Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 27, 2022 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Transition Report | false | |
Entity File Number | 001-15751 | |
Entity Registrant Name | eMAGIN CORPORATION | |
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, $.001 Par Value Per Share | |
Trading Symbol | EMAN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,680,029 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Central Index Key | 0001046995 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 4,290 | $ 5,724 |
Restricted cash | 511 | 806 |
Accounts receivable, net | 5,020 | 4,488 |
Account receivable-due from government awards | 367 | 292 |
Unbilled accounts receivable | 1,318 | 1,102 |
Inventories | 7,661 | 7,632 |
Prepaid expenses and other current assets | 672 | 691 |
Total current assets | 19,839 | 20,735 |
Property, plant and equipment, net | 37,499 | 30,483 |
Operating lease right-of-use assets | 84 | 113 |
Intangibles and other assets | 33 | 37 |
Total assets | 57,455 | 51,368 |
Current liabilities: | ||
Accounts payable | 1,160 | 1,348 |
Accrued compensation | 2,181 | 1,664 |
Revolving credit facility, net | 2,087 | 1,974 |
Common stock warrant liability | 2 | 1,374 |
Other accrued expenses | 391 | 722 |
Deferred revenue | 114 | 54 |
Operating lease liability - current | 63 | 60 |
Finance lease liability - current | 1,127 | 1,133 |
Other current liabilities | 366 | 608 |
Total current liabilities | 7,491 | 8,937 |
Other liability - long term | 28 | 28 |
Deferred income - government awards - long term | 19,161 | 12,458 |
Operating lease liability - long term | 22 | 54 |
Finance lease liability - long term | 11,647 | 11,647 |
Total liabilities | 38,349 | 33,124 |
Commitments and contingencies (Note 8) | ||
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, $0.001 par value: 10,000 shares designated and 5,659 issued and outstanding as of June 30, 2022 and December 31, 2021. | ||
Common stock, $0.001 par value: authorized 200,000,000 shares, issued 75,621,126 shares, outstanding 75,459,060 shares as of June 30, 2022 and issued 72,931,490 shares, outstanding 72,769,424 shares as of December 31, 2021. | 75 | 72 |
Additional paid-in capital | 278,372 | 275,936 |
Accumulated deficit | (258,841) | (257,264) |
Treasury stock, 162,066 shares as of June 30, 2022 and December 31, 2021. | (500) | (500) |
Total shareholders' equity | 19,106 | 18,244 |
Total liabilities and shareholders' equity | $ 57,455 | $ 51,368 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
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 | 75,621,126 | 72,931,490 |
Common stock, shares outstanding | 75,459,060 | 72,769,424 |
Treasury stock, shares | 162,066 | 162,066 |
Preferred Stock- Series B [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 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues: | ||||
Total revenues, net | $ 7,159 | $ 6,279 | $ 14,517 | $ 13,052 |
Cost of revenues: | ||||
Total cost of revenues | 5,590 | 5,708 | 10,459 | 10,773 |
Gross profit | 1,569 | 571 | 4,058 | 2,279 |
Operating expenses: | ||||
Research and development | 1,457 | 1,788 | 2,941 | 3,630 |
Selling, general and administrative | 1,904 | 1,690 | 4,074 | 3,514 |
Total operating expenses | 3,361 | 3,478 | 7,015 | 7,144 |
Loss from operations | (1,792) | (2,907) | (2,957) | (4,865) |
Other (expense) income: | ||||
Change in fair value of common stock warrant liability | 226 | 2,642 | 1,372 | (4,566) |
Interest expense, net | (225) | (205) | (439) | (415) |
Gain on forgiveness of debt | 1,963 | |||
Other income, net | 351 | 192 | 447 | 227 |
Total other income (expense) | 352 | 2,629 | 1,380 | (2,791) |
Loss before provision for income taxes | (1,440) | (278) | (1,577) | (7,656) |
Income taxes | ||||
Net loss | $ (1,440) | $ (278) | $ (1,577) | $ (7,656) |
Loss per share, basic | $ (0.02) | $ 0 | $ (0.02) | $ (0.11) |
Loss per share, diluted | $ (0.02) | $ 0 | $ (0.02) | $ (0.11) |
Weighted average number of shares outstanding: | ||||
Basic | 73,895,212 | 72,193,205 | 73,368,347 | 71,238,060 |
Diluted | 73,895,212 | 72,193,205 | 73,368,347 | 71,238,060 |
Product [Member] | ||||
Revenues: | ||||
Total revenues, net | $ 7,026 | $ 5,742 | $ 14,053 | $ 11,847 |
Cost of revenues: | ||||
Cost of revenues | 5,522 | 5,466 | 10,309 | 10,173 |
Contract [Member] | ||||
Revenues: | ||||
Total revenues, net | 133 | 537 | 464 | 1,205 |
Cost of revenues: | ||||
Cost of revenues | $ 68 | $ 242 | $ 150 | $ 600 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholder's 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, 2020 | $ 69 | $ 268,729 | $ (252,058) | $ (500) | $ 16,240 | |
Balance, shares at Dec. 31, 2020 | 5,659 | 68,890,819 | ||||
Exercising of options | 364 | 364 | ||||
Exercising of options, shares | 227,792 | |||||
Stock based compensation | 13 | 13 | ||||
Exercise of common stock warrants | $ 3 | 5,059 | 5,062 | |||
Exercise of common stock warrants, shares | 3,019,247 | |||||
Net loss | (7,378) | (7,378) | ||||
Balance at Mar. 31, 2021 | $ 72 | 274,165 | (259,436) | (500) | 14,301 | |
Balance, shares at Mar. 31, 2021 | 5,659 | 72,137,858 | ||||
Balance at Dec. 31, 2020 | $ 69 | 268,729 | (252,058) | (500) | $ 16,240 | |
Balance, shares at Dec. 31, 2020 | 5,659 | 68,890,819 | ||||
Exercise of common stock warrants, shares | 3,343,660 | |||||
Net loss | $ (7,656) | |||||
Balance at Jun. 30, 2021 | $ 72 | 275,173 | (259,714) | (500) | 15,031 | |
Balance, shares at Jun. 30, 2021 | 5,659 | 72,665,730 | ||||
Balance at Mar. 31, 2021 | $ 72 | 274,165 | (259,436) | (500) | 14,301 | |
Balance, shares at Mar. 31, 2021 | 5,659 | 72,137,858 | ||||
Exercising of options | 381 | 381 | ||||
Exercising of options, shares | 203,459 | |||||
Stock based compensation | 37 | 37 | ||||
Exercise of common stock warrants | 590 | $ 590 | ||||
Exercise of common stock warrants, shares | 324,413 | 324,413 | ||||
Net loss | (278) | $ (278) | ||||
Balance at Jun. 30, 2021 | $ 72 | 275,173 | (259,714) | (500) | 15,031 | |
Balance, shares at Jun. 30, 2021 | 5,659 | 72,665,730 | ||||
Balance at Dec. 31, 2021 | $ 72 | 275,936 | (257,264) | (500) | 18,244 | |
Balance, shares at Dec. 31, 2021 | 5,659 | 72,931,490 | ||||
Stock based compensation | 165 | 165 | ||||
Public offering of common shares, net of offering costs | 460 | 460 | ||||
Public offering of common shares, net of offering costs, shares | 405,086 | |||||
Net loss | (137) | (137) | ||||
Balance at Mar. 31, 2022 | $ 72 | 276,561 | (257,401) | (500) | 18,732 | |
Balance, shares at Mar. 31, 2022 | 5,659 | 73,336,576 | ||||
Balance at Dec. 31, 2021 | $ 72 | 275,936 | (257,264) | (500) | $ 18,244 | |
Balance, shares at Dec. 31, 2021 | 5,659 | 72,931,490 | ||||
Exercising of options, shares | ||||||
Net loss | $ (1,577) | |||||
Balance at Jun. 30, 2022 | $ 75 | 278,372 | (258,841) | (500) | 19,106 | |
Balance, shares at Jun. 30, 2022 | 5,659 | 75,621,126 | ||||
Balance at Mar. 31, 2022 | $ 72 | 276,561 | (257,401) | (500) | 18,732 | |
Balance, shares at Mar. 31, 2022 | 5,659 | 73,336,576 | ||||
Vesting of RSUs, shares | 110,608 | |||||
Stock based compensation | 214 | 214 | ||||
Public offering of common shares, net of offering costs | $ 3 | 1,597 | 1,600 | |||
Public offering of common shares, net of offering costs, shares | 2,173,942 | |||||
Net loss | (1,440) | (1,440) | ||||
Balance at Jun. 30, 2022 | $ 75 | $ 278,372 | $ (258,841) | $ (500) | $ 19,106 | |
Balance, shares at Jun. 30, 2022 | 5,659 | 75,621,126 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (1,577) | $ (7,656) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,671 | 1,427 |
Change in fair value of common stock warrant liability | (1,372) | 4,566 |
Gain on forgiveness of debt | (1,963) | |
Stock-based compensation | 379 | 50 |
Amortization of operating lease right-of-use assets | 29 | 30 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (607) | 3,133 |
Unbilled accounts receivable | (216) | (530) |
Inventories | (29) | 246 |
Prepaid expenses and other current assets | 19 | 148 |
Deferred revenues | 60 | (339) |
Operating lease liabilities | (29) | (30) |
Accounts payable, accrued expenses, and other current liabilities | (173) | (1,134) |
Net cash used in operating activities | (1,845) | (2,052) |
Cash flows from investing activities: | ||
Purchase of equipment | (1,128) | (501) |
Purchase of equipment, government grant | (7,418) | (5,198) |
Net cash used in investing activities | (8,546) | (5,699) |
Cash flows from financing activities: | ||
Borrowings (repayments) under revolving line of credit, net | 113 | (1,470) |
Proceeds from public offering, net | 2,060 | |
Change in finance lease liabilities | (144) | (158) |
Proceeds from government grant | 6,633 | 4,615 |
Proceeds from warrant exercise | 5,652 | |
Proceeds from exercise of stock options | 745 | |
Net cash provided by financing activities | 8,662 | 9,384 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (1,729) | 1,633 |
Cash, cash equivalents, and restricted cash, beginning of period | 6,530 | 10,426 |
Cash, cash equivalents, and restricted cash, end of period | 4,801 | 12,059 |
Cash, cash equivalents, end of period | 4,290 | 10,568 |
Restricted cash, end of period | 511 | 1,491 |
Supplementary Cash Flow Information | ||
Cash paid for interest | 439 | 210 |
Cash paid for income taxes | ||
Non-cash activities: | ||
Right-of-use assets obtained in exchange for finance lease liabilities | $ 137 | $ 108 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Description of the Business and Summary of Significant Accounting Policies [Abstract] | |
