock warrant liability | 1,474 | 2,194 |
2018 January and February Issuance [Member] | ||
Class of Warrant or Right [Line Items] | ||
Fair Value at December 31, | 22 | 1,342 |
2017 May issuance [Member] | ||
Class of Warrant or Right [Line Items] | ||
Fair Value at December 31, | $ 1 | $ 155 |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 11, 2019 | Apr. 09, 2019 | Jan. 25, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 13, 2020 | Nov. 22, 2019 |
Class of Stock [Line Items] | |||||||
Common stock, price per share | $ 1.35 | ||||||
Proceeds from offering | $ 11,900 | $ 3,476 | $ 12,172 | ||||
Number of shares of common stock called by warrants | 3,922,842 | ||||||
Warrants exercise price per share | $ 1.55 | ||||||
Number of shares of common stock called by each warrant | 0.4 | ||||||
Offering close date | Jan. 29, 2018 | ||||||
Public offering of common shares, net of offering costs, shares | 9,807,105 | ||||||
Registered Direct Offering [Member] | |||||||
Class of Stock [Line Items] | |||||||
Shares issued | 4,000,000 | ||||||
Common stock, price per share | $ 0.49 | $ 0.50 | |||||
Proceeds from offering | $ 2,000 | $ 2,000 | |||||
Number of shares of common stock called by warrants | 4,000,000 | ||||||
Warrants exercise price per share | $ 0.01 | ||||||
Concurrent Private Placement [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock, price per share | $ 1.35 | ||||||
Proceeds from offering | $ 300 | ||||||
Number of shares of common stock called by warrants | 81,487 | ||||||
Offering close date | Feb. 15, 2018 | ||||||
Public offering of common shares, net of offering costs, shares | 203,708 | ||||||
ATM Offering [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares of common stock called by warrants | 5,000,000 | ||||||
Warrants issued, value | $ 1,700 | ||||||
Commission rate | 3.00% | ||||||
Unregistered [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares of common stock called by warrants | 3,000,000 | ||||||
Unregistered [Member] | Registered Direct Offering [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares of common stock called by warrants | 3,000,000 | ||||||
Warrants exercise price per share | $ 0.78 | $ 0.78 | |||||
Period after issuance in which warrants are exercisable | 6 months | 9 months | |||||
Warrant term | 5 years 6 months | 5 years 6 months | |||||
Subsequent Event [Member] | ATM Offering [Member] | |||||||
Class of Stock [Line Items] | |||||||
Warrants issued, value | $ 2,500 | ||||||
Series B Preferred Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares designated | 10,000 | 10,000 | |||||
Preferred stock, liquidation preference | $ 5,659 | $ 5,659 | |||||
Preferred stock, conversion price per share | $ 0.75 | ||||||
Preferred stock, redemption price per share | $ 1,000 | ||||||
Preferred stock, shares issued | 5,659 | 5,659 | |||||
Preferred stock, shares outstanding | 5,659 | 5,659 |
Shareholders' Equity (Common Sh
Shareholders' Equity (Common Share Activity) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shareholders' Equity [Abstract] | ||
Options exercised | 12,500 | 99,937 |
Proceeds | $ 9 | $ 98 |
Warrants exercised | 30,000 | |
Proceeds | $ 46 |
Stock Compensation (Narrative)
Stock Compensation (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options in-the-money | 0 | ||
Closing stock price | $ 0.34 | ||
Unrecognized stock option compensation, net of forfeitures | $ 400,000 | ||
Unrecognized compensation cost, weighted average period of recognition | 8 months 12 days | ||
Weighted average fair value per share for options granted | $ 0.65 | $ 1.70 | |
Dividend yield | 0.00% | 0.00% | |
Intrinsic value of options exercised | $ 2,000 | ||
Dividend declared and paid | $ 0 | $ 0 | |
2005 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee purchase price, percentage of fair market value | 85.00% | ||
Shares available for issuance/grant | 300,000 | ||
2017 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance/grant | 49,834 | ||
Shares authorized | 2,000,000 | ||
2019 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized | 5,000,000 | ||
2019 Employee Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance/grant | 5,000,000 | ||
2019 Consultant and Non-Employee Director Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance/grant | 2,000,000 | ||
Share-based Payment Arrangement, Tranche One [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Share-based Payment Arrangement, Tranche One [Member] | 2019 Plan [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year |
Stock Compensation (Schedule of
Stock Compensation (Schedule of Option Activity) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Compensation [Abstract] | ||