Description of the Business and Summary of Significant Accounting Policies | Note 1 – Description of the Business and Summary of Significant Accounting Policies The Business eMagin Corporation, or the Company, designs, develops, manufactures and markets Active Matrix organic light emitting diode, or OLED, -on-silicon microdisplays used in military and commercial AR/VR devices and other near-eye imaging products which utilize OLED microdisplays. The Company’s products are sold mainly in North America, Asia, and Europe. Basis of Presentation In the opinion of management, the accompanying unaudited interim Condensed Consolidated Financial Statements of eMagin Corporation and its subsidiary reflect all adjustments, including normal recurring accruals, necessary for a fair presentation. All significant intercompany balances and 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. Certain information and footnote disclosure normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States, or GAAP, have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the SEC. These unaudited Condensed Consolidated Financial Statements, and related disclosures, should be read in conjunction with the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31 , 2021 . The results of operations for the periods ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year. The Consolidated Financial Statements as of December 31, 2021 are derived from audited financial statements included in the Company’s 2021 Form 10-K. Use of estimates In accordance with GAAP, 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, liability classified warrants, percentage of completion of contracts, 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. 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. The total intangible amortization expense was approximately $ 2 thousand and $ 4 thousand for the three and six months ended June 30, 2022 and 2021, respectively. Product warranty The Company generally 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 three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Beginning balance $ 416 $ 465 $ 519 $ 615 Warranty accruals and adjustments ( 127 ) 242 ( 227 ) 100 Warranty claims ( 7 ) ( 2 ) ( 10 ) ( 10 ) Ending balance $ 282 $ 705 $ 282 $ 705 Earnings per Common Share Basic earnings 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, restricted stock units and convertible preferred stock. Diluted earnings 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. The Company’s Series B Convertible Preferred stock, or 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 earnings per share. Diluted earnings per share must be calculated under both the treasury stock and two-class method, and the calculation that results in the most dilutive earnings per share amount for the common stock is reported. 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. In accordance with the Preferred Stock – Series B agreements, the conversion price was adjusted to $ 0.3033 per share in December 2019, and the resultant, if converted common shares are reflected in the table of anti-dilutive common stock equivalents below. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share data) for the three and six months ended June 30, 2022 and 2021: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Loss $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Income allocated to participating securities — — — — Loss allocated to common shares $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Change in fair value of warrant liability (1) $ — $ — $ — $ — Loss allocated to common shares - Diluted $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Weighted average common shares outstanding - Basic 73,895,212 72,193,205 73,368,347 71,238,060 Dilutive effect of liability classified warrants — — — — Weighted average common shares outstanding - Diluted (1) 73,895,212 72,193,205 73,368,347 71,238,060 Net loss per share: Basic $ ( 0.02 ) $ - $ ( 0.02 ) $ ( 0.11 ) Diluted $ ( 0.02 ) $ - $ ( 0.02 ) $ ( 0.11 ) (1) For the three months ended June 30, 2022 and 2021, income (loss) allocated to common shares, and the weighted average shares used for calculating basic and diluted earnings per share exclude the assumed impact of exercise liability classified warrants, because it would be anti-dilutive to the earnings per share calculation. In calculating net income (loss) per share amounts, all shares underlying the potentially dilutive common stock equivalents were excluded from the calculation of diluted net income (loss) per common share in both periods, because their effect was anti-dilutive. The following table sets forth the potentially dilutive common stock equivalents for the three and six months ended June 30, 2022 and 2021 that were not included in diluted earnings per share, or EPS, as their effect would be anti-dilutive: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Restricted Stock Units 408,226 435,501 408,226 435,501 Options 3,625,426 3,841,671 3,625,426 3,841,671 Warrants 6,009,374 9,339,816 6,009,374 9,339,816 Convertible preferred stock 18,726,009 18,726,009 18,726,009 18,726,009 Total potentially dilutive common stock equivalents 28,769,035 32,342,997 28,769,035 32,342,997 Government Funding The Company accounts for awards received from the U.S. Government for procurement of capital equipment after reviewing the terms of the underlying award contract, and in accordance with contract and equipment purchase milestones and accounting principles for grant accounting. For awards in which the Company will hold title to the underlying equipment, the Company initially records amounts invoiced to the U.S. Government for equipment progress payments on the accompanying Condensed Consolidated Balance Sheets as Deferred Income – Government Awards – long term and Accounts Receivable – due from Government Awards. The Company records such progress payments made to capital equipment vendors in Property, plant and equipment. Amounts recorded in Deferred Income – Government Awards – long term are recognized as Other Income on the accompanying Condensed Consolidated Statement of Operations on a systematic basis as depreciation and other expenses are incurred over the useful life of the capital equipment. Restricted Cash The Company accounts for cash received pursuant to U.S. Government funding, that is legally restricted for procurement of capital equipment, as Restricted Cash on the accompanying Condensed Consolidated Balance Sheets. Restricted Cash amounts are received from the U.S. Government in advance of progress payments required for various program related capital equipment purchases and are disbursed by the Company to related equipment vendors. 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, or the 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. The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a 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 Condensed Consolidated 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 is currently the only financial asset 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 Condensed Consolidated Balance Sheets, 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, 2022 $ 1,374 Change in fair value of warrant liability, net ( 1,372 ) Balance as of June 30, 2022 $ 2 The fair value of the liability for common stock purchase warrants at issuance and at June 30, 2022 was 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. Inputs to the model at June 30, 2022 included remaining contractual terms of the warrants of 0.58 years, at risk-free interest rates of 2.51 % with no expected dividends, and expected volatility of the price of the underlying common stock of 45.02 % . 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 three months ended June 30, 2022, one customer of 11.0 % accounted for over 10% of net revenues. For the six months ended June 30, 2022, a different customer of 12.5 % accounted for over 10% of net revenues. As of June 30, 2022, the Company had accounts receivable from those two customers that accounted for 8.4 % and 1.1 % of total accounts receivable, respectively. For the three and six months ended June 30, 2021, one customer of 19.4 % and 15.6 %, respectively accounted for over 10% of the Company’s net revenues. Liquidity and Going Concern The accompanying Condensed Consolidated Financial Statements have been prepared on a 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 six months ended June 30, 2022, the Company incurred a net loss of $ 1.6 million and used cash in operating activities of $ 1.8 million. As of June 30, 2022, the Company had $ 4.3 million of cash, $ 2.1 million of outstanding indebtedness and borrowing availability of $ 0.7 million under its ABL Facility. The Company’s ABL Facility expires on December 31, 2022, and renews automatically for another year unless terminated pursuant to its terms. The ABL Facility agreement contains certain lenders remedies that give the bank the ability to impose discretionary reserves against our borrowing availability or terminate the facility upon events of default. 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 2022 and beyond at present availability levels, or at all. 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. In addition, the COVID-19 pandemic, and disruptions caused by the war in the Ukraine have significantly increased economic and demand uncertainty across the globe and contributed to supply chain shortages and disruptions. Although demand for the Company’s products has remained steady, the Company’s ability to obtain components and other materials or services on a timely basis has resulted in manufacturing delays, and increased costs. If these trends worsen as a result of COVID-19, the Ukraine war, or other semiconductor supply chain issues or result in lost orders it could materially and adversely affect its business, financial condition, and results of operations. 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 has taken actions to increase revenues and to reduce expenses and is considering financing alternatives. 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) continue a Work Status Reduction program that began in October 2019 wherein senior management work status was reduced by approximately 20%, 3) continue to utilize government grants for purchase of capital equipment and funding manufacturing personnel, 4) reduce discretionary and other expenses, 5) seek to enter new markets, 6) sell shares under it’s At the Market or ATM equity facility entered into in November 2021, and 7) consider additional financing and/or strategic alternatives. The Company is reassessing its business plans and forecasts over the next two years. Based on its known cash needs as of July 2022, and the anticipated availability of its ABL facility, the Company has developed plans to extend its liquidity to support its working capital requirements through the third quarter of 2023. However, there can be no assurance the Company’s plans will be achieved and the Company will be able to meet its financial obligations as they become due without obtaining additional financing or sources of capital. 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. Recently adopted accounting pronouncements The Company's accounting policies are the same as those described in Note 1 to the Company's Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2021 . Recently issued accounting pronouncements 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 is currently evaluating the impact of this ASU on the Condensed Consolidated Financial Statements. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This guidance changes how entities account for convertible instruments and contracts in an entity's own equity and simplifies the accounting for convertible instruments by removing certain separation models for convertible instruments. This guidance also modifies the guidance on diluted earnings per share calculations. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU on the Condensed Consolidated Financial Statements. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 2 – Revenue Recognition All of the Company’s revenues are earned from contracts with customers and are classified as either Product or Contract revenues. Contract revenues include R&D activities performed pursuant to 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. The Company’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. The Company’s 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 generally 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, or 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 Condensed 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 . Costs to Obtain and Fulfill a Contract The incidental costs related to obtaining product sales contracts are non-recoverable from customer and, accordingly, are expensed as incurred. The Company capitalizes costs incurred to fulfil its R&D contracts that i) relate directly to a contract or anticipated contract, ii) are expected to satisfy the Company’s performance obligation under the contract, and iii) are expected to be recovered through revenue generated under the contract. Contact fulfillment costs are expensed to cost of revenue as the related performance obligations are satisfied. Disaggregation of Revenue The Company sells products directly to military contractors and OEM’s who use the Company’s 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 products 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 Condensed Consolidated Statements of Operations. Additional disaggregated revenue information for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 North and South America $ 3,790 $ 3,647 $ 8,116 $ 6,950 Europe, Middle East, and Africa 3,099 2,090 6,019 4,621 Asia Pacific 270 542 382 1,481 Total $ 7,159 $ 6,279 $ 14,517 $ 13,052 Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Military $ 4,799 $ 3,884 $ 10,159 $ 7,759 Commercial, including industrial and medical 1,184 820 2,161 1,800 Consumer 23 500 312 1,150 Multiple 1,153 1,075 1,885 2,343 Total $ 7,159 $ 6,279 $ 14,517 $ 13,052 Accounts Receivable from Customers Accounts receivable, net of allowances, were $ 5.0 million and $ 4.5 million as of June 30, 2022 and December 31, 2021. 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 cost based input method is applied and such revenue exceeds the amount invoiced to the customer. Unbilled receivables are disclosed on the Condensed Consolidated Balance Sheets. 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 Condensed Consolidated Statements of Operations. Total contract assets and liabilities consisted of the following amounts (in thousands): June 30, December 31, 2022 2021 Unbilled Receivables (contract assets) $ 1,318 $ 1,102 Deferred Revenue (contract liabilities) $ 114 $ 54 For the three and six months ended June 30, 2022 the Company recognized no revenue and $ 42 thousand of revenue related to its contract liabilities that existed at December 31, 2021, respectively. For the three and six months ended June 30, 2021 the Company recognized $ 37 thousand and $ 339 thousand respectively, of revenue related to its contract liabilities that existed at December 31, 2020. 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 June 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 2.7 million. The Company expects to recognize revenue on all of its remaining performance obligations over the next 12 months. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2022 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | Note 3 – Accounts Receivable The majority of the Company’s commercial accounts receivable are due from OEM’s. Credit is extended based on an evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable consisted of the following (in thousands): June 30, December 31, 2022 2021 Accounts receivable $ 5,159 $ 4,627 Less allowance for doubtful accounts ( 139 ) ( 139 ) Accounts receivable, net $ 5,020 $ 4,488 |
Inventories, Net
Inventories, Net | 6 Months Ended |
Jun. 30, 2022 | |
Inventories, Net [Abstract] | |
Inventories, Net | Note 4 – Inventories, net The components of inventories are as follows (in thousands): June 30, December 31, 2022 2021 Raw materials $ 2,749 $ 3,517 Work in process 3,077 2,149 Finished goods 2,225 2,363 Total inventories 8,051 8,029 Less inventory reserve ( 390 ) ( 397 ) Total inventories, net $ 7,661 $ 7,632 |
Line of Credit _ Loan Payable
Line of Credit / Loan Payable | 6 Months Ended |
Jun. 30, 2022 | |
Line of Credit / Loan Payable [Abstract] | |
Line of Credit / Loan Payable | Note 5 – Line of Credit / Loan Payable Revolving Credit Facility June 30, December 31, (in thousands) 2022 2021 Revolving credit facility $ 2,087 $ 1,974 On December 21, 2016, the Company entered into the ABL Facility with a lender that provides for up to a maximum amount of $ 5 million based on a borrowing base equivalent to 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. The ABL Facility renewed on December 31, 2021 and will automatically renew on December 31, 2022 for a one year term unless written notice to terminate the agreement is provided by either party. 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 Consolidated Balance Sheet. 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 June 30, 2022 the Company had $ 2.1 million in borrowings outstanding under the ABL Facility, had unused borrowing availability of $ 0.7 million under the ABL Facility and was in compliance with all financial debt covenants under the ABL Facility. Promissory Note under the Paycheck Protection Program On June 8, 2020, the Company received a loan under the U.S. Small Business Administration’s, or SBA, Paycheck Protection Program, or PPP, from KeyBank National Association related to the COVID-19 pandemic in the amount of $ 1.9 million at an interest rate of 1 % per annum. The Company used the proceeds to pay qualified payroll costs, in accordance with loan requirements and applied for forgiveness of the entire loan in the fourth quarter of 2020. During the first quarter of 2021 the entire loan amount was forgiven and recorded in the Condensed Consolidated Statements of Operations as gain on forgiveness of debt. |
Stock Compensation
Stock Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Stock Compensation [Abstract] | |
Stock Compensation | Note 6 – Stock 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 fair value of Restricted Stock Units, or RSU’s is established by the market price of the Company’s common stock at the date of grant and for time based grants, is amortized over the vesting period using the straight line method. Performance-based RSUs are typically granted such that they vest upon the achievement of EBITDA targets, during a specified performance period, subject to the satisfaction of certain time-based service criteria. Compensation expense from these awards is equal to the fair market value of the Company’s ordinary shares on the date of grant and is recognized over the remaining service period based on the probable outcome of achievement of the financial metrics used in the specific grant’s performance criteria. Management’s estimate of the number of shares expected to vest is based on the anticipated achievement of the specified non-market performance criteria, which are assessed at each reporting period. The following table summarizes the allocation of non-cash stock-based compensation to our expense categories for the three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Cost of revenues $ 30 $ 3 $ 58 $ 3 Research and development 56 9 92 12 Selling, general and administrative 128 25 229 35 Total stock compensation expense $ 214 $ 37 $ 379 $ 50 The following table summarizes the Company’s stock-based compensation expense by each award type: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Stock options $ 119 $ 13 $ 189 $ 25 Restricted Share Units 95 24 190 25 Total stock compensation expense $ 214 $ 37 $ 379 $ 50 At June 30, 2022, total unrecognized compensation costs related to stock options and RSUs was approximately $ 62 thousand and $ 0.9 million, respectively, net of estimated forfeitures. Total unrecognized compensation cost for stock options and RSUs will be adjusted for future changes in estimated forfeitures and is expected to be recognized over a weighted average period of approximately 0.9 years and approximately 2.1 years, respectively. Stock Option Summary The following key assumptions were used in the Black-Scholes option pricing model to determine the fair value of stock options granted: Six Months Ended June 30, 2022 2021 Dividend yield 0 % 0 % Risk free interest rates 3.24 - 3.25 % 1.77 - 2.48 % Expected volatility 79.3 to 83.0 % 41.7 to 49.2 % Expected term (in years) 5.0 to 5.5 3.5 to 4.0 The Company does not expect to pay dividends in the near future. Therefore, the Company used an expected dividend yield of 0 %. The risk-free interest rate used in the Black-Scholes option pricing model is based on applicable yield available at the date of the option grant 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 the 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. A summary of the Company’s stock option activity for the six months ended June 30, 2022 presented in the following table (unaudited): Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Outstanding at December 31, 2021 3,712,867 $ 1.81 Options granted 270,000 0.73 Options exercised — — Options forfeited ( 5,000 ) 0.40 Options cancelled or expired ( 352,441 ) 3.59 Outstanding at June 30, 2022 3,625,426 $ 1.56 3.66 $ 144,835 Vested or expected to vest at June 30, 2022 (1) 3,622,861 $ 1.56 3.65 $ 144,835 Exercisable at June 30, 2022 3,489,426 $ 1.59 3.42 $ 144,835 (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to total unvested options. 