Number of Shares, Outstanding at December 31, 2018 | 4,678,420 | |
Number of Shares, Options granted | 1,438,695 | |
Number of Shares, Options exercised | (12,500) | (99,937) |
Number of Shares, Options forfeited | (9,200) | |
Number of Shares, Options cancelled or expired | (690,430) | |
Number of Shares, Outstanding at December 31, 2019 | 5,404,985 | 4,678,420 |
Number of Shares, Vested or expected to vest at December 31, 2019 | 5,401,528 | |
Number of Shares, Exercisable at December 31, 2019 | 5,232,179 | |
Weighted Average Exercise Price, Outstanding at December 31, 2018 | $ 2.81 | |
Weighted Average Exercise Price, Options granted | 0.65 | |
Weighted Average Exercise Price, Options exercised | 0.70 | |
Weighted Average Exercise Price, Options forfeited | 2.66 | |
Weighted Average Exercise Price, Options cancelled or expired | 1.54 | |
Weighted Average Exercise Price, Outstanding at December 31, 2019 | 2.40 | $ 2.81 |
Weighted Average Exercise Price, Vested or expected to vest at December 31, 2019 | 2.40 | |
Weighted Average Exercise Price, Exercisable at December 31, 2019 | $ 2.40 | |
Weighted Average Remaining Contractual Life (In Years), Outstanding at December 31, 2019 | 3 years 6 months 7 days | |
Weighted Average Remaining Contractual Life (In Years), Vested or expected to vest at December 31, 2019 | 3 years 6 months 7 days | |
Weighted Average Remaining Contractual Life (In Years), Exercisable at December 31, 2019 | 3 years 6 months 7 days |
Stock Compensation (Schedule _2
Stock Compensation (Schedule of Allocation of Non-Cash Stock-Based Compensation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock compensation expense | $ 551 | $ 610 |
Cost of Revenues [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock compensation expense | 25 | 36 |
Research and Development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock compensation expense | 85 | 95 |
Selling, General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock compensation expense | $ 441 | $ 479 |
Stock Compensation (Schedule _3
Stock Compensation (Schedule of Key Assumptions of Fair Value of Stock Options Granted) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Risk free interest rates, minimum | 1.77% | 2.16% |
Risk free interest rates, maximum | 2.48% | 2.75% |
Expected volatility, minimum | 41.70% | 46.40% |
Expected volatility, maximum | 49.20% | 50.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 3 years 6 months | 3 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 4 years | 4 years 9 months 18 days |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | |
Commitments and Contingencies [Abstract] | |||
Equipment purchases commitments | $ 300,000 | ||
Demand letter for payment | $ 900,000 | ||
Consumer Night Vision, accrued invoices | $ 1,000,000 | ||
Fully vested service period | 5 years | ||
Percentage employer matches employee contributions | 50.00% | ||
Percentage employer matches to a maximum qualified compensation | 3.00% | ||
Employer contributions | $ 100,000 | $ 0 |
Quarterly Financial Informati_3
Quarterly Financial Information (Schedule of Quarterly Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information [Abstract] | ||||||||||
Revenues | $ 7,334 | $ 7,919 | $ 5,361 | $ 6,112 | $ 5,435 | $ 6,867 | $ 7,066 | $ 6,867 | $ 26,726 | $ 26,235 |
Gross profit | 2,676 | 2,491 | 225 | 1,336 | (471) | 2,379 | 106 | 1,980 | 6,728 | 3,994 |
Net (loss) income before income tax | (207) | (315) | (2,337) | (1,439) | (2,459) | 63 | (5,065) | (2,081) | (4,298) | (9,542) |
Net income (loss) | $ (207) | $ (315) | $ (2,337) | $ (1,439) | $ (2,459) | $ 63 | $ (5,065) | $ (2,081) | $ (4,298) | $ (9,542) |
Net loss per share: Basic | $ 0 | $ (0.01) | $ (0.05) | $ (0.03) | $ (0.05) | $ 0 | $ (0.11) | $ (0.05) | $ (0.09) | $ (0.21) |
Net loss per share: Diluted | $ 0 | $ (0.01) | $ (0.05) | $ (0.03) | $ (0.05) | $ 0 | $ (0.11) | $ (0.05) | $ (0.09) | $ (0.21) |
Weighted average common shares outstanding - Basic | 49,316,852 | 49,173,773 | 48,817,940 | 45,161,273 | 45,161,273 | 45,149,717 | 45,111,273 | 42,255,189 | 48,132,714 | 44,429,114 |
Weighted average number of shares outstanding - diluted | 49,316,852 | 49,173,773 | 48,817,940 | 45,161,273 | 45,161,273 | 45,265,370 | 45,111,273 | 42,255,189 | 48,132,714 | 44,429,114 |
Change in fair value of common stock warrant liability | $ 1,474 | $ 2,194 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - ATM Offering [Member] - USD ($) $ in Thousands | Feb. 13, 2020 | Nov. 22, 2019 |
Warrants issued, value | $ 1,700 | |
Subsequent Event [Member] | ||
Warrants issued, value | $ 2,500 | |
Accrued sales commission | $ 15 |