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. The Company issues new shares of common stock upon exercise of stock options. There were no options were exercised in the three and six months ended June 30, 2022. Restricted Stock Units (“RSU”) Summary The following table summarized the activity in respect of RSUs issued under the Company for the six months ended June 30, 2022: Weighted Average Grant Date Number of Awards Fair Value Per Share Service Performance Service Performance based based based based RSU's outstanding at December 31, 2021 405,453 103,047 $ 3.52 $ 3.60 Granted 165,885 46,729 1.01 1.07 Vested and settled ( 110,608 ) — 3.60 — Forfeited ( 52,504 ) ( 34,349 ) 3.60 3.60 RSU's outstanding at June 30, 2022 408,226 115,427 $ 3.13 $ 2.58 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | Note 7 – Income Taxes The Company’s effective tax rate is calculated quarterly based upon current assumptions relating to the full year’s estimated operating results and various tax-related items. The Company’s effective tax rate was 0 % for the three and six months ended June 30, 2022 and 2021 . The difference between the effective tax rate of 0 % and the U.S. federal statutory rate of 21 % for three and six months ended June 30, 2022 and 2021 was primarily due to recognizing a full valuation allowance on deferred tax assets. The Company determined that, based on all available evidence, both positive and negative, including the Company’s latest forecasts and cumulative losses in recent years, it was more likely than not that none of its deferred tax assets would be realized and therefore it continued to record a full valuation allowance as of June 30, 2022. The Company’s 2017 and prior net operating loss carry-forward amounts expire through 2037 and are subject to certain limitations that may occur due to a change in the ownership provisions under Section 382 of the Internal Revenue Code and similar state provisions. Pursuant to provisions of the Tax Cuts and Jobs Act, the net operating losses originating in years subsequent to 2017 can be carried forward indefinitely. Due to the Company’s operating loss carry-forwards, all tax years remain open to examination to the extent of the operating loss carry-forward 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. On March 27, 2020, the President of the United States signed the CARES Act. The CARES Act provides several provisions that effect businesses from an income tax perspective. Due to the history of the tax losses, most of the CARES Act provisions have no current benefit to the Company. The Company can, however, benefit from one provision, which allows for the immediate refund of the Alternative Minimum Tax Credit, or AMT Credit, previously recognized as deferred tax asset. The Company has filed an amendment to claim the AMT Credit and is anticipating a refund of $ 212 thousand. This tax receivable was recorded during 2017, and is reflected in Prepaid Expenses and Other Current Assets on the Condensed Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies Equipment Purchase Commitments The Company has committed to equipment purchases of approximately $ 17.3 million at June 30, 2022, of which $ 16.4 million relates to equipment to be purchased under government awards. Litigation From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of our business. In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims. The Company investigates these claims as they arise. Although claims are inherently unpredictable, the Company is currently not aware of any matters that, if determined adversely to the Company, would individually or taken together, have a material adverse effect on its business, financial position, results of operations, or cash flows. As disclosed in the financial statements in Company’s Annual Report on Form 10-K for the year ended December 31, 2018, the Company 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 Electronics Limited, or Suga, a contract manufacturer in anticipation of future production. As a result of settlement of the arbitration with Suga related to those costs in the second quarter of 2021, the Company removed the $ 1.0 million accrual from its balance sheet, wrote off $ 0.3 million in prepayments and recorded a gain of $ 0.1 million in Other Income/Expense during the second quarter of 2021. |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2022 | |
Warrants [Abstract] | |
Warrants | Note 9 – 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. The following table sets forth the Company’s outstanding common stock warrants as of June 30, 2022: Issued Outstanding Exercise Price Expiration 2017 Warrant Issuance (1) 100,000 100,000 2.25 Sep 2022 2018 Warrant Issuance (2) 4,004,329 2,909,374 1.55 Jan 2023 2019 Warrant Issuance (3) 6,000,000 3,000,000 0.78 Oct 2024 6,009,374 (1) Issued in conjunction with an unsecured line of credit. (2) Warrant is subject to liability accounting. (3) Private Placement unregistered warrants exercisable six months following issuance. Equity classified warrants The 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 Condensed Consolidated Balance Sheets. Liability classified warrants The 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 warrants were classified in the accompanying Condensed Consolidated Balance Sheets 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 Scholes method the fair value of the Company’s warrants are as follows (in thousands): June 30, December 31, 2022 2021 2018 January and February Issuance Fair Value $ 2 $ 1,355 2017 May Issuance (1) Fair Value — 19 $ 2 $ 1,374 (1) Warrants from the 2017 May Issuance expired on May 24, 2022. Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Change in Fair Value of common stock warrant liability (1) $ 226 $ 2,642 $ 1,372 ( 4,566 ) (1) The combined changes in fair value are reflected as income (loss) from change in the fair market value of common stock warrant liability. During the three and six months ended June 30, 2022, there were no warrant exercises. During the three months ended June 30, 2021, the Company received $ 0.6 million in payment of the exercise price for warrants to purchase 324,413 shares of common stock. During the six months ended June 30, 2021, the Company received $ 5.7 million in payment of the exercise price for warrants to purchase 3,343,660 shares of common stock. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | Note 10 – Leases The Company leases office and manufacturing facilities in Hopewell Junction, New York under a non-cancelable lease agreement, which, as amended, expire in 2031, and includes two, five year options to extend. The lease agreement did not contain any residual value guarantees, or material restrictive covenants. Upon signing a 12 th amendment in November 2020, the Company reassessed the lease from operating to a finance lease. 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 expired in October 2021 . The lease agreement did not contain any residual value guarantees, material restrictive covenants or a renewal option and was classified as an operating lease. In October 2021, the Company signed an additional two year extension of the lease for the Santa Clara design group facility, and has classified this as an operating lease. On May 2, 2019, the Company entered into a three year finance lease commitment for phone equipment. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring lease liabilities. The Company estimates its incremental borrowing rate based on a yield curve analysis, utilizing the interest rate derived from the fair value analysis of the Company’s credit facility and adjusting it for factors that appropriately reflect the profile of secured borrowing over the expected term of the lease. The components of lease expense were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Finance Lease Cost: Amortization of right-of-use assets $ 149 $ 155 $ 302 $ 312 Interest on lease liabilities 198 197 396 396 Operating lease cost 16 15 33 30 Total Lease Cost $ 363 $ 367 $ 731 $ 738 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 14 $ 15 $ 29 $ 31 Financing cash flows from finance leases $ 270 $ 294 $ 542 $ 549 Right-of-use assets obtained in exchange for new finance lease liabilities $ 69 $ 94 $ 137 $ 108 Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ - $ - $ - June 30, 2022 December 31, 2021 Finance lease right-of-use assets $ 13,106 $ 12,318 Operating lease right-of-use assets $ 84 $ 113 Finance lease liability, current $ 1,127 $ 1,133 Finance lease liability, non-current $ 11,647 $ 11,647 Operating lease liabilities, current $ 63 $ 60 Operating lease liabilities, non-current $ 22 $ 54 Weighted average remaining lease terms - finance leases 20.58 years 20.58 years Weighted average remaining lease terms - operating leases 1.33 years 1.83 years Weighted average discount rate - finance leases 6.42 % 6.42 % Weighted average discount rate - operating leases 6.48 % 7.75 % Future annual minimum lease payments and finance lease commitments as of June 30, 2022 were as follows (in thousands): Operating Leases Finance Leases 2022 $ 33 $ 527 2023 55 1,214 2024 - 1,229 2025 - 1,229 2026 - 1,229 Thereafter - 22,717 Total undiscounted future minimum lease payments 88 28,145 Less imputed interest ( 3 ) ( 15,371 ) Lease liability $ 85 $ 12,774 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2022 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | Note 11 – Shareholders’ Equity Equity Raises On November 18, 2021, the Company entered into an ATM offering agreement with H.C. Wainwright & Co., LLC, or Wainwright, relating to sales of shares of its common stock under an ATM facility. On November 18, 2021, the Company also filed a prospectus supplement to allow the sale of shares of its common stock having an aggregate offering price of up to $ 10.0 million under the ATM facility. During the six months ended June 30, 2022, the Company raised $ 2.1 million, net of offering expenses, through the sale of shares under the ATM facility. The Company used and intends to use the net proceeds from sales made under the ATM facility for working capital and other general corporate purposes. |
Government Funding
Government Funding | 6 Months Ended |
Jun. 30, 2022 | |
Government Funding [Abstract] | |
Government Funding | Note 12 – Government Funding On July 28, 2020, the Company announced that it had been awarded a $ 33.6 million contract over the next 33 months from the U.S. Department of Defense, or the DoD, to sustain and enhance U.S. domestic capability for high resolution, high brightness OLED microdisplays that will be based on the Company’s proprietary direct patterning technology dPd. This investment is in addition to the $ 5.5 million award announced on June 11, 2020, under the U.S. Department of Defense Industrial Base Analysis, or IBAS, Program for OLED Supply Chain Assurance and will be used to increase capacity and sustain operations at the Company’s Hopewell Junction, New York, headquarters. These funds will be used to procure key equipment and tooling, and reimburse the Company for certain labor and material costs, which the Company believes will improve all aspects of its OLED microdisplay production, including increased throughput and capacity. Pursuant to the preliminary Technology Investment Agreement the U.S. government provided when the award was announced, the Company expects that the U.S. government will own the related equipment purchases until the end of the 33 month contract period, at which point the Company can apply to take title. The Company began making payments to related equipment vendors during the fourth quarter of 2020. For accounting purposes, the Company considers that it is probable that title will pass to the Company and accordingly will treat this award in a similar fashion as the IBAS award. The Company recognizes the government awards as deferred income – government awards as program milestones are invoiced, and will recognize other income as depreciation and other expenditures are incurred over the useful life of the capital equipment. As of June 30, 2022, the Company has received $ 19.8 million in total, for initial deposits required by capital equipment vendors. Amounts received, pending payment of deposits to vendors as of June 30, 2022, of $ 0.5 million are reflected in restricted cash on the accompanying Condensed Consolidated Balance Sheets. Amounts due from the U.S. DoD pursuant to invoices for capital equipment are presented on the Condensed Consolidated Balance Sheets as accounts receivable – due from government awards. The total amount invoiced on these programs of $ 19.8 million is reflected less depreciation in deferred revenue government awards – long term, and other current liabilities. Additional amounts remaining under the awards will be recorded in a similar fashion and will coincide with the progress payments required under the various capital equipment purchase terms. For the six months ended June 30, 2022, the Company recognized deferred income related to certain overhead expenses, not capitalized, of $ 159 thousand. The terms of various government agreements provide among other items that the Company must achieve certain yield targets, give priority to military orders and continue to maintain the productive capacity of equipment purchased for up to five years past the completion of the programs. |
Description of the Business a_2
Description of the Business and Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2022 | |
Description of the Business and Summary of Significant Accounting Policies [Abstract] | |
The Business | The Business eMagin Corporation, or the Company, designs, develops, manufactures and markets Active Matrix organic light emitting diode, or OLED, -on-silicon microdisplays used in military and commercial AR/VR devices and other near-eye imaging products which utilize OLED microdisplays. The Company’s products are sold mainly in North America, Asia, and Europe. |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited interim Condensed Consolidated Financial Statements of eMagin Corporation and its subsidiary reflect all adjustments, including normal recurring accruals, necessary for a fair presentation. All significant intercompany balances and 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. Certain information and footnote disclosure normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States, or GAAP, have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the SEC. These unaudited Condensed Consolidated Financial Statements, and related disclosures, should be read in conjunction with the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31 , 2021 . The results of operations for the periods ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year. The Consolidated Financial Statements as of December 31, 2021 are derived from audited financial statements included in the Company’s 2021 Form 10-K. |
Use of Estimates | Use of estimates In accordance with GAAP, 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, liability classified warrants, percentage of completion of contracts, 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. |
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. The total intangible amortization expense was approximately $ 2 thousand and $ 4 thousand for the three and six months ended June 30, 2022 and 2021, respectively. |
Product Warranty | Product warranty The Company generally 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 three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Beginning balance $ 416 $ 465 $ 519 $ 615 Warranty accruals and adjustments ( 127 ) 242 ( 227 ) 100 Warranty claims ( 7 ) ( 2 ) ( 10 ) ( 10 ) Ending balance $ 282 $ 705 $ 282 $ 705 |
Earnings per Common Share | Earnings per Common Share Basic earnings 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, restricted stock units and convertible preferred stock. Diluted earnings 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. The Company’s Series B Convertible Preferred stock, or 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 earnings per share. Diluted earnings per share must be calculated under both the treasury stock and two-class method, and the calculation that results in the most dilutive earnings per share amount for the common stock is reported. 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. In accordance with the Preferred Stock – Series B agreements, the conversion price was adjusted to $ 0.3033 per share in December 2019, and the resultant, if converted common shares are reflected in the table of anti-dilutive common stock equivalents below. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share and share data) for the three and six months ended June 30, 2022 and 2021: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Loss $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Income allocated to participating securities — — — — Loss allocated to common shares $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Change in fair value of warrant liability (1) $ — $ — $ — $ — Loss allocated to common shares - Diluted $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Weighted average common shares outstanding - Basic 73,895,212 72,193,205 73,368,347 71,238,060 Dilutive effect of liability classified warrants — — — — Weighted average common shares outstanding - Diluted (1) 73,895,212 72,193,205 73,368,347 71,238,060 Net loss per share: Basic $ ( 0.02 ) $ - $ ( 0.02 ) $ ( 0.11 ) Diluted $ ( 0.02 ) $ - $ ( 0.02 ) $ ( 0.11 ) (1) For the three months ended June 30, 2022 and 2021, income (loss) allocated to common shares, and the weighted average shares used for calculating basic and diluted earnings per share exclude the assumed impact of exercise liability classified warrants, because it would be anti-dilutive to the earnings per share calculation. In calculating net income (loss) per share amounts, all shares underlying the potentially dilutive common stock equivalents were excluded from the calculation of diluted net income (loss) per common share in both periods, because their effect was anti-dilutive. The following table sets forth the potentially dilutive common stock equivalents for the three and six months ended June 30, 2022 and 2021 that were not included in diluted earnings per share, or EPS, as their effect would be anti-dilutive: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Restricted Stock Units 408,226 435,501 408,226 435,501 Options 3,625,426 3,841,671 3,625,426 3,841,671 Warrants 6,009,374 9,339,816 6,009,374 9,339,816 Convertible preferred stock 18,726,009 18,726,009 18,726,009 18,726,009 Total potentially dilutive common stock equivalents 28,769,035 32,342,997 28,769,035 32,342,997 |
Government Funding | Government Funding The Company accounts for awards received from the U.S. Government for procurement of capital equipment after reviewing the terms of the underlying award contract, and in accordance with contract and equipment purchase milestones and accounting principles for grant accounting. For awards in which the Company will hold title to the underlying equipment, the Company initially records amounts invoiced to the U.S. Government for equipment progress payments on the accompanying Condensed Consolidated Balance Sheets as Deferred Income – Government Awards – long term and Accounts Receivable – due from Government Awards. The Company records such progress payments made to capital equipment vendors in Property, plant and equipment. Amounts recorded in Deferred Income – Government Awards – long term are recognized as Other Income on the accompanying Condensed Consolidated Statement of Operations on a systematic basis as depreciation and other expenses are incurred over the useful life of the capital equipment. |
Restricted Cash | Restricted Cash The Company accounts for cash received pursuant to U.S. Government funding, that is legally restricted for procurement of capital equipment, as Restricted Cash on the accompanying Condensed Consolidated Balance Sheets. Restricted Cash amounts are received from the U.S. Government in advance of progress payments required for various program related capital equipment purchases and are disbursed by the Company to related equipment vendors. |
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, or the 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. The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into a 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 Condensed Consolidated 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 is currently the only financial asset 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 Condensed Consolidated Balance Sheets, 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, 2022 $ 1,374 Change in fair value of warrant liability, net ( 1,372 ) Balance as of June 30, 2022 $ 2 The fair value of the liability for common stock purchase warrants at issuance and at June 30, 2022 was 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. Inputs to the model at June 30, 2022 included remaining contractual terms of the warrants of 0.58 years, at risk-free interest rates of 2.51 % with no expected dividends, and expected volatility of the price of the underlying common stock of 45.02 % |
Concentrations | 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 three months ended June 30, 2022, one customer of 11.0 % accounted for over 10% of net revenues. For the six months ended June 30, 2022, a different customer of 12.5 % accounted for over 10% of net revenues. As of June 30, 2022, the Company had accounts receivable from those two customers that accounted for 8.4 % and 1.1 % of total accounts receivable, respectively. For the three and six months ended June 30, 2021, one customer of 19.4 % and 15.6 %, respectively accounted for over 10% of the Company’s net revenues. |
Liquidity and Going Concern | Liquidity and Going Concern The accompanying Condensed Consolidated Financial Statements have been prepared on a 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 six months ended June 30, 2022, the Company incurred a net loss of $ 1.6 million and used cash in operating activities of $ 1.8 million. As of June 30, 2022, the Company had $ 4.3 million of cash, $ 2.1 million of outstanding indebtedness and borrowing availability of $ 0.7 million under its ABL Facility. The Company’s ABL Facility expires on December 31, 2022, and renews automatically for another year unless terminated pursuant to its terms. The ABL Facility agreement contains certain lenders remedies that give the bank the ability to impose discretionary reserves against our borrowing availability or terminate the facility upon events of default. 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 2022 and beyond at present availability levels, or at all. 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. In addition, the COVID-19 pandemic, and disruptions caused by the war in the Ukraine have significantly increased economic and demand uncertainty across the globe and contributed to supply chain shortages and disruptions. Although demand for the Company’s products has remained steady, the Company’s ability to obtain components and other materials or services on a timely basis has resulted in manufacturing delays, and increased costs. If these trends worsen as a result of COVID-19, the Ukraine war, or other semiconductor supply chain issues or result in lost orders it could materially and adversely affect its business, financial condition, and results of operations. 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 has taken actions to increase revenues and to reduce expenses and is considering financing alternatives. 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) continue a Work Status Reduction program that began in October 2019 wherein senior management work status was reduced by approximately 20%, 3) continue to utilize government grants for purchase of capital equipment and funding manufacturing personnel, 4) reduce discretionary and other expenses, 5) seek to enter new markets, 6) sell shares under it’s At the Market or ATM equity facility entered into in November 2021, and 7) consider additional financing and/or strategic alternatives. The Company is reassessing its business plans and forecasts over the next two years. Based on its known cash needs as of July 2022, and the anticipated availability of its ABL facility, the Company has developed plans to extend its liquidity to support its working capital requirements through the third quarter of 2023. However, there can be no assurance the Company’s plans will be achieved and the Company will be able to meet its financial obligations as they become due without obtaining additional financing or sources of capital. 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. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently adopted accounting pronouncements The Company's accounting policies are the same as those described in Note 1 to the Company's Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2021 . Recently issued accounting pronouncements 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 is currently evaluating the impact of this ASU on the Condensed Consolidated Financial Statements. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This guidance changes how entities account for convertible instruments and contracts in an entity's own equity and simplifies the accounting for convertible instruments by removing certain separation models for convertible instruments. This guidance also modifies the guidance on diluted earnings per share calculations. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. The Company is currently evaluating the impact of this ASU on the Condensed Consolidated Financial Statements. |
Description of the Business a_3
Description of the Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Description of the Business and Summary of Significant Accounting Policies [Abstract] | |
Summary of Activity Related to Warranty Liability Included in Other Current Liabilities | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Beginning balance $ 416 $ 465 $ 519 $ 615 Warranty accruals and adjustments ( 127 ) 242 ( 227 ) 100 Warranty claims ( 7 ) ( 2 ) ( 10 ) ( 10 ) Ending balance $ 282 $ 705 $ 282 $ 705 |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Loss $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Income allocated to participating securities — — — — Loss allocated to common shares $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Change in fair value of warrant liability (1) $ — $ — $ — $ — Loss allocated to common shares - Diluted $ ( 1,440 ) $ ( 278 ) $ ( 1,577 ) $ ( 7,656 ) Weighted average common shares outstanding - Basic 73,895,212 72,193,205 73,368,347 71,238,060 Dilutive effect of liability classified warrants — — — — Weighted average common shares outstanding - Diluted (1) 73,895,212 72,193,205 73,368,347 71,238,060 Net loss per share: Basic $ ( 0.02 ) $ - $ ( 0.02 ) $ ( 0.11 ) Diluted $ ( 0.02 ) $ - $ ( 0.02 ) $ ( 0.11 ) (1) For the three months ended June 30, 2022 and 2021, income (loss) allocated to common shares, and the weighted average shares used for calculating basic and diluted earnings per share exclude the assumed impact of exercise liability classified warrants, because it would be anti-dilutive to the earnings per share calculation. |
Schedule of Potentially Dilutive Common Stock Equivalents | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Restricted Stock Units 408,226 435,501 408,226 435,501 Options 3,625,426 3,841,671 3,625,426 3,841,671 Warrants 6,009,374 9,339,816 6,009,374 9,339,816 Convertible preferred stock 18,726,009 18,726,009 18,726,009 18,726,009 Total potentially dilutive common stock equivalents 28,769,035 32,342,997 28,769,035 32,342,997 |
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, 2022 $ 1,374 Change in fair value of warrant liability, net ( 1,372 ) Balance as of June 30, 2022 $ 2 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 North and South America $ 3,790 $ 3,647 $ 8,116 $ 6,950 Europe, Middle East, and Africa 3,099 2,090 6,019 4,621 Asia Pacific 270 542 382 1,481 Total $ 7,159 $ 6,279 $ 14,517 $ 13,052 Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Military $ 4,799 $ 3,884 $ 10,159 $ 7,759 Commercial, including industrial and medical 1,184 820 2,161 1,800 Consumer 23 500 312 1,150 Multiple 1,153 1,075 1,885 2,343 Total $ 7,159 $ 6,279 $ 14,517 $ 13,052 |
Schedule of Contract Assets and Liabilities | June 30, December 31, 2022 2021 Unbilled Receivables (contract assets) $ 1,318 $ 1,102 Deferred Revenue (contract liabilities) $ 114 $ 54 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounts Receivable [Abstract] | |
Schedule of Accounts Receivable | June 30, December 31, 2022 2021 Accounts receivable $ 5,159 $ 4,627 Less allowance for doubtful accounts ( 139 ) ( 139 ) Accounts receivable, net $ 5,020 $ 4,488 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventories, Net [Abstract] | |
Schedule of Components of Inventories | June 30, December 31, 2022 2021 Raw materials $ 2,749 $ 3,517 Work in process 3,077 2,149 Finished goods 2,225 2,363 Total inventories 8,051 8,029 Less inventory reserve ( 390 ) ( 397 ) Total inventories, net $ 7,661 $ 7,632 |
Line of Credit _ Loan Payable (
Line of Credit / Loan Payable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Line of Credit / Loan Payable [Abstract] | |
Schedule of Line of Credit | June 30, December 31, (in thousands) 2022 2021 Revolving credit facility $ 2,087 $ 1,974 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stock Compensation [Abstract] | |
Schedule of Allocation of Non-Cash Stock-Based Compensation | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Cost of revenues $ 30 $ 3 $ 58 $ 3 Research and development 56 9 92 12 Selling, general and administrative 128 25 229 35 Total stock compensation expense $ 214 $ 37 $ 379 $ 50 |
Schedule of Stock-Based Compensation Cost by Award Type | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Stock options $ 119 $ 13 $ 189 $ 25 Restricted Share Units 95 24 190 25 Total stock compensation expense $ 214 $ 37 $ 379 $ 50 |
Schedule of Key Assumptions of Fair Value of Stock Options Granted | Six Months Ended June 30, 2022 2021 Dividend yield 0 % 0 % Risk free interest rates 3.24 - 3.25 % 1.77 - 2.48 % Expected volatility 79.3 to 83.0 % 41.7 to 49.2 % Expected term (in years) 5.0 to 5.5 3.5 to 4.0 |
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, 2021 3,712,867 $ 1.81 Options granted 270,000 0.73 Options exercised — — Options forfeited ( 5,000 ) 0.40 Options cancelled or expired ( 352,441 ) 3.59 Outstanding at June 30, 2022 3,625,426 $ 1.56 3.66 $ 144,835 Vested or expected to vest at June 30, 2022 (1) 3,622,861 $ 1.56 3.65 $ 144,835 Exercisable at June 30, 2022 3,489,426 $ 1.59 3.42 $ 144,835 (1) The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to total unvested options. |
Schedule of Restricted Stock Unit Activity | Weighted Average Grant Date Number of Awards Fair Value Per Share Service Performance Service Performance based based based based RSU's outstanding at December 31, 2021 405,453 103,047 $ 3.52 $ 3.60 Granted 165,885 46,729 1.01 1.07 Vested and settled ( 110,608 ) — 3.60 — Forfeited ( 52,504 ) ( 34,349 ) 3.60 3.60 RSU's outstanding at June 30, 2022 408,226 115,427 $ 3.13 $ 2.58 |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Warrants [Abstract] | |
Summary of Warrants Issued and Warrants Outstanding | Issued Outstanding Exercise Price Expiration 2017 Warrant Issuance (1) 100,000 100,000 2.25 Sep 2022 2018 Warrant Issuance (2) 4,004,329 2,909,374 1.55 Jan 2023 2019 Warrant Issuance (3) 6,000,000 3,000,000 0.78 Oct 2024 6,009,374 (1) Issued in conjunction with an unsecured line of credit. (2) Warrant is subject to liability accounting. (3) Private Placement unregistered warrants exercisable six months following issuance. |
Fair Value of Warrants | June 30, December 31, 2022 2021 2018 January and February Issuance Fair Value $ 2 $ 1,355 2017 May Issuance (1) Fair Value — 19 $ 2 $ 1,374 (1) Warrants from the 2017 May Issuance expired on May 24, 2022. Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Change in Fair Value of common stock warrant liability (1) $ 226 $ 2,642 $ 1,372 ( 4,566 ) (1) The combined changes in fair value are reflected as income (loss) from change in the fair market value of common stock warrant liability. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Components of Lease Expense | Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Finance Lease Cost: Amortization of right-of-use assets $ 149 $ 155 $ 302 $ 312 Interest on lease liabilities 198 197 396 396 Operating lease cost 16 15 33 30 Total Lease Cost $ 363 $ 367 $ 731 $ 738 |
Schedule of Other Information | Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 14 $ 15 $ 29 $ 31 Financing cash flows from finance leases $ 270 $ 294 $ 542 $ 549 Right-of-use assets obtained in exchange for new finance lease liabilities $ 69 $ 94 $ 137 $ 108 Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ - $ - $ - June 30, 2022 December 31, 2021 Finance lease right-of-use assets $ 13,106 $ 12,318 Operating lease right-of-use assets $ 84 $ 113 Finance lease liability, current $ 1,127 $ 1,133 Finance lease liability, non-current $ 11,647 $ 11,647 Operating lease liabilities, current $ 63 $ 60 Operating lease liabilities, non-current $ 22 $ 54 Weighted average remaining lease terms - finance leases 20.58 years 20.58 years Weighted average remaining lease terms - operating leases 1.33 years 1.83 years Weighted average discount rate - finance leases 6.42 % 6.42 % Weighted average discount rate - operating leases 6.48 % 7.75 % |
Future Annual Minimum Lease Payments and Finance Lease Commitments | Operating Leases Finance Leases 2022 $ 33 $ 527 2023 55 1,214 2024 - 1,229 2025 - 1,229 2026 - 1,229 Thereafter - 22,717 Total undiscounted future minimum lease payments 88 28,145 Less imputed interest ( 3 ) ( 15,371 ) Lease liability $ 85 $ 12,774 |
Description of the Business a_4
Description of the Business and Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2022 USD ($) item customer $ / shares | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) customer $ / shares | Mar. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) item customer $ / shares | Jun. 30, 2021 USD ($) customer $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 $ / shares | |
Accounting Policies [Line Items] | ||||||||
Total intangible amortization expense | $ 2 | $ 2 | $ 4 | $ 4 | ||||
Standard product warranty period | 1 year | |||||||
Unbilled revenue, billed and collected, term | 1 year | |||||||
Net loss | $ (1,440) | $ (137) | $ (278) | $ (7,378) | $ (1,577) | $ (7,656) | ||
Net income (loss) per share: Basic | $ / shares | $ (0.02) | $ 0 | $ (0.02) | $ (0.11) | ||||
Net cash used in operating activities | $ 1,845 | $ 2,052 | ||||||
Cash and cash equivalents | $ 4,290 | $ 10,568 | $ 4,290 | $ 10,568 | $ 5,724 | |||
Preferred Stock- Series B [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Conversion price per share | $ / shares | $ 0.3033 | |||||||
Warrants [Member] | Measurement Input, Expected Term [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Expected term | 6 months 29 days | 6 months 29 days | ||||||
Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Measurement input | item | 0.0251 | 0.0251 | ||||||
Warrants [Member] | Measurement Input, Price Volatility [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Measurement input | item | 0.4502 | 0.4502 | ||||||
Minimum [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Payment term | 30 days | |||||||
Maximum [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Payment term | 60 days | |||||||
Revolving Credit Facility [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Outstanding amount on credit facility | $ 2,087 | $ 2,087 | $ 1,974 | |||||
Remaining borrowing capacity | $ 700 | $ 700 | ||||||
Revenues [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Number of customers | customer | 1 | |||||||
Concentration risk percentage | 11% | |||||||
Revenues [Member] | Customer Concentration Risk [Member] | Different Customer [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 12.50% | |||||||
Cost of Goods, Product Line [Member] | Supplier Concentration Risk [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Number of suppliers | item | 2 | |||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Number of customers | customer | 1 | 1 | ||||||
Concentration risk percentage | 15.60% | |||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Number of customers | customer | 2 | |||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 19.40% | 8.40% | ||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 1.10% |
Description of the Business a_5
Description of the Business and Summary of Significant Accounting Policies (Summary of Activity Related to Warranty Liability Included in Other Current Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Description of the Business and Summary of Significant Accounting Policies [Abstract] | ||||
Beginning balance | $ 416 | $ 465 | $ 519 | $ 615 |
Warranty accruals and adjustments | (127) | 242 | (227) | 100 |
Warranty claims | (7) | (2) | (10) | (10) |
Ending balance | $ 282 | $ 705 | $ 282 | $ 705 |
Description of the Business a_6
Description of the Business and Summary of Significant Accounting Policies (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Description of the Business and Summary of Significant Accounting Policies [Abstract] | ||||||
Net loss | $ (1,440) | $ (137) | $ (278) | $ (7,378) | $ (1,577) | $ (7,656) |
Income (loss) allocated to common shares | (1,440) | (278) | (1,577) | (7,656) | ||
Income (loss) allocated to common shares - Diluted | $ (1,440) | $ (278) | $ (1,577) | $ (7,656) | ||
Weighted average common shares outstanding - Basic | 73,895,212 | 72,193,205 | 73,368,347 | 71,238,060 | ||
Weighted average common shares outstanding - Diluted | 73,895,212 | 72,193,205 | 73,368,347 | 71,238,060 | ||
Net income (loss) per share: Basic | $ (0.02) | $ 0 | $ (0.02) | $ (0.11) | ||
Net income (loss) per share: Diluted | $ (0.02) | $ 0 | $ (0.02) | $ (0.11) |
Description of the Business a_7
Description of the Business and Summary of Significant Accounting Policies (Schedule of Potentially Dilutive Common Stock Equivalents) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common stock equivalents | 28,769,035 | 32,342,997 | 28,769,035 | 32,342,997 |
Restricted Share Units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common stock equivalents | 408,226 | 435,501 | 408,226 | 435,501 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common stock equivalents | 3,625,426 | 3,841,671 | 3,625,426 | 3,841,671 |
Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common stock equivalents | 6,009,374 | 9,339,816 | 6,009,374 | 9,339,816 |
Preferred Stock- Series B [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common stock equivalents | 18,726,009 | 18,726,009 | 18,726,009 | 18,726,009 |
Description of the Business a_8
Description of the Business and Summary of Significant Accounting Policies (Reconciliation of the Level 3 Warrant Liability Measured and Recorded at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Description of the Business and Summary of Significant Accounting Policies [Abstract] | ||||
Balance as of January 1, 2022 | $ 1,374 | |||
Change in fair value of warrant liability, net | $ (226) | $ (2,642) | (1,372) | $ 4,566 |
Balance as of June 30, 2022 | $ 2 | $ 2 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |||||
Product warranty term | 1 year | ||||
Unbilled revenue, billed and collected, term | 1 year | ||||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 5,020 | $ 5,020 | $ 4,488 | ||
Revenue recognized related to contract liabilities | $ 42 | $ 37 | $ 42 | $ 339 |
Revenue Recognition (Remaining
Revenue Recognition (Remaining Performance Obligations Narrative) (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 $ in Millions | Jun. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 2.7 |
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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | $ 7,159 | $ 6,279 | $ 14,517 | $ 13,052 |
Military [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | 4,799 | 3,884 | 10,159 | 7,759 |
Commercial, including Industrial and Medical [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | 1,184 | 820 | 2,161 | 1,800 |
Consumer [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | 23 | 500 | 312 | 1,150 |
Multiple [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | 1,153 | 1,075 | 1,885 | 2,343 |
North and South America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | 3,790 | 3,647 | 8,116 | 6,950 |
Europe, Middle East, and Africa [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | 3,099 | 2,090 | 6,019 | 4,621 |
Asia Pacific [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from contract with customer | $ 270 | $ 542 | $ 382 | $ 1,481 |
Revenue Recognition (Schedule_2
Revenue Recognition (Schedule of Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Revenue Recognition [Abstract] | ||
Unbilled Receivables (contract assets) | $ 1,318 | $ 1,102 |
Deferred Revenue (contract liabilities) | $ 114 | $ 54 |
Accounts Receivable (Schedule o
Accounts Receivable (Schedule of Accounts Receivable) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts Receivable [Abstract] | ||
Accounts receivable | $ 5,159 | $ 4,627 |
Less allowance for doubtful accounts | (139) | (139) |
Accounts receivable, net | $ 5,020 | $ 4,488 |
Inventories, Net (Schedule of C
Inventories, Net (Schedule of Components of Inventories) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventories, Net [Abstract] | ||
Raw materials | $ 2,749 | $ 3,517 |
Work in process | 3,077 | 2,149 |
Finished goods | 2,225 | 2,363 |
Total inventories | 8,051 | 8,029 |
Less inventory reserve | (390) | (397) |
Total inventories, net | $ 7,661 | $ 7,632 |
Line of Credit _ Loan Payable_2
Line of Credit / Loan Payable (Narrative) (Details) - USD ($) | 6 Months Ended | |||
Dec. 21, 2016 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 08, 2020 | |
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 to 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% | |||
Borrowing base equivalent of eligible inventory | $ 2,000,000 | |||
Borrowing base equivalent of eligible inventory, percentage | 50% | |||
Stated interest rate | 6.50% | |||
Monthly interest payment | $ 2,000 | |||
Monthly administrative fee | $ 1,000 | |||
Annual facility fee on maximum amount borrowable | 1% | |||
Automatic renewal term | 1 year | |||
Minimum net worth required | $ 13,000,000 | |||
Minimum working capital required | 4,000,000 | |||
Outstanding amount on credit facility | 2,087,000 | $ 1,974,000 | ||
Remaining borrowing capacity | $ 700,000 | |||
Revolving Credit Facility [Member] | Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 3% | |||
Paycheck Protection Program [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Stated interest rate | 1% | |||
Loans payable | $ 1,900,000 |
Line of Credit _ Loan Payable_3
Line of Credit / Loan Payable (Schedule of Line of Credit) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving credit facility | $ 2,087 | $ 1,974 |
Stock Compensation (Narrative)
Stock Compensation (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost, weighted average period of recognition | 10 months 24 days | |
Dividend yield | 0% | 0% |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock option compensation, net of forfeitures | $ 62 | |
Restricted Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock option compensation, net of forfeitures | $ 900 | |
Unrecognized compensation cost, weighted average period of recognition | 2 years 1 month 6 days |
Stock Compensation (Schedule of
Stock Compensation (Schedule of Allocation of Non-Cash Stock-Based Compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock compensation expense | $ 214 | $ 37 | $ 379 | $ 50 |
Cost of Revenues [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock compensation expense | 30 | 3 | 58 | 3 |
Research and Development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock compensation expense | 56 | 9 | 92 | 12 |
Selling, General and Administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock compensation expense | $ 128 | $ 25 | $ 229 | $ 35 |
Stock Compensation (Schedule _2
Stock Compensation (Schedule of Stock-Based Compensation Cost by Award Type) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock compensation expense | $ 214 | $ 37 | $ 379 | $ 50 |
Stock Options [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock compensation expense | 119 | 13 | 189 | 25 |
Restricted Share Units [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock compensation expense | $ 95 | $ 24 | $ 190 | $ 25 |
Stock Compensation (Schedule _3
Stock Compensation (Schedule of Key Assumptions of Fair Value of Stock Options Granted) (Details) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Risk free interest rates, minimum | 3.24% | 1.77% |
Risk free interest rates, maximum | 3.25% | 2.48% |
Expected volatility, minimum | 79.30% | 41.70% |
Expected volatility, maximum | 83% | 49.20% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years | 3 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 6 months | 4 years |
Stock Compensation (Schedule _4
Stock Compensation (Schedule of Option Activity) (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Stock Compensation [Abstract] | |
Number of Shares, Outstanding at December 31, 2021 | shares | 3,712,867 |
Number of Shares, Options granted | shares | 270,000 |
Number of Shares, Options exercised | shares | |
Number of Shares, Options forfeited | shares | (5,000) |
Number of Shares, Options cancelled or expired | shares | (352,441) |
Number of Shares, Outstanding at June 30, 2022 | shares | 3,625,426 |
Number of Shares, Vested or expected to vest at June 30, 2022 | shares | 3,622,861 |
Number of Shares, Exercisable at June 30, 2022 | shares | 3,489,426 |
Weighted Average Exercise Price, Outstanding at December 31, 2021 | $ / shares | $ 1.81 |
Weighted Average Exercise Price, Options granted | $ / shares | 0.73 |
Weighted Average Exercise Price, Options exercised | $ / shares | |
Weighted Average Exercise Price, Options forfeited | $ / shares | 0.40 |
Weighted Average Exercise Price, Options cancelled or expired | $ / shares | 3.59 |
Weighted Average Exercise Price, Outstanding at June 30, 2022 | $ / shares | 1.56 |
Weighted Average Exercise Price, Vested or expected to vest at June 30, 2022 | $ / shares | 1.56 |
Weighted Average Exercise Price, Exercisable at June 30, 2022 | $ / shares | $ 1.59 |
Weighted Average Remaining Contractual Life (In Years), Outstanding at June 30, 2022 | 3 years 7 months 28 days |
Weighted Average Remaining Contractual Life (In Years), Vested or expected to vest at June 30, 2022 | 3 years 7 months 24 days |
Weighted Average Remaining Contractual Life (In Years), Exercisable at March 31, 2022 | 3 years 5 months 1 day |
Aggregate Intrinsic Value, Outstanding at March 31, 2022 | $ | $ 144,835 |
Aggregate Intrinsic Value, Vested or expected to vest at March 31, 2022 | $ | 144,835 |
Aggregate Intrinsic Value, Exercisable at March 31, 2022 | $ | $ 144,835 |
Stock Compensation (Schedule _5
Stock Compensation (Schedule of Restricted Stock Unit Activity) (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Service Based Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Awards, RSUs outstanding at December 31, 2021 | 405,453 | |
Number of Awards, Granted | 165,885 | |
Number of Awards, Vested and settled | (110,608) | |
Number of Awards, Forfeited | (52,504) | |
Number of Awards, RSUs outstanding at June 30, 2022 | 408,226 | |
Weighted Average Grant Date Fair Value per Share, RSUs outstanding at December 31, 2021 | $ 3.13 | $ 3.52 |
Weighted Average Grant Date Fair Value per Share, Granted | 1.01 | |
Weighted Average Grant Date Fair Value per Share, Vested and settled | 3.60 | |
Weighted Average Grant Date Fair Value per Share, Forfeited | 3.60 | |
Weighted Average Grant Date Fair Value per Share, RSUs outstanding at June 30, 2022 | $ 3.13 | |
Performance Based Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Awards, RSUs outstanding at December 31, 2021 | 103,047 | |
Number of Awards, Granted | 46,729 | |
Number of Awards, Vested and settled | ||
Number of Awards, Forfeited | (34,349) | |
Number of Awards, RSUs outstanding at June 30, 2022 | 115,427 | |
Weighted Average Grant Date Fair Value per Share, RSUs outstanding at December 31, 2021 | $ 2.58 | $ 3.60 |
Weighted Average Grant Date Fair Value per Share, Granted | 1.07 | |
Weighted Average Grant Date Fair Value per Share, Vested and settled | ||
Weighted Average Grant Date Fair Value per Share, Forfeited | 3.60 | |
Weighted Average Grant Date Fair Value per Share, RSUs outstanding at June 30, 2022 | $ 2.58 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Taxes [Abstract] | ||||
Effective tax rate | 0% | 0% | 0% | 0% |
Federal statutory rate | 21% | 21% | 21% | 21% |
Operating loss carryforward, expiration | Dec. 31, 2037 | |||
Expected refund for AMT credit carryforward | $ 212 | $ 212 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||||
Equipment purchases commitments | $ 17,300 | ||||
Consumer Night Vision, accrued invoices | $ 1,000 | ||||
Other income (expense) | $ 351 | $ 192 | 447 | $ 227 | |
Reclassification, Other [Member] | |||||
Loss Contingencies [Line Items] | |||||
Consumer Night Vision, accrued invoices | (1,000) | $ (1,000) | |||
Prepayment, writeoff | 300 | ||||
Other income (expense) | $ 100 | ||||
Government Award [Member] | |||||
Loss Contingencies [Line Items] | |||||
Equipment purchases commitments | $ 16,400 |
Warrants (Narrative) (Details)
Warrants (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Warrants [Abstract] | ||||
Warrants exercised | 0 | 0 | ||
Proceeds from exercise of warrants | $ 600 | $ 5,652 | ||
Exercise of common stock warrants, shares | 324,413 | 3,343,660 |
Warrants (Summary of Warrants I
Warrants (Summary of Warrants Issued and Warrants Outstanding) (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Outstanding | 6,009,374 |
2017 Warrant Issuance 1 [Member] | |
Class of Warrant or Right [Line Items] | |
Issued | 100,000 |
Outstanding | 100,000 |
Exercise Price | $ / shares | $ 2.25 |
Expiration | 2022-09 |
2018 Warrant Issuance [Member] | |
Class of Warrant or Right [Line Items] | |
Issued | 4,004,329 |
Outstanding | 2,909,374 |
Exercise Price | $ / shares | $ 1.55 |
Expiration | 2023-01 |
2019 Warrant Issuance [Member] | |
Class of Warrant or Right [Line Items] | |
Issued | 6,000,000 |
Outstanding | 3,000,000 |
Exercise Price | $ / shares | $ 0.78 |
Expiration | 2024-10 |
Warrants (Fair Value of Warrant
Warrants (Fair Value of Warrants) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | |||||
Fair Value | $ 2 | $ 2 | $ 1,374 | ||
Change in Fair Value of common stock warrant liability | 226 | $ 2,642 | 1,372 | $ (4,566) | |
2018 January and February Issuance [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Fair Value | $ 2 | $ 2 | 1,355 | ||
2017 May issuance [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Fair Value | $ 19 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 1 Months Ended | 3 Months Ended | |
Oct. 31, 2021 | Dec. 31, 2019 | May 02, 2019 | |
Santa Clara, California [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lease expiration date | 2021-10 | ||
Lease extension term | 2 years | 2 years | |
Phone Equipment [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Finance lease, term of contract | 3 years |
Leases (Components of Lease Exp
Leases (Components of Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Finance Lease Cost: | ||||
Amortization of right-of-use assets | $ 149 | $ 155 | $ 302 | $ 312 |
Interest on lease liabilities | 198 | 197 | 396 | 396 |
Operating lease cost | 16 | 15 | 33 | 30 |
Total Lease Cost | $ 363 | $ 367 | $ 731 | $ 738 |
Leases (Schedule of Other Infor
Leases (Schedule of Other Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||||
Operating cash flows from operating leases | $ 14 | $ 15 | $ 29 | $ 31 | |
Financing cash flows from finance leases | 270 | 294 | 542 | 549 | |
Right-of-use assets obtained in exchange for new finance lease liabilities | 69 | 94 | 137 | 108 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | |||||
Finance lease right-of-use assets | 13,106 | 13,106 | $ 12,318 | ||
Operating lease right-of-use assets | 84 | 84 | 113 | ||
Finance lease liability, current | 1,127 | 1,127 | 1,133 | ||
Finance lease liability, non-current | 11,647 | 11,647 | 11,647 | ||
Operating lease liabilities, current | 63 | 63 | 60 | ||
Operating lease liabilities, non-current | $ 22 | $ 22 | $ 54 | ||
Weighted average remaining lease terms - finance leases | 20 years 6 months 29 days | 20 years 6 months 29 days | 20 years 6 months 29 days | ||
Weighted average remaining lease terms - operating leases | 1 year 3 months 29 days | 1 year 3 months 29 days | 1 year 9 months 29 days | ||
Weighted average discount rate - finance leases | 6.42% | 6.42% | 6.42% | ||
Weighted average discount rate - operating leases | 6.48% | 6.48% | 7.75% |
Leases (Future Annual Minimum L
Leases (Future Annual Minimum Lease Payments and Finance Lease Commitments) (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Operating Leases | |
2022 | $ 33 |
2023 | 55 |
Total undiscounted future minimum lease payments | 88 |
Less imputed interest | (3) |
Lease liability | 85 |
Finance Leases | |
2022 | 527 |
2023 | 1,214 |
2024 | 1,229 |
2025 | 1,229 |
2026 | 1,229 |
Thereafter | 22,717 |
Total undiscounted future minimum lease payments | 28,145 |
Less imputed interest | (15,371) |
Lease liability | $ 12,774 |
Shareholders' Equity (Narrative
Shareholders' Equity (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 18, 2021 | Jun. 30, 2022 | |
Class of Stock [Line Items] | ||
Proceeds from offering | $ 2,060 | |
ATM Offering [Member] | ||
Class of Stock [Line Items] | ||
Sale of stock agreement, authorized amount | $ 10,000 | |
Proceeds from offering | $ 2,100 |
Government Funding (Narrative)
Government Funding (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2021 | Jul. 28, 2020 | Jun. 11, 2020 | |
Government Funding [Abstract] | ||||
Amount awarded | $ 33,600 | $ 5,500 | ||
Government funding, term of contract | 33 months | |||
Deposits received, required by capital equipment vendors | $ 19,800 | |||
Restricted cash | 511 | $ 806 | ||
Amount invoiced | 19,800 | |||
Deferred income related to certain overhead expenses, not capitalized | $ 159 | |||
Maintain productive capacity of equipment purchased past completion of program, period | 5 